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Copyright and all other relevant rights over this material are
owned jointly by the University of the Philippines College of
Law, the Faculty Editor and the Student Editorial Team.
The ownership of the work belongs to the University of the
Philippines College of Law. No part of this book shall be
reproduced or distributed without the consent of the UP
College of Law.
All rights are reserved.
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Table of Contents
Chapter I. Civil Personality..............................3
I. Concept and Classes of Persons..........3
II. Capacity to Act and Restrictions
Thereon..........................................................5
Chapter II. Citizenship and Domicile..............8
I. Who are Filipinos ..................................8
II. Domicile ................................................8
Chapter III. Marriage.........................................9
I. Definition and Nature of Marriage.........9
II. Requisites of Marriage ..........................9
III. Marriages Solemnized Abroad............11
IV. Presumption of Marriage.....................11
Chapter IV. Void Marriages ...........................13
I. Grounds ..............................................13
II. Period to File Action or Raise Defense
15
III. Effects of Nullity ..................................16
Chapter V. Voidable Marriages .....................18
I. Grounds for Annulment (Art. 45, FC) ..18
II. Marriage When One Spouse Absent ..21
III. Effects of Pending Actions/Decree
(Art. 49, FC) .................................................22
IV. Voidable v. Void Marriage...................23
V. Voidable v. Legal Separation..............23
VI. Jurisdiction ..........................................23
Chapter VI. Legal Separation, Divorce and De
Facto Separation............................................24
I. Grounds for Legal Separation.............24
II. Defenses .............................................25
III. When to File/Try Actions.....................25
IV. Effects of Filing Petition for Legal
Separation....................................................25
V. Effects of Decree for Legal Separation
25
VI. Reconciliation......................................26
VII. Divorce............................................26
VIII. De Facto Separation.......................27
Chapter VII. Rights and Obligations Between
Husband and Wife..........................................28
I. Obligations of Spouses (Arts. 68-71, FC)
28
II. Rights of Spouses (Arts. 72-73, FC) ...28
III. Use of Surname ..................................28
Chapter VIII. Property Relations Between
Spouses ..........................................................29
I. General Provisions..............................29
II. Donations by Reason of Marriage ......30
III. Absolute Community of Property ........ 31
IV. Conjugal Partnership of Gains............ 34
V. Separation of Properties During
Marriage....................................................... 38
VI. Property regime of unions without
marriage....................................................... 39
Chapter IX. The Family and the Family Home
......................................................................... 41
I. Family.................................................. 41
II. Family Home....................................... 41
Chapter X. Paternity and Filiation ................ 43
I. Kinds of Filiation.................................. 43
II. Impugning Legitimacy (Art. 166) ......... 43
III. Proof of Filiation (Arts. 172 and 175 (1))
44
IV. Legitimation (Arts. 177 and 182)......... 45
V. Rights of Legitimate and Illegitimate
Children (SSS)............................................. 45
Chapter XI. Adoption ..................................... 46
I. RA 8552: Domestic Adoption Act of
1998 46
II. Adoption Procedure under RA 8552 IRR
(Secs. 10-32) ............................................... 47
III. RA 8043: Inter-Country Adoption Act of
1995 49
Chapter XII. Support ...................................... 51
I. Support................................................ 51
II. Who are Obliged to Support Each Other
(Art. 195)...................................................... 51
III. Properties Answerable for Support (Art.
197-198) ...................................................... 52
IV. Order of Support (SDAB) .................... 52
Chapter XIII. Parental Authority.................... 53
I. Parental Authority ............................... 53
II. Substitute and Special Parental
Authority....................................................... 54
III. Suspension or Termination of Parental
Authority....................................................... 55
IV. Rights and Duties of Children ............. 55
Chapter XIV. Funerals.................................... 56
I. General Guidelines ............................. 56
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Chapter I. Concept of Succession................59
I. Definition of Succession (Art. 774, CC)
59
II. Opening of Succession (Art. 777, CC) 59
III. Kinds of Succession (Art. 778, CC) ....59
IV. Heirs....................................................60
Chapter II. Testamentary Succession..........61
I. Concept ...............................................61
II. Testamentary Capacity .......................61
III. Formalities of Wills..............................61
IV. Qualifications of Witnesses to a Notarial
Will 62
V. Qualifications of Witnesses to a Notarial
Will 63
VI. Institution of Heirs ...............................63
VII. Applicable Principles of Private
International Law .........................................63
VIII. Codicils and Incorporation by
Reference ....................................................64
IX. Revocation of Wills and Testamentary
Dispositions..................................................64
X. Allowance and Disallowance of Wills..65
XI. Substitution of Heirs............................66
XII. Legitimes.........................................67
XIII. Preterition........................................69
XIV. Reserva Troncal .............................69
XV. Disinheritance .................................70
XVI. Legacies and Devises.....................71
Chapter III. Intestate Succession..................74
I. Causes for Legal or Intestate
Succession...................................................74
II. The Intestate or Legal Heirs................74
III. Fundamental Underlying Principles in
Legal or Intestate Succession......................74
IV. Relationship (Arts. 963-969, CC) ........75
V. The Right of Representation (Art. 970,
CC) 75
VI. Order of Legal or Intestate Succession
76
VII. Concurrence in Legal or Intestate
Succession...................................................77
VIII. Outline of Intestate Shares .............77
IX. Order of Concurrence in the Case of an
Adopted Child (Art, 190, FC) .......................78
Chapter IV. Provisions Common to
Testamentary and Intestate Succession .....79
I. Accretion .............................................79
II. Capacity to Succeed ...........................80
III. Acceptance and Repudiation of
Inheritance ...................................................81
IV. Collation (Arts. 1061-1077, CC)..........81
Chapter V. Partition and Distribution of
Estate .............................................................. 83
I. Concept of Partition ............................ 83
II. Effects of Partition............................... 84
III. Nullification of Partition ....................... 84
IV. Important Periods in Partition ............. 85
Chapter VI. Application of the Important
Concepts through Sample Computational
Problems......................................................... 86
I. Institution of Heirs ............................... 86
II. Legitimes............................................. 86
III. Intestate Succession........................... 87
IV. Accretion ............................................. 87
V. Collation .............................................. 88
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Chapter I. General Provisions.......................91
I. Obligations ..........................................91
II. Sources of Obligations........................91
Chapter II. Nature and Effect of Obligations93
I. Kinds of Prestations ............................93
II. Breach of Obligation............................94
III. Fortuitous Event (Force Majeure) .......96
IV. Remedies to Creditors ........................96
V. Usurious Transactions and Rules on
Interest .........................................................97
Chapter III. Different Kinds of Obligations ..98
I. Pure and Conditional Obligations .......98
II. Reciprocal Obligations ......................100
III. Obligations with a Period ..................100
IV. Alternative and Facultative Obligations
101
V. Joint and Solidary Obligations ..........103
Effects of Prejudicial and Beneficial Acts
(Art.1212) ...................................................105
VI. Divisible and Indivisible Obligations..106
VII. Oblligations with a Penal Clause ..106
Chapter IV. Extinguishment of Obligations
.......................................................................107
I. Payment or Performance..................107
II. Loss or Impossibility..........................109
III. Condonation or Remission of the Debt
109
IV. Confusion or Merger of Rights ..........110
V. Compensation...................................110
VI. Novation ............................................111
Charts: Payment & Performance................114
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Chapter I. General Provisions.....................122
I. Classification of Contracts.................122
II. Elements of Contracts.......................123
III. Stages of Contracts...........................123
IV. Charactertics of Contracts (MARCO) 123
Chapter II. Essential Requisites .................125
I. Consent .............................................125
II. Object ................................................127
III. Cause................................................127
Chapter III. Forms of Contracts ..................129
I. Rules .................................................129
II. Kinds of Formalities...........................129
Chapter IV. Reformation of Contracts........130
Chapter V. Interpretation of Contracts.......130
Chapter VI. Defective Contracts .................131
I. Rescissible Contracts (Arts. 1380-1389)
131
II. Voidable Contracts (Arts. 1390-1402)
132
III. Unenforceable Contracts (Arts. 1403-
1408) ..........................................................133
IV. Void or Inexistent Contracts (Arts. 1409-
1422) ..........................................................134
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Chapter I. Definition and Classification of
Property.........................................................137
I. Definition ...........................................137
II. Classification.....................................137
Chapter II. Ownership..................................144
I. Definition ...........................................144
III. Specific Rights under the Civil Code.144
IV. Limitations on Real Right of Ownership
146
Chapter III. Accession..................................147
I. Definition ...........................................147
II. General Principles of Accession .......147
III. Kinds of Accession............................147
IV. Principles Governing Each Kind of
Accession...................................................147
Chapter IV. Quieting of Title........................152
I. In General .........................................152
II. Purpose.............................................152
III. Nature: Quasi in Rem........................152
IV. Requisites .........................................152
V. Prescription of Action ........................153
Chapter V. Co-Ownership............................154
I. Definition ...........................................154
II. Characteristics ..................................154
III. Difference between Co-ownership and
Joint Tenancy.............................................155
IV. Difference between Co-ownership and
Partnership.................................................155
V. Sources of Co-Ownership.................155
VI. Rights of Each Co-owner over the Thing
or Property Owned in Common.................157
VII. Implication of Co-owners Right over
His Ideal Share ..........................................161
VIII. Rules on Co-Ownership Not
Applicable to CPG or ACP.........................161
IX. Special Rules on Ownership of Different
Stories of a House as Differentiated from
Provisions of the Condominium Act...........162
X. Extinguishment of Co-Ownership .....166
Chapter VI. Possession ...............................168
I. Definition ...........................................168
II. Degrees of Possession .....................169
III. Classes of Possession......................169
IV. Cases of Possession.........................169
V. What Things May be Possessed ......170
VI. What May Not Be Possessed by Private
Persons......................................................171
VII. Acquisition of Possession.............171
VIII. Effects of Possession ...................173
IX. Effects of Possession in the Concept of
Owner ........................................................177
X. Presumption in Favor of the
Possessorfor Acquisitive Prescription....178
XI. Possesion May Be Lost By ...............179
Chapter VII. Usufruct ................................... 181
I. Concept............................................. 181
II. Characteristics .................................. 181
III. Usufruct Distiguished from Lease and
Servitude.................................................... 181
IV. Classes of Usufruct........................... 182
V. Rights of Usufructuary ...................... 184
VI. Rights of the Naked Owner............... 186
VII. Obligations of the Usufructuary .... 187
VIII. Special Cases of Usufruct ............ 190
IX. Extinguishment of Usufruct ............... 192
X. Conditions Not Affecting Usufruct ..... 194
Chapter VIII. Easement ................................ 196
I. Concept............................................. 196
II. Essential Features ............................ 196
III. Classification of Servitudes............... 197
IV. General Rules Relating to Servitudes
198
V. Modes of Acquiring Easements ........ 198
VI. Rights and Obligations of Owners of
Dominant and Servient Estates................. 199
VII. Modes of Extinguishment of
Easements................................................. 200
VIII. Legal Easements.......................... 202
Chapter IX. Nuisance................................... 212
I. Definition ........................................... 212
II. Classes ............................................. 212
III. Liability in Case of Nuisance............. 213
IV. Regulation of Nuisances................... 214
Chapter X. Modes of Acquiring Ownership
....................................................................... 217
I. Mode v. Title ..................................... 217
II. Mode ................................................. 217
Chapter XI. Donation ................................... 222
I. Nature ............................................... 222
II. Requisites ......................................... 222
III. Kinds ................................................. 222
IV. Who May Give or Receive Donations
223
V. Who May Not Give or Receive
Donations................................................... 224
VI. Acceptance ....................................... 225
VII. Form ............................................. 225
VIII. What May Be Donated ................. 225
IX. Effect ................................................. 226
X. Revocation and Reduction................ 227
Chapter XII. Lease........................................ 232
I. General Characteristics .................... 232
II. Kinds ................................................. 232
III. Lease of Things ................................ 232
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Table of Contents
Chapter I: Background, Basic Concepts and
General Principles........................................239
I. Definitions and Basic Concepts ........239
II. Nature and stages.............................240
III. Purpose of Registration.....................240
IV. Modes of Acquiring Land Titles.........240
V. Jurisdiction ........................................240
Chapter 2: Torrens Certificate of Title .......241
I. Original Certificate of Title or OCT....241
II. Transfer Certificate of Title................241
III. Patents ..............................................241
Chapter 3: Original Registration.................242
I. Laws Governing Land Registration...242
II. Effect of Registration.........................242
III. Original Registration Proceeding ......242
IV. Attributes of and Limitation In Certificate
of Title and Registered Land (FIIC) ...........247
V. Judicial Confirmation of Imperfect or
Incomplete Titles............................249
Chapter 4: Cadastral Registration
Proceedings..................................................251
I. Steps in Cadastral Registration
Proceedings...............................................252
Chapter 5: Subsequent Registration..........253
I. Two Types of Dealings......................253
II. Necessity and Effects of Registration
253
III. Voluntary vs. Involuntary Dealings..253
IV. Registration of Voluntary Instruments in
General ......................................................254
V. Registration of Deeds of Sale and
Transfers....................................................255
VI. Mortgages and Leases......................256
VII. Powers of Attorney; Trusts ...........257
VIII. Involuntary Dealings .....................257
Chapter 6: System of Registration of
Unregistered Lands ..................................... 261
I. Key Points......................................... 261
II. Procedure ......................................... 261
Chapter 7: Registration of Public Lands ... 262
I. Classification of Land of the Public
Domain ...................................................... 262
II. Nature of Title to Public Lands
Conveyed .................................................. 262
III. Procedure of Conveying Public Land to
a Private Person........................................ 262
IV. Director of Lands: Quasi-judicial officer
263
V. Modes of Alienating Public Lands:.... 263
VI. Patents ......................................... 263
Chapter 8: Remedies of the Aggrieved Party
....................................................................... 264
Chapter 9: Reconstitution 0f Titles ........... 266
I. Grounds ............................................ 266
II. Petitions for Reconstitution............... 266
III. Duties of the Land Registration Authority
266
IV. Effects of Fraud, Deceit and
Machination in the Reconstitution of Titles 266
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Chapter I. The Contract of Sale ..................269
I. Definition (Art 1458, CC) ...................269
II. Elements ...........................................269
III. Stages ...............................................274
IV. Kinds of Sale.....................................275
V. Form..................................................276
VI. Sale Distinguished From Other
Contracts....................................................276
Chapter II. Obligations of the Seller and
Buyer .............................................................278
I. Obligations of the Seller ....................278
II. Obligations of the Buyer....................284
Chapter III. Double Sales.............................286
I. General Rule.....................................286
II. Requisites .........................................286
III. Rules Governing Sale of Movables,
Immovables and Unregistered Lands........286
Chapter IV. Risk of Loss..............................288
I. General Rule.....................................288
II. Exceptions.........................................288
Chapter V. Documents of Title....................289
I. In General .........................................289
II. Negotiable Documents of Title..........289
III. Non-Negotiable Documents of Title..289
Chapter VI. Remedies of the Seller and Buyer
.......................................................................291
I. General Remedies (Art. 1191, CC) ...291
II. Remedies of the Seller......................291
III. Remedies of the Buyer......................295
Chapter VII. Extinguishment of Sale ..........298
I. In General .........................................298
II. Conventional Redemption.................298
III. Equitable Mortgage...........................299
IV. Legal Redemption.............................300
Chapter VIII. Philippine Bulk Sales Law (Act
3952) ..............................................................303
I. Purpose.............................................303
II. Coverage...........................................303
III. Duty of Seller.....................................303
IV. Effect of non-compliance...................304
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Chapter I. General Principles......................307
I. Types of Credit Transactions ............307
II. Security .............................................307
III. Bailment ............................................307
Chapter II. Loan (Arts. 1933-1961, CC).......309
I. Definition ...........................................309
II. Characteristics of a Loan ..................309
III. Kinds of Loan: In General .................309
IV. Commodatum....................................309
V. Obligations of the Bailee in
Commodatum ............................................310
VI. Obligations of the Bailor in
Commodatum ............................................311
VII. Mutuum or Simple Loan................311
VIII. Interests ........................................312
IX. The Usury Law..................................312
Chapter III. Deposit ......................................314
I. Definition ...........................................314
II. Kinds of Deposit ................................314
III. Characteristics of Deposit .................314
IV. Deposit Distinguished From Mutuum
and Commodatum.....................................314
V. Obligations of the Depositary............314
VI. Obligations of the Depositor..............317
VII. Extinguishment of Deposit (Art. 1995)
317
VIII. Necessary Deposit........................317
IX. Judicial Deposit .................................318
Chapter IV. Guaranty ...................................319
I. Definition ...........................................319
III. Classification.....................................319
IV. Rules Governing Guaranty ...............319
V. Guaranty Distinguished from Others.322
VI. The Guarantor (Arts. 2056-2057)......322
VII. Effects of Guaranty.......................322
VIII. Extinguishment of Guaranty .........325
Chapter V. Legal and Judicial Bonds.........326
Chapter VI. Suretyship.................................327
Chapter VII. Pledge, Mortgage, Antichresis
.......................................................................328
I. Essential Requisites Common to Pledge
and Mortgage (Art. 2085)...........................328
II. Pledge...............................................329
III. Mortgage ...........................................332
IV. Foreclosure of Mortgage (Art. 2085).334
V. Antichresis.........................................336
VI. Chattel Mortgage...............................336
Chapter VIII. Concurrence and Preference of
Credits........................................................... 338
I. General Provisions............................ 338
II. Classification of Credits .................... 338
III. Preference of Credits........................ 338
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Chapter I. Nature, Form, and Kinds of Agency
.......................................................................341
I. Definition [Art. 1868, CC] ..................341
II. Purpose.............................................341
III. Characteristics [CNPPBF].................342
IV. Essential Elements............................342
V. Determination of Existence of Agency
342
VI. Agency v Similar Contracts...............343
VII. Kinds.............................................344
Chapter II. Obligations of the Agent...........348
I. To Carry Out the Agency ..................348
III. To Advance the Necessary Funds [Art.
1886, CC] ...................................................349
IV. To Act in Accordance with Principals
Instructions.................................................349
V. To Prefer Interest of Principal Over
Personal Interest........................................349
VI. To Render Accounts and Deliver Things
Received by Virtue of the Agency..............349
VII. To Be Responsible for Substitutes350
VIII. To Pay Interest .............................350
IX. To Answer for His Negligence or Fraud
[Art. 1909, CC] ...........................................350
X. Special Obligations of Factor/
Commission Agents...................................350
Chapter III. Liabilities of the Agent .............352
I. Liability to Third Persons...................352
II. Liability to the Principal .....................352
III. Liability of Two or More Agents.........353
Chapter IV. Obligations of the Principal ...354
I. To Comply with the obligations
contracted by the agent .............................354
II. To Advance the Necessary Sums and
Reimburse the Agent .................................355
III. To Indemnify the Agent for Damages355
IV. To Pay the Agents Compensation ...356
V. To Be Solidarily Liable ......................356
Chapter V. Extinguishment of Agency......357
Extinguishment of Agency [EDWARD] ......357
I. Expiration of the period for which it was
constituted..................................................357
II. Death, civil interdiction, insanity,
insolvency ..................................................357
III. Withdrawal of the agent ....................357
IV. Accomplishment of the object of the
agency .......................................................357
V. Revocation ........................................357
VI. Dissolution of the firm/corp. Which
entrusted/accepted the agency..................358
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Table of Contents
Chapter I. Nature, Creation, Kinds of
Partnership ...................................................361
I. Essential Features ............................361
III. Distinctions........................................362
IV. Rules to Determine Existence...........363
V. How Partnership is Formed ..............363
VI. Partnership Term ..............................363
VII. Kinds of Partnerships....................363
Chapter II. Obligations of the
Partnership/Partners Among Themselves 366
CRRAMP-LS..............................................366
I. Make Contributions as Promised......366
III. Manage the Partnership....................367
IV. Render Full Information.....................368
V. Account for benefits ..........................368
VI. Reimburse expenses ........................368
VII. Liable for Partnership Contracts ...368
VIII. Solidarily Liable with Partnership.369
Chapter III. Obligations of the
Partnership/Partners as to Third Persons.370
LANN .........................................................370
I. Operate Under a Firm Name (Art. 1815,
CC) 370
II. Bound by Partnership Admission......370
III. Bound by Notice Partner ...................370
IV. Liable for Acts of the Partnership......370
Chapter IV. Rights of Partners...................371
I. Share in Losses and Profits ..............371
II. Associate Another in His Interest ......371
III. Access to Partnership Books ............371
IV. Obtain Formal Account .....................371
V. Property Rights .................................371
VI. Convery Real Property (Art. 1819, CC)
372
Chapter V. Rights of the Partnership........374
I. Acquire Immovables..........................374
II. Preference of Creditors.....................374
Chapter VI. Dissolution and Winding Up..375
I. Definitions .........................................375
II. Causes for Dissolution ......................375
III. Consequences of Dissolution ...........375
IV. Partners Liability...............................376
Chapter VII. Rights of Partners Upon
Dissolution....................................................377
I. Right to Wind Up...............................377
II. Right to Damages for or to Continue
Business on Wrongful Dissolution .............377
III. Right to Lien or Retention, to Stand in
Place of Creditor, to be Indemnified .......... 377
IV. Right of Retiring/Deceased Partner (Art.
1841, CC) .................................................. 377
V. Right of Account (Art. 1842, CC) ...... 378
Chapter VIII. Rules on Settlement (Art. 1839,
CC)................................................................. 379
Chapter IX. Limited Partnership................ 380
I. Definition ........................................... 380
II. Forming/Amending a Limited
Partnership (Art. 1844, CC) ....................... 381
III. Limited Partner.................................. 382
IV. General Partner ................................ 384
V. Dissolution ........................................ 384
VI. Settling Accounts for Dissolution ...... 385
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Chapter I. Introduction, Definitions............388
A. Tort and Quasi-Delict ........................388
B. Damages...........................................389
Chapter II. Concept of Quasi-Delict............390
A. Elements ...........................................390
B. Distinguished.....................................390
Chapter III. Negligence ................................392
A. Concept of Negligence......................392
B. Degrees of Negligence......................393
C. Proof of Negligence...........................393
D. Defenses ...........................................394
Chapter IV. Causation..................................396
A. Proximate Cause...............................396
Chapter V. Persons Liable...........................399
A. The Tortfeasor...................................399
B. Vicarious Liability ..............................399
C. Specific Liability.................................403
D. Joint and Solidary Liability ................407
E. Civil Liability Arising From Crime...........407
F. Prescription .......................................408
Chapter VI. Tortious Interference With
Contract.........................................................409
Chapter VII. Torts with Independent Civil
Action ............................................................410
A. Violation of Civil and Political Rights.410
B. Defamation, Fraud, Physical Injuries 410
Chapter VIII. Human Relations Provisions 413
A. Abuse of Rights.................................413
B. Acts Contra Bonus Mores .................413
Other Torts ...............................................414
C. Dereliction of Duty.............................414
D. Illegal Acts.........................................414
E. Unfair Competition ............................414
F. Violation of Human Dignity................414
Chapter IX. Damages ...................................415
A. Definition and Concept......................415
B. Kinds of Damages.............................415
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Chapter I. Introduction.................................427
Chapter II. Jurisdiction ................................429
I. Bases of Exercise of Judicial Jurisdiction
429
II. Exercise of Jurisdiction .....................429
III. Ways of Dealing with Jurisdiction in a
Conflicts Problem.......................................430
Chapter III. Choice of Law...........................431
I. Approaches to Choice of Law...........431
Chapter IV. Characterization.......................433
I. Types of Characterization .................433
II. Depecage..........................................433
Chapter V. Renvoi ........................................434
I. Definition ...........................................434
II. Ways of Dealing with Renvoi ............434
Chapter VI. Notice and Proof of Foreign Law
.......................................................................435
I. Proof of Foreign Law.........................435
II. Exceptions to the Application of Foreign
Law 435
Chapter VII. Nationality................................436
I. Determination of Nationality..............436
II. Procedure for Naturalization .............436
III. Loss of Philippine Citizenship ...........437
IV. Problems in Applying the Nationality
Principle .....................................................438
Chapter VIII. Domicile ..................................439
I. Domicile ............................................439
II. Comparative Merits and Demerits of
Domicile and Nationality ............................440
Chapter IX. Principles on Personal Status
and Capacity.................................................441
I. Definition ...........................................441
II. Beginning and End of Personality.....441
III. Absence ............................................441
IV. Name.................................................442
V. Age of Majority ..................................442
VI. Capacity ............................................442
Chapter X. Family Relations........................443
I. Marriage............................................443
II. Divorce and Separation.....................445
III. Annulment and Declaration of Nullity445
IV. Parental Relations.............................446
V. Adoption ............................................446
Chapter XI. Property .................................... 447
I. Controlling LawLex Situs/Lex Rei
Sitae447
II. Exceptions to Lex Situs..................... 447
III. Situs of Certain Properties................ 447
Chapter XII. Contracts ................................. 449
I. Extrinsic Validity of Contracts ........... 449
II. Extrinsic Validity of Contracts ........... 449
III. Capacity to Enter Into Contracts....... 449
IV. Choice of Law Issues in Conflicts
Contracts Cases ........................................ 449
V. Limitation Choice of Law................... 450
VI. Applicable Law in the Absence of
Effective Choice......................................... 450
Chapter XIII. Succession............................. 451
I. Extrinsic Validity (Arts. 17, 815-817, CC)
451
II. Intrinsic Validity................................. 451
III. Interpretation of Wills ........................ 451
IV. Revocation ........................................ 451
V. Probate.............................................. 451
VI. Administration of Estates .................. 452
VII. Trusts............................................ 452
Chapter XIV. Torts and Crimes................... 453
I. Torts.................................................. 453
II. Crimes............................................... 454
Chapter XV. Torts and Crimes.................... 455
I. Personal Law of Corporations .......... 455
II. Domicile/Residence of Corporations 455
III. Jurisdiction Over Foreign Corporations
455
IV. Right of Foreign Corporations to Bring
Suit 456
Chapter XVI. Foreign Judgments............... 457
I. Recognition v. Enforcement.............. 457
II. Bases of Recognition and Enforcement
457
III. Policy of Preclusion Underlying
Recognition and Enforcement ................... 457
IV. Requisites for Recognition or
Enforcement .............................................. 457
V. Procedures for Enforcement ............. 457
VI. Effect of Foreign Judgment in the
Philippines ................................................. 458
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Table of Contents
Chapter I. Civil Personality..............................3
I. Concept and Classes of Persons..........3
Thereon..........................................................5
Chapter II. Citizenship and Domicile..............8
I. Who are Filipinos ..................................8
II. Domicile ................................................8
Chapter III. Marriage.........................................9
I. Definition and Nature of Marriage.........9
II. Requisites of Marriage ..........................9
III. Marriages Solemnized Abroad............11
IV. Presumption of Marriage.....................11
Chapter IV. Void Marriages ...........................13
I. Grounds ..............................................13
II. Period to File Action or Raise Defense
15
III. Effects of Nullity ..................................16
Chapter V. Voidable Marriages .....................18
I. Grounds for Annulment (Art. 45, FC) ..18
II. Marriage When One Spouse Absent ..21
(Art. 49, FC) .................................................22
IV. Voidable v. Void Marriage...................23
V. Voidable v. Legal Separation..............23
VI. Jurisdiction ..........................................23
Chapter VI. Legal Separation, Divorce and De
Facto Separation............................................24
I. Grounds for Legal Separation.............24
II. Defenses .............................................25
III. When to File/Try Actions.....................25
Separation....................................................25
V. Effects of Decree for Legal Separation
25
VI. Reconciliation......................................26
VII. Divorce............................................26
VIII. De Facto Separation.......................27
Chapter VII. Rights and Obligations Between
Husband and Wife..........................................28
I. Obligations of Spouses (Arts. 68-71, FC)
28
II. Rights of Spouses (Arts. 72-73, FC) ...28
III. Use of Surname ..................................28
Spouses ..........................................................29
I. General Provisions..............................29
II. Donations by Reason of Marriage ......30
III. Absolute Community of Property ........ 31
IV. Conjugal Partnership of Gains............ 34
Marriage....................................................... 38
VI. Property regime of unions without
marriage....................................................... 39
Chapter IX. The Family and the Family Home
......................................................................... 41
I. Family.................................................. 41
II. Family Home....................................... 41
Chapter X. Paternity and Filiation ................ 43
I. Kinds of Filiation.................................. 43
II. Impugning Legitimacy (Art. 166) ......... 43
III. Proof of Filiation (Arts. 172 and 175 (1))
44
IV. Legitimation (Arts. 177 and 182)......... 45
Children (SSS)............................................. 45
Chapter XI. Adoption ..................................... 46
1998 46
II. Adoption Procedure under RA 8552 IRR
(Secs. 10-32) ............................................... 47
III. RA 8043: Inter-Country Adoption Act of
1995 49
Chapter XII. Support ...................................... 51
I. Support................................................ 51
II. Who are Obliged to Support Each Other
(Art. 195)...................................................... 51
III. Properties Answerable for Support (Art.
197-198) ...................................................... 52
IV. Order of Support (SDAB) .................... 52
Chapter XIII. Parental Authority.................... 53
I. Parental Authority ............................... 53
Authority....................................................... 54
III. Suspension or Termination of Parental
Authority....................................................... 55
IV. Rights and Duties of Children ............. 55
Chapter XIV. Funerals.................................... 56
I. General Guidelines ............................. 56
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Chapter I. Civil Personality
I. CONCEPT AND CLASSES OF PERSONS
A. NATURAL PERSONS
B. JURIDICAL PERSONS
II. CAPACITY AND RESTRICTIONS THEREON
A. PRESUMPTIONS OF CAPACITY
B. RESTRICTIONS
1. MINORITY
2. INSANITY
3. BEING DEAF-MUTE
4. PRODIGALITY
5. CIVIL INTERDICTION
6. FAMILY RELATIONS
7. ABSENCE
I. Concept and Classes of Persons
Concept of Persons
Personality is the quality derived from
being a person; it is an attribute of
persons.
Characteristics
1. It is not a being, but a quality of certain
beings.
1. It is not a physical element, but a juridical
concept.
2. It is not an object of contract, or of
possession, and cannot be impaired by
agreement.
2. It is a matter of public interest.
Article 37, Civil Code. 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.
Kinds of Juridical Capacity
1. Juridical Capacity:
aka as Legal Capacity/Personality =
Fitness of man to be the subject of legal
relations
It refers to the aptitude for the holding
and enjoyment of rights.
It is inherent in every natural person
and is lost only through death. This
attaches to man by the mere fact of his
being a man.
2. Capacity to Act:
It refers to the power to do acts with
legal effect.
It is conditional and variable. It is
acquired and may be lost. It requires
both intelligence and will.
Note: Juridical capacity can exist even
without capacity to act; the existence of
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Prof. Carolina Austria
Faculty Editor
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the latter implies that of the former. The
capacity or incapacity of persons depends
upon the law. Both juridical capacity and
capacity to act are not rights but qualities of
persons; hence, they cannot be renounced.
A. Natural Persons (asked in 99 bar exam)
General Rule: Birth determines personality (Art
40). Death extinguishes civil personality (Art
42).
Exception: a conceived child shall be
considered born for all purposes that are
FAVORABLE to it, provided it be born
later (Art 40, 2nd clause) with the following
circumstances:
a. From the time it is completely delivered
from the mother's womb.
b. But if the fetus had an intra-uterine life
of less than seven months, it should
survive for at least 24 hours after its
complete delivery. (Art. 41, CC)
Article 40, Civil Code. 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.
Birth = complete removal of the fetus from the
mothers womb; before birth, a fetus is merely
part of the mothers internal organs
Personality of Conceived Child
1. Limited = only for purposes FAVORABLE to
it
2. Conditional = it depends upon the child
being born alive later
Period of Conception = the first 120 days of
the 300 days preceding the birth of the child
A conceived child can acquire rights while still in
the mothers womb. It can inherit by will or by
intestacy.
Geluz v CA, (1961)
An aborted fetus had conditional personality but
never acquired legal rights/civil personality
because it was not alive at the time of delivery
from the mothers womb. No damages can be
claimed in behalf of the unborn child.
Article 41, Civil Code For civil purposes, the fetus
is considered born if it is alive at the time it is
completely delivered from the mother's womb.
However, if the fetus had an intra-uterine life of less
than seven months, it is not deemed born if it dies
within twenty-four hours after its complete delivery
from the maternal womb.
Complete respiration = test/sign of
independent life
Note: For a fetus that had an intra-uterine life
of less than seven months, it is necessary
that it lives for at least 24 hours, for it to be
considered born.
Article 42, Civil Code. 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.
People v. Tirol, (1981)
Criminal liability ends with death BUT civil
liability may be charged against the estate.
Article 43, Civil Code. 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.
Note: Article 43 provides a statutory
presumption when there is doubt on the
order of death between persons who are
called to succeed each other (only).
Joaquin v. Navarro, (1948)
The statutory presumption of Article 43 was not
applied due to the presence of a credible
eyewitness as to who died first.
Presumption in the Rules of Court (Rule 123,
sec. 69, par. ii)
Age Presumed Survivor
1. Both under 15 Older
2. Both above 60 Younger
3. One under 15, the
other above 60
One under 15
4. Both over 15 and
under 60; different
sexes
Male
5. Both over 15 and
under 60; same sex
Older
6. One under 15 or
over 60, the other
between those ages
One between 15 and 60
Note: Applicable only to two or more persons
who perish in the same calamity, and it is
not shown who died first, and there are no
particular circumstances from which it can
be inferred.
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B. Juridical Persons
Juridical Persons (Art 44, Civil Code)
1. The State and its Political subdivisions;
2. Other Corporations, Institutions and Entities
for public interest or purpose, created by
law;
3. Corporations, Partnerships, and
Associations for private interest or purpose
to which the law grants a juridical
personality.
Governing Laws (Art 45, Civil Code)
Juridical Person Governed by
1. State Constitution (defines its
organization and limits its
rights vis--vis citizens)
2. Political
Subdivision
Charter creating them
3. Public
Corporation
Charter creating them
4. Private
Corporation
Corporation Code, Articles of
Incorporation and By-Laws
5. Partnerships Stipulations of the parties and
suppletorily by the general
provisions on partnership of
the Civil Code
Rules
1. Juridical persons may acquire and
possess property of all kinds, incur
obligations, and bring civil or criminal
actions (Art. 46, CC)
2. Upon dissolution of corporations or
institutions and other entities for public
interest, their property and assets shall be
disposed of in pursuance of the law or
charter creating them. (Art. 47, CC)
Thereon
A. Presumption of Capacity
Standard Oil Co. v. Arenas, (1911)
Capacity to act is presumed until the contrary is
proven, and that it be the reason for the specific
act attributed. Proof of restriction: habituality,
presence at the time, no other cause
B. Restrictions
Article 38, Civil Code. 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.
Article 39, Civil Code. 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. The
consequences of these circumstances are governed
in this Code, other codes, the Rules of Court, and in
special laws.
Capacity to act is not limited on account of religious
belief or political opinion.
A married woman, twenty-one years of age or over,
is qualified for all acts of civil life, except in cases
specified by law.
General Rule: Incapacitated persons are not
exempt from certain obligations arising from
his acts or property relations.
________________
1. Minority
RA 6809 (1989): An act lowering the age of
majority from twenty-one to eighteen years.
Effects on Contracts
a. they cannot give consent to a contract
[Art 1327 (1), CC]
b. a contract where one of the parties is a
minor is voidable [Art 1390(1),CC]
c. a contract is unenforceable when both
of the parties are minors (incapable of
giving consent) [Art 1403(3), CC]
d. minority cannot be asserted by the
other party in an action for annulment
(Art 1397, CC)
e. not obliged to make restitution except
insofar as he has been benefited (Art
1399, CC)
f. minor has no right to demand the
thing/price voluntarily returned by him
(Art 1426, CC)
g. minor has no right to recover
voluntarily paid sum or delivered thing, if
consumed in good faith (Art 1427, CC)
h. must pay reasonable amount for
necessaries delivered to him (Art 1489,
CC)
Mercado v. Espiritu, (1918)
Estoppel works against minors who
misrepresent their ages in a contract
and are compelled to comply with its
terms.
Bambalan v. Maramba, (1928)
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When a minor made no active
misrepresentation as to his minority and
such minority is known to the other
party, the contract is voidable (Art 1403)
as to the minor.
Braganza v. Villa Abrille, (1959)
Minors are obliged to make restitution
insofar as they have been benefited (Art
1399)
Effects on Marriage
a. May not yet contract marriage (Art 5,
FC)
b. marriages, where one of the parties is
below 18, even with the consent of
parents/guardians, are VOID (Art 35,
FC)
2. Insanity
Insanity includes many forms of mental
disease, either inherited or acquired. A
person may not be insane but only mentally
deficient (idiocy, imbecility, feeble-
mindedness).
Effect on Contracts
a. incapacity to give consent to a
contract [Art 1327(2), CC]
b. contracts entered into during lucid
intervals are valid (Art. 1328, CC)
c. restitution of benefits (Art 1399, CC)
Effect on Crimes
a. General rule: EXEMPTED from criminal
liability
b. Exception: acted during lucid interval
Effect on Marriage
a. may be annulled if either party was of
unsound mind unless the such party
after coming to reason, freely cohabited
with the other [Art 45(2), FC]
b. action for annulment of marriage must
be filed by the sane spouse who had no
knowledge of the others insanity; or by
any relative/guardian of the insane; or
by the insane spouse during a lucid
interval or after regaining sanity [Art
47(2), FC]
3. State of Being Deaf-Mute
a. cannot give consent to a contract if
he/she also does not know how to
write [Art 1327(2), CC]
b. can make a valid WILL, provided: the
contents of the same have either been
read personally by him or communicated
to him by 2 persons (Art 807, CC)
c. cannot be a witness to the execution of
a will (Art 820, CC)
4. Prodigality
Martinez v. Martinez, (1902)
A spendthrift or a prodigal is a person,
who, by excessive drinking, gambling,
idleness or debauchery of any kind shall
so spend, waste or lessen his estate as
to expose himself or his family to want
or suffering. The acts of prodigality
must show a morbid state of mind.
Note: It is not the circumstance of
prodigality, but the fact of being under
guardianship that restricts capacity to
act.
5. Civil Interdiction
a. It is an accessory penalty imposed
upon persons who are sentenced to a
principal penalty not lower than
reclusion temporal (article 41, Revised
Penal Code).
b. offender is deprived of rights of
parental authority, or guardianship, of
marital authority, of the right to manage
his property and of the right to dispose
of such (Art 34, RPC)
c. for the validity of marriage settlements,
the participation of the guardian shall
be indispensible (Art 123, CC)
6. Family Relations
a. justifying circumstance if acted in
defense of person/rights of spouse,
ascendants, descendants,
brothers/sisters, and other relatives up
to the 4
th
civil degree [Art 11(2), RPC]
b. mitigating circumstance if acted in the
immediate vindication of a grave
offense/felony committed against his
spouse, ascendants or relatives of the
same civil degree [Art 12(5), RPC]
c. incestuous and void marriages:
between ascendants and
descendants of any degree;
between brothers and sisters,
whether full or half-blood. (Art 37,
FC)
d. donations/grants of gratuitous
advantage between spouses during
the marriage shall be VOID, except
moderate gifts during family occasions
(Art 87, FC)
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e. descendants cannot be compelled to
testify in a criminal case, against his
parents and grandparents
UNLESS: crime was against the
descendant OR by one parent
against the other (Art 215, FC)
f. spouses cannot sell property to each
other, except:
absolute separation is agreed upon
in the marriage settlements
judicial separation of property (Art
1490, CC)
7. Absence
Article 390, Civil Code. After an absence of seven
years, it being unknown whether or not the
absentee still lives, he shall be presumed dead for
all purposes, except for those of succession.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an
absence of ten years. If he disappeared after the
age of seventy-five years, an absence of five years
shall be sufficient in order that his succession may
be opened. (n)
Art. 391, Civil Code. The following shall be
presumed dead for all purposes, including the
division of the estate among the heirs:
1. A person on board a vessel lost during a
sea voyage, or an aeroplane which is
missing, who has not been heard of for
four years since the loss of the vessel or
aeroplane;
2. A person in the armed forces who has
taken part in war, and has been missing
for four years;
3. A person who has been in danger of
death under other circumstances and his
existence has not been known for four
years.
Article 124, FC
a. administration and enjoyment of the
CPG shall belong to both spouses
jointly
b. in case of disagreement, husbands
decision shall prevail, subject to
recourse to the court by the wife for
proper remedy
c. if one spouse is incapacitated/unable
to administer, sole powers of
administration may be assumed by the
other spouse.
d. General Rule: This power does not
include disposition/encumbrance.
Exception: judicial authority or
written consent of other spouse
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Chapter II. Citizenship and Domicile
(asked in 75, 81, 87, 93, 05 and 08 bar
exams)
I. WHO ARE FILIPINO CITIZENS
II. DOMICILE
A. REQUISITES OF DOMICILE
B. KINDS OF DOMICILE
I. Who are Filipinos
1. Those who are citizens of the Philippines at
the time of the adoption of the 1987
Constitution;
2. Those whose fathers or mothers are
citizens of the Philippines;
3. Those born before January 17, 1973, of
Filipino mothers, who elect Philippine
citizenship upon reaching the age of
majority; and
4. Those who are naturalized in accordance
with law. (Art IV, 1, 1987 Philippine
Constitution)
Note: These have superseded the rules on
citizenship enumerated in the Civil Code.
Citizen = owes allegiance to the state and is
entitled to its protection
II. Domicile
For Natural Persons
the place of their habitual residence (Art.
50, CC).
For Natural Persons
the place where their legal representation
is established, or where they exercise their
primary functions, unless there is a law or
other provision that fixes the domicile (Art.
51, CC).
Domicile vs. Residence
While domicile is permanent (there is intent
to remain), residence is temporary and may
be changed anytime (there is no necessary
intent to remain).
________________
A. Requisites of Domicile (Callejo v. Vera)
1. Physical Presence
2. Intent to remain permanently (animus
manendi)
B. Kinds of Domicile
1. Domicile of Origin
Domicile of parents of a person at the
time he was born.
2. Domicile of Choice
Domicile chosen by a person, changing
his domicile of origin.
A 3rd requisite is necessary intention
not to return to ones domicile as his
permanent place.
3. Domicile by Operation of Law (i.e., Article
69, domicile of minor)
Romualdez-Marcos vs. Comelec
(1995) A married woman does not
lose her domicile to her husband.
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Chapter III. Marriage
I. DEFINITION AND NATURE OF MARRIAGE
II. REQUISITES OF MARRIAGE
A. ESSENTIAL REQUISITES
B. FORMAL REQUISITES
III. MARRIAGES SOLEMNIZED ABROAD
IV. PRESUMPTION OF MARRIAGE
I. Definition and Nature of Marriage
(asked in 91, 92 and 99 bar exams)
Definition of Marriage (Art 1 FC)
What SPECIAL CONTRACT of permanent
union
Who Between a MAN and a WOMAN
How Entered into in accordance with LAW
Purpose Establishment of CONJUGAL and
FAMILY life
Significance FOUNDATION of the family and an
INVIOLABLE SOCIAL INSTITUTION
whose nature, consequences and
incidents are governed by law and not
subject to stipulations EXCEPT that
marriage settlements may fix the
property relations during the marriage
within the limits provided by this code.
Breach of Promise to Marry
(asked in 09 bar exam)
1. As a general rule breach of promise to
marry is not an actionable wrong
(Tanjanco v CA, Wassmer v Velez) and
cannot give rise to liability for damages
in line with the principle of freedom of
consent in marriage (Art 2(2) Family
Code). (Reyes)
2. However damages may be claimed based
on the principles laid down in Art 19-21 &
2176 of the CC
Art. 19, Civil Code. 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.
Art. 20, Civil Code. Every person who, contrary to
law, wilfully or negligently causes damage to another
shall indemnify the latter for the same.
Art. 21, Civil Code. 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.
Art. 2176, Civil Code. Whoever by act or omission
causes damage to another, there being fault or
negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this
Chapter.
EXPENSES or other incidents that
directly arose from the contract to marry
can be claimed IF the breach of promise
was done in a manner considered as
contrary to morals, good customs or
public policy (cost of wedding
preparations). (Wassmer v Velez)
LOST WAGES arising from voluntary
dismissal in anticipation of marriage can
be sued for. (Tanjanco v CA)
EXPENSES made for the renovation of
an anticipated conjugal home can be
sued for. (Piccininni v. Hajus-US
Jurisprudence)
II. Requisites of Marriage
(asked in 76, 82, 89, 90, 99, 02, 04, 07,
and 09 bar exams)
A. Essential Requisites of Marriage
Essential Requisites [LC]
1. Legal Capacity of the contracting parties,
who must be a male and a female
2. Consent (of the parties) freely given in the
presence of a solemnizing officer. (Art. 2
FC)
Legal Capacity
Male or female>=18, not under any
impediments mentioned in Art 37
(incestuous marriage) & Art 38 (marriage
against public policy), may contract
marriage. (Art 5)
Must be Male and Female
1. Jones v Hallahan, (1973): Application for
marriage license was denied since marriage
is defined by law as a contract entered into
between a man and a woman.
2. Silverio v Republic, (2007): Changing of
gender in ones birth certificate was denied;
otherwise, it would result in confusion and
would allow marriage between persons of
the same sex which is in defiance of the law,
as marriage is a union between a man and a
woman.
Note: The best source for citing the requirement
(of male/female) is still statutory, as provided
explicitly in the Family Code.
Consent Freely Given
People v Santiago, (51 Phil 68): A marriage
entered into by a person whose real intent is
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to avoid prosecution for rape is void for total
lack of consent. The accused did not intend
to be married. He merely used such
marriage to escape criminal liability.
Absence and Defect of Essential
Requisites
Absence Defect
Effect VOID VOIDABLE
Illustration ! marriage
entered into by
a person <18
(Art 35 (1))
! marriage
entered into by
persons of the
same sex
(Jones v
Hallahan)
! marriage
contracted
through mistake
of one
contracting
party as to the
identity of the
other
(Art 35 (5))
! consent of
either party
was obtained
through fraud,
force,
intimidation or
undue
influence
(Art 45 (3)
(4)FC)
B. Formal Requisites of Marriage
Formal Requisites [AVC]
1. Authority of Solemnizing Officer
2. A Valid marriage License
3. Marriage Ceremony (Art 4 FC)
Authority of Solemnizing Officer
1. Who may solemnize marriage: (JC-
SPAMM)
a. Incumbent member of the Judiciary
within his jurisdiction. (Art 7 FC)
b. Priest, Rabbi, Imam or Minister of any
Church or Religious Sect. Must be:
Duly authorized by his church or
religious sect
Registered with the civil registrar
general
Acting within the limits of the written
authority granted to him by his
church or religious sect.
At least one of the contracting
parties belongs to the solemnizing
officers church or religious sect. (Art
7 FC)
c. Ship Captain or Airplane Chief may
solemnize a marriage in articulo mortis
between passengers or crew members
(Art 7,31 FC)
d. A Military commander of a unit may
solemnize marriages in articulo mortis
between persons within the zone of
military operation. (Art 7,32 FC)
e. Consul-general, consul or vice-consul
may solemnize marriages between
Filipino citizens abroad. (Art 7,10 FC)
f. Municipal and City Mayors (LGC sec
444 and 455)
2. Marriage is void when solemnized by any
person not legally authorized to perform
marriages unless either or both parties
believed in good faith that the solemnizing
officer had legal authority to do so. (Art 35
(2))
3. Absence & Irregularity of Authority of a
solemnizing officer
Absence Irregularity
Effect VOID No effect on
validity but party
responsible will
be liable.
Illustration ! Marriage is
void when
solemnized by a
priest not duly
authorized by his
Church to
solemnize
marriage.
(Art 7 FC)
! lack of valid
notification of
both parties
desiring a
ceremony in a
remote place
was held to be
only a mere
IRREGULARITY
(Navarro vs.
Domagtoy 1996)
Marriage License
1. Marriages Exempt from marriage license
requirement (AREC)
a. Marriage in Articulo mortis (Art. 27, FC)
b. Marriage in Remote and inaccessible
places (Art. 28, FC)
c. Marriages by Muslims and Ethnic
cultural minorities provided they are
solemnized in accordance with their
customs, rites or practices. (Art. 33, FC)
d. Marriage by parties who have Cohabited
for at least 5 years without any legal
impediment. (Art. 34, FC, Ninal v
Badayog (2000))
2. Absence & Irregularity of Marriage License
Effect VOID No effect on
validity but party
responsible will be
liable.
Illustration ! Issuance
of the Civil
Registrar of a
CERTIFICATE
! mere
IRREGULARITIES
in the marriage
license, such as a
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DUE SEARCH
AND
INABILITY TO
FIND the
application of a
marriage
license means
its absence,
thus rendering
the
marriage
VOID.
(Republic v
CA)
! Before a
marriage can
be solemnized,
a valid
marriage
license MUST
FIRST
BE
PRESENTED,
otherwise the
marriage is
VOID. (Moreno
v Bernabe)
typographical
error, do not affect
the validity of a
marriage.
(Alcantara v
Alcantara)
3. Things to do at the local civil registrar:
a. File an application of marriage license at
the proper local civil registrar. (Art. 11,
FC)
b. Present birth or baptismal certificate.
(Art. 12, FC)
c. If aged 18-21 years, present parental
consent. (Art. 14, FC)
d. If aged 21-25, present parental advice.
(Art. 15, FC)
e. If aged 18-25, present certificate of
marriage counseling from your priest.
(PD 965)
f. Pay the required fees. (Art 19, FC)
g. If foreigner, present certificate of legal
capacity issued by diplomat or consular
officials. (Art. 21, FC)
Marriage Ceremony
1. No prescribed form or religious rite for the
solemnization of marriage is required. (Art.
6, FC
The couple's written agreement where
they declare themselves as husband
and wife, signed by them before a judge
and two capable witnesses, even though
it was independently made by them, still
counts as a valid ceremony. (Martinez v
Tan, 12 Phil 731)
2. Minimum requirements prescribed by law:
(AP-PMS)
a. Appearance of contracting parties
personally before the solemnizing officer
(Art 3 FC)
b. Personal declaration that they take each
other as husband and wife. (Art 3 FC)
c. Presence of at least two witnesses of
legal age. (Art 3 FC)
d. The declaration shall be contained in the
Marriage certificate. (Art 6 FC)
e. Marriage certificate shall be Signed by
the contracting parties and their
witnesses and attested by the
solemnizing officer. (Art. 6, FC)
Note: In a marriage in articulo mortis, when
one or both parties are unable to sign
the marriage certificate, it shall be
sufficient for one of the witnesses to
write the name of said party, which shall
be attested by the solemnizing officer.
(Art 6, par. 2)
3. Places where marriage SHALL be
solemnized: (CCO)
a. Chambers of Judge or an open court
b. Church, Chapel or Temple
c. Office of the consul general, consul or
vice consul (Art. 8, FC)
Exception:
a. Marriages in articulo mortis
b. Marriages in remote places
c. Written request from both parties.
III. Marriages Solemnized Abroad
General Rule
Marriages solemnized abroad in accordance
with the laws in force in that country shall be
valid in the Philippines. (Art 26 FC)
Exceptions
1. Marriage between persons below 18 years
old Art. 35(1)
2. Bigamous or polygamous marriage Art.
35(4)
3. Mistake in identity Art. 35 (5)
4. Marriages void under Article 53 Art. 35 (6)
5. Psychological incapacity Art. 36
6. Incestuous marriages Art. 37
7. Marriage void for reasons of public policy
Art. 38
IV. Presumption of Marriage
1. Presumption in favor of a valid marriage (
Art 220 CC)
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2. The presumption that a man and a woman
deporting themselves as husband and wife
have entered into a lawful contract of
marriage is satisfactory if uncontradicted.
(Sec. 3 (aa), Rule 131, ROC)
3. In marriages of exceptional character, the
existence of the marriage is presumed, even
in the TOTAL ABSENCE of a marriage
license. (Vda. De Jacob v CA, 1999)
4. if a marriage certificate is missing, and all
means HAVE NOT YET BEEN
EXHAUSTED to find it, then the marriage is
presumed to exist (Sevilla v Cardenas,
2006)
5. Absence of a marriage certificate is not
proof of absence of marriage. To prove the
fact of marriage, the following would
constitute competent evidence: (1) the
testimony of witnesses to matrimony; (2) the
couples public cohabitation; and (3) birth
and baptismal certificates of children born
during the union. (Trinidad v CA, 1998)
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Chapter IV. Void Marriages
I. GROUNDS
II. PERIOD TO FILE ACTION OR RAISE
DEFENSE
III. EFFECTS OF NULLITY
I. Grounds
Art. 4(1): The absence of any essential or
formal requisites shall render the marriage void
ab initio, except as stated in Article 35 (a).
VOID AB INITIO MARRIAGES:
A. Article 35 (Void from the Beginning)
1. Contracted by any party below eighteen
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.
Note: Ones belief in good faith that the
solemnizing officer has the required
authority is a mistake of fact, and not of law.
3. Solemnized without license, except in
marriages under exceptional circumstances
4. Bigamous or polygamous marriages not
falling under Article 41 (Art. 41: subsequent
marriage by present spouse who obtained a
declaration of presumptive death for absent
spouse prior to the subsequent marriage)
5. There is a mistake as to the identity of the
other contracting party
6. Subsequent marriages that are void
under Article 53 (Art 53: a subsequent
marriage is null and void if prior to its
celebration, it has not recorded in the civil
registry and registries of property the items
in Art. 52)
B. Article 36 (Psychological Incapacity)
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
Republic v. Molina, (1997)
a. The burden of proof to show the nullity
of the marriage belongs to the plaintiff.
b. The root cause of the psychological
incapacity must be: (a) medically or
clinically identified, (b) alleged in the
complaint, (c) sufficiently proven by
the experts, (d) clearly explained in
the decision.
Note: The new Supreme Court Rule on
Declaration of absolute nullity of Void
Marriages and annulment of Voidable
Marriages (A.M. No. 02-11-10-SC,
effective March 15, 2003 and Barcelona
vs. CA (2003) provide that expert
opinion is not a condition sine qua non
for proof of psychological incapacity.
The root cause may be proven by the
totality of evidence in actual trial.
c. The incapacity must be proven to be
existing at the time of the
celebration of the marriage.
d. Such incapacity must also be shown to
be medically or clinically permanent
or incurable.
e. Such illness must be grave enough to
bring about the disability of the party to
assume the essential obligations of
marriage.
f. The essential marital obligations must
be those embraced by Articles 68 up to
71 of the Family Code as regards the
husband and wife as well as Articles
220, 221, and 225 of the same Code in
regard to parents and their children.
g. Interpretations given by the National
Appellate Matrimonial Tribunal of the
Catholic Church in the Philippines,
while not controlling or decisive, should
be given great respect by our courts.
h. The trial court must order the
prosecuting attorney or fiscal and the
Solicitor General to appear as
counsel for the state. No decision shall
be handed down unless the Solicitor
General issues a certification.
Note: The new Supreme Court Rule on
Declaration of absolute nullity of Void
Marriages and annulment of Voidable
Marriages (A.M. No. 02-11-10-SC, effective
March 15, 2003 provide that the appearance
of the prosecuting attorney or fiscal and the
Solicitor-General is no longer mandatory.
Santos v. Bedia-Santos, (1995):
Laid down 3 characteristics for determining
psychological incapacity: gravity,
antecedent, and incurability.
Tsoi v. CA, (1997)
Refusal of husband to have sex was
interpreted to be PI. A man who can but
wont is PI
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Marcos vs. Marcos (2000)
Psychological incapacity maybe established
by the totality of the evidence presented.
Personal medical examination could be
dispensed with.
Republic vs. San Jose (2007)
There is no requirement that the respondent
be medically examined first.
Antonio v. Reyes, (2006):
pathological liar, Molina guidelines met.
C. Article 37 (Incestuous)
1. Between ascendants and descendants of
any degree, legitimate or illegitimate
2. Between brothers and sisters, whether of
the full or half blood, legitimate or illegitimate
D. Article 38 (Against Public Policy)
1. Between collateral blood relatives,
legitimate or illegitimate, up to the fourth civil
degree.
2. Between step-parents and step-children.
Note: Stepbrothers and stepsisters can
marry because marriages between them are
not among those enumerated in article 38.
3. Between parents-in-law and children-in-
law.
4. Between adopting parent and 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.
9. Between parties where one, with the
intention to marry the other, killed that
other person's spouse, or his or her own
spouse.
Relationships outside of Art. 37 and 38 which
are not impediments to marriage: brother-in-law
with sister-in-law, stepbrother with stepsister,
guardian with ward, adopted with illegitimate
child of the adopter, adopted son of the husband
with adopted daughter of the wife, parties who
have been convicted of adultery.
E. Article 41 (Bigamous Marriages,
Absentee Spouse and Presumptive
Death)
General Rule
Marriage contracted by any person during
the subsistence of a previous marriage is
void.
Exceptions: The following subsequent marriage
of the present spouse is valid:
1. Subsequent marriage due to ordinary
absence where:
a. the prior spouse had been absent for 4
consecutive years;
b. the spouse present had a well-founded
belief that absent spouse is dead; and
c. judicial declaration of presumptive
death was secured (no prejudice to the
effect of the reappearance of the absent
spouse).
2. Subsequent marriage due to extraordinary
absence where:
a. the prior spouse had been missing for 2
consecutive years;
b. there is danger of death attendant to
the disappearance;
c. the spouse present had a well-founded
belief that the missing person is dead;
and
d. judicial declaration of presumptive
death was secured (no prejudice to the
effect of the reappearance of the absent
spouse).
Note:
Institution of a summary proceeding is not
sufficient. There must also be a summary
judgment. (BALANE)
Only the deserted spouse can file or institute
an action a summary proceeding for the
declaration of presumptive death of the
absentee (Bienvenido case)
There must have been diligent efforts on the
part of the deserted spouse to locate the
absent spouse. These diligent efforts
correspond to the requirement of the law for
a well-founded belief.
Exception to the exception
When both parties to the subsequent acted in
bad faith (Art. 44)
Connected Provisions
Art. 390, Civil Code. After an absence of 7 years, it
being unknown whether or not the absentee still lives,
he shall be presumed dead for all purposes, except
for those of succession.
The absentee shall not be presumed dead for the
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purpose of opening his succession till after an
absence of 10 years. If he disappeared after the age
of 75 years, an absence of 5 years shall be sufficient
in order that his succession may be opened.
Art. 391, Civil Code. The following shall be presumed
dead for all purposes, including the division of the
estate among the heirs: (SAAD)
1. A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who
has not been heard of for four years since the
loss of the vessel or aeroplane;
2. A person in the armed forces who has taken part
in war, and has been missing for four years;
3. A person who has been in danger of death
under other circumstances and his existence has
not been known for four years.
Note:
Although seven years is required for the
presumption of death of an absentee in the
Civil Code, Art. 41 of the Family Code
makes an exception for the purpose of
remarriage by limiting such requirement to
four years.
Art. 41 also limits the required four years in
Art. 391 for absence under exceptional
circumstances to only two years.
F. Article 44 (Present spouse who
contracts marriage in bad faith)
Both spouses of a subsequent marriage
acted in bad faith in case where a previous
spouse was an absentee
G. Article 53 (Non-Recording)
Subsequent marriage of spouses where the
requirements of recording under Art. 52 for
void marriages shall not have been complied
with
H. Article 40 (Judicial Declaration of
Nullity)
Art. 40, Civil Code. 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.
Under the Civil Code (superseded by the Family
Code), there was no need for a judicial
declaration of nullity of a previous marriage for a
subsequent marriage to be valid (People v.
Mendoza). However, Article 40 of the FC now
requires a final judgment to declare a
previous marriage void for a subsequent
marriage to be valid. (Terre v. Terre, Atienza v.
Brillantes)
Terre v. Terre, (1998)
A lawyer was disbarred for grossly immoral
conduct by convincing the other party that a
judicial declaration of nullity was not
required and subsequently contracting
another marriage while his first marriage
was subsisting.
Atienza v. Brillantes, (243 SCRA 32)
A judges first marriage contracted in 1965
was void for not having a marriage license,
but the requirement for a judicial declaration
of nullity in Art. 40 applies for his
subsequent marriage contracted in 1991.
Apiag v. Cantero, (1997)
Where both marriages were contracted prior
to the effectivity of the FC, the requirement
of Art. 40 does not apply to the second
marriage where a right is already vested and
which the FC cannot have retroactive effect.
Judicial declaration of nullity of a marriage is
now an absolute requirement:
a. For the validity of any subsequent
marriage
b. For the subsequent marriage not to be
considered as bigamous
Domingo v. CA, (1993)
The judicial declaration of nullity can be
invoked for purposes other than remarriage.
Article 40 was interpreted as being a
requirement for purposes of remarriage but
not limited for that purpose. Separation of
property is also a valid purpose for filing for
a judicial declaration of nullity.
Borja-Manzano v. Sanchez, (2001)
Legal separation does not severe marital
bonds. Cohabitation under Art. 34 merely
exempts the spouses from obtaining a
marriage license, and is not met when there
exists legal impediment to marry during the
period of cohabitation.
II. Period to File Action or Raise
Defense
Art. 39. The action or defense for the declaration
of absolute nullity of a marriage shall not
prescribe. (as amended by R.A. 8533)
The phrase "However, in case of marriage
celebrated before the effectivity of this Code
and falling under Article 36, such action or
defense shall prescribe in ten years after
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this Code shall taken effect" has been
deleted by Republic Act No. 8533 [Approved
February 23, 1998]).
It must be noted that under the new
Supreme Court Rule on Declaration of
Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No.
02-11-10-SC, effective March 15, 2003,
nullity of the marriage can still be collaterally
attacked.
As to the parties allowed to file the action
Enrico v. Heirs of Sps. Medinaceli (2007):
Only an aggrieved or injured spouse may file
a petition for annulment of voidable
marriages or declaration of absolute nullity
of void marriages. Such petition cannot be
filed by compulsory or intestate heirs of the
spouses or by the State. The Committee is
of the belief that they do not have a legal
right to file the petition. Compulsory or
intestate heirs have only inchoate rights
prior to the death of their predecessor, and,
hence, can only question the validity of the
marriage of the spouses upon the death of a
spouse in a proceeding for the settlement of
the estate of the deceased spouse filed in
the regular courts. (also reiterated in Carlos
vs. Sandoval, 2008)
III. Effects of Nullity
Effects of Termination of Bigamous Marriage
(Art. 43 and 44)
1. Children conceived prior to its termination
considered legitimate
2. Property Regime dissolved and liquidated
(party in bad faith shall forfeit his/her share
in favor of the common children or if there
are none, children of the guilty spouse by a
previous marriage, and in case there are
none, to the innocent spouse)
3. Donation propter nuptias remains valid,
(but if the donee contracted marriage in bad
faith, donations will be revoked)
4. Insurance benefits innocent spouse may
revoke designation of guilty party as
beneficiary, even if such designation is
stipulated as irrevocable
5. Succession Rights Party in bad faith
disqualified to inherit from innocent spouse,
whether testate or intestate
6. Donations - If both parties of subsequent
marriage acted in bad faith, any donations
and testamentary dispositions made by one
party to the other by reason of marriage will
be revoked (Art. 44)
Effects of Other Void Marriages
1. 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 [Art. 50(1)]
2. Final judgment in such cases shall provide
for the liquidation, partition, and
distribution of the:
a. properties of the spouses
b. custody and support of the common
children
c. delivery of their presumptive legitimes
unless such matters had been
adjudicated in previous judicial
proceedings [Art. 50(2)]
all creditors (of the spouses/property
regime) shall be notified of the
proceedings for liquidation [Art. 50(2 and
3)]
3. In the partition, the conjugal dwelling and
lot shall be adjudicated to the spouse with
whom majority of the common children
remain (Art. 102 and 129) [Art. 50(4)]
4. Presumptive legitimes, computed as of the
date of the final judgment, shall be
delivered in cash, property or sound
securities
a. unless the parties, by mutual agreement
judicially approved, had already
provided for such [Art. 51(1)]
b. the children/guardian/trustee may ask
for the enforcement of the judgment [Art.
51(2)]
c. the delivery of the presumptive legitimes
shall not prejudice the ultimate
successional rights, but the value of the
properties already received shall be
considered as advances on their
legitime [Art. 51(3)]
5. Either of the former spouses may marry
again AFTER compliance with the
requirements of Article 52, otherwise, the
subsequent marriage is void (Art. 53)
Requirement (Art. 52) recording in the
appropriate civil registry AND registries
of property:
a. judgment of annulment/absolute nullity
of marriage
b. partition and distribution of the
properties of the spouses
c. delivery of the childrens presumptive
legitimes
otherwise, these shall not affect third
persons
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6. Generally, children born or conceived within
void marriages are illegitimate.
Exception:
children conceived or born before
the judgment under Article 36 has
become final and executory
children conceived or born of
subsequent marriages under Article
53
Nial v. Badayog, (2000)
Children of first marriage assailed the
validity of the second marriage
contracted by their father without a
marriage license and after the latters
death.
Void marriages can be attacked
collaterally and do not prescribe
De Castro v. Assidao-de Castro, (2008)
Validity of marriage was attacked
collaterally in an action for support for
determining legitimacy of the child.
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Chapter V. Voidable Marriages
(asked in 75, 76, 78, 83, 86, 90, 91, 93, 94,
95, 96, 97, 02, 03, 04, 07, and 09 bar
exams)
I. GROUNDS FOR ANNULMENT
A. EXPLANATION
B. WHO MAY FILE, PRESCRIPTION,
RATIFICATION
C. MARRIAGES NOT SUBJECT TO
RATIFICATION
II. WHEN ONE SPOUSE IS ABSENT
A. REQUIREMENTS FOR SUBSEQUENT
MARRIAGE TO BE VALID WHEN PRIOR
SPOUSE IS ABSENT
B. EFFECT OF REAPPEARANCE OF
ABSENT SPOUSE
III. EFFECTS OF PENDING ACTION/DECREE
IV. VOIDABLE VS. VOID
V. VOIDABLE VS. LEGAL SEPARATION
VI. JURISDICTION
I. Grounds for Annulment (Art. 45, FC)
Marriage may be annulled on the ff grounds
existing at time of marriage: P I F F I S
P 1. One of the parties is 18 or above but
below 21, and there is no parental
consent.
I 2. Either party was of unsound mind
(insanity).
F 3. The consent of either party was
obtained through fraud (different from
mistake in identity):
a. through non-disclosure of a
previous conviction of a crime
involving moral turpitude;
b. through concealment by the wife
of the fact at the time of the
marriage that she was pregnant
by another man;
c. through concealment of a
sexually-transmitted disease,
regardless of its nature, existing
at the time of marriage;
d. through concealment of drug
addiction, habitual alcoholism or
homosexuality/lesbianism.
(Art.46, FC)
F 4. The consent of either party was
obtained through force, intimidation,
or undue influence.
I 5. Either party is physically incapable of
consummating the marriage
(impotence; this is different from
sterility).
S 6. Either party has a serious and
incurable sexually-transmissible
disease, even if not concealed.*
TOLENTINO
Action to Annul: action in rem, concerns status
of parties; res is relation bet parties or marriage
tie; jurisdiction depends on nationality or
domicile not the place of celebration
A. Grounds for Annulment explained:
1. Lack of parental consent
a. 18<=x<21 w/o parental consent
b. Ratified upon free cohabitation upon
reaching 21.
c. TOLENTINO: parents whose consents
were wanting may ratify before 21; this
right can be waived; however, the Code
Commission believes that no such
ratification can be made by the parent.
2. Insanity
a. mental incapacity or insanity is a vice of
consent; insanity (1) of varying degrees,
(2) curable being an illness, capable of
ratification or convalidation, (3) has lucid
intervals, (4) ground only for annulment
in many countries
b. can be ratified by cohabitation after
insane is cured
c. mere mental weakness is not a ground
for annulment, but if found grave enough
may amount to psychological incapacity.
d. intoxication, somnambulism where one
had no mental capacity to give consent
is equivalent to insanity
e. must EXIST AT THE TIME of the
celebration of the marriage.
f. law presumes SANITY, burden of proof
on party alleging insanity
3. Fraud
a. only those enumerated in Art. 46 FC
non-disclosure of previous
CONVICTION by final judgment of a
crime involving MORAL
TURPITUDE
concealment by wife at the time of
marriage, that she was pregnant by
another man
concealment of STD regardless of
nature existing at time of marriage
concealment of drug addiction,
habitual alcoholism, homosexuality,
lesbianism existing at time of
marriage
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b. No other misrepresentation or deceit of
CHARACTER, HEALTH, RANK,
FORTUNE OR CHASTITY shall
constitute FRAUD
c. TOLENTINO: fraud must relate to fact
material to the marital relation;
PRINCIPLE OF ENUMERATION; no
other cases of fraud can be ground for
annulment; INCLUSIO UNIUS EST
EXCLUSIO ALTERIUS
d. Conviction of Crime: requisites are
moral turpitude
conviction
e. Concealment of Pregnancy
fraud against very essence of
marriage; importance of procreation
of children; an assault to the
integrity of the union by introducing
ALIEN BLOOD
If husband knew of pregnancy, the
marriage cannot be annulled on the
ground of concealment. Three (3)
months after the celebration of the
marriage, a baby was born.
Annulment was refused because of
advanced stage of pregnancy,
which must be patent to the
husband (Buccat v Mangonon)
If there was coitus before marriage
& wife was pregnant at time of
marriage although he may not be
the father, marriage cannot be
annulled because man knows wife
is unchaste. Principle: one cannot
go to court with unclean hands.
Prof. Balane: An isolated case and
is not doctrinal.
f. Marriage cannot be annulled on ground
that wife concealed the fact that she had
been lewd & corrupt and had illegitimate
child (Shrady v Logan)
g. Maybe ratified upon cohabitation after
knowledge of fraud
Buccat v Buccat, 72 Phil. 19
Wife gave birth 3 months after marriage
celebration. Husband filed for
annulment. Ground: concealment of
non-virginity. Court held that it was
unbelievable that wife could have
concealed 6 months of pregnancy.
Aquino v Delizo, 109 Phil. 21
The Supreme Court granted annulment
because the wife concealed the fact that
she was 4 months pregnant during the
time of the marriage. It argued that since
Delizo was naturally plump, Aquino
could hardly be expected to know, by
mere looking, whether or not she was
pregnant at the time of the marriage.
Almelor v. RTC, (2008)
It is the concealment of homosexuality,
and not homosexuality per se, that
vitiates the consent of the innocent
party. Such concealment presupposes
bad faith and intent to defraud the other
party in giving consent to the marriage.
Corpuz v. Ochoterena, (2004)
In a legal separation or annulment case,
the prosecuting attorney must first rule
out collusion as a condition sine qua non
for further proceedings. A certification
by the prosecutor that he was present
during the hearing and even cross-
examined the plaintiff does not suffice to
comply with the mandatory requirement.
STD: Art. 45 vs. Art. 46
Art. 45 STD Art. 46 STD
Ground for annulment The STD is a type of fraud
which is a ground for
annulment
Does not have to be
concealed
Must be concealed
Must be serious and
incurable
Need not be serious nor
incurable
The STD itself is the
ground for annulment
It is the concealment that
gives rise to the annulment
Effect of Cure to Fraud in Art. 46:
Recovery or rehabilitation from STD,
drug addiction, and habitual alcoholism
will NOT BAR ACTION for annulment;
defect: not the disease, but the FRAUD
which VITIATED CONSENT
4. Force, intimidation, undue influence
a. FORCE must be one as to prevent party
from acting as a free agent; will
destroyed by fear/compulsion
b. INTIMIDATION must be one as to
compel the party by reasonable/well-
grounded fear/evil imminent upon
person/properties
c. DEGREE OF INTIMIDATION: age, sex,
condition of person borne in mind
d. A threat to enforce claim thru competent
authority, lawful or not, does not vitiate
consent
e. VIOLENCE or INTIMIDATION annul
obligation even if by third person (Art.
1336, CC)
f. UNDUE INFLUENCE when improper
advantage of his power over the will of
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another, depriving freedom of choice.
(Art. 1337, CC)
EXAMPLE: confidentiality, family
relations, suffering from mental
weakness, in financial distress
g. Threat to FILE A CASE OF immorality
on bar candidate where he does not
marry a girl who he has impregnated
does not vitiate consent (Ruiz v Atienza)
h. Threat or intimidation as no to act as
FREE AGENT; threatened of armed
demonstrations by brother is
ANNULLABLE (Tiongco v Matig-a)
i. Man rapes a girl, marries her & has no
intention to live with the girl; marriage is
annullable (People v Santiago)
j. Committee added undue influence,
maybe compelled to enter out of
REVERENTIAL FEAR e.g., fear of
causing distress to parents,
grandparents, etc
5. Impotency
a. should exist at the time of celebration
marriage
b. should continue to the time of trying
annulment case
c. should appear incurable
d. should be unknown to the other party
e. physical condition: sexual intercourse
with a person of the opposite sex is
impossible, not mere sterility
f. only potent spouse can file action
(principle: one cannot come to court with
unclean hands)
g. must exist at time of marriage, must be
continuous, must be incurable; thus if
removable by operation, NOT
ANNULLABLE (Sarao v Guevarra, CA,
40 O.G. 155 Supp. 263)
h. both spouses impotent, marriage cannot
be annulled because neither spouse is
aggrieved
i. impotency due to old age, marriage
cannot be annulled
j. POTENCY PRESUMED; party who
alleges impotency has burden of proof
(Jimenez v Canizares)
k. Although potency is presumed, there is
a doctrine in England called TRIENNIAL
COHABITATION that if wife remains
virgin after 3 yrs, husband presumed
impotent & has burden to prove
otherwise (Tompkins v Tompkins)
l. REFUSAL of wife to be examined DOES
NOT PRESUME impotency because
Filipino women are inherently shy &
bashful; TC must order physical
examination because w/o proof of
impotency, she is presumed potent; to
order her to undergo physical exam
does not infringe constitutional rights
against self-incriminating (Jimenez v
Canizares)
m. Villanueva vs. CA (2006): Absence of
cohabitation is not a ground for
annulment.
n. NOTE: if wife continues to refuse to
undergo physical exam, she can be held
for CONTEMPT & ordered to be
confined in jail until she does so
o. RELATIVE IMPOTENCY: may now be
invoked because there are cases where
one is impotent with respect to his
spouse but not with other men or
women.
p. EXAMPLE: penile erection to other
women possible; unusually large penis
can fit with abnormally large vagina
6. Sexually-transmissible disease serious and
incurable
a. should exist at the time of the marriage
b. should be found serious
c. should appear to be incurable
d. Should be unknown to other party
e. reason: danger to the health of spouse
& offspring/s
f. same as incurable impotency
g. Ratification or Convalidation of Voidable
Marriages: by cohabitation or
prescription cannot be ratified or
convalidated:
prior subsisting marriage; would
result in anomalous relationship
vitiated by impotency remains as
long as afflicted
vitiated by affliction of STD remains
as long as afflicted
Affliction of STD is unknown to the
other spouse (BALANE)
The other spouse must also be free
from a similar STD. (BALANE)
h. 2 & 3 prescribe w/in 5 yrs by Art. 47(5)
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B. Who may File, Prescription, Ratification
Ground
(Art. 45)
Who can file
(Art. 47)
Prescription
(Art. 47)
Ratification
(Art. 45)
Lack of parental consent 1. Underage party 1. 5 years after
attaining 21.
Free cohabitation after
attaining age of 21.
2. Parent or guardian 2. Before child reaches
21.
Insanity 1. Sane spouse with
no knowledge of the
others insanity
2. Legal guardian of
insane party
1. Any time before the
death of either party
Free cohabitation of
insane party after
insane party comes to
reason
3. Insane party 2. During lucid interval
or after regaining
sanity, and before
death
Fraud Injured party
(defrauded party)
Five years after
discovery of fraud
having full knowledge
of fraud
Force, intimidation, undue
influence
Injured party Five years after
disappearance of force
or intimidation
the force has ceased
or disappeared
Impotence Healthy party Five years after
marriage
Deemed ratified when
action prescribes
STD Healthy party Five years after
marriage
Deemed ratified when
action prescribes
C. Marriages Not Subject to
Ratification/Convalidation
1. One spouse is incurably impotent (Art. 47
prescription: 5 years)
2. One spouse has an incurable STD (Art. 47
prescription: 5 years)
3. Sane spouse marries an insane spouse w/o
knowledge of insanity
4. Prior subsisting marriage
II. Marriage When One Spouse Absent
A. Requirements for Subsequent Marriage
to be Valid When Prior Spouse is
Absent (Art. 41, FC):
1. The prior spouse had been absent for 4
consecutive years, or 2 years in cases
under Art. 391 CC.
2. The spouse present has a well-founded
belief that the absent spouse was already
dead.
3. 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.
__________
B. Effect of Reappearance of Absent
Spouse:
General Rule
The subsequent marriage remains valid.
Exception
It is automatically terminated by the
recording of the affidavit of reappearance of
the absent spouse.
Exception to the Exception
If there is a judgment annulling the previous
marriage or declaring it void ab initio. (Art.
42, FC)
TOLENTINO
Status of Subsequent Marriage: generally
considered bigamous & void EXCEPT par. 2 of
this article; good faith w/o falling under par. 2 will
render marriage VOID
When Voidable: must act in GOOD FAITH and
1. absent spouse not heard from 7 consecutive
yrs
2. although absent for less than 7 yrs,
generally considered dead
3. presumed to be dead after 4 yrs when
occurrence of death in A391
Judicial Declaration Unnecessary: purpose of
validity of marriage, missing spouse need not be
judicially declared an absentee, enough required
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period elapsed from time the absentee was last
heard not from judicial declaration. After 7
years, presumptive death arises w/o need for
judicial declaration
Prior Voidable Marriage: UNLESS final
judgment or dissolved by death, subsequent
marriage NULL & VOID
Status of Subs Marriage: during subsisting
marriage, remarriage is BIGAMOUS & VOID.
EXCEPT:
1. absentee four years or for two under special
circumstances
2. absence gives rise to presumption of death
w/c is required to be declared in SUMMARY
PROCEEDING to enable to remarry
Period of Absence:
1. GENERALLY, under CC, 7 years required
for declaration of presumptive death For
REMARRIAGE, reduced to 4 years by FC
2. EXCEPT in cases, CC 4 years & FC 2 years
IF
a. ON BOARD VESSEL lost at sea
voyage, airplane
b. ARMED FORCES in war
c. DANGER OF DEATH under other
circumstances, existence not known
Good Faith: PERIOD of absence for
PRESUMPTIVE DEATH is MANDATORY thus
cannot be shortened by good faith and if be
done so will be VOID
Burden of Proof: two successive marriages,
presumption on validity of 2
nd
marriage and
burden on party ATTACKING VALIDITY OF 2
ND
MARR. PRESUMPTION in favor of
INNOCENCE prevails over PRESUMPTION of
CONTINUANCE OF LIFE OF 1
ST
SPOUSE &
MARITAL RELATIONS.
Meaning of Absent spouse
1. Absent for 4 years having well-founded
belief of death
2. period of 4 years reduced to 2 years in
danger of death in A391 CC where:
a. on board vessel lost at sea or airplane
(includes all kinds of watercraft &
aircraft)
b. armed forces in war
(all military operations involving armed
fighting; does not apply to nurses,
doctors, reporters or cameramen)
c. danger of death
(includes earthquakes, fires,
explosions, dangerous
expeditions, landslides, volcanic
eruptions)
3. 2-year period counted from event of death
presumed
4. Republic v. Bermudez-Lorino, (2005)
The RTC rendered a decision declaring the
presumptive death of respondents absent
spouse based on Art. 41, FC. The Republic
appealed the decision to the CA. Applying
Art. 247 FC, the SC ruled that the CA did not
have jurisdiction over the appeal because
summary proceedings are immediately final
and executory, and therefore unappealable.
Difference between Absence in the Civil
Code and Family Code
Family Code Civil Code
As to
period
4 years under
normal
circumstances; 2
years under special
circumstances
Absent for at least 7
years; 4 years
under special
circumstances
As to
remarriage
In order to remarry,
summary
proceeding is
necessary
Declaration of
presumptive death
is not necessary
As to who
can
institute
the action
Can be instituted by
the present spouse,
any interested
party, and the
subsequent spouse
The spouses
themselves
As to
effect on
subsequen
t marriage
Subsequent
marriage is
automatically
terminated by the
recording of an
affidavit of
reappearance of the
absent spouse
Upon
reappearance,
judicial proceeding
is necessary to
declare marriage
null and void
As to
ground
Well founded belief
that the absent
spouse is dead
Generally believed
to be dead
(Art. 49, FC)
1. The court shall provide for the support of
the spouses,
2. The custody and support of the common
children, giving paramount consideration to
their moral and material welfare, their choice
of parent with whom they wish to remain.
3. The court shall also provide for visitation
rights of other parent.
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Art. 363 (CC): No child under 7 years shall be
separated from the mother unless there is a
compelling reason to do so.
Art. 48 (FC): To prevent collusion between the
parties, fabrication or suppression of evidence,
the prosecuting attorney or fiscal shall appear on
behalf of the State.
IV. Voidable v. Void Marriage
Voidable Marriage Void Marriage
Nature VALID until annulled by court INEXISTENT from the beginning
Convalidation CAN be convalidated by
prescription or free cohabitation
CANNOT be convalidated
Effect on property ACP exists unless another
system is instituted through
marriage settlement
No Community Property, only Co-
ownership
Legitimacy of children Children are LEGITIMATE if
conceived before decree of
annulment
General rule: Children are
ILLEGITIMATE (Art. 165, FC)
Exception: In void marriages by
reason of psychological incapacity
(Art. 36) or non-partition of
properties in a previous marriage
(Art. 53), children are considered
LEGITIMATE
How to impugn Can only be attacked
DIRECTLY (there must be
Annulment Decree)
May be attacked DIRECTLY or
COLLATERALLY, except for
purpose of remarriage (there must
be Judicial Declaration of Nullity)
Effect of death of parties Can no longer be impugned
after death of parties
May still be impugned after death of
parties
V. Voidable v. Legal Separation
Voidable Marriage Legal Separation
ground for annulment
at the time of marriage
causes after the
celebration of marriage
terminates marital
bond
does not terminate
marital bond
once final, cannot be
set aside to restore
marital relation
marital relations can
resume upon
reconciliation
VI. Jurisdiction
Tamano v. Ortiz, (1998)
PD No. 1083 (Code of Muslim Personal
Laws of the Philippines) does not provide for
a situation where the parties were married
both in civil and Muslim rites. Consequently,
the shari'a courts are not vested with original
and exclusive jurisdiction when it comes to
marriages celebrated under both civil and
Muslim laws. Hence, the Regional Trial
Courts have jurisdiction over such cases.
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Chapter VI. Legal Separation, Divorce
and De Facto Separation
I. GROUNDS FOR LEGAL SEPARATION
II. DEFENSES
III. WHEN TO FILE/TRY ACTIONS
A. PRESCRIPTION
B. RECONCILIATION PERIOD
C. ATTEMPTS ON RECONCILIATION
D. CONFESSION
E. COLLUSION
IV. EFFECTS OF FILING PETITION FOR LEGAL
SEPARATION
V. EFFECTS OF DECREE FOR LEGAL
SEPARATION
VI. RECONCILIATION
A. HOW DONE
B. EFFECTS OF RECONCILIATION
VII. DIVORCE
VIII.DE FACTO SEPARATION
I. Grounds for Legal Separation
(asked in 75, 76, 79, 80, 82, 89, 94, 96, 97,
02, 03, 06, and 07 bar exams)
(Art. 55, FC) [V A P I D H B I L A]
Note: The grounds for legal separation are
exclusive.
V 1. Repeated physical violence or
grossly abusive conduct directed
against petitioner, a common child, or a
child of the petitioner.
A 2. Physical violence or moral pressure
to compel petitioner to change religious
or political affiliation.
P 3. Attempt of respondent to corrupt or
induce petitioner, a common child, or
child of petitioner, to engage in
prostitution or connivance in such
corruption or inducement.
I 4. Final judgment sentencing
respondent to imprisonment of more
than 6 years, even if pardoned
(executive pardon, not pardon from
offended party).
D 5. Drug addiction or habitual alcoholism
of respondent.
a. When it existed from the time of
celebration, and concealed from
petitioner, can be a ground for
annulment of marriage.
b. When it occurred only after the
marriage, it is only a ground for
legal separation, whether
concealed or not.
c. Drug addiction or habitual
alcoholism may be supervening.
H 6. Lesbianism or homosexuality of
respondent.
Same as rules on drug addiction
B 7. Contracting by respondent of a
subsequent bigamous marriage,
whether in the Philippines of abroad.
I 8. Sexual infidelity or perversion.
a. No conviction is required.
L 9. Attempt on the life of petitioner by
respondent.
a. There is no need for criminal
conviction. Only a preponderance
of evidence is required.
A 10. Abandonment of petitioner by
respondent without justifiable cause for
more than one year.
People v. Zapata and Bondoc, 88 Phil 688
(1951)
Adultery is not a continuing crime, but is
consummated and exhausted at the moment
of carnal union. As such, every sexual act is
a ground for legal separation.
Gandioco v Pearanda, 155 SCRA 725
(1989)
In sexual infidelity as a ground for legal
separation, there is no need for prior
conviction for concubinage, because legal
separation only requires a preponderance of
evidence, as opposed to proof beyond
reasonable doubt required in concubinage.
Lapuz Sy v. Eufemio, 43 SCRA 177
(1972)
The death of one party in a legal separation
case abates the action. This is because the
death of either spouse automatically
dissolves the marriage. An action for legal
separation is also purely personal between
the spouses.
Dela Cruz. v. Dela Cruz 22 SCRA 333
Abandonment is not mere physical
estrangement but also financial and moral
desertion. There must be an absolute
cessation of marital relations, duties, and
rights with the intention of perpetual
separation.
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II. Defenses
Grounds for denying legal separation (Art.
56, FC) [4CMPRD]
1. Condonation by aggrieved party
2. Consent by aggrieved party to the
commission of the offense
3. Connivance between parties in the
commission of the offense
4. Mutual guilt or Recrimination between
spouses in the commission of any ground
for legal separation
5. Collusion between parties to obtain decree
of legal separation
6. Prescription of action for legal separation
(Art. 57: 5 years from occurrence of the
cause of action)
7. Reconciliation of parties during pendency
of action (Art. 66 par.1)
8. Death of either party during pendency of
action (Lapuz-Sy v Eufemio, supra)
Bugayong v. Ginez, 100 Phil. 616 (1956)
Continued cohabitation despite full
knowledge of the spouses infidelity
constitutes implied condonation.
III. When to File/Try Actions
A. Prescription
Action prescribes after five years from the
occurrence of the cause (Art. 57, FC)
B. Reconciliation Period
Action cannot be tried before six months have
elapsed from the filing of the petition (Art. 58.
FC)
Note: without prejudice to judicial determination
of custody of children, alimony, and support
pendente lite
C. Attempts on Reconciliation
Action cannot be tried unless the court has
attempted to reconcile the spouses, and
determined that despite such efforts,
reconciliation is highly improbable (Art. 59, FC)
D. Confession
No decree of legal separation shall be based
upon a stipulation of facts or a confession of
judgment (Art. 60, par. 1. FC)
Note: Art. 60 par. 1 applies only if the judgment
was based solely on the stipulation of facts.
Thus, if other grounds were used, Art. 60
par. 1 is not applicable. (BALANE)
E. Collusion
The court shall assign the prosecuting attorney
or fiscal to make sure that there is no collusion
between the parties, and that evidence is not
fabricated or suppressed (Art. 60, par. 2, FC)
Separation (LAC)
1. The spouses are entitled to Live separately,
but the marital bond shall not be severed.
(Art. 61, par. 1. FC).
2. Administration of Community or Conjugal
Property If there is no written agreement
between the parties, the court shall
designate one of them or a third person to
administer the ACP or CPG. (Art. 61, par. 2,
FC)
3. Custody of children The court shall give
custody of children to one of them, if there is
no written agreement between the spouses.
It shall also provide for visitation rights of the
other spouse. (Art. 62, cf. Art. 49. FC)
V. Effects of Decree for Legal
Separation (LACIDIMS)
1. The spouses can Live separately (Art. 63.
FC)
2. The ACP or CPG shall be dissolved and
liquidated, and the share of the guilty
spouse shall be forfeited in favor the
common children, previous children, or
innocent spouse, in that order (Art. 63. cf.
Art. 43, par. 2).
3. Custody of the minor children shall be
awarded to the innocent spouse (Art. 63.
FC, cf. Art 213)
4. Guilty spouse shall be disqualified from
Inheriting from innocent spouse by intestate
succession. The provisions in favor of the
guilty party in the will of the innocent spouse
shall also be revoked by operation of law.
(Art. 63, FC)
5. Donations in favor of the guilty spouse may
be revoked (Art. 64. FC)
6. Innocent spouse may also revoke
designation of guilty spouse as beneficiary
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in an Insurance policy, even if such
stipulations are irrevocable (Art. 64. FC, cf.
PD 612, sec. 11).
7. Obligation for Mutual support ceases, but
the court may order the guilty spouse to
support the innocent spouse. (Art. 198, FC)
8. The wife shall continue to use the Surname
of the husband even after the decree for
legal separation. (Art. 372, CC)
VI. Reconciliation
A. How Done
Should the spouses reconcile, they should file a
corresponding joint manifestation under oath
of such reconciliation. (Art. 65, FC)
B. Effects of Reconciliation
1. Proceedings for legal separation shall be
terminated at whatever stage. (Art. 66, FC)
2. If there is a final decree of legal separation,
it shall be set aside. (Art. 66, FC)
3. The separation of property and forfeiture of
share of guilty spouse shall subsist, unless
the spouses agree to revive their former
property regime or to institute another
property regime. ( Art. 66 cf. Art. 67, FC)
4. Joint custody of children is restored.
5. The right to intestate succession by guilty
spouse from innocent spouse is restored.
The right to testamentary succession
depends on the will of the innocent spouse.
VII. Divorce
(asked in 87, 90, 96, 97, 99, 02, 06 bar
exams)
General Rule
Divorce is not allowed in the Philippines and
even for Filipinos abroad.
Exception
Foreign and Muslim divorces.
Foreign Divorces (asked in 09 bar exam)
Art. 15, Civil Code. Laws relating to family rights and
duties, or to the status, condition and legal capacity of
the persons are binding upon citizens of the
Philippines, even though living abroad.
The Nationality Theory of Jurisdiction /
Nationality Principle applies to personal
rights.
Effect: Filipinos living abroad could not
obtain a valid divorce even in countries
where divorce is legally permissible.
Art. 26(2), Civil Code. 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 Philippines law.
Valid Foreign Divorce
a. valid marriage between a Filipino
citizen and a foreigner
b. divorce is validly obtained by the alien
spouse
c. alien spouse becomes capacitated to
remarry
Result: the Filipino spouse shall likewise
have the capacity to remarry under
Philippine law
Van Dorn v. Romillo, 139 SCRA 139 (1985)
Before the effectivity of the FC, the SC
applied Article 15 of the CC, from the
foreigners perspective, to decree the validity
of a divorce with respect to the Filipino
spouse to prevent the unjust result to the
Filipino spouse as the alien spouse is
already capacitated to remarry.
Quita v. Dandan, 300 SCRA 406 (1998)
The time of obtaining foreign citizenship is
necessary to determine the validity of
divorce obtained by the spouse who applied
for foreign citizenship. It must be
ascertained that when that spouse obtained
the divorce, he/she was no longer bound by
Philippine domestic law
Llorente v. CA, 345 SCRA 592 (2000)
A 2
nd
marriage obtained by a Filipino who is
already a US citizen at the time of the
divorce and the remarriage makes the 2
nd
marriage completely valid.
Garcia v. Recio, 366 SCRA 437 (2001)
Philippine courts do not take cognizance of
foreign laws. The foreign law granting
divorce as well as the nature of the divorce
granted (w/n it was absolute) must be
proven.
Republic vs. Orbecido, (2005)
The period of reckoning to determine
citizenship for the purpose of the application
of Art.26 par.2 is the time of securing a
divorce.
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Muslim Divorces
Presidential Decree 1083 (Code of Muslim
Personal Laws)
7 forms of Muslim divorces (Art. 45) (TF-
KILTZ)
a. talaq- repudiation of the wife by the
husband
b. ila- vow of continence by the husband
c. zihar- injurious assimilation of the wife
by the husband
d. lian- acts of imprecation
e. khul- redemption by the wife
f. tafwid- exercise by the wife of the
delegated right to repudiate
g. faskh- judicial decree
Grounds for faskh (Art. 52)
a. The marriage bond shall be severed and
the spouses may contract another
marriage
b. The spouses shall lose their mutual
rights of inheritance
c. The custody of children shall be
determined in accordance with Article 78
of the code
d. The wife shall be entitled to recover from
the husband her whole dower in case
the talaq has been affected after the
consummation of the marriage, or one-
half thereof if effected before its
consummation
e. The husband shall not be discharged
from his obligation to give support in
accordance with Article 67
f. The conjugal partnership, if stipulated in
the marriage settlements, shall be
dissolved and liquidated.
Yasin v. Sharia District Ct, 241 SCRA 606
(1995)
A Muslim divorce dissolves the marital bond
and therefore a woman may use her maiden
name and surname without any special
proceeding in court.
VIII. De Facto Separation
Rules applicable to De Facto Separation
Art. 100, Family Code. De Facto Separation shall
not affect the regime of absolute community,
except that:
1. The spouse who abandons the conjugal home
without just cause is not entitled to support,
2. Judicial authorization may be obtained when the
consent of one spouse is required by law for any
transaction of the other (subject to Art. 239), and
3. The separate property of both spouses shall be
solidarily liable for the support of the family in the
absence of sufficient community property. The spouse
present shall be given judicial authority to administer
or encumber any specific separate property of the
absent spouse and use the fruits thereof to satisfy the
latters share.
Art. 127. Same rules as above, but for Conjugal
Partnership of Gains
Procedural Rules for Art. 100/127, par. 2:
1. In the case of Art 100/127 par. 2, a verified petition
may be filed in court, attaching the proposed deed or
description of the transaction and the reason why the
other spouses consent has not been secured. (Art.
239)
2. Court shall issue a notice for the initial conference
and shall notify the other spouse to show cause why
petition should not be granted. (Art. 242)
3. If the petition is not resolved at the initial
conference, then the court shall decide in a summary
hearing. (Art. 246)
4. Its decision shall be final and executory. (Art. 247)
Perez v. CA, 255 SCRA 661 (1996)
Applicability of the tender years presumption
of Art. 213 (No child under 7 years of age
shall be separated from the mother) to de
facto separation, save for compelling
reasons such as neglect, abandonment,
unemployment and immorality, habitual
drunkenness, drug addiction, maltreatment
of child, insanity, communicable disease.
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Chapter VII. Rights and Obligations
Between Husband and Wife
(asked in 75, and 84 bar exams)
I. OBLIGATION OF SPOUSES
II. RIGHTS OF SPOUSES
III. USE OF SURNAME
I. Obligations of Spouses (Arts. 68-71,
FC)
Live together (cohabitation Art. 68)
Exemption: One spouse living abroad
or there are valid and compelling
reasons (Art. 69, Par 2)
Exemption to Exemption: Incompatibility
with the solidarity of the family (Art. 69,
Par. 2)
Observe mutual love, respect, and fidelity
Render mutual help and support (Art. 68)
Fix the family domicile.
In case of disagreement, the court shall
decide. (Art. 69, Par. 1)
Jointly support the family. (Art. 70)
From the conjugal property/income of
the fruits of their separate properties
In case of absence/insufficiency, from
their separate properties (liable in
proportion to their properties)
Manage the household. (Art. 71)
II. Rights of Spouses (Arts. 72-73, FC)
In case the other spouse neglects his or her
duties or commit acts which tend to bring
danger, dishonor or injury to the family, the
aggrieved party may apply the court for
relief. (Art. 72)
Injury contemplated is physical, moral,
emotional, or psychological, not
financial.
Either spouse may exercise any legitimate
profession, without need for consent of the
other.
The other spouse may only object on
valid, serious, and moral grounds.
In case of disagreement, the Court shall
decide whether
o the objection is proper, and
o benefit has accrued to the family
before OR after the objection.
If BEFORE, enforce resulting obligation
against the community property.
obligation against the separate property
of the spouse who has not obtained
consent (Art. 73 [Omission corrected on
Nov. 8, 1968])
III. Use of Surname
Married Women: (Art. 370, CC)
A married woman may use:
a. Her maiden first name and surname and
add her husband's surname, or
b. Her maiden first name and her
husband's surname or
c. Her husband's full name, but prefixing a
word indicating that she is his wife, such
as Mrs.
Yasin v. Sharia District Court, (1995)
The woman only has an option and not
a duty to use the surname of her
husband, as provided for in Art. 370,
CC. Moreover, when her husband dies,
the woman can revert to her old name
without need for judicial declaration.
Widows
A widow may use the deceased husbands
surname as though he were still living. (Art.
373, CC)
Mistresses
The Supreme Court allowed the mistress to
use her live-in partners name, since
everyone already knew that she was a
mistress, so as to avoid confusion. (Legamia
v. IAC (1984))
Divorcees
The Supreme Court allowed the mistress to
use her live-in partners name, since
everyone already knew that she was a
mistress, so as to avoid confusion.
(Tolentino v. CA (1988))
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Spouses
I. GENERAL PROVISIONS
II. DONATIONS BY REASON OF MARRIAGE
III. ACP
A. IN GENERAL
B. WHAT CONSTITUTES COMMUNITY
PROPERTY
C. CHARGES UPON THE ACP
D. ADMINISTRATION, OWNERSHIP AND
DISPOSITION OF THE ACP
E. DISSOLUTION OF THE ACP
F. LIQUIDATION OF ASSETS AND
LIABILITIES
IV. CPG
A. WHERE IT APPLIES
B. HUSBAND AND WIFE PLACE IN
COMMON FUND
C. EXCLUSIVE PROPERTIES OF THE
SPOUSES
D. WHAT CONSTITUTES THE CPG
E. RULES
F. CHARGES UPON CPG
G. ADMINISTRATION OF THE CPG
H. DISSOLUTION OF THE CPG
I. LIQUIDATION OF ASSETS AND
LIABILITIES
V. SEPARATION OF PROPERTIES DURING
MARRIAGE
VI. PROPERTY REGIME OF UNIONS WITHOUT
MARRIAGE
I. General Provisions
(asked in 76, 86, 91, 92, 94, 95, 96, 97 and
05 bar exams)
Order to be followed (Arts. 74, 75, FC)
1. Marriage settlements before marriage
spouses can agree to whatever regime they
want (ACP, CPG, complete separation or
any other property regime to be agreed
upon prior to the celebration of the
marriage).
2. Family Code If there are no marriage
settlements, or if the regime agreed upon is
void, the Absolute Community of Property
will be followed
3. Local Customs
General Rule (Art. 80, FC)
Property relations between Filipino spouses are
governed by Philippine laws, regardless of the
place of marriage and their residence
(Nationality Rule- Art 15, NCC).
Hence
The rule that ACP is the default mode of
property relations absent any marriage
settlement applies to all Filipinos, regardless of
the place of the marriage and their residence.
Exceptions
1. Where both spouses are aliens
2. As to the extrinsic validity of contracts
3. Contrary stipulation
Requirements for Marriage Settlements (Art.
77, FC) (WiSER)
1. Must be in writing (public or private)
2. Signed by the parties
3. Executed before the celebration of the
marriage
4. Must be registered in local civil registry to
affect third persons (If not registered, will not
prejudice third persons, ACP will apply)
5. If party needs parental consent (age 18-21),
parent/guardian must be a party to the
settlement (Art. 78)
6. If party is under civil interdiction or other
disability (not including insanity), court
appointed guardian must be a party (Art. 79)
General Rule: All modifications to the
marriage settlement must be made
before the marriage is celebrated. (Art.
76)
Exceptions:
Legal Separation (Art. 63 (2), FC)
o The property regime is
dissolved.
Revival of the former property
regime upon reconciliation if the
spouses agree (Art. 66 (2))
A spouse may petition the court for:
o Receivership
o Judicial separation of property,
or
o The authority to be the sole
administrator of the conjugal
partnership
If the other spouse
abandons the other without
just cause or fails to comply
with his or her obligations to
the family. (Art. 128)
Judicial Dissolution (Arts. 135 and
136)
Furthermore: Marriage settlements are
considered ACCESSORY to the
marriage
Stipulations in consideration of
future marriage and donations will
be void if the marriage does NOT
take place. (Art. 81, FC)
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II. Donations by Reason of Marriage
Requisites of donations propter nuptias: (Art.
82, FC)
a) Made before the celebration of marriage.
b) Made in consideration of the marriage.
c) In favor of one or both spouses.
d) The donor must be one of the betrothed or
any third person
Donations excluded
1. Ordinary wedding gifts given after the
celebration of the marriage
2. Donations in favor of future spouses made
before marriage but not in consideration
thereof
3. Donations made in favor of persons other
than the spouses even if founded on the
intended marriage
Who may donate
1. Spouses to each other
2. Parents of one or both spouses
3. 3
rd
persons to either or both spouses
Moreover, in donations propter nuptias, the
marriage is really a consideration but not in
the sense of giving birth to the obligation.
There can be a valid donation even if the
marriage never took place. However, the
absence of marriage is a ground for the
revocation of the donation. (Solis v. Barroso,
(1928))
Donations propter nuptias are without
onerous consideration, marriage being
merely the occasion or motive for the
donation, not its cause. Being liberalities,
they remain subject to reduction for
inofficiousness upon the donors death, if
they should infringe the legitime of a forced
heir. (Mateo v. Lagua, (1969))
Rules to Follow in Donation Propter
Nuptias
1. Family Code provisions (Arts. 82-87)
2. Ordinary Donation provisions (Art. 83, FC;
Title III of Book III of the NCC)
3. Provisions on testamentary succession and
the formalities of wills for donations on future
property (Art. 84, par. 2)
Distinguished from Ordinary Donations
DONATIONS PROPTER
NUPTIAS
ORDINARY
DONATIONS
Does not require express
acceptance
Express acceptance
necessary
DONATIONS PROPTER
NUPTIAS
ORDINARY
DONATIONS
May be made by minors
(Art. 78)
Cannot be made by
minors
May include future
property
Cannot include future
property
If present property is
donated and property is
not absolute community,
limited to 1/5 (Art. 84)
No limit to donation of
present property provided
legitimes are not
impaired
Grounds for revocation -
In Art. 86
Grounds for revocation -
in donation laws
Rules
1. Before Marriage
General Rule:
Future spouses cannot donate to each
other more than 1/5 of their present
property (excess shall be considered
void) (Art. 84, FC)
Exception:
If they are governed by ACP
2. During Marriage
General Rule:
Spouses cannot donate to each other,
directly or indirectly (donations made by
spouses to each other during the
marriage are void) (Art. 87, FC)
Exception:
Moderate gifts on the occasion of any
family rejoicing.
Matabuena v Cervantes, (1971)
The donation between common-law
spouses falls within the provision prohibiting
donations between spouses during
marriage.
Harding v. Commercial Union, (1918)
The prohibition on donations can only be
assailed by persons who bear such relation
to the parties or the property itself, that their
rights are being interfered with. Here, the
insurance company of the donated car
cannot assail the validity of the donation. In
addition, the codal exception of moderate
gifts depends on the income class of the
spouses and a car could be considered a
moderate gift that does not infringe the
prohibition of donation between spouses.
Sumbad v. CA, (1999)
The donation made by a man to a woman
was held valid because no proof was shown
that they were still living in a common-law
relationship at the time of the donation.
Donation of Property Subject to
Encumbrances
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1. Are considered valid.
2. In case of foreclosure
a. if property value < obligation, donee
shall not be liable
b. if property value > obligation, donee
shall be entitled to the excess (Art. 85,
FC)
Grounds for Revocation of Donation Propter
Nuptias (Art. 86, FC) (CAVaLRI)
1. If the marriage is not celebrated or judicially
declared void ab initio, except donations
made in settlements.
2. When the marriage takes place without the
consent of the parents or guardians, as
required by law.
3. When the marriage is annulled, and the
donee acted in bad faith.
4. Upon legal separation, if the donee is the
guilty spouse.
5. If there is a resolutory condition, and it is not
complied with.
6. When donee has committed an act of
ingratitude: (Art. 765, CC) (PCS)
a. An offense against person or property of
donor, or his wife or children under
parental authority.
b. An imputation to the donor of any
criminal offense, or any act involving
moral turpitude, even if proven, unless
the crime is committed against the
donee, his wife or children under his
authority.
c. Refusing to support the donor, if he/she
is legally required to do so.
*The action for filing for revocation of donation
prescribes.
III. Absolute Community of Property
A. In General
(Asked in 98 and 07 bar exams)
When it commences
At the precise moment of the celebration of the
marriage (Art. 88, FC). However, if the marriage
is celebrated before the Family Code took effect
(1988), the default property regime is the
Conjugal Partnership of Gains (CPG).
Waiver of Rights (Art. 89, FC)
General Rule: NOT ALLOWED
Exceptions
a. When there is judicial separation of
property
b. When there is legal separation
c. When the marriage is dissolved (by
death of one of the spouses)
d. When the marriage is annulled
Supplementary Rules to Follow
Co-ownership (Art. 90, FC)
B. What Constitutes Community Property
What it consists
All the property owned by the spouses at the
time of the celebration of the marriage or
acquired thereafter. (Art. 91, FC)
Under the ACP, spouses cannot exclude specific
properties from the regime.
What is Excluded (BGM) (Art. 92, FC)
1. Properties acquired by a gratuitous title, i.e.
donation, inheritance by testate and
intestate succession, including the fruits of
such properties
EXCEPT: When it was expressly provided
by the donor or testator that the property
shall form part of the ACP
2. Properties for personal use
EXCEPT: Jewelry - they form part of the
ACP
3. Properties acquired before the marriage, for
those with legitimate descendants with a
former marriage (to protect rights of children
by a former marriage)
Presumption
All properties acquired during the marriage form
part of the ACP, unless it be proven that they are
excluded. (Art. 93, FC)
C. Charges Upon the ACP (Art. 94, FC) (4
debts, 2 taxes, 2 expenses, support,
donation)
1. Support
Spouses
Even if not living together except
when a spouse leaves conjugal
home without just cause
Even during pendency of action for
legal separation or annulment of
marriage
Common children
Legitimate children of previous marriage
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Illegitimate children - follow the
provisions on Support and (9)
2. Debts and Obligations Contracted During
Marriage
Either by both spouses or one of them,
with the consent of the other.
In (2) and (3), creditors need not prove
that the debts benefited the family.
3. Debts Contracted by one Spouse Without
Consent of the other
ACP liable only to the extent that the
debt benefited the family.
4. Tax, Liens, Repairs on Community Property
Includes both major and minor repairs
5. Taxes and Expenses for Mere preservation
of Separate properties
Applies only to separate properties by
either spouse being used by the family,
not those that do not benefit the family.
Expenses limited to minor repairs.
6. Expenses for professional, Vocational, or
Self-Improvement Course of Spouses
7. Ante-nuptial Debts that Benefited the Family
If the ante-nuptial debt did not benefit
the family, applicable rule is (9).
8. Donations by Both Spouses to Common
Legitimate Children
Purpose: professional, vocational
courses or activities for self-
improvement
9. Ante-Nuptial Debts not under (7), Support of
Illegitimate Children, Liabilities of Either
Spouse Arising from Crime or Quasi-Delict
Only ff the debtor-spouse has no
exclusive property or his or her property
is insufficient.
The payments by the ACP are deemed
advances to be deducted from the share
of the guilty spouse upon the liquidation
of the absolute community.
10. Expenses of Litigation between Spouses
Except when suit is groundless
If community property is insufficient except in
(9), spouses are solidarily liable for the unpaid
balance from their separate properties.
Gambling losses shall be borne by the losing
spouses separate property, winnings shall
accrue to the community property. (Art. 95, FC)
D. Administration, Ownership and
Disposition of ACP
Administration of property
Belongs to both spouses jointly. If they disagree
the husbands decision prevails. However, the
wife has five years from the date of the decision
to go to court for recourse. Otherwise, it is
presumed that she agreed with the husbands
decision. (Art. 96, FC)
Except
When the other spouse is incapacitated, or
unable to participate in the administration (e.g.
when abroad). The powers refer solely to
administration; disposition or encumbrance
requires consent of the absent or incapacitated
spouse.
Homeowners Savings & Loan Bank v. Dailo
(2005)
In the absence of (court) authority or written
consent of the other spouse, any disposition
or encumbrance of the conjugal property
shall be void.
Disposition of Property
Either spouse may, through a will, dispose
his/her interest in the community property. (Art.
97, FC) However, the will should refer only to
his/her own share in the community property
Donation of Property
General Rule
Donation of one spouse without the consent
of the other is not allowed (Art. 98, FC)
Exceptions
a. Moderate donations to charity due to
family rejoicing or distress;
b. Moderate gifts by each spouse to the
other due to family rejoicing. (Note:
Whats moderate depends on the socio-
economic status of the family)
E. Dissolution of ACP
ACP terminates upon (Art. 99, FC)
1. Death of either spouse follow rules in Art.
103
2. Legal Separation follow rules in Arts. 63
and 64
3. Annulment or judicial declaration of nullity
follow rules in Arts. 50 to 52
4. Judicial separation of property during
marriage follow rules in Arts. 134 to 138
Rules on De Facto Separation (ART. 100,
FC)
De facto separation does not affect the ACP;
EXCEPT that:
1. Spouse who leaves the conjugal home
without just cause shall not be entitled to
support. He/She, however, is still required to
support the other spouse and the family.
2. If consent is necessary for transaction but is
withheld or otherwise unobtainable,
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authorization may be obtained from the
court.
3. Support for family will be taken from the
ACP.
4. If ACP is insufficient, spouses shall be
solidarily liable.
5. If it is necessary to administer or encumber
separate property of spouse who left,
spouse present may ask for judicial authority
to do this.
6. If ACP is not enough and one spouse has
no separate property, spouse who has
property is liable for support, according to
provisions on support.
Abandonment (Art. 101, FC)
Present spouse may petition the court for:
1. receivership;
2. judicial separation of property; or
3. authority to be the sole administrator of the
absolute community, subject to
precautionary conditions that the court may
impose.
Spouse is prima facie considered to have
abandoned the other spouse and the family if:
1. he/she has left for a period of three months,
2. he/she has failed to inform his/her
whereabouts for a period of three months.
F. Liquidation of Assets and Liabilities
(asked in 89 and 99)
Process of liquidation of ACP (Art. 102, FC)
1. Inventory of assets of ACP and of spouses,
with market values.
2. Obligations are paid with community
property, and separate obligations not
charged to ACP paid by respective assets of
spouses.
a. If obligations exceed the assets of the
ACP, nothing is divided. Creditors can
go after the separate properties of the
spouses, which are solidarily liable for
the deficiency.
3. Delivery of whatever remains in their
exclusive property.
4. Balance, or net remainder is divided equally
between the spouses, irrespective of how
much each brought into the community.
5. If personal obligations of a spouse exceed
his/her separate property, creditor can go
after the share of the spouse on the net
remainder of the ACP, without prejudice to
the provisions of law on forfeitures and
delivery of presumptive legitimes.
6. After covering all community obligations and
obligations of spouses, balance of separate
properties shall be delivered to respective
spouses or their heirs, and they will also
divide into two equal shares whatever is left
of the community assets, without prejudice
to the provisions of law on forfeitures and
delivery of presumptive legitimes.
Rules in Case of Termination of Marriage by
Death of One of the Spouses (Art. 103, FC)
1. The community property shall be liquidated
in the same proceeding for the settlement of
the estate of the deceased spouse.
2. If no such judicial settlement proceeding is
instituted, surviving spouse shall liquidate
the community property either judicially or
extra-judicially within one year from the
death of the deceased spouse.
a. If no liquidation is made within the
period, any disposition or encumbrance
involving community property of the
terminated marriage shall be void.
b. Non-compliance with liquidation
procedures would mean that a
subsequently contracted marriage will
follow a regime of complete separation
of property.
Procedure for Liquidation of Community
Properties of Two Marriages (Art. 104, FC)
1. Determine the capital, fruits, and income of
each community upon such proof as may be
considered according to the rules of
evidence.
2. In case of doubt as to which community the
existing properties belong, they shall be
divided between two communities in
proportion to the capital and duration of
each.
Onas v. Javillo, (1934)
Javillo contracted 2 marriages. SC ruled that
each absolute community should be
considered owner of the parcels of land
acquired during its existence. Death
discontinues ACP.
Vda. De Delizo v. Delizo, (1976
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.
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IV. Conjugal Partnership of Gains
(Asked in 79 bar exam)
CPG Ordinary partnership
1. Existence Exists with the mere fact of marriage Comes into existence according to
agreement between parties
2. Purpose,
duration, and
rules
Predetermined by legislator, the law
fixing its conditions.
Determined by will of partners.
3. Profits Divided equally between spouses,
irrespective of the amount of capital that
they bring into marriage
Depends upon respective capitals of
partners, or upon their agreement
4. Equality No equality between spouses in control,
management, and disposition, because
the law grants the husband some
predominance.
General rule is that all partners have
equal rights in administration,
management, and control of
partnership.
5. Personality No juridical personality Considered a juridical person
6. Commencement At precise moment of celebration of
marriage
At the time agreed upon by partners
7. Regulation By law By agreement of parties; subsidiarily,
by law
8. Purpose Not particularly for profit For profit
9. Causes for
dissolution
Death, legal separation, annulment,
JDN, judicial separation of property
Death, insolvency, civil interdiction,
termination of term, express will of any
partner, etc. (Arts 1830-1931)
10. Effect of death
of a partner
Dissolution of partnership Surviving partners may choose to
continue partnership
11. Division of
properties
Only upon dissolution There can be division of profits without
dissolution
12. Management Joint; in case of disagreement, the
husbands decision shall prevail, wife
has recourse to courts
Same as individual partners, except
when one or more partners designated
as managers.
CPG ACP
1. Property acquired
before marriage.
Each spouse retains his/her property;
only fruits part of conjugal property
Properties become part of community
property
2. Property acquired
during marriage
Part of conjugal property Becomes community property
3. Upon dissolution
of marriage
Separate properties are returned; net
profits divided between spouses or
heirs
Net remainder of ACP divided equally
between spouses or heirs
4. Basis Capital and properties of spouses kept
separate and distinct from benefits;
insurmountable obstacle to
presumption of solidarity
Mutual trust and confidence between
spouses; fosters oneness of spouses
5. Liquidation Exclusive properties will have to be
identified and returned, and
sometimes, identification is difficult.
Easier to liquidate because net
remainder of community properties are
simply divided between spouses or
heirs.
A. Where It Applies (Art. 105)
1. For marriages before the implementation of
the Family Code.
2. For marriages after the Family Code, if
agreed to by the parties through a marriage
settlement.
Note: CPG begins at the precise moment the
marriage celebrated (Art 107)
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B. Husband and Wife Place in Common
Fund (PIPF-EC) (Art. 106)
1. The proceeds, products, fruits, and income
of their separate properties;
2. Everything acquired by them within marriage
through their own efforts;
3. Everything acquired by them by chance
C. Exclusive Properties of the Spouses
1. Art 109 (OGRE)
Directly
acquired or
originally
exclusive
(1) Property brought into marriage by
each spouse as his/her own
(2) Property acquired by either spouse
during the marriage by gratuitous title
Property
by
substitution
(3) Property acquired by right of
redemption, by barter, or by exchange
with property belonging to either spouse
(4) Property purchased with exclusive
money of either spouse
2. Other Separate Property: (CSI)
a. Collection of credits belonging to one
spouse exclusively but the interests
shall belong to the CPG (Art 119)
b. Sale of separate property of a spouse
c. Indemnity paid in case of expropriation
of separate property or under an
insurance policy covering separate
property.
Spouses retain the ownership,
possession, administration and
enjoyment of their exclusive properties
(Art 110, par 1.)
Possession by one spouse of the
separate property the other spouse does
not affect ownership
Transfer of administration of a spouses
exclusive property to the other spouse
must be made in a public instrument
recorded in the registry of property of
the place where the property is located
(Art 110, FC) but ownership is not
conferred to the administrator spouse
(Rodriguez v. de la Cruz, 1907).
D. What Constitutes the CPG (Art. 117)
(asked 75, 76, 78, 85, and 87 bar exams)
(OLF-N-HOLC)
1. Acquired by Onerous Title during the
Marriage at Expense of Common Fund
2. Acquired through the Labor, Industry, Work,
Profession of Either or both Spouses
3. Fruits from common property and net
fruits of exclusive property of each spouse
4. Share of either spouse in hidden treasure,
whether as finder or owner of property
where treasure is found
5. Acquired through occupation such as
fishing or hunting
6. Livestock existing at dissolution of
partnership in excess of what is brought by
either spouse to the marriage
7. Acquired by chance, such as winnings
from gambling or betting
Moral damages arising from a contract paid
from CPG are also awarded to the CPG
(Zulueta v. Pan-Am, 1973).
Loans contracted during the marriage are
conjugal, and so is any property acquired
therefrom (Mendoza v. Reyes, 1983).
E. Rules
1. presumption that property is conjugal: all
property acquired during the marriage,
whether made, contracted, or registered in
the name of one spouse, are presumed
conjugal unless the contrary is proven (Art.
116, FC).
As a condition sine qua non for the
operation of the presumption in favor of
the conjugal partnership the party who
invokes the presumption must first prove
that the property was acquired during
the marriage. (Acabal v. Acabal, 2005)
"X married to Y" as it appears in land
titles is not conclusive of the conjugal
status of the property (Jocson v. CA,
1989).
Exclusive property brought into a
second marriage remains exclusive
property of that spouse under CPG
regime; ACP is not retroactive for
marriages celebrated under the Civil
Code (Francisco v. CA, 1998).
2. property purchased by installment (paid
partly with conjugal funds and partly with
exclusive funds) Art. 118:
conjugal property if full ownership was
vested during the marriage CPG shall
reimburse the owner-spouse
exclusive property if full ownership was
vested before the marriage owner-
spouse shall reimburse the CPG
Exclusive property brought into a second
marriage remains exclusive property under
CPG regime. ACP is not retroactive for
marriages celebrated under the Civil Code
(Castillo v. Pasco, 1964).
Even if the installment is completed after the
marriage, the property is exclusive if
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ownership was vested in one spouse before
the marriage (Lorenzo v. Nicolas, 1952).
3. rules on improvement on exclusive
property: (Art. 120)
accession - if original value is greater
than new value (value of land + value of
improvements + net change in value),
then land remains exclusive property of
the owner-spouse; subject to
reimbursement of the cost of
improvement
reverse accession - if original value is
less than new value, then land becomes
conjugal property; subject to the
reimbursement of the value of the
property of the owner-spouse at the
dissolution of the CPG.
Change of ownership takes place at the time
when the improvements are made
(Calimlim-Canullas v. Fortun, 1984).
4. If winning ticket is bought by conjugal
funds, prize is conjugal; otherwise, it is
exclusive property of spouse who owns the
ticket.
5. Property belonging to one spouse
converted into another kind totally different
in nature from its original form during
marriage becomes conjugal in the absence
of proof that the expenses of conversion
were exclusively for the account of the
original owner-spouse, subject to
reimbursement of the value of the original
property from the conjugal partnership
6. Money received under the Social Security
Act is not conjugal, although the
employee-spouse contributes to the SSS
with his salaries, but belongs to the
designated beneficiary under the Social
Security Law.
7. Intellectual property, like copyright or
patent, should, according to Tolentino, citing
Planiol and Ripert, be considered separate
property of the spouse who produces or
invents or discovers it.
8. Business property (e.g. trade-marks, trade
names, service marks, business goodwill)
are merely accessories to some commercial
establishment or product, so that if such
establishment or product is separate
property of one spouse, then the business
property is separate property; but all benefits
or earnings derived from these different
kinds of property during the marriage should
belong to the conjugal property (Tolentino,
id., citing the same authority).
F. Charges upon CPG
(asked in 87 and 04 bar exams)
Art. 121, Family Code. The conjugal partnership
shall be liable for:
(1) The support of the spouse, their common
children, and the 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 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) Ante-nuptial 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.
* Same as the rule governing ACP
Categorization of CPG Charges
(Pangalangan notes)
Debts &
Obligations
Taxes &
Expenses
Support
(2) Debts incurred:
(a) by
administrator-
spouse for the
benefit of the
family;
(b) by both
spouses;
(c) by one spouse
with the consent of
the other
(4)
maintenance
of CPG
properties
(1) support of
spouses and
common
children
(3) by one spouse
without the consent
of
the other for the
(5) mere
preservation
of all
exclusive
(6) education
of spouses,
absolute
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benefit of the
family
Properties
(7) antenuptial
debts for the
benefit of the
Family
(9) litigation
expenses,
unless the
suit is
groundless
(8) education
of common
children, only
for
value of
donation
Debts incurred in the exercise of a spouses
profession are charged on the CPG (Javier
v. Osmea, 34 PHIL 336).
Debts incurred during the marriage are
presumed to be conjugal and thus are
charged on the CPG (Cobb-Perez v. Lantin,
23 SCRA 637)
Loan contracts signed by both spouses are
conjugal, and they are jointly liable for
payment, even if only one spouse signs a
subsequent promissory note (DBP v. Adil,
161 SCRA 307).
Debts incurred for the benefit of third
persons are not charged on the CPG
(Luzon Surety Co. v. De Garcia, 30 SCRA
111).
G. Administration of the CPG
(asked in 75, 77, 02 and 06 bar exams)
1. 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 5 years from the date of the contract
implementing such decision (Art. 124,
par.1).
Sale by the husband of property
belonging to the conjugal partnership
without the consent of the wife when
there is no showing that the latter is
incapacitated is void ab initio. (Abalos v.
Macatangay, Jr, 2004)
2. Disposition or encumbrance of conjugal
property requires: (Art. 124, par. 2)
a. The consent or approval by both
spouses; OR
b. Judicial authority secured in court
Donation of CPG must be with the
consent of the other spouse except
moderate donations for charity, on
occasions of family rejoicing, or family
distress (Art 125, cf. Art 98)
Mere awareness of a transaction is NOT
consent (Jader-Manalo v. Camaisa,
2002)
Homeowners Savings & Loan Bank v.
Dailo (2005)
In the absence of (court) authority or
written consent of the other spouse,
any disposition or encumbrance of
the conjugal property shall be void.
H. Dissolution of the CPG
1. Termination of CPG Art. 126 (cf. Art. 99)
(DLAJ)
a. Death
b. Legal Separation
c. Annulment or declaration of nullity
d. Judicial separation of property
2. CPG not affected by de facto Separation Art.
128 (cf. Art. 100)
3. Abandonment and Absence (cf. Art. 101)
Ayala Investment v. Ching, (1998)
The Supreme Court ruled that indirect
benefits that might accrue to a husband
in signing as a surety or guarantee
agreement not in favor of the family but
in favor of his employer corporation are
not benefits that can be considered as
giving a direct advantage accruing to the
family. Hence, the creditors cannot go
against the conjugal partnership
property of the husband in satisfying the
obligation subject of the surety
agreement. A contrary view would put in
peril the conjugal partnership by
allowing it to be given gratuitously as in
cases of donation of conjugal
partnership property, which is prohibited.
I. Liquidation of Assets and Liabilities
(asked in 87 and 89 bar exams)
1. Procedure (Art. 129) IAR-DRIN-PC
a. Prepare an inventory of all properties
b. Amounts advanced by CPG in payment
of personal debts and obligations shall
be credited to CPG
c. Reimburse each spouse for the use of
his/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.
d. Debts and obligations of CPG shall be
paid out of the conjugal assets,
otherwise both spouses are solidarily
liable with their exclusive property.
e. Remains of the exclusive properties
shall be delivered to respective owner-
spouses
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f. Indemnify loss or deterioration of
movables belonging to either spouse,
even due to fortuitous event, used for
the benefit of the family
g. Net remainder of CPG shall the
constitute the profits which shall be
divided equally between husband and
wife except when:
o A different proportion or division was
agreed upon in the marriage
settlements
o There has been a voluntary waiver
or forfeiture of such share as
provided in the FC
h. Presumptive legitimes delivered to
common children per Art. 51
i. Conjugal dwelling goes to:
o Spouse with whom majority of
common children choose to remain
(below 7yrs deemed to have chosen
the mother)
o Whoever the court chooses in case
of lack of majority
2. Rules
Property must be recorded in the
registry of property in order to affect
third persons dealing with registered
property.
Spouses are not co-owners of CPG
during the marriage and cannot alienate
the supposed ! interest of each in the
said properties. The interest of the
spouses in the CPG is only inchoate or
a mere expectancy and does not ripen
into title until it appears after the
dissolution and liquidation of the
partnership that there are net assets.
(De Ansaldo v. Sheriff of Manila, 1937)
Rules on liquidation upon death and
liquidation of CPG of 2 or more
marriages same as in ACP (Art. 103 &
104)
Support to surviving spouse & children
during liquidation is charged against the
fruits or income of their shares in the
properties. (Art. 133)
Personal debt acquired during marriage
of either spouse is not chargeable
against community property (Go v.
Yamane, 2006)
Marriage
Art. 134, Family Code. In the absence of an express
declaration in the marriage settlements, the
separation of property between spouses during the
marriage shall not take place except by judicial order.
Such judicial separation of property may either be
voluntary or for sufficient cause.
Judicial separation of property may either be
(1) voluntary or (2) for sufficient cause.
A. Sufficient Causes and Grounds for
Return to Previous Regime
Sufficient Causes for
Judicial Separation of
Property (Art. 135)
(CALASA)
Grounds for Return to
Previous Regime
(Art. 141)
(1) Spouse of petitioner
has been sentenced
to a penalty which
carries with it civil
interdiction
(1) Termination of the civil
interdiction
is judicially declared
an absentee
(2) Reappearance of
absentee spouse
(3) Loss of parental
authority of the
spouse of petitioner
has been decreed by
the court
(5) Restoration of parental
authority to the spouse
previously deprived of
it
has abandoned the
latter or failed to
comply with his or
her obligations to the
family
(4) When the spouse who
left the conjugal home
without legal
separation resumes
common life with the
other
(5) The spouse granted
the power of
administration in the
marriage settlements
has abused that
power
(3) When the court, being
satisfied that the
spouse granted the
power of
administration in will
not again abuse that
power, authorizes the
resumption of said
administration
(6) At the time of the
petition, the spouses
have been separated
in fact for at least 1
year and
reconciliation is
highly improbable.
(6) Reconciliation and
resumption of common
life of the spouse who
have separated in
facts for at least 1 year
(7) When after voluntary
dissolution of the ACP
or CPG has been
judicially decreed upon
the joint petition of the
spouses, they agree to
the revival of the
former property
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regime. No voluntary
separation of property
may thereafter be
granted.
B. Rules
1. Each spouse shall contribute to the family
expenses, in proportion to their income. In
case of insufficiency, the market value of
their separate properties. (Art. 146 par. 1)
2. Liability of spouses to the creditors of the
family shall be SOLIDARY. (Art. 146, par. 2)
Abandonment is defined as the lack of
intention to return to the conjugal home,
without justifiable cause (Dela Cruz v. Dela
Cruz)
C. Effects of separation of property
between spouses
1. ACP or CPG is dissolved and liquidated (Art.
137)
2. Provisions on complete separation of
property applies after dissolution of
ACP/CPG (Art. 138)
a. Liability spouses to creditors shall be
solidary with their separate properties
b. mutual obligation to support each
continues except when there is legal
separation
3. Petition and final judgment of separation of
property must be filed in the appropriate
registries (Art. 139)
4. rights previously acquired by creditors are
not prejudiced (Art. 140)
D. Transfer of Administration to the Other
Spouse (Art. 142) (GACA)
When one spouse.
1. Becomes the guardian of the other.
2. Is judicially declared an absentee.
3. Is sentenced to a penalty which carries with
it civil interdiction.
4. 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.
In Re: voluntary dissolution of CPG of spouses
Bernas, 14 SCRA 237
A voluntary separation of properties is not
perfected by mere consent but upon the
decree of the court approving the same. The
petition for voluntary separation of property
was denied because the children of the 1
st
and 2
nd
marriages were not informed; the
separation of property may prejudice the
rights and shares of the children.
Maquilan v. Maquilan, (2007)
A compromise agreement with judicial
recognition is valid, pending petition for
declaration of nullity of marriage.
VI. Property regime of unions without marriage
(asked in 79, 87, 98, 00 and 09 bar exams)
Art. 147 Art. 148
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. (144a)
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 bad faith.
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Art.147 Art.148
Applicability
1. man and woman
2. living together as husband and wife
3. with capacity to marry (Art.5 without any
legal impediment)
a. at least 18 years old
b. not Art. 37 (incestuous void
marriage)
c. not Art. 38 (void marriage by reason
of public policy)
d. not bigamous
4. other void marriages due to absence of
formal requisite
1. man and woman
2. living together as husband and wife
3. NOT capacitated to marry (Art.35(1)
under 18 years old)
4. adulterous relationship (e.g.
concubinage)
5. bigamous/polygamous marriage
(Art.35(4))
6. incestuous marriages under Art.37
7. Void marriages by reason of public
policy under Art.38
Salaries and wages Owned in equal shares Separately owned by parties
Properties acquired
through exclusive
funds
Remains exclusive provided there is proof Remains exclusive
Properties acquired
by both through
work or industry
Governed by rules on co-ownership
Owned in common in proportion to
respective contribution
Properties acquired
while living
together
Owned in equal shares since it is
presumed to have been acquired through
joint efforts
if one party did not participate in
acquisition, presumed to have contributed
through care and maintenance of family
and household
No presumption of joint acquisition. When
there is evidence of joint acquisition but
none as to the extent of actual
contribution, there is a presumption of
equal sharing
Forfeiture
When only one of the parties is in good faith,
the share of the party in bad faith shall be
forfeited:
1. In favor of their common children
2. 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
3. In the absence of such descendants, such
share belongs to the innocent party
If one party is validly married to another
his/her share in the co-owned properties
will accrue to the ACP/CPG of his/her
existing valid marriage
If the party who acted in bad faith is not
validly married to another, his/her share
shall be forfeited in the same manner as
that provided in Art 147
The same rules on forfeiture shall apply if
both parties are in bad faith
Yaptinchay v. Torres, (1969)
Application of Article 148; there was no
proof of actual contribution, while there was
a subsisting marriage apart from the union
without marriage, therefore, the N. Forbes
house goes to the CPG of subsisting
marriage
Juaniza v. Jose, (1979)
Property acquired by a married party during
cohabitation with another not his spouse
belongs to the CPG of the marriage, and the
other party cannot be held jointly/severally
liable for it
Villanueva v. CA, (2004)
Transfer of certificate and tax declarations
are not sufficient proof of joint contribution.
Joaquino v. Reyes (2004)
Prohibitions against donations between
spouses must likewise apply to donations
between persons living together in illicit
relations;
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Chapter IX. The Family and the Family
Home
I. FAMILY
A. FAMILY RELATIONS
B. GENERAL RULE
C. EXCEPTIONS
II. FAMILY HOME
A. GENERAL RULE
B. EXCEPTIONS
C. BENEFICIARIES OF THE FAMILY HOME
D. REQUISITES FOR CREDITOR TO AVAIL
OF THE RIGHT UNDER ARTICLE 160
I. Family
Basic social institution which public policy
cherishes and protects hence, no suit between
members of the family shall prosper unless
compromise between parties has failed.
A. Family relations include:
1. Between husband and wife
2. Between parents and children
3. Among other ascendants and descendants
4. Among brothers and sisters, full or half
blood.
B. General Rule
For a suit between members of the same family
to prosper, the following are required:
1. Earnest efforts towards a compromise have
been made
2. Such efforts have failed
3. Such earnest efforts and the fact of failure
must be alleged
Note: The case will be dismissed if it is shown
that no such efforts were made.
C. Exceptions to the general rule
(VJLAFF)
1. Civil status of persons,
2. Validity of marriage or a legal separation,
3. Any ground for legal separation,
4. Future support,
5. Jurisdiction of courts,
6. Future legitime
Hontiveros v. RTC, (1999)
Whenever a stranger is a party in a case
involving family members, the requisite
showing of earnest efforts to compromise is
no longer mandatory, as such inclusion of a
stranger takes the case out of the ambit of
FC 151.
II. Family Home
(asked in 94 and 07 bar exam)
Dwelling place of a person and his family
Guidelines
1. It is deemed constituted from time of actual
occupation as a family residence
2. It must be owned by person constituting it
3. It must be permanent
4. Rule applies to valid and voidable and even
to common-law marriages under Arts.147
and 148
5. It continues despite death of one or more
spouses or unmarried head of family for 10
years or as long as there is a minor
beneficiary (Art.159)
6. Can only constitute one family home
A. General Rule
The family home is exempt from (EFA):
1. Execution
2. Forced sale
3. Attachment
B. Exceptions in the exemption of the
family home from execution (Art. 156)
1. Nonpayment of taxes.
2. Debts incurred prior to the constitution of the
family home.
3. Debts secured by mortgages on the
premises before or after such constitution.
4. Debts due to laborers, mechanics,
architects, builders, materialmen and others
who have rendered service or furnished
material for the construction of the building.
C. Beneficiaries of the family home (Art.
154)
1. Husband and wife, or an unmarried person
who is the head of the family
2. Parents (may include parent-in-laws),
ascendants, descendants, brothers and
sisters (legitimate/illegitimate), who are living
in the family home and who depend on the
head of the family for support
Requisites to be a beneficiary (RLD)
1. The relationship is within those
enumerated
2. They live in the family home
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3. They are dependent for legal support on the
head of the family
Requirements for the sale, alienation,
donation, assignment, or encumbrance of
the family home
1. the written consent of the person
constituting it,
2. his/her spouse, and
3. majority of the beneficiaries of legal age
Note: If there is a conflict, the Court will decide.
In case of death (ART. 159)
! 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 as long as there is a minor
beneficiary.
! The heirs cannot partition the home unless
the court finds compelling reasons therefor.
D. Requisites for creditor to avail of the
right under Article 160
Requisites
1. He must be a judgment creditor;
2. His claim is not among those excepted
under Article155, and
3. He has reasonable grounds to believe that
the family home is worth more than the
maximum amount fixed in Article 157
Procedure to avail of right under Article
160
1. The creditor must file a motion in the court
proceeding where he obtained a favorable
for a writ of execution against the family
home.
2. There will be a hearing on the motion where
the creditor must prove that the actual value
of the family home exceeds the maximum
amount fixed by the FC either at the time of
its constitution or as a result of
improvements introduced thereafter its
constitution.
3. If the creditor proves that the actual value
exceeds the maximum amount the court will
order its sale in execution.
4. If the family home is sold for more than the
value allowed, the proceeds shall be applied
as follows:
a. First, the obligation enumerated in
Article 155 must be paid
b. Then the judgment in favor of the
creditor will be paid, plus all the costs of
execution
c. The excess, if any, shall be delivered
Versola v. Mandolaria, (2006)
The proof that the house is the family home
must be alleged against creditors; Applied
the rule in Art. 160, FC.
Patricio v. Dario III, (2006)
WON the grandson of the deceased is a
beneficiary according to Art. 154 FC. The
beneficiary should satisfy all requisites; he
must be dependent on the head of the
family.
Arriola v. Arriola, (2008)
This case involves half brothers and a
second wife; the family home includes the
land it is built on. The rule in Art. 159 of the
FC regarding the 10 year period is applied,
the parties involved must wait.
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Chapter X. Paternity and Filiation
I. KINDS OF FILIATION
II. IMPUGNING LEGITIMACY
III. PROOF OF FILIATION
IV. LEGITIMATION
V. RIGHTS OF LEGITIMATE OR ILLEGITIMATE
CHILDREN
I. Kinds of Filiation
(Arts. 163, 164, 165 FC)
1. Natural
a. Legitimate
b. Illegitimate
2. Legal Fiction (Adoption)
Legitimate Children
(asked in 79, 82, 84, 85, 99 and 03 bar
exams)
Conceived or born during the marriage of
parents
May be thru natural means or by artificial
insemination.
1. Natural/Biological
Liyao v. Liyao, (2002): A child conceived or
born during a valid marriage is presumed to
belong to that marriage, regardless of the
existence of extramarital relationships.
2. Artificial Insemination (Art. 164)
Requisites for children conceived through
artificial insemination to be considered
legitimate:
a. Artificial insemination made on wife
b. Sperm comes any of the following:
Husband
Donor
husband and donor
c. In case of donor sperm, husband and
wife must authorize/ratify insemination in
a written instrument
Executed & signed by husband and
wife before the birth of the child.
Recorded in the civil registry
together with the birth certificate of
the child.
Illegitimate Children
(asked in 80, 82, 83, 84, 90, 93, 99, 00, 07,
08 and 09 bar exams)
General Rule: Those conceived and born
outside of a valid marriage.
Exceptions:
a. Children of marriages void under Art.36
(psychological incapacity).
b. And under Art. 53 (the second marriage
of a widow or widower who has not
delivered to his or her children by his or
her first marriage the legitime of said
children). (SEMPIO-DIY)
De Castro v. Assidao-De Castro, (2008)
Common children born before the
annulment are legitimate, and therefore
entitled to support from each of the spouses.
II. Impugning Legitimacy (Art. 166)
A. Grounds
Thus the grounds for impugning the legitimacy of
a child are:
1. Physical impossibility for sexual
intercourse within the first 120 days of the
300 days which immediately preceded the
child's birth due to:
2. Other biological or scientific reasons,
except Artificial Insemination.
3. And in case of Artificial Insemination, the
consent of either parent was vitiated
through fraud, violence, mistake,
intimidation, or undue influence.
Macadangdang v. CA, (1980)
Only a proximate separation between the
spouses is not sufficient physical separation
as grounds for impugning legitimacy.
Andal v. Macaraig, (1951)
Serious illness of the husband which
absolutely prevented him from having sexual
intercourse with his wife, like if the husband
was already in comatose or a vegetable, or
sick with syphilis in the tertiary stage so that
copulation was not possible. But
tuberculosis, even in its most crucial stage,
does not preclude copulation between the
sick husband and his wife.
Jao v. CA, (1987)
Blood-type matching is an acceptable
means of impugning legitimacy, covered by
Art. 166(2), under "biological or other
scientific reasons." But this is only
conclusive of the fact of non-paternity.
B. Action for Impugning Legitimacy (Arts.
170 and 171)
The action for impugning the legitimacy of a
child may be brought within 1, 2, or 3 years from
the knowledge of the birth, or the knowledge
of registration of birth.
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1. Within 1 year if husband or any heirs
reside in the same city or municipality where
the child was born or his birth was recorded.
2. Within 2 years if the husband or all heirs
live in the Philippines but do not reside in the
same city or municipality where the child's
birth took place or was recorded
3. Within 3 years if the husband or all heirs
live outside the Philippines when the child's
birth took place or was recorded in the
Philippines
If the birth of the child has been concealed or
was unknown to the husband, the above periods
shall be counted:
1. from the discovery or knowledge of the
birth of the child, or
2. from the discovery or knowledge of its
registration,
3. whichever is earlier.
Sayson v. CA
Legitimacy can only be attacked directly
General Rule: Only the husband can
impugn the legitimacy of a child. If he does
not bring action within the prescribed
periods, he cannot file such action anymore
thereafter, and this is also true with his heirs.
Exception: That the heirs of the husband
may file the action or continue the same if it
has already been filed
a. If the husband died before the
expiration of the period fixed for bringing
his action
b. If he should die after the filing of the
complaint without having desisted
c. If the child was born after the death of
the husband.
III. Proof of Filiation (Arts. 172 and 175
(1))
(asked in 85, 95, 05 and 06 bar exams)
A. Rules
Legitimate or illegitimate children may prove
their filiation in the same way and on the same
evidence.
General Rule: They may only prove their status
using the following pieces of evidence:
1. Their record of birth appearing in the civil registry.
2. An admission of his filiation (legitimate or
illegitimate) by his parent or parents in a public
document or a private handwritten instrument and
signed by said parent or parents. (SEMPIO-DIY)
3. Proof of open and continuous possession of
status as legitimate or illegitimate child
4. Any other means stated by the rules of court or
special laws
Mendoza v. Melia, 17 SCRA 788
Baptismal certificates are given probative
value only for births before 1930. Birth
certificates must be signed by the parents
and sworn for it to be admitted as evidence.
Baluyut v. Baluyut, (1990)
Unsigned birth certificates are not evidence
of recognized filiation.
Acebedo v. Arquero, (2003)
Baptismal certificates are only conclusive of
the sacrament administered, and cannot be
used as proof of filiation.
Lim v. CA, (1975)
Marriage certificates cannot be used as
proof of filiation.
Jison v. CA, (1998)
Rule 130, Sec. 40 is limited to objects
commonly known as family possessions
reflective of a family's reputation or tradition
regarding pedigree like inscriptions on
tombstones, monuments, or coffin plates.
Eceta v. Eceta (2004)
Signature of the father on the birth certificate
is considered as an acknowledgement of
paternity and mere presentation of a duly
authenticated copy of such certificate will
successfully establish filiations.
Heirs of Rodolfo Baas v. Heirs of Bibiano
Baas, (1985)
"Su padre [Your father]" ending in a letter is
only proof of paternal solicitude and not of
actual paternity. Signature on a report card
under the entry of "Parent/Guardian" is
likewise inconclusive of open admission.
De Jesus v. Syquia, (1933)
By "open and continuous possession of the
status of a legitimate child" is meant the
enjoyment by the child of the position and
privileges usually attached to the status of a
legitimate child, like bearing the paternal
surname, treatment by the parents and
family of the child as legitimate, constant
attendance to the child's support and
education, and giving the child the
reputation of being a child of his parents.
Agustin v. CA, (2005)
DNA evidence can be used as proof of
paternity.
De Jesus v. Estate of Decedent Juan Gamboa
Dizon (2001)
The due recognition of an illegitimate child in
a record of birth, a will, a statement before a
court of record, or in any authentic writing, is
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in itself a consummated act of
acknowledgement of the child, and no
further court action is required.
Gono-Javier vs. Court of Appeals, (1994)
Mere possession of status as an illegitimate
child does not make a recognized
illegitimate child but is only a ground for
bringing an action to compel judicial
recognition by the assumed parent.
Herrera v. Alba, (2005)
In assessing the probative value of DNA
evidence, therefore, courts should consider,
among other things, the following data:
a. How the samples were collected,
b. How they were handled,
c. The possibility of contamination of the
samples,
d. The procedure followed in analyzing the
samples,
e. Whether the proper standards and
procedures were followed in conducting the
tests,
f. and the qualification of the analyst who
conducted the tests.
Estate of Rogelio Ong v. Diaz, (2007)
DNA evidence can still be used even after
the death of the parent.
B. Action for Claiming Filiation (Arts. 173
and 175 (2))
The child can bring the action during his or
her lifetime and even after the death of the
parents. The action does not prescribe as
long as he lives.
If the child is a minor, or is incapacitated or
insane, his guardian can bring the action in
his behalf.
IV. Legitimation (Arts. 177 and 182)
(asked in 82, 90, 92, 04 08 and 09 bar
exams)
"Legitimated" children are illegitimate children
who because of the subsequent marriage of
their parents are, by legal fiction, considered
legitimate.
Requisites for legitimation
1. The child was conceived and born outside of
wedlock.
2. General rule: The parents, at the time of the
child's conception, were not disqualified by any
impediment to marry each other.
Exception: RA 9858 - Children born to
parents who were so disqualified only
because either or both of them were below
eighteen (18) years of age at the time of
childs conception may be legitimated.
Grounds for impugning legitimation
1. The subsequent marriage of the child's parents is
void.
2. The child allegedly legitimated is not natural.
3. The child is not really the child of the alleged
parents. (SEMPIO-DIY)
Children (SSS)
1. Surname
a. Legitimate and legitimated: Surname of
father and mother
b. Illegitimate: uses surname of mother but the
fathers surname may be used if father has
explicitly recognized the child as his (RA
9255, Revilla Law)
2. Succession (asked in 09 bar exams)
a. Legitimate and legitimated: those granted in
Civil Code
b. Illegitimate: ! the share of a legitimate child
3. Support
a. Legitimate and legitimated: in accordance to
provisions in the family code
b. Illegitimate: entitle to support but support will
come from separate properties of parent.
Republic v. Vicencio, (1998)
A legitimate child's use of the father's
surname is mandatory.
De Asis v. CA, (1999)
Obligation to support a legitimate child
cannot be waived or compromised.
David v. CA, (1995)
Parental authority over an illegitimate child
belongs to the mother.
Tonog v. CA, (2002)
However, this may be temporarily denied to
the mother by reason of her incapacity.
Mossesgeld v. CA, (1998)
The father cannot force the use of his
surname without first establishing legitimacy.
Under RA 9255, only an acknowledgment
by the father is necessary for the use of the
father's surname.
Capote v. CA, (2007)
An illegitimate child already given the
father's surname without the latter's
acknowledgment, must revert to using the
mother's surname.
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Chapter XI. Adoption
I. R.A. 8552
A. WHO MAY ADOPT
B. WHO MAY BE ADOPTED
II. ADOPTION PROCEDURE UNDER RA 8552
IRR
A. PRE-ADOPTION SERVICES
B. EFFECTS OF ADOPTION
C. RESCISSION OF ADOPTION
D. EFFECTS OF RESCISSION
E. RECTIFICATION OF SIMULATED BIRTHS
III. R.A. 8043: INTER-COUNTRY ADOPTION ACT
OF 1995
A. WHO MAY ADOPT
B. WHO MAY BE ADOPTED
C. WHERE TO FILE APPLICATION
D. DOCUMENTS TO SUPPORT
APPLICATION
E. INTER-COUNTRY ADOPTION BOARD
F. TRIAL CUSTODY
ADOPTION
(Asked in 76, 77, 85, 94, 95, 96, 00, 01, 03,
04, 05, 07, 08 bar exams)
LEGITIMATION ADOPTION
The law merely
makes legal what
exists by nature
The law merely
creates by
fiction a
relation which
did not in fact
exist
Persons
affected
Only natural
children
Generally
applies to
strangers
Procedure Extrajudicial acts of
parents
Always by
judicial decree
Who
applies
Only by both
parents
Husband and
wife adopt
jointly with
exceptions
(RA8552)
Effect Same status and
rights with that of a
legitimate child not
only in relation to
the legitimizing
parents but also to
other relatives
Creates a rel.
only between
the child and
the adopting
parents
1998
A. Who May Adopt (Sec.7)
1. Filipino Citizens
a. Of legal age
b. In possession of full civil capacity and
legal rights
c. Of good moral character
d. Has not been convicted of any crime
involving moral turpitude
e. Emotionally and psychologically capable
of caring for children
f. At least sixteen (16) years older than
adoptee, except when adopter is
biological parent of the adoptee or is the
spouse of the adoptees parent
g. In a position to support and care for
his/her children in keeping with the
means of the family
2. Aliens
a. Possession of the same as the
qualifications for Filipinos
b. His/her country has diplomatic relations
with the Philippines
c. Has been living continuously for 3 years
(provided that absences not exceeding
60 days per 1 year for professional,
business, or emergency reasons are
allowed) in RP prior to the filing of
application and maintains such
residence until the decree is entered
d. 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
e. His/her government allows the adoptee
to enter his/her country as his/her
adoptee
f. Has submitted all the necessary
clearances and such certifications as
may be required
**Items numbers c, d and e may be
waived under the following
circumstances:
a. Adopter is a former Filipino Citizen who
seeks to adopt a relative within the 4
th
degree of consanguinity or affinity
b. One who seeks to adopt the legitimate
or illegitimate child of his/her Filipino
spouse
c. One who is married to a Filipino Citizen
and seeks to adopt jointly with his/her
spouse a relative within the 4
th
degree of
consanguinity or affinity of the Filipino
spouse
3. Guardians
With respect to theirs ward after the
termination of the guardianship and
clearance of his/her accountabilities.
Husband and wife shall adopt jointly;
Except
1. if one spouse seeks to adopt the legitimate
child of the other
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2. if one of the spouse seeks to adopt his/her
illegitimate child provided that other spouse
has signified his/her consent
3. if spouses are legally separated from each
other
** if spouses jointly adopt, parental authority
shall be exercised jointly
B. Who May Be Adopted (Sec. 8)
1. Any person below 18 years old who has
been administratively or judicially declared
available for adoption
2. The legitimate child of one spouse by the
other spouse
3. An illegitimate child by a qualified adopter to
improve the childs status to that of
legitimacy
4. A person of legal age if, prior to the
adoption, said person has been consistently
considered and treated by the adopter(s) as
his/her child since minority
5. A child whose previous adoption has been
rescinded
6. A child whose biological or adoptive
parent(s) has died, provided that no
proceedings shall be initiated within 6
months from the time of death of said
parent(s)
Consent Necessary for Adoption (Sec. 9)
1. The prospective adoptee if 10 years or older
2. The prospective adoptees biological
parents, legal guardian or the government
instrumentality or institution that has custody
of the child
3. The prospective adopters legitimate and
adopted children who are ten years or over
and, if any, illegitimate children living with
them
4. The spouse, if any, of the person adopting
or to be adopted.
Note: A decree of adoption shall be effective
as of the date the original petition was filed.
It also applies in case the petitioner dies
before the issuance of the decree of
adoption to protect the interest of the
adoptee.
Child to be Adopted Adopter
Biological parent signs a
Deed of Voluntary
Commitment (Rescissible
within 6 months)
Inquiry at DSWD
Voluntary Commitment:
Declaration of Availability
for Adoption
Attendance of DSWD
Adoption Fora and
Seminars (include
counseling) Involuntary Commitment:
(1) Announcement of
Missing Child in
Tri-Media
(2) Declaration of
Abandonment
(3) Declaration of
Availability for
Adoption
Case Study Report Application for Adoption
Case Study Report
Matching
Placement
Supervised Trial Custody
Home Study Report
Recommendation and
Consent
Petition for Adoption
Adoption Decree
II. Adoption Procedure under RA 8552
IRR (Secs. 10-32)
(as discussed in Prof. Elizabeth Pangalangans
class)
A. Pre-Adoption Services
The DSWD shall provide for the following
services:
1. Counseling services for the biological
parents, prospective parents, and
prospective adoptee
2. Exhaust all efforts to locate the biological
parents, if unknown
B. Effects of Adoption (Secs. 16-18)
1. Parental Authority
All legal ties between biological parents and
adoptee are severed, and the same shall be
vested on the adopter, except if the
biological parent is the spouse of the
adopter.
2. Legitimacy
The adoptee shall be considered legitimate
son/daughter of the adopter for all intents
and purposes and shall be entitled to all the
rights and obligations provided by law to
legitimate children born to them without
discrimination of any kind.
3. Succession
Adopter and adoptee shall have reciprocal
rights of succession without distinction from
legitimate filiation, in legal and intestate
succession. If adoptee and his/her biological
parents had left a will, the law on
testamentary succession shall govern.
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C. Rescission of Adoption (Sec. 19)
Adoption, being in the best interest of the child,
shall not be subject to rescission by the
adopter(s).
Adopted may request for rescission, with the
assistance of DSWD, if a minor, or over 18 but
incapacitated, based on the ff grounds:
1. repeated physical and verbal maltreatment
despite having undergone counseling
2. attempt on life of adoptee
3. sexual assault or violence
4. abandonment or failure to comply with
parental obligations
However, the adopter(s) may disinherit the
adopted based on causes as enumerated in Art.
919 of the NCC.
D. Effects of Rescission (Sec. 20)
1. The parental authority of the adoptee's
biological parents, if known, OR the legal
custody of the DSWD shall be restored if the
adoptee is still a minor or incapacitated.
2. The reciprocal rights and obligations of the
adopters and the adoptee to each other
shall be extinguished.
3. The court shall order the Civil Registrar to
cancel the amended certificate of birth of the
adoptee and restore his/her original birth
certificate.
4. Successional rights shall revert to its status
prior to adoption, but only as of the date of
judgment of judicial rescission. Vested rights
acquired prior to judicial rescission shall be
respected.
E. Rectification of Simulated Births (Sec.
22)
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,
1. 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:
2. 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:
3. That such person complies with the
procedure for Legal Adoption as specified in
this Act, which includes the Child and Home
Study Report of DSWD to determine if
alleged conditions in the application for
rectification exist, and other requirements as
determined by the Department.
Tamargo v. CA (1992)
Where the petition for adoption was granted
after the child had shot and killed a girl, the
Supreme Court did not consider that
retroactive effect may be given to the decree
of adoption so as to impose a liability upon
the adopting parents accruing at a time
when adopting parents had no actual or
physically custody over the adopted child.
Retroactive effect may perhaps be given to
the granting of the petition for adoption
where such is essential to permit the accrual
of some benefit or advantage in favor of the
adopted child. In the instant case, however,
to hold that parental authority had been
retroactively lodged in the adopting parents
so as to burden them with liability for a
tortuous act that they could not have
foreseen and which they could not have
prevented would be unfair and
unconscionable.
Lazatin v. Campos, (1979)
Adoption is a juridical Act, proceeding in
rem. Because it is artificial, the statutory
requirements in order to prove it must be
strictly carried out. Petition must be
announced in publications and only those
proclaimed by the court are valid. Adoption
is never presumed.
Santos v. Aranzanso, (1966)
Validity of facts behind a final adoption
decree cannot be collaterally attacked
without impinging on that courts jurisdiction.
DSWD v. Belen, (1997)
Participation of the appropriate government
instrumentality in performing the necessary
studies and precautions is important and is
indispensable to assure the childs welfare.
Landingin v. Republic, (2006)
Consents for adoption must be written and
notarized.
Sayson v. CA. (1992)
Adopted children have a right to represent
their adopters in successional interests. (I
dont know the basis for this doctrine but
according to SCRA and my notes, the
decision in this case was: Although an
adopted child shall be deemed to be a
legitimate child and have the same rights as
the latter, these rights do not include the
right of representation. The relationship
created by the adoption is between only the
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adopting parents and the adopted child. It
does not extend to the blood relatives of
either party.)
III. RA 8043: Inter-Country Adoption Act
of 1995
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.
A. Who May Adopt (Sec. 9)
Any foreign national or a Filipino citizen
permanently residing abroad who has the
qualifications and none of the disqualifications
under the Act may file an application if he/she:
1. Is at least 27 years of age and at least 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
2. If married, his/her spouse must jointly file for
the adoption
3. 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
4. Has not been convicted of a crime involving
moral turpitude
5. Is eligible to adopt under his/her national law
6. 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
7. 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
8. 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
B. Who May Be Adopted (Sec. 8)
1. Only a legally-free child may be the subject
of inter-country adoption.
2. A legally-free child is one who has been
voluntarily or involuntarily committed to the
DSWD of the Philippines, in accordance with
the Child and Youth Welfare Code.
3. No child shall be matched to a foreign
adoptive family unless it is satisfactorily
shown that the child cannot be adopted
locally.
4. 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
f. Recent photo of the child
C. Where to File Application (Sec.10)
Application shall be filed with the Philippine
Regional Trial Court having jurisdiction over the
child, or with the Inter-Country Adoption Board,
through an intermediate agency, whether
governmental or an authorized and accredited
agency, in the country of the prospective
adoptive parents.
D. Application Should Be Supported By
The Following Documents Written And
Officially Translated In English (Sec.
10)
1. Birth Certificate of applicants
2. Marriage Contract and Divorce decree, if
applicable
3. Written consent of their biological or
adoptive children above 10 years of age in
the form of sworn statement,
4. Physical, medical and psychological
evaluation by a duly licensed physician and
psychologist
5. Income Tax Returns or any document
showing the financial capability of the
applicant
6. Police Clearance
7. Character reference from the local
church/minister, applicants employer and a
member of the immediate community who
have known the applicant for at least 5 years
8. Recent postcard-sized pictures of the
applicant and his immediate family
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E. Inter-Country Adoption Board
1. as the central authority in matters relating to
inter-country adoption
2. Ensures 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
F. Trial Custody (Sec. 14)
1. The governmental agency or the authorized
and accredited agency in the country of the
adoptive parents shall be responsible for the
trial custody and the care of the child. It shall
also provide for counseling and other related
services.
2. The trial custody shall be for a period of 6
months from the time of placement.
3. It starts upon actual physical transfer of the
child to the applicant who, as actual
custodian, shall exercise substitute parental
authority over the person of the child
4. The adopting parents 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.
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Chapter XII. Support
(asked in 84, 85, 05, 08 bar exams)
A. KINDS
B. CHARACTERISTICS
C. HOW SUPPORT IS GIVEN
II. WHO ARE OBLIGED TO SUPPORT EACH
OTHER
III. PROPERTIES ANSWERABLE FOR SUPPORT
IV. ORDER OF SUPPORT
A. IF THERE ARE MULTIPLE OBLIGORS
B. IF THERE ARE MULTIPLE RECIPIENTS
I. Support
Consists of everything indispensable for
sustenance, dwelling, clothing, medical
attendance, education and transportation, in
keeping with the financial capacity of the
family (Art. 194).
The right and duty to support, especially the
right to education, subsists even beyond the
age of majority (Art. 194).
The amount of support is in proportion to the
means of the provider and the needs of the
receiver, and can be reduced or increased if
such circumstances change (Arts. 201 -
202).
The obligation to give support shall be
DEMANDABLE from the time the person
who has a right to receive the same needs it
for maintenance, but it shall not be
PAYABLE except from the date of judicial or
extra-judicial demand (Art. 203).
When, WITHOUT THE KNOWLEDGE of the
person obliged to give support, it is given by
a stranger, the stranger has the right to
claim the same from the person obliged,
unless it appears that he gave it without
intention of being reimbursed (Art. 206).
When the person obliged to give support
UNJUSTLY REFUSES OR FAILS to give
support when urgently needed, any third
person may furnish support to the needy
individual, with right of reimbursement from
the person obliged to give support. This
particularly applies when the father or
mother of a minor child unjustly refuses to
support or fails to give support to the child
when urgently needed (Art. 207).
Future support cannot be the subject matter
of a compromise; such are void (Art. 2035,
CC).
Refusal to support children or descendants
without justifiable cause is a sufficient
condition for the disinheritance of parents or
ascendants, whether legitimate or
illegitimate (Art. 920, CC).
Unjustified refusal to support ones children
or spouse is a sufficient cause for
disinheriting a spouse (Art. 921, CC).
Spouses are jointly responsible for the
family's support. Support expenses shall be
paid from the CP, or in absence thereof, the
income/fruits of their separate properties, or
in insufficiency/absence of such, from the
separate properties (Art. 70).
___________
A. Kinds of Support
1. Legal that which is required to be given by
law
2. Judicial that which is required to be given
by court order whether pendente lite or in a
final judgment
3. Voluntary or Conventional by agreement
B. Characteristics of Support (PREVIEW)
1. Personal
2. Intransmissible
3. Not subject to waiver or compensation with
regard to future support
4. Exempt from attachment or execution,
except if support is contractual or given by
will. In such cases, any excess legal support
can be subject to levy on attachment or
execution.
5. Reciprocal on the part of those who are by
law bound to support each other
6. Variable
C. How Support is Given (Art. 204)
1. Payment of the amount;
2. Accepting the recipient in the home of the
provider, unless there is a legal or moral
obstacle from doing so.
II. Who are Obliged to Support Each
Other (Art. 195)
1. Spouses;
2. Legitimate ascendants and descendants;
3. Parents and their children (legitimate and
illegitimate) and the children of the latter
(legitimate and illegitimate);
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4. Legitimate brothers and sisters, whether of
full or half-blood;
5. Illegitimate brothers and sisters, EXCEPT
when the need for support of one (of age) is
due to a cause imputable to his/her fault or
negligence (Art. 196).
[NOTE: Both legitimate and illegitimate children
are entitled to support.]
III. Properties Answerable for Support
(Art. 197-198)
1. From the separate property of the obligor. If
no separate property, the ACP/CPG (if
financially capable) shall advance the
support, to be deducted from the obligors
share upon liquidation of such regime.
2. Pending legal separation or annulment,
support (pendente lite) for spouses and
children will come from the ACP/CPG. After
final judgment granting the petition, mutual
support obligation between spouses ceases.
(But in legal separation court may order
guilty spouse to give support to innocent
spouse.)
[NOTE: De facto separation does not affect the
ACP, except that the spouse who leaves the
conjugal home without just cause shall not be
entitled to support (Art. 100).]
IV. Order of Support (SDAB)
A. Order of support if there are multiple
obligors (2 or more; Art. 199)
1. Spouses
2. Descendants, nearest in degree
3. Ascendants, nearest in degree
4. Brothers and Sisters
When two or more are obliged to give
support, the payment shall be divided
between them IN PROPORTION to their
resources;
Also, in case of URGENT NEED and by
special circumstances, judge may order only
one obligor to furnish support without
prejudice to reimbursement from other
obligors of the share due from them (Art.
200).
B. Order of priority if there are multiple
recipients (Sempio-Diy)
1. Observe order in Article 199 (SDAB);
2. But if the concurrent obligees are the
spouse and a child subject to parental
authority, the child shall be preferred.
[NOTE: Tolentino says that the above
preference given to a child under parental
authority over the spouse should prevail only if
the person obliged to support pays it out of his
own separate property. So if the support comes
from ACP or CPG, the above rule of preference
for the child does not apply.]
Pelayo v. Lauron, (1909)
Even if the parents-in-law were the ones
who called for the physicians services for
the childbirth of their daughter-in-law, it is
the womans husband who is bound to pay
the fees due to the physician.
Lacson v. Lacson, (1968)
Man is still liable for support in arrears since
the mother advanced it from a stranger (the
uncle of the daughters).
Lacson v. Lacson, (2006)
Acknowledgment of and commitment to
comply with support obligation through a
note in his own handwriting is proof that a
demand was made.
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Chapter XIII. Parental Authority
I. PARENTAL AUTHORITY GENERAL
PROVISIONS
A. CUSTODY
B. OTHER RIGHTS AND DUTIES IN
EXERCISE OF PARENTAL AUTHORITY
II. SUBSTITUTE AND SPECIAL PARENTAL
AUTHORITY
III. SUSPENSION OR TERMINATION OF
PARENTAL AUTHORITY
IV. RIGHTS AND DUTIES OF CHILDREN
I. Parental Authority
(asked in 94, 03 and 05 bar exams)
(patria potestas):
Its the mass of rights and obligations which
parents have in relation to the person and
property of their children until their emancipation,
and even after this under certain circumstances
(Manresa).
Parental authority includes (Art. 209 FC):
1. The caring for and rearing of children for
civic consciousness and efficiency;
2. The development of the moral, mental and
physical character and well-being of said
children
Rules as to the exercise of parental
authority:
1. 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 (Art. 211 FC)
2. If the child is illegitimate, parental authority
is with the mother (Art.176 FC; see also
Chapter 10).
Cases when parental authority and
responsibility may be transferred or
renounced:
Adoption;
Guardianship; or
Commitment of the child in an entity or
institution engaged in child care or in a
childrens home
Characteristics of parental authority:
1. It is a natural right and duty of the parents
(Art. 209 FC)
2. It cannot be renounced, transferred or
waived, except in cases authorized by law
(Art 210 FC)
3. It is jointly exercised by the father and the
mother (Art. 211 FC)
4. It is purely personal and cannot be
exercised through agents
5. It is temporary
________________
A. Custody
Parental Preference Rule
The natural parents, who are of good character
and who can reasonably provide for the child,
are ordinarily entitled to custody as against all
persons (Santos v CA, 1995).
Who exercises authority in cases of death,
absence, remarriage, or separation of
parents
In case one parent is absent or already
dead, the present or surviving parent (Art.
212 FC)
Remarriage shall not affect the parental
authority over the children (Art. 212 FC)
In case of a void/annulled marriage, and
there is no agreement bet. spouses, the
parent designated by the court (Art. 43 FC
par 1; Art. 49 FC).
Innocent spouse gets custody of minor
children in legal separation (Art. 63 FC par
3).
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 (Art. 213 FC par 1).
Tender Years Presumption
NO child under 7 years of age shall be
separated from the mother, unless the court
finds compelling reasons to order otherwise.
(Art. 213 FC par 2; Gamboa v. CA, 2007)
Examples of compelling reasons are:
When the mother is insane;
with a communicable disease that might
endanger the life or health of the child;
is maltreating the child; or
has another child by another man who lives
with her. (Cervantes v. Fajardo, 1989)
[NOTE: Prostitution or infidelity to husband does
not make a mother unfit as parent.]
B. Other Rights and Duties in Exercise of
Parental Authority
Rights of Parents upon their children
To have them in their custody (Art. 220 FC
par 1)
To represent them in all matters affecting
their interests (Art. 200 FC par 6)
Demand respect and obedience and impose
discipline on them (Art. 200 FC par 7&8; see
also People v Silvano, 1999)
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Administer the property of a child for her/his
support and education, unless title/transfer
provides otherwise (Art. 226 FC par 1)
Administer the fruits and income (ONLY) of
the childrens property primarily to support
the child and secondarily to use for the daily
needs of the family (Art. 226 FC par 2)
To give or withhold consent on marriage,
pre-nuptial, donation propter nuptias,
adoption, and employment
To disinherit them for just cause
Duties of Parents upon their children
Support and upbringing in accordance to
their means (Art. 220 par 1)
Educate, instruct, and provide them with
moral and spiritual guidance, and love and
understanding (Art. 220 par 3
Defend them against unlawful aggression
Answer for damages caused by their fault or
negligence, and for civil liability for crimes
committed by them (Art. 221 FC)
Give their lawful inheritance
Liability of parents for torts committed by
their minor children (Art. 221 FC; Art. 2180
CC)
Parents and other persons exercising
parental authority are civilly liable for the
torts of their unemancipated children:
Provided they are living in their
company, and
Subject to the appropriate defenses
provided by law, like observing the
diligence of a good father of a family to
prevent the damage (Libi v. IAC, 1992)
If the minor child is, therefore, not living with
the parents but has been entrusted to the
care of other persons, or is an intern in
school, the liability does not apply.
This liability of the parents and those
exercising parental authority over the child is
solidary and primary and direct, not
subsidiary
Authority
(Asked in 2003 bar exam)
Substitute parental authority exercised by (in
order):
1. The surviving grandparent (Art. 214 FC)
2. Oldest brother or sister, over 21 years old,
unless unfit or unqualified (Art. 216 FC par
2).
3. Childs actual custodian, over 21 years old,
unless unfit or unqualified (Art. 216 FC par
3)
[NOTE: The same order applies to the
appointment of judicial guardian]
Special parental authority exercised by (Art.
218 FC)
1. School, its administrators and teachers, or
2. The individual, entity or institution engaged
in child care.
Substitute
Parental
Authority
Special Parental Authority
It is exercised in
case of death,
absence, or in
case of
unsuitability of
parents.
It is exercised concurrently with the
parental authority of the parents
and rests on the theory that while
the child is in the custody of the
person exercising special parental
authority, the parents temporarily
relinquish parental authority over
the child to the latter.
St. Marys Academy v. Carpitanos, (2002)
The special parental authority and
responsibility applies to all authorized
activities, whether inside or outside the
premises of the school, entity or institution.
Liability of those exercising special parental
authority over the child (Art. 219 FC)
1. They are principally and solidarily liable
for damages caused by the acts or missions
of the minor child while under their
supervision, instruction or custody.
HOWEVER, this liability is subject to the
defense that the person exercising parental
authority exercised proper diligence.
2. The parents and judicial guardians of the
minor or those exercising substitute parental
authority over the minor are subsidiarily
liable for said acts and omissions of the
minor.
Effects of Parental Authority Upon the
Property of the Child (Art. 225 FC)
The Father and Mother shall jointly exercise
legal guardianship over the property of the
minor child without court appointment
In case of disagreement, the fathers
decision shall prevail, unless there is judicial
order to the contrary
If the market value of the property or the
annual income of the child exceeds
P50,000, the parent is required to furnish a
bond of not less than 10% of the value of the
childs property or income
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III. Suspension or Termination of
Parental Authority
Grounds for Suspension of Parental
Authority (CLEBC; Art. 230-31 FC)
1. Conviction of parent for crime punished w/
civil interdiction
2. Treats child with excessive harassment and
cruelty
3. Gives corrupting orders, counsel or example
4. Compels child to beg
5. Subjects or allows acts of lasciviousness
Parental Authority Permanently Terminates
(Art. 228 FC)
1. Upon death of parents
2. Upon death of child
3. Upon emancipation of child
4. If the parents exercising parental authority
has subjected the child or allowed him to be
subjected to sexual abuse (Art. 232 FC)
Termination of parental authority which can
be revived by final judgment (Art. 229 FC)
1. Upon adoption of the child;
2. Upon the appointment of a general guardian
for the child;
3. Upon judicial declaration
IV. Rights and Duties of Children
Art. 356, NCC
parental care
receive at least elementary education
be given moral and civil training by parents
or guardian
live in an atmosphere conducive to his
physical, moral, and intellectual
development
Art. 3, PD603
to be born well
right to a wholesome family life
right to a well-rounded development
right to a balanced diet, adequate clothing,
shelter, proper medical attention, and all
basic physical requirements of a healthy life
raised in an atmosphere of morality and
rectitude
education commensurate to his abilities
full opportunities for a safe and wholesome
recreation
protection against exploitation and other bad
influences
right to the care, assistance and protection
of the State
right to an efficient and honest government
right to grow up as a free individual
Duties of Children:
Art. 357, NCC
obey and honor his parents or guardian
respect old relatives and persons holding
substitute parental authority
exert his utmost for his education and
training
cooperate with the family in matters for his
own good
Art. 4, PD603
strive to live an upright and virtuous life
love, obey, respect his parents and
cooperate with them in strengthening the
family
extend his love to his brothers and sisters
exert his utmost to develop his potentials
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Chapter XIV. Funerals
I. General Guidelines
Art. 305, Civil Code. 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.
Art. 306, Civil Code. Every funeral shall be in
keeping with the social position of the deceased.
Art. 307, Civil Code. 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.
Art. 308, Civil Code. No human remains shall be
retained, interred, disposed of or exhumed without the
consent of the persons mentioned in articles 294 and
305.
Art. 309, Civil Code. 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.
Art. 310, Civil Code. 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.
Duty and Right to make funeral
arrangements (in relation to Art. 199 FC)
1. Spouse
2. Descendants in nearest degree
3. Ascendants in nearest degree
4. Brothers and sisters
5. Municipal authorities if there are no
persons who are bound to support or if such
persons are without means
Guidelines in making funeral arrangements
The persons who preferred in the right to
make funeral arrangements may waive the
right expressly or impliedly in which case the
right and duty immediately descend to the
person next in the order
It must be in keeping with the social position
of the deceased.
Law shall prevail over the will of the persons
who have the right to control the burial of
deceased exhumation, evidential purpose,
disposition of corpse by deceased,
mutilation of corpses and autopsies.
Corpses which are to be buried at public
expenses may also be used for scientific
purposes under certain conditions.
Expressed wishes of the deceased is given
priority provided that it is not contrary to law
and must not violate the legal and
reglamentary provisions concerning funerals
and disposition of the remains (time,
manner, place or ceremony)
In the absence of expressed wishes, his
religious beliefs or affiliation shall determine
the funeral rights.
In case of doubt, the persons in Art. 199
shall decide.
Any person who disrespects the dead or
interferes with the funeral shall be liable for
material and moral damages.
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Table of Contents
Chapter I. Concept of Succession................59
I. Definition of Succession (Art. 774, CC)
59
II. Opening of Succession (Art. 777, CC) 59
III. Kinds of Succession (Art. 778, CC) ....59
IV. Heirs....................................................60
Chapter II. Testamentary Succession..........61
I. Concept ...............................................61
II. Testamentary Capacity .......................61
III. Formalities of Wills..............................61
IV. Qualifications of Witnesses to a Notarial
Will 62
V. Qualifications of Witnesses to a Notarial
Will 63
VI. Institution of Heirs ...............................63
International Law .........................................63
Reference ....................................................64
IX. Revocation of Wills and Testamentary
Dispositions..................................................64
X. Allowance and Disallowance of Wills..65
XI. Substitution of Heirs............................66
XII. Legitimes.........................................67
XIII. Preterition........................................69
XIV. Reserva Troncal .............................69
XV. Disinheritance .................................70
XVI. Legacies and Devises.....................71
Chapter III. Intestate Succession..................74
Succession...................................................74
II. The Intestate or Legal Heirs................74
Legal or Intestate Succession......................74
IV. Relationship (Arts. 963-969, CC) ........75
CC) 75
76
VII. Concurrence in Legal or Intestate
Succession...................................................77
VIII. Outline of Intestate Shares .............77
IX. Order of Concurrence in the Case of an
Adopted Child (Art, 190, FC) .......................78
Testamentary and Intestate Succession .....79
I. Accretion .............................................79
II. Capacity to Succeed ...........................80
Inheritance ...................................................81
IV. Collation (Arts. 1061-1077, CC)..........81
Estate .............................................................. 83
I. Concept of Partition ............................ 83
II. Effects of Partition............................... 84
III. Nullification of Partition ....................... 84
IV. Important Periods in Partition ............. 85
Concepts through Sample Computational
Problems......................................................... 86
I. Institution of Heirs ............................... 86
II. Legitimes............................................. 86
III. Intestate Succession........................... 87
IV. Accretion ............................................. 87
V. Collation .............................................. 88
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Chapter I. Concept of Succession
I. DEFINITION OF SUCCESSION
II. OPENING OF SUCCESSION
III. KINDS OF SUCCESSION
IV. KINDS OF HEIRS
I. Definition of Succession (Art. 774,
CC)
It 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
a process of transmission of property,
rights, and obligations not extinguished by
death (Balane)
II. Opening of Succession (Art. 777, CC)
The rights to succession are transmitted
from the moment of the death of the
decedent.
However, a person may be presumed
dead for the purpose of opening his
succession (Rules on presumptive death
in Arts. 390-391, CC). In this case,
succession is only of provisional character
because there is always a chance that the
absentee may still be alive.
III. Kinds of Succession (Art. 778, CC)
Testamentary (Art. 779, CC) - results from
the designation of an heir made in a will
Legal or intestate (Art. 960, CC) - takes
place by operation of law in the absence of a
valid will
If a person dies without a will or with a
void will or one which has subsequently
lost its validity;
The suspensive condition attached to
the institution of heir does not happen or
is not fulfilled or the heir dies before the
testator or repudiates the inheritance,
there being no substitution and no right
of accretion takes place
When the heir instituted in incapable of
succeeding, except in cases provided in
this Code.
Heir dies before the testator
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Testator repudiates the inheritance
Mixed (Art. 780, CC) - effected partly by will
and partly by operation of law
IV. Heirs
Those who are called to the whole or to an
aliquot portion of the inheritance either by
will or by operation of law
Compulsory Heirs those who succeed by
force of law to some portion of the
inheritance, in an amount predetermined by
law known as the legitime, of which they
cannot be deprived by the testator, except
by a valid disinheritance. They succeed
regardless of a will.
Voluntary or Testamentary Heirs those
who are instituted by the testator in his will,
to succeed to the portion of the inheritance
of which the testator can freely dispose.
They succeed by reason of a will.
Legal or Intestate Heirs those who
succeed to the estate of the decedent who
dies without a valid will, or to the portion of
such estate not disposed of by will. They
succeed in the absence of a valid will,
although this is not the only ground for
intestacy, as can be seen in Chapter III.
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Chapter II. Testamentary Succession
I. Concept of Testamentary Succession
II. Testamentary Capacity
III. Formalities of Wills
IV. Qualifications of Witnesses to a Notarial Will
V. Amending a Will
VI. Institution of Heirs
VII. Applicable Principles of Private International
Law
VIII. Codicils and Incorporation by Reference
IX. Revocation of wills and Testamentary
disposition
X. Allowance and Disallowance of wills
XI. Substitution of Heirs
XII. Legitimes
XIII. Preterition
XIV. Reserva Troncal
XV. Disinheritance
XVI. Legacies and Devices
I. Concept
Governing Law on Validity with Respect to
the Time of Execution
Aspect of the
Will
Governing Law
Formal Validity
Law in force at the time the will
was executed (Art. 795, CC)
Intrinsic
Validity
Law of decedents nationality at
the time of his death (Art. 16
and 2263, CC)
II. Testamentary Capacity
Requirements (SAP)
Testator is of Sound mind at the time of
execution (Art. 798, CC)
Not under 18 years of Age (Art. 797,
CC)
Not expressly Prohibited by law to make
a will (Art. 796, CC)
Soundness of mindRules to remember:
It is sufficient that the testator (NPC)
o Knew the Nature of the estate to
be disposed of; (N)
o The Proper objects of his bounty;
(P)
o Character of the testamentary act
(C) (Art. 799, CC)
It is not necessary that the testator be in
full possession of all his reasoning
faculties, or that his mind be wholly
unbroken, unimpaired, or unshattered by
disease, injury or other cause. (Art. 799,
CC)
Soundness of mind is presumed (Art.
800, CC)
III. Formalities of Wills
Kinds of Wills
1. Notarial will- Ordinary or attested will (Arts.
804-808, CC)
2. Holographic will (Arts. 804 and 810, CC)
Common Requirements for Both Kinds of
Wills (Art. 804, CC)
1. Every will must be in writing; and
2. Executed in the language known to the
testator.
_____________
Specific Requirements for Notarial Wills
(Asked in 75, 86, 90, 93, 07 and 08)
1. In writing (Art. 804, CC)
2. In the language known to the testator (Art.
804, CC)
3. SUBSCRIPTION: Subscribed to, at the
end (Art. 805, CC) -
a. By the testator himself; or
b. By the testators name written by a
representative in his presence and
under his express direction.
4. ATTESTATION: Attested and subscribed
by 3 or more credible witnesses in the
presence of the testator and of one
another (Art. 805, CC).
GENERAL RULE EXCEPTION
The law presumes that
every person is of sound
mind
If within one month
before making a will the
testator is known to be
insane, the burden of
proof that he had a lucid
interval is on the one
alleging the validity of
the will.
Supervening incapacity will not
invalidate the will. Supervening capacity
will also not validate the will. (Art. 801,
CC)
The attestation clause shall state the ff:
Number of pages;
The fact that the testator or his
representative under his express
direction signed the will and every
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page in the presence of instrumental
witnesses
That the witnesses signed the will
and all its pages in the presence of
the testator and of one another.
Test of Presence:
Jaboneta vs. Gustilo, (1906): Not
whether they actually saw each other
sign, but whether they might have seen
each other sign had they chosen to do
so considering their mental and physical
condition and position with relation to
each other at the moment of inscription
of each signature.
5. MARGINAL SIGNATURES: Testator or his
representative shall write his name, and the
witnesses shall sign each and every page
except the last page (Art. 805, CC)
Exceptions:
When the will consists of only one
page
Abangan vs. Abangan, (1919):
When the will consists of only two
pages, the first of which contains all
dispositions and is signed at the
bottom by the testator and the
witnesses, and the second page
contains only the attestation clause
duly signed at the bottom by the
witnesses.
In the case of Matias vs. Salud (1957),
the use of thumbprint was allowed.
Icasiano vs. Icasiano, (1964): The
inadvertent failure of one witness to affix
his signature to one page of a
testament, due to the simultaneous
lifting of two pages in the course of
signing, is not per se sufficient to justify
denial of probate.
6. PAGE NUMBERINGS: Numbered
correlatively (Art. 805, CC), i.e., Page One
of Five pages
7. Acknowledged before a notary public by
the testator and the witnesses (Art. 806, CC)
In the case of Cruz vs. Villasor (1973)
the court ruled that the Notary public
cannot be considered a third witness.
He cannot acknowledge before himself
his having signed the will. To allow such
would have the effect of having only two
attesting witnesses to the will which
would be in contravention of Arts. 805
and 806.
_____________
Special Requirements for Notarial Wills
1. Deaf Mute (Art. 807, CC)
a. Testator must personally read the will; or
b. Testator shall personally designate two
persons to read the contents and
communicate it to him in some
practicable manner.
2. Blind (Art. 808, CC)
a. The will shall be read to the testator
twice - By one of the subscribing
witnesses and by the notary public
acknowledging the will.
b. In the case of Garcia vs. Vasquez
(1970), the court considered a testator
suffering from Glaucoma as legally
blind.
_____________
Requisites for a Holographic Will
1. In writing (Art. 804, CC)
2. In a language known to the testator (Art.
804, CC)
3. Entirely written, dated and signed in the
hand of the testator himself (Art. 810, CC)
IV. Qualifications of Witnesses to a
Notarial Will
Qualifications (Art. 820, CC)
1. Of sound mind
2. Aged 18 years or over
3. Not blind, deaf or dumb
4. Able to read and write
Disqualifications (Art. 821, CC)
1. Person not domiciled in the Philippines
2. Those who have been convicted of
falsification, perjury, or false testimony.
Interested witness (Art. 823, CC)
General Rule Exception
Devises or legacies in
favor of a spouse, parent
or child who also attests
to the will as a witness
shall be void
If there are three other
competent witnesses, the
device or legacy shall be
valid and the interested
witness shall be treated
as a mere surplasage
Creditors are not incompetent to be
witnesses (Art. 824, CC)
Supervening incompetency shall not prevent
the allowance of the will (Art. 822, CC)
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V. Qualifications of Witnesses to a
Notarial Will
Notarial Will v. Holographic Will
Notarial Will Holographic WIll
NOTARIAL codicil ONLY Notarial Codicil; or
Holographic Codicil; or
Additional dispositions
below the signature,
dated and signed in the
hand of the testator.
Codicil (Art. 825, CC)- it is a supplement
or addition to a will, made AFTER the
execution and annexed to be taken as
part thereof, by which any disposition
made in the original is explained,
added to, or altered.
Effect of insertion written by another person
on the validity of a holographic will)
When made Effect
After the execution,
without consent of
testator
Insertion considered not
written. Validity cannot be
defeated by the malice or
caprice of a third person
After execution, with
consent
Will is valid, insertion is
void.
After execution, validated
by testators signature
Insertion becomes part of
the will. Entire will
becomes void because it
is not wholly written by
the testator.
Contemporaneous to the
execution of the will
Will is void because it is
not written entirely by the
testator
VI. Institution of Heirs
(Asked in 94, 05, 06, and 08)
Definition (Art. 841, CC)
It is an act by virtue of which a testator
designates in his will the persons who
are to succeed him.
Requisites for a valid institution
1. Testator has capacity to make the
institution
2. The institution is made in a will
3. Institution is made personally by the
testator and is not left to a third person
4. Persons instituted must be identified or
identifiable
5. There must be no preterition of compulsory
heirs
6. Only the free portion can be disposed of
by institution.
A voluntary heir who dies before the testator
or proves to be incapacitated transmits
nothing to his heirs (Art. 851, CC)
Three principles in institution of heirs
1. Equality of heirs (Art. 846, CC)
a. Heirs instituted without designation of
shares shall inherit in equal parts
b. NOTE: This applies even to institution of
full and half-blood siblings.
2. Individuality of institution (Art. 847, CC)
Example: I designate A, B, and the
children of C. Unless otherwise stated, if
C has two children, the estate will be
distributed in four equal parts.
3. Simultaneity of institution (Art. 849, CC)
Example: I designate my brother A and
his children. A and his children will
inherit at the same time, unless
otherwise expressly stated that they will
inherit successively.
Institution based on a false cause (Art. 850,
CC)
GENERAL RULE EXCEPTION
False cause is
considered not written
and the institution will
take effect
If the testator would
not have made the
institution had he
known the false cause,
the institution would
NOT take effect
Example: I designate A to half of the
estate ONLY because he is the husband
of my daughter. Note that the reliance
on the false cause must be clear and
unmistakable.
International Law
Governing Law As to Time of Execution of
Will
Aspect of the Will Governing Law
Formal Validity Law in force at the time
the will was made
Intrinsic Validity Law of decedents
nationality at the time of
his death (Art. 16, CC)
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Governing Law as to Place of Execution of
Will
Testator
Place of
Execution of Will Governing Law
Filipino
Philippines Philippine Law (Art.
16, CC)
Outside of the
Philippines
1. Law of the country
in which it is executed
(Art. 17, CC); or
2. Philippine Law (Art.
815, CC)
Alien Philippines 1. Philippine Law; or
2. Law of the country
of which testator is a
citizen or subject (Art.
817, CC)
Outside of the
Philippines
1. Law of the place
where the will is
executed (Art. 17,
CC); or
2. Law of the place
where the testator
resides; or
3. Law of the
testators country; or
4. Philippine Law (Art.
816, CC)
Aspects of the Will Governed by the National
Law of the Decedent
1. Order of succession;
2. Amount of successional rights;
3. Intrinsic validity of testamentary
provisions; and
4. Capacity to succeed.
Joint Will
1. A single testamentary instrument,
2. Which contains the wills of two or more
persons,
3. Jointly executed by them,
4. Either for their reciprocal benefit or for the
benefit of a third person.
Mutual Wills
1. Executed pursuant to an agreement
between two or more persons,
2. Jointly executed by them,
3. Either for their reciprocal benefit or for the
benefit of a third person.
Reciprocal Wills
1. Testators name each other as beneficiaries
in their own wills,
2. under similar testamentary plans
Note: A will that is both joint and mutual is one
executed jointly by two or more persons,
the provisions of which are reciprocal and
which shows on its face the devises are
made in consideration of each other.
Such is prohibited under Art. 819, CC.
Prohibition is applicable only to joint
wills executed by Filipinos.
Reference
Codicil (Arts. 825-826, CC)
1. It is a supplement or addition to a will,
2. made after the execution of a will,
3. and annexed to be taken as a part of the
will,
4. by which any disposition made in the original
will is explained, added to, or altered.
5. in order that it may be effective, it shall be
executed as in the case of a will.
Incorporation by Reference; Requisites (Art,
827, CC)
1. The document or paper referred to in the will
must be in existence at the time of the
execution of the will.
2. The will must clearly describe and identify
the same, stating among other things the
number of pages thereof.
3. It must be identified by clear and
satisfactory proof as the document or paper
referred to therein; and
4. It must be signed by the testator and the
witnesses on each and every page,
except in case of voluminous books of
account or inventories.
IX. Revocation of Wills and
Testamentary Dispositions
Modes of Revocation (Art. 830, CC)
1. By implication of law; or
2. By the execution of a will, codicil or other
writing executed as provided in the case of
wills; or
3. By burning, tearing, canceling, or
obliterating the will with the intention of
revoking it, by the testator himself, or by
some other person in his presence, and
by his express direction.
Note: The act contemplating revocation must be
done at any time before the death of the
testator. The right of revocation cannot be
waived or restricted. (Art. 828, CC)
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Law Governing Revocation (Art. 829, CC)
Place of
Revocation
Testators
Domicile
Governing
Law
Philippines
Philippines, or
some other
country
Philippine Law
Outside the
Philippines
Philippines Philippine Law
Foreign
Country
1. Law of the
place where
the will was
made; or
2. Law of the
place in which
the testator
had his
domicile at the
time of
revocation
Doctrine of Dependent Relative Revocation
Molo vs. Molo, (1951): The rule that where
the act of destruction is connected with the
making of another will so as to fairly raise
the inference that the testator meant the
revocation of the old to depend upon the
efficacy of the new disposition intended to
be substituted, the revocation will be
conditional and dependent upon the
efficacy of the new disposition; and if for
any reason, the new will intended to be
made as a substitute is inoperative, the
revocation fails and the original will
remain in full force.
X. Allowance and Disallowance of Wills
Probate
It is a Special Proceeding required to
establish the validity of a will and in order to
pass real or personal property (Art. 838, CC)
Mercado vs. Santos (1938): The probate of
a will by the probate court having jurisdiction
thereof is usually considered as conclusive
as to its due execution and validity, and is
also conclusive that the testator was of
sound and disposing mind at the time when
he executed the will, and was not acting
under duress, menace, fraud, or undue
influence, and that the will is genuine and
not a forgery.
General Rule: In probate proceedings, the
probate court cannot inquire into the intrinsic
validity of testamentary provisions. Only the
extrinsic validity of such wills may be
examined.
Exceptions:
a. Acain vs Diongson (1987): When the will
is intrinsically void, on its face such that
to rule on its formal validity would be a
futile exercise
b. Valera vs. Inserto, (1987): Claimants are
all heirs, and they consent, either,
expressly or impliedly, to the submission
of the question of intrinsic validity to the
court.
c. Pastor vs. CA, (1983): Probate court
may pass upon the title thereto, but such
determination is provisional and not
conclusive, and is subject to the final
decision in a separate action to resolve
title.
Matters to be Proved in Probate
1. Whether the instrument which is offered for
probate is the last will and testament of
the decedent
2. Whether the will has been executed in
accordance with the formalities
prescribed by law
3. Whether the testator had testamentary
capacity at the time of execution of the will
Grounds for Disallowance of Will (Art. 839,
CC; Rule 76, Sec 9) (SUM IFF)
1. If the Signature of the testator was procured
by fraud;
2. If it was procured by Undue and improper
pressure and influence, on the part of the
beneficiary or some other person;
3. If the testator acted by Mistake or did not
intend that the instrument he signed should
be his will at the time affixing his signature
thereto;
4. If the testator was Insane or otherwise
mentally incapable of making a will at the
time of its execution;
5. If the Formalities required by law have not
been complied with; or
6. If it was executed through Force or under
duress, or the influence of fear, or threats.
Note: This list on the grounds for disallowance
of will is exclusive.
Revocation v. Disallowance
Revocation Disallowance
Voluntary Act of the
Testator
Given by Judicial Decree
With or Without Cause Must always be for a
legal cause
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May be partial or total Always total, except
when the ground of fraud
of influence for example
affects only certain
portions of the will
XI. Substitution of Heirs
Definition of Substitution (Art. 857, CC)
1. It is the appointment of another heir,
2. So that he may enter into the inheritance in
default of the heir originally instituted.
Classes of Substitution
1. Simple or Common: The testator may
designate one or more persons to substitute
the heir/s instituted in case the heirs should:
a. die before him (predecease),
b. should not wish to accept the
inheritance (repudiation), or
c. should be incapacitated to accept the
inheritance (incapacitated). (Art. 859,
CC)
2. Brief or Compendious (Art. 860, CC)
a. Brief Two or more persons were
designated by the testator to substitute
for only one heir
b. Compendious One person is
designated to take the place of two or
more heirs
3. Reciprocal
If the heirs instituted in unequal shares
should be reciprocally substituted, the
substitute shall acquire the share of the
heir who dies, renounces, or is
incapacitated, unless it clearly appears
that the intention of the testator was
otherwise. If there is more than one
substitute, they shall have the same
share in the substitution as the
institution.
Example (only 1 substitute): If two heirs
are reciprocally substituted, then if one
of them dies before the testator dies,
renounces, or turns out to be
incapacitated, the other will get his
share, regardless of whether or not their
shares are equal.
Example (more than 1 substitute): A is
instituted to 1/3, B to 1/6, and C to !. If
C dies before the testator, renounces or
turns out to be incapacitated, then the
other two will get his shares in the same
proportion as in the institution. A will get
twice as much as B (because his share
of 1/3 in the institution is twice the size
of Bs share of 1/6)
4. Fideicommissary
If the testator institutes an heir with an
obligation to preserve and to deliver to
another the property so inherited. The
heir instituted to such condition is called
the First Heir or the Fiduciary Heir; the
one to receive the property is the
fideicommissary of the second heir. (Art.
863, CC)
Requisites of a Fideicommisary Substitution
(Arts. 863-865, CC)
1. A Fiduciary or First Heir instituted is
entrusted with the obligation to preserve
and to transmit to a Fideicommissary
Substitute or Second Heir the whole or part
of the inheritance.
2. The substitution must not go beyond one
degree from the heir originally instituted.
3. The Fiduciary Heir and the
Fideicommissary are living at the time of
the death of the testator.
4. The fideicommissary substitution must be
expressly made.
5. The fideicommissary substitution is imposed
on the free portion of the estate and
never on the legitime
Note:
a. Palacios vs. Ramirez (1982): Degree
refers to degree of relationship.
b. PCIB vs. Escolin (1974): In the absence
of an obligation on the part of the first
heir to preserve the property for the
second heir, there is no fideicommissary
substitution.
Effects of predecease of the first
heir/fiduciary or the second
heir/fideicommisary
Legend:
T Testator
FH First Heir / Fiduciary
SH Second Heir / Fideicommissary
Substitute
Situation 1: If the following is the sequence
of death of the three parties: FH SH T,
who will inherit? The legal heirs. There is
no fideicommissary substitution because FH
and SH are not living at the time of the
testators death. (Art 863, CC)
Situation 2: T SH FH, who will inherit?
The SH and his heirs under Art. 866, CC.
This is because the SH passes his rights to
his own heirs when he dies before FH.
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Situation 3: FH T SH, who will inherit?
No specific provision in law, but SH inherits
because the T intended him to inherit.
XII. Legitimes
Definition of Legitime (Art. 886, CC)
1. It is that part of the testators property which
he cannot dispose of,
2. Because the law has reserved it for his
compulsory heirs.
Classes of Compulsory Heirs (Art. 887, CC)
1. Primary: Those who have precedence
over and exclude other compulsory heirs:
Legitimate Children and Legitimate
Descendants with respect to their
Legitimate Parents and Ascendants
2. Secondary: Those who succeed only in
the absence of the Primary compulsory
heirs:
a. Legitimate Parents and Legitimate
Ascendants, with respect to their
Legitimate Children and Descendants.
(They will inherit only in default of
legitimate children and their
descendants)
b. Illegitimate Parents with respect to their
Illegitimate Children. (They will inherit
only in default of the illegitimate and
legitimate children and their respective
descendants). Note that other
illegitimate ascendants are not included.
3. Concurring: Those who succeed together
with the primary or the secondary
compulsory heirs:
a. Widow or Widower / Surviving Spouse
(Legitimate)
b. Illegitimate Children and Illegitimate
Descendants
If the testator is a
LEGITIMATE CHILD:
If the testator is an
ILLEGITIMATE CHILD:
1. LC and descendants 1. LC and descendants
2. In default of No. 1, LP
and ascendants
2. ILC and descendants
3. SS 3. In default of Nos. 1-2.
ILP only
4. IC and descendants 4. SS
Legend:
LC Legitimate Children
ILC Illegitimate Children
SS Surviving Spouse
LP Legitimate Parents
ILP Illegitimate Parents
Specific Rules on Legitimes
1. Direct Descending Line
a. Rule of Preference between lines (Art
978 and 985, CC)
Those in the direct descending line
shall exclude those in the direct
ascending and collateral lines; and
Those in the direct ascending line
shall, in turn, exclude those in the
collateral line.
b. Rule of Proximity (Art 926, CC)
The relative nearest in degree
excludes the farther one
c. Right or representation ad infinitum in
case of predecease, incapacity, or
disinheritance (Art 972 and 992, CC)
For decedents who are Legitimate
Children, only the Legitimate
Descendants are entitled to right of
representation.
For decedents who are Illegitimate
Children, both the Legitimate and
the Illegitimate Descendants can
represent, only with respect to the
decedents illegitimate parents.
d. If all the Legitimate Children
repudiate their legitime, the next
generation of Legitimate Descendants
may succeed in their own right.
2. Direct Ascending Line
a. Rule of division between lines
The father and the mother shall
inherit equally if both living. One
succeeds to the entire estate of the
child if the other is dead. (Art. 986,
CC)
In default of the mother and the
father, the ascendants nearest in
degree will inherit. (Art. 987)
If there are more than one relative of
the same degree but of different
lines, one half will go to the paternal
ascendants and the other half to the
maternal ascendants. (Art. 987)
b. Rule of equal division
The relatives who are in the same
degree shall inherit in equal shares.
(Art 987)
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Summary of Legitimes of Compulsory Heirs
(Asked in 82, 85, 86, 97, 99, 03, and 05)
Surviving
Relatives
LC &
Descendants
SS ILC LP &
Ascendants
ILP
1 LC alone ! (divided by #
of children)
2 1 LC, SS ! "
3 LC, SS ! (divided by #
of children)
Same as
share of 1
LC
4 LC, ILC ! ! share of 1
LC
5 1 LC, SS, ILC ! "
(preferred)
! share of 1
LC
6 2 or more LC, SS,
ILC
! (divided by #
of children)
Same as
share of 1
LC
! share of 1
LC
7 LP alone !
8 LP, ILC " !
9 LP, SS " !
10 LP, SS, ILC
1/8
" !
11 ILC alone ! (divided
by # of
children)
12 ILC, SS
1/3 1/3
(divided
by # of
children)
13 SS alone ! or
1/3
if
marriage in
articulo
mortis
14 ILP alone !
15 ILP, SS " "
16 Adopter, ILC, SS
1/3 1/3 1/3
(adopter)
Steps in Determining the Legitime of
Compulsory Heirs
1. Determine the gross value of the estate at
the time of the death of the testator.
2. Determine all debts and charges which are
chargeable against the estate.
3. Determine the net value of the estate by
deducting all the debts and charges from the
gross value of the estate.
4. Collate or add the value of all donations inter
vivos to the net value of the estate.
5. Determine the amount of the legitime from
the total thus found.
6. Impute the value of all donations inter vivos
made to strangers against the disposable
free portion and restore it to the estate if the
donation is inofficious.
7. Distribute the residue of the estate in
accordance with the will of the testator.
Note: Please see the Illustrative Integrative
Problems in Chapter VI for the application of
these steps.
Remedy of a Compulsory Heir in case of
Impairment of Legitime
Extent and Nature of
Impairment
Remedy
Total omission of a
compulsory heir who is a
direct descendant or
ascendant (preterition)
Annulment of institution
and reduction of legacies
and devises (Art. 854, CC)
Testamentary dispositions
impairing or diminishing
the legitime
Reduction of the
disposition insofar as they
may be inofficious or
excessive (Art. 907, CC)
Partial impairment Completion of the legitime
(Art. 906, CC)
Impairment by inofficious
donations
Collation reduction of
donations (Arts. 771 and
911, CC)
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XIII. Preterition
(Asked in 88, 99, 00, 01 and 08)
A. Concept of Preterition (Art. 854, CC)
1. There must be a total omission of one,
some or all of the heir/s in the will.
2. 2. The omission must be that of a
compulsory heir.
3. 3. The compulsory heir omitted must be of
the direct line.
4. The omitted compulsory heir must be living
at the time of the testators death or must
at least have been conceived before the
testators death.
B. Effects of Preterition (Art. 854, CC)
1. The institution of the heir is annulled.
2. Devises and legacies shall remain valid as
long as they are not inofficious.
3. If the omitted compulsory heir should die
before the testator, the institution shall be
effective, without prejudice to the right of
representation.
Neri vs. Akutin (1941): When there are
no devises and legacies, preterition will
result in the annulment of the will and
give rise to intestate succession.
XIV. Reserva Troncal
(Asked in 79, 82, 85, and 87)
A. Concept of Reserva Troncal (Art. 891,
CC)
Situation
1. A descendant (prepositus) inherits or
acquires property from an ascendant
(source) by gratiutious title or from a brother
or sister
2. The same property is inherited by another
ascendant (reservista) or is otherwise
acquired by him by operation of law from the
said descendant (prepositus)
Then an obligation arises
The said ascendant (reservista) must
reserve the property for the benefit of the
relatives of the deceased descendant within
the third civil degree and who belong to the
line from which the said property came
(reservatorios).
___________
B. Requisites for Reserva Troncal
(Chua vs. CFI and Gonzales vs. CFI)
1. That the property was acquired by a
descendant (Prepositus) from an ascendant
or from a brother or sister (Source) by
gratuitous title,
2. That the Prepositus died without an issue,
3. That the property is inherited by another
ascendant (Reservista) by operation of law,
and
4. That there are relatives within the 3
rd
degree
(Reservatarios) belonging to the line from
which said property came.
___________
C. Reserva Minima v. Reserva Maxima
Situation
1. The prepositus acquired property
gratuitously from an ascendant or a brother
or sister
2. In his will, he institutes as his heir his
ascendant (who is also a compulsory heir)
such that the ascendant receives half of the
estate by operation of law as legitime and
the other half by testamentary disposition
Problem
Will the property acquired gratuitiously by
the prepositus from the source be treated as
acquired by the ascendant-heir by operation
of law (legitime) and therefore reservable or
by testamentary disposition?
Two Views
1. Reserva Maxima: The entire property will be
considered acquired as legitime and
therefore wholly reservable
2. Reserva Minima: One half is reservable, the
other half is not subject to reserva troncal
(Tolentino, p. 284)
___________
D. Extinguishment of the Reserva
(Tolentino, p. 300-305) (LDD-RRP)
1. Loss of the reservable property
2. Death of the reservista
3. Death of all the relatives within the third
degree belonging to the line from which the
property came
4. Renunciation by the reservatorios
5. Registration of the reservable property
under the Torrens system as free
6. Prescription, when the reservista holds the
property adversely against the reservatorios,
as free from reservation
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XV. Disinheritance
(Asked in 82, 84, 99, 00, and 08)
A. Definition of Disinheritance (Art. 915, CC)
1. It is the act by which the testator
2. For just cause
3. Deprives a compulsory heir of his right to the
legitime.
B. Requisites of a Valid Disinheritance
1. Heir disinherited must be designated by
name or in such a manner as to leave no
room for doubt as to who is intended to be
disinherited.
2. It must be for a cause designated by law.
3. It must be made in a valid will.
4. It must be made expressly, stating the cause
in the will itself.
5. The cause must be certain and true, and
must be proved by the interested heir if the
person should deny it.
6. It must be unconditional.
7. It must be total.
_________________________________________________________________________________
C. Summary of Causes of Disinheritance
Grounds for Disinheritance 919 920 921 1032
1 Guilty or Convicted of Attempt Against the Life of the Testator, Spouse,
Ascendant or Descendant
* * * *
2 Accused Testator or Decedent of Crime Punishable by Imprisonment of
6 years or more, and Found Groundless or False
* * * *
3 Causes testator or decedent to Make a Will or Change one by Fraud,
Violence, Intimidation, or Undue Influence
* * * *
4 Unjustified Refusal to Support Testator * * *
5 Convicted of Adultery or Concubinage with Spouse of Testator or
Decedent
* * *
6 Maltreatment of testator by Word and Deed *
7 Leading a Dishonorable or Disgraceful Life *
8 Conviction of Crime which carries the penalty of Civil Interdiction *
9 Abandonment of Children or Inducing Children to Live Corrupt and
Immoral Life or Against Attempted Virtue
* *
10 Loss of Parental Authority * *
11 Attempt by One Parent Against the Life of the Other UNLESS there is
Reconciliation Between Parents
*
12 Spouse Has Given Cause for Legal Separation *
13 Failure to Report Violent Death of Decedent Within One Month UNLESS
Authorities Have Already Taken Action
*
14 Force, Violence, Intimidation, or Undue Influence to Prevent Another
from Making a Will or Revoking One Already Made or Who Supplants or
Alters the Latters Will
*
15 Falsifies or Forges Supposed Will of the Decedent *
Art, 919, CC: Children and Descendants
Art. 920, CC: Parents and Ascendants
Art. 921, CC: Spouse
Art. 1032, CC: Unworthiness
D. Modes of Revocation
1. Reconciliation (Art 922, CC)
2. Subsequent institution of the disinherited
heir
3. Nullity of the will which contains the
disinheritance.
Note: The moment that testator uses one of the
acts of unworthiness as a cause for
disinheritance, he thereby submits it to the
rules on disinheritance. Thus,
reconciliation renders the disinheritance
ineffective.
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XVI. Legacies and Devises
Legacy and Devise Distinguished
LEGACY DEVISE
A gift of personal
property given in a will
A gift of real property
given in a will
It is bequeathed It is devised
Persons Charged With the Duty to Give
Legacies and Devises in a Will
1. Compulsory heir, provided, their legitimes
are not impaired (Art. 925, CC)
2. Voluntary heir
3. Legatee or devisee can be charged with
the duty of giving a sub-legacy or sub-
devisee but only to the extent of the value of
the legacy or devise given him (Art. 925,
CC)
4. The estate represented by the executor
or administrator, if no one is charged with
this duty to pay or deliver the legacy or
devise in the will
a. If there is an administration proceeding,
it constitutes a charge upon the estate.
b. If there is no administration proceeding,
it is a charge upon the heirs.
Validity and Effect of Legacy or Devise
Legacy or devise of a thing belonging to
another (Art. 930, CC)
STATUS OF PROPERTY
GIVEN BY
LEGACY/DEVISE
EFFECT ON
THE LEGACY/
DEVISE
Testator erroneously
believed that the property
Void
belonged to him
The thing bequeathed
afterwards becomes his by
whatever title
Effective
Legacy or devise of thing already belonging
to the legatee or devisee
STATUS OF
PROPERTY GIVEN
BY LEGACY/DEVISE
EFFECT ON THE
LEGACY/DEVISE
The thing already
belongs to the legatee
or devisee at the time
of the execution of the
will (Art. 932, CC)
Ineffective
The thing is subject to
an encumbrance or
interest of another
person (Art. 932, CC)
Valid only as to the
interest or
encumbrance
Legatee or devisee
subsequently alienates
the thing (Art. 933,CC)
Ineffective
After alienating the
thing, the legatee or
devisee subsequently
reacquires it
gratuitously (Art. 933,
CC)
Ineffective
After alienating the
thing, the legatee or
devisee acquires it by
onerous title (Art. 933,
CC)
Legatee or devisee
can demand
reimbursement from
the heir or estate
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Different Objects of Legacies and Devises (Art. 934-944,CC)
1. Legacy of a thing pledged or mortgaged to secure a debt (Art 934, CC)
2. Legacy of credit, or remission or release of a debt (Art 935 CC)
3. Legacy to the debtor of thing pledged by him (Art 936, CC)
4. Legacy or devise to a creditor if the testator orders the payment of a debt (Art 939, CC)
5. Alternative legacies and devises (Art 940, CC)
6. Legacy of generic personal property or indeterminate real property (Art 941, CC)
7. Legacy of education (Art 944, CC)
8. Legacy of support (Art 944, CC)
OBJECTS OF LEGACY OR
DEVISE
EFFECT
Thing pledged or mortgaged to
secure a debt
Estate is obliged to pay the debt
Other charges pass to the legatee or devisee
Credit or remission or release of a
debt
Effective only as regards the credit or debt existing at the
time of the testators death
Legacy lapses if the testator later brings action against the
debtor
If generic, comprises all credits/debts existing at time of
execution of will
Thing pledged by debtor Only the pledge is extinguished; the debt remains
To a creditor Shall not be applied to his credit unless the testator so
declares
Order of payment of a debt If testator does not really owe the debt, the disposition is
void
If the order is to pay more that the debt, the excess is not
due
This is without prejudice to the payment of natural
obligations
Alternative legacies and devises The choice is with the heir, or the executor or administrator
If the heir, legatee or devisee dies the right passes to their
heirs
Once made, the choice is irrevocable
Legacy of generic personal property
or indeterminate real property
Legacy is valid even if there are no things of the same kind
in the estate
Devise of indeterminate real property valid only if there are
immovable property of the same kind in the estate
The choice belongs to the heir, legatee or devisee or the
executor or administrator
Legacy of education Lasts until the legatee is of age or beyond the age of
majority in order that he may finish some professional,
vocational or general course provided he pursues his
course diligently
If testator did not fix the amount it is fixed in accordance
with the social standing and circumstances of the legatee
and the value of the estate
Legacy of support Lasts during lifetime of legatee
If the testator used to give the legatee a sum of money for
support, give the same amount unless it is markedly
disproportionate to the estate
If testator did not fix the amount it is fixed in accordance
with the social standing and circumstances of the legatee
and the value of the estate
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Order of Payment In Case the Estate Is Not Sufficient to Cover All the Legacies and Devises
ART. 911 ART. 950
Order of Preference
(LIPO)
Order of Preference
(RPSESO)
Legitime of compulsory heirs
Donations Inter vivos
Preferential legacies or devises
All Other legacies or devises pro rata
Remuneratory legacy/devise
Preferential legacy/devise
Legacy for Support
Legacy for Education
Legacy/devise of Specific, determinate thing
which forms a part of the estate
All Others pro rata
Application: Application:
When the reduction is necessary to
preserve the legitime of compulsory
heirs from impairment whether there are
donations inter vivos or not; or
When, although, the legitime has been
preserved by the testator himself there are
donations inter vivos.
NOTE:
Art. 911, CC governs when there is a conflict
between compulsory heirs and the devisees
and legatees.
When there are no compulsory heirs and the
entire estate is distributed by the testator as
legacies or devises; or
When there are compulsory heirs but their
legitime has already been provided for by the
testator and there are no donations inter
vivos.
NOTE:
Art. 950, CC governs when the question of
reduction is exclusively among legatees and
devisees themselves.
How Legacy or Devise Delivered (Art. 951,
CC)
1. The very thing bequeathed shall be
delivered and not its value
2. With all its accessions and accessories
3. In the condition in which it may be upon
the death of the testator
4. Legacies of money must be paid in cash
Ground for Revocation of Legacies and
Devises (Art. 957, CC) (TALO)
1. Testator Transforms the thing such that it
does not retain its original form or
denomination
2. Testator Alienates the thing by any title or
for any cause. Reacquisition of the thing by
the testator does not make the legacy or
devise valid, unless it is effected by right
of repurchase.
3. Thing is totally Lost during the lifetime or
after the death of the testator
4. Other causes: nullity of will, non-compliance
with suspensive condition, sale of the thing
to pay the debts of the deceased during the
settlement of his estate.
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Chapter III. Intestate Succession
I. Causes for Legal or Intestate Succession
II. The Intestate or Legal Heirs
III. Fundamental Underlying Principles in Legal
or Intestate Succession
IV. Relationship
V. The right of Representation
VII. Concurrence in Legal or Intestate Succession
VIII. Outline of Intestate Shares
IX. Order of Concurrence in the case of an
Adopted Child
The Civil Code does not state a definition of
legal or intestate succession. Art. 960 only
enumerates the instances when legal
succession takes place. This enumeration is not
exclusive, as there are other instances where
intestacy may occur, as listed below.
Succession
1. If a person dies without a will (Art 960[1])
2. If a person dies with a void will (Art 960[1])
3. If a person dies with a will which has
subsequently lost its validity (Art 960[1])
4. When the will does not institute an heir (Art
960[2])
5. When the will does not dispose of all the
property belonging to the testator. Legal
succession shall take place only with
respect to the property which the testator
has not disposed (Art 960[2])
6. If the suspensive condition attached to the
institution of the heir does not happen or is
not fulfilled (Art 960[3])
7. If the heir dies before the testator (Art
960[3])
8. If the heir repudiates the inheritance, there
being no substitution, and no right of
accretion takes place (Art 960[3])
9. When the heir instituted is incapable of
succeeding, except in cases provided in
the Civil Code (Art 960[4])
10. Preterition Intestacy may be total or partial
depending on whether or not there are
legacies or devises (Balane, p.426)
11. Upon the expiration of a resolutory term
attached to the institution of heir (Balane,
p.426)
12. Upon fulfillment if a resolutory condition
attached to the institution of heir, rendering
the will ineffective (Balane, p.426)
Note: In all cases where there has been an
institution of heirs, follow the I.S.R.A.I order:
a. If the Institution fails, Substitution
occurs.
b. If there is no substitute, the right of
Representation applies in the direct
descending line to the legitime if the
vacancy is caused by predecease,
incapacity, or disinheritance.
c. The right of Accretion applies to the
free portion when the requisites in Art.
1016 are present.
d. If there is no substitute, and the right of
Representation or Accretion are not
proper, the rules on Intestate
succession shall apply.
II. The Intestate or Legal Heirs
1. Relatives
a. Legitimate ascendants
b. Illegitimate parents
c. Legitimate children
d. Illegitimate children
e. Surviving Spouse
f. Brothers, sisters, nephews and nieces
(BSNN)
g. Other collateral relatives
2. Surviving spouse
3. State (through escheat proceedings)
Legal or Intestate Succession
Rule of Preference between Lines
1. Those in the direct descending line shall
exclude those in the direct ascending and
collateral lines;
2. Those in the direct ascending line shall, in
turn, exclude those in the collateral line.
Rule of Proximity
The relative nearest in degree excludes the
farther one. (Art. 962, par.1 CC), saving the right
of representation when it properly takes place.
Rule of Equal Division
1. The relatives who are in the same degree
shall inherit in equal shares. (Arts. 962
par.2, 987 and 1006, CC)
2. Exceptions: (Balane pp.427-428)
a. the rule of preference of lines
b. the distinction between legitimate and
illegitimate filiation (the ratio under
present law is 2:1) (Art 983, in relation to
Article 895 as amended by Article 176
FC)
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c. the rule of division by line in the
ascending line Article 987 par.2)
d. the distinction between full-blood and
half-blood relationship among brothers
and sisters, as well as nephews and
nieces. (Art 1006 and 1008)
e. representation
Rule of Barrier between the legitimate family
and the illegitimate family (the iron-curtain
rule)
The illegitimate family cannot inherit by intestate
succession from the legitimate family and vice-
versa. (Art. 992, CC)
Rule of Double Share for full blood
collaterals
When full and half-blood brothers or sisters,
nephews or nieces, survive, the full blood shall
take a portion in the inheritance double that of
the half-blood. (Arts. 895 and 983, CC)
Note:
1. If one of the legitimate ascendants,
illegitimate parents, legitimate children or
illegitimate children survives, the brother,
sisters, nephews, and nieces (BSNN) are
excluded
2. If one of the legitimate ascendants,
illegitimate parents, legitimate children,
illegitimate children or surviving spouse
survives, the other collateral relatives and
the state are excluded.
3. If any of the heirs concur in legitimes, then
they also concur in intestacy.
IV. Relationship (Arts. 963-969, CC)
Number of generations determines
proximity. (Art 963)
Each generation forms a degree. (Art 963)
A series of degrees forms a line. (Art 964
par.1)
A line may either be direct or collateral. (Art
964 par.1)
A direct line is that constituted by the series
of degrees among ascendants and
descendants (ascending and descending).
(Art 964 par.2)
A collateral line is that constituted by the
series of degrees among persons who are
not ascendants or descendants, but who
come from a common ancestor. (Art 964
par.3)
Full blood same father and mother. (Art
967 par.1)
Half-blood only one of either parent is the
same. (Art 967 par.2)
In adoption, the legal filiation is personal and
exists only between the adopter and the
adopted. The adopted is deemed a
legitimate child of the adopter, but still
remains as an intestate heir of his natural
parents and other blood relatives. (Art. 189,
FC)
CC)
(Asked in 77, 82, 85, 88, 92, 97, and 07)
It is a right created by fiction of law;
By virtue of which the representative is
raised to the place and degree of the person
represented;
And acquires the rights which the latter
would have if he were living or if he would
have inherited.
Important Concepts
Representation is only allowed with respect
to inheritance conferred by law (i.e., as to
legitimes and intestate shares [ Art 923,
CC]), in cases of incapacity,
disinheritance, and predecease of an
heir.
There is no representation in voluntary
succession (by will). (Art 856, CC)
There is also no representation in
repudiation. Note, however that a
renouncer can represent, but cannot be
represented.
Representation takes place ad infinitum in
the direct descending line but never in the
direct ascending line. ( Art 972, CC)
In the collateral line, representation takes
place only in favor of the children of the
brothers or sisters (i.e., nephews and
nieces) whether of the full or half-blood (Art.
972, CC) and only if they concur with at
least one uncle or aunt. In this case, they
share in the inheritance per stirpes. If the
children survive alone, they inherit in their
own right and share in equal proportions or
per capita. (Art. 975)
Inheritance per stirpes means that the
representative/s shall not inherit more than
what the person they represent would
inherit, if he were living or could inherit.
(Art.975, CC)
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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. (Art. 971, CC)
General Rule
Grandchildren inherit from the
grandparents by right of
representation, if proper.
Exception
Whenever all the children repudiate,
the grandchildren inherit in their own
right because representation is not
proper. (Art 969, CC)
Right of representation in the collateral line
is only possible in INTESTATE succession.
It cannot take place in testamentary
succession.
In determining whether or not representation
is proper, apply the DOUBLE HEIRSHIP
TEST (Art. 973, CC): the representative
must be a legal heir of both the person he is
representing and the decedent.
Thus, illegitimate children can represent
illegitimate children parents in inheritance
from illegitimate grandparents. (*Rationale:
Iron-curtain rule under Art. 992, CC)
On the other hand, a legitimate child may
represent either a legitimate or illegitimate
parent in the inheritance of either a
legitimate or illegitimate grandparents. (Arts.
902, 989,990)
Representation in Adoption (Asked in 94,
04, and 07)
If the adopting parent should die before
the adopted child, the later cannot
represent the former in the inheritance
of the parents or ascendants of the
adopter. The adopted child is not related
to the deceased in that case, because
filiation created by fiction of law is
exclusively between the adopter and the
adopted. (TOLENTINO pp. 448-449)
(Asked in 77, 78, 97, 98, 99, 00, 06, and 08)
Decedent is a Legitimate Child Decedent is an Illegitimate Child Decedent is an Adopted Child
1 LC and
Legitimate descendants
LC and
LC and
2 LP and
Legitimate ascendants
ILC and
Illegitimate descendants
ILC and Illegitimate descendants
3 ILC and
Illegitimate descendants
ILP LP or ILP and
Legitimate ascendants,
Adoptive parents
4 SS SS SS
5 Legitimate siblings,
Nephews,
Nieces
Illegitimate siblings,
Nephews,
Nieces
Siblings,
Nephews,
Nieces
6 Legitimate collateral relatives within
the 5
th
degree
State State
7 State
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VII. Concurrence in Legal or Intestate Succession
INTESTATE HEIRS Excludes Excluded By Concurs With
LC and
Ascendants,
Collaterals and
State
No one SS and
ILC
ILC
and Descendants
ILP,
Collaterals and
State
No one SS
LC and
LP
LP and
Legitimate ascendants
Collaterals and
State
LC ILC and
SS
ILP Collaterals and
State
LC and ILC SS
SS Collaterals other than
siblings, nephews and nieces
No one LC, ILC, LP, ILP
Siblings
Nephews
Nieces
Siblings,
Nephews
Nieces
All other collaterals and
State
LC, ILC, LP, ILP SS
Other collaterals within 5
th
degree
Collateral more remote in
degree and
State
LC, ILC, LP, ILP and
SS
Collaterals in the same
degree
State No one Everyone No one
VIII. Outline of Intestate Shares
(Asked in 76, 79, 92, 03, 04, 06, and 08)
1. Legitimate children only
a. Divide entire estate equally among all
legitimate children (Art. 979, CC)
b. Legitimate children include an adopted
child.
2. Legitimate children and Illegitimate
children
Divide entire estate such that each
illegitimate child gets ! of what a legitimate
child gets (Art. 983, CC and Art. 176, FC)
3. Legitimate children and surviving spouse
a. Divide entire estate equally between the
legitimate children and the surviving
spouse, the latter deemed as one child.
The same rule holds where there is only
one child.
b. Children as used in Art. 996 is
interpreted to include a situation where
there is only one child.
4. Legitimate children. Surviving spouse,
and Illegitimate children
Divide the entire estate such that the
surviving spouse is deemed one legitimate
child and each illegitimate child getting ! of
what the legitimate child gets (Art. 996, CC
and Art. 176, FC)
5. Legitimate parents only
Divide the entire estate equally. (Art. 985,
CC)
6. Legitimate ascendants only (excluding
parents)
Divide the entire estate equally but with the
observance of the rule of division by line
(Art. 987, CC)
7. Legitimate parents and illegitimate
children
Legitimate parents get ! of the estate,
illegitimate children get the other ! (Art.
991,CC)
8. Legitimate parents and surviving spouse
Legitimate parents get ! of the estate; The
surviving spouse gets the other ! (Art.
997,CC)
9. Legitimate parents, surviving spouse and
illegitimate children
Legitimate parents get ! of the estate;
surviving spouse and the illegitimate child
each get " each, the latter to share among
themselves if more than one. (Art. 1000,
CC)
10. Illegitimate children only
Divide the entire estate equally. (Art. 988,
CC)
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11. Illegitimate children and surviving
spouse
Illegitimate children get ! of the estate; the
surviving spouse gets the other !. (Art. 998,
CC)
12. Surviving spouse only
Entire estate goes to the surviving spouse.
(Art. 994/995, CC)
13. Surviving spouse and illegitimate parents
Illegitimate parents get ! and the spouse
gets the other ! (by analogy with Art. 997,
CC)
14. Surviving spouse and legitimate brothers
and sisters, nephews and nieces
Surviving spouse gets ! of the estate, while
the rest gets the other ! with the nephews
and nieces inheriting by representation if
proper. (Art. 1001, CC)
15. Surviving spouse and illegitimate
brothers and sisters, nephews and
nieces
Surviving spouse gets ! of the estate while
the rest gets the other ! with the nephews
and nieces inheriting by representation, if
proper; Note that all the other relatives
should be illegitimate because of the iron-
curtain rule. (Art. 994,CC)
16. Illegitimate parents only
Entire estate goes to the illegitimate parents.
(Art 993, CC)
17. Illegitimate parents and children of any
kind (whether legitimate or illegitimate
child)
Illegitimate parents are excluded and do not
inherit; For the rule on the respective shares
of the children, see numbers 1, 2 or 10,
whichever is applicable.
18. Legitimate brothers and sisters only
Divide the entire estate such that full-blood
brothers/sisters gets a share double the
amount of a half-blood brother or sister. (Art.
1004 and 1006, CC)
19. Legitimate brothers and sisters, nephews
and nieces
Divide the entire estate observing the 2 is to
1 ratio for full and half blood relationships
with respect to the brothers and sisters, with
the nephews and nieces inheriting by
representation, if proper. (Art. 1005 & 1008,
CC)
20. Nephews and nieces only
Divide the entire estate per capita, observing
the 2 is to 1 ratio. (Arts. 975 and 1008, CC)
21. Other collaterals (Arts. 1009 and 1010)
a. Divide entire estate per capita.
b. Collateral relatives must be with the 5
th
degree of consanguinity.
c. Note: the nearer relative excludes the
more remote relatives.
22. State
If there are no other intestate heirs, the
State inherits the entire estate through
escheat proceedings. (Art. 1011, CC)
IX. Order of Concurrence in the Case of
an Adopted Child (Art, 190, FC)
(Asked in 79, 86, 04 and 07)
SURVIVORS SHARE
LC, ILC, SS As in the case of ordinary
intestate succession
LP or ascendants or ILP
Adopter
!
!
LP or ascendants or ILP
or Adopter
SS
!
!
LP or ascendants
Adopter
ILC or descendants
!
!
LP or ascendants
Adopter
SS
ILC or descendants
1/3
1/3
1/3
Adopter alone Entire estate
Collateral blood relatives As in the case of ordinary
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Testamentary and Intestate Succession
I. Accretion
II. Capacity to Succeed
III. Acceptance or Repudiation of Inheritance
IV. Collation
I. Accretion
A. Definition of Accretion (Art. 1015, CC)
It 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 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.
Accretion happens when there is
repudiation, incapacity, or predecease of
an heir.
It is the mechanism where the share of an
heir is increased by vacant shares vacated
by heirs who cannot inherit for various
reasons. (RATIONALE: the decedent
intended to give the property to nobody but
the co-heirs.)
There can only be accretion if there is an
institution of heirs with respect to specific
properties. (Art 1016, CC)
Among compulsory heirs, there can only be
accretion with respect to the free portion.
There can be no accretion with respect to
the legitimes. (Arts. 1021 and 1018, CC)
The heirs to whom the portion goes by the
right of accretion take it in the same
proportion that they inherit. (Art. 1019, CC)
The heirs to whom the inheritance accrues
shall succeed to all the rights and
obligations which the heir who renounced or
could not receive it would have had. (Art.
1020, CC)
In testamentary succession, when the right
of accretion does not take place, the vacant
portion of the instituted heirs, if no substitute
has been designated, shall pass to the legal
heirs of the testator, who shall receive it with
the same charges and obligations. (Art
1022, CC)
Accretion shall also take place among
devisees, legatees and usufructuaries under
the same conditions established for heirs.
(Art 1023, CC)
____________________________________________________________________________________
Effect of Predecease, Incapacity, Disinheritance or Repudiation in Testamentary and Intestate
Succession
CAUSE OF VACANCY TESTAMENTARY SUCCESSION INTESTATE
SUCCESSION LEGITIME FREE PORTION
Predecease Representa-tion
Intestate Succession
Accretion
Representation
Intestate
Succession
Incapacity Representa-tion
Accretion
Representation
Intestate
Succession
Disinheritance Representa-tion
- -
Repudiation Intestate Succession Accretion Accretion
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II. Capacity to Succeed
A. Requisites for Capacity to Succeed by
Will or by Intestacy (Art. 1024 1025,
CC)
The heir, legatee or devisee must be living
or in existence at the moment the
succession opens; (Art 1025) and
He must not be incapacitated or disqualified
by law to succeed. (Art 1024, par.1)
B. Who Are Incapable of Succeeding
BASED ON UNDUE INFLUENCE OR
INTEREST (Art. 1027, CC) PIGRAP
Priest who heard the last confession of
the testator during his last illness, or the
minister of the gospel who extended
spiritual aid to him during the same
period;
Individuals, associations and
corporations not permitted by law to
inherit;
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; except if the guardian
is his ascendant, descendant, brother,
sister, or spouse;
Relatives of the 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;
Attesting witness to the execution of a
will, the spouse, parents, or children, or
any one claiming under such witness,
spouse, parents, or children;
Physician, surgeon, nurse, health officer
or druggist who took care of the testator
during his last illness.
BASED ON MORALITY OR PUBLIC
POLICY (Arts. 739 and 1028, CC)
Those made in favor of a person with
whom the testator was guilty of adultery
or concubinage at the time of the
making of the will.
Those made in consideration of a crime
of which both the testator and the
beneficiary have been found guilty.
Those made in favor of a public officer
or his spouse, descendants and
ascendants, by reason of his public
office.
BASED ON ACTS OF UNWORTHINESS
(Art. 1032, CC)
The following are incapable of succeeding
by reason of unworthiness:
a. Parents who have abandoned their
children or induced their daughters to
lead a corrupt or immoral life, or
attempted against their virtue;
b. Any person who has been convicted of
an attempt against the life of the
testator, his or her spouse,
descendants, or ascendants;
c. 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;
d. 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;
e. Any person convicted of adultery or
concubinage with the spouse of the
testator;
f. Any person who by fraud, violence,
intimidation, or undue influence should
cause the testator to make a will or to
change one already made;
g. 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;
h. Any person who falsifies or forges a
supposed will of the decedent.
C. Pardon of Acts of Unworthiness
EXPRESS IMPLIED
Made by the execution of
a document or any
writing in which the
decedent condones the
cause of incapacity
Effected when the
testator makes a will
instituting the unworthy
heir with knowledge of
the cause of incapacity
Cannot be revoked Revoked when the
testator revokes the will
or the institution
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Inheritance
Characteristics (VIR) (Arts. 1041 1042, 1056,
CC)
1. Voluntary and free (Art 1041, CC)
2. Irrevocable except if there is vitiation of
consent or an unknown will appears (Art
1056, CC)
3. Retroactive (Art 1042, CC)
Requisites (Art. 1043, CC)
1. Certainty of death of the decedent
2. Certainty of the right to the inheritance
Acceptance vs. Repudiation
1. Acceptance involves the confirmation of
transmission of successional rights, while
repudiation renders such transmission
ineffective.
2. Repudiation is equivalent to an act of
disposition and alienation.
3. The publicity required for repudiation is
necessary for the protection of other heirs
and also of creditors.
Forms of Acceptance (Arts. 1049 1050,
CC)
1. Express Acceptance one made in a
public or private document. (Art. 1049 par.
1)
2. Tacit Acceptance one resulting from acts
by which the intention to accept is
necessarily implied or from acts which one
would have no right to do except in the
capacity of an heir.
Examples: (Art. 1050, CC)
a. when the heir sells, donates or assigns
his right
b. when the heir demands partition of the
inheritance
c. when the heir alienates some objects of
the inheritance, etc.
3. Implied acceptance - Within thirty days
after the court has issued an order for the
distribution of the estate in accordance with
the Rules of Court, the heirs, devisees and
legatees shall signify to the court having
jurisdiction whether they accept or repudiate
the inheritance; if they do not do so within
that time, they are deemed to have accepted
the inheritance. (Art 1057, CC)
Forms of Repudiation (Art. 1051, CC)
1. in a public instrument acknowledged before
a notary public; or
2. in an authentic document equivalent of an
indubitable writing or a writing whose
authenticity is admitted or proved; or
3. by petition presented to the court having
jurisdiction over the testamentary or
intestate proceeding
Heirs in Two Capacities (Art. 1055, CC)
1. If a person is called to the same inheritance
as an heir by will and by law and he
repudiates the inheritance in his capacity as
a testamentary heir, he will be considered to
have also repudiated the inheritance as a
legal heir.
2. If he repudiates it as a legal heir, without his
being a testamentary heir, he may still
accept it in the latter capacity.
IV. Collation (Arts. 1061-1077, CC)
(Asked in 77, 78, 79, and 93)
A. Concept of Collation
To collate is to bring back or to return to the
hereditary mass in fact or by fiction property
which came from the estate of the decedent,
during his lifetime by donation or other
gratuitous title but which the law considers
as an advance from the inheritance. (Art
1061, CC)
It is the act by virtue of which, the
compulsory heir who concurs with other
compulsory heirs in the inheritance bring
back to the common hereditary mass the
property which they may have received from
the testator so that a division may be
effected according to law and the will of the
testator.
In reducing inofficious donations, the last to
be donated should be the first to be
reduced.
RATIONALE FOR COLLATION: If
donations inter vivos will not be collated,
then the rule on legitimes shall be
circumvented or disregarded.
B. Operations Related to Collation
Collation adding to the mass of the
hereditary estate the value of the donation
or gratuitous disposition.
Imputing or Charging crediting the
donation as an advance on the legitime (if
the donee is a compulsory heir) or on the
free portion (if the donee is a stranger).
(BALANE p 522)
Reduction determining to what extent the
donation will remain and to what extent it is
excessive or inofficious.
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Restitution returning or the act of
payment of the excess to the mass of
hereditary estate.
C. Persons Obliged to Collate
GENERAL RULE: Compulsory heirs
EXCEPTIONS:
when the testator should have so
expressly provided (Art. 1062, CC)
when the compulsory heir should have
repudiated his inheritance (Art 1062,
CC)
Grandchildren who survive with their uncles,
aunts, or first cousins and inherit by right of
representation (Art 1064, CC)
*Note: Grandchildren may inherit from their
grandparent in their own right, i.e., as heirs
next in degree, and not by right of
representation if their parent repudiates the
inheritance of the grandparent, as no living
person can be represented except in cases
of disinheritance and incapacity. In this
case, the grandchildren are not obliged to
bring to collation what their parent has
received gratuitously from their grandparent.
D. What to Collate
Any property or right received by gratuitous
title during the testators lifetime (Art 1061,
CC)
All that they may have received from the
decedent during his lifetime. (Art 1061, CC)
Expenses incurred by the parents in giving
their children a professional, vocational or
other career shall not be brought to collation
unless the parents so provide, or unless
they impair the legitime; but when their
collation is required, the sum which the child
would have spent if he had lived in the
house and company of his parents shall be
deducted therefrom. (Art 1068, CC)
Any sums paid by a parent in satisfaction of
the debts of his children, election expenses,
fines, and similar expenses shall be brought
to collation. (Art 1069, CC)
E. Properties Not Subject to Collation
Absolutely no collation
Expenses for support, education (only
elementary and secondary), medical
attendance, even in extraordinary illness,
apprenticeship, ordinary equipment, or
customary gifts. (Art. 1067, CC)
Generally not imputable to legitime/
cannot be collected, subject to
exceptions
Expenses incurred by parents in giving
their children professional, vocational or
other career unless the parents so
provide, or unless they impair the
legitime. (Art. 1067, CC)
Wedding gifts by parents and
ascendants, consisting jewelry, clothing
and outfit, except when they exceed
1/10 of the sum disposable by will. (Art.
1070, CC)
Neither shall donations to the spouse of
the child be brought to collation; but if
they have been given by the parent to
the spouses jointly, the child shall be
obliged to bring to collation one-half of
the thing donated. (Art. 1066, CC)
Note: Parents are not obliged to bring to
collation in the inheritance of their
ascendants any property which may have
been donated by the latter to their children.
(Art 1065, CC)
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Estate
I. The Concept of Partition
II. The Effect of Partition
III. Nullification of Partition
IV. Important Periods in Partition
I. Concept of Partition
Separate, Divide, Assign. Partition is the
separation, division and assignment of a
thing held in common among those to whom
it may belong. The thing itself or its value
may be divided. (Art. 1079, CC)
Owned in common. Before partition, the
whole estate of the decedent is owned in
common by the heirs. (Art 1078, CC)
Thing or value may be divided. (Art 1079)
Acts deemed partition. Every act which is
intended to put an end to indivision among
heirs and legatees or devisees is deemed a
parition, although it should purport to be a
sale, an exchange, a compromise, or any
other transaction. (Art 1082, CC)
A void partition may be valid if
1. the will was in fact a partition
2. the beneficiaries of the void will were legal
heirs
The titles of acquisition or ownership of each
property shall be delivered to the co-heir to
whom said property has been adjudicated.
(Art. 1089 CC)
Kinds of Partition
1. Judicial v. Extrajudicial Partition
a. Judicial Partition done by Court
pursuant to an Order of Distribution
which may or may not be based on a
project of partition.
b. Extra-judicial partition made by the
decedent himself by an act inter vivos or
by will or by a third person entrusted by
the decedent or by the heirs themselves.
(PARAS)
2. Partition Inter Vivos (Asked in 85)
It is one that merely allocates specific
items or pieces of property on the basis
of the pro-indiviso shares fixed by law or
given under the will to heirs or
successors. (Art. 1080, cc)
Who May Effect Partition
1. The Decedent, during his lifetime by an act
inter vivos or by will (Art.1080, CC)
2. The decedents heirs (Art.1083, CC)
3. A competent court (Art. 1083,CC)
4. A third person not an heir designated by the
decedent (Art.1081, CC)
Who Can Demand Partition
1. Compulsory heir
2. Voluntary heir upon fulfillment of condition if
any (Art 1084, CC)
3. Legatee or devisee
4. Any person who has acquired interest in the
estate
When Partition Cannot Be Demanded
1. When expressly Prohibited by the testator
for a period not exceeding 20 years (Art
1083, CC)
2. When the co-heirs Agreed that the estate
shall not be divided for a period not
exceeding 10 years, renewable for another
10 years
3. When Prohibited by law
4. When to partition the estate would render it
unserviceable for the use for which it is
intended
Prohibition to Partition
1. The prohibition to partition for a period not
exceeding 20 years can be imposed on the
legitime.
2. If the prohibition to the partition is for more
than 20 years, the excess is void.
3. Even if a prohibition is imposed, the heirs by
mutual agreement can still make the
partition.
Effects of Inclusion of Intruder in Partition
(Art 1108, CC)
1. Between a true heir and several mistaken
heirs partition is void.
2. Between several true heirs and a mistaken
heir transmission to mistaken heir is void
3. Through error or mistake, share of true
heir is allotted to mistaken heir partition
shall not be rescinded unless there is bad
faith or fraud on the part of the other
persons interested, but the latter shall be
proportionately obliged to pay the true heir
of his share. The partition with respect to the
mistaken heir is void. (Sempio-Dy)
Right of Redemption in Partition
Should any of the heirs sell his hereditary
rights to a stranger before the partition, any
or all of the co-heirs may be subrogated to
the rights of the purchaser by reimbursing
him for the price of the sale, provided they
do so within the period of one month from
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the time they were notified in writing of the
sale by the vendor (Art. 1088, CC)
Strangers those who are not heirs on the
succession.
II. Effects of Partition
Effect
A partition legally made confers upon each heir
the exclusive ownership of the property
adjudicated to him (Art 1091, CC)
Warranty
After the partition has been made, the co-
heirs shall be reciprocally bound to warrant
the title to, and the quality of, each property
adjudicated (Art. 1092 CC)
The reciprocal obligation of warranty
referred to in the preceding article shall be
proportionate to the respective
hereditary shares of the co-heirs;
But if any one of them should be
insolvent, the other co-heirs shall be
liable for his part in the same proportion,
deducting the part corresponding to the
one who should be indemnified.
Those who pay for the insolvent heir
shall have a right of action against him
for reimbursement, should his financial
condition improve (Art. 1093 CC)
An action to enforce the warranty among the
co-heirs must be brought within ten years
from the date the right of action accrues.
(Art. 1094 CC)
If a credit should be assigned as collectible,
the co-heirs shall not be liable for the
subsequent insolvency of the debtor of the
estate, but only for his insolvency at the
time the partition is made. (Art 1095, CC)
The warranty of the solvency of the debtor
can only be enforced during the five years
following the partition.
Co-heirs do not warrant bad debts, if so
known to, and accepted by the distributee.
But if such debts are not assigned to a
co-heir, and should be collected, in
whole or in part, the amount collected
shall be distributed proportionately
among the heirs. (Art. 1095 CC)
End of Warranty
The obligation of warranty among co-heirs shall
cease in the ff cases:
The testator himself has made the partition
Unless it appears, or it may be
reasonably presumed, that his intention
was otherwise, but the legitime shall
always remain unimpaired.
When its has been so expressly stipulated in
the agreement of partition
Unless there has been bad faith
When the eviction is due to a cause
subsequent to the partition, or has been
caused by the fault of the distributee of the
property. (Art. 1096, CC)
(Asked in 90)
Causes for Rescission or Annulment
1. A partition may be rescinded or annulled for
the same causes as contracts. (Art 1097,
CC)
2. A partition, judicial or extra-judicial, may also
be rescinded on account of lesion, when any
one of the co-heirs received things whose
value is less by at least one-fourth, than the
share to which he is entitled, considering the
value of the things at the time they were
adjudicated (Art. 1098, CC)
This article applies only to cases of
partition among-coheirs
Lesion is the injury suffered in
consequence of inequality of situation by
one party who does not receive the full
equivalent for what she gives in a sale
or any commutative contract
3. The partition made by the testator cannot be
impugned on the ground of lesion, except
when the legitime of the compulsory heirs is
thereby prejudiced, or when it appears or
may be reasonably be presumed, that the
intention of the testator was otherwise. (Art.
1099, CC)
4. Preterition of a compulsory heir in the
partition (Art 1104, CC):
Partition shall not be rescinded unless
bad faith or fraud on the part of other
heirs is proved.
The culpable heirs shall share in the
damages of the prejudiced compulsory
heir proportionately.
5. A partition which includes a person believed
to be an heir, but who is not, shall be void
only with respect to such person. (Art.
1105 CC
___________
The action for rescission on account of
lesion shall prescribe after four years from
the time the partition was made. (Art. 1100,
CC)
The heir who is sued shall have the option of
indemnifying the plaintiff for the loss, or
consenting to a new partition
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Indemnity may be made:
By payment in cash or
By the delivery of a thing of the same
kind and quality as that awarded to the
plaintiff.
If a new partition is made, it shall affect
neither those who have not been prejudiced
nor those who have not received more than
their just share (Art. 1101, CC)
An heir who has alienated the whole or a
considerable part of the real property
adjudicated to him cannot maintain an action
for rescission on the ground of lesion, but he
shall have a right to be indemnified in cash
(Art. 1102, CC)
The omission of one or more objects or
securities of the inheritance shall not cause
the rescission of the partition on the ground
of lesion, but the partition shall be completed
by the distribution of the objects or securities
which have been omitted. (Art. 1103, CC)
Difference of Nullity from Rescission
Nullity is not the same as Rescission:
1. Nullity - the act is supposed to never have
existed
2. Rescission - the act is valid at the origin
though it afterwards became ineffective
1 month or less
before making a
will
Testator, if publicly known to be
insane, burden of proof is on the
one claiming validity of the will
20 years Maximum period testator can
prohibit alienation of dispositions
5 years from
delivery to the
State
To claim property escheated to
the State
1 month To report knowledge of violent
death of decedent lest he be
considered unworthy
5 years from the
time disqualified
person took
possession
Action for declaration of
incapacity & for recovery of the
inheritance, devise or legacy
30 days from
issuance of order
of distribution
Must signify
acceptance/repudiation
otherwise, deemed accepted
1 month form
written notice of
sale
Right to repurchase hereditary
rights sold to a stranger by a co-
heir
10 years To enforce warranty of
title/quality of property
adjudicated to co-heir from the
time right of action accrues
5 years from
partition
To enforce warranty of solvency
of debtor of the estate at the time
partition is made
4 years form
partition
Action for rescission of partition
on account of lesion
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Concepts through Sample
Computational Problems
I. Institution of Heirs
II. Legitimes
III. Intestate Succession
IV.
II. The Effect of Partition
(Based on the lectures of Prof. Danilo L.
Concepcion)
I. Institution of Heirs
A. Excess Institution
Mickey died testate, leaving a total estate of
P12,000. According to his Will, Goofy gets !,
Donald gets 1/3 and Minnie gets " of the
property. How will you compute the proportional
reduction from each heirs shares in order not to
exceed the total estate of Mickey (assuming no
legitime is impaired)?
Goofys original
share:
! of 12,000 6,000
Donalds
original share:
1/3 of 12,000 4,000
Minnies original
share:
" of 12,000 3,000
TOTAL:
13,000
EXCESS:
1,000
Goofys reduction = 6,000/13,000 x 1,000 =
461.53846
Donalds reduction = 4,000/13,000 x 1,000 =
307.69231
Minnies reduction = 3,000/13,000 x 1,000 =
230.76923
Total Deduction = P1000
P13,000 P1,000 = P12,000 (the total estate)
Goofy gets P6000 P461.53846
Donald gets P4,000 P307.69231
Minnie gets P3,000 P230.76923
___________
B. Deficiency in Institution
Mickey died testate, leaving a total estate of
P12,000. According to his Will, Goofy gets 1/3,
Donald gets " and Minnie gets " of the
property. How will you compute the proportional
increase in each heirs shares in order not to
exceed the total estate of Mickey (assuming no
legitimes were impaired)?
Goofys
original share:
1/3 of 12,000 4,000
Donalds
original share:
1/4 of 12,000 3,000
Minnies
original share:
1/4 of 12,000 3,000
TOTAL: 10,000
DEFICIENCY
: 2,000
Goofys increase = 4,000/10,000 x 2,000 = 800
Donalds increase = 3,000/10,000 x 2,000 = 600
Minnies increase = 3,000/10,000 x 2,000 = 600
Total Deficiency = P2000
P10,000 + P2,000 = P12,000 (the total estate)
Goofy gets P4000 + 800 = P 4,800
Donald gets P3,000 + 600 = P3, 600
Minnie gets P3,000 + 600 = P 3, 600
II. Legitimes
A. Legitimes: Concurrence of Legitimate
and Illegitimate Children
Homer died of heart attack. His wife, Marge,
predeceased him. He had only 1 legitimate child,
Bart, and 4 illegitimate children, Lisa, Maggie,
Wolverine and Cyclops. Homer has a total
estate of P120,000. How much is the legitime of
each heir?
The legitimate child should get ! of the estate
while the illegitimate children get ! of what the
legitimate child gets.
Bart - P60,000
Lisa - P30,000
Maggie - P30,000
Wolverine - P30,000
Cyclops - P30,000
But this would amount to a total of P180,000.
Thus, there must be a reduction of the shares of
the illegitimate children.
Reduction = excess / number of illegitimate
children
Reduction = (180,000 120,000) / 4 = 15,000
P30,000 (share) 15,000 (reduction) =
P15,000
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Final Answer:
Bart = P60,000
Lisa = P15,000
Maggie = P15,000
Wolverine = P15,000
Cyclops = P15,000
TOTAL = P120,000
___________
B. Legitimes: Concurrence of Spouse and
Legitimate Children
Anderson Silva died, leaving a total estate of
P120,000. He was survived by his wife,
Machida, and his three children: Chuck, Quinton,
and George. How much legitime is allotted by
law to each heir?
Legitimate Children get !
The ! is divided into as many legitimate
children.
Wife gets an amount equal to the share of a
legitimate child.
Final Answer:
Chuck = P20,000
Quinton = P20,000
George = P20,000
Machida = P20,000
Free Portion = P40,000
___________
C. Legitimes: Concurrence of Spouse,
Legitimate and Illegitimate Children
Princess toadstool died, survived by her
husband, kupa, her legitimate child, mushroom,
and by her two illegitimate children, mario and
luigi. She has a total estate of p120,000. How
much legitime is allotted by law to each heir?
The legitimate child gets !.
The wife gets ! of the share of the legitimate
child (because there is only one legitimate child)
The illegitimate children will each get ! of the
share of the legitimate child.
Mushroom P60,000
Kupa P30,000
Mario P30,000
Luigi P30,000
But this will yield a total of p150,000. Thus the
shares of the illegitimate children must be
reduced.
Reduction = excess / number of illegitimate
children
Reduction = (150,000 - 120,000)/2 =15,000
P30,000 (share) 15,000 (reduction)
=P15,000
Final Answer:
Mushroom = P60,000
Kupa = P30,000
Mario = P15,000
Luigi = P15,000
III. Intestate Succession
Hulk Hogan died intestate, with a total estate of
P70,000. His wife, Sable, his legitimate son,
Ultimate Warrior, and his two illegitimate
children, Stone Cold and Undertaker, survived
him. How will his estate be divided among these
heirs?
Applying the law in intestate succession, each
heirs will receive the ff:
Ultimate Warrior P35,000
Stone Cold P17,500
Undertaker P17,500
Sable P35,000
Since the total shares will exceed P70,000,
reduction is in order. The share of those who will
receive more than their legitimes must be
reduced. The spouses share should be reduced
first to the amount of her legitime (P17,500)
(note: the share of the others are equal to their
legitimes)
Further reductions shall be made since the
amount will still exceed the net estate. Following
the law of legitimes, namely that the legitime of
the legitimate child and the surviving spouse
shall be preferred over the illegitimate childrens
shares, the reduction will be suffered by the
illegitimate children.
Final Answer:
Ultimate Warrior P35,000
Stone Cold P8750
Undertaker P8750
Sable P17,500
IV. Accretion
Goku died testate, leaving an estate of P720. In
his will, he instituted his sons to his entire estate.
His sons are Vegeta, Napa, Raditz and Freeza.
Vegeta, who had two children (Trunks and
Bulma), predeceased Goku. Napa, who hated
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his fathers guts, repudiated his share in the
will.
Raditz, who likewise has two children
(Tenshenhan and Chowzu), was found to be
incapacitated to inherit from his father.
Lastly, Freeza, the youngest and most beloved
son of Goku, has a son, Magneato.
Determine Legitime and Free Portion:
Heir Will
Vegeta (predeceased) 180 = legitime:120
free: 60
Napa (repudiated) 180 (automatically
becomes free portion)
Raditz (incapacitated) 180 = legitime:120
free: 60
Freeza 180 = legitime:120
free: 60
Determine amount received by heirs through
representation for the legitimes
Heir Representation for
Legitime
Vegeta (predeceased) Legitime = 120
Trunks: 60
Bulma: 60
Napa (repudiated)
Raditz (incapacitated) Legitime = 120
Tenshenhan: 60
Chowzu: 60
Freeza
Determine if there is accretion:
Heir Accretion
Vegeta (predeceased) - 60
Napa (repudiated) -180
Raditz (incapacitated) -60
Freeza + (60 + 60 + 180) or +
300
COMPUTE:
Heir Final Answer
Vegeta (predeceased) Trunks: 60
Bulma: 60
Napa (repudiated) 0
Raditz (incapacitated) Tenshenhan: 60
Chowzu: 60
Freeza 480
V. Collation
Sponge Bob died intestate on September 17,
1985. He left an estate of P90,000. He was
survived by his wife, Sandy, and his two children
Spiderman and Robinhood. During Mr. Bobs
lifetime, on January 1, 1980, he donated
P50,000 to Spiderman. In 1982, he made a
donation to Robinhood worth P100,000.
Compute for the shares of each heir.
Total Estate = Gross Estate Liabilities +
Donations Inter Vivos
Total Estate = 90,000 0 + 150,000 = P240,000
Determine the Legitimes:
Legitimate Children = ! of Total Estate
Therefore: Spiderman = P60,000
Robinhood = P60,000
Surviving Spouse = amount equal to Legitimate
Child
Therefore: Sandy = P60,000
Determine their Intestate Shares
Heir Final Answer
Spiderman 80, 000
(60,000 = legitime)
Robinhood 80,000
(60,000 = legitime)
Sandy 80,000
(60,000 = legitime)
Determine Advances
Heir Advance
Spiderman 50,000
Robinhood 100,000
Sandy
Compute:
Heir Computation
Spiderman Legitime: 60,000 50,000 = 10,000
Free Portion = 20,000
Robinhood Legitime: 60,000 60,000 = 0
Free Portion: 20,000 20,000 = 0
(20,000 still unaccounted for)
Sandy
Since Robinhoods share has been exhausted
but there is still a deficiency of 20,000, this
20,000 will be deducted from the free portions
of Spiderman and Sandy Pro Rata.
Heir Computation
Spiderman Legitime Left: 10,000
Free Portion Left =
20,000 10,000 = 10,000
Robinhood 0
Sandy Legitime: 60,000
Free Portion: 20,000 10,000 =
10,000
Therefore
Heir Final Answer
Spiderman 20,000
Robinhood 0
Sandy 70,000
- end of Succession -
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Table of Contents
Chapter I. General Provisions.......................91
I. Obligations ..........................................91
II. Sources of Obligations........................91
Chapter II. Nature and Effect of Obligations93
I. Kinds of Prestations ............................93
II. Breach of Obligation............................94
III. Fortuitous Event (Force Majeure) .......96
IV. Remedies to Creditors ........................96
Interest .........................................................97
Chapter III. Different Kinds of Obligations ..98
I. Pure and Conditional Obligations .......98
II. Reciprocal Obligations ......................100
III. Obligations with a Period ..................100
IV. Alternative and Facultative Obligations
101
V. Joint and Solidary Obligations ..........103
(Art.1212) ...................................................105
VI. Divisible and Indivisible Obligations..106
VII. Oblligations with a Penal Clause ..106
Chapter IV. Extinguishment of Obligations
.......................................................................107
I. Payment or Performance..................107
II. Loss or Impossibility..........................109
III. Condonation or Remission of the Debt
109
IV. Confusion or Merger of Rights ..........110
V. Compensation...................................110
VI. Novation ............................................111
Charts: Payment & Performance................114
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Chapter I. General Provisions
I. OBLIGATIONS
II. SOURCES OF OBLIGATIONS
A. LAW
B. CONTRACTS
C. QUASI-CONTRACTS
D. DELICTS
E. QUASI-DELICTS
Article 1156, Civil Code. An obligation is a juridical
necessity to give, to do or not to do.
I. Obligations
Elements of an Obligation (De Leon, 2003)
1. ACTIVE SUBJECT (Obligee/Creditor): the
person who has the right or power to
demand the prestation.
2. PASSIVE SUBJECT (Obligor/Debtor): the
person bound to the perform the prestation.
3. PRESTATION (Object): the conduct
required to be observed by the
debtor/obligor (to give, to do or not to do).
4. VINCULUM JURIS (Juridical or Legal Tie;
Efficient Cause): that which binds or
connects the parties to the obligation.
II. Sources of Obligations
A. Law
Art. 1158, Civil Code. Obligations derived from law
are not presumed. Only those expressly determined in
this Code or in special laws are demandable, and
shall be regulated by the precepts of the law which
establishes them; and as to what has not been
foreseen, by the provisions of this Book.
B. Contracts
Art. 1159. Has the Force of Law Between
Parties. Obligations arising from contracts have
the force of law between the contracting parties
and should be complied with in good faith
C. Quasi-Contracts
Art. 2142, Civil Code. 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.
Lawful Distinguished from crimes
Voluntary Distinguished from quasi-delict,
which are based on fault and
negligence
Unilateral Distinguished from contract which is
based on agreement
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Prof. Solomon Lumba
Faculty Editor
Leo Ledesma
Lead Writer
Krizel Malabanan
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Writers
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Subject Editors
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Editors-in-Chief
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Members
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Kinds of Quasi-Contracts
Negotiorum Gestio: officious or voluntary
management of the property or affairs of
another without the knowledge or consent of
the latter.
Solutio Indebiti: undue payment. The
juridical relation arises when:
o a thing is received without any right; and
o the thing delivered by mistake.
Others: See Arts. 2164-2175
(De Leon, 2003)
D. Delicts (Acts or omissions punished by law;
crimes)
Extent of Civil Liability
Governed by the Revised Penal Code and the
Civil Code, includes:
1. Restitution;
2. Reparation of damages caused; and
3. Indemnity for consequential damages (Art.
104, Revised Penal Code).
(Tolentino, 1987)
Enforcement of Civil Liability
1. Independent: Criminal and civil action
arising from the same offense may be
instituted separately.
2. Suspended: However, after criminal action
has been commenced prosecution for civil
action is suspended in whatever stage it
may be found, until final judgment in the
criminal proceeding is rendered;
3. Impliedly Instituted: Civil action is impliedly
instituted with the criminal action, when:
offended party expressly waives the civil
action or reserves the right to institute a
separate civil action; or
the law provides for an independent civil
action
Barredo v. Garcia, (1942): The same negligent act
may give rise to an action based on delict or quasi-
delict and the injured party is free to choose which
remedy to enforce.
Mendoza vs. Arrieta, (1979): If the civil action is
based on quasi-delict, there is no need to reserve the
right to file a civil action in the criminal case.
Effect of Acquittal on Civil Actions
Barred No Effect
if based on the very
same facts on which
the criminal action
which ended in
acquittal was based
if the facts alleged in
the civil case has been
found to be non-
existent in the criminal
an independent civil
action is allowed by law
acquittal is due to lack
of proof beyond
reasonable doubt
action (res judicata)
if judgment of acquittal
contained a declaration
that no negligence can
be attributed to the
accused and that the
fact from which civil
action might arise did
not exist
E. Quasi-Delicts (Voluntary acts or omissions
with fault or negligence causing damage to
another; not a crime nor a contract)
Quasi-Delict Crimes
Private, against
individual
Public, against the State
Criminal intent is not
necessary
Criminal intent is
necessary for criminal
liability
Present in any act or
omission where fault or
negligence intervenes
An act can is only
punishable when there is
a law penalizing it
Gives rise to liability for
damages to the injured
party
There are crimes from
which no civil liability
arises
Reparation,
compensation or
indemnification of the
injury suffered by the
injured party
Fine or imprisonment or
both, to public treasury
Preponderance of
evidence
Proof of guilt beyond
reasonable doubt
Can be compromised Can never be
compromised
Requisites of Liability (DWD)
1. Wrongful act or omission by fault or
negligence
2. Damage or injury proven by the person
claiming recovery
3. Direct causal connection between the fault
or negligence and the damage or injury
Liability for Quasi-
Delict (Art. 2180, NCC)
Liability for Crimes
(Art. 103, RPC)
Primary, can be directly
sued by the injured
party
Subsidiary, employee
must first be convicted
and sentenced to pay
civil indemnity
All employers, whether
engaged in some
enterprise or not, are
liable for acts of
employees, even
household helpers
Employer is only liable
when he is engaged in
some kind of business
or industry
Avoid civil liability by
proving exercise of
diligence of a good
father of a family
Subsidiary liability is
absolute and cannot be
avoided by any proof of
diligence
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Chapter II. Nature and Effect of
Obligations
I. KINDS OF PRESTATIONS
II. BREACH OF OBLIGATIONS
III. FORTUITOUS EVENTS
IV. REMEDIES
V. USURIOUS TRANSACTIONS
I. Kinds of Prestations
KINDS OF PRESTATION
1. TO GIVE: real obligation; to deliver either
(1) a specific or determinate thing, or (2) a
generic or indeterminate thing.
2. TO DO: positive personal obligation;
includes all kinds of work or services.
3. NOT TO DO: negative personal
obligation; to abstain from doing an act;
includes the obligation not to give.
Accessories: those joined to or included with
the principal for the latters completion, better
use, perfection or enjoyment
Accessions: additions to or improvement upon
a thing, either naturally or artificially
OBLIGATION TO GIVE
Specific Thing Generic Thing Limited
Generic Thing
Particularly
designated or
physically
segregated
from all other of
the same class;
identified by
individuality.
Object is
designated only
by its class/
genus/ species.
Debtor can give
anything of the
same class as
long as it is of
the same kind.
When the
generic objects
are confined to
a particular
class.
Cannot be
substituted.
Can be
substituted by
any of the same
class and same
kind.
Personal Right Real Right
Vested before delivery Vested after delivery
A right enforceable only
against the debtor
A right enforceable
against the world
Right of the creditor to
demand from the debtor,
the fulfillment of a
prestation to give, to do
or not to do
Right pertaining to a
person over a specific
thing, without a passive
subject individually
determined against
whom such right may be
personally enforced
Duties of the Debtor Rights of the creditor
To Give
Specific
Thing
(Asked
in 83,
84, 85
and
86)
To preserve or take care of the thing
due
To deliver the thing itself
To deliver the fruits of the thing
To deliver the accessions and
accessories
To pay for damages in case of breach
To compel specific performance
To recover damages in case of breach of
the obligation, exclusive or in addition to
specific performance
Entitlement to fruits and interests from the
time the obligation to deliver arises
To Give
Generic
Thing
To deliver a thing of the quality intended
by the parties taking into consideration
the purpose of the obligation and other
circumstances
Creditor cannot demand a thing of
superior quality neither can the debtor
deliver a thing of inferior quality
To be liable for damages in case of
breach
To ask for performance of the obligation
To ask that the obligation be complied with
by a third person at the expense of the
debtor
To recover damages in case of breach of
obligation
To Do To do it
To shoulder the cost of having someone
else do it
To undo what has been poorly done
To compel performance
To recover damages where personal
qualifications of the debtor are involved
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Not To
Do
Not to do what should not be done
To shoulder the cost of undoing what
should not have been done
To ask to undo what should not be done
To recover damages, where it would be
physically or legally impossible to undo
what has been undone, because of :
o the very nature of the act itself;
o rights acquired by third persons who
acted in good faith;
o when the effects of the acts prohibited
are definite in character and will not
cease even if the thing prohibited be
undone.
II. Breach of Obligation
A. Voluntary fraud, negligence, delay or
contravention of tenor of the obligation
B. Involuntary fortuitous event
TYPES OF BREACH
Substantial Breach Slight or Casual Breach
Total breach
Amounts to Non-
Performance;
Basis for rescission
under Art. 1191 and
payment of damages
Partial breach
Obligation is partially
performed;
Gives rise to liability for
damages only
1. FRAUD (DOLO): deliberate or intentional
evasion of the normal fulfillment of an
obligation (De Leon, 2003).
Future Fraud: Any waiver of action for
future fraud is void (Art. 1171).
Past Fraud: can be subject of a valid
waiver by the aggrieved party (De Leon,
2003).
Woodhouse vs. Halili, (1953): In order
that fraud may vitiate consent, it must be
the dolo causante and not merely the
dolo incidente, inducement to the
making of the contract. The false
representation was used by plaintiff to
get from defendant a bigger share of net
profits. This is just incidental to the
matter in agreement. Because despite
plaintiffs deceit, respondent would have
still entered into the contract.
2. NEGLIGENCE or FAULT (CULPA):
omission of that diligence which is required
by the nature of the obligation and
corresponds with the circumstances of the
person, of the time and of the place (Art.
1173).
Effect of Contributory Negligence
Reduces or mitigates the recoverable
damages, UNLESS, the negligent act or
omission of the creditor is the
proximate cause of the event which led
to the damage or injury complained of.
In this case, he cannot recover.
Diligence Required (De Leon, 2003)
a. By stipulation: that agreed upon by
the parties.
b. By law: in the absence of
stipulation, that required by law in
the particular case.
c. Diligence of a good father of a
family: if both the contract and law
are silent.
Future Negligence: may be waived
except in cases where the nature of the
obligation or the public requires another
standard of care (i.e. extraordinary
diligence as for a common carrier)
Fraud Negligence
There is deliberate
intention to cause
damage
There is no deliberate
intention to cause damage
Liability cannot be
mitigated
Liability may be mitigated
Waiver for future fraud
is void
Waiver for future
negligence may be
allowed in certain cases:
gross can NEVER
be excused in
advance; amounts to
wanton attitude; rules
on fraud shall apply
simple may be
excused in certain
cases
Mandarin Villa Inc. v. CA (1996): Test of Negligence:
Did the defendant in doing the alleged negligent act
use the reasonable care and caution which an
ordinary and prudent person would have used in the
same situation? If not, then he is guilty of negligence.
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Extent of Damages to be Awarded
Bad Faith Good Faith
Debtor is liable for all
damages which can be
reasonably attributed to
the non-performance of
the obligation. Any waiver
or renunciation made in
anticipation of such
liability is null and void
Debtor is liable only for
the natural and
probable
consequences of the
breach of obligation and
fortuitous events
Culpa Contractual Culpa Aquiliana Asked
in 83, 84, and 86)
Negligence is merely
incidental in the
performance of an
obligation
Negligence is substantive
and independent
There is always a pre-
existing contractual
relation
There may or may not be
a pre-existing contractual
obligation
The source of obligation
of defendant to pay
damages is the breach or
non-fulfillment of the
contract
The source of obligation
is the defendants
negligence itself
Proof of the existence of
the contract and of its
breach or non-fulfillment
is sufficient prima facie to
warrant recovery
The negligence of the
defendant must be
proved
Proof of diligence in the
selection and supervision
of the employees is NOT
available as defense
Proof of diligence in the
selection and supervision
of the employee is a
defense
Culpa Criminal: wrong or negligence in
the commission of a crime
3. DELAY or DEFAULT (MORA): failure to
perform an obligation on time which
constitutes breach of the obligation (De
Leon, 2003).
Mora Solvendi: delay on the part of the
debtor to fulfill his obligation either to
give (Ex re) or to do (Ex persona),
(Asked in 83, 84, 85, and 86);
No Mora Solvendi in:
Negative Obligations because delay
is impossible (De Leon, 2003);
Natural Obligations (Tolentino,
1987).
Mora Accipiendi: delay on the part of
the creditor to accept the performance of
the obligation
Compensatio Morae: delay of the
parties in reciprocal obligations; effect:
as if there is no default.
Mora Solvendi Mora Accipiendi
Requisites
1. Obligation must be
liquidated, due and
demandable
2. Non-performance by
the debtor on period
agreed upon
3. Demand, judicial or
extra-judicial, by the
creditor
Requisites
1. Debtor offers of
performance
2. Offer must be in
compliance with the
prestation
3. Creditor refuses the
performance
without just cause
Effects
!" The debtor is liable
for damages
#" The debtor is liable
even if the loss is due
to fortuitous events
$" For determinate
objects, the debtor
shall bear the risk of
loss
Effects
1. The responsibility of
the debtor is
reduced to fraud
and gross
negligence
2. The debtor is
exempted from risk
of loss of the thing
which is borne by
the creditor
3. The expenses
incurred by the
debtor for the
preservation of the
thing after the mora
shall be chargeable
to the creditor
4. If the obligation
bears interest, the
debtor does not
have to pay from
the time of delay
5. The creditor is liable
for damages
6. The debtor may
relieve himself of
obligation by
consigning the thing
Rules on Mora, Delay or Default
Unilateral Obligations Reciprocal Obligations
General Rule:
No demand no delay.
The mere expiration of
the period fixed by the
parties is not enough in
order that the debtor may
incur in delay.
General Rule:
Delay occurs from the
moment one party fulfills
his undertaking, while the
other does not comply or
is not ready to comply in
a proper manner with
what is incumbent upon
him.
No delay if neither party
performs his undertaking
(Art. 1169, par. 2).
Exceptions
1. the obligation or law
provides
2. time is of the
essence
3. demand useless
4. debtor
acknowledges that
he is in default
Exception:
different dates for the
performance of
respective obligations are
fixed by the parties
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4. CONTRAVENTION OF THE TENOR:
violation of the terms and conditions
stipulated in the obligation, which must not
be due to a fortuitous event or force majeure
(De Leon, 2003).
In any manner contravenes the
tenor means any illicit act, which
impairs the strict and faithful fulfillment
of the obligation, or every kind of
defective performance (Tolentino, 1987).
III. Fortuitous Event (Force Majeure)
Any event which could not be foreseen, or which
though foreseen are inevitable (Art. 1174)
A happening independent of the will of the
debtor and which makes the normal fulfillment of
the obligation impossible (De Leon, 2003).
A. Act of God: an accident, due directly or
exclusively to natural causes without human
intervention, which by no amount of
foresight, pains or care, reasonably to have
been expected, cold have been prevented.
B. Act of Man: force majeure is a superior or
irresistible force, which is essentially an act
of man; Includes unavoidable accidents,
even if there has been an intervention of
human element, provided that no fault or
negligence can be imputed to the debtor
(Asked in 81, 87 and 88)
Liability in case of Fortuitous Event
No person shall be responsible for fortuitous
events, UNLESS:
1. expressly specified by law (Arts. 552(2),
1942, 2147, 2148, 2159)
2. liability specified by stipulation
3. the nature of the obligations requires
assumption of risk (Art. 1174)
4. when debtor is guilty of concurrent or
contributory negligence
5. debtor has promised to deliver the same
thing to two or more persons who do not
have the same interests (Art. 1165 par. 3)
6. the thing is lost due to the obligors fraud,
negligence, delay or contravention of the
tenor of the obligation (Art. 1170)
7. the obligation to deliver a specific thing
arises from a crime (Art. 1268)
8. the object is a generic thing, i.e. the genus
never perishes
Requisites for Exemption
1. The event must be independent of the
debtors will (fraud or negligence)
2. The event must be unforeseeable or
inevitable
3. The event renders it impossible for debtor to
fulfill his obligation in a normal manner
4. The debtor must be free from any
participation in the aggravation of the injury
to the creditor (Tolentino, 1987; De Leon,
2003)
5. It must be the only and sole cause, not
merely a proximate cause.
IV. Remedies to Creditors
Art. 1170, Civil Code. 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.
Transmissibility of Rights
Art. 1178: Rights acquired by virtue of an
obligation are transmissible in character,
UNLESS prohibited:
1. by their very nature (i.e. personal
obligations)
2. by stipulation of the parties
3. by operation of law
(De Leon, 2003)
Primary Remedies
Arts. 1165-1168: PRESS
1. Specific Performance performance
by the debtor of the prestation itself
2. Substituted Performance someone
else performs or something else is
performed at the debtors expense
3. Equivalent Performance right to
claim damages (in either performance or
rescission)
4. Rescission right to rescind or cancel
the contract
5. Pursue the Leviable to attach the
properties of the debtor, except those
exempt by law from execution
Subsidiary Remedies of Creditor
General Rule: Contracts are binding only
between the parties thereto, and their heirs,
assignees, and the estate, UNLESS: Accion
Subrogatoria and Accion Pauliana
1. Accion Subrogatoria: right of creditor to
exercise all of the rights and bring all of the
actions which his debtor may have against
third persons; Novation by change of debtor
(Art. 1291, par.3).
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Requisites
a. Debtor to whom the right of action
properly pertains must be indebted to
the creditor
b. The debt is due and demandable
c. The creditor must be prejudiced by the
failure of the debtor to collect his own
debt from 3
rd
persons either through
malice or negligence
d. The debtors assets are insufficient
(debtor is insolvent)
e. The right of action is not purely personal
to the debtor
2. Accion Pauliana: Rescission, which
involves the right of the creditor to attack or
impugn by means of a rescissory action any
act of the debtor which is in fraud and to the
prejudice of his rights as creditor.
Requisites: CASAL
a. There is a credit in favor of plaintiff
prior to alienation
b. The debtor has performed a
subsequent contract conveying a
patrimonial benefit to third persons
c. The creditor has no other legal remedy
to satisfy his claim
d. The debtors acts are fraudulent to the
prejudice of the creditor
e. The third person who received the
property is an accomplice in the fraud
Accion Subrogatoria Accion Pauliana
Not necessary that
creditors claim is prior to
the acquisition of the right
by the debtor
Credit must exist before
the fraudulent act
No need for fraudulent
intent
Fraudulent intent is
required if the contract
rescinded is onerous
No period for prescription Prescribes in 4 years
from the discovery of the
fraud
3. Accion Directa (Art. 1729, 1652, 1608,
1893): the right of lessor to go directly to a
sublessee for unpaid rents of the lessee
4. The right of laborers or persons who furnish
materials for a piece of work undertaken by
a contractor to go directly to the owner for
any unpaid claim due to the contractor
5. The right of vendor against every possessor
whose right is derived from the vendee
6. The right of a principal against a substitution
appropriated by an agent
Siguan v. Lim, (1999): Petitioner cannot invoke the
credit of a different creditor to justify the rescission of
the subject deed of donation, because the only
creditor who may benefit from the rescission is the
creditor who brought the action; those who are
strangers to the action cannot benefit from its effects.
Interest
USURY: stipulation of interest rates higher than
the ceiling provided by law.
Note: Usury Law (Act No. 2655, as amended)
was repealed by Central Bank Circular No. 905,
Dec. 10, 1982.
INTEREST
Art. 1176, Civil Code. Receipt of the principal without
reservation as to the interest shall give rise to a
disputable presumption that the interest has been
paid. Receipt of the latter installment without
reservation as to prior installments shall likewise give
rise to a disputable presumption that such prior
installments have been paid.
Determination of Interests
Eastern Shipping Lines v. CA (1961)
Stage 1
For loan or forbearance
of money, goods or
credit, the interest rate
is 12%
NOT for loan or
forbearance of money,
goods or credit, the
interest rate is 6%
a) Interest = interest
rate stipulated in
writing + 12% legal
interest, computed
from date of judicial
demand (filing of
complaint)
a) If date of demand is
certain, compute from
the date when demand
is made (judicial or
extra-judicial)
b) If there is no
stipulated interest rate,
the interest rate is 12%
computed from date of
default or demand
(judicial or extra-
judicial)
b) If date of demand is
NOT certain, compute
from the date of trial
court decision (judicial
demand)
Stage 2
Add 12% interest from finality of SC decision until
fully paid (equivalent to a forbearance of credit)
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Chapter III. Different Kinds of Obligations
I. PURE AND CONDITIONAL OBLIGATIONS
II. RECIPROCAL OBLIGATIONS
III. OBLIGATIONS WITH A PERIOD
IV. ALTERNATIVE AND FACULTATIVE
OBLIGATIONS
V. JOINT AND SOLIDARY OBLIGATIONS
VI. DIVISIBLE AND INDIVISIBLE OBLIGATIONS
VII. OBLIGATIONS WITH A PENAL CLAUSE
I. Pure and Conditional Obligations
(Asked in 79, 88, 00, 03)
Pure Obligation (Art.1179): Effectivity or
extinguishment does not depend upon the
fulfillment or non-fulfillment of a condition or
upon the expiration of a term or period and
characterized by the quality of its being
IMMEDIATELY DEMANDABLE.
Conditional Obligation (Art.1181): Effectivity is
subject to the fulfillment or non-fulfillment of a
condition, which is characterized to be a
FUTURE and UNCERTAIN event.
Effects of Conditions
1. Suspensive Condition: Obligation shall
only be effective upon the fulfillment of the
condition (Art.1181). What is acquired by the
obligee upon the constitution of the
obligation is mere hope or expectancy, but is
protected by law.
Before Fulfillment After Fulfillment
The demandability and
acquisition or effectivity
of the rights arising from
the obligation is
suspended. Anything
paid by mistake during
such time may be
recovered.
The obligation arises or
becomes effective.
The obligor can be
compelled to comply with
what is incumbent upon
him.
Doctrine of Constructive Fulfillment
of Suspensive Conditions
Art. 1186: the condition shall be deemed
fulfilled when the obligor actually
prevented the obligee from complying
with the condition, and that such
prevention must have been voluntary or
willful in character.
Applicable to suspensive conditions
and not to resolutory conditions.
The article can have no application
to an external contingency which is
lawfully within the control of the
obligor.
The mere intention of the debtor to
prevent, without actually preventing
fulfillment is not sufficient.
Constructive fulfillment will not hold
when the debtor acts pursuant to a
right. There is constructive
fulfilment:
a. Intent of the obligor to prevent
fulfilment; and
b. Actual prevention of compliance
Principle of Retroactivity in
Suspensive Conditions
Art.1187, par.1: once the condition is
fulfilled its effects must logically retroact
to the moment when the essential
elements, which gave birth to the
obligation have taken place. The
condition which is imposed is only
accidental, not an essential element of
the obligation.
Applied only to consensual
contracts. No application to real
contracts which can only be
perfected by delivery.
To Give To Do/Not To Do
If reciprocal, the fruits
and interests shall be
deemed to have been
mutually compensated
as a matter of justice and
convenience
(Art. 1187, par. 1)
In obligations to do or not
to do, the court shall
determine the retroactive
effect of the condition
that has been complied
with.
(Art. 1187, par. 2)
If unilateral, the debtor
shall appropriate the
fruits and interests
received, unless from the
nature and circumstance
it should be inferred that
the intention of the
persons constituting the
same was different.
The power of the court
includes the
determination whether or
not there will be any
retroactive effects. This
rule shall likewise apply
in obligations with a
resolutory condition (Art.
1190 par. 3)
Preservation of Creditors Rights
Art.1188, par.1: The creditor may,
before the fulfillment of the condition,
bring the appropriate action for the
preservation of his rights. However, this
does not grant any preference of credit
but only allows the bringing of the proper
action for the preservation of the
creditors rights.
2. Resolutory Condition: Obligation becomes
demandable immediately after its
establishment or constitution. The rights are
immediately vested to the creditor, but
always subject to the threat or danger of
extinction by the happening of the resolutory
condition (Tolentino, 1987).
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Before Fulfillment After Fulfillment
Preservation of creditors
rights (Art. 1188, par. 1)
also applies to
obligations with a
resolutory condition
Whatever may have
been paid or delivered by
one or both of the parties
upon the constitution of
the obligation shall have
to be returned upon the
fulfillment of the
condition. There is no
return to the status quo.
However, when condition
is not fulfilled, rights are
consolidated and they
become absolute in
character
3. Potestative Condition
Exclusively
upon the
Creditors Will
Exclusively
upon the
Debtors Will
in case of a
Suspensive
Condition
(Art. 1182)
Exclusively
upon the
Debtors Will
in case of a
Resolutory
Condition
(Art. 1179, par
2)
Condition and
obligation is
valid
Condition and
obligation are
void because to
allow such
condition would
be equivalent to
sanctioning
obligations
which are
illusory. It also
constitutes a
direct
contravention of
the principle of
mutuality of
contracts.
Condition and
obligation is
valid because in
such situation,
the position of
the debtor is
exactly the
same as the
position of the
creditor when
the condition is
suspensive. It
does not render
the obligation
illusory.
4. Casual Condition: The fulfillment of the
condition depends upon chance and/or upon
the will of a third person (Art. 1182)
5. Mixed Condition: The fulfillment of the
condition depends partly upon the will of a
party to the obligation and partly upon
chance and/or will of a third person
Osmena v. Rama: Defendant executed an
endorsement saying that shell pay her debt if the
house in which she lives is sold. Such condition
depended upon her exclusive will thus it is void.
Hermosa v. Longara: The condition that payment
should be made by Hermosa as soon as he receives
funds from the sale of his property in Spain is a mixed
condition. The condition implies that the obligor
already decided to sell the house and all that was
needed to make the obligation demandable is that the
sale be consummated and the price thereof remitted
to the islands. There were still other conditions that
had to concur to effect the sale, mainly that of the
presence of a buyer, ready, able and willing to
purchase the property under the conditions set by the
intestate.
6. Impossible Condition: conditions which
are impossible, contrary to good customs, or
public policy and those prohibited by law
shall annul the obligations which depend
upon them (Art. 1183).
If pre-existing obligation, only the
impossible condition is void, but not the
obligation.
If divisible obligation, that part which is
not affected by the impossible or
unlawful condition shall be valid.
If the condition is not to do an
impossible thing, it shall be considered
as not having been agreed upon (Art
1183, par. 2). Consequently, it becomes
pure and immediately demandable.
If attached to a simple or remuneratory
donation (Art. 727), or testamentary
disposition (Art. 873), condition is
considered as not imposed while the
obligation is valid.
7. Positive Condition: Obligation shall be
extinguished as soon as the time expires or
if it becomes indubitable that the event will
not take place (Art.1184)
8. Negative Condition: Obligation shall be
rendered effective from the moment the time
indicated has lapsed, or if it has become
evident that the event will not occur
(Art.1185)
When no period has been fixed, the
intention of the parties is controlling,
and the time shall be that which the
parties may have contemplated, taking
into account the nature of the obligation
(Art 1185, par. 2).
Effects of Loss, Deterioration, and
Improvement in Real Obligations Pending the
Condition (Art. 1189)
Without
Debtors
Fault/Act
With Debtors
Fault/Act
Loss Obligation is
extinguished
Obligation is
converted into
one of
indemnity for
damages
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Deterioration Impairment to be
borne by the
creditor
Creditor may
choose
between
bringing an
action for
rescission of
the obligation
OR bringing an
action for
specific
performance
with damages
in either case.
Improvement Improvement at
the debtors
expense, the
debtor shall
ONLY have
usufructuary
rights
Improvement
by the things
nature or by
time shall inure
to the benefit of
the creditor
Loss, defined: when the thing perishes; goes
out of commerce; disappears in such a way that
its existence is unknown or it cannot be
recovered
II. Reciprocal Obligations
Obligations which are established from same
cause, such that one obligation is correlative to
the other. It results in mutual relationship
between the creditor and the debtor. It is
performed simultaneously, so that the
performance of one is conditioned upon the
simultaneous fulfillment of the other.
Tacit Resolutory Condition: if one of the
parties fail to comply with what is incumbent
upon him, there is a right on the part of the other
to rescind the obligation. The power to rescind is
given to the injured party (Tolentino, 1987).
Rescission of Reciprocal Obligations (Art.
1191, CC)
Right to rescind is implied in reciprocal
obligations thus where one party fails to
comply with this obligation under a contact,
the other party has the right to either
demand the performance or ask for the
resolution of the contract.
Based on the breach of faith committed by
the person who is supposed to comply with
the obligation as compared to the rescission
referred to in Art. 1308 which involves the
damage or lesion, or injury to the economic
interest of a person.
Where both parties have committed a
breach of obligation, the liability will be
shouldered by the first infractor. This shall
be determined by the courts. However, if it
cannot be determined who was the first
infractor, the contract shall be deemed
extinguished and each shall bear his own
damages (Art.1192).
UP v. Delos Angeles (1970): The injured party may
extra-judicially rescind the contract on account of the
breach of the other party. However, this is without
prejudice to the option of the other party to resort to
the courts in order to determine if the rescission made
is valid, if not, the party who rescinded the contract
will be sentenced to pay damages.
Where the other party does not oppose the
extra-judicial declaration of rescission, such
declaration shall produce legal effect.
Effect is retroactive therefore invalidating
and unmaking the juridical tie between the
contracting parties, leaving things in their
status before the celebration of the contract.
III. Obligations with a Period
Period or Term (Asked in 84, 86 and 91):
Interval of time, which either suspends
demandability or produces extinguishment.
The period must be: future, certain, and possible
(Tolentino, 1987).
Fortuitous event does not interrupt the
running of the period. It only relieves the
contracting parties from the fulfillment of
their respective obligations during the
period.
Kinds of Period (Art. 1193):
1. Ex die - period with a suspensive effect.
Obligation becomes demandable after
the lapse of the period.
2. In diem - period with a resolutory effect.
Obligation is demandable at once but is
extinguished upon the lapse of the
period.
Art. 1180, Civil Code. When the debtor binds himself
to pay when his means permit him to do so, the
obligation shall be deemed to be one with a period,
subject to the provisions of Article 1197.
Term/Period and Condition Distinguished
Term/Period Condition
Interval of time which is
future and certain
Fact or event which is
future and uncertain
Must necessarily come,
although it may not be
known when
May or may not happen
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Exerts an influence upon
the time of demandability
or extinguishment of an
obligation
Exerts an influence upon
the very existence of the
obligation itself
No retroactive effect
unless there is an
agreement to the contrary
Has retroactive effect
When it is left exclusively
to the will of the debtor,
the existence of the
obligation is not affected
When it is left exclusively
to the will of the debtor,
the very existence of the
obligation is affected
Benefit of the Period
Presumption: Period in an obligation is
presumed to be established for the benefit of
both the creditor and debtor, UNLESS: If from
the tenor of the obligation or other
circumstances, it shall appear that the period
has been established in favor of either the
creditor or debtor (Art. 1196).
Period for the Benefit of either Creditor or
Debtor
Creditor Debtor
Creditor may demand
the fulfillment or
performance of the
obligation at any time
but the obligor cannot
compel him to accept
payment before the
expiration of the period
Debtor may oppose any
premature demand on
the part of the oblige for
the performance of the
obligation, of if he so
desires, he may
renounce the benefit of
the period by performing
his obligation in advance
When court may fix period
Art. 1197: as general rule, the court is not
authorized to fix a period for the parties (De
Leon, 2003).
Araneta v. Phil. Sugar Estates, provides:
First, the Court shall determine:
If the obligation does not fix a period, but from
its nature and circumstances, it can be inferred
that a period was intended
If the period is void, such as when it depends
upon the will of the debtor
If the debtor binds himself when his means
permit him to do so.
Second, it must decide what period was probably
contemplated by the parties.
The only action that can be maintained
under Art. 1197 is the action to ask the
courts to fix the term within which the debtor
must comply with his obligation. The
fulfillment of the obligation itself cannot be
demanded until after the court has fixed the
period for compliance, therewith, and such
period has arrived.
Art. 1197 does not apply to contract of
services and to pure obligations.
The court, however, to prevent
unreasonable interpretations of the
immediate demandability of pure obligations,
may fix a reasonable time in which the
debtor may pay.
(Tolentino, 1987)
When Debtor Loses Right to Use Period
Art.1198: I GIV A LA
1. Debtor becomes Insolvent, unless he gives
a guaranty or security for his debt, after
obligation is contracted
2. Debtor fails to furnish the Guaranties or
securities promised
3. Debtor by his own acts Impaired said
guaranties or securities after their
establishment, and when through a
fortuitous event they disappear, unless he
immediately gives new one equally
satisfactory
4. Debtor Violates any undertaking, in
consideration of which the creditor agreed to
the period
5. Debtor attempts to Abscond
6. By Law or stipulation
7. Parties stipulate an Acceleration Clause
In the cases provided, the obligation becomes
immediately due and demandable even if the
period has not yet expired. The obligation is thus
converted into a pure obligation (Tolentino,
1987).
IV. Alternative and Facultative
Obligations
Alternative Obligations Facultative Obligations
Several objects are due Only one object is due
May be complied with by
delivery of one of the
objects or by performance
of one of the prestations
which are alternatively
due
May be complied with by
the delivery of another
object or by the
performance of another
prestation in substitution
of that which is due
Choice may pertain to
debtor, creditor, or third
person
Choice pertains only to
the debtor
Loss/impossibility of all
objects/prestations due to
fortuitous event shall
extinguish the obligation.
The loss/impossibility of
one of the things does not
extinguish the obligation.
Loss/impossibility of the
object/prestation due to
fortuitous event is
sufficient to extinguish
the obligation
Culpable loss of any of
the objects alternatively
Culpable loss of the
object which the debtor
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due before the choice is
made may give rise to
liability on the part of the
debtor
may deliver in
substitution before the
substitution is effected
does not give rise to any
liability on the part of the
debtor
A. Alternative Obligations
Several prestations are due but the performance
of one is sufficient (De Leon, 2003).
Right of Choice
Art. 1200: to the debtor, UNLESS:
1. when it is expressly granted to the
creditor
2. when it is expressly granted to a third
person
Limitations to the right of choice
1. impossible prestations
2. unlawful prestations
3. those which could not have been the
object of the obligation
4. only one prestation practicable (Art.
1202)
(De Leon, 2003)
When choice shall produce effect
Art. 1201: Choice shall produce no effect except
from the time it has been communicated. The
effect of the notice is to limit the obligation of the
object or prestation selected. Notice of selection
or choice may be in any form provided it is
sufficient to make the other party know that the
selection has been made. It can be:
o oral
o in writing
o tacit
o any other equivocal means
Choice of the debtor when communicated to
the creditor does not require the latters
concurrence.
When the choice is rendered impossible
through the creditors fault, the debtor may
bring an action to rescind the contract with
damages (Art.1203).
Obligation is converted into a simple
obligation when:
o When the person who has the right of
choice has communicated his choice
(Art. 1201)
o When only one prestation is practicable
(Art. 1202)
Effect of Loss of Objects
Art. 1204: Debtors Choice
Fortuitous
Event
Debtors Fault
All Lost Debtor is
released from the
obligation
Creditor shall have
a right to indemnity
for damages based
on the value of the
last thing which
disappeared or
service which
become impossible
Some Debtor to deliver
that which he
shall choose
from among the
remainder
Debtor to deliver
that which the
creditor shall
choose from among
the remainder
without damages
One
Remains
Debtor to deliver
that which
remains
Debtor to deliver
that which remains
Art. 1205: Creditors Choice
Fortuitous
Event
Debtors Fault
All Lost Debtor is
released from the
obligation
Creditor may claim
the price/value of
any of them with
indemnity for
damages
Some Debtor to deliver
that which he
shall choose
from among the
remainder
creditor may claim
any of those
subsisting without a
right to damages
OR price/value of
the thing lost with
right to damages
One
Remains
Creditor may
claim any of
those subsisting
without a right to
damages OR
price/value of the
thing lost with
right to damages
Creditor may claim
the remaining thing
without a right to
damages OR the
price/value of the
thing lost with right
to damages
B. Facultative Obligation
Only one prestation has been agreed upon but
the debtor may render another in substitution
(De Leon, 2003)
Effect of Loss of Substitute
Before Substitution is
Made
After Substitution is
Made
If due to bad faith or
fraud of obligor: obligor
is liable
The loss or
deterioration of the
substitute on account
of the obligors delay,
negligence or fraud
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If due to the negligence
of the obligor: obligor is
not liable
obligor is liable
because once
substitution is made,
the obligation is
converted into a simple
one with the substituted
thing as the object of
the obligation.
V. Joint and Solidary Obligations
A. Joint Obligations
One where a concurrence of several creditors,
or of several debtors, or of several creditors and
debtors, by virtue of which, each of the creditors
has a right to demand, and each of the debtors
is bound to render compliance with his
proportionate part of the prestation which
constitute the object of the obligation (Obligacion
Mancomunada).
Presumption: Obligation is presumed joint if
there is a concurrence of several creditors, of
several debtors, or of several creditors and
debtors in one and the same obligation (Art.
1207).
Exceptions:
1. When the obligation expressly stated that
there is solidarity
2. When the law requires the solidarity
3. When the nature of the obligation requires
solidarity
4. When the nature or condition is imposed
upon heirs or legatees, and the testament
expressly makes the charge or condition in
solidum
5. When the solidary responsibility is imputed
by a final judgment upon several defendants
Principal Effects of Joint Liability
1. Demand by one creditor upon the debtor,
produces the effects of default only with
respect to the creditor who demanded and
the debtor on whom the demand was made,
but not with respect to others
2. Interruption of prescription by the judicial
demand of one creditor upon a debtor, does
not benefit the other creditors nor interrupt
the prescription as to other debtors
3. Vices of each obligation arising from the
personal defect of a particular debtor or
creditor does not affect the obligation or right
of the others
4. Insolvency of a debtor does not increase the
responsibility of his co-debtors, nor does it
authorize a creditor to demand anything
from his co-debtors
5. Defense of res judicata is not extended from
one debtor to another
Joint Divisible Obligation
Art. 1208: Each creditor can demand only for the
payment of his proportionate share of the
credit, while each debtor can be liable only for
the payment of his proportionate share of the
debit
Presumption: Credit or debt shall be presumed
to be divided into as many equal shares as there
are creditors or debtors.
Joint creditor cannot act in representation of
the others, neither can a joint debtor be
compelled to answer for the liability of
others.
Joint Indivisible Obligation
Art. 1209: no creditor can act in representation
of the other; no debtor can be compelled to
answer for the liability of the others.
If there are two or more debtors, the
fulfillment of or compliance with the
obligation requires the concurrence of all the
debtors, although each for his own share
and for the enforcement of the obligation
In case of breach where one of the joint
debtors fails to comply with his undertaking,
the obligation can no longer be fulfilled or
performed. Consequently, it is converted
into one of indemnity for damages.
In case of insolvency of one of the
debtors, the others shall not be liable for his
shares. To hold otherwise would destroy the
joint character of the obligation.
Joint Divisible
Obligations
Joint Indivisible
Obligations
In case of breach of
obligation by one of the
debtors, damages due
must be borne by him
alone
In case of breach where
one of the joint debtors
fails to comply with his
undertaking, the
obligation can no longer
be fulfilled or performed.
Thus action must be
converted into indemnity
for damages.
Plurality of Creditors: If one or some of
the creditors demands the prestation,
the debtor may legally refuse to deliver
to them, he can insist that all the
creditors together receive the thing, and
if any of them refuses to join the others,
the debtor may deposit the thing in court
by way of consignation (Tolentino,
1987).
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B. Solidary Obligation
An obligation where there is concurrence of
several creditors, or of several debtors, or of
several creditors and several debtors, by virtue
of which, each of the creditors has the right to
demand, and each of the debtors is bound to
render, entire compliance with the prestation
which constitutes the object of the obligation
(Obligacion Solidaria).
Indivisibility Solidarity
Refers to the prestation
which constitutes the
object of the obligation
Refers to the legal tie or
vinculum, and
consequently to the
subjects or parties of
the obligation
Plurality of subjects is not
required
Plurality of subjects is
indispensable
In case of breach,
obligation is converted into
indemnity for damages
because the indivisibility of
the obligation is terminated
When there is liability
on the part of the
debtors because of the
breach, the solidarity
among the debtors
remains
The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does
solidarity itself imply indivisibility. (Art. 1211)
Kinds of Solidary Obligations
1. Active (solidarity among creditors): Each
creditor has the authority to claim and
enforce the rights of all, with the resulting
obligation of paying everyone of what
belongs to him.
Creation of a relationship of mutual
agency among co-creditors.
A solidary creditor cannot assign his
rights without the consent of the others.
(Art. 1213)
Each debtor may pay to any solidary
creditor, but if any demand, judicial or
extrajudicial, has been made by one of
them, payment must be made to him.
(Art. 1214)
2. Passive (solidarity among debtors): Each
debtor can be made to answer for the
others, with the right on the part of the
debtor-payor to recover from the others their
respective shares.
Creation of a relationship of mutual
guaranty among co-debtors
The total remission of the debt in favor
of a debtor releases all the debtors
All the debtors are liable for the loss of
the thing due, even if such loss is
caused by the fault of only one of them
and for delay, even if it is caused by just
one of them
The interruption of prescription as to
one debtor affects all the others; but the
renunciation by one debtor of
prescription already had does not
prejudice the others
3. Mixed: Solidarity among creditors and
debtors
Solidarity is not destroyed by the fact
that the obligation of each debtor is
subject to different conditions or periods.
The creditor can commence an action
against anyone of the debtors for the
compliance with the entire obligation
minus the portion or share which
corresponds to the debtor affected by
the condition or period.
____________________________________________________________________________________
Effects of Modes of Extinguishment
Assignment of
Rights in Solidary
Obligations
Novation
Compensation &
Confusion
Remission
Loss or
Impossibility
The solidary
creditor cannot
assign his right
because it is
predicated upon
mutual
confidence,
UNLESS, the (1)
the assignment is
to a co-creditor;
(2) assignment is
with consent of
co-creditor
If prejudicial, the
solidary creditor
who effected the
novation shall
reimburse the
others for
damages incurred
by them;
If beneficial and
secured by one,
he shall be liable
to the others for
the share
(obligation &
benefits) which
If it is partial, the
rules regarding
application of
payment shall
apply (w/o)
prejudice to the
right of other
creditors who
have not caused
the confusion or
compensation to
be reimbursed to
the extent that
their rights are
diminished or
If entire
obligation,
obligation is totally
extinguished.
If for the benefit
of one of the
debtors covering
his entire share,
he is completely
released from the
creditor/s.
If for the benefit
of one of the
debtors and it
covers only part
If not debtors
fault, the
obligation is
extinguished
If thru debtors
OR fortuitous
event after delay,
the obligation is
converted into
indemnity for
damages but the
solidary character
of the obligation
remains.
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corresponds to
them
If by substituting
the debtor, the
solidary creditor
who effected the
novation is liable
for the acts of the
new debtor in
deficiency or
damages
If by subrogating
a third person in
creditors rights,
the obligation is
not in reality
extinguished as
the relation
between the other
creditors and the
debtor/s is
maintained.
affected
If total, the
obligation is
extinguished,
what is left is the
ensuing liability
for reimbursement
of his share, his
character as a
solidary debtor is
not affected.
(Art.1212)
1. Each one of the solidary creditors may do
whatever may be useful or beneficial to the
others, but not anything which may be
prejudicial to the latter.
2. As far as the debtors are concerned, a
prejudicial act performed by a solidary
creditor is binding.
3. As between the solidary creditors, the
creditor who performed such act shall incur
the obligation of indemnifying the others for
damages.
Defenses Available to a Solidary Debtor (Art.
1222)
1. Those derived from the nature of the
obligation
2. Those personal to him
3. Those pertaining to his own share
4. Those personally belonging to other co-
debtors but only as regards that part of the
debt for which the latter are responsible.
Effects
Demand Upon a
Solidary Debtor
Payment by a Debtor
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. (Art.
1216)
Full payment made by
one of the solidary
debtors extinguishes the
obligation. (Art. 1217)
The creditor may proceed
against any one of the
solidary debtors or all
simultaneously (Art.
1216)
If two or more solidary
debtors offer to pay, the
creditor may choose
which offer to accept.
(Art. 1217)
A creditors right to
proceed against the
surety exists
independently of his right
to proceed against the
principal
The solidary debtor who
made the payment shall
have the right to claim
from his co-debtors the
share which corresponds
to them with interest,
UNLESS barred by
prescription or illegality.
(Art. 1218)
When a solidary debtor pays the entire
obligation, the resulting obligation of the co-
debtors to reimburse him becomes joint.
If payment was made before the debt
became due, no interest during the
intervening period may be demanded. (Art.
1217 par. 2)
When one of the solidary debtors cannot
reimburse his share to the debtor paying the
obligation due to insolvency, such share
shall be borne by all his co-debtors, in
proportion to the debt of each. (Art. 1217,
par. 2)
Inchausti v. Yulo, (1914): Debtors obligated
themselves solidarily, so creditor can bring its action
against any of them. Remission of any part o fthe
debt, made by the creditor in favor of one of the
solidary debtors, inures to the benefit of the rest of
them.
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VI. Divisible and Indivisible Obligations
A. Divisible Obligations
One which is susceptible of partial performance;
that is, the debtor can legally perform the
obligation by parts and the creditor cannot
demand a single performance of the entire
obligation (Tolentino, 1987).
B. Indivisible Obligations
One which cannot be validly performed in parts
(Tolentino, 1987).
Divisibility/indivisibility refers to the
performance of the prestation and not to the
thing which is the object thereof. The thing
may be divisible, yet the obligation may be
indivisible.
When the obligation has for its object the
execution of a certain number of days of
work, the accomplishment of work by
metrical units, or analogous things which by
their nature are susceptible of partial
performance, it shall be divisible (Art.1225,
par. 2).
When there is plurality of debtors and
creditors, the effect of divisibility/indivisibility
of the obligation depend upon whether the
obligation is joint or solidary.
A joint indivisible obligation give rise to
indemnity for damages from the time anyone
of the debtors does not comply with is
undertaking.
(Art. 1224)
Effect
Creditor cannot be compelled partially to receive
the prestation in which the obligation consists;
neither may the debtor be required to make the
partial payment (Art. 1248), UNLESS:
The obligation expressly stipulates the
contrary
The different prestations constituting the
objects of the obligation are subject to
different terms and conditions
The obligation is in part liquidated and in part
unliquidated
VII. Oblligations with a Penal Clause
Penal Clause: An accessory undertaking to
assume greater liability in case of breach (De
Leon, 2003). It is attached to an obligation in
order to ensure performance. The enforcement
of the penalty can be demanded by the creditor
only when the non-performance is due to the
fault or fraud of the debtor.
If the principal obligation is void, penal
clause shall also be void. However, the
nullity of the penal clause does not carry
with it the nullity of the principal
obligation (Art.1230).
Purposes of Penalty
1. Funcion coercitiva de garantia - to insure the
performance of the obligation.
2. Funcion liquidatoria - to liquidate the amount of
damages to be awarded to the injured party in
case of breach of the principal obligation
(compensatory).
3. Function estrictamente penal - to punish the
obligor in case of breach of the principal
obligation (punitive).
Effects of Penalty
1. The penalty shall substitute the indemnity for
damages and payment of interest in case of
non-compliance (Art. 1226), UNLESS:
a. There is a stipulation to the contrary
b. The obligor refuses to pay the penalty
c. The obligor is guilty of fraud
2. Debtor cannot exempt himself from the
performance of the principal obligation by
paying the stipulated penalty unless this
right has been expressly reserved for him
(Art. 1227).
3. Creditor cannot demand the fulfillment of the
principal obligation and demanding the
satisfaction of the penalty at the same time
unless the right has been clearly granted to
him (Art. 1227). Tacit or implied grant is
admissible.
a. If creditor has chosen fulfillment of the
principal obligation and performance thereof
become impossible without his fault, he may
still demand the satisfaction of the penalty.
b. If there was fault on the part of the debtor,
creditor may demand not only satisfaction of
penalty but also the payment of damages.
c. If creditor chooses to demand the
satisfaction of the penalty, he cannot
afterwards demand the fulfillment of the
obligation.
Proof of Actual Damage
Art. 1228: Proof of actual damages is not
necessary is applicable only to the general rule
stated in Art. 1226 and not to the exceptions.
The penalty is exactly identical with what is
known as liquidated damages in Art. 2226.
When Penalty may be Reduced
Art. 1229:
1. If the principal obligation has been partly
complied with.
2. If the principal obligation has been irregularly
complied with.
3. If the penalty is iniquitous or unsconscionable
even if there has been no performance.
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Chapter IV. Extinguishment of
Obligations
I. PAYMENT OR PERFORMANCE
II. LOSS OF THE THING DUE OR IMPOSSIBILITY
OF PERFORMANCE
III. CONDONATION OR REMISSION OF THE
DEBT
IV. CONFUSION OR MERGER OF RIGHTS
V. COMPENSATION
VI. NOVATION
I. Payment or Performance
Art. 1232, Civil Code. Payment means not only
delivery of money but also performance, in any
manner, of the obligation.
See Diagrams of Prof. Labitag at the end
section of Obligations.
SPECIAL FORMS OF PAYMENT
A. Application of Payment (Art. 1252)
Designation of the debt to which should be
applied a payment made by a debtor who owes
several debts to the same creditor
Rules on Application
1. Preferential right of debtor - debtor has the
right to select which of his debts he is
paying.
2. The debtor makes the designation at the
time he makes the payment
3. If not, the creditor makes the application, by
so stating in the receipt that he issues,
unless there is cause for invalidating the
contract.
4. If neither the creditor nor debtor exercises
the right to apply, or if the application is not
valid, the application is made by operation of
law.
5. If debt produces interest - payment not
deemed applied to the principal unless
interests are covered.
6. When no application can be inferred from
the circumstances of payment, it is applied
to: to the most onerous debt of the debtor; or
if debts due are of the same nature and
burden, to all the debts in proportion
7. Rules of application of payment may not be
invoked by a surety or solidary guarantor.
Reparations Commission vs. Universal Deep Sea
Fishing Corp. (1978): Rules on application of payment
cannot be made applicable to a person whose
obligation as a mere surety is both contingent and
singular. There must be full and faithful compliance
with the terms of the contract.
B. Payment by Cession (Art. 1255)
Act whereby a debtor abandons all his property
to his creditors, so that the latter may apply the
proceeds (of its sale) to their credits.
C. Dation in payment (Art. 1245)
Delivery and transmission of ownership of a
thing by the debtor to the creditor as an
accepted equivalent of the performance of the
obligation (dacion en pago).
Dation in payment Payment by cession
In favor of only one
creditor
There are various
creditors
Payment extinguishes the
obligation to the extent of
the value of the thing
delivered, unless the
parties agree that the
obligation be totally
extinguished
Extinguishes credits
only up to the extent of
proceeds from sale of
assigned property,
unless otherwise
agreed upon
Transfer of ownership of
thing alienated to creditor
Only possession and
administration with
authorization to convert
property to cash with
which the debts shall
be paid
Not necessarily in state of
financial difficulty
Assignment
presupposes
insolvency of debtor.
Assignment of only some
specific thing
Assignment involves all
the property of the
debtor.
D. Tender of payment and consignation
1. Tender of payment: Manifestation made by
debtor to creditor of his desire to comply
with his obligation, with offer of immediate
performance
Preparatory act to consignation
Extrajudicial in character
2. Consignation: Deposit of the object of
obligation in a competent court in
accordance to the rules prescribed by law,
whenever the creditor unjustly refuses
payment or because of some circumstances
which render direct payment to the creditor
impossible or inadvisable.
Principal act which constitutes a form of
payment.
Judicial in character.
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When Tender and Refusal Not Required (Art.
1259)
1. Creditor is absent or unknown, or does not
appear at the place of payment
2. Creditor is incapacitated to receive the thing
due at time of payment
3. Without just cause, creditor refuses to give
receipt
4. Two or more persons claim the same right to
collect
5. Title of the obligation has been lost
Effects of Withdrawal by Debtor
Arts. 1260- 1261
1. Before approval of the court - Obligation
remains in force.
2. After approval of the court or acceptance by
the creditor, with the consent of the latter -
Obligation remains in force, but guarantors
and co-debtors are liberated. Preference of
the creditor over the thing is lost.
3. After approval of the court or acceptance by
the creditor, and without creditors consent -
Obligation subsists, without change in the
liability of guarantors and co-debtors, or the
creditors right of preference.
Art. 1259, Civil Code. Expenses of consignation,
when properly made, shall be charged against the
creditor.
Requisites and Effects
Application of
Payment
Cession Dation Tender and Consignation
Requisites
1. Plurality of
debts
2. Debts are of
the same kind
3. Debts are owed
to the same
creditor and by
the same
debtor
4. All debts must
be due
5. Payment made
is not sufficient
to cover all
debts
Requisites
1. Plurality of debts
2. Plurality of
creditors
3. Partial insolvency
of the debtor
4. Abandonment of
the totality of the
debtors
properties for the
benefit of the
creditors
5. Acceptance by
the creditors
Requisites
1. Should not be
prejudicial to
other creditors
2. Should not
constitute a
pactum
commissorium
Requisites
1. There is a debt due
2. consignation is made because
of some legal cause
3. previous notice of consignation
was given to those persons
interested in the performance
of the obligation
4. amount or thing due was
placed at the disposal of the
court
5. after the consignation has been
made, the persons interested
were notified thereof
Effects
Payment of debt
designated as to
corresponding
amount
Effects
Assignment liberates
debtor up to the
amount of the net
proceeds of the sale
of his assets
Assignment does not
vets title to the
property in the
creditors,
who are only
authorized to sell it.
Effects
Extinguishment of
debt from as an
equivalent of the
performance of the
obligation
Effects
If accepted by the creditor or
declared properly made by the
Court:
1. Debtor is released in same
manner as if he had performed
the obligation at the time of
consignation
2. Accrual of interest is
suspended from the moment of
consignation.
3. Deterioration or loss of the
thing or amount consigned,
occurring without the fault of
debtor, must be borne by
creditor from the moment of
deposit
4. Any increment or increase in
the value of the thing after
consignation inures to the
benefit of the creditor
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II. Loss or Impossibility
(Asked in 83, 84, 85, and 94)
A. Loss
A thing is lost when it perishes, goes out of
commerce or disappears in such a way that its
existence is unknown or it cannot be recovered
(Art. 1189, par. 2)
Effects of Loss
Obligation to Deliver a
Specific Thing
Obligation to Deliver a
Generic Thing
Extinguishment of the
obligation if the thing was
destroyed w/o fault of the
debtor and before he has
incurred delay.
Loss of a generic thing
does not extinguish an
obligation, UNLESS,
Delimited generic
things: kind or class is
limited itself, and the
whole class perishes
Action against 3
rd
persons - creditor shall have
all the rights of action the debtor may have
against 3
rd
persons by reason of the loss.
Presumption: The loss was due to the debtors
fault, UNLESS:
1. Law provides that the debtor shall be liable
even if the loss is due to fortuitous events
(Arts. 1942, 1979, 2147, 2159)
2. Obligor is made liable by express stipulation
3. Nature of the obligation requires an
assumption of risk
4. Fault or negligence concurs with the
fortuitous event
5. Loss occurs after delay
6. Debtor has promised to deliver the same
thing to two or more different parties
7. Obligation arises from a criminal act
8. Borrower in commodatum: saves his own
things and not the thing of the creditor
during a fortuitous event
In Reciprocal Obligations
Extinguishment of the obligation due to loss of
the thing or impossibility of performance affects
both the creditor and debtor; the entire juridical
relation is extinguished.
Partial loss
Art. 1264: Partial loss due to a fortuitous event
does not extinguish the obligation; thing due
shall be delivered in its present condition,
without any liability on the part of the debtor,
UNLESS, the obligation is extinguished when
the part lost was of such extent as to make the
thing useless.
Loss of the thing when in possession of the
debtor: Loss was due to the debtors fault.
Burden of explaining the loss of the thing falls
upon him, UNLESS, due to a natural calamity:
earthquake, flood, storm, etc.
Subjective impossibility: Where there is no physical
or legal loss, but the thing belongs to another, the
performance by the debtor becomes impossible. The
debtor must indemnify the creditor for damages.
B. Impossibility of Performance (Arts. 1266-
1267, CC)
When prestation becomes legally or physically
impossible (by fortuitous event or force
majeure), the debtor is released.Impossibility
must have occurred without fault of debtor, and
after the obligation has been constituted.
PARTIAL IMPOSSIBILITY
1. Courts shall determine whether it is so
important as to extinguish the obligation.
2. If debtor has performed part of the obligation
when impossibility occurred, creditor must
pay the part done as long as he benefits
from it.
3. If debtor received full payment from creditor,
he must return excess amount
corresponding to part which was impossible
to perform.
Doctrine of Unforeseen Events
When the service has become so difficult as to
be manifestly beyond the contemplation of all
the parties, the obligor may be released in whole
or in part (De Leon, 2003).
Requisites:
1. Event could not have been foreseen at the
time of the constitution of the contract.
2. Event makes performance extremely difficult
but not impossible.
3. Event not due to any act of the parties.
4. Contract is for future prestation.
III. Condonation or Remission of the
Debt
CONDONATION: An act of liberality, by virtue of
which, without receiving any equivalent, creditor
renounces the enforcement of the obligation.
The obligation is extinguished either in whole or
in such part of the same which to remission
refers.
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Requisites
1. Debt must be existing and demandable
2. Renunciation must be gratuitous; without
any consideration
3. Debtor must accept the remission
Effect
Art. 1273: Renunciation of the principal debt
shall extinguish the accessory obligations, but
remission of the latter leaves the principal
obligation in force.
Presumptions
Arts. 1271, 1272, 1274:
Whenever the private document in which the
debt is found in the possession of the
debtor, it shall be presumed that the creditor
delivered it voluntarily, unless contrary is
proved.
Delivery of a private document evidencing
credit, made voluntarily by the creditor to the
debtor, implies the renunciation of the action
of creditor against the latter.
Kinds
1. As to form (Art. 1270)
Express: made formally; in accordance
with forms of ordinary donations
Implied: inferred from the act of the
parties
2. As to extent
Total: entire obligation
Partial: may refer only to amount of
indebtedness, or to an accessory
obligation, or to some other aspect of
the obligation
3. As to constitution
Inter vivos: effective during the lifetime
of the creditor
Mortis causa: effective upon death of the
creditor; must be contained in a will or
testament
IV. Confusion or Merger of Rights
CONFUSION: The meeting in one person of the
qualities of creditor and debtor of the same
obligation.
Requisites
1. It should take place between principal debtor
and creditor
2. It must be complete and definite- Parties
must meet all the qualities of creditor and
debtor in the obligation/ in the part affected.
Effects
Arts. 1275- 1277:
1. The obligation is extinguished from the time
the characters of the debtor and creditor are
merged in the same person.
2. In joint obligations, confusion does not
extinguish the obligation except as regards
the corresponding share of the creditor or
debtor in whom the two characters concur.
3. In solidary obligations, confusion in one of
the solidary debtors extinguishes the entire
obligation.
4. Obligation is not extinguished when
confusion takes place in the person of
subsidiary debtor (e.g. guarantor), but
merger in the person of the principal debtor
shall benefit the former.
V. Compensation
COMPENSATION: Offsetting of two obligations
which are reciprocally extinguished if they are of
the same value, or extinguished to the
concurrent amount if of different values. (Asked
in 80, 81, 98, and 02)
Compensation Confusion
There must always be 2
obligations
Involves only one
obligation
There are 2 persons who are
mutually debtors and
creditors of each other in 2
separate obligations, each
arising from the same cause.
There is only one
person whom the
characters of the
creditor and debtor
meet
Kinds
1. As to extent
Total: Debts are of the same amount
Partial: Amounts are not equal
2. As to origin
Legal: takes place by operation of law
Conventional: parties agree to
compensate their mutual obligations
even when some requisite in Art. 1279 is
lacking (Art. 1282).
Judicial: decreed by court when there is
counterclaim; effective upon final
judgment (Art. 1283).
Facultative: when it can be claimed by
one of the parties who, however, has the
right to object to it.
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Requisites Effects
1. Each obligor is
bound principally,
and at the same time
a principal creditor of
the other
2. Both debts must
consist in a sum of
money, or if the
things due are
FUNGIBLE, of the
same kind & quality
3. Both debts are due
4. Debts are liquidated
and demandable
5. There must be no
retention or
controversy over
either of the debts,
commenced by 3
rd
persons and
communicated in
due time to the
debtor
6. Compensation is not
prohibited by law
1. Effects rise from the
moment all the
requisites concur.
2. Debtor claiming its
benefits must prove
compensation; once
proven, effects
retroact from the
moment when the
requisites concurred.
3. Both debts are
extinguished to the
concurrent amount,
eventhough the
creditors and debtors
are not aware of the
compensation.
4. Accessory
obligations are also
extinguished.
Compensation is prohibited in:
1. Contracts of depositum
2. Contracts of commodatum
3. Future support due by gratuitous title
4. Civil liability arising from a penal offense
5. Obligations due to the government
6. Damage caused to the partnership by a
partner
ASSIGNMENT OF CREDIT (Art. 1285):
No effect and does not bind the debtor unless
and until the latter is notified of the assignment
or learns of it.
With Debtors
Consent
With Debtors
Knowledge
Without
Debtors
Knowlege
Debtors
consent to
assignment of
credit
constitutes a
waiver of
compensation,
unless he
reserved his
right to
compensation.
Debtor may set
up
compensation
of debts
(maturing)
before the
assignment of
credit but not of
subsequent
ones
Debtor may
setup
compensation
of all credits
(maturing) prior
to the
assignment and
also latter ones
until he had
knowledge of
the assignment.
Facultative compensation: Compensation which
can only be set up at the option of a creditor, when
legal compensation cannot take place because some
legal requisites in favor of the creditor are lacking.
Creditor may renounce his right to compensation, and
he himself may set it up.As opposed to conventional
compensation, facultative compensation is unilateral
and does not depend upon the agreement of the
parties.
VI. Novation
NOVATION: Extinguishment of an obligation by
the substitution or change of the obligation by a
subsequent one which extinguishes or modifies
the first either by changing the object or principal
conditions, or by substituting the person of the
debtor, or by subrogating a third person in the
rights of the creditor. A juridical act of dual
functionit extinguishes an obligation, and at
the same time, it creates a new one in lieu of the
old. (Asked in 78, 88, 94 and 01)
Requisites
1. A previous valid obligation
2. Agreement of all the parties to the new
obligation
3. Extinguishment of the old obligation
4. Validity of the new obligation
Novation is not presumed.
Express novation: Parties must expressly
disclose their intent to extinguish the old
obligation by creating a new one.
Implied novation: No specific form is
required. There must be incompatibility
between the old and new obligation or
contract.
(Asked in 79, 82, 88, and 94)
California Bus Line v. State Investment (2003): In the
absence of an unequivocal declaration of
extinguishment of the pre-existing obligation, only
proof of incompatibility between the old and new
obligation would warrant a novation by implication.
The restructuring agreement merely provided for a
new schedule of payments and authority giving Delta
to take over management and operations of CBLI in
case it fails to pay installments. There was no change
in the object of prior obligations.
Test of Incompatibility
Whether or not the old and new obligation can
stand together, each one having an independent
existence. No incompatibility exists when they
can stand together. Hence, there is no novation.
Incompatibility exists when they cannot stand
together. Hence, there is novation.
Effects
In General If Original
Obligation is
Void
If New
Obligation is
Void
1. Old
obligation is
extinguished
and replaced
by the new
one
stipulated.
Novation is void if
the original
obligation was
void, except
when annulment
may be claimed
only by the
New obligation is
void, the old
obligation
subsists, unless
the parties
intended that the
former realations
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debtor, or when
ratification
validates acts
that are voidable.
(Art. 1298)
1. Original
obligation is void:
No novation
2. Original
obligation
voidable:
Effective if
contract is ratified
before novation
shall be
extinguished in
any event. (Art.
1297)
1. New obligation
void: No novation
2. New obligation
voidable:
Novation is
effective
Accessory obligations are also extinguished,
but may subsist only insofar as they may
benefit 3
rd
persons who did not give their
consent to the novation OR may not be
affected upon agreement between the
parties.
Original or new obligation with suspensive or
Art. 1299: If original obligation was subject to a
suspensive or resolutory condition, the new
obligation shall be under the same condition,
unless it is otherwise stipulated.
Compatible Conditions Incompatible
Conditions
Fulfillment of both
conditions: new
obligation becomes
demandable
Fulfillment of
condition concerning
the original
obligation: old
obligation is revived;
new obligation loses
force
Fulfillment of
condition concerning
the new obligation:
no novation;
requisite of a
previous valid and
effective obligation
lacking
Original obligation is
extinguished, while
new obligation exists
Demandability shall
be subject to
fulfillment/
nonfulfillment of the
condition affecting it
OBJECTIVE NOVATION
1. Change of the subject matter
2. Change of causa or consideration
3. Change of the principal conditions or terms
SUBJECTIVE NOVATION
1. Substitution of the Debtor: Consent of
creditor is an indispensable requirement
both in expromision and delegacion.
Expromision Delegacion
Initiative for change does
not emanate from the
debtor, and may
Even be made without
his knowledge.
Debtor (delegante) offers
or initiates the change,
and the creditor
(delegatorio) accepts 3
rd
person (delegado) as
consenting to the
substitution
Requisites
1. Consent of the
creditor and the new
debtor
2. Knowledge or
consent of the old
debtor is not
required
Requisites
1. Consent of old
debtor, new debtor,
and creditor
Effects
1. Old debtor is
released
2. Insolvency of the
new debtor does not
revive the old
obligation in case the
old debtor did not
agree to expromision
3. If with knowledge
and consent of old
debtor, new debtor
can demand
reimbursement the
entire amount paid
and w/ subrogation
of creditors rights
4. If without knowledge
of the old debtor,
new debtor can
demand
reimbursement only
up to the extent that
the latter has been
benefited w/o
subrogation of
creditors rights
Effects
1. Insolvency of the
new debtor revives
the obligation of the
old debtor if it was
anterior and public,
and known to the old
debtor.
2. New debtor can
demand
reimbursement of
the entire amount he
has paid, from the
original debtor. He
may compel creditor
to subrogate him to
all of his rights.
2. Subrogation of a 3
rd
person in the rights
of the creditor
a. Conventional subrogation: by
agreement of the parties;
Requisites: the consent of the 3
rd
person, and of the original parties (Art.
1301).
Conventional
subrogation
Assignment of credit
Debtors consent is
necessary
Debtors consent is not
required
Extinguishes an
obligation and gives
rise to a new one
Refers to the same right
which passes from one
person to another, without
modifying or extinguishing
the obligation
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Defects/ vices in the
old obligation are
cured
Defects/ vices in the old
obligation are not cured
b. Legal subrogation: by operation of law
Legal subrogation is not presumed,
except in the following circumstances:
1. When creditor pays another creditor
who is preferred, even without the
debtors knowledge
2. When a 3
rd
person not interested in
the obligation pays with the express
or tacit approval of the debtor
3. When, even without the knowledge
of the debtor, a person interested in
the fulfillment of the obligation
without prejudice to the effects of
confusion as to the latters share
effects of confusion as to the latters
share
Effects
Total Partial
1. Transfers to the
person subrogated
the credit with all the
rights thereto
appertaining, either
against the debtor or
3
rd
persons.
2. Obligation is not
extinguished, even if
the intention is to
pay it.
3. Defenses against the
old creditor are
retained, unless
waived by the debtor
1. A creditor, to whom
partial payment has
been made, may
exercise his right for
the remainder, and
shall be preferred to
the person
subrogated in his
place in virtue of the
partial payment.
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Charts: Payment & Performance
by Professor Eduardo A. Labitag
UP College of Law
(Asked in 75, 84, 88, 95, and 98)
114
WHO CAN PAY?
In GENERAL
1. Debtor or his:
2. Authorized Agent
3. Heir
4. Successor-in- interest
3
rd
PERSON
Interested in obligation
(creditor cannot refuse
to accept valid payment)
Payment w/ or
w/o debtors
knowledge
Effects:
1. Valid payment;
obligation extinguished
2. Debtor to reimburse
fully 3
rd
person interested
in obligation
3. 3
rd
person subrogated
to rights of creditor
Not interested in obligation
(creditor may refuse to accept
payment [1236])
Payment with
debtors consent
(express/tacit)
Payment without
debtors knowledge
or against the will of D
Effects:
1. 3rd person is entitled
to full reimbursement
2. Legal subrogation
(novation) 3
rd
person
is subrogated/step into
the shoes of creditor
Effects:
3
rd
person can only be
reimbursed only insofar as
payment has been beneficial to
debtor(1236, 2
nd
. par.)
burden of proof on 3
rd
person
cannot compel C to subrogate
him (1237)
3
rd
person (whether or not
interested in obligation) does not
intend to be reimbursed (1238)
Debtor must give
consent
Effects:
1. Payment is deemed
as a donation/offer of
donation
2. Donation must be in
proper form (if above
P5Th must be in
writing
In Obligation to Give, if
PAYOR has
No free disposal & no
capacity to alienate
Minor who entered
contract w/o consent of
parent or guardian
Effects: Payment is invalid w/o prejudice to
natural obligations
Effects: No right to recover fungible
thing delivered to creditor who spent
or consumed it in good faith
Legend:
G = General Rule
= Exception
C = Creditor
D = Debtor
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115
TO WHOM PAYMENT MAY BE MADE
In GENERAL
Creditor /person in whose favor obligation was
constituted, or
His successor in interest, or
Any person authorized to received payment (1240)
Payment to Incapacitated
Creditor (1241)
G NOT valid
1) If C has kept the thing delivered
2) Insofar as payment benefited C
Payment to 3
rd
PERSON (1241,
2
nd
par.)
G VALID if 3
rd
person proves
that it
redounded to
Cs benefit
Exception to proof of benefit:
.3
rd
person acquires Cs rights after payment
.C ratifies payment
.Cs conduct leads D to believe that 3
rd
person had authority to receive payment
.Assignment of credit without notice to D
In Case of
ACTIVE
SOLIDARITY
If no demand is made, D may pay to ANY of
solidary creditors
If any judicial/extrajudicial demand is made by any
one of the creditors who made the demand (1214)
If payment is made
to a WRONG
PARTY
Effect:
No extinguishment
Extinguishment if fault or
negligence can be imputed
to creditor
Payment in good faith to person in
possession of credit = debtor released
(1242)
If debtor pays creditor after being
judicially ordered to retain debt =
payment not valid (1243)
Payment made in good faith to any
person in possession of credit
Effect: D released (1242)
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WHAT IS TO BE PAID? IDENTITY
In GENERAL
The very prestation (thing or service
Obligation to give a
SPECIFIC thing
Give:
1. Specific thing itself
2. Accessions & accessories
3. If with loss, improvements,
deterioration Apply Art.
1189
Debtor cannot compel C
to receive a different
specific thing even latter
has same value or more
valuable than that due
(1244)
Obligation to give a
GENERIC thing
G:
C cannot demand a thing of superior quality;
can demand inferior
D cannot deliver a thing of inferior quality
Unless quality & circumstances have been
stated (1246) purpose and other circumstances
of obligation considered
Obligation to pay sum of money, if D alienates
property to C = DACION EN PAGO governed by
law on SALES (1245)
Obligation to DO or
NOT to DO
Identity: The very same act promised to be done
or not to be done
Substitution cannot be done against Cs will
(1244, 2
nd
par.)
Payment of
MONEY
1. Payment of domestic obligations in Phil.
Currency
Exceptions under R.A. 4100; R.A. 8183
Foreign currency if agreed to by parties
2. In case of extraordinary inflation/deflation,
basis
of payment is value of currency at the time of
obligation was established (1250)
Payment of
INTEREST
No interest (i.e., for the use of someones money)
shall be due unless expressly stipulated in writing
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In Case of SUBSTANTIAL
PERFORMANCE IN
GOOD FAITH (1234)
D may recover as if there had
been complete fulfillment
- Less damages suffered by C
PRESUMPTIONS
in payment of
INTERESTS &
INSTALLMENTS
INTEREST If principal amount is
received w/o reservation as to
interest interest is presumed to
have been paid (1176; 1253)
INSTALLMENTS If a latter
installment of a debt is received
w/o reservation to prior
installments
Prior installments are
presumed paid (1176, 2
nd
par.)
HOW IS PAYMENT TO BE MADE INTEGRITY
In GENERAL
1233 Complete delivery or rendering
1248 C cannot be compelled to
received partial prestations; D cannot
be compelled to give partial payments
Exceptions:
2. When debt is in part liquidated & in part
unliquidated
3. When there are several subjects/parties
are bound under different terms/conditions
Effect if C accepts incomplete
performance (1235): WAIVER
- May be express or implied
If C knows the incompleteness/
irregularity of the payment, and he
still accepts it w/o objection, then
obligation is deemed extinguished
(estoppel)
* There must be intent to waive
Except if C has no knowledge of
the incompleteness
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WHERE PAYMENT IS TO BE MADE (ART. 1251)
In GENERAL
In the place designated in the obligation
If no place is designated
If obligation is to deliver a
SPECIFIC thing
Place of performance is
wherever the thing was at
the moment obligation was
constituted
Unless there is a
contrary express
stipulation
In any other case
Domicile of debtor
If D changes his domicile
in bad faith or after he has
incurred in delay
Additional expenses
shall be borne by D
Expenses of Making
Payment
In GENERAL
Extrajudicial expenses
required by the payment
shall be borne by DEBTOR
Unless otherwise
stipulated
As to JUDICIAL expenses
Rules of Court shall
govern
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WHEN PAYMENT IS TO BE MADE?
When obligation is due and
demandable but D may pay before
due date if period is for benefit of D
In GENERAL
Payment to be made when the creditor
makes a demand
(judicially/extrajudicially)
Exceptions wherein demand of creditor is not
necessary for delay to exist:
1. When obligation/law expressly declares
2. Nature & circumstances of the obligation
designation of time is controlling motive or
establishment of contract
3. When demand would be useless
WHY SHOULD PAYMENT BE MADE?
Because C may compel D to pay, and
failure to pay will allow C to satisfy credit
from properties of D that are not exempt
from execution
- end of Obligations -
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Table of Contents
Chapter I. General Provisions.....................122
I. Classification of Contracts.................122
II. Elements of Contracts.......................123
III. Stages of Contracts...........................123
IV. Charactertics of Contracts (MARCO) 123
Chapter II. Essential Requisites .................125
I. Consent .............................................125
II. Object ................................................127
III. Cause................................................127
Chapter III. Forms of Contracts ..................129
I. Rules .................................................129
II. Kinds of Formalities...........................129
Chapter IV. Reformation of Contracts........130
Chapter V. Interpretation of Contracts.......130
Chapter VI. Defective Contracts .................131
131
132
III. Unenforceable Contracts (Arts. 1403-
1408) ..........................................................133
IV. Void or Inexistent Contracts (Arts. 1409-
1422) ..........................................................134
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Chapter I. General Provisions
I. CLASSIFICATION
II. ELEMENTS
III. STAGES
IV. CHARACTERISTICS
Article 1305, Civil Code. A contract is a meeting of
minds, between two persons whereby one binds
himself, with respect to the other, to give something
or to render some service.
I. Classification of Contracts
A. To formation:
1. Consensual: consent is enough; e.g.
sale
2. Real: consent and delivery is required;
e.g. deposit, pledge
3. Solemn or formal: special formalities are
required for perfection e.g. donation of
realty
B. To relation to other contracts:
1. Principal: may exist alone; e.g. lease
2. Accessory: depends on another contract
for its existence; e.g. guaranty
3. Preparatory: a preliminary step towards
the celebration of a subsequent
contract; e.g. agency
C. To nature of vinculum
1. Unilateral: only one party is bound by
the prestation; e.g. commodatum
2. Bilateral (synallagmatic): where both
parties are bound by reciprocal
prestations; e.g. sale
D. To fulfillment of prestations
1. Commutative: fulfillment is determined in
advance
2. Aleatory: fulfillment is determined by
chance
E. By equivalence of prestations
1. Gratuitous: no correlative prestation is
received by a party
2. Onerous: there is an exchange of
correlative prestations
3. Remuneratory: the prestation is based
on services or benefits already received
F. By the time of fulfillment
1. Executed: obligation is fulfilled at the
time contract is entered into
2. Executory: fulfillment does not take
place at the time the contract is made
G. To their purpose
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Prof. Solomon Lumba
Faculty Editor
Leo Ledesma
Lead Writer
Krizel Malabanan
Ivy Velasco
Tin Reyes
Frances Domingo
Hazel Abenoja
Writers
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Kristine Bongcaron
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Subject Editors
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Kristine Bongcaron
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Editors-in-Chief
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Kae Guerrero
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Pat Hernandez
Viktor Fontanilla
Rusell Aragones
Romualdo Menzon Jr.
Rania Joya
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Michelle Arias
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Volunteers
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Lilibeth Perez
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Members
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1. Transfer of ownership, e.g. sale
2. Conveyance of Use, e.g. Commodatum
3. Rendition of Service, e.g. agency
H. To their subject matter
1. Things, e.g. sale, deposit
2. Services, e.g. agency
I. To their designation
1. Nominate: the law gives the contract a
special designation or particular name
e.g. deposit
2. Innominate: the contract has no special
name
Article 1305, Civil Code. INNOMINATE
CONTRACTS shall be regulated by the stipulations
of the parties, by the general provisions of Titles I
and II of [the Civil Code], by the rules governing the
most analogous nominate contracts, and by the
customs of the place.
Classes of Innominate Contracts
1. Do ut des: I give so that you may give
2. Do ut facias: I give so that you may do
3. Facio ut facias: I do so that you may do
4. Facio ut des: I do so that you may give
II. Elements of Contracts
A. Essential: Those without which the contract
would not exist (consent, object, causa).
B. Natural: Those which are derived from the
nature of the contract and ordinarily
accompany the same-they are presumed to
exist unless the contrary is stipulated e.g.
warranty in sales
C. Accidental: Those which exist only if
stipulated
Solemn Real Consensual
Common
Elements
Consent, subject matter, causa
Special
Elements
Formality Delivery None
Example Donationo
f personal
property
more than
P5K
Loan,
pledge
Others
III. Stages of Contracts
A. Preparation, conception or generation:
period of negotiation and bargaining, ending
at the moment of agreement
B. Perfection or birth: the moment when the
parties come to agree on the terms of the
contract
C. Consummation or death: the fulfillment or
performance of the terms agreed upon
IV. Charactertics of Contracts (MARCO)
A. MUTUALITY
The contract must bind both contracting parties;
its validity or compliance cannot be left to the will
of one of them (Art.1308).
Taylor v. Uy Teng Piao, 1922: [BUT] a contract may
expressly confer upon one party the right to cancel
the contract because the exercise of that right is a
fulfillment of the provisions of the contract itself
The release must be binding on both parties.
The determination of the performance may
be left to a 3
rd
person, whose decision shall
NOT be binding if:
It is evidently inequitable (the courts will
decide)
The decision had not been made known
to both parties (Art.1309)
B. AUTONOMY
The contracting parties may establish such
stipulations, clauses, terms and conditions as
they may deem convenient, provided they are
not contrary to law, morals, good customs,
public order, or public policy (Art. 1306).
C. RELATIVITY
Contracts take effect only between parties, their
assigns and heirs UNLESS, obligations arising
from the contract are not transmissible by their
(1) nature, (2) by stipulation or (3) by provision of
law. The heir is not liable beyond the value of
the property he received from the decedent. (Art.
1311)
Exception: Strangers may enforce the contract
in their favor in the ff. cases:
1. Stipulations Pour Autrui
If a contract should contain some stipulation
in favor of a third person, he may demand its
fulfilment provided he communicated his
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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 favour upon a third
person (Art.1311).
Requisites:
a. There must be a stipulation in favor of a
third person
b. The stipulation must be part, not the
whole of the contract
c. The contracting parties must have
clearly and deliberately conferred a
favor upon a third person, NOT a mere
incidental benefit or interest.
d. The third person must have
communicated his acceptance to the
obligor before its revocation
e. No relation of agency exists between
any of the parties and the third person
favored
Florentino v. Encarnacion, 1977:
a. Contracts to perform personal acts
which cannot be as well performed by
others are discharged by the death of
the promissor. Conversely, where the
service or act is of such a character that
it may as well be performed by another,
or where the contract, by its terms,
shows that performance by others
was contemplated, death does not
terminate the contract or excuse
nonperformance.
b. In this case the stipulation is a
stipulation pour atrui because the true
intent of the parties is to confer a direct
and material benefit upon a third party.
Accion Directa: Where the statute
authorizes the creditor to sue on his
debtors contract, e.g. lessor v. sub-
lessee (Art. 1651,1652) (J.B.L. Reyes)
2. Third Person In Possession
When the third person comes into
possession of the object of a contract
creating real rights (Art 1312)
3. Fraud
Where the contract is entered into in order to
defraud a person (Art. 1313)
4. Tortuous Interference
Where the third person induces a
contracting party to violate his contract
(Art.1314).
Requisites:
a. Existence of a valid contract
b. Knowledge of the third person of the
existence of the contract; and
c. Interference by third person without
legal justification or excuse
D. CONSENSUALITY
Contracts are perfected by mere consent and
from that moment, the parties are bound not only
to the fulfillment of what has been expressly
stipulated but also to all consequences which,
according to their nature, may be in keeping with
good faith, usage and law, (Art.1315) EXCEPT
real contracts, such as deposit, pledge and
commodatum, are not perfected until the
delivery of the object of the obligation.
(Tolentino)
E. OBLIGATORY FORCE
Art. 1159, Civil Code. Obligations arising from
contracts have the force of law between the
contracting parties and should be complied with in
good faith.
Art. 1308, Civil Code. The contract must bind both
contracting parties; its validity or compliance cannot
be left to the will of one of them.
Art. 1315, Civil Code. Contracts are perfected by
mere consent, and from that moment the parties are
bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping
with good faith, usage and law.
Art. 1356, Civil Code. 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.
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Chapter II. Essential Requisites
I. CONSENT
II. OBJECT
III. CAUSE
I. Consent
Conformity of the parties to the terms of the
contract; the acceptance by one of the offer
made by the other. (Manresa)
Requisites:
1. It must be manifested by the concurrence of
the offer and acceptance (Arts. 1319-1326)
2. The contracting parties must possess the
necessary legal capacity (Arts. 1327-1329)
3. It must be intelligent, free, spontaneous, and
real (not vitiated) (Arts. 1330-1346)
A. Concurrence
1. Offer: a unilateral proposition which one
party makes to the other for the celebration
of the contract. (Tolentino)
Requisites:
a. Definite
b. Intentional
c. Complete
Invitations to make offers
(advertisements)
Business advertisements of things for
sale, are NOT definite offers, just
invitations to make an offer, UNLESS
the contrary appears (Art. 1325)
Advertisements for bidders are
invitations to make proposals, advertiser
is NOT bound to accept lowest or
highest bid, UNLESS contrary appears;
the bidder is the offeror (Art. 1326).
Statements of intention: no contract
results even if accepted
Rosenstock v. Burke, 1924:
FACTS: Elser, in a letter, informed Burke that he was
in a position and is willing to entertain the purchase
of the yacht under some terms.
HELD: The word entertain applied to an act does not
mean the resolution to perform said act, but simply a
position to deliberate for deciding to perform or not to
perform said act. It was merely a position to deliberate
whether or not he would purchase the yacht and
invitation to a proposal being made to him, which
might be accepted by him or not.
OFFER TERMINATES upon:
a. Rejection by the offeree
b. Incapacity (death, civil interdiction,
insanity, or insolvency) of the offeror or
offeree before acceptance is conveyed
c. Counter-offer
d. Lapse of the time stated in the offer
without acceptance being conveyed
e. Revocation of the offer before learning
of acceptance
f. Supervening illegality before acceptance
(J.B.L. Reyes)
2. Acceptance
Requisites:
a. Unqualified and Unconditional, i.e. it
must conform with all the terms of the
offer, otherwise it is a counter-offer (Art.
1319)
b. Communicated to the offeror and
learned by him (Arts. 1319, 1322). If
made through an agent, the offer is
accepted from the time the acceptance
is communicated to such agent.
c. Express/Implied, but is not presumed
OPTION CONTRACT: A preparatory
contract in which one party grants to the
other, for a fixed period, the option to decide
whether or not to enter into a principal
contract. (Art. 1324)
With consideration Without consideration
Offeror cannot
unilaterally withdraw his
offer
Offeror may withdraw by
communicating withdrawal
to the offeree before
acceptance
B. Capacity
1. Incapacitated to Give Consent
a. Minors, UNLESS, the minors consent
is operative in contracts:
For necessaries (Art.1427)
Where the minor actively
misrepresents his age (estoppel)
Mercado v. Espiritu, 1917:
Minors held in estoppel through
active misrepresentation
Bambalan v. Maramba, 1928:
There is no estoppel if the minority
was known.
b. Insane or demented persons,
UNLESS, they contract during a lucid
interval
c. Deaf-mutes who do not know how to
read and write.
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2. Disqualified to Contract (Art. 1329):
a. Those under Civil interdiction for
transactions inter vivos (RPC Art. 34)
b. Undischarged insolvents (Insolvency
Law, Sec.24)
c. Husband and wife: cannot donate (Art.
123 FC) to each other, nor sell if the
marriage is under ACP (Art.1490)
d. The ff. cannot purchase (Art. 1491):
The guardian: his wards property
The agent: the principals property
Executors and administrators:
property under administration
Public officers-state property under
their administration
Justices, judges, prosecutors, clerks
of court, lawyers-property attached
in litigation.
e. Members of Ethnic Minorities: their
contracts (excluding sale of personal
property or personal service contracts)
must be approved by the Governor or
his representative. (Public Land Act)
Incapacity to Give
Consent (Art. 1327)
Disqualification to
Contract (Art.1329)
Restrains the exercise of
the right to contract
Restrains the very right
itself
Based on subjective
circumstances of certain
persons
Based on public policy
and morality
Voidable Void
C. Vices of Consent (Art. 1330, CC) (MIVUF)
1. Mistake
Inadvertent and excusable disregard of a
circumstance material to the contract. (J.B.L.
Reyes)
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 (Art.1331)
Mistake of Fact Mistake of Law Mutual Mistake
When one or
both contracting
parties believe
that a fact exists
when in reality it
does not, or vice
versa
When one or
both parties
arrive at an
erroneous
conclusion on
the
interpretation of
a question of
law or the legal
effects
Must be as
to the legal
effect of an
agreement
Must be
mutual
Real purpose
of the parties
must have
been
frustrated
2. 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 (Art. 1335).
Martinez v. HSBC, 1910: The conveyance of several
properties by to her husbands creditors, though
reluctant is still consent. She assented to the
requirements of the defendants, the civil and criminal
actions against them would be dropped. A contract is
valid even though one of the parties entered into it
against his wishes and desires, or even against his
better judgment. Contracts are also valid even though
they are entered into by one of the parties without
hope of advantage or profit.
3. Violence
Irresistible force used to extort consent
(J.B.L. Reyes)
4. 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
(Art. 1337).
Circumstances:
a. Relationship of the parties (family,
spiritual, confidential etc.)
b. That the person unduly influenced was
suffering from infirmity (mental
weakness, ignorance etc.) (Art.1337)
5. 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 (Art. 1338).
Art. 1339, Civil Code. Failure to disclose facts, when
there is a duty to reveal them, as when the parties are
bound by confidential relations, constitutes fraud.
Art. 1340, Civil Code. The usual exaggerations in
trade, when the other party had an opportunity to
know the facts, are not in themselves fraudulent.
Art. 1341, Civil Code. 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.
Art. 1342, Civil Code. Misrepresentation by a third
person does not vitiate consent, unless, such
misrepresentation has created substantial mistake
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and the same is mutual.
Art. 1343, Civil Code. Misrepresentation made in
good faith is not fraudulent but may constitute error.
SIMULATION OF CONTRACTS (Art. 1345-
1346): Declaration of a non-existent will made
deliberately for the purpose of producing the
appearance of a transaction that does not exist,
or which is different from the one which actually
arose. (J.B.L. Reyes)
Absolute Relative
No real transaction is
intended
Real transaction is hidden
Fictitious contract Disguised contract
Void Bound as to hidden
agreement, so long as it
does not prejudice a third
person and is not contrary
to law, morals, good
customs, public order or
public policy
II. Object
The thing right or service which is the subject
matter of the obligation arising from the contract.
Requisites:
a. Lawful: Not contrary to law, morals, good
customs, public order or public policy.
b. Actual or possible
c. Transmissible: Within the commerce of man
d. Determinate or determinable
All things or services may be the object of
contracts, EXCEPT:
Things which are outside the commerce of
men
Intransmissible rights
Future inheritance except in cases
authorized by law
Impossible things or services
Objects which are indeterminable as to their
kind, the genus should be expressed
In order that a thing, right or service may be the
object of a contract, it should be in existence at
the moment of the celebration of the contract, or
at least, it can exist subsequently or in the
future.
A FUTURE THING may be the object of a
contract, such contract may be interpreted as a:
Conditional contract: where its efficacy
should depend upon the future existence of
the thing
Aleatory contract: where one of the contracting
parties assumes the risk that the thing will never
come into existence, e.g. insurance
III. Cause
It is the impelling reason for which a party
assumes an obligation under a contract.
Requisites:
a. Existing
b. Licit or Lawful
c. True
Cause in:
Onerous
Contracts
Renumeratory
Contracts
Pure
Beneficence
As to each of
the contracting
parties is
understood to
be the
undertaking or
the promise of
the thing or
service by the
other party
The service or
benefit which is
remunerated
Mere
liberality of
the
benefactor
In Villaroel v. Estrada (1940), where a moral
obligation is based upon a previous civil obligation,
which has already been barred by the statute of
limitations at the time the contract is entered into, it
constitutes a sufficient cause or consideration to
support a contract (Natural Obligation).
BUT,
In Fisher v. Robb (1939), if the moral obligation arises
wholly from ethical consideration, it cannot constitute
a sufficient cause to support an onerous contract, as
when the promise is made on the erroneous belief
that one was morally responsible for the failure of an
enterprise (Moral Obligation).
Cause Defined Effect
Lack of
Cause
Absence or total
lack of cause
The contract
confers no right
and has no legal
effect
Illegality of
Cause
Contrary to law,
morals, good
customs, public
policy and
public order
Null and Void
Falsity of
cause
Cause is stated
but is untrue
Void if it should
not be proved that
it was founded
upon another
cause which was
true and lawful
Lesion or
inadequacy
of cause
Cause is not
proportionate to
object
Shall not invalidate
the contract
except when
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a)there is fraud,
mistake, undue
influence
b)when parties
intended a
donation
Liguez v. CA (1957): In making the donation in
question, Lopez was not moved exclusively by the
desire to benefit Liguez, but also to secure her
cohabiting with him, so that he could gratify his sexual
impulses. The donation was an onerous transaction
and clearly predicated upon an illicit causa.
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Chapter III. Forms of Contracts
I. RULES
II. KINDS OF FORMALITIES
I. Rules
Contracts shall be obligatory, in whatever form
they may have been entered into, provided all
the essential requisites for their validity are
present. (Art. 1356)
Spiritual System of the Spanish Code: The law looks
more on the spirit rather than the form of contracts.
Exceptions:
When the law requires that a contract be in
some form for validity (Arts. 1357-1358)
When the law requires that contract be in
some form to be enforceable (Statute of
Frauds)
II. Kinds of Formalities
A. Contracts Which Must Appear in Writing:
1. Donation of personal property whose
value exceeds five hundred pesos (Art
748)
2. Sale of a piece of land or any interest
therein through an agent (Art 1874)
3. Antichresis (Art 2134)
4. Agreements regarding payment of
interests in contracts of loans (Art. 2314)
B. Contracts Which Must Appear in a Public
Document
1. Art. 1358:
a. 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 a
governed by Articles 1403, No. 2,
and 1405;
b. The cession, repudiation or
renunciation of hereditary rights or
of those of the conjugal partnership
of gains;
c. 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;
d. The cession of actions or rights
proceeding from an act appearing in
a public document.
e. All other contracts where the
amount involved exceeds five
hundred pesos 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.
2. Donation of immovable properties (Art.
749)
3. Partnership where immovable property
or real rights are contributed to the
common fund (Arts.1771 and 1773)
BF Corporation v. CA, 1998: A contract may be
encompassed in several instruments even though
every instrument is not signed by the parties since it is
sufficient if the unsigned instruments are clearly
identified or referred to and made part of the signed
instruments.
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Chapter IV. Reformation of Contracts
Reformation of Contracts (Art 1359-1369)
REFORMATION: is that remedy in equity by
means of which a written instrument is made or
construed so as to express or conform to the
real intention of the parties when some error or
mistake has been committed. (J.B.L. Reyes)
Requisites (Art 1359):
1. There must be a meeting of the minds of the
contracting parties;
2. Their true intention is not expressed in the
instrument;
3. Such failure to express their true intention is
due to mistake, fraud, inequitable conduct,
or accident; and
4. There is clear and convincing proof of
mistake, fraud, inequitable conduct, or
accident.
If the mistake, fraud, inequitable conduct, or accident
has prevented the meeting of the minds of the parties,
the proper remedy is not reformation but annulment of
the contract. (See also Art 1390)
Who May Ask for Reformation (Art. 1368):
1. Either party or his successors in interest, if
the mistake was mutual; otherwise,
2. Upon petition of the injured party, or his
heirs and assigns.
NO REFORMATION in (Art. 1366):
1. Simple donations inter vivos wherein no
condition is imposed;
2. Wills;
3. When the real agreement is void.
Implied Ratification (Art. 1367): The action to
enforce the instrument bars subsequent action
to reform.
Chapter V. Interpretation of Contracts
RULES ON DOUBTS (Art. 1378)
Principal
Objects
Gratuitous
Contracts
Onerous
Contracts
Doubts where
it cannot be
known what
may have
been the
intention or
will of the
parties, the
contract shall
be null and
void.
Absolutely
impossible to
settle doubts by
the rules and
only refer to
incidental
circumstances
the least
transmission
of rights and
interests shall
prevail.
Absolutely
impossible to
settle doubts by
the rules and
only refer to
incidental
circumstances
the doubt shall
be settled in
favor of the
greatest
reciprocity of
interests.
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Chapter VI. Defective Contracts
I. RESCISSIBLE
II. VOIDABLE
III. UNENFORCEABLE
IV. VOID OR INEXISTENT
What are the
rescissible
contracts? (Art
1381; see also Art
1382)
Contracts of
guardians
Contracts in
representation
of absentees
Contracts are
entered into to
defraud existing
creditors
Contracts refer
to things in
litigation
What makes it
defective?
When the acts of
administration
cause LESION or
damage to the
WARD they
represent by more
than 25% of the
value of the thing
When the acts
of administration
cause LESION
or damage to
the ABSENTEE
they represent
by more than
25% of the value
of the thin
When the creditors
cannot in any other
manner collect the
claims due them
If entered into by
the defendant
without the
knowledge &
approval of the
litigants or
competent judicial
authority
Effect on the
Contract
Valid until rescinded (Art 1380)
How to rescind? Direct Action (different from action for
rescission under Art 1191)
NO rescission if:
1. Injured party has other legal
means to obtain reparation (Art
1383).
2. Plaintiff cannot return his part of
the obligation (Art 1385 par 1)
3. Object of the contract is in the
hands of third person, onerously
acquired by him in good faith (Art
1385 par 2)
4. If the court approves the
contracts under Art 1381 par 1
and 2 (Art 1386)
Accion Pauliana for Contracts in Fraud of
Creditors
NO rescission if:
1. Injured party has other legal means to
obtain reparation (Art 1383)
2. Plaintiff cannot return his part of the
obligation (Art 1385 par 1)
3. Object of the contract is in the hands of
third person, onerously acquired by
him in good faith (Art 1385 par 2)
Who can rescind? In general, by
injured party
By ward, or by
guardian ad litem
of ward during
incapacity of ward
in an action
against the
original guardian
By absentee By creditor(s) By party litigant
When to rescind
(Art 1389)
Within four years
from [re-] gaining
capacity
Within 4 years
from knowledge
of domicile of
absentee
Within 4 years from
knowledge of
fraudulent contract
Within 4 years
from knowledge of
fraudulent contract
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What makes it
defective? (Art
1390)
Incapacity of one party to the
contract
Consent vitiated by mistake, violence,
intimidation, undue influence or fraud
Effect on the
Contract
Valid until annulled by competent court (Art 1390 last par)
How to annul? 1. Directly, by an action for annulment
2. Indirectly, by counterclaim asking for positive action of the court to set aside the
contract
Annulment cannot proceed when:
1. the object of the contract is lost through fraud or deceit of the person with right to
institute proceedings (art 1401 par 1);
2. the right of action is based upon the incapacity of any one of the contracting
parties and the thing is lost through the fault or fraud of the plaintiff (Art 1401 par
2)
Who can/cannot
annul?
(Art 1397)
1. Parties who are obliged principally or subsidiarily
2. Persons who are capable cannot allege the incapacity of those with whom they
contracted
3. Persons who exerted intimidation, violence, or undue intimidation, or employed
fraud, or caused mistake, cannot base their action upon these flaws of the
contract
When? (Art 1391) Within four years after guardianship of
minors or incapacitated persons
ceases
Within four years
1. After intimidation, violence or undue
influence ceases
2. From the time of discovery of mistake
or fraud
Effect of
Annulment
1. Mutual restitution of the things delivered, along with fruits and price paid with
interest (Art 1398)
2. Damages to be paid by party who caused defect of the contract, by virtue of
Article 20 and 21 of the Civil Code
How to Cure
Defect? (Arts
1392 - 1396)
1. Express (written or oral manifestation) or tacit ratification (acts or conduct) by
injured party, or guardian of incapacitated person.
! Ratification does not require the conformity of the contracting party
who has no right to bring the action for annulment (Art 1395)
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III. Unenforceable Contracts (Arts. 1403-1408)
What are the
unenforceable
contracts? (Art
1403)
Contract entered into
without authority of, or
in excess of authority
given by owner
Contracts covered by
Statute of Frauds which
did not comply with the
written memorandum
requirement
(See Art 1403 par 2)
Contract where both
parties are incapable
of giving consent to
contract
Effect on the
Contract
No effect unless ratified. Cannot be enforced by a proper action in court.
How to assail? Not by direct action.
!" As a defense, by
motion to dismiss the
complaint on the
ground that the contract
is unenforceable
Not by direct action.
1. As a defense, by motion
to dismiss the complaint
on the ground that the
contract is unenforceable;
2. Objection to the
presentation of oral
evidence to prove an oral
contract (See Art 1405)
Not by direct action.
1. As a defense, by
motion to dismiss the
complaint on the
ground that the
contract is
unenforceable
Who can assail?
*an
unenforceable
contract cannot
be assailed by
third persons (Art
1408)
By person whose name
the contract was entered
into; By owner of property.
By party against whom the
contract is being enforced;
or his privies.
By party against whom
the contract is being
enforced; or his privies;
or parents or guardians
persons, as it is a
personal defense
When? When a party asks the court to enforce the contract
How to Cure
Defect? (Art
1403)
1. Ratification by person
whose name the
contract was entered
into
1. Ratification by party
against whom the
contract is being
enforced
2. By failure to object to the
presentation of oral
evidence to prove an oral
contract or by the
acceptance of benefits
under the contract (Art
1405)
1. By ratification of
party against whom
the contract is being
enforced; or his
privies; or parents or
guardians
The ratification by
one party converts
the contract into a
voidable contract (Art
1407)
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IV. Void or Inexistent Contracts (Arts. 1409-1422)
What makes it
defective?
Contracts Cause, Object
of Purpose is contrary to
morals, good customs,
public order or public
policy
(Art 1409 par 1)
Inexistent contracts, or
contracts whose essential
elements are absent
(Art Art 1409 par 2, 3, 4,5)
Contracts expressly
prohibited or declared
void by law (Art 1409
par 7); contracts
which are direct
results of a previous
illegal contract (art
1422)
Contracts which
are inconsistent
and void from the
beginning (Art
1409)
1.Those whose Cause, Object of Purpose is contrary to 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
How to assail? 1. File for action for declaration of inexistence or nullity of contract
2.As a defense during trial (Art 1409 last par). Such defense not available to third
persons not directly affected by contract (Art 1421)
3.In pari delicto applies when cause or object of contract constitutes a criminal
offense (Art 1411)
Who can assail? 1. Innocent party Art
1411 par 2; Art 1412
par2)
2. Less-guilty party, upon
court discretion
3. Incapacitated person
who is a party to an
illegal contract, upon
court discretion (Art
1415)
4. Any person whose
interests are directly
affected by the
contract (Art 1421)
1. Any of the parties
2. Any person whose
interests are directly
affected by the contract
(Art 1421)
1. Any person whose
interests are
directly affected by
the contract Art
(1421)
2. By party for whose
protection the
prohibition of the
law is designed (Art
1416)
When? The action or defense does not prescribe (Art 1410)
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Table of Contents
Property.........................................................137
I. Definition ...........................................137
II. Classification.....................................137
Chapter II. Ownership..................................144
I. Definition ...........................................144
III. Specific Rights under the Civil Code.144
IV. Limitations on Real Right of Ownership
146
Chapter III. Accession..................................147
I. Definition ...........................................147
II. General Principles of Accession .......147
III. Kinds of Accession............................147
Accession...................................................147
Chapter IV. Quieting of Title........................152
I. In General .........................................152
II. Purpose.............................................152
III. Nature: Quasi in Rem........................152
IV. Requisites .........................................152
V. Prescription of Action ........................153
Chapter V. Co-Ownership............................154
I. Definition ...........................................154
III. Difference between Co-ownership and
Joint Tenancy.............................................155
IV. Difference between Co-ownership and
Partnership.................................................155
V. Sources of Co-Ownership.................155
VI. Rights of Each Co-owner over the Thing
or Property Owned in Common.................157
His Ideal Share ..........................................161
Applicable to CPG or ACP.........................161
IX. Special Rules on Ownership of Different
Stories of a House as Differentiated from
Provisions of the Condominium Act...........162
X. Extinguishment of Co-Ownership .....166
Chapter VI. Possession ...............................168
I. Definition ...........................................168
II. Degrees of Possession .....................169
III. Classes of Possession......................169
IV. Cases of Possession.........................169
V. What Things May be Possessed ......170
VI. What May Not Be Possessed by Private
Persons......................................................171
VII. Acquisition of Possession.............171
VIII. Effects of Possession ...................173
IX. Effects of Possession in the Concept of
Owner ........................................................177
Possessorfor Acquisitive Prescription....178
XI. Possesion May Be Lost By ...............179
Chapter VII. Usufruct ................................... 181
I. Concept............................................. 181
II. Characteristics .................................. 181
III. Usufruct Distiguished from Lease and
Servitude.................................................... 181
IV. Classes of Usufruct........................... 182
V. Rights of Usufructuary ...................... 184
VI. Rights of the Naked Owner............... 186
VII. Obligations of the Usufructuary .... 187
VIII. Special Cases of Usufruct ............ 190
IX. Extinguishment of Usufruct ............... 192
X. Conditions Not Affecting Usufruct ..... 194
Chapter VIII. Easement ................................ 196
I. Concept............................................. 196
II. Essential Features ............................ 196
III. Classification of Servitudes............... 197
198
V. Modes of Acquiring Easements ........ 198
Dominant and Servient Estates................. 199
Easements................................................. 200
VIII. Legal Easements.......................... 202
Chapter IX. Nuisance................................... 212
I. Definition ........................................... 212
II. Classes ............................................. 212
III. Liability in Case of Nuisance............. 213
IV. Regulation of Nuisances................... 214
Chapter X. Modes of Acquiring Ownership
....................................................................... 217
I. Mode v. Title ..................................... 217
II. Mode ................................................. 217
Chapter XI. Donation ................................... 222
I. Nature ............................................... 222
II. Requisites ......................................... 222
III. Kinds ................................................. 222
223
Donations................................................... 224
VI. Acceptance ....................................... 225
VII. Form ............................................. 225
VIII. What May Be Donated ................. 225
IX. Effect ................................................. 226
X. Revocation and Reduction................ 227
Chapter XII. Lease........................................ 232
I. General Characteristics .................... 232
II. Kinds ................................................. 232
III. Lease of Things ................................ 232
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Property
I. DEFINITION
II. CLASSIFICATION
A. UNDER THE CIVIL CODE
B. BY OWNERSHIP
C. OTHER CLASSIFICATIONS
I. Definition
PROPERTY: Mass of things or objects
characterized by
1. Utility capacity to satisfy human wants
2. Individualityand substantivity separate and
autonomous existence
3. Susceptibility of being appropriated those
which cannot be appropriated because of
their distance, depth or immensity cannot be
considered as things (i.e. stars, ocean)
II. Classification
A. UNDER THE CIVIL CODE
Article 414, Civil Code. All things which are or may
be the object of appropriation are considered either:
1. Immovable or real property; or
2. Movable or personal property.
IMMOVABLES OR REAL PROPERTY
Article 415
The following are immovable property:
1. Land, buildings, roads and constructions of
all kinds adhered to the soil;
2. Trees, plants, and growing fruits, while they
are attached to the land or form an integral
part of an immovable;
3. Everything attached to an immovable in a
fixed manner, in such a way that it cannot be
separated therefrom without breaking the
material or deterioration of the object;
4. Statues, reliefs, paintings or other objects for
use or ornamentation, placed in buildings 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;
5. Machinery, receptacles, instruments or
implements intended by the owner of the
tenement for an industry or works which
may be carried on in a building or on a piece
of land, and which tend directly to meet the
needs of the said industry or works;
6. Animal houses, pigeon-houses, beehives,
fish ponds or breeding places of similar
nature, in case their owner has placed them
or preserves them with the intention to have
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them permanently attached to the land, and
forming a permanent part of it; the animals
in these places are included;
7. Fertilizer actually used on a piece of land;
8. Mines, quarries, and slag dumps, while the
matter thereof forms part of the bed, and
waters either running or stagnant;
9. 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;
10. Contracts for public works, and servitudes
and other real rights over immovable
property.
Immovables by Nature
Those which cannot be moved from place to
place; their intrinsic quality have no utility except
in a fixed place (Par. 1 & 8)
1. Par. 1: Lands, building, roads and
constructions
a. Buildings
To be considered a building, their
adherence to the land must be
permanent and substantial.
Buildings have been considered as
immovables, despite:
Treatment by the parties e.g.
they constitute a separate
mortgage on the building and
the land (Punzalan v.
Lacsamana)
Separate Ownership i.e. a
building on rented land is still
considered an immovable.
(Tolentino)
2. Par. 8: Mineral deposits and waters
a. Mineral Deposits
Minerals still deposited in the soil
When minerals have been
extracted, they become chattel.
b. Slag Dump: dirt and soil taken from a
mine and piled upon the surface of the
ground. Inside the dump can be found
the minerals.
c. Waters: those still attached to or running
thru the soil or the ground.
Immovables by Incorporation
Those which are essentially movables but are
attached to an immovable in such a way as to be
an integral part thereof (Par. 2, 3, 4, 6 & 7)
1. Par. 2: Trees and plants
a. Trees and plants: only immovables
when they are attached to the land or
form an integral part of an immovable
When they have been cut or
uprooted, they become movables.
b. However, by special treatment of Act
1508 (Sec. 7, Chattel Mortgage Law),
growing crops may be subject of a
Chattel Mortgage.
c. For the purpose of attachment: growing
crops are to be attached in the same
manner as realty. (Rule 59, Sec. 7)
2. Par. 3: Things incorporated
a. Res vinta in Roman Law
b. Attachment in a fixed manner:
breakage or injury in case of separation
will be substantial e.g. wells, sewers,
aqueducts and railways
Whether attached by the owner
himself or some other person
3. Par. 7: Fertilizer
Actually used means it has been spread
over the land.
Immovables by Destination
Those which are essentially movables but by the
purpose for which they have been placed in an
immovable, partake of the nature of an
immovable because of the added utility derived
therefrom (Par. 4, 5, 6 & 9)
1. Par. 4: Fixtures and ornaments
Requisites:
a. Placed by the owner or by the tenant as
agent of the owner;
b. With intention of attaching them
permanently even if adherence will not
involve breakage or injury.
Where the improvement or ornaments
placed by the lessee are not to pass to the
owner at the expiration of the lease, they
remain movables for chattel mortgage
purposes. (Davao Sawmill v. Castillo)
2. Par. 3 v. Par. 4
Par. 3 Par. 4
Cannot be separated from
immovable without
breaking or deterioration
Can be separated from
immovable without
breaking or deterioration
Need not be placed by the
owner
Must be placed by the
owner, or by his agent,
expressed or implied
Real property by
incorporation
Real property by
incorporation and
destination
3. Par. 5: Machinery and equipment
a. Immovable characteristic depends upon
their being destined for use in the
industry or work in the tenement;
The moment they are separated,
(from the immovable or from the
industry or work in which they are
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utilized) they recover their
condition as movables.
If it is still needed for the industry
but separated from the tenement
temporarily, the property continues
to be immovable.
b. Requisites for Immovability in Par. 5:
Placed by the owner or the tenant
as agent of the owner;
Adapted to the needs of the industry
or work carried on
EXCEPT: When estoppel operates
Parties to a contract may by agreement
treat as personal property that which by
nature would be real property, as long
as no interest of third parties would be
prejudiced. That characterization is
effective as between the parties.
(Makati Leasing v. Wearever)
c. EFFECT of Attachment
Machinery become part of the
immovable.
The installation of machinery and
equipment in a mortgaged sugar
central for the purpose of carrying
out the industrial functions of the
latter and increasing production,
constitutes a permanent
improvement on said sugar central
and subjects said machinery and
equipment to the mortgage
constituted thereon. (Berkenkotter
v. Cu Unjieng)
4. Par. 6: Animal houses and animals therein
a. Requisites:
Placed by the owner or the tenant
as agent of the owner, with the
intention of permanent attachment;
Forming a permanent part of the
immovable.
5. Par. 9: Docks and fixed floating structures
a. A floating house tied to a shore or bank
post and used as a residence is
considered real property, considering
that the waters on which it floats are
considered immovables.
b. But if the floating house makes it a point
to journey from place to place, it
assumes the category of a vessel, and
is considered immovable property
Immovables by Analogy (Par. 10)
Contracts for public works, servitudes, other
real rights over immovable property e.g.
usufruct and lease of real property for a
period of 1 year and registered
Effect of Enumeration: Art. 415 not
absolute
1. Parties may by agreement treat as movable
that which is enumerated by law as
immovable, but effective only as to them.
The view that parties to a deed of chattel
mortgage may agree to consider a house as
personal property for the purposes of said
contract, "is good only insofar as the
contracting parties are concerned. It is
based, partly, upon the principle of estoppel"
(Evangelista vs. Alto Surety)
2. For purposes of taxation, improvements on
land are commonly taxed as realty, even
though for some purposes, they might be
considered as personalty.
It is a familiar phenomenon to see things
classified as real property for purposes of
taxation, which on general principle, might
be considered personal property. (Manila
Electric v. Central Bank)
MOVABLES OR PERSONAL PROPERTY
Article 416, Civil Code. The following things are
deemed to be personal property:
1. Those movables susceptible of
appropriation which are not included in the
preceding article;
2. Real property which by any special
provision of law is considered as personal
property;
3. Forces of nature which are brought under
control by science; and
4. In general, all things which can be
transported from place to place without
impairment of the real property to which
they are fixed.
Article 417, Civil Code. The following are also
considered as personal property:
1. Obligations and actions which have for their
object movables or demandable sums; and
2. Shares of stock of agricultural, commercial
and industrial entities, although they may
have real estate.
Tests to Determine Movable Character
1. By exclusion everything NOT included in
Article 415
Parties cannot by agreement treat as
immovable that which is legally movable.
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2. By description an object is immovable if it
possesses:
a. Ability to change location whether it
can be carried from place to place;
b. Without substantial injury to the
immovable to which it is attached.
The steel towers built by MERALCO are not
buildings or constructions since they are
removable and merely attached to a square
metal frame by means of bolts, which when
unscrewed could easily be dismantled and
moved from place to place, without breaking
the material or causing deterioration to the
object they are attached. (Board of
Assessment Appeals v. Meralco)
3. By special provision of law real property is
considered as personal property
a. Growing crops under the Chattel
Mortgage Law
b. Machinery installed by a lessee not
acting as agent of the owner (Davao
Sawmill v. Castillo)
c. Intellectual property considered
personal property; it consists in the
pecuniary benefit which the owner can
get by the reproduction or manufacture
of his work.
4. By forces of nature e.g. electricity, gas,
heat, oxygen
IMPORTANCE AND SIGNIFICANCE OF
CLASSIFICATION UNDER THE CIVIL CODE
Criminal Law
1. Usurpation of property can take place only
with respect to real property.
Art. 312. Occupation of real property
or usurpation of real rights in
property.
Any person who, by means of violence
against or intimidation of persons, shall
take possession of any real property or
shall usurp any real rights in property
belonging to another, in addition to the
penalty incurred for the acts of violence
executed by him, shall be punished by a
fine from 50 to 100 per centum of the
gain which he shall have obtained, but
not less than 75 pesos.
If the value of the gain cannot be
ascertained, a fine of from 200 to 500
pesos shall be imposed.
2. Robbery and theft can be committed only
against personal property.
Art. 293. Who are guilty of robbery.
Any person who, with intent to gain,
shall take any personal property
belonging to another, by means of
violence or intimidation of any person, or
using force upon anything shall be guilty
of robbery.
Art. 308. Who are liable for theft.
Theft is committed by any person who,
with intent to gain but without violence
against or intimidation of persons nor
force upon things, shall take personal
property of another without the latter's
consent.
Form of Contracts Involving Movables and
Immovables
1. Subject matter of specific contracts: only
real property can be the subject of real
mortgage (Art. 2124) and antichresis (Art
2132); only personal property can be the
subject of voluntary deposit (Art. 1966),
pledge (Art. 2094) and chattel mortgage (Act
1508)
2. Donations of real property are required to
be in a public instrument (Art. 749) but a
donation of a movable mat be made orally or
in writing (Art. 748)
Acquisitive Prescription
1. Real Property can be acquired by
prescription in 30 years (bad faith) and 10
years (good faith).
2. Movables can be acquired by prescription in
8 years (bad faith) and 4 years (good faith).
Venue
1. Rule 4, Sec. 1: Venue of real actions.
Actions affecting title to or possession of
real property, or interest therein, shall be
commenced and tried in the proper court
which has jurisdiction over the area
wherein the real property involved, or a
portion thereof, is situated. Forcible
entry and detainer actions shall be
commenced and tried in the municipal
trial court of the municipality or city
wherein the real property involved, or a
portion thereof, is situated.
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2. Rule 4, Sec. 2: Venue of personal actions.
All other actions may be commenced
and tried where the plaintiff or any of the
principal plaintiffs resides, or where the
defendant or any of the principal
defendants resides, or in the case of a
non-resident defendant where he may
be found, at the election of the plaintiff.
Governing Law
1. Immovables are governed by the law of the
country wherein they are located
2. Movables are governed by the personal
laws of the owner which in some cases is
the law of his nationality and in other cases,
the law of his domicile.
Action for Recovery of Possession
1. Possession of real property may be
recovered through accion reivindicatoria,
accion publiciana, forcible entry and
unlawful detainer.
2. Possession of movable property may be
recovered through replevin.
B. CLASSIFICATION BY OWNERSHIP
Article 419, Civil Code. Property is either of public
dominion or of private ownership.
PROPERTY OF PUBLIC DOMINION
Article 420, Civil Code. The following things are
property of public dominion:
1. Those intended for public use, such as
roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks,
shores, roadsteads, and others of similar
character;
2. Those which belong to the State, without
being for public use, and are intended for
some public service or for the development
of the national wealth.
Public Dominion As defined by Art. 420, CC
Public Domain Used in Article XII, Section 2, of
the 1987 Constitution
Public Lands Public Land Act
Characteristics of Public Dominion
1. Not owned by the State and its subdivisions
but pertains to it as territorial sovereign, to
hold in trust for the interest of the
community.
2. Intended for public use, and not for use by
the State as a juridical person
3. Cannot be the subject of appropriation either
by the State or by private persons
Classifications
1. Administered by the State
a. For public usemay be used by
everybody, even by strangers or aliens,
in accordance with its nature but nobody
can exercise over it the rights of a
private owner.
b. For public servicemay be used only by
authorized persons but exists for the
benefit of all e.g. fortresses, unleased
mines and civil buildings
c. For development and national wealth
includes natural resources such as
minerals, coal, oil and forest
2. Administered by Municipal Corporations
Article 424, Civil Code. Property for public use, in
the provinces, cities, and municipalities, consist of
the provincial roads, city streets, municipal streets,
the squares, fountains, public waters, promenades,
and public works for public service paid for by said
provinces, cities, or municipalities.
Property of public dominion is outside the
commerce of man
They cannot be the subject matter of private
contracts, cannot be acquired by
prescription and they are not subject to
attachment and execution nor burdened with
a voluntary easement.
PRIVATE OWNERSHIP
Can be exercised by the State in its private
capacity or by private persons
Patrimonal Property of the State
Article 421, Civil Code. All other property of the
State, which is not of the character stated in the
preceding article, is patrimonial property.
1. Owned by the State over which it has the
same rights as private individuals in relation
to their own property
2. Subject to the administrative laws and
regulations on the procedure of exercising
such rights.
3. Examples: friar lands, escheated properties
and commercial buildings
4. Purpose of Patrimonial Property
a. Enables the State to attain its economic
ends
b. Serves as a means for the States
subsistence and preservation
c. Enables the State to fulfill its primary
mission
5. Conversion of Property of Public
Dominion to Patrimonial Property
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Property of public dominion, when no
longer intended for public use or for
public service, shall form part of the
patrimonial property of the State [Art.
422, Civil Code]
6. Requires a Declaration by the
Government through its executive or
legislative departments to the effect that it is
no longer needed for public use or service.
Patrimonial Property of Municipal
Corporations
Article 424(2), Civil Code. All other property
possessed by any of them [the provinces, cities, and
municipalities] is patrimonial and shall be governed
by this Code, without prejudice to the provisions of
special laws.
1. The province or municipality, as a juridical
entity, also possesses private property to
answer for its economic necessities.
2. Classification of Properties of provinces,
cities and municipalities (Salas v.
Jarencio)
a. Properties acquired with their own
funds in their private or corporate
capacity over which the political
subdivision has ownership and control
b. Properties of public dominion held in
trust for the States inhabitants are
subject to the control and supervision of
the State
3. A municipal corporation must prove that
they acquired the land with their own
corporate funds
The presumption is that land comes from the
State upon the creation of the municipality.
All lands in the possession of the
municipality, EXCEPT for those acquired
with its private funds, are deemed to be
property of public dominion, held in trust for
the State for the benefit of its inhabitants.
Congress has paramount power to dispose
of lands of public dominion in a municipality,
the latter being a subdivision only for
purposes of local administration. (Salas v.
Jarencio)
Private Property of Private Persons
Article 425, Civil Code. Property of private
ownership, besides the patrimonial property of the
State, provinces, cities, and municipalities, consists
of all property belonging to private persons, either
individually or collectively.
Refers to all property belonging to private
persons, natural or juridical, either
individually or collectively (co-owned
property)
CONVERSION
Alienable Public Land converted to Private
Property through Prescription
Alienable public land held by a possessor
personally/through predecessors-in-interest,
openly, continuously and exclusively for 30
years is CONVERTED to private property by
the mere lapse or completion of the period.
The application for confirmation is mere
formality, because land had already been
converted, giving rise to a registrable title.
(Director of Lands v. IAC)
See New Law
Private Land converted to Property of Public
Dominion through abandonment and
reclamation
Through the gradual encroachment or
erosion by the ebb and flow of the tide,
private property may become public IF the
owner appears to have ABANDONED the
land, and permitted it to be totally destroyed
so as to become part of the shore. The land
having disappeared on account of the
gradual erosion, and having remained
submerged until they were reclaimed by the
government, they are public land.
(Government v. Cabangis)
C. OTHER CLASSIFICATIONS
By their physical existence
1. Corporeal
All property the existence of which can be
determined by the senses (res qui tangi
possunt)
2. Incorporeal
a. Things having abstract existence,
created by man and representing value.
b. Includes rights over incorporeal things,
credits, and real rights other than
ownership over corporeal things.
By their autonomy or dependence
1. Principal
Those to which other things are considered
dependent or subordinated, such as the land
on which a house is built.
2. Accessory
Those which are dependent upon or
subordinated to the principal. They are
destined to complete, enhance or ornament
another property.
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By their subsistence after use
Article 418, Civil Code. Movable property is either
consumable or nonconsumable. To the first class
belong those movables which cannot be used in a
manner appropriate to their nature without their
being consumed; to the second class belong all the
others.
1. Consumable
a. Those whose use according to their
nature destroys the substance of the
thing or causes their loss to the owner.
(ex: food)
b. Consumable goods cannot be the
subject matter of a contract of
commodatum unless the purpose of
the contract is not the consumption of
the object, as when it is merely for
exhibition.
2. Non-consumable e.g. money in coin
Susceptibility to substitution
1. Fungibles
Things which because of their nature or the
will of the parties, are capable of being
substituted by others of the same kind, not
having a distinct individuality.
2. Non-Fungibles
Things which cannot be substituted for
another
Consumable v. Fungible: It is the intention
of the parties to a contract which determines
whether the object is fungible or non-
fungible and not the consumable or non-
consumable nature of the thing.
By susceptibility to deterioration
1. Deteriorable that deteriorate through use or
by time
2. Non-deteriorable
By reason of their susceptibility to division
1. Divisible
Those which can be divided physically or
juridically without injury to their nature. E.g.:
piece of land or an inheritance.
2. Indivisible
Those which cannot be divided without
destroying their nature or rendering
impossible the fulfillment of the juridical
relation of which they are object.
By reason of designation
1. Generic
That which indicates its homogenous nature,
but not the individual such as a horse,
house, dress, without indicating it.
2. Specific
That which indicates the specie or its nature
and the individual, such as the white horse
of X.
Existence in point of time
1. Present
Those which exist in actuality, either
physical or legal, such as, the erected
building.
2. Future
Those which do not exist in actuality, but
whose existence can reasonably be
expected with more or less probability, such
as ungathered fruits.
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Chapter II. Ownership
I. DEFINITION
II. BUNDLE OF RIGHTS IN OWNERSHIP
III. SPECIFIC RIGHTS OF THE OWNER
IV. LIMITATIONS ON THE RIGHTS OF
OWNERSHIP
I. Definition
Independent right of exclusive
enjoyment and control of a thing
For the purpose of deriving all
advantages required by the reasonable
needs of the owner/holder of right and
promotion of general welfare
A thing pertaining to one person
Completely subjected to his will
In everything not prohibited by public
law or the rights of another
II. Rights Included in Ownership
Art. 428, Civil Code
1. The owner has the right to enjoy and
dispose of a thing, without other limitations
than those established by law.
2. The owner has also a right of action against
the holder and possessor of the thing in
order to recover it.
5 + 1 BUNDLE OF RIGHTS
1. Jus Utendi: Right to enjoy and receive what
the property produces
2. Jus Fruendi: Right to receive fruits
3. Jus Abutendi: Right to consume a thing by
use
1. Jus Disponendi: Right to to alienate,
encumber, transform or even
destroy the thing owned
2. Jus Vindicandi: Right to recover
possession of property based on a
claim of ownership
4. Jus Possidendi: Right to possess the
property (Implied from all the other rights)
III. Specific Rights under the Civil Code
Specific Rights
1. Right to Self Help
2. Right to Enclose of Fence
3. Right to Receive Just Compensation
4. Right to Accession
5. Right to Space and Subsoil
6. Right to Hidden Treasure
7. Right to Recover Possession
Right to Self Help
Article 429, Civil Code. The owner or lawful
possessor of a thing has the right to exclude any
person from the enjoyment and disposal therof. 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.
1. Authorizes the lawful possessor to use
force, to prevent a threatened lawful
invasion or usurpation
2. Requisites
a. Lawful possession
b. Actual or threatened unlawful physical
invasion or usurpation of his property
Must not be a valid exercise of right
or public function
c. Force used is reasonably necessary to
repel or prevent the aggression (least
damage rule)
d. Physical invasion must not have
succeeded yet, and possession has not
been lost
Once property is lost, the owner can
no longer use force, but must file
action to recover
Right to Enclose or Fence
Article 430, Civil Code. 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.
But right is limited by servitudes existing
thereon
The owner of lower lands cannot erect
works that will impede or prevent such an
easement or charge, constituted and
imposed by the law upon his estate for the
benefit of higher lands belonging to different
owners; neither can the latter do anything to
increase or extend the easement. It is true
that the Code authorizes every owner to
enclose his estate by means of walls,
ditches, fences or other device, but this right
is limited by the easement imposed upon his
estate. (Lunod v. Meneses)
Right to Receive Just Compensation (in case
of expropriation)
Article 435, Civil Code. 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.
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Requisites of a Valid Expropriation
a. For public use or utility
b. Necessity of expropriation: reasonable
in view of purpose of the taking
c. Just compensation: Market value +
consequential damages
Right to Accession
Article 440, Civil Code. 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.
Right to Space and Subsoil
1. Ownership of surface and everything under
the property
a. Can construct works, make plantings
and excavations
b. Respecting servitudes and reasonable
requirements of aerial navigation
c. Easement of lateral and subjacent
support
2. Subject to laws and ordinances
The doctrine that ownership of the land
extends to the periphery of the universe
(Cujus est solum ejus est usque ad
coelum, usque ad infernos) is no longer
applied in the modern world, in view of the
doctrine that the air is a public highway. (US
v. Causby)
Right to Hidden Treasure
Article 438, Civil Code. 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 or the
arts, the State may acquire them at their just price,
which shall be divided in conformity with the rule
stated.
Article 439, Civil Code. 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
1. Legal concept of hidden treasure
a. Consist of money jewels or other
precious objects
b. Hidden and unknown, such that the
finding is a real discovery
2. Owner also owns hidden treasure found in
the land subject to:
a. Right of a finder by chance who is not a
trespasser/intruder: ! of treasure
b. Right of a usufructuary who finds
treasure: ! of treasure
c. Right of State to acquire things of
interest to science or the arts
Right to Recover Possession
1. Movable Property: Replevin
for manual delivery of property
Prescription of Right: 4 years (GF) or 8
years (BF)
2. Immovable Property
a. Accion Reinvindicatoria: Recovery of
ownership of real property
Including but not limited to possession
Prescription of Action: 30 years
b. Accion Publiciana: Recovery of a better
right to possess (de jure)
Judgment as to who has the better
right of possession
Also, actions for ejectment not filed
within 1 year must be filed as accion
publiciana
Prescription: 10 years
c. Accion Interdictal: Recovery of
actual/physical possession (de facto)
FORCIBLE ENTRY: Lawful possessor
deprived through FISTS:
o FISTS (Force, Intimidation,
Strategy, Threats, Stealth)
o Prescription: 1 year from
dispossession (force,
intimidation, threats) or from
knowledge of dispossession
(strategy, stealth)
UNLAWFUL DETAINER: Possessor
refused to vacate upon demand by
owner
o Legal possession (by
permission/tolerance) becomes
unlawful upon failure to vacate
o Prescription of action: 1 year
from last notice to vacate
In case of leases of residential units, the
grounds for judicial ejectment are limited to
those enumerated in, RA 9653: Rent
Control Law of 2009 (See Section on
Special Laws)
3. Requisites for Recovery [Art. 434, Civil
Code]
a. Property must be identified
Through a relocation survey and a title
properly identifying boundaries and
location
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b. Plaintiff must rely on the strength of his
title and not on weakness of defendants
title
Right must be founded on positive title
and not on lack or insufficiency of
defendants
Ei incumbit probatio qui dicit, non
qui negat: He who asserts, not he
who denied must prove
IV. Limitations on Real Right of
Ownership
Limitations Provided by Law
1. In General
a. Police Power: Property taken with no
compensation for general welfare
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. [Art. 436, Civil Code]
Requisites: To justify the exercise of
police power, the following must
appear:
o The interests of the public
generally, require such
interference (as distinguished
from those of a particular class)
o The means are reasonably
necessary for the
accomplishment of a purpose,
and not unduly oppressive
b. Taxation: Forced contribution to the
operation of government
c. Eminent Domain: Property taken for
public use/purpose, but subject to due
process and payment of just
compensation
Requisites To justify the exercise of
the right of eminent domain, the
following requisites must all be
present:
o Private property as the object of
the expropriation;
o The property is taken by the
State or by competent authority;
o The purpose of the taking is for
public use;
o The taking must be attended
with due process of law;
o There is payment of just
compensation
2. Specific Limitations
a. Legal Servitudes: once requisites are
satisfied, the servient owner may ask
the Court to declare the existence of an
easement
Art. 644 & 678: Aqueduct
Art. 679: Planting of trees
Art. 670: Light and View
Art. 649 & 652: Right of Way
Art. 637: Passage of water from upper
to lower tenements
Art. 676: Drainage of buildings
Art. 684-687: Lateral and subjacent
support
b. Must not injure the rights of a third
person
Sic Utere Tuo Ut Alienum Non
Laedas
The owner of a thing cannot make use
thereof in such manner as to injure the
rights of a third person. [Art. 431, Civil
Code]
c. Act in State of Necessity
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. [Art. 432, Civil Code]
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Chapter III. Accession
I. DEFINITION
II. GENERAL PRINCIPLES OF ACCESSION
III. KINDS OF ACCESSION
IV. PRINCIPLES APPLICABLE TO EACH
A. PRINCIPLES APPLICABLE TO
ACCESSION DISCRETA
B. PRINICPLES APPLICABLE TO
ACCESSION CONTINUA
V. ACCESSION OVER MOVABLES
I. Definition
ACCESSION: Owner of a thing becomes the
owner of everything that it may produce or which
may be inseparably united or incorporated
thereto, either naturally or artificially
II. General Principles of Accession
1. Accessory follows the principal: presumption
of ownership of both principal and accessory
2. No one shall be unjustly enriched at the
expense of another: right to acquire but with
duty to reimburse
III. Kinds of Accession
1. Accession Discreta
a. Natural
b. Industrial
c. Civil
2. Accession Continua
a. Over Immovables
Industrial
Natural
o Alluvion
o Avulsion
o Change of Course of River
o Formation of Islands
b. Over Movables
Conjunction and Adjunction
Commixtion and Confusion
Specification
Accession
A. Accession Discreta
Accession Discreta: Accession of Fruits
Article 441, Civil Code. To the owner belongs:
1. The natural fruits;
2. The industrial fruits;
3. The civil fruits.
Article 442, Civil Code. 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.
1. Accession Discreta Natural
Article 444, Civil Code. Only such as are manifest
or born are considered as natural or industrial fruits..
a. Spontaneous products of the soil
without the intervention of man
b. The young of animals
Products of animals which can be
removed without killing the principal
(e.g. fleece, wool, milk, etc. but not
meat, fur, hide)
Time of Accrual depending on kind:
2. Accession Discreta Industrial: Refers to
fruits produced by the land through labor
and cultivation
3. Accession Discreta Civil: Refers to rentals
of a movable or an immovable
Principles Applicable to Accession
Discreta
1. Time of Accrual depending on kind:
a. Annuals: from the time seedlings
appear on the ground
b. Perennials: from the time fruits actually
appear on the plants
c. Young of animals: from the time they
are in the womb, although unborn
beginning of maximum ordinary period
of gestation
d. Fowls: from the time of incubation
2. A receiver of fruits has the obligation to pay
the expenses incurred by a third person in
the production, gathering and preservation.
(Art. 443, Civil Code)
Exception: Receiver does not have to
pay if fruits are recovered before
gathering from a possessor in bad
faith, receiver does NOT have to pay
indemnity
But if recovered after fruits have been
gathered, receiver must pay since the
fruits have been separated from
immovable, hence accession principles
will not apply
Accession Continua over Immovables:
Accession by Attachment/Incorporation
1. Accession Continua Artificial or
Industrial: Building, planting or sowing on
land owned by another (over immovables)
a. GENERAL RULE: Whatever is built,
planted or sown on the land of another +
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improvements or repairs made thereon,
belong to the owner of the land subject
to the rules on BPS.
b. PRESUMPTIONS:
All works, sowing and planting are
presumed made by the owner
All works are presumed made at the
owners expense, unless the contrary
is proved
The owner of the principal thing owns
the natural, industrial and civil fruits,
except when the following persons
exist:
o Possessor in Good Faith
o Usufructuary
o Lessee
o Antichretic creditor
c. Meaning of BAD FAITH
Bad faith
o On the part of the landowner:
Whenever the building, planting
or sowing was done with the
knowledge and without
opposition on his part
o On the part of owner of
materials: Allows the use of his
materials without protest
o On the part of the builder,
planter and sower: Knows that
he does not have title to the
land, nor the right to build
thereon OR no permission of
the owner of the materials to
pay their value
Bad faith leads to liability for
damages and the loss of the works or
the improvement without
reimbursement
Bad faith of one party neutralizes the
bad faith of the other
SUMMARY OF BUILDER, PLANTER AND SOWER PROVISIONS
ART. 447-455
Case 1: Landowner is BPS using material of another
Landowner and BPS Owner of Material
Good faith
Right to acquire the improvements after paying the
value of materials.
Good faith
Limited right of removal if there would be no injury
to work constructed, or without plantings or
constructions being destroyed. (Article 447)
Right to receive payment for value of materials
Bad faith
Acquire BPS after paying its value and paying
indemnity for damages (Article 447) but subject to
OMs right to remove
Good faith
Right to receive payment for value of materials
Absolute right of removal of the work constructed in
any event
Right to be indemnified for damages
Good faith
Right to acquire the improvements without paying
indemnity
Right to acquire indemnity for damages if there are
hidden defects known to OM
Bad faith
Lose materials without right to indemnity
Bad faith
Same as though acted in good faith under Article 453
Bad faith
Same as though acted in good faith under Article
453
Case 2: BPS builds, plants, or sows on anothers ;and using his own materials
Landowner BPS and Owner of Material
Good faith
Landowner has option to:
a. Acquire the improvement after paying
indemnity which may be the original cost of
improvement OR increase in value of the whole
brought about by the improvement
b. Sell the land to the BP or collect rent from
sower UNLESS value of land is more than the
thing built, planted or sown or BP shall pay rent
fixed by parties or by the court in case of
Good faith
BPS has right to retain (right of retention) the land
until the payment of indemnity
NOTE: During this period BPS is not required to pay
rent.
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disagreement.
NOTE: Landowner can be forced to choose under pain
of direct contempt or court can choose for him.
Good faith
Landowner has right to collect damages in any case
and option to:
a. Acquire improvements without paying
indemnity if the improvements are still standing
on the land
b. Sell the land to BP or collect rent from the
sower unless value of the improvements in
which case there will be a forced lease
c. Order demolition of improvements or
restoration o0f land to its former condition at
the expense of the BPS
Landowner must pay for necessary expenses for
preservation
Bad faith
Pay damages to landowner
BPS lose materials without right to indemnity
No right to refuse to buy the land
Recover necessary expenses for preservation of
land
Bad faith
Landowner must indemnify BPS for the
improvements and pay damages as if he himself did
the BPS
Landowner has no option to sell the land and
cannot compel BPS to buy the land unless BPS
agrees to
Good faith
BPS has right to :
a. Be indemnified for damages
b. Remove all improvements in any event
Bad faith
Same as though acted in bad faith under Article 453
Bad faith
Same as though acted in bad faith under Article 453
Case 3: BPS builds, plants or sows on anothers land with materials owned by third persons
Landowner BPS Owner of Material
Good faith
Right to acquire improvements
and pay indemnity to BPS;
subsdiarily liable to OM
Has option to:
a. Sell land to BP except if the
value of the land is
considerably more
b. Rent to sower
Good faith
Right of retention until
necessary and useful expenses
are paid
Pay value of materials to OM
Good faith
Collect value of material
primarily from BPS and
subsidiarily liable for landowner
if BPS is insolvent
Limited right of removal
Good faith
Right to acquire improvements
and pay indemnity to BPS
Has option to:
a. Sell land to BP except if the
value of the land is
considerably more
b. Rent to sower
Without subsidiarily liability for
cost of materials
Good faith
necessary and useful expenses
are paid.
Keep BPS without indemnity to
OM and collect damages from
him
Bad faith
Lose the material without right
to indemnity
Must pay for damages to BPS
Good faith
Landowner has right to collect
damages in any case and
option to:
a. Acquire improvements w/o
paying for indemnity; or
b. Demolition or restoration;
or
c. Sell to BP, or to rent to
sower
Pay necessary expenses to
BPS
Bad faith
Recover necessary expenses
for preservation of land from
landowner unless landowner
sells land
Bad faith
Recover value from BPS (as if
both are in good faith)
If BPS acquires improvement,
remove materials if feasible w/o
injury
No action against landowner but
liable to landowner for damages
Bad faith
Same as when all acted in good
faith under Article 453
Bad faith
Bad faith
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Bad faith
Acquire improvement after
paying indemnity and damages
to BPS unless latter decides to
remove
Subsidiarily liable to OM for
value of materials
Good faith
May remove improvements
Be indemnified for damages in
any event
Good faith
Remove materials if possible
w/o injury
Collect value of materials from
BPS; subsidiarily from
landowner
Bad faith
Acquire improvements after
indemnity; subsidiarily liable to
OM for value of materials
Has option to:
a. Sell the land to BP except if
the value of the land is
considerably more
b. Rent to sower
Bad faith
necessary expenses are paid
and pay him damages
Good faith
Collect value of materials
subsidiarily from landowner
Collect damages from BPS
If BPS acquires improvements,
remove materials in any event
Good faith
Acquire imrovement after
paying indemnity; subsidiarily
liable to OM
Landowner has option to:
a. Sell land to BP except if
value of land is
considerably more
b. Rent to sower
Bad faith
necessary expenses are paid
Pay damages to OM
Good faith
Collect value of materials
subsidiarily from landowner
Collect damages from BPS
If BPS acquires improvements,
absolute right of removal in any
event
Bad faith
Acquire improvements and pay
indemnity and damages to BPS
unless latter decides to remove
materials
Good faith
Receive indemnity for damages
Absolute right of removal of
improvements in any event
Bad faith
No right to indemnity
Loses right to mnaterial
2. Accession Continua Natural: Land
deposits, etc.
a. ALLUVIUM: Soil is gradually deposited
on banks adjoining the river
REQUISITES
o Deposit of soil or sediment is
gradual and imperceptible
o As a result of the action of the
currents of the waters of the
river
o Land where the accretion takes
place is adhacent to the banks
of the rivers
o Deemed to Exist: When the
deposit of the sediment has
reached a level higher than the
highest level of the water during
the year
EFFECT
o Land automatically owned by
the riparian owner
o BUT does not automatically
become registered property
RATIONALE
o To offset the owners loss from
possible erosion due to the
current of the river
o Compensate for the subjection
of the land to encumbrances
and legal easements
b. AVULSION: A portion of land is
segregated from one estate by the
forceful current of a river, creek or
torrent and transferred to another
REQUISITES
o Segregation and transfer of land
is sudden and abrupt
o Caused by the current of the
water
o Portion of land transported must
be known and identifiable
OR
o Can also apply to sudden
transfer by other forces of
nature such as land transferred
from a mountain slope because
of an earthquake
RESULT: The ownership of the
detached property is retained by the
owner subject to removal within 2
years from the detachment
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c. CHANGE OF COURSE OF RIVER
REQUISITES
o Change in the natural course of
the waters of the river
o Such change causes the
abandonment of the river beds
Natural Bed: ground
covered by its waters
during ordinary floods
o Such change is sudden or
abrupt
RESULTS:
o Owners whose lands are
occupied by the new course
automatically become owners of
the old bed, in proportion to the
area they lost
o Owners of the lands adjoining
the old bed are given the right to
acquire the same by paying the
value of the land
Not exceeding the value
of the land invaded by
the new bed (the old
property of the owner)
o The new bed opened by the
river on a private estate shall
become of public dominion
d. FORMATION OF ISLANDS
Belong to the State if:
o Formed on the SEAS within the
jurisdiction of the Philippines
o Formed on LAKES
o Formed on NAVIGABLE or
FLOATABLE RIVERS
Capable of affording a
channel or passage for
ships and vessels
Must be sufficient not only
to float bancas and light
boats, but also bigger
watercraft
Deep enough to allow
unobstructed movements of
ships and vessels
TEST: can be used as a
highway of commerce, trade
and travel
Belong to the Owners of the nearest
margins or banks if
o Formed through successive
accumulation of alluvial deposits
o On NON-NAVIGABLE and
NON-FLOATABLE RIVERS
If island is in the middle:
divided longitudinally in half.
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Chapter IV. Quieting of Title
I. IN GENERAL
II. PURPOSE
III. NATURE
IV. REQUISITES
A. THERE IS A CLOUD ON TITLE TO REAL
PROPERTY
B. THE PLAINTIFF MUST HAVE LEGAL OR
EQUITABLE TITLE TO OR INTEREST IN
THE PROPERTY
C. PLAINTIFF MUST RETURN THE
BENEFITS RECEIVED FROM THE
DEFENDANT
V. PRESCRIPTION
Article 476, Civil Code. 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.
Article 478, Civil Code. 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.
I. In General
1. Applicable to real property
2. Basis: Equity comes to the aid of the plaintiff
who would suffer if the instrument (which
appear to be valid but is in reality void,
ineffective, voidable or unenforceable) was
to be enforced.
II. Purpose
1. To declare:
a. The invalidity of a claim on a title
b. The invalidity of an interest in property
2. To free the plaintiff and all those claiming
under him any hostile claim on the property.
III. Nature: Quasi in Rem
1. A suit against a particular person or persons
in respect to the res and the judgment will
apply only to the property in dispute.
2. The action to quiet title are characterized as
proceedings quasi in rem. Technically, they
are neither in rem nor in personam. In an
action quasi in rem, an individual is named
as defendant. However, unlike suits in rem,
a quasi in rem judgment is conclusive only
between the parties. (Spouses Portic v.
Cristobal)
Justifications for quieting of title
1. To prevent future or further litigation on the
ownership of the property
2. To protect the true title and possession
3. To protect the real interest of both parties
4. To determine and make known the precise
state of the title for the guidance of all
The action to quiet title does not apply
1. To questions involving interpretation of
documents
2. To mere written or oral assertions of claims
a. Unless made in a legal proceeding
b. Or asserting that an instrument or entry
in plaintiffs favor is not what it purports
to be
3. To boundary disputes
4. To deeds by strangers to the title unless
purporting to convey the property of the
plaintiff
5. To instruments invalid on their face
6. Where the validity of the instrument involves
a pure question of law
IV. Requisites
REQUISITES OF AN ACTION TO QUIET
TITLE
1. There is a CLOUD on title to real property or
any interest to real property.
2. The plaintiff must have legal or equitable title
to, or interest in the real property.
3. Plaintiff must return the benefits received
from the defendant.
A. There is a CLOUD on title to real property
or any interest to real property
1. Cloud on title means a semblance of title,
either legal or equitable, or a claim or a right
in real property, appearing in some legal
form but which is, in fact, invalid or which
would be inequitable to enforce.
2. A cloud exists if:
a. There is a claim emerging by reason of:
Any instrument e.g. a contract, or
any deed of conveyance, mortgage,
assignment, waiver, etc. covering the
property concerned
Any record, claim, encumbrance
e.g. an attachment, lien, inscription,
adverse claim, lis pendens, on a title
Any proceeding e.g. an extrajudicial
partition of property
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b. The claim should appear valid or
effective and extraneous evidence is
needed to prove their validity or
invalidity.
Test: Would the owner of the property
in an action for ejectment brought by
the adverse party be required to offer
evidence to defeat a recovery?
As a general rule, a cloud is not
created by mere verbal or parole
assertion of ownership or an interest
in property.
c. Such instrument, etc. is, in truth and in
fact, invalid, ineffective, voidable, or
unenforceable, or has been
extinguished or terminated, or has been
barred by extinctive prescription.
d. Such instrument, etc. may be prejudicial
to the true owner or possessor.
B. The plaintiff must have legal or equitable
title to, or interest in the real property
Article 477, Civil Code. 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.
1. Legal title: the party is the registered owner
of the property.
2. Equitable title: the person has the
beneficial ownership of the property.
C. Plaintiff must return the benefits received
from the defendant
Article 479, Civil Code. 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 plaintiffs benefit.
NOTE: REQUISITES OF AN ACTION TO
PREVENT A CLOUD
1. Plaintiff has a title to a real property or
interest therein
2. Defendant is bent on creating a cloud on the
title or interest therein. The danger must not
be merely speculative or imaginary but
imminent.
3. Unless the defendant is restrained or
stopped, the title or interest of the plaintiff
will be prejudiced or adversely affected.
V. Prescription of Action
1. When plaintiff is in possession of the
property the action to quiet title does not
prescribe.
a. The reason is that the owner of the
property or right may wait until his
possession is disturbed or his title is
assailed before taking steps to vindicate
his right.
b. An action to quiet title to property in
ones possession is imprescriptible.
The rationale for this rule has been
aptly stated thus: The owner of real
property who is in possession thereof
may wait until his possession is invaded
or his title is attacked before taking
steps to vindicate his right. A person
claiming title to real property, but not in
possession thereof, must act
affirmatively and within the time
provided by the statute. Possession is a
continuing right as is the right to defend
such possession. So it has been
determined that an owner of real
property in possession has a continuing
right to invoke a court of equity to
remove a cloud that is a continuing
menace to his title. Such a menace is
compared to a continuing nuisance or
trespass which is treated as successive
nuisances or trespasses, not barred by
statute until continued without
interruption for a length of time sufficient
to affect a change of title as a matter of
law." (Pingol v. CA)
2. When the plaintiff is not in possession of
the property, the action to quiet title may
prescribe.
a. 10 yrs. ordinary prescription
b. 30 yrs. extraordinary prescription
Article 480, Civil Code. The principles of the
general law on the quieting of title are hereby
adopted insofar as they are not in conflict with this
Code.
Article 481, Civil Code. The procedure for the
quieting of title or the removal of a cloud therefrom
shall be governed by such rules of court as the
Supreme Court shall promulgate.
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Chapter V. Co-Ownership
I. DEFINITION
II. CHARACTERTISTICS
A. THERE IS A PLURALITY OF OWNERS
BUT ONLY ONE REAL RIGHT OR
OBJECT OF OWNERSHIP.
B. THE RECOGNITION OF IDEAL SHARES
OR ALIQUOT DEFINED BUT NOT
PHYSICALLY IDENTIFIED
C. EACH CO-OWNER HAS ABSOLUTE
CONTROL OVER HIS IDEAL SHARE
D. MUTUAL RESPECT AMONG CO-OWNERS
IN REGARD TO USE, ENJOYMENT AND
PRESERVATION OF THE THINGS AS A
WHOLE.
III. DIFFERENCE BETWEEN CO-OWNERSHIP
AND JOINT TENANCY
IV. DIFFERENCE BETWEEN CO-OWNERSHIP
AND PARTNERSHIP
V. SOURCES OF CO-OWNERSHIP
A. LAW
1. COHABITATION
2. PURCHASE
3. INTESTATE SUCCESSION
4. DONATION
5. CHANCECOMMIXTION IN GOOD
FAITH
6. HIDDEN TREASURES
7. EASEMENT OF PARTY WALL
8. OCCUPATIONHARVESTING AND
FISHING
9. CONDOMINIUM LAW
B. CONTRACTS
1. BY AGREEMENT OF 2 OR MORE
PERSONS
2. BY UNIVERSAL PARTNERSHIP
3. BY ASSOCIATION AND SOCIETIES
WITH SECRET ARTICLES
VI. RIGHTS OF EACH CO-OWNER OVER THE
THING OR PROPERTY OWNED IN COMMON
A. TO USE THE THING ACCORDING TO THE
PURPOSE INTENDED
B. TO SHARE IN THE BENEFITS IN
PROPORTION TO HIS INTEREST,
PROVIDED THE CHARGES ARE BORNE
BY EACH IN THE SAME PROPORTION
C. TO BRING AN ACTION IN EJECTMENT
D. TO COMPEL THE OTHER CO-OWNERS
TO CONTRIBUTE TO THE EXPENSES
FOR THE PRESERVATION OF THE
PROPERTY OWNED IN COMMON AND TO
THE PAYMENT OF TAXES
E. TO OPPOSE ANY ACT OF ALTERATION
F. TO PROTEST AGAINST ACTS OF
MAJORITY WHICH ARE SERIOUSLY
PREJUDICIAL TO THE MINORITY
G. TO EXERCISE LEGAL REDEMPTION
H. TO ASK FOR PARTITION
VII. IMPLICATIONS OF CO-OWNERS RIGHT
OVER HIS IDEAL SHARE
A. RIGHTS OF A CO-OWNER
B. EFFECT OF TRANSACTION BY EACH CO-
OWNER
VIII. RULES ON CO-OWNERSHIP NOT
APPLICABLE TO CPG OR ACP
IX. SPECIAL RULES ON OWNERSHIP OF
DIFFERENT STORIES OF A HOUSE AS
DIFFERENTIATED FROM THE PROVISIONS
OF THE CONDOMINIUM ACT
X. EXTINGUISHMENT OF CO-OWNERSHIP
A. TOTAL DESTRUCTION OF THE THING OR
LOSS OF THE PROPERTY CO-OWNED
B. MERGER OF ALL INTERESTS IN ONE
PERSON
C. ACQUISITIVE PRESCRIPTION
D. PARTITION OR DIVISION
I. Definition
Article 484, Civil Code. 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.
II. Characteristics
A. There is a plurality of owners but only
one real right or object of ownership
1. There are at least 2 persons
2. There is unity or material indivision of a
single object.
B. There are ideal shares defined but not
physically identified
Article 485, Civil Code. 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.
C. Each co-owner has absolute control over
his ideal share
Every co-owner has absolute ownership
of his undivided interest in the co-owned
property and is free to alienate, assign
or mortgage his interest except as to
purely personal rights. While a co-
owner has the right to freely sell and
dispose of his undivided interest,
nevertheless, as a co-owner, he cannot
alienate the shares of his other co-
owners nemo dat qui non habet.
(Acabal v. Acabal)
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D. Mutual respect among co-owners in
regard to use, enjoyment and
preservation of the things as a whole
1. The property or thing held pro-indiviso is
impressed with a fiduciary character:
each co-owner becomes a trustee for
the benefit of his co-owners and he may
not do any act prejudicial to the interest
of his co-owners.
2. Until a judicial division is made, the
respective part of each holder cannot be
determined. The effects of this would be:
a. Each co-owner exercises together
with the others joint ownership
over the pro indiviso property, in
addition to his use and enjoyment of
the same
b. Each co-owner may enjoy the whole
property and use it.
Only limitation: a co-owner cannot use
or enjoy the property in a manner that
shall injure the interest of his other co-
owners. (Pardell v. Bartolome)
III. Difference between Co-ownership
and Joint Tenancy
Co-Ownership Joint Tenancy
Origin
Civil Law Common Law
Other names
Tenancy in Common,
ownership in common,
Co-dominium
Joint ownership,
all for one, one for all
Extent of ownership
Each co-owner owns
undivided thing + own
ideal part/share of each
Every joint tenant owns
the whole property
because their rights are
inseparable
Right to dispose of share
Each co-owner may
dispose of his undivided
share without the consent
of others.
A joint tenant may not
dispose of his
share/interest without the
consent of others
(rationale: he may
prejudice the others by
alienating his share)
Effect of death
The share of a co-owner
descends to his heirs
The ownership of a joint
tenant dies with him, and
his surviving joint tenants
are subrogated to his
rights by virtue of jus
accrescendi
(survivorship)
Effect of legal disability/incapacity
Defense against
prescription is exclusive
to the co-owner with
disability/incapacity
Defense of one can be
used by all, as
disability/incapacity
inures to the benefit of
the others for purposes of
prescription
IV. Difference between Co-ownership
and Partnership
Co-ownership Partnership
Creation
By law, fortuitous event,
occupancy, succession
or contract (no formalities
of a contract necessary)
Only by contract
Legal personality
Co-ownership has no
legal personality
Partnership has a distinct
personality from the
partners
Purpose
Collective enjoyment of
the property
Profit or advancement of
pecuniary interest
Disposal of share
Each co-owner may
dispose of his undivided
share without the consent
of others
A partner may not
dispose of his
share/interest or transfer
the same to a 3
rd
person
without the consent of
others
Mutual representation
No mutual representation
(except if there is a
special authority for such
representation)
Generally, a partner
binds other partners
(there is mutual
representation)
Effect of legal disability/ incapacity/ death
Does not dissolve the co-
ownership
Dissolves partnership
Profit distribution
Must be proportional to
the interest of each co-
owner (not subject to
stipulation)
Depends upon the
stipulation in their
contract
Duration
General rule: an
agreement to keep the
ownership for more than
10 years is void
No term limit set by law
Attachment
Creditors of a co-owner
can attach on the shares
of others
Creditors of a partner
cannot attach and sell on
execution the shares of
other partners in the
partnership
V. Sources of Co-Ownership
A. Law
1. Cohabitation: co-ownership between
common law spouses
The Family Code, in the following
provisions, made the rules on co-
ownership apply
Article 147: between a man and a
woman capacitated to marry each
other
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Article 148: between a man and a
woman not capacitated to marry each
other
Article 90: if matter is not provided in
the FC Chapter on ACP, then rules on
co-ownership will apply
2. Purchase creating implied trust: co-
ownership between persons who agree to
purchase property
Article 1452, Civil Code. If two or more
persons agree to purchase property and
by common consent the legal title is
taken in the name of one of them for the
benefit of all, a trust is created by force
of law in favor of the others in proportion
to the interest of each.
3. Intestate succession: co-ownership
between the heirs before partition of the
estate
a. Article 1078, Civil Code. Where there
are two or more heirs, the whole estate
of the decedent is, before its partition,
owned in common by such heirs, subject
to the payment of debts of the
deceased.
b. Intestate Succession (without will)
c. For as long as the estate is left
undivided the heirs will be considered
co-owners of the inheritance. If one of
the heirs dies, his heirs will in turn be co-
owners of the surviving original heirs.
4. Donation: Co-ownership between donees
Article 753, Civil Code. When a
donation is made to several persons
jointly, it is understood to be in equal
shares, and there shall be no right of
accretion among them, unless the donor
has otherwise provided.
5. Chance/Commixtion in Good Faith: Co-
ownership between owners of 2 things that
are mixed by chance or by will of the owners
Article 472, Civil Code. 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.
6. Hidden Treasure co-ownership between
finder and owner of the land
Article 438, Civil Code. 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 or the arts, the State may
acquire them at their just price, which
shall be divided in conformity with the
rule stated.
7. Easement of Party Wall co-ownership
of part-owners of a party wall
Article 658, Civil Code. 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!
8. Occupation: Harvesting and Fishing: co-
ownership by two or more persons who
have seized a res nullius thing
9. Condominium Law: co-ownership of the
common areas by holders of units
!"#$ %& RA 4726. The Condominium
Act$ Unless otherwise expressly
provided in the enabling or master deed
or the declaration of restrictions, the
incidents of a condominium grant are as
follows:
(c) Unless otherwise, provided,
the common areas are held in
common by the holders of units,
in equal shares, one for each
unit.
B. Contracts
1. By Agreement of Two or More Persons
a. Article 494, Civil Code. 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.
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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.
b. Two or more persons may agree to
create a co-ownership
c. Note: there is a 10-year term limit for
ownership by agreement; BUT: Term
may be extended by a new agreement
2. By the creation of a Universal
Partnership
a. Of all present property
Article 1778, Civil Code. A
partnership of all present property is
that in which the partners contribute all
the property which actually belongs to
them to a common fund, with the
intention of dividing the same among
themselves, as well as all the profits
which they may acquire therewith.
Article 1779, Civil Code. In a
universal partnership of all present
property, the property which belonged
to each of the partners at the time of
the constitution of the partnership,
becomes the common property of all
the partners, as well as all the profits
which they may acquire therewith.
A stipulation for the common
enjoyment of any other profits may
also be made; but the property which
the partners may acquire
subsequently by inheritance, legacy,
or donation cannot be included in such
stipulation, except the fruits thereof.
b. Of profits
Article 1780, Civil Code. A universal
partnership of profits comprises all that
the partners may acquire by their
industry or work during the existence of
the partnership.
Movable or immovable property which
each of the partners may possess at the
time of the celebration of the contract
shall continue to pertain exclusively to
each, only the usufruct passing to the
partnership.
3. By Associations and Societies with
Secret Articles
Article 1775, Civil Code. Associations
and societies, whose articles are kept
secret among the members, and
wherein any one of the members may
contract in his own name with third
persons, shall have no juridical
personality, and shall be governed by
the provisions rel"#$%& #' (')'*%+,-.$/!
VI. Rights of Each Co-owner over the
Thing or Property Owned in Common
Rights of Each Co-owner over the Thing or
Property Owned in Common
1. To use the thing according to the purpose
intended (Jus Utendi)
2. To share in the benefits in proportion to his
interest provided the charges are borne by
each in the same proportion
3. To bring an action in ejectment
4. To compel the other co-owners to contribute
to expense for preservation of the property
owned in common and to the payment of
taxes
5. To oppose any act of Alteration
6. To protest against acts of majority which are
seriously prejudicial to the minority
7. To exercise legal redemption
8. To ask for partition
Right use the thing according to the purpose
intended (Jus Utendi)
Article 486, Civil Code. 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.
1. Limitations on co-owners right:
a. Use must be to the purpose for which it
is intended.
As stipulated in the agreement
In the absence of agreement, the
purpose for which it was ordinarily
adapted according to its nature.
In the absence of the above, the use
for which it was previously or formerly
devoted.
b. Use must be without prejudice to the
interest of the co-ownership.
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c. Use must not prevent the other co-
owners from making use of the property
according to their own rights.
2. Changing the purpose of the thing
The purpose of the thing may be changed
by an agreement, express or implied,
provided that the following will be observed:
It does not cause injury or prejudice to
the interest of the co-ownership
Any act against the collective interest
is an act against ownership.
A co-owner cannot devote the
community property to his exclusive
use
It does not prevent the use by other
co-owners
Right to share in the benefits in proportion to
his interest provided the charges are borne
by each in the same proportion
void.
contrary is proved.
Right to bring an action in ejectment
Article 487, Civil Code. Any one of the co-owners
may bring an action in ejectment.
1. Action in Ejectment covers all kinds of action
for recovery of possession (reivindicatoria,
publiciana, forcible entry, unlawful detainer)
2. There is no need to include all the co-
owners as co-plaintiffs because the suit is
deemed to be instituted for the benefit of all
3. But the action will not prosper if the action is
brought for the benefit of the plaintiff alone
and not for the co-ownership
4. Article 487 of the Civil Code, which provides
simply that any one of the co-owners may
bring an action in ejectment, is a categorical
and an unqualified authority in favor of
owner to evict the petitioners from the
portions of lot. The rule is a co-owner may
bring an action to exercise and protect the
rights of all. When the action is brought by
one co-owner for the benefit of all, a
favorable decision will benefit them; but an
adverse decision cannot prejudice their
rights. (Resuena v. CA)
Right to compel the other co-owners to
contribute to expense for preservation of the
property owned in common and to the
payment of taxes
Article 488, Civil Code. 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.
1. This provision includes only necessary
expenses and taxes, and NOT those for
mere luxury, embellishment or pleasure
a. Expenses for preservation: those which,
if not made, would endanger the
existence of the thing or reduce its value
or productivity
b. Not used for the improvement of the
thing (what is intended is the
preservation of the thing, not gaining
profit from it)
2. Renunciation
a. Other co-owners have the option not to
contribute by renouncing so much of his
undivided interest as may be equivalent
to his share of the necessary expenses
and taxes
Must be express; thus, failure to pay
is not a renunciation
Requires the consent of other co-
owners because it is a case of dacion
en pago (cessation of rights) involving
expenses and taxes already paid
(J.B.L. Reyes)
b. A co-owner cannot renounce his share if
it will be prejudicial to another co-owner
3. Procedure: Repairs for preservation
Article 489, Civil Code. 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.
a. Notify other co-owners, as far as
practicable
b. However, a co-owner can advance
expenses for preservation of the
property even without prior consent of
others. He is entitled to reimbursement
for the amount spent for necessary
expenses.
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4. Procedure: Embellishment or
improvements
a. Notify co-owners of improvements and
embellishments to be made
If no notification is made, the co-owner
who advanced the expenses still has
the right to be reimbursed if he proves
the necessity of such repairs and the
reasonableness of the expense
EXCEPTION: If the others can prove
that had he notified them, they could
have hired the services of another
who would charge less than the
people with whom the one who
advanced contracted or that they
know of a store that sells the needed
material at a cheaper price
o Co-owner only entitled to be
reimbursed for the amount that
should have been spent had he
notified the others, and
difference shall be borne by him
alone
b. Decision by majority must be followed
Right to oppose any act of Alteration
Article 491, Civil Code. 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.
1. Alteration: a change which more or less
permanently changes the use of a thing and
adversely affecting the condition of the thing
or its enjoyment by the others.
2. It involves:
a. Change of the thing from the state or
essence in which the others believe it
should remain, or
b. Withdrawal of the thing from the use to
which they wish to be intended, or
c. Any other transformation which
prejudices the condition or substance of
the thing or its enjoyment by the others
3. Rule: Any act of alteration requires
UNANIMOUS CONSENT OF ALL CO-
WORKERS
a. BUT when there is unreasonable
withholding of consent: the co-owner
may go to court to seek adequate relief.
b. Note: consent may be express or tacit
c. Reason for the rule: alteration is an act
of ownership, not of mere
administration.
4. Alteration v. Administration
Alteration Administration
More permanent result
and relate to the
substance or form of
the thing
Refers to the
enjoyment of the thing
and is of transitory
character
Nature: if the thing
does not require any
modification for its
enjoyment, any
modification that is
made will be
considered an
alteration
When the thing in its
nature requires
changes, modifications
can be considered as
acts of simple
administration
Consent: Unanimous
consent of all
Consent: mere majority
is sufficient
a. Alteration without consent of all is illegal
The one who did the alteration will
lose whatever he spent in case he is
made to demolish the work he has
done (no right to reimbursement)
Damages to the non-consenting co-
owner can also be granted by the
court
b. Note: This is subject to ratification if
co-owners decide to contribute to the
expenses by reimbursing the co-owner
who made the alteration (effect: benefit
of alteration will inure to the co-
ownership)
Right to protest against acts of majority
which are seriously prejudicial to the
minority
Article 492(3), Civil Code. 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.
1. Acts of administration
a. Acts of management that do not involve
alteration of the property
b. Acts which are temporary in character
so much so that they do not bind the
property for a long time
c. Acts that do not create real rights over
the common property
2. Rule:
If there is a disagreement or conflict of
opinions by and among the co-owners
on the matter of administration and
better enjoyment of the common
property, the resolution of the co-owners
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representing the controlling interest (not
majority in number) shall be binding
upon all co-owners.
3. Who can be the administrator?
He or she may or may not be a co-
owner, PROVIDED that the co-owners
delegated him or her.
4. What can an administrator do?
a. PROVIDED there is a unanimous
consent of all co-owners, an
administrator may compromise on,
donate, cede, alienate, mortgage, or
encumber the common property
b. If the amount of individual contribution is
undetermined, the law presumes that
they all contributed proportionately
(Lavadia v. Cosme)
Right to exercise legal redemption
Article 1620, Civil Code. A co-owner of a thing may
exercise the right of redemption in case the shares
of all the other co-owners or of any of them, are sold
to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a
reasonable one.
Should two or more co-owners desire to exercise the
right of redemption, they may only do so in
proportion to the share they may respectively have
in the thing owned in common.
Article 1623, Civil Code. The right of legal pre-
emption or redemption shall not be exercised except
within thirty days from the notice in writing by the
prospective vendor, or by the vendor, as the case
may be. The deed of sale shall not be recorded in
the Registry of Property, unless accompanied by an
affidavit of the vendor that he has given written
notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that
of adjoining owners.
1. Redemption: Act of reclaiming possession
of something by payment of a specific price
2. The 30-day redemption period starts from
the date of written notification of the sale
made by the co-owner.
Without such written notice, the 30-day
period does not start to run
3. Exceptions:
a. Estoppel by laches (inaction)
If there is oral notification and
several years have passed (implied
waiver) and there is reliance on the
non-action of co-owners
b. Estoppel by silence
When there is duty to speak
4. Note: The written notification must come
from the prospective vendor
a. The vendor is in a better position to
know things involving the property and
the sale
b. Redemption of the property by a co-
owner does not vest him sole
ownership over said property.
Redemption will inure to the benefit of all
co-owners. Redemption is not a mode of
termination of relationship. (Mariano v.
CA)
5. Other cases where right of redemption is
given
a. Rural land
Article 1621, Civil Code. The
owners of adjoining lands shall also
have the right of redemption when a
piece of rural land, the area of which
does not exceed one hectare, is
alienated, unless the grantee does
not own any rural land.
This right is not applicable to
adjacent lands which are separated
by brooks, drains, ravines, roads
and other apparent servitudes for
the benefit of other estates.
If two or more adjoining owners
desire to exercise the right of
redemption at the same time, the
owner of the adjoining land of
smaller area shall be preferred; and
should both lands have the same
area, the one who first requested
the redemption.
b. Urban land
Article 1622, Civil Code. Whenever a
piece of urban land which is so small
and so situated that a major portion
thereof cannot be used for any
practical purpose within a reasonable
time, having been bought merely for
speculation, is about to be re-sold, the
owner of any adjoining land has a right
of pre-emption at a reasonable price.
If the re-sale has been perfected, the
owner of the adjoining land shall have
a right of redemption, also at a
reasonable price.
When two or more owners of adjoining
lands wish to exercise the right of pre-
emption or redemption, the owner
whose intended use of the land in
question appears best justified shall
be preferred.
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Right to ask for partition
Article 494, Civil Code. 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.
1. Partition: segregation or division of a
property in common to those to whom it
belongs
2. Rule: Right to demand partition does not
prescribe
3. Exceptions to the rule:
a. When indivision within 10 years is
stipulated by the co-owners
b. When co-ownership is imposed as a
condition in a donation or in a last will
and testament by the
transferor/donor/testator
c. When from the nature of the property in
common, it cannot be divided (i.e. party
wall)
d. When partition is generally prohibited by
law (i.e. ACP, party wall)
e. When the partition would render the
thing unserviceable or the thing held in
common is essentially indivisible
If the thing cannot be physically
partitioned, they may sell the thing
and the co-owners may divide the
proceeds)
f. When acquisitive prescription has set in
favor of a stranger to con-ownership or
in favor of a co-owner
His Ideal Share
A. Rights of a Co-owner
1. To share in fruits and benefits
2. To alienate, mortgage, or encumber and
dispose his ideal share (but other co-owners
may exercise right of legal redemption within
30 days from notification of prospective co-
owner vendor)
3. To substitute another person in the
enjoyment of thing
4. To renounce part of his interest to reimburse
necessary expenses incurred by another co-
owner (Article 488)
Article 488, Civil Code. 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.
B. Effect of Transaction by Each Owner
1. Limited to his share in the partition
2. Transferee does not acquire any specific
portion of the whole property until partition
3. Creditors of co-owners may intervene in the
partition to attack the same if it is prejudicial
(Art. 499)
Article 499, Civil Code. 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.
Note: Creditors cannot ask for rescission even if
not notified in the absence of fraud (Art. 497,
Civil Code)
Article 497, Civil 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.
Applicable to CPG or ACP
These two regimes are governed by the
provisions on the Family Code
Even void marriages and cohabitation of
incapacitated persons are governed by
Article 50, 147, and 148 of the Family Code
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IX. Special Rules on Ownership of
Different Stories of a House as
Differentiated from Provisions of the
Condominium Act
RA 4726. THE CONDOMINIUM ACT
Sec. 2. A Condominium is an interest in real
property consisting of a separate interests in a unit
in a residential, industrial or commercial building or
in an industrial estate and an undivided interests in
common, directly and indirectly, in the land, or the
appurtenant interest of their respective units in the
common areas.
The real right in condominium may be ownership or
any 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:
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 parts of floors) in a building or
buildings and such accessories as may be
appended thereto: Provided, that in the case
of an industrial estate wherein the
condominium project consists of several
buildings, plants and factories may, by
themselves, be considered separately as
individual units as herein defined.
c. "Project" means the entire parcel of real
property divided or to be divided in
condominiums, including all structures
thereon.
d. "Industrial Estate or Estate" means a certain
tract of land which is subdivided and
developed primarily for industrial purposes
and which usually includes provisions for
basic infrastructure facilities and common
services such as roads, water, electricity,
drainage and waste disposal system.
e. "Common areas" means the entire project
except all units separately granted or held or
reserved.
f. "To divide" real property means to divide the
ownership thereof or other interests therein
by conveying one or more condominium
therein but less than the whole thereof.
Sec. 4. The provisions of this Act shall apply to
property divided or to be divided into condominium
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 to be
located;
b. Description of the building or buildings,
stating the number of storeys and basement,
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
purchased in the separate units and the
common areas of the condominium projects.
Where title to or to appurtenant interests in
the common areas is to be held by a
condominium corporation, a statement to
this effect shall be included;
e. 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 encumbrances on the
property, that they consent to the
registration of the deed;
f. 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 been filed in said
office.
2. A diagrammatic floor plan of the building
or buildings each unit, its relative
location and approximate dimensions.
g. Any reasonable restriction not contrary to
law, morals, or public policy regarding the
right of any condominium owner to alienate
or dispose off his condominium.
h. The enabling or master deed may be
amended or revoked upon registration of an
instrument executed by a simple majority of
the registered owners of the property:
Provided, That in a condominium project
exclusively for either residential or
commercial use, simple majority shall be on
a per unit of ownership basis and that in the
case of mixed use, simple majority shall be
on a floor area of ownership basis:
Provided, further, That prior notifications to
all registered owners shall be submitted to
the Housing and Land Use Regulatory
Board and the city/municipal engineer for
approval before it can be registered. Until
registration of a revocation, the provisions of
this Act shall continue to apply to such
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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 interest in the common areas or in a
proper case, the membership or share holdings in
the condominium corporation: Provided, however,
That where the common areas in the condominium
project are held by the owners of separate units as
co-owners hereof, no condominium unit therein shall
be conveyed or transferred to persons other than
Filipino citizens or corporation at least 60% 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, ceiling, windows and doors thereof:
Provided, that in the case of an industrial
estate condominium projects, wherein whole
buildings, plants or factories may be
considered as unit defined under section 3
(b) hereof, the boundary of a unit shall
include the outer surfaces of the perimeter
walls of said buildings, plants or factories.
The following are not part of the unit:
bearing walls, columns, floors, roofs,
foundations, and other common structural
elements of the buildings; lobbies,
stairways, hall ways and other areas of
common use, elevator equipment and
shafts, central heating, central refrigeration
and central air conditioning equipment,
reservoir, 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
appurtenant thereof, an exclusive casement
for the use of the air space encompasses 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 units as to render it untenantable.
c. Unless otherwise provided, the common
areas are held in common by the holders of
units, in equal share one for each unit.
d. A non-exclusive easement for ingress,
egress and support through the common
areas in appurtenant to each unit and the
common areas are subject to such
easement.
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 hounding his own unit:
provided, that in the case of an industrial
estate condominium unit, such right may be
exercised over the external surfaces of the
said 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
condominium owner.
g. Each condominium owner has also the
absolute right to sell or dispose of his
condominium unless the master deed
contains a requirements 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 condominium
in a condominium project, an action may be brought
by one or more such person for partition thereof, by
sale of the entire project, as if the owners of all the
condominium 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 a
material part thereof unfit for its use prior
thereto, the project had 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 30
percent interest in the common areas are
opposed to the repair or restoration of the
projects; or
c. That project has been in existence in excess
of 50 years, that it is obsolete and
uneconomical, and that condominium
owners holding in aggregate more than 50
percent interest in the common areas are
opposed to repair or restoration or
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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 70 percent interest in
the common areas are opposed to the
continuation of the condominium regime
after expropriation or condemnation of a
material proportion thereof; or
e. That the condition 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
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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 registration and regulation of a
condominium corporation shall be vested with the
Housing And Land Use Regulatory Board (HLURB)
and the term of the said corporation shall be
coterminous with the duration of the subdivision
projects, the provision of the corporation law to the
contrary notwithstanding.
Sec. 12. The dissolution of the condominium
corporation in any manner and any of the causes
provided by law shall be governed by the provisions
of the Title XIV of the Corporation Code.
Sec. 13. Until the enabling or the master deed of
the project in which the condominium corporation
owns or holds the common areas 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. The three years after damage or
destruction to the project in which damage
or destruction renders a materials 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. The damage or destruction to the project
has rendered one half or more of the units
therein untenantable and that more than 30
percent of the member of the corporation
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
excess of 50 years, that it is obsolete and
uneconomical and that more than 50
percent of the members of the corporation
if non-stock or stockholders representing
more than 50 percent of the capital stock
opposed to the repair or restoration or
remodeling or modernizing of the project; or
d. That project or 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
70 percent interest in the corporation if non-
stock, or the stockholders representing
more than 70 percent of the capital stock
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, are
opposed to the continuation of the
condominium regime after expropriation or
condemnation of a material portion thereof.
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 such purpose:
Provided, that all the requirements of Section 62 of
the Corporation Law are complied with.
x x x
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 a simple
majority of the registered owners: provided, that
prior notification to all registered owners are done
and provided further, that the condominium
corporation may expand or integrate the project with
another upon the affirmative vote of a simple
majority of the registered owners, subject only to the
final approval of the HLURB.
x x x
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
owner and upon surrender of all their condominium
owner's copies, cancel the certificate of title of the
property and issue a new one in the name of said
condominium owners as pro-indiviso co-owners
thereof.
x x x
Sec. 23. Where, in an action for partition of a
condominium corporation on the ground that the
project or a material part thereof has been
condemned or expropriated, the court finds that the
condition provided in this Act or in the declaration
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
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condominium project, the owners thereof, and the
respective rights of the 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
several.
Sec. 25. The building and design standards for
condominium projects to be promulgated by HLURB
shall provide for, among others, accessibility
features for disabled persons pursuant to Batas
Pambansa Bilang 344 of 1994.
Sec. 26. 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 tax on each such condominium
shall constitute a lien solely thereon.
Sec. 27. All acts or parts of Acts in conflict on
inconsistent with this Act are hereby amended
insofar as condominium and its incidents are
concerned.
Concept of Condominium
It is an interest in real property consisting of a:
1. SEPARATE INTEREST in a unit in a
a. residential, or
b. industrial, or
c. commercial building
2. UNDIVIDED INTEREST in common directly
or indirectly,
a. in the land on which it is located
b. in other common areas of the building
When Ownership of the Unit is Acquired
1. Ownership is acquired only after the buyer
had fully paid the purchase price.
2. The ownership of the unit is what makes the
buyer a shareholder in the condominium.
Note: The condominium law effectively
separates the building from the land (by a
master deed)
3. Building is deemed an accessory
Amendments
Co-ownership in common areas means shared
expenses in these areas
1. Sec 4: simple majority of the property
2. Sec 16: common areas may be disposed by
affirmative vote of a simple majority of the
registered owners
What Does the Housing and Land Use
Regulatory Board Do?
They hear the complaints of buyers.
Important Documents in Condo Ownership
1. Deed of sale
2. Master deed (Sec. 4)
3. Declaration of restrictions (Sec. 9): pertains
to how common areas will be governed and
who will do the governing
a. i.e. how to contribute to common area
expenses: contribution to maintenance,
upkeep, repair of common areas
included
b. there is an Assessment, which is a lien
upon the condo unit
X. Extinguishment of Co-Ownership
A. Total destruction of thing or loss of the
property co-owned
Is there still co-ownership if a building is
destroyed?Yes, over the land and the
debris.
B. Merger of all interests in one person
C. Acquisitive Presciption
By whom
1. A third person (Art. 1106)
2. A co-owner against the other co-owners
Requisites
1. Unequivocal acts of repudiation of the rights
of the other co-owners (you oust the other
co-owners)
a. Must be shown by clear and convincing
evidence
b. Must be within the knowledge of the
other co-owners
c. Must not be a mere refusal to recognize
the others as co-owners
2. Open and adverse possession - Not mere
silent possession
Note: there is a presumption that
possession of a co-owner is NOT adverse
Prescription only arises and produces all
effects when the acts are clearly meant
to oust the rights of the other co-owners
D. Partition or Division
Effects of Partition
1. Confers upon each heir the exclusive
ownership of the property adjudicated to him
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2. Co-heirs shall be reciprocally bound to
warrant the title to and the quality of each
property adjudicated
3. Reciprocal obligation of warranty shall be
proportionate to the respective hereditary
shares of co-heirs
4. An action to enforce warranty must be
brought within 10 years from the date the
right accrues
5. The co-heirs shall not be liable for the
subsequent insolvency of the debtor of the
estate
Note: Unless partition is effected, each heir
cannot claim sole ownership over a
definite portion of the land and cannot
dispose of the same. Heirs become the
undivided owner of the whole estate
each co-owner shall have full ownership
if his part even as to fruits and benefits.
He may alienate, assign or mortgage his
share. The effect of such act shall be
limited to the portion allotted to him
during partition. Until said partition
though, he cannot alienate a specific
part of the estate. A co-owner cannot
adjudicate to himself a definite portion
owned in common until partition by
agreement or by a judicial decree. Until
then, they can only sell their
successional rights. (Carvaria v. CA)
Rights of Creditors of Individual Co-
Owners
Article 497, Civil 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.
Creditors referred to in the provision: All
creditors, whether ordinary or preferred, who
became such during the subsistence of the
co-ownership.
Rule: The creditors are allowed to take part
in the partition.
Reason for the rule: They own part of the
interest of the o-owners who made the
assignment or alienation.
Procedure for Partition
Governing rule: Rule 69 of the Rules of
Court
How: By agreement by parties or by judicial
decree
Form: Oral or Written (Statute of Frauds
does not operate here because it is not a
conveyance of property but a mere
segregation or designation of which parts
belong to whom)
Rules of Court does not preclude
agreements or settlements.
Action for Partition:
a. WON the plaintiff is indeed a co-owner
of the property
b. HOW will the property be divided
between the plaintiff and defendant.
Intervention of creditors and assignees:
a. The law does not expressly require that
there should be a previous notice to the
creditors and assignees before a
partition can be validly made, but the
right of creditors and assignees to take
part in the division presupposes the duty
to notify them.
b. If notice is not given, the partition will not
be binding on them.
c. Once notice has been given, it is the
duty of creditors and assignees to
intervene and make known their stand.
i. If they fail to do this, they cannot
question the division made,
except in case of fraud.
ii. If they formulate a formal
question to its being made, they
can contest such partition mad
in spite of their opposition.
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Chapter VI. Possession
I. DEFINITION AND CONCEPT
II. DEGREES OF POSSESSION
A. MERE HOLDING WITHOUT TITLE
WHATSOEVER, AND IN VIOLATION OF
THE RIGHT OF THE OWNER
B. POSSESSION WITH JURIDICAL TITLE
BUT NOT THAT OF OWNERSHIP
C. POSSESSION WITH JUST TITLE, BUT
NOT FROM THE TRUE OWNER
D. POSSESSION WITH JUST TITLE FROM
THE TRUE OWNER
III. CLASSES OF POSSESSION
A. NATURAL POSSESSION
B. CIVIL POSSESSION
IV. CASES OF POSSESSION
A. POSSESSION IN ONES OWN NAME AND
POSSESSION IN THE NAME OF
ANOTHER
B. POSSESSION IN THE CONCEPT OF AN
OWNER AND POSSESSION IN THE
CONCEPT OF A HOLDER
C. POSSESSION IN GOOD FAITH AND
POSSESSION IN BAD FAITH
V. WHAT THINGS OR RIGHTS MAY BE
POSSESSED
VI. WHAT MAY NOT BE POSSESSED BY
PRIVATE PERSONS
VII. ACQUISITION OF POSSESSION
A. WAYS OF ACQUIRING POSSESSION
B. BY WHOM MAY POSSESSION BE
ACQUIRED
C. WHAT DO NOT AFFECT POSSESSION
D. RULES TO SOLVE CONFLICTS OF
POSSESSION
VIII. EFFECTS OF POSSESSION
A. RIGHT TO BE PROTECTED IN HIS
POSSESSION
B. ENTITLEMENT TO FRUITS
C. REIMBURSEMENT FOR EXPENSES
D. GOOD FAITH (IN CONCEPT OF OWNER)
IS EQUIVALENT TO TITLE
IX. EFFECT OF POSSESSION IN THE CONCEPT
OF OWNER
X. LOSS OF POSSESSION
A. ABANDONMENT
B. ASSIGNMENT
C. DESTRUCTION OR TOTAL LOSS OF
THING OR THING GOES OUT OF
COMMERCE
D. POSSESSION BY ANOTHER FOR MORE
THAN 1 YEAR
I. Definition
Article 523, Civil Code. Possession is the holding
of a thing or the enjoyment of a right.
Concept of Possession
1. To possess, in a grammatical sense, means
to have, to physically and actually occupy a
thing, with or without right. (Sanchez
Roman)
2. It is the holding of a thing or a right, whether
by material occupation or by the fact that the
thing or the right is subjected to the action of
our will. (Manresa)
3. It is an independent right apart from
ownership.
Right of Possession
(jus possessionis)
Right to possess
(jus possidendi)
Independent right Incident to ownership
4. Possession includes the idea of occupation.
It cannot exist without it. (Exceptions: Art.
537)
Essential Requisites of Possession
1. Corpus possessionis: Holding (actual or
constructive) of a thing or exercise of a right,
if right is involved.
a. General Rule: Possession and
cultivation of a portion of a tract under
claim of ownership of all is a
constructive possession of all, if the
remainder is not in adverse possession
of another.
b. Doctrine of constructive possession
applies when the possession is under
title calling for the whole. It does not
apply where possession is without title.
Note: Possession in the eyes of law does
not mean that a man has to have his
feet on every square meter of the
ground before it can be said that he is in
possession. The general rule is that the
possession and cultivation of a tract of
land under a claim of ownership of all, is
a constructive possession of all, if the
remainder is not in adverse possession
of another. (Ramos v. Director of
Lands)
2. Animus possidendi: Intention to possess
a. Animus possidendi is essential in
possession. There is no possession if
the holder does not want to exercise the
rights of a possessor. Animus
possidendi is implied from the acts of
the possessor.
b. Animus possidendi may be contradicted
and rebutted by evidence to prove that
the person who is in possession, does
not in fact exercise power or control and
does not intend to do so
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II. Degrees of Possession
A. Mere holding or possession without title
whatsoever and in violation of the right
of the owner
e.g. possession of a thief or usurper of
land
Here, both the possessor and the public
know that the possession is wrongful.
B. Possession with juridical title but not that
of ownership
e.g. possession of a tenant, depository
agent, bailee trustee, lessee, antichretic
creditor.
This possession is peaceably acquired.
This degree of possession will never
ripen into full ownership as long as there
is no repudiation of concept under which
property is held.
C. Possession with just title or title
sufficient to transfer ownership, but not
from the true owner
e.g. possession of a vendee from a
vendor who pretends to be the owner.
This degree of possession ripens into
full ownership by lapse of time.
D. Possession with a just title from the true
owner.
This is possession that springs from
ownership.
III. Classes of Possession
The Old Civil Code had a distinction between
natural possession and civil possession. This
distinction has been abolished by the present
Code.
A. Natural Possession
Physical holding of a thing (detention); all
retention or enjoyment of a thing or right.
B. Civil Possession
Natural possession coupled with the
intention of acquiring ownership of the thing
or right.
The following may be said to have civil
possession:
a. The owner himself, who holds and
enjoys the things belonging to him.
b. The possessor who is not the owner but
has the intention to act as such, and is
considered as such by others.
c. The thief and the usurper who, in spite
of their intention and the fact that they
are civil possessors according to the
Code, cannot and should not become
owners.
IV. Cases of Possession
A. Possession for Oneself, or Possession
Exercised in Ones Own Name and
Possession in the Name of Another.
Article 524, Civil Code. Possession may be
exercised in one's own name or in that of another.
Name under which possession may be
exercised
1. In ones own name the fact of possession
and the right to such possession is found in
the same person.
2. In the name of another the one in actual
possession is without any right of his own,
but is merely an instrument of another in the
exercise of the latters possession.
Kinds of possession in the name of
another
1. Necessary arises by operation of law
e.g. representatives who exercise
possession in behalf of a conceived
child, juridical persons, persons not sui
juris and the conjugal partnership
2. Voluntary effected through the mutual
consent of the parties
e.g. agents or administrators appointed
by the owner or possessor.
Third person may also voluntary
exercise possession in the name of
another, but it does not become
effective unless ratified by the person in
whose name it is exercise.
B. Possession in the Concept of an Owner,
and Possession in the Concept of a
Holder with the Ownership Belonging to
Another
Article 525, Civil Code. 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.
1. Possession in Concept of Holder:
One who possesses as a mere holder,
not in the concept of owner,
acknowledges in another a superior right
which he believes to be ownership,
whether his belief be right or wrong.
e.g. tenant, usufructuary, borrower in
commodatum.
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2. Possession in Concept of Owner:
May be exercised by the owner himself
or one who claims to be so.
When a person claims to be the owner
of a thing, whether he believes so or not,
acting as an owner, and performing acts
of ownership, and he is or may be
considered as the owner by those who
witness his exercise of proprietary
rights, then he is in the possession of an
owner. This is the kind of possession
that ripens into ownership under Article
540, when such possession is public,
peaceful and uninterrupted (see Art.
1118).
Effects of Possession in Concept of an
Owner
a. Converted into ownership by the lapse
of time necessary for prescription
b. Possessor can bring all actions
necessary to protect his possession,
availing himself of any action which an
owner can bring, except accion
revindicatoria which is substituted by
accion publiciana.
c. He can ask for the inscription of
possession in the registry of property
d. Upon recovering possession from one
who has unlawfully deprived him of it, he
can demand fruits and damages
e. He can do on the thing possessed
everything that the law authorizes an
owner to do; he can exercise the right of
pre-emption and is entitled to the
indemnity in case of appropriation.
C. Possession in Good Faith and
Possession in Bad Faith
Article 526, Civil Code. 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.
1. Possessor in good faith one who is
unaware that there exists a flaw which
invalidates his acquisition of the thing.
Good faith consists in the possessors
belief that the person from whom he
received a thing was the owner of the
same and could convey his title.
It implies freedom from knowledge and
circumstances which ought to put a
person on inquiry.
The belief of a possessor that he is the
owner of the thing must be based upon
the title or mode of acquisition, such as
a sale, a donation, inheritance or other
means of transmitting ownership; for
without this, there can be no real, well-
grounded belief of ones ownership.
Error in the application of the law, in the
legal solutions that arise from such
application, in the appreciation of legal
consequence of certain acts, and in the
interpretation of doubtful provisions or
doctrines, may properly serve as basis
for good faith.
A misconception of the law, no matter
how honest cannot have the effect of
making one a possessor in good faith,
when he does not hold a title valid in
form or a deed sufficient in terms to
transfer property.
2. Possessor in bad faith one who knows
his title is defective
Only personal knowledge of the flaw in
the title or mode of acquisition can make
him a possessor in bad faith for bad faith
is not transmissible from one person to
another.
Mistake upon a doubtful or difficult
question of law as a basis of good faith
Mistake or ignorance of the law, by
itself, cannot become the basis of good
faith. What makes the error or ignorance
a basis of good faith is the presence of
an apparent doubt or difficulty in the
law. In other words, the law is complex,
ambiguous, or vague such that it is open
to two or more interpretations.
When the ignorance of the law is gross
and inexcusable, as when a person of
average intelligence would know the
law, such ignorance cannot be the basis
of good faith. Otherwise, the intendment
of Article 3 which states that, Ignorance
of the law excuses no one from
compliance therewith, will be defeated.
V. What Things May be Possessed
Article 530, Civil Code. Only things and rights
which are susceptible of being appropriated may be
the object of possession.
Not all things susceptible of appropriation can be
the object of prescription (See Art. 1113)
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VI. What May Not Be Possessed by
Private Persons
1. Res Communes
2. Property of Public Dominion
3. Right under discontinuous and/or non-
apparent easement
VII. Acquisition of Possession
A. Ways of Acquiring Possession
Article 531, Civil Code. 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.
1. By material occupation of the thing
Material occupation occupation,
under this provision, is used in its
ordinary meaning or general sense and
not in its technical meaning under Article
712, which defines occupation as a
mode of acquiring ownership.
Possession acquired by material
occupation is only possession as a fact,
not the legal right of possession.
Constructive delivery is considered as
an equivalent of material occupation in
two situations where such occupation is
essential to the acquisition of
possession:
Tradicion brevi manu takes place
when one who possess a thing by
title other than ownership, continues
to possess the same under a new
title, that of ownership.
Tradicion constitutum possessorium
takes place when the owner
alienates the thing, but continues to
posses the same under a different
title.
2. By subjection to the action of ones will
This mode of acquiring possession
refers more to the right of possession
than to possession as a fact. The action
of our will must be juridical, in the sense
that it must be according to law.
This includes the following kinds of
constructive delivery:
Tradicion symbolica effected by
delivering some object or symbol
placing the thing under the control of
the transferee
Tradicion longa manu effected by
the transferor pointing out to the
tranferee the things which are being
transferred
3. By execution of proper acts under legal
formalities
This mode of acquiring possession
refers to juridical acts or the acquisition
of possession by sufficient title
evidenced by the performance of
required formalities.
Examples:
Donations
Succession
Contracts (like a sale with right to
repurchase)
Judicial possession
Execution of judgments
Execution and registration of public
instruments
Inscription of possessory information
titles
The execution of the required formalities
is equivalent to delivery of the property
subject thereof.
B. By Whom May Possession Be Acquired
Article 532, Civil Code. 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.
Possession may be acquired by
1. by the same person
2. by his legal representative
3. by his agent
4. by any person without any power
whatsoever but subject to ratification,
without prejudice to proper case or
negotiorum gestio (Arts. 2144, 2149, 2150)
5. qualifiedly, minors and incapacitated
persons
By the same person
Elements of personal acquisition:
1. Must have the capacity to acquire
possession
2. Must have the intent to possess
3. The possibility to acquire possession must
be present.
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By his legal representative
Requisites of acquisition through another:
1. That the representative or agent has the
intention to acquire the thing or exercise the
right for another, and not for himself
2. That the person for whom the thing has
been acquired or the right exercised, has the
intention of possessing such thing or
exercising such right
Note:
Bad faith is personal and
intransmissible. Its effects must be
therefore, be suffered only by the person
who acted in bad faith; his heir should
not be saddled with the consequences
Good faith can only benefit the person
who has it; and the good faith of the heir
cannot erase the effects of bad faith of
his predecessor.
Article 534, Civil Code. 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.
By any person without any power
whatsoever but subject to ratification,
without prejudice to proper case or
negotiorum gestio (Arts. 2144, 2149, 2150)
Article 2144, Civil Code. Whoever voluntarily takes
charge of the agency or management of the
business or property of another, without any power
from the latter, is obliged to continue the same until
the termination of the affair and its incidents, or to
require the person concerned to substitute him, if the
owner is in a position to do so. This juridical relation
does not arise in either of these instances:
1. When the property or business is not
neglected or abandoned;
2. If in fact the manager has been tacitly
authorized by the owner.
In the first case, the provisions of Articles 1317,
1403, No. 1, and 1404 regarding unauthorized
contracts shall govern.
In the second case, the rules on agency in Title X of
this Book shall be applicable.
Article 2149, Civil Code. The ratification of the
management by the owner of the business produces
the effects of an express agency, even if the
business may not have been successful.
Article 2150, Civil Code. Although the officious
management may not have been expressly ratified,
the owner of the property or business who enjoys
the advantages of the same shall be liable for
obligations incurred in his interest, and shall
reimburse the officious manager for the necessary
and useful expenses and for the damages which the
latter may have suffered in the performance of his
duties.
The same obligation shall be incumbent upon him
when the management had for its purpose the
prevention of an imminent and manifest loss,
although no benefit may have been derived.
Qualifiedly, minors and incapacitated
persons
Article 535, Civil Code. 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.
Incapacitated all those who do not have
the capacity to act (insane, lunatic, deaf-
mutes who cannot read and write,
spendthrifts and those under civil
interdiction)
Object of possession things only, not
rights.
Method of acquisition material occupation;
acquisition by means for which the
incapacitated person has the capacity, such
as acquisition by succession, testate or
intestate, or by donations propter nuptias,
pure and simple donations
C. What Do Not Affect Possession
Article 537, Civil Code. Acts merely tolerated, and
those executed clandestinely and without the
knowledge of the possessor of a thing, or by
violence, do not affect possession.
1. Acts merely tolerated
Those which by reason of
neighborliness or familiarity, the owner
of property allows his neighbor or
another person to do on the property;
Those particular services or benefits
which ones property can give to another
without material injury or prejudice to the
owner, who permits them out of
friendship or courtesy
Acts of little disturbances which a
person, in the interest of neighborliness
or friendly relations permits others to do
on his property, although continued for a
long time, no right will be acquired by
prescription
Note: Permissive use merely tolerated by
the possessor cannot affect possession
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and cannot be the basis of acquisitive
prescription. Possession to constitute
the foundation of prescriptive right, must
be possession under claim of title, it
must be adverse. (Cuaycong v.
Benedicto)
2. Acts executed clandestinely and without
the knowledge of the possessor
Article 1108, Civil Code. Possession has to be in
the concept of an owner, public, peaceful and
uninterrupted.
3. Acts of violence as long as the
possessor objects thereto (i.e. he files a
case)
Article 536, Civil Code. 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.
Possession acquired by force, not only
when one forcibly takes away the
property from another, but also when
one occupied the property in the
property in the absence of another, and
repels the latter upon his return.
Force may be actual or threatened; and
may be employed by the possessor
himself, or by another for him, and
against any possessor.
Effect on Possession: Acts mentioned
do not constitute true possession. They
do not interrupt the period of prescription
nor affect the rights to the fruits.
For all purposes that may be favorable
to the true possessor, his possession is
not considered interrupted.
D. Rules to Solve Conflicts of Possession
Article 538, Civil Code. 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.
General Rule
Possession cannot be recognized in two
different personalities, except in cases of co-
possession by co-possessors without conflict of
claims of interest.
In case of conflicting possession
preference is given to
1. Present possessor or actual possessor
2. If there are two or more possessors, the one
longer in possession
3. If the dates of possession are the same, the
one who presents a title
4. If all conditions are equal, the thing shall be
placed in judicial deposit pending
determination of possession or ownership
through proper proceedings
VIII. Effects of Possession
A. Right to be Protected in His Possession
In general, every possessor has a right to be
respected in his possession; if disturbed therein,
possessor has a right to be protected in or
restored to said possession.
Article 539, Civil Code. 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.
Every possessor includes all kinds of
possession, from that of an owner to that of a
mere holder, except that which constitutes a
crime.
Reason for the rule: To prevent anyone from
taking the administration of justice into his own
hands. Even the owner cannot forcibly eject the
possessor, but must resort to the courts.
Actions to Recover Possession
1. Summary proceedings Forcible entry and
Unlawful detainer
Article 1674, Civil Code. In ejectment cases where
an appeal is taken the remedy granted in Article
539, second paragraph, shall also apply, if the
higher court is satisfied that the lessee's appeal is
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frivolous or dilatory, or that the lessor's appeal is
prima facie meritorious. The period of ten days
referred to in said article shall be counted from the
time the appeal is perfected.
Plaintiff may ask for writ of preliminary
mandatory injunction within 10 days
from filing of complaint in forcible entry
(Art. 539). The same writ is available in
unlawful detainer actions upon appeal.
(Art. 1674)
Forcible entry and Unlawful
Detainer
Rule 70, Rules of Court gives any
person deprived of the possession of
any land or building by force,
intimidation, strategy, or stealth at any
time within one year after such unlawful
deprivation, the action of forcible entry.
by force, intimidation, strategy, or
stealth includes every situation or
condition under which one person can
wrongfully enter upon real property and
exclude another, who has had prior
possession therefrom.
2. Accion Publiciana (based on superior right
of possession, no ownership)
Action for the recovery of possession of
real property upon mere allegation and
proof of a better title thereto
3. Accion Reinvindicatoria (recovery of
possession based on a claim of ownership)
An action setting up title and right to
possession
Not barred by a judgment in an action
for forcible entry and unlawful detainer
4. Action for Replevin (possession or
ownership for movable property)
Lawful Possessor Can Employ Self-help
Article 429, Civil Code. 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
Article 540, Civil Code. Only the possession
acquired and enjoyed in the concept of owner can
serve as a title for acquiring dominion.
To consolidate title by prescription, the
possession must be under claim of ownership,
and it must be peaceful, public and uninterrupted
It is only the conviction of ownership externally
manifested, which generates ownership.
Acts of possessory character done by virtue of a
license or mere tolerance on the part of the real
owner are not sufficient and will not confer title
by prescription or adverse possession.
The following cannot acquire title by prescription:
1. Lessees, trustees, pledges, tenants on
shares or planters and all those who hold in
the name or representation of another;
2. Mere holders placed in possession of the
property by the owner, such as agents,
employees;
3. Those holding in a fiduciary character, like
receivers, attorneys, depositaries and
antichretic creditors
4. Co-owner, with regard to common property;
Except: When he holds the same adversely
against all of them with notice to them the
exclusive claim of ownership
Article 542, Civil Code. 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.
Refers to all kinds of possession, whether in
concept of owner or not, in good faith or in bad
faith, and in ones own name or anothers in
reference to things only, NOT rights.
Article 543, Civil Code. 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.
B. Entitlement to fruits possessor in good
faith/bad faith (Art. 544, 549)
Article 544, Civil Code. 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.
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Provision is based on the following reasons
of equity
1. The fruits received are generally used for
the consumption and livelihood of the
possessor, and his life and expenses may
have been regulated in view of such fruits
2. The owner has been negligent in not
discovering or contesting the possession of
the possessor; it would be unjust after the
possessor has been thus allowed to rely on
the efficacy of the title, to require him to
return the fruits he has received on the basis
of that title.
3. Between the owner, who has abandoned his
property and left it unproductive, and the
possessor, who has contributed to the social
wealth, by the fruits he has produced, the
law leans toward the latter
Right of the possessor in good faith
Only limited to the fruits of the thing. He must
restore the fruits received from the time such
good faith ceased. He has no rights to the
objects which do not constitute fruits.
Legal interruption of possession in good
faith
Takes place when an action is filed against
himfrom the time he learns of the complaint,
from the time he is summoned to the trial.
Article 545, Civil Code. 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.
Old Civil Code New Civil Code
Possessor in GF was
reimbursed the entire
expense of cultivation
incurred by him
Proportionate division of
expenses of production
Charges Those which are incurred,
not on the thing itself but because of it.
It is borne by the two possessors in
proportion to their respective
possession.
It includes every presentation required
of the possessor by reason of
possession of the thing, whether it
constitutes a real right or not.
e.g. Taxes, contributions in favor of the
government
When fruits are insufficient
There should only be reimbursement of
expenses; but each possessor should suffer a
proportionate reduction due to the insufficiency
of the harvest.
C. Reimbursement for Expenses
Possessor in Good Faith/Bad Faith
Article 546, Civil Code. 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.
Necessary Expenses
1. Imposed by the thing itself and have no
relation to the desire or purpose of the
possessor; hence they are reimbursed,
whatever may be the juridical character of
the person who advanced them.
2. They are the cost of living for the thing and
must be reimbursed to the one who paid
them, irrespective of GF or BF. Only a
possessor in GF is entitled to retain the thing
until he is reimbursed
3. Those imposed for the preservation of the
thing. They are not considered
improvements; they do not increase the
value of the thing, but merely prevent them
from becoming useless.
Useful Expenses
1. Incurred to give greater utility or productivity
to the thing
2. e.g. Wall surrounding an estate, an irrigation
system, planting in an uncultivated land, a
fishpond, an elevator in the building, electric
lighting system
3. They are reimbursed only to the possessor
in GF as a compensation or reward for him.
Possessor in BF cannot recover such
expenses
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Article 547, Civil Code. 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.
Article 548, Civil Code. 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.
Expenses for Luxury
1. They do not affect the existence or the
substance of the thing itself, but only the
comfort, convenience or enjoyment of the
possessor. They are not the subject of
reimbursement, because the law does not
compensate personal whims or caprices.
2. e.g. Opening of a garden, placing fountains
and statues in it, adorning the ceilings
paintings, and the walls with reliefs
Useful Expenses Expenses for Luxury
Those which increase the
income derived from the
thing
Those which merely
embellished the thing
Result: Increase in the
products, either
absolutely, or because of
greater facilities for
producing them
Includes expenses
resulting in real benefit or
advantage to the thing
Result: Benefit or
advantage is only for the
convenience of definite
possessors
The resulting utility is
essential and absolute, to
all who may have the
thing.
The utility is for the
possessor or particular
persons alone and is
therefore accidental.
Article 549, Civil Code. 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..
Article 550, Civil Code. The costs of litigation over
the property shall be borne by every possessor.
Article 550, Civil Code. Improvements caused by
nature or time shall always inure to the benefit of the
person who has succeeded in recovering
possession
Includes all the natural accessions
referred to by articles 457-465, and all
those which do not depend upon the will
of the possessor.
e.g. widening of the streets, rising of
fountains of fresh or mineral water,
increase of foliage of trees
Liability for loss or deterioration of property
by possessor in bad faith
Article 552, Civil Code. 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.
Possessor in GF Possessor in BF
Fruits Received
Entitled to the fruits while possession is in GF
and before legal interruption (544)
Must reimburse the legitimate possessor
(549)
Pending Fruits
Entitled to part of the expenses of cultivation,
and to a part of the net harvest, in proportion
to the time of the possession.
Indemnity may be, at the owners option,
1. In money, OR
2. By allowing full cultivation and gathering
of the fruits (545)
Must reimburse the legitimate possessor
(549)
Charges
Must share with the legitimate possessor, in
proportion to the time of the possession (545) Same as with GF (545)
Necessary
Expenses
Right to reimbursement and retention in the
meantime (546) Reimbursement only (546)
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Useful Expenses
Right of retention until reimbursed; Owners
option to reimburse him either for expenses
or for increase in value which the thing may
have acquired (546)
Limited right of removal should not damage
principal and owner does not exercise option
of paying the expenses or increase in value
(547)
No right to reimbursement and no right of
removal (547)
Ornamental
Expenses
Limited right of removal (548) Limited right of removal (549)
Deterioration of
Loss
No liability unless due to fraud or negligence
after becoming in BF (552)
Liable in every case (552)
Costs of Litigation Bears cost (550) Bears cost (550)
D. Possession of Movable Acquired in Good
Faith (in concept of owner) is Equivalent
to Title (Art. 559)
Article 559, Civil Code. 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
Possessor has actual title which is defeasible
only by true owner.
Requisites of Title
1. Possession in GF
2. The owner has voluntarily parted with the
possession of the thing
3. The possession is in the concept of an
owner
When the owner can recover
1. Has lost the thing
2. Has been unlawfully deprived thereof
IX. Effects of Possession in the Concept
of Owner
1. Possession may be lapsed of time ripen into
full ownership, subject to certain exceptions.
2. Presumption of just title and cannot be
obliged to show or prove it (Art. 541);
exception (Art. 1131)
Article 541, Civil Code. 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.
Basis: Possession is presumed
ownership, unless the contrary is
proved. This presumption is prima facie
and it prevails until contrary is proved.
Just title that which is legally sufficient
to transfer the ownership or the real right
to which it relates.
For the purposes of prescription, there is
just title when the adverse claimant
came into possession of the property
through one of the modes recognized by
law for the acquisition of ownership or
other real rights, but the grantor was not
the owner or could not transmit any
right. (Art. 1129)
Exception
Article 1131, Civil Code. For the purposes of
prescription, just title must be proved; it is never
presumed.
3. Possessor may bring all actions necessary
to protect his possession except
revindicatoria
4. May employ self help under Art. 429
5. Possessor may ask for inscription of such
real right of possession in the registry of
property
6. Has right to the fruits and reimbursement of
expenses (assuming he is possessor in
good faith)
7. Upon recovery of possession which has
unlawfully deprived may demand fruits and
damages
8. Generally, he can do on the things
possessed everything that the law
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authorizes the owner to do until he is ousted
by one who had a better right.
9. Possession in good faith and possession in
bad faith (Art. 528)
Mistake upon doubtful or difficult
question of law as a basis of good faith
(Art. 526, par 3)
Possessorfor Acquisitive
Prescription
Of good faith until contrary is proved
Article 527, Civil Code. Good faith is always
presumed, and upon him who alleges bad faith on
the part of a possessor rests the burden of proof.
Presumption is only juris tantum because
possession is the outward sign of
ownership. Unless such proof of bad faith is
presented, the possessor will be held to be
in good faith.
So long as the possessor is not actually
aware of any defect invalidating his title, he
is deemed a possessor in good faith.
Of continuity of initial good faith in which
possession was commenced of possession
in good faith does not lose this character
except in case and from the moment
possessor became aware or is not unaware
of improper or wrongful possession
Article 528, Civil Code. 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.
Good faith ceases from the date of the
summons to appear at the trial
Good faith ceases when there is:
a. Extraneous evidence
b. Suit for recovery of the property by the
true owner
Of enjoyment of possession in the same
character in which possession was required
until contrary is proved
Article 529, Civil Code. It is presumed that
possession continues to be enjoyed in the same
character in which it was acquired, until the contrary
is proved.
Of non-interruption of possession in favor of
present possessor who proves possession
at a previous time until the contrary is
proved
Article 554, Civil Code. 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.
Article 1120, Civil Code. Possession is interrupted
for the purposes of prescription, naturally or civilly.
Article 1121, Civil Code. Possession is naturally
interrupted when through any cause it should cease
for more than one year.
The old possession is not revived if a new
possession should be exercised by the same
adverse claimant.
Article 1122, Civil Code. If the natural interruption
is for only one year or less, the time elapsed shall be
counted in favor of the prescription.
Article 1123, Civil Code. Civil interruption is
produced by judicial summons to the possessor.
Article 1124, Civil Code. Judicial summons shall be
deemed not to have been issued and shall not give
rise to interruption:
1. If it should be void for lack of legal
solemnities;
2. If the plaintiff should desist from the
complaint or should allow the proceedings
to lapse;
3. If the possessor should be absolved from
the complaint.
In all these cases, the period of the interruption shall
be counted for the prescription
Other presumptions with respect to specific
properties of property rights
1. Of extension of possession of real property
to all movables contained therein so long as
in is not shown that they should be
excluded; exceptions.
Article 426, Civil Code. Whenever by provision of
the law, or an individual declaration, the expression
"immovable things or property," or "movable things
or property," is used, it shall be deemed to include,
respectively, the things enumerated in Chapter 1
and Chapter 2.
Whenever the word "muebles," or "furniture," is used
alone, it shall not be deemed to include money,
credits, commercial securities, stocks and bonds,
jewelry, scientific or artistic collections, books,
medals, arms, clothing, horses or carriages and their
accessories, grains, liquids and merchandise, or
other things which do not have as their principal
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object the furnishing or ornamenting of a building,
except where from the context of the law, or the
individual declaration, the contrary clearly appears.
2. Non-interruption of possession of hereditary
property
Article 553, Civil Code. 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.
Article 1078, Civil Code. Where there are two or
more heirs, the whole estate of the decedent is,
before its partition, owned in common by such heirs,
subject to the payment of debts of the deceased.
3. Of just title in favor of possessor in concept
of owner
Article 541, Civil Code. 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.
Article 1141, Civil Code. 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.
XI. Possesion May Be Lost By
Article 555, Civil Code. 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.
A. Abandonment
Includes the giving up possession, and
not necessarily of ownership by every
possessor.
It is the opposite occupation. It consists
of the voluntary renunciation of all the
rights which the person may have in a
thing, with intent to lose such a thing. To
be effective, it must be necessary that it
be made by a possessor in the concept
of an owner.
It must be clearly appear that the spes
recuperandi is gone and the animus
revertendi is finally given up.
B. Assignment, either onerous or gratuitous
Complete transmission of ownership
rights to another person, gratuitously or
onerously
C. Possession by another; if possession
has lasted longer than one year; real
right of possession not lost after 10
years - (Subject to Article 537)
Article 537, Civil Code. 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 that is lost here refers only
to possession as a fact (de facto), not
the legal right of possession (de jure). It
is the possession that the new
possessor acquires.
Real right of possession is lost only after
10 years.
After one year, the actions for forcible
entry and unlawful detainer can no
longer be brought. But accion publiciana
may still be instituted to recover
possession de jure
Article 553, Civil Code. 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.
The improvements, having ceased to
exist, the lawful possessor or owner
cannot benefit from them; hence he
should not pay for them.
Necessary expenses are not considered
improvements, and even if the object for
which they were incurred no longer
exists at the time of entry upon
possession, the lawful possessor or
owner has to pay for them.
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
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the provisions of the Mortgage Law and the Land
Registration laws.
Third parties relying on the Registry of
Property are privileged to consider the
registered possessors or owners as still
such in spite of loss
Article 558, Civil Code. 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.
Rules for Loss of Movables:
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.
Control judicial control or right, or
that the thing remains in ones patrimony
Article 560, Civil Code. 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.
Kinds of Animals:
1. Wildthose which live naturally
independent of man
2. Domesticatedthose which, being wild by
nature, have become accustomed to
recognize the authority of man. When they
observe this custom, they are placed in the
same category as domestic and when they
lose it, they are considered as wild.
3. Domestic or Tamethose which are
bornand reared ordinarily under the control
and care of man; they are under the
ownership of man, and do not become res
nullius unless they are abandoned.
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Chapter VII. Usufruct
I. CONCEPT
II. CHARACTERISTICS
III. DISTINGUISHED FROM LEASE AND
SERVITUDE
IV. CLASSIFICATION
V. RIGHTS OF USUFRUCTUARY
VI. OBLIGATIONS OF USUFRUCTUARY
A. AT THE BEGINNING OF THE USUFRUCT
B. DURING THE USUFRUCT
C. AT THE TIME OF THE TERMINATION OF
THE USUFRUCT
VII. SPECIAL CASES
VIII. EXTINGUISHMENT
I. Concept
Article 562, Civil Code. 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.
Objects of Usufruct
1. Independent Rights
A servitude which is dependent on the
tenement to which it attaches cannot be
the object of usufruct
2. Things
Non-consumable things
Consumable things, but only as to their
value if appraised, or on an equal
quantity and quality if they were not
appraised
3. Unproductive things e.g. sterile or absolutely
unproductive land, or things for mere
pleasure, such as promenades, statues or
paintings, even if they do not produce any
utility.
II. Characteristics
Characteristics
1. It is a real right
2. Of temporary duration
3. To derive all advantages from the thing due
to normal exploitation
Natural Characteristics
1. Includes only the right to use (jus utendi)
and the right to the fruits (jus fruendi)
2. Usufructuary must preserve the form or
substance of the thing
a. Preservation is a natural requisite, not
essential because the title constituting it
or the law may provide otherwise
b. Reason for preserving form and
substance
To prevent extraordinary
exploitation;
To prevent abuse, which is frequent;
To prevent impairment.
c. Exception: In an abnormal usufruct,
alteration is allowed
3. Usufruct is extinguished by the death of the
usufructuary
a. Natural because a contrary intention
may prevail
III. Usufruct Distiguished from Lease
and Servitude
Usufruct vs. Lease
Basis Usufruct Lease
By the nature of
the right
Always a real
right
Quasi-real or
personal right
By the creator
of the right
Owner
Need not be an
owner
By the cause
Passive owner
who allows the
usufructuary to
enjoy the thing
Active owner or
lessor who
makes the
lessee enjoy
the thing
By the extent of
enjoyment
Generally
covers all the
utility of which
the thing is
capable
Generally
covers a
particular utility
By the origin
May be created
by law, by will of
the parties, or
by prescription
May only be
created by the
will of the
parties
As regards
repairs and
taxes
Pays for
ordinary repairs
and taxes on
the fruits
Generally not
borne by a
lessee
Usufruct vs. Servitude
Basis Usufruct Servitudes
As to the object
May involve
real or personal
property
May only
involve real
property
By the extent or
enjoyment
Covers all the
uses of the
thing
Limited to a
particular use
Similarities between Usufruct and
Servitude
Both are real rights, whether registered or not.
1. Both rights may be registered, provided that
the usufruct involves real property. All
easements of course concerns real property.
2. Both may ordinarily be alienated or
transmitted in accordance with the
formalities set by law.
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IV. Classes of Usufruct
A. By Origin
Article 563, Civil Code. 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.
1. Voluntary: created by the will of private
persons
a. By act inter vivos such as contracts
and donations
By alienation of the usufruct
By retention of the usufruct
Where a usufruct is constituted inter
vivos and for valuable consideration,
the contract is unenforceable unless
in writing
b. By act mortis causa such as testament
2. Legal: as provided by law
Usufruct of parents over the property of
unemancipated children (now limited to the
collectively daily needs of the family as per
the Family Code)
Article 226, Family Code. 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.
3. Mixed: created both by law and the acts of
persons
Article 565, Civil Code. 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 rights and duties of the usufructuary
provided by law may be modified or
eliminated by the parties.
The title constituting the usufruct may
validly authorize the usufructuary to
alienate the thing itself held in usufruct.
If the usufructuary is authorized to
alienate the thing in case of
necessity, it is the usufructuary who
determines the question of
necessity.
B. By Person Enjoying Right of Usufruct
Article 564, Civil Code. 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.
1. Simple: only one usufructuary enjoys the
property
2. Multiple: several usufructuaries enjoy the
property
a. Simultaneous: at the same time
b. Successive: one after the other
Limitations on successive usufruct
1. If usufruct is by donation, ALL donees must
be alive.
may also be donated to one person and the usufruct
to another or others, provided all the donees are
living at the time of the donation.
2. Fiduciary or first heir and the second heir
must be alive at the time of the death of the
testator.
Article 863, Civil Code. A fideicommissary
substitution by virtue of which the fiduciary or first
heir instituted is entrusted with the obligation to
preserve and to transmit to a second heir the whole
or part of the inheritance, shall be valid and shall
take effect, provided such substitution does not go
beyond one degree from the heir originally instituted,
and provided further, that the fiduciary or first heir
and the second heir are living at the time of the
death of the testator.
3. If by testamentary succession, there must
be only 2 successive usufructuaries, and
both must be alive or at least already
conceived at the time of the testators death.
Article 869, Civil Code. A provision whereby the
testator leaves to a person the whole or part of the
inheritance, and to another the usufruct, shall be
valid. If he gives the usufruct to various persons, not
simultaneously, but successively, the provisions of
Article 863 shall apply
C. By Object of Usufruct
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1. Rights
a. Must not be strictly personal or
intransmissible.
b. Usufruct over a real right is by itself a
real right.
c. Right to receive present or future
support cannot be the object of the
usufruct.
2. Things
a. Normal: involves non-consummable
things where the form and substance
are preserved
b. Abnormal or irregular
Article 574, Civil Code. 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.
In reality, the usufruct is not upon
the consumable things themselves
which are delivered to the
usufructuary, but upon the sum
representing their value or upon a
quantity of things of the same kind
and quality.
The usufructuary, in effect, becomes
the owner of the things in usufruct,
while the grantor becomes a mere
creditor entitled to the return of the
value or of the things of the same
quantity and quality (as if converted
into a simple loan)
D. By the Extent of the Usufruct
1. As to the fruits
a. Total: all consumed by the usufruct
b. Partial: only on certain aspects of the
usufructs fruits
2. As to object
a. Singular: only on particular property of
the owner
b. Universal: pertains to the whole
property;
Article 598, Civil Code. 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.
Article 595, Civil Code. 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.
A universal usufructuary must pay the
debts of the naked owner, if stipulated.
If there are no stipulations, the
usufructuary only has to pay when the
usufruct has been made in fraud of
creditors.
Article 758, Civil Code. When the donation
imposes upon the donee the obligation to pay the
debts of the donor, if the clause does not contain
any declaration to the contrary, the former is
understood to be liable to pay only the debts which
appear to have been previously contracted. In no
case shall the donee be responsible for the debts
exceeding the value of the property donated, unless
a contrary intention clearly appears.
Article 759, Civil Code. There being no stipulation
regarding the payment of debts, the donee shall be
responsible therefor only when the donation has
been made in fraud of creditors.
The donation is always presumed to be in fraud of
creditors, when at the time thereof the donor did not
reserve sufficient property to pay his debts prior to
the donation.
E. By the Terms of the Usufruct
1. Pure: no terms or conditions
2. Conditional: either suspensive or resolutory
3. With a term or period
a. Ex die: from a certain day
b. In diem: up to a certain day
c. Ex die in diem: from a certain day up to
a certain day
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V. Rights of Usufructuary
A. As to Thing and Its Fruits
1. Right to enjoy the property to the same
extent as the owner, but only with respect to
its use and the receipt of its fruits.
Article 566, Civil Code. 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.
Usufructuary cannot extract products
which do not constitute fruits because
he is bound to preserve the form and
substance of the thing.
Usufructuary rights may be transferred,
assigned or otherwise disposed of by
the usufructuary.
Not exempt from execution and can be
sold at public auction.
2. As to hidden treasure, usufructuary is
considered a stranger without a right to a
share, unless he is also the finder of the
treasure
which it is found.
If the things found be of interest to science of the
stated.
3. Right to fruits pending at the beginning of
usufruct
which it is found.
If the things found be of interest to science of the
stated.
Fruits pending at the
beginning of the
usufruct
Fruits pending at the
time of termination of
the usufruct
Belong to the
usufructuary
Belong to the naked
owner
Without need to
reimburse the expenses
to the owners
The owner shall
reimburse to the
usufructuary ordinary
cultivation expenses
from the proceeds of the
fruits (not to exceed the
value of the fruits)
Without prejudice to the
right of 3
rd
persons e.g. if
the fruits had been
planted by a possessor
in good faith, the
pending crop expenses
and charges shall be
prorated between said
possessor and the
usufructuary
Rights of innocent 3
rd
parties should not be
prejudiced.
Fruits already matured at the time of the
termination of the usufruct, which
ordinarily would have already been
gathered by the usufructuary, may
remain ungathered for no fault imputable
to him, but because of malice or an act
imputable to the naked owner or a 3
rd
person, or even due to force majeure or
fortuitous event.
4. Right to civil fruits
Article 569, Civil Code. Civil fruits are deemed to
accrue daily, and belong to the usufructuary in
proportion to the time the usufruct may last.
Article 570, Civil Code. 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.
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In either case they shall be distributed as civil fruits,
and shall be applied in the manner prescribed in the
preceding article.
5. Right to enjoy any increase through
accessions and servitudes, including
products of hunting and fishing
Article 571, Civil Code. 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
6. Right to lease the thing
Article 572, Civil Code. 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.
a. Exceptions:
Legal usufructs cannot be leased.
Caucion juratoria (lease would
show that the usufructuary does not
need the property badly)
b. Effect of the transfer of right:
The transfer or lease of the usufruct
does NOT terminate the relation of
the usufructuary with the owner
Death of the transferee does not
terminate the usufruct but it
terminates upon the death of the
usufructuary who made the transfer.
c. Rules as to Lease
The property in usufruct may be
leased even without the consent of
the owner.
The lease should be for the same
period as the usufruct.
EXCEPT: leases of rural lands
continues for the remainder of
the agricultural year
A lease executed by the
usufructuary before the
termination of the usufruct and
subsisting after the termination
of the usufruct must be
respected, but the rents for the
remaining period will belong to
the owner.
o 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. (Art. 568, Civil
Code)
It is the usufructuary and not the
naked owner who has the right
to choose the tenant.
o As corollary to the right of
the usufructuary to all the
rent, to choose the tenant,
and to fix the amount of the
rent, she necessarily has
the right to choose herself
as the tenant thereof; and,
as long as the obligations
she had assumed towards
the owner are fulfilled.
(Fabie v. Gutierrez David)
A lease executed by the owner
before the creation of the
usufruct is not extinguished by
such usufruct.
d. Limitations on the Right to Lease the
Property
Usufructuary cannot alienate a thing
in usufruct
Cannot alienate or dispose of
the objects included in the
usufruct
Cannot renounce a servitude
Cannot mortgage or pledge a
thing
EXCEPT: When the right of
usufruct is converted into the
right of ownership
o When the things are
consumable (574);
o When the things by their
nature are intended for sale,
such as the merchandise in
a commercial
establishment; and
o When the things, whatever
their nature, are delivered
under appraisal as
equivalent to their sale
Future crops may be sold but such
sale would be void if not ratified by
the owner.
The buyers remedy is to
recover from the usufructuary.
Only voluntary usufruct can be
alienated.
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The usufructuary-lessor is liable for
the act of the substitute.
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. (Art. 590, Civil Code)
7. Right to improve the thing, but improvement
inures for the benefit of the naked owner
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.
Usufructuary is not entitled to
reimbursement.
Whenever the usufructuary can remove
the improvements without injury to the
property in usufruct, he has the right to
do so, and the owner cannot prevent
him from doing so even upon payment
of their value.
This right does not involve an obligation
if the usufructuary does not wish to
exercise it, he cannot be compelled by
the owner to remove the improvements.
This right to remove improvements can
be enforced only against the owner, not
against a purchaser in good faith to
whom a clean title has been issued.
Usufructuary may set off the
improvements against any damage to
the property
Article 580, Civil Code. The usufructuary may set
off the improvements he may have made on the
property against any damage to the same.
It is necessary that the
improvements should have
increased the value of the property,
and that the damages are imputable
to the usufructuary.
Increase in value and the amount of
damages are set off against each
other.
If the damages exceed the increase
in value, the difference should be
paid by the usufructuary as
indemnity.
If the increase in value exceeds the
damages, and the improvements
are of such nature that they can be
removed without injury to the thing
in usufruct, the settlement of the
difference must be agreed upon by
the parties.
If the improvements cannot be
removed without injury, the excess
in value accrues to the owner.
Registration of improvements to
protect usufructuary against 3
rd
persons
B. As to the Legal Right of Usufruct Itself
1. Right to mortgage right of usufruct
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.
Does not include parental usufruct
because of personal and family
considerations.
2. Right to alienate the usufruct except in
purely personal usufructs or when title
constituting it prohibits the same
Parental usufruct is inalienable
VI. Rights of the Naked Owner
1. At the beginning of the usufruct (see
obligations of usufructuary at the beginning
of the usufruct)
2. During the usufruct
a. Retains title to the thing or property
b. He may alienate the property: he may
not alter the form or substance of the
thing; nor do anything prejudicial to the
usufructuary
Article 581, Civil Code. 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.
c. He may construct buildings, make
improvements and plantings, provided:
Value of the usufruct is not impaired
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Rights of the usufructuary are not
prejudiced
VII. Obligations of the Usufructuary
A. At the Beginning of Usufruct or Before
Exercising the Usufruct
Article 583, Civil Code. 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.
[NOTE: These requirements are NOT conditions
precedent to the commencement of the right of
the usufructuary but merely to the entry upon the
possession and enjoyment of the property.]
To make an inventory
Requisites
a. Immovables must be described
b. Movables appraised because they are
easily lost or deteriorated.
Concurrence of the owner in the making of
the inventory
Expenses for the making of the inventory
are borne by the usufructuary
Inventory may be in a private document,
except when immovables are involved (a
public instrument is prescribed to affect 3
rd
persons)
Failure to make an inventory failure does not
affect the rights of the usufructuary to enjoy
the property and its fruits.
a. A prima facie presumption arises that
the property was received by the
usfructuary in good condition
b. Even if he is already in possession, he
may still be required to make an
inventory.
Exceptions to the requirement of
inventory
a. No one will be injured thereby
b. Title of the usufruct excuses the making
of the inventory
Article 585, Civil Code. 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.
Title constituting usufruct excused the
making of inventory
Title constituting usufruct already makes an
inventory
To give a bond for the faithful performance of
duties as usufructuary
Any kind of sufficient security is allowed, e.g.
cash, personal bond, mortgage
No bond is required in the following
a. No prejudice would result (Art. 585)
b. Usufruct is reserved by a donor (Art.
584)
Gratitude on the donees part
demands that the donor be excused
from filing the bond
c. Title constituting usufruct excused
usufructuary
d. If usufructuary takes possession under a
caucion juratoria (Art. 587)
The security given may be by a
personal bond, a pledge, or a
mortgage.
It is only by way of exception that a
caucion juratoria is allowed, and
only under the special
circumstances:
o Proper court petition
o Necessity for delivery of
furniture, implements or house
included in the usufruct
o Approval of the court
o Sworn promise
A usufructuary under this can
neither alienate his right nor lease
the property, for that would mean
that he does not need the dwelling
or the implements and furniture.
void.
contrary is proved.
Article 584, Civil Code. 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.
Article 587, Civil Code. 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
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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.
Effect of filing a bond
Article 588, Civil Code. 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
Retroactivity: upon giving the security,
the usufructuary will be entitled to all the
benefits accruing since the time when
he should have begun to receive them.
Effect of failure to give bond
Article 586, Civil Code. 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.
Right of the naked owner
o Potestative right; if he does not wish
to exercise it, he may deliver the
property to the usufructuary.
o Delivery, however, does not mean a
renunciation of the right to demand
security.
o He shall have the ff. options:
1. Receivership of realty, sale of
movables, deposit of securities,
or investment of money; or
2. Retention of the property as
administrator.
o Net products less administration
expenses fixed by agreement or by
the Court, shall be delivered to the
usufructuary.
Right of the usufructuary
o He may alienate his right over the
property which he does not possess
in the same form as he holds it,
without prejudice to the right of the
transferee to give the required
security.
B. During the Usufruct
To take care of the thing like a good father of
a family
Article 589, Civil Code. The usufructuary shall take
care of the things given in usufruct as a good father
of a family.
Article 610, Civil Code. 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.
1. When damages are caused to the property
by the fault or negligence of the
usufructuary, the naked owner need not wait
for the termination of the usufruct before
bringing the action to recover proper
indemnity.
2. The bad use of a thing, which causes
considerable injury, entitles the owner to
demand the delivery and administration of
the thing.
3. The exercise of this remedy does NOT
extinguish the usufruct.
To undertake ordinary repairs
Article 592, Civil Code. 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
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them after demand by the owner, the latter may
make them at the expense of the usufructuary.
1. Ordinary repairs:
a. Deteriorations or defects arise from the
natural use of the thing;
b. Repairs are necessary for the
preservation of the thing.
2. The usufructuary is bound to pay only for the
repairs made during the existence of the
usufruct.
If the defects existed already at the time
the usufruct began, the obligation to
defray the ordinary repairs falls upon the
owner.
3. If the defects are caused by the ordinary use
of the thing, the usufructuary may exempt
himself from making the repairs by returning
to the owner the fruits received during the
time that the defects took place.
EXCEPT: When the ordinary repairs are
due to defects caused by the fault of the
usufructuary
4. If the usufructuary fails to make the repairs
even after demand, the owner may make
them at the expense of the usufructuary
To notify owner of need to undertake
extraordinary repairs
Article 593, Civil Code. 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.
Article 594, Civil Code. 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.
1. Extraordinary repairs
a. Those caused by exceptional
circumstances, whether or not they are
necessary for the preservation of the
thing;
b. Those caused by the natural use of the
thing, but are not necessary for its
preservation.
2. General Rule: Naked owner must make the
extraordinary repairs
Usufructuary obliged to pay legal
interest on the amount while usufruct
lasts
3. If the extraordinary repairs are
indispensable, and the naked owner fails to
undertake them, the usufructuary may make
such repairs
Requisites:
a. There must be due notification to
the naked owner of the urgency if
it is not urgent, there is no obligation
to give notice.
b. The naked owner failed to make
them
c. The repair is needed for
preservation
The usufructuary who has made the
extraordinary repairs necessary for
preservation, is entitled to recover from
the owner the increase in value which
the tenement acquired by reason of
such works.
Usufructuary may retain until he is paid.
To pay for annual charges and taxes on the
fruits
Article 596, Civil Code. 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.
Article 597, Civil Code. 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.
Article 612, Civil Code. 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.
It is well settled that a real tax, being a
burden upon the capital, should be paid
by the owner of the land and not by a
usufructuary. There is no merit in the
contention of distinguishing public lands
into alienable and indisposable. All
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properties owned by the government,
without any distinction, are exempt from
taxation. (Board of Assessment
Appeals of Zamboanga del Sur v.
Samar Mining Company, Inc.)
To notify owner of any act detrimental to
ownership
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.
To shoulder the costs of litigation re
usufruct
Article 602, Civil Code. The expenses, costs and
liabilities in suits brought with regard to the usufruct
shall be borne by the usufructuary.
To answer for fault or negligence of alienee,
lessee or agent of usufructuary
Article 590, Civil Code. 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. (498)
The usufructuary is made liable for the
acts of the substitute. While the
substitute answers to the usufructuary,
the usufructuary answers to the naked
owner.
C. At the Time of the Termination of the
Usufruct
To deliver the thing in usufruct to the
owner in the condition in which he has
received it, after undertaking ordinary
repairs
Exception: abnormal usufruct return
the thing of same kind, quantity and
quality; if with appraised value, must
return value appraised
VIII. Special Cases of Usufruct
A. Usufruct over a pension or periodical
income
Article 570, Civil Code. 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.
B. Usufruct of property owned in common
Article 582, Civil Code. 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.
1. The usufructuary takes the place of the
owner as to:
a. Management;
b. Fruits; and
c. Interest
2. Effect of partition:
a. The right of the usufructuary is not
affected by the division of the property in
usufruct among the co-owners.
b. After partition, the usufruct is transferred
to the part allotted to the co-owner
C. Usufruct constituted on a flock or herd of
livestock
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.
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1. On sterile stock: same rules on
consumable property govern (i.e.
replacement upon termination)
2. On fruitful stock
a. Must replace ordinary losses of the
stock with the young if:
Some animals die from natural
causes
Some animals are lost due to
rapacity of beasts of prey
b. There is no obligation to replace if:
There is a total loss of animals
because of some unexpected or
unnatural loss (like contagious
disease or any other uncommon
event, provided the usufructuary has
no fault);
If all perish, the usufructuary
should deliver the remains to
the owner.
There is a partial loss
If a part of the stock perishes,
the usufruct subsists on the
remainder.
D. Usufruct over fruit bearing trees and
sprout and woodlands
Article 575, Civil Code. 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.
Article 576, Civil Code. If the owner should make
the extraordinary repairs, 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 can:
1. Use dead trunks and those cut off or
uprooted by accident.
2. Make usual cuttings that owner used to do.
3. Cut the trees that are not useful
E. Usufruct on a right of action
Article 578, Civil Code. 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.
1. The action may be instituted in the
usufructuarys name. As the owner of the
usufruct, he is properly deemed a proper
party in interest.
2. If the purpose is the recovery of the property
or right, he is still required under 578 to
obtain the naked owners authority.
3. If the purpose is to object to or prevent
disturbances over the property, no special
authority from the naked owner is needed.
F. Usufruct on mortgaged property
Article 600, Civil Code. 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.
1. When the usufruct is universal and some
objects are mortgaged, apply Art. 598.
2. If the usufructuary mortgaged the usufruct
himself, he is liable to pay his own debt.
G. Usufruct over an entire patrimony
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.
1. Applies when:
a. If the usufruct is a universal one
b. And the naked owner Has debts or is
obliged to make periodical payments
(whether or not there be known capital)
2. General rule: the usufructuary is not liable
for the owners debts.
3. Exceptions:
a. When it is so stipulated; in which case
The usufructuary shall be liable for
the debt specified.
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If there is no specification, he is
liable only for debts incurred by the
owner before the usufruct was
constituted.
b. When the usufruct is constituted in fraud
of creditors
4. In no case shall the usufructuary be
responsible for debts exceeding the benefits
under the usufruct. (except when the
contrary intention appears)
H. Usufruct over deteriorable property
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.
1. It is sufficient if the usufructuary returns the
things in the condition in which they may
have been found at the time of the expiration
of the usufruct despite ordinary defects
caused by use and deterioration produced
by age and time.
EXCEPT when caused by the
usufructuarys fraud and negligence.
2. If usufructuary does not return the things
upon the expiration of the usufruct, he
should pay an indemnity equivalent to the
value of the things at the time of such
expiration.
I. Usufruct over consumable property
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.
Abnormal Usufruct
If the thing is appraised at delivery, the
usufructuary must pay their appraised
value at the termination of the usufruct.
If they were not appraised, he must
return the same kind and quality or pay
the current price at the expiration of the
usufruct.
IX. Extinguishment of Usufruct
Article 603, Civil Code. 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.
A. Death of usufructuary
Exceptions
1. In multiple usufructs: it ends at the death of
the last survivor
Article 611, Civil Code. 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.
a. If simultaneously constituted: all the
usufructuaries must be alive (or at least
conceived) at the time of constitution.
b. If successively constituted:
If by virtue of donation all the
donees-usufructuaries must be
living at the time of the donation;
If by will there should only be 2
successive usufructuaries and both
must have been alive at the time of
testators death.
2. If the period is fixed by reference to the life
of another or there is a resolutory condition
Death does not affect the usufruct and
the right is transmitted to the heirs of the
usfructuary until the expiration of the
term or the fulfillment of the condition.
Article 606, Civil Code. 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.
3. When a contrary intention clearly appears
If the usufructuary dies before the
happening of a resolutory condition, the
usufruct is extinguished.
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st
view: usufruct is personal and it
CANNOT be extended beyond the
lifetime of the usufructuary. (Sanchez
Roman and SC)
B. Expiration of period or fulfillment of
resolutory condition imposed on
usufruct by person constituting the
usufruct
1. In favor of juridical persons: period cannot
exceed 50yrs.
Article 605, Civil Code. 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.
2. Time that may elapse before a 3
rd
person
attains a certain age, even if the latter dies
before period expires, unless granted only in
consideration of his existence
Article 606, Civil Code. 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.
C. Merger of rights of usufruct and naked
ownership in one person
Illustration: H was the usufructuary of
land owned by X. x dies, leaving in his
will, the naked ownership of the land to
H. the usufruct is extinguished because
now H is both the naked owner and the
usufructuary.
D. Renunciation of usufruct
1. Waiver: voluntary surrender of the rights of
the usufructuary, made by him with intent to
surrender them
2. Limitations
a. Must be express: tacit renunciation is
not sufficient
b. Does not need the consent of naked
owner
c. If made in fraud of creditors, waiver may
be rescinded by them through action
under Article 1381 (accion pauliana)
E. Extinction or loss of property
If destroyed property is not insured
Article 607, Civil Code. 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.
Article 608, Civil Code. 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.
See Summary of Arts. 607 and 608
F. Termination of right of person
constituting the usufruct
Example: usufructs constituted by a
vendee a retro terminate upon
redemption
G. Prescription
Adverse possession against the owner
or the usfructuary.
It is not the non-use which extinguishes
the usufruct by prescription, but the use
by a 3
rd
person.
There can be no prescription as long as
the usfructuary receives the rents from
the lease of the property, or he enjoys
the price of the sale of his right.
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SUMMARY (ARTS. 607 AND 708)
SITUATION EFFECT
Art. 607
If destroyed property is not insured
If the building forms part of an immovable under
usufruct
Usufruct continues over the land and the remaining
materials
If usufruct is on the building only Usufruct continues over the land and materials (plus
interests), if owner does not rebuild
If owner rebuilds, usufructuary must allow owner to
occupy the land and to make use of materials; but the
owner must pay interest on the value of both the land
and the materials.
Art. 608
If destroyed property is insured before termination of the usufruct
When insurance premium paid by owner and
usufructuary (par. 1)
If owner rebuilds, usufruct subsists on new building
If owner does not rebuild interest upon insurance
proceeds paid to usufructuary
When the insurance taken by the naked owner
only because usufructuary refuses to contribute to
the premium (par. 2)
Owner entitled to insurance money (no interest paid to
usufructuary)
If he does not rebuild, usufruct continues over
remaining land and/or owner may pay interest on
value of both materials and land (607)
If owner rebuilds, usufruct does not continue on new
building, but owner must pay interest on value of land
and old materials
When insurance taken by usufructuary only
depends on value of usufructuarys insurable
interest
Insurance proceeds goes to the usufructuary
No obligation to rebuild
Usufruct continues on the land
Owner has not share in insurance proceeds
X. Conditions Not Affecting Usufruct
A. Expropriation of thing in usufruct
Article 609, Civil Code. 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.
3 SITUATIONS
1. If naked owner alone was given the
indemnity, he has the option:
a. To replace with equivalent thing
b. Or to pay to the usufructuary legal
interest on the indemnity requires
security given by the naked owner for
the payment of the interest
2. If both the naked owner and the
usufructuary were separately given
indemnity, each owns the indemnity given to
him, the usufruct being totally extinguished.
3. If usufructuary alone was given the
indemnity, he must give it to the naked
owner and compel the latter to return either
the interest or to replace the property. He
may even deduct the interest himself, if the
naked owner fails to object.
B. Bad use of thing in usufruct
Article 610, Civil Code. 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.
Does not extinguish the usufruct but
1. Entitles the owner to demand delivery and
administration of the thing.
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2. The bad use must cause considerable injury
not to the thing, but to the owner.
C. Destruction if a building over which the
usufruct is constituted (Arts. 607 and
608)
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Chapter VIII. Easement
I. CONCEPT
II. ESSENTIAL FEATURES OF
EASEMENTS/REAL
III. CLASSIFICATION OF SERVITUDES
IV. GENERAL RULES ON SERVITUDE
V. MODES OF ACQUIRING EASEMENTS
A. BY TITLE
B. BY PRESCRIPTION
VI. RIGHTS AND OBLIGATIONS OF OWNERS
A. OF DOMINANT ESTATE
B. OF SERVIENT ESTATE
VII. MODES OF EXTINGUISHMENT OF
EASEMENTS
VIII. LEGAL EASEMENTS
I. Concept
Art. 613, Civil Code. 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. (530)
A real right which burdens a thing with a
prestation of determinate servitudes for the
exclusive enjoyment of one who is NOT an
owner of a tenement
A real right by virtue of which the owner has
to ABSTAIN from doing or ALLOW
somebody else to do something to his
property for the benefit of another
II. Essential Features
1. It is a real right it gives an action in rem
or real action against any possessor of
the servient estate
o Owner of the dominant estate can file a
real action for enforcement of right to an
easement
o Action in rem: an action against the
thing itself, instead of against the
person.
2. It is a right enjoyed over another property
(jus in re aliena) it cannot exist in ones
property (nulli res sua servit)
o When a dominant and servient estate
have the same owner, an easement is
extinguished. Separate ownership is a
prerequisite to an easement.
3. It is a right constituted over an
immovable by nature (land and
buildings), not over movables. (Article
613)
o Immovable: used in its common and
not in the legal sense, meaning only
property immovable BY NATURE can
have easements.
4. It limits the servient owners right of
ownership for the benefit of the dominant
estate.
o Right of limited use but no right to
possess servient estate.
o There exists a limitation on ownership:
the dominant owner is allowed to enjoy
or use part of the servient estate, or
imposes on the owner a restriction as to
his enjoyment of his own property.
o Being an abnormal limitation of
ownership, it cannot be
presumed.
5. It creates a relation between tenements
o No transfer of ownership, but a
relationship is created, depending on the
easement.
6. Generally, it may consist in the owner of
the dominant estate demanding that the
owner of the servient estate refrain from
doing something (servitus in non
faciendo) or that the latter permit that
something be done over the servient
property (servitus in patendo), but not in
the right to demand that the owner of the
servient right to demand that the owner
of the servient estate do something
(servitus in faciendo) except if such act
is an accessory obligation to a preadial
servitude (obligation propter rem)
o Servient owner merely allows something
to be done to his estate.
o EXCEPTIONS: Praedial servitudes
a. Right to place beams in an adjoining
wall to support a structure
b. Right to use anothers wall to
support a building
7. It is inherent or inseparable from estate
to which they actively or passively
belong
Art. 617, Civil Code. Easements are inseparable
from the estate to which they actively or passively
belong.
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o Easements are merely accessory to the
tenements, and a quality thereof. They
cannot exist without tenements.
o Easements exist even if they are not
expressly stated or annotated as an
encumbrance of the titles.
8. It is intransmissible it cannot be
alienated separately from the tenement
affected or benefited
o Any alienation of the property covered
carries with it the servitudes affecting
said property. But this affects only the
portion of the tenement with the
easement, meaning the portions
unaffected can be alienated without the
servitude.
9. It is indivisible
Art. 618, Civil Code. 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.
10. It has permanence once it attaches,
whether used or not, it continues and
may be used at anytime
o Perpetual: exists as long as property
exists, unless it is extinguished.
III. Classification of Servitudes
1. As to recipient of benefits
a. Real or Praedial: exists for the benefit of
a particular tenement.
b. Personal: exists for the benefit of
persons without a dominant tenement
e.g. usus habitatio (right to reside in a
house) and operae servorum (right to
the labor of slaves) in Roman Law
2. As to cause or origin
a. Legal: created by law, whether for public
use or for the interest of private persons
o Once requisites are satisfied, the
owner of the dominant estate may
ask the Court to declare that an
easement is created.
o Example: Natural drainage of
waters, Abutment of land, Aqueduct,
etc.
b. Voluntary: Created by the will of the
owners of the estate through contract
*** There is no such thing as a JUDICIAL
EASEMENT. The Courts cannot create
easements, they can only declare the existence
of one, if it exists by virtue of the law or will of
the parties.
3. As to its exercise (Article 615)
Art. 615, Civil Code. Easements may be continuous
or discontinuous, apparent or nonapparent.
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. (532)
This classification is important in
determining prescription: only continuous
and apparent easements can be created by
prescription
Continuous: Use is or may be incessant,
without the intervention of any man
Discontinuous: Used at intervals, and
dependent upon the acts of man.
4. As indication of its existence
Also important for purposes of prescription
Apparent: Made known and continually
kept in view by external signs that reveal
the use and enjoyment of the same
Non-apparent: No external indication of
their existence
5. By the object or obligation imposed
(Article 616)
a. Positive: Imposes upon the owner of the
servient estate the obligation of allowing
something to be done, or doing it himself
b. Negative: Prohibits the owner of the
servient estate from doing something
which he could lawfully do if the
easement did not exist.
o Prescription starts to run from
service of notarial prohibition)
o e.g. Negative Easement of Light
and View: An opening is made on
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the wall of the dominant estate, and
the easement consists of imposing
upon the servient estate the
obligation to not build anything that
would obstruct the light
1. Nulli res sua servi: No one can have a
servitude over ones own property
2. Servitus in faciendo consistere nequit: A
servitude cannot consist in doing
o Although some easements seem to
impose a positive prestation upon the
owner of the servient estate, in reality,
the primary obligation is still negative.
o Illustration: Under Article 680: the owner
of a tree whose branches extend over to
a neighboring property is required to cut
off the extended branches, but the real
essence of the easement is the
obligation NOT TO ALLOW the
branches of the tree to extend beyond
the land
3. Servitus servitutes esse non potes: There
can be no servitude over another servitude
4. A servitude must be exercised civiliter
in a way least burdensome to the owner of
the land
5. A servitude must have a perpetual cause
V. Modes of Acquiring Easements
A. By Title juridical act which gives rise
to the servitude (e.g. law, donations,
contracts or wills)
Because the road was voluntarily created as a
servitude by the owner, he may close it at his
pleasure. But while the road is open, he may not
capriciously exclude the owner of the tuba saloon
from its use. (North Negros Sugar v. Hidalgo)
1. If easement has been acquired but no proof
of existence of easement available, and
easement is one that cannot be acquired by
prescription
Article 623, Civil Code. 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 defect may be cured by:
a. Deed of recognition by owner of servient
estate: By affidavit or a formal deed
acknowledging the servitude
b. By final judgment: Owner of the
dominant estate must file a case in
Court to have the easement declared by
proving its existence through other
evidence
2. Existence of an apparent sign considered as
title
Article 624, Civil Code. 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.
o Illustration: The presence of 4 windows
was considered an apparent sign which
created a negative easement of light
and view (altius non tollendi) i.e. not to
build a structure that will cover the
windows. (Amor v. Florentino)
B. By Prescription
Requisites
1. Easement must be continuous and
apparent.
Although the road had been used for
more than 20 years, since an easement
of right of way is a discontinuous
easement, it CANNOT be acquired by
prescription because of the requirement
of continuous or uninterrupted
possession. Since the dominant owner
cannot be continually and
uninterruptedly crossing the servient
estate, but can do so only at intervals,
the easement is necessarily of an
intermittent or discontinuous nature.
(Ronquillo v. Roco)Sasa
2. Easement must have existed for 10 years.
3. NO NEED for good faith or just title.
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Dominant and Servient Estates
A. Of Dominant Estate
1. Right of owner of dominant estate
(Limited Jus Utendi: limited by the nature of
the easement itself)
a. To use the easement and exercise all
rights necessary for it
Article 625, Civil Code. Upon the establishment of
an easement, all the rights necessary for its use are
considered granted.
Article 626, Civil Code. 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.
o Owner of the dominant estate is
granted the right to use the principal
easement, and all accessory
servitudes
o Example: Easement of drawing
water carries with it the easement of
right of way to the place where
water is drawn.
o Limitation: Only for the original
immovable and the original purpose
b. To do at his expense, all necessary
works for the use and preservation of
the easement
Article 627, Civil Code. The owner of the dominant
estate may make, at his own expense, on the servient
state any works necessary for the use and
preservation of the servitude, but without altering it or
rendering it more burdensome.
For this purpose he shall notify the owner of the
servient estate, and shall choose the most convenient
time and manner so as to cause the least
inconvenience to the owner of the servient estate.
o Necessity of the works determine
extent of such works.
c. In a right of way, to ask for change in
width of easement sufficient for
needs
Article 651, Civil Code. 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.
Encarnacion v. Court of Appeals: The Court
granted the modification of the easement stating that
under the law, the needs of the dominant property
ultimately determine the width of the passage. And
these needs may vary from time to time. When
petitioner started out as a plant nursery operator, he
and his family could easily make do with a few
pushcarts to tow the plants to the national highway.
But the business grew and with it the need for the use
of modern means of conveyance or transport.
Petitioner should not be denied a passageway wide
enough to accomodate his jeepney since that is a
reasonable and necessary aspect of the plant nursery
business.
2. Obligations of the owner of dominant
estate
a. To use the easement for benefit of
immovable and in the manner
originally established
o Article 626 (supra): Right to use
the easement for the benefit of the
immovable originally contemplated,
and in the manner originally
established.
o If established for a particular
purpose, the easement cannot be
used for a different one. However, if
established in a general way,
without specific purpose, the
easement can be used for all the
needs of the dominant estate.
b. To notify owner of servient before
making repairs and to make repairs in
a manner least inconvenient to
servient estate
o Article 627(2) (supra): Notify the
owner of the servient estate before
making repairs and choosing the
most convenient time and manner
so as to cause the least
inconvenience to the owner of the
servient estate.
c. Not to alter easement or render it more
burdensome
o Article 627 (supra): Owner of
dominant estate may make repairs
at his expense, but cannot alter the
easement or make it more
burdensome.
o Court allowed Central to use the
right of way to transport the
additional sugar. This did not make
the easement more burdensome nor
did it alter it. What is prohibited is
extending the road or repairing it or
depositing excavations outside the
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area. But the additional use
produced no such effects.
(Valderama v. North Negros)
d. To contribute to expenses of works
necessary for use and preservation
of servitude, if there are several
dominant estates, unless he
renounces his interest
Article 628, Civil Code. Should there be several
dominant estates, the owners of all of them shall be
obliged to contribute to the expenses referred to in the
preceding article, in proportion to the benefits which
each may derive from the work. Any one who does
not wish to contribute may exempt himself by
renouncing the easement for the benefit of the others.
If the owner of the servient estate should make use of
the easement in any manner whatsoever, he shall
also be obliged to contribute to the expenses in the
proportion stated, saving an agreement to the
contrary.
B. Of Servient Estate
1. Rights of owner of servient estate
a. To retain ownership and use of his
property
o The owner of the servient estate
retains the ownership of the portion
on which the easement is
established, and may use the same
in such a manner as not to affect the
exercise of the easement. (Art. 630,
Civil Code)
o Servient owner must respect the use
of the servitude, but retains
ownership and use of the same, in a
manner not affecting the easement.
b. To change the place and manner of
the use of the easement
Article 629, Civil Code. The owner of the servient
estate cannot impair, in any manner whatsoever, the
use of the servitude
Nevertheless, if by reason of the place originally
assigned, or of the manner established for the use of
the easement, the same should become very
inconvenient to the owner of the servient estate, or
should prevent him from making any important works,
repairs or improvements thereon, it may be changed
at his expense, provided he offers another place or
manner equally convenient and in such a way that no
injury is caused thereby to the owner of the dominant
estate or to those who may have a right to the use of
the easement.
o REQUISITES if change will cause
prejudice to the dominant owner nor
impair the use of the servitude:
By reason of the place/manner
originally assigned, the use of
such easement has become
VERY INCONVENIENT to the
owner
The easement should prevent
him from making any important
works, repairs or improvements
thereon
Change must be done at his
expense
He offers another place or
manner equally convenient
In such a way that no injury is
caused by the change to the
owner of the dominant estate or
to those who may have a right
to use the easement
c. To use the easement
o May use the easement but must
also contribute proportionately to the
expenses
2. Obligations of the servient estate
a. Not to impair the use of the easement
o The owner of the servient estate
cannot impair, in any manner
whatsoever, the use of the
servitude. (Art. 629(1), Civil Code)
b. To contribute proportionately to
expenses if he uses the easement
o If the owner of the servient estate
should make use of the easement in
any manner whatsoever, he shall
also be obliged to contribute to the
expenses in the proportion stated,
saving an agreement to the contrary
(Art. 628(2), Civil Code)
Easements
Article 631, Civil Code. 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
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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.
(546a)
Modes of Extinguishment
1. Merger: must be absolute, perfect and
definite, not merely temporary
o Absolute: Ownership of the property
must be absolute, thus not applicable to
lease, usufruct, etc.
o Perfect: Merger must not be subject to
a condition
o If the merger is temporary, there is at
most a suspension of the easement, but
no extinguishment.
2. By non-user for 10 years
o Owner of dominant estate does not
exercise right over easement.
o Inaction, not outright renunciation.
o Due to voluntary abstention by the
dominant owner, and not to a fortuitous
event
o Computation of the period
Discontinuous easements: counted
from the day they ceased to be used
Continuous easements: counted
from the day an act adverse to the
exercise of the easement took place
E.g. in an easement of light and
view, the erection of works
obstructing the servitude would
commence the period of
prescription
o Use by a co-owner of the dominant
estate bars prescription with respect to
the others
o Servitudes not yet exercised cannot be
extinguished by non-user
An easement must have first been
used, before it can be extinguished
by inaction.
3. Extinguishment by impossibility of use
o Impossibility referred to must render the
entire easement unusable for all time.
o Impossibility of using the easement due
to the condition of the tenements (e.g.
flooding) only suspends the servitude
until it can be used again.
o EXCEPT: If the suspension exceeds 10
years, the easement is deemed
extinguished by non-user
4. Expiration of the term or fulfillment of
o Applicable only to voluntary easements
5. Renunciation of the owner of the
dominant estate
o Must be specific, clear, express
(distinguished from non-user)
6. Redemption agreed upon between the
owners
7. Other causes not mentioned in Article
631
o Annulment and rescission of the title
constituting the voluntary easement
o Termination of the right of grantor of the
voluntary easement
o Abandonment of the servient estate
Owner of the servient estate gives
up ownership of the easement (e.g.
the strip of land where the right of
way is constituted) in favor of the
dominant estate.
The easement is extinguished
because ownership is transferred to
the dominant owner, who now owns
both properties.
o Eminent domain
The governments power to
expropriate property for public use,
subject to the payment of just
compensation.
o Special cause for extinction of legal
rights of way; if right of way no longer
necessary
Art. 655, Civil Code
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.
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In both cases, the public
highway must substantially meet
the needs of the dominant
estate in order that the
easement may be extinguished.
Right of way ceases to be
necessary:
Owner of the of the dominant
estate has joined to another
abutting on a public road
A new road is opened giving
access to the isolated estate
Requisite: the public highway must
substantially meet the needs of the
dominant estate in order that the
easement may be extinguished
Owner of the servient estate may
demand that the easement be
extinguished.
Owner of the servient estate must
return indemnity he received (value
of the land)
VIII. Legal Easements
A. Law governing legal easements
1. For public easements
a. Special laws and regulations relating
thereto (ex: PD 1067 and PD 705)
b. By the provisions of Chapter 2, Title VII,
Book II, NCC
2. For private legal easements
a. By agreement of the interested parties
whenever the law does not prohibit it
and no injury is suffered by a 3
rd
person
b. By the provisions of Chapter 2, title VII,
Book II
B. Private legal easements provided for by
the NCC
THOSE ESTABLISHED FOR THE USE OF
WATER OR EASEMENTS RELATING TO
WATERS
1. Natural drainage of waters
Article 637, Civil Code. 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.
a. REQUISITE: Waters must flow naturally,
without the intervention of man
b. DUTIES:
o DOMINANT OWNER (Higher
Estate)
Cannot construct works to
increase the burden e.g. canals
draining other lands into the
lower estate, works which
prevent absorption of water like
pavements which make the
ground more impervious than it
is.
May demand that the servient
owner allow him to make works
necessary to remove
obstructions impeding natural
passage
o SERVIENT OWNER (Lower Estate)
Cannot make works which
would impede the servitude e.g.
dams which would block the
natural flow, walls, ditches that
enclose the tenements.
Can construct works that he
may deem necessary to prevent
damage to himself, so long as
he does not cause damage to
inferior tenements
2. Easements on lands along riverbanks
Article 638, Civil Code. 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.
3. Abutment of a dam
Article 639, Civil Code. 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. (554)
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o Easement of abutment of a dam may be
established after payment of proper
indemnity
o REQUISITES:
1) Construction of dam mecessary for
the use of any other continuous or
discontinuous stream
2) Person who is to construct the dam
is NOT the owner of the banks or
lands which must support the dam
4. Aqueduct
Article 642, Civil Code. 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.
Article 643, Civil Code. 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.
Article 644, Civil Code. The easement of aqueduct
for private interest cannot be imposed on buildings,
courtyards, annexes, or outhouses, or on orchards or
gardens already existing.
Article 645, Civil Code. 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.
Article 645, Civil Code. 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.
o Any person wishing to use upon his own
estate any water can make it flow
through intervening estates with
obligation to indemnify owners of such
estates
o Considered as a continuous and
apparent easement, even though the
flow of water may not be continuous
o REQUISITES:
1) Dominant owner must prove that:
a) He can dispose of the water
b) Water is sufficient for the use for
which it is intended
c) The proposed right of way is the
most convenient and the least
onerous to third persons
2) Dominant owner must also
indemnify the servient estate in the
manner determined by laws and
regulations
3) Dominant owner cannot impose the
easement of aqueduct on buildings,
courtyards, annexes, outhouses,
orchards or gardens already existing
Existing structures cannot be injured to
establish the easement.
RIGHT OF SERVIENT OWNER:
May fence or build over the
aqueduct in such a manner as not to
cause any damage, or render
impossible any necessary repairs
and cleanings
5. Stop lock and sluice gate
Article 647, Civil Code. 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.
6. Stop lock and sluice gate
1. REQUISITES:
1) Can be imposed only for reasons of
public use in favor of a town or
village
2) After payment of proper indemnity
THE EASEMENT OF RIGHT OF WAY
Article 649, Civil 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.
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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. (564a)
2. Who may demand:
(1) The owner of the dominant estate
(2) Any person with the real right to
cultivate or use the immovable e.g.
a usufructuary
BUT a lessee cannot demand such
easement, because the lessor is the one
bound to maintain him in the enjoyment
of the property
3. REQUISITES:
(1) Dominant estate is surrounded by
other immovables owned by other
persons
(2) There must absolutely be no access
to a public highway
(3) Even if there is access, it is difficult
or dangerous to use, or grossly
insufficient
4. Mere inconvenience in the use
of an outlet does not render the
easement a necessity.
5. An adequate outlet is one that
is sufficient for the purpose and
needs of the dominant owner,
and can be established at a
reasonable expense.
6. Does not necessarily have to be
by land an outlet through a
navigable river if suitable to the
needs of the tenement is
sufficient.
(4) Isolation of the immovable is NOT
due to the dominant owners own
acts e.g. if he constructs building to
others obstructing the old way
(5) Payment of indemnity
o If right of way is permanent and
continuous for the needs of the
dominant estate = value of the
land + amount of damage
caused to the servient estate
o If right of way is limited to
necessary passage for
cultivation of the estate and for
gathering crops, without
permanent way = damage
caused by encumbrance.
7. RULES FOR ESTABLISHING THE
RIGHT OF WAY
1) Must be established at the point
LEAST prejudicial to the servient
estate
Art. 650, Civil Code. 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.
a. Insofar as consistent with the
first rule, where the distance
from the dominant estate to a
public highway is shortest
E.g. as between a longer way
without injury to the servient
estates constructions, etc. and
a shorter way that would cause
injury
b. The criterion of least prejudice
to the servient estate must
prevail over the criterion of
shortest distance although this
is a matter of judicial
appreciation. While shortest
distance may ordinarily imply
least prejudice, it is not always
so as when there are permanent
structures obstructing the
shortest distance; while on the
other hand, the longest distance
may be free of obstructions and
the easiest or most convenient
to pass through. (Quimen v.
CA)
c. The fact that LGV had other
means of egress to the public
highway cannot extinguish the
said easement, being voluntary
and not compulsory. The free
ingress and egress along
Mangyan Road created by the
voluntary agreement between
the parties is thus legally
demandable with the
corresponding duty on the
servient estate not to obstruct
the same. (La Vista
Association v. CA)
2) Width of the easement shall be that
which is sufficient for the needs of
the dominant estate
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a. Easement may be changed
from time to time depending
upon the needs of the dominant
tenement
b. 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. (Art. 651, CC)
3) Necessary repairs for a permanent
right of way shall be made by the
DOMINANT OWNER.
4) A proportionate share of taxes shall
be reimbursed by the dominant
owner to the proprietor of the
servient estate
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 (Art. 654, CC)
5) In cases where the dominant estate
needing the right of way is acquired
by sale, exchange or partition and
the Estate is surrounded by other
estates owned by the vendor,
exchanger of co-owner
a. Vendor, exchanger or co-owner
shall grant the right of way
WITHOUT INDEMNITY
Granting the servitude
without indemnity is a tacit
condition of the sale,
exchange or partition: each
party receives something
b. Donor (simple donation) must
still be indemnified for right of
way
Grantor receives nothing
from the grantee, therefore
no implied condition as to a
right of way is constituted
c. If the land of the grantor is the
one which becomes isolated, he
may demand right of way after
paying an indemnity
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. (Art.
652, CC)
8. EXTINGUISHMENT
Extinguished in the following
circumstances because easement
ceases to be necessary:
1) Owner has joined the dominant
estate to another abutting the public
road
2) A new road is opened giving access
to the isolated estate
3) Extinguishment is NOT automatic.
The owner of the servient estate
must ask for such extinguishment
4) Indemnity paid to the servient owner
must be returned:
a. If easement is permanent: value
of the land must be returned
b. If easement is temporary:
nothing to be returned
9. SPECIAL RIGHTS OF WAY
Right of way to carry materials for
the construction, repair,
improvement, alteration or
beautification of a building through
the estate of another
Right of way to raise on anothers
land scaffolding or other objects
necessary for the work
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. (Art. 656)
Right of way for the passage of
livestock known as animal path,
animal trail, watering places, resting
places, animal folds (Art. 657)
Easements of the right of way
for the passage of livestock
known as animal path, animal
trail or any other, and those for
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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
Article 659, Civil Code. 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.
PARTY WALL
WALL OWNED IN
COMMON
Built by common
agreement by getting
land from the adjoining
tenements in equal parts
Owned by adjoining
owners from its
construction or by
subsequent act
Owner may use the wall
for his own exclusive
benefit
Co-owner cannot use the
wall for his own exclusive
benefit, because he
would be impairing the
rights of his co-owners
Each owner may insert
beams but only to the
extent of ! of its
thickness
Each owner can insert
beams in the wall to the
extent of entire thickness
1. DETERMINING THE EXISTENCE OF A
PARTY WALL
a. PRESUMED in the following situations
unless there is a TITLE or EXTERIOR
SIGN or PROOF to the contrary
(i) In dividing walls of adjoining
buildings, up to the point of common
elevation
(ii) In dividing walls of gardens or yards,
situated in cities, towns or rural
communities
(iii) In fences, walls and live hedges
dividing rural lands
(iv) Ditches or drains between two
estates
b. EXTERIOR SIGNS CONTRARY TO
THE EASEMENT OF PARTY WALL
(merely illustrative and not exclusive)
(i) A window or opening in the dividing
wall of buildings
(ii) A lower part of the wall slants or
projects outward on one side of the
wall, while the other side is straight
and plumb on its facement
(iii) Entire wall is built WITHIN the
boundaries of one of the estates
(iv) Dividing wall bears the burden of
beams, floors and roof frame of only
one of the buildings
(v) Dividing wall between courtyards,
garden or tenements is constructed
in such a way that the it sheds water
upon only one of the estates
(vi) Dividing wall has stepping stones
which project from the surface of
one side only, but not on the other
(vii) Lands enclosed by fences or live
hedges adjoin others which are not
enclosed
2. OTHERS NOT ENUMERATED in ARTICLE
659
a. Two adjoining tenements surrounded by
live hedges of different kinds = the
hedge must belong to the owner of the
tenement using the same kind of plants
b. For ditches or drains between two
estates, whenever the earth or dirt
removed to open or clean the ditch is
only on one side thereof
3. CONTRADICTORY SIGNS
a. Contradictory external signs are left to
the determination of the Court, but the
quality instead of the number of signs
must prevail. Also, a presumption arising
from the object or purpose of the wall is
of more force than that arising from a
doubtful external sign.
b. Title, as an express proof of ownership
prevails over an external sign, which
merely gives rise to a presumption
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4. RULES
a. Cost of repairs and construction,
maintenance of fences, hedges, ditches
and drains shall be borne by ALL the
owners of the lands or tenements
EXCEPT: if the defects were occasioned
only by one owner
b. An owner may exempt himself from
contributing to the expenses by
renouncing his part-ownership,
UNLESS the party wall supports a
building he owns
Renunciation refers not only to the wall,
but also to the land on which it is
constructed.
c. An owner of a building supported by a
party wall who desires to demolish his
building, may also renounce his part
ownership of the wall.
BUT he must still bear the cost of all the
repairs and work necessary to prevent
any damage to the party wall.
d. Every owner may increase the height
of the wall, at his own expense and
paying for damages caused by the work.
He must also pay for:
Expenses of maintaining the wall in
the part newly raised, or deepened
foundation
Indemnity for increased expenses
necessary for the preservation of
the wall by reason of the greater
height or depth which has been
given it
Reconstruction expenses in case
the party wall cannot bear the
increased height.
If increased thickness is needed, the
owner shall give the space required
from his own land
Other owners may acquire part
ownership of the increased height,
depth or thickness of the wall, by
paying proportionately the value of
the work at the time of the
acquisition, and of the land for its
increased thickness
e. Part-owners may use the party wall IN
PROPORTION to the right he may have
in the co-ownership, without interfering
with the common and respective uses of
the others.
E.g. A ! interest in the wall = !
payment for expenses = ! use as in
one can insert beams in the wall up to !
thickness
THE EASEMENT OF LIGHT AND VIEW
1. NATURE OF THE EASEMENT
a. POSITIVE: Opening a window through a
party wall
When a part owner of a party wall opens
a window therein, such act implies the
exercise of the right of ownership by the
use of the entire thickness of the wall =
invasion of the right of the other part
owners / violation of the right to
proportional use of the party wall.
b. NEGATIVE: Formal prohibition upon the
owner of the adjoining land or tenement
When a person opens a window on his
own building, he does nothing more than
exercise an act of ownership on his
property.
Does not establish an easement
Coexistent is the right of the owner of
the adjacent property to build on his own
land, even if such structures cover the
window
If the adjacent owner does not build
structures to obstruct the window, such
is considered mere tolerance and NOT a
waiver of the right to build.
An easement is created only when the
owner opens up a window prohibits or
restrains the adjacent owner from doing
anything, which may tend to cut off or
interrupt the light + prescriptive period
2. EASEMENT vs. DIRECT VIEW
o Acquired by the person who opens the
window
o The following structures cannot be built
without following the prescribed
distances
Window, apertures, balconies and
other projections with a direct view
upon or towards an adjoining land
must have a distance of 2 METERS
between the wall and the contiguous
property.
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For structures with a side or oblique
view (at an angle from the boundary
line), there should be a distance of
60 centimeters.
Measured from:
The outer line of the wall if the
openings do not project
The outer line of the openings if
they project
The dividing line between the
two properties in cases of
oblique view
If distances are not complied
with:
Windows are considered
unlawful openings
Owner may be ordered by the
Court to close them
Even if the adjoining owner
does not object to the
construction of such structures
at first, he cannot be held to be
in estoppel, except if 10-year
period of acquisitive prescription
has passed.
Does not give rise to
prescription
Mere opening of the window in
violation of the distances does
not give rise to the easement of
light and view by prescription
o In buildings separated by a public way
or alley, not less than 3 meters wide, the
distances required (2 m, 60 cm) do not
apply.
o If an easement is acquired to have direct
views, balconies or belvederes, the
owner of the servient estate must not
build at less than 3 meters from the
boundary line of the two tenements.
The distances may be stipulated by
the parties, but should not be less
than what is prescribed by the law
(2 meters and 60 cm)
3. EXCEPTION TO EASEMENT vs. DIRECT
VIEW
o Owners of a wall (not a party wall)
adjoining a tenement of another can
make openings to admit light without
complying with the distance
requirements SO LONG AS:
Openings are made at the height of
the ceiling joists (horizontal beams)
or immediately under the ceiling
Size: 30 cm square
With iron grating imbedded in the
wall
With a wire screen
o But owner of the adjoining estate can
close the opening if:
He acquires part ownership of the
party wall
He constructs a building or raises a
wall on his land, unless an
easement of light has been acquired
o If requirements are not complied with,
the owner of the adjoining estate may
compel the closure of the opening.
o The action to compel the closing of the
opening may prescribe, if the opening is
permitted without protest.
BUT prescription of the action to
compel the closure of the opening
DOES NOT MEAN that the
servitude of light and view has been
acquired.
Period of acquisitive prescription will
only start to run from the time the
owner asserting the servitude has
forbidden the owner of the adjoining
tenement from doing something he
could lawfully do.
THUS, although the action to
compel the closure might have
prescribed, the owner of the
adjoining estate may still build on
his own land a structure which might
obstruct the view.
THE EASEMENT OF DRAINAGE OF
BUILDINGS
Article 674, Civil Code. The owner of a building shall
be obliged to construct its roof or covering in such
manner that the rain water shall fall on his own land or
on a street or public place, and not on the land of his
neighbor, even though the adjacent land may belong
to two or more persons, one of whom is the owner of
the roof.
Even if it should fall on his own land, the owner shall
be obliged to collect the water in such a way as not to
cause damage to the adjacent land or tenement.
Article 675, Civil Code. The owner of a tenement or
a piece of land, subject to the easement of receiving
water falling from roofs, may build in such manner as
to receive the water upon his own roof or give it
another outlet in accordance with local ordinances or
customs, and in such a way as not to cause any
nuisance or damage whatever to the dominant estate.
Article 676, Civil Code. Whenever the yard or court
of a house is surrounded by other houses, and it is
not possible to give an outlet through the house itself
to the rain water collected thereon, the establishment
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of an easement of drainage can be demanded, giving
an outlet to the water at the point of the contiguous
lands or tenements where its egress may be easiest,
and establishing a conduit for the drainage in such
manner as to cause the least damage to the servient
estate, after payment of the property indemnity.
1. Regulating the disposal of rain water
a. Owner of a building is obliged to
construct a roof or covering so as to
ensure that the rain water shall fall on
his own land, or on a street or public
place, and NOT on the land of his
neighbor.
b. Owner is also obliged to collect the war
falling on his own land so as not to
cause damage to adjacent tenements
2. Rain water is res nullius, and has no owner.
This article merely imposes a limitation on
the use of ones property, so that rain water
falling thereon may not cause damage.
3. Obligation to collect water (#2) is an
exception to the rule requiring lower
tenements to receive water flowing from
higher tenements.
EASEMENT GIVING AN OUTLET TO THE
WATER THROUGH CONTIGUOUS
ESTATES
o Requisites:
a. Yard or court of a house is surrounded
by other houses
b. Water is collected thereon
c. Not possible to give an outlet through
the house itself
d. Establishment of conduit for drainage
must be at a point where egress is
easiest and where it will cause the least
damage to the servient estate
e. After payment of proper indemnity
INTERMEDIATE DISTANCES AND WORKS
FOR CERTAIN CONSTRUCTIONS AND
PLANTINGS
Article 677, Civil Code. No constructions can be built
or plantings made near fortified places or fortresses
without compliance with the conditions required in
special laws, ordinances, and regulations relating
thereto
Article 675, Civil Code. No person shall build any
aqueduct, well, sewer, furnace, forge, chimney,
stable, depository of corrosive substances,
machinery, or factory which by reason of its nature or
products is dangerous or noxious, without observing
the distances prescribed by the regulations and
customs of the place, and without making the
necessary protective works, subject, in regard to the
manner thereof, to the conditions prescribed by such
regulations. These prohibitions cannot be altered or
renounced by stipulation on the part of the adjoining
proprietors.
In the absence of regulations, such precautions shall
be taken as may be considered necessary, in order to
avoid any damage to the neighboring lands or
tenements.
Article 679, Civil Code. No trees shall be planted
near a tenement or piece of land belonging to another
except at the distance authorized by the ordinances or
customs of the place, and, in the absence thereof, at
a distance of at least two meters from the dividing line
of the estates if tall trees are planted and at a distance
of at least fifty centimeters if shrubs or small trees are
planted.
Every landowner shall have the right to demand that
trees hereafter planted at a shorter distance from his
land or tenement be uprooted.
The provisions of this article also apply to trees which
have grown spontaneously.
Article 680, Civil Code. If the branches of any tree
should extend over a neighboring estate, tenement,
garden or yard, the owner of the latter shall have the
right to demand that they be cut off insofar as they
may spread over his property, and, if it be the roots of
a neighboring tree which should penetrate into the
land of another, the latter may cut them off himself
within his property.
Art. 681, Civil Code. Fruits naturally falling upon
adjacent land belong to the owner of said land.
1. SUMMARY
CONSTRUCTIONS may be built only after
complying with prescribed regulations
(special laws, ordinances, regulations):
a. Constructions or plantings near fortified
places or fortresses
b. Aqueduct, well, sewer, furnace, forge,
chimney, stable, depository of corrosive
substances, machinery, factory (with
dangerous and noxious substances)
Distances must be observed and
protective works necessary for the
conditions must be made
c. Trees planted near a tenement or piece
of land
In the absence of ordinances or
customs of the place:
(1) TALL TREES: At a distance of
at least 2 meters from the
dividing line of the estates
(2) SHRUBS/SMALL TREES: At
least 50 cm from the dividing
line
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If trees are planted at a shorter
distance, landowner may demand
that it be uprooted
2. Plantings Encroaching on Adjoining
Estates
a. Branches of any tree extending over a
neighboring estate, garden, etc.
Owner of the adjoining estate has the
right to demand that they be cut off
insofar as they may spread over his
property.
b. Roots of a neighboring tree which
should penetrate into the land of another
o Owner may cut the roots off himself
within his property, even without
notice to the owner of the trees
o Roots, by accession are converted
into the property of the owner of the
land into which they penetrate.
o Also, cutting off the roots will not
give the cutter any benefit, in
contrast to cutting off the branches
of a tree.
o PRESCRIPTION OF ACTION TO
CUT: Period only starts to run after
the owner of the estate has
demanded that the owner of the
trees cut off the branches or roots,
and the latter refuses.
The fact that the owner does not
cut off the trees only constituted
mere tolerance.
c. Fruits naturally falling upon adjacent
land belong to the owner of the land
o Not by right of occupation but by
principle of accession.
o Owner of the tree retains ownership:
If he picks the fruits from the
branches which invade the
neighboring tenement
If fruits fall on immovables for
public use (not considered as
fruits of these
THE EASEMENT AGAINST NUISANCES
Article 682, Civil Code. Every building or piece of
land is subject to the easement which prohibits the
proprietor or possessor from committing nuisance
through noise, jarring, offensive odor, smoke, heat,
dust, water, glare and other causes.
o Material impairment depends on the
nature and purpose of the tenement e.g.
dwelling house vs. factory
o Degree of annoyance to be tolerated
depends on what is usual for a specific
locality.
Article 683, Civil Code. Subject to zoning, health,
police and other laws and regulations, factories and
shops may be maintained provided the least possible
annoyance is caused to the neighborhood.
EASEMENT OF LATERAL AND SUBJACENT
SUPPORT
Article 684, Civil Code. No proprietor shall make
such excavations upon his land as to deprive any
adjacent land or building of sufficient lateral or
subjacent support.
1. An owner cannot make such excavations as
to deprive any adjacent land or building of
sufficient lateral or subjacent support
2. LATERAL SUPPORT
a. Limitation on the right to excavate on his
own land: one cannot excavate so close
to an adjoining estate as to deprive it of
natural support and cause it to crumble.
b. Not necessary that the excavation is
made on the lot immediately adjoining. It
is sufficient if the excavation results in a
slide in the plaintiffs property
c. An owner who makes excavations can
either:
Observe a sufficient distance to
permit the necessary lateral support
of adjoining land
Support the latter artificially through
walls, etc.
3. SUBJACENT SUPPORT
a. Exists when there is severance of
ownership (surface owner vs. substrata
owner) as in mines and tunnels.
b. The owners of the rights below the
surface are burdened with the easement
to refrain from removing such sufficient
support which will protect the surface
from subsidence or sinking, and keep it
securely at its original level.
4. REMEDIES FOR VIOLATION
a. Action for Damages against the one who
made the excavation, whether owner or
contractor, etc.
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b. Injunction
Restraining the owner from
excavating so as to deprive the land
of natural support
Will prohibit merely any excavation
which shall cause the plaintiffs land
to fall away due to withdrawal of
support
5. OTHER RULES:
a. Stipulations or testamentary provisions
allowing excavations that cause danger
to adjacent land or building is VOID.
b. Also applicable to future constructions
c. Any proprietor intending to make any
excavation shall notify all owners of
adjacent lands.
Notice must sufficiently inform the
adjoining owner of the nature and
extent of the proposed excavation,
so as to enable the owner to take
the necessary precautions to protect
his property.
No formal notice is necessary if the
adjoining owner already has actual
knowledge of such excavation.
But giving notice does not absolve
the excavator from the duty to
exercise reasonable care to avoid
injury to neighbors.
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Chapter IX. Nuisance
I. DEFINITION
II. CLASSES
III. LIABILITY IN CASE OF NUISANCE
IV. REGULATION OF NUISANCE
I. Definition
Article 694, Civil Code. 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.
To constitute a nuisance there must be an
arbitrary or abusive use of property or disregard
of commonly accepted standards set by society.
Nuisance v. Trespass
Nuisance Trespass
Use of ones own
property in such a
manner as to cause injury
to the property or right or
interest of another, and
generally results from the
commission of an act
beyond the limits of the
property affected.
Direct infringement of
anothers right of
property.
Injury is consequential Injury is immediate
Nuisance v. Negligence
Nuisance Negligence
Whether it was
unreasonable for the
defendant to act as he
did in view of the
threatened danger or
harm to one in plaintiffs
position.
Whether the defendants
use of his property was
unreasonable as to
plaintiff, without regard to
foreseeability of injury.
Liability for the resulting
injury to others
regardless of the degree
of care or skill exercised
to avoid such injury.
Liability is based on a
want of proper care
Principles ordinarily apply
where the cause of action
is for continuing harm
caused by continuing or
recurrent acts which
cause discomfort or
annoyance to plaintiff in
the use of his property.
Principles ordinarily apply
where the cause of action
is for harm resulting from
one act which created an
unreasonable risk of
injury.
Examples as enumerated under CC
1) Injury to health Any business,
although itself lawful, which necessarily
impregnates large volumes of the
atmosphere with disagreeable,
unwholesome or offensive matter, may
become a nuisance to those occupying
adjacent property, in case it is so near,
and the atmosphere is contaminated to
such an extent as substantially to impair
the comfort and enjoyment of adjacent
occupants.
2) Dangerous to safety manufacture,
storing or keeping of explosives in large
quantities in the vicinity of dwelling
houses or excavation adjoining a public
highway
3) Annoyance to senses
slaughterhouses and cowhide storage
vats from which emanated vile and
offensive odors; noise of animals kept in
residential neighborhood
o To be judged by the effect they are
calculated to produce upon
ordinary people under normal
circumstances, not by their effect
upon the oversensitive, the
fastidious or the sick, nor, on the
other hand, by their effect upon
those who are abnormally
indifferent to such things, or who by
long experience have learned to
endure them without
inconvenience.
o Inconvenience must be materially
interfering with the ordinary
comfort, physically, of human
existence.
4) Shocking to decency bawdy or
disorderly house; building used for either
lewdness or of assignation or
prostitution
5) Hinders or impairs the use of
property illegal construction on
anothers land
II. Classes
Art. 695, Civil Code. 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.
1. According to Nature (old classification)
a. Nuisance per se or at law
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o An act, occupation or structure
which is a nuisance at all times and
under any circumstances,
regardless of location or
surroundings.
b. Nuisance per accidens or in fact
o One that becomes a nuisance by
reason of circumstances and
surroundings.
o It is not a nuisance by its nature but
it may become so by reason of the
locality, surrounding, or the manner
in which it is conducted, managed,
etc.
Per se Per accidens
The wrong is established
by proof of the mere act.
It becomes a nuisance
as a matter of law.
Proof of the act and its
consequences.
2. According to Scope of Injurious Effects
o Test: not the number of persons
annoyed but the possibility of
annoyance to the public by the invasion
of its rights the fact that it is in a public
place and annoying to all who come
within its sphere.
a. Public
o The doing of or the failure to do
something that injuriously affects the
safety, health or morals of the
public.
o It causes hurt, inconvenience or
injury to the public, generally, or to
such part of the public as
necessarily comes in contact with it.
b. Private
o One which violates only private
rights and produces damages to but
one or a few persons.
Public Private
Affects the public at large
Affects the individual or a
limited number of
individuals only
Need not affect the whole
community or hurt and
injure all the public. It is
sufficient if it affects the
surrounding community
generally or if the injury is
occasioned to such part
of the public as come in
contact with it.
c. Mixed
3. Doctrine of Attractive Nuisance
o One who maintains on his premises
dangerous instrumentalities or
appliances of a character likely to attract
children in play, and who fails to
exercise ordinary care to prevent
children from playing therewith or
resorting thereto, is liable to a child of
tender years who is injured thereby,
even if the child is technically a
trespasser in the premises.
o Basis of liability The attractiveness is
an invitation to children. Safeguards to
prevent danger must therefore be set
up.
A swimming pool or water tank is not an attractive
nuisance, for while it is attractive, it cannot be a
nuisance, being merely an imitation of the work of
nature. (Hidalgo Enterprises v. Balandan)
III. Liability in Case of Nuisance
o Who are liable
Art. 696, Civil Code. 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.
o Liability of creator of nuisance: He who
creates a nuisance is liable for the resulting
damages and his liability continues as long
as the nuisance continues.
There must be a breach of some duty on
the part of the person sought to be held
liable for damages resulting from a
nuisance before an action will lie against
him.
No one is to be held liable for a
nuisance which he cannot himself
physically abate without legal action
against another for that purpose.
Where several persons, acting
independently, cause damage by acts
which constitute a nuisance, each is
liable for the damage which he has
caused or for his proportionate share of
the entire damage.
o Liability of transferees: The grantee of
land upon which there exists a nuisance
created by his predecessors in title is NOT
responsible therefore merely because he
becomes the owner of the premises, or
merely because he permits it to remain.
He shall be liable if he knowingly
continues the nuisance. Generally, he is
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not liable for continuing it in its original
form, unless he has been notified of its
existence and requested to remove it, or
has actual knowledge that it is a
nuisance and injurious to the rights of
others.
o Nature of liability: All persons who
participate in the creation or maintenance of
a nuisance are jointly and severally liable for
the injury done.
If 2 or more persons who create or
maintain the nuisance act entirely
independent of one another, and without
any community of interest, concert of
action, or common design, each is liable
only so far as his acts contribute to the
injury.
For joint liability, there must be some
joint or concurrent act or community of
action or duty, or the several wrongful
acts done at several times must have
concurred in their effects as one single
act to produce the injury complained of.
o Right to recover damages
Art. 697, Civil Code. The abatement of a
nuisance does not preclude the right of any
person injured to recover damages for its
past existence.
Abatement and damages are
cumulative remedies.
o No Prescription
Art. 698, Civil Code. Lapse of time cannot
legalize any nuisance, whether public or
private.
The action to abate a public or private
nuisance is NOT extinguished by
prescription. (Art. 1143[2])
IV. Regulation of Nuisances
A. PUBLIC NUISANCE
1. Remedies to abate a nuisance
Article 699, Civil Code. The remedies against a
public nuisance are:
1. A prosecution under the Penal Code or any local
ordinance: or
2. A civil action; or
2. (3) Abatement, without judicial proceedings.
a. Criminal prosecution: Only for a public
nuisance, not for a private one.
Public nuisances are offenses
against the State, and since early
times it has been held that one who
is responsible for this may be
proceeded against criminally by
indictment.
Question of intent is immaterial.
Persons liable person is liable for
the consequence which his act
produced
b. Civil action:
1) Judgment with abatement
defendant convicted of maintain a
nuisance may also be ordered to
abate the nuisance
2) Injunction where the injury
occasioned by an indictable
nuisance is pressing or imminent, so
that the public safety is menaced or
public rights are obstructed or
interfered with, and the special
circumstances are such that the
ordinary process of the court is not
sufficiently prompt or effective to
prevent the injury or obstruction, the
remedy can be injunction provided
the right is clear and the wrong has
not been acquiesced in by the
plaintiff.
c. Extrajudicial abatement: This right is
based upon necessity which must be
present to justify its exercise.
It must be reasonably and efficiently
exercised, means employed must
not be unduly oppressive on
individuals, and no more injury must
be done to the property or rights of
individuals than is necessary to
accomplish the abatement.
No right to compensation if property
taken or destroyed is a nuisance.
2. Who can file an action for abatement
Article 700, Civil Code. The district health officer
shall take care that one or all of the remedies against
a public nuisance are availed of.
Article 701, Civil Code. 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.
Article 702, Civil Code. The district health officer
shall determine whether or not abatement, without
judicial proceedings, is the best remedy against a
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public nuisance.
Article 703, Civil Code. A private person may file an
action on account of a public nuisance, if it is specially
injurious to himself.
a. General rule: Individual has no right of
action against a public nuisance. The
abatement proceedings must be
instituted in the name of the State or its
representatives.
b. Except: An individual who has suffered
some special damage different from that
sustained by the general public, may
maintain a suit in equity for an injunction
to abate it, or an action for damages
which he has sustained.
Action becomes a tort if an
individual has suffered particular
harm, in which case the nuisance is
treated as a private nuisance with
respect to such person.
3. Requisites of the right of a private
individual to abate a public nuisance
Article 704, Civil Code. 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.
a. The right must be exercised only in
cases of urgent or extreme necessity.
The thing alleged to be a nuisance must
be existing at the time that it was alleged
to be a nuisance.
b. Summary abatement must be resorted
to within a reasonable time after
knowledge of the nuisance is acquired
or should have been acquired by the
person entitled to abate.
c. Person who has the right to abate must
give a reasonable notice of his intention
to do so, and allow thereafter a
reasonable time to enable the other to
abate the nuisance himself.
d. Means employed must reasonable and
for any unnecessary damage or force,
the actor will be liable. Right to abate is
not greater than the necessity of the
case and is limited to the removal of
only so much of the objectionable thing
as actually causes the nuisance.
e. Abatement must be approved by the
district health officer.
f. Property must not be destroyed unless it
is absolutely necessary to do so.
g. Right must always be exercised with the
assistance of local police so as not to
disturb the public peace.
B. PRIVATE NUISANCE
Article 705, Civil Code. The remedies against a
private nuisance are:
1. A civil action; or
2. Abatement, without judicial proceedings.
Article 706, Civil Code. 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.
Article 707, Civil Code. 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.
a. Action for damages: Recovery is
limited to the damage occasioned up to
the time of the commencement of the
action.
If nuisance continues to the time of
trial, then damages shall be
computed from that time.
If nuisance is permanent, a single
action is enough to cover both past
and prospective damages. If
temporary or recurrent, each
repetition of it gives rise to a new
cause of action and successive
actions will lie.
b. Defenses to action:
1) Public necessity private interest
must yield to the public good;
creation of nuisance amounts to
taking of property therefore just
compensation must be made.
2) Estoppel one who voluntarily
places himself in a situation
whereby he suffers an injury will not
be heard to say that his damage is
due to a nuisance maintained by
another.
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3) Non-existence of the nuisance
4) Impossibility of abatement
c. Liability of person abating: Whoever
abates an alleged nuisance and thus
destroys or injures private property, or
interferes with private rights, whether a
public officer or private person, unless
he acts under the order of a court having
jurisdiction, does so at his peril.
d. Remedies of property owner: A
person whose property is seized or
destroyed as a nuisance may resort to
the courts to determine w/n it was in fact
a nuisance.
1) Action for replevin
2) Enjoin the sale or destruction of the
property
3) Action for the proceeds of its sale
and damages if it has been sold
4) Enjoin private parties from
proceeding to abate a supposed
nuisance
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Chapter X. Modes of Acquiring
Ownership
I. MODE V. TITLE
II. MODES
A. ORIGINAL MODES
1. OCCUPATION
2. INTELLECTUAL CREATION
B. DERIVATIVE MODES
1. LAW
2. DONATION
3. SUCCESSION
4. ACQUISITIVE PRESCRIPTION
5. TRADITION
I. Mode v. Title
Article 712, Civil Code. 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.
Mode is a specific cause which produces
dominion and other real rights as a result of
the co-existence of special status of things,
capacity and intention of persons and
fulfillment of the requisites of law.
Title is every juridical right which gives a
means to the acquisition of real rights but in
itself is insufficient to produce them.
Ownership is not transferred by contract
merely but by tradition or delivery. Contracts
only constitute titles or rights to transfer or
acquisition of ownership, while delivery is
the mode accomplishing the same.
Distinctions:
Mode Title
Directly and immediately
produces a real right
Serves merely to give the
occasion for its
acquisition or existence
Cause Means
Proximate cause Remote cause
Essence of the right
which is to be created or
transmitted
Means whereby that
essence is transmitted
II. Mode
A. ORIGINAL
Original modes of acquisition are those which
produce the acquisition of ownership
independent of any preexisting right of another
person, hence, free from burdens or
encumbrances.
1. OCCUPATION
Article 713, Civil Code. Things appropriable by
nature which are without an owner, such as animals
that are the object of hunting and fishing, hidden
treasure and abandoned movables, are acquired by
occupation.
Requisites:
o Corporeal personal property
o Property susceptible of
appropriation not res communes
o Seizure with intent to appropriate
o Res nullius (no owner) or res
derelict (abandoned property)
o Observance of conditions
prescribed by law
Kinds:
o Of Animals
Wild or feral animals seizure
(hunting/fishing) in open season
by means NOT prohibited
Tamed/domesticated animals
general rule: belong to the
tamer but upon recovering
freedom are susceptible to
occupation UNLESS claimed
within 20days from seizure by
another (ART. 716)
Tame/domestic animals not
acquired by occupation
EXCEPT when ABANDONED
o Of Other Personal Property
Abandoned may be acquired
Lost not known to be
abandoned (ART. 719)
Hidden treasure finder gets !
by occupation; landowner gets
! by accession; EXCEPT in
CPG system, share goes to the
partnership
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Specific rules
o Not applicable to ownership of a
piece of land
The ownership of a piece of
land cannot be acquired by
occupation. (Article 714, Civil
Code)
State owns a piece of land
which has no owner therefore it
cannot be acquired by
occupation.
o Privilege to hunt and fish regulated
by special law
right to hunt and to fish is
regulated by special laws.
o Occupation of a swarm of bees or
domesticated animals
owner of a swarm of bees shall
have a right to pursue them to
anothers land, indemnifying the
possessor of the latter for the
damage. If the owner has not
pursued the swarm, or ceases
to do so within two consecutive
days, the possessor of the land
may occupy or retain the same.
The twenty days to be counted
from their occupation by another
person. This period having
expired, they shall pertain to him
who has caught and kept them.
Article 560, Civil Code. 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.
o Pigeons and fish
Article 717, Civil Code.
Pigeons and fish which from
their respective breeding places
pass to another pertaining to a
different owner shall belong to
the latter, provided they have
not been enticed by some
artifice or fraud.
o Hidden treasure
Article 718, Civil Code. He
who by chance discovers
hidden treasure in anothers
property shall have the right
granted him in article 438 of this
Code.
o Lost movables; procedure after
finding lost movables
Art. 719, CC
Whoever finds a movable,
which is not treasure, must
return it to its previous
possessor. If the latter is
unknown, the finder shall
immediately deposit it with
the mayor of the city or
municipality where the
finding has taken place.
The finding shall be publicly
announced by the mayor for
two consecutive weeks in
the way he deems best.
If the movable cannot be
kept without deterioration, or
without expenses which
considerably diminish its
value, it shall be sold at
public auction eight days
after the publication.
Six months from the
publication having elapsed
without the owner having
appeared, the thing found,
or its value, shall be
awarded to the finder. The
finder and the owner shall
be obliged, as the case may
be, to reimburse the
expenses.
Article 720, CC. If the owner
should appear in time, he shall
be obliged to pay, as a reward
to the finder, one-tenth of the
sum or of the price of the thing
found.
2. INTELLECTUAL CREATION
Article 721, Civil Code. By intellectual creation, the
following persons acquire ownership:
1. The author with regard to his literary, dramatic,
historical, legal, philosophical, scientific or other
work
2. The composer; as to his musical composition;
3. The painter, sculptor, or other artist, with respect
to the product of his art;
4. The scientist or technologist or any other person
with regard to his discovery or invention.
Article 722, Civil Code. The author and the
composer, mentioned in Nos. 1 and 2 of the
preceding article, shall have the ownership of their
creations even before the publication of the same.
Once their works are published, their rights are
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governed by the Copyright laws.
The painter, sculptor or other artist shall have
dominion over the product of his art even before it is
copyrighted.
The scientist or technologist has the ownership of his
discovery or invention even before it is patented.
Article 723, Civil Code. Letters and other private
communications in writing are owned by the person to
whom they are addressed and delivered, but they
cannot be published or disseminated without the
consent of the writer or his heirs. However, the court
may authorize their publication or dissemination if the
public good or the interest of justice so requires.
Article 724, Civil Code. Special laws govern
copyright and patent.
Dual interest in letters (ART. 723):
o From the viewpoint of the
SENDER/WRITER the intellectual
property consists in the ideas and
thoughts expressed therein.
o From the viewpoint of the
RECIPIENT the paper or material
used where the writing was
impressed or done, pertains in
ownership to the recipient.
Intellectual Property Code of 1997
(RA 8293) is the special law which
governs copyright and patent
INTELLECTUAL PROPERTY RIGHTS
1. COPYRIGHT and RELATED RIGHTS
Copyright
o an intangible, incorporeal right
o granted by statute
o to the author or originator of certain
literary or artistic productions,
o whereby he is invested, for a
specific period,
30 YRS. renewable for another
30 YRS.
40 YRS for SERIAL publications
from the publication of the 1
st
volume renewable for 30 YRS.
o with the sole and exclusive privilege
of multiplying copies of the same
and publishing and selling them.
Purpose of the law: protect and control
the visible thing created and the
intangible estate arising from the
privilege of publishing and selling to
others copies of the thing produced
Kinds
o Common law copyright
o Statutory copyright
2. TRADEMARKS, TRADE NAMES and
SERVICE MARKS
Definitions under the Trademark Law
(RA 166):
o Trademark - any word, name,
symbol, emblem, sign or device or
any combination thereof adopted
and used by a manufacturer or
merchant to identify his goods and
distinguish them from those
manufactured, sold or dealt in by
others.
o Trade-name - individual names and
surnames, firm names, trade-
names, devices or words used by
manufacturers, industrialists,
merchants, agriculturists, and others
to identify their business, vocations
or occupations
o Service mark - mark used in the
sale or advertising of services to
identify the services of one person
and distinguish them from the
services of others
3. GEOGRAPHIC INDICATIONS of ORIGIN
False designation of origin is punishable
under ART. 189 of RPC
4. INDUSTRIAL DESIGNS
Any composition of lines and colors or
any 3-dimensional form, w/n associated
with lines and colors
5. PATENTS
An exclusive right to invention granted to
a patentee, his heirs or assigns for the
term thereof
Essential elements of an invention to
be patentable:
o Novelty
o Prior art
Requisites:
o There must be an invention
o Of a new and useful machine,
product/substance of possible
advantage to the public
o Not previously known or used or
described in printed publications or
in public use or on sale in the Phils.
or covered by prior patent
o Includes new and original industrial
designs
o NOT patentable if:
Contrary to public order, morals,
public health or welfare
Abstract idea/principle/theorem
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6. TOPOGRAPHIES of INTEGRATED
CIRCUITS
7. RIGHTS of PERFORMERS, PRODUCERS
of SOUND RECORDINGS and
BROADCASTING ORGANIZATIONS
8. PROTECTION of UNDISCLOSED
INFORMATION
_______________
B. DERIVATIVE
Derivative modes of acquiring ownership are
based on a right previously held by another
person, and therefore, subject to the same
characteristics, powers, burdens, etc. as when
held by previous owner.
1. LAW should be interpreted to apply only to
situations where ownership is vested
independently of the other modes
2. DONATION see next chapter
3. SUCCESSION MORTIS CAUSA
Article 774, Civil Code. 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.
Article 776, Civil Code. The inheritance includes all
the property, rights and obligations of a person which
are not extinguished by his death
Article 777, Civil Code. The rights to the succession
are transmitted from the moment of the death of the
decedent.
Elements of Succession:
o Transmission of property, rights and
obligations to another
o Cause of transmission is the DEATH
of the decedent
o Procedure of transmission is by
WILL or OPERATION of LAW
o ACCEPTANCE of the inheritance by
the heir
Rights to the succession are vested as
of the MOMENT of DEATH of the
decedent
4. (ACQUISITIVE) PRESCRIPTION
Mode of acquiring ownership through
the lapse of time in the manner and
under the conditions laid down by law
Possession should be:
o In the concept of an owner
o Public
o Peaceful
o Uninterrupted
o Adverse
ACQUISITIVE v. EXTINCTIVE
Acquisitive
Prescription
Extinctive Prescription
vests the property and
raise a new title in the
occupant
Statute of limitation
Positive action of the
possessor
Inaction or neglect of the
owner
Requisites common to ordinary and
extraordinary acquisitive
prescription:
o Capacity of the acquirer
o Capacity of the loser to lose by
prescription
o Object susceptible to prescription
o Lapse of required time
Ordinary acquisitive
! Movable property 4yrs
! Immovable 10yrs
Extraordinary acquisitive
! Movable 8yrs
! Immovable 30yrs
Additional requirements for ordinary
acquisitive prescription:
o Good faith
o Just title
5. TRADITION
Requisites:
o Pre-existence of right in estate of
grantor
o Just cause or title for the
transmission
o Intention
o Capacity
o Act of giving it outward form,
physically, symbolically or legally
Kinds:
o Real tradition PHYSICALY
DELIVERY of the thing; actual
transfer of control and possession
with intent to pass ownership or real
right over the property
Movable hand to hand transfer
of the thing
Immovable material acts
performed by grantee
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o Constructive tradition NOT the real
or material delivery of the thing that
may take place in any of the ff:
Symbolic delivery delivery of
signs or things which represent
that which is being transmitted
Delivery of public instrument
substitution of the real delivery
of possession by a public writing
with delivery of document
Traditio longa manu pointing
of the thing within sight by
grantor to grantee
Traditio brevi manu
grantees continuous
possession over the thing
delivered but now under the title
of ownership
Traditio constitutum
possessorium owner
remains in possession of the
thing but in another concept
Quasi-tradition delivery of
incorporeal things or rights by
the grantee of his right with the
owners consent
Tradition by operation of law
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Chapter XI. Donation
I. NATURE
II. REQUISITES
III. KINDS
IV. WHO MAY GIVE OR RECEIVE DONATIONS
V. WHO MAY NOT GIVE OR RECEIVE
DONATIONS
VI. ACCEPTANCE
VII. FORM
VIII. WHAT MAY BE DONATED
IX. EFFECT
X. REVOCATION AND REDUCTION
I. Nature
BILATERAL contract creating
UNILATERAL obligations on the donors
part
Requires CONSENT of BOTH donor
and donee though it produces
obligations only on the side of the
DONOR
II. Requisites
CONSENT and CAPACITY of the
parties
ANIMUS DONANDI (intent to donate)
DELIVERY of thing donated
FORM as prescribed by law
IMPOVERISHMENT of donors
patrimony and ENRICHMENT on part of
done
III. Kinds
A. As to its taking effect
1. INTER VIVOS
Article 729, Civil Code. When the donor intends
that the donation shall take effect during the lifetime of
the donor, though the property shall not be delivered
till after the donor's death, this shall be a donation
inter vivos. The fruits of the property from the time of
the acceptance of the donation, shall pertain to the
donee, unless the donor provides otherwise.
Article 730, Civil Code. The fixing of an event or the
imposition of a suspensive condition, which may take
place beyond the natural expectation of life of the
donor, does not destroy the nature of the act as a
donation inter vivos, unless a contrary intention
appears.
Article 731, Civil Code. When a person donates
something, subject to the resolutory condition of the
donor's survival, there is a donation inter vivos.
Take effect independently of the donors
death
Irrevocable EXCEPT for the ff grounds:
o Subsequent birth of the donors
children
o Donors failure to comply with
imposed conditions
o Donees ingratitude
o Reduction of donation by reason of
inofficiousness
NO OPTION to revoke AT WILL before
the donor dies
2. MORTIS CAUSA
Article 728, Civil Code. Donations which are to take
effect upon the death of the donor partake of the
nature of testamentary provisions, and shall be
governed by the rules established in the Title on
Succession.
Becomes effective upon the death of
donor
Donors death ahead of the donee is a
SUSPENSIVE CONDITION for the
existence of the donation
Characteristics:
o Transferor retains ownership and
control of the property while alive
o Transfer is revocable at will before
his death
o Transfer will be VOID if the
transferor should survive the
transferee
INTER VIVOS v. MORTIS CAUSA
Inter vivos Mortis causa
As to
formalities
Executed and
accepted with
formalities
prescribed by CC
748 & 749
Must be in the
form of a will, with
all the formalities
for the validity of
wills
Otherwise, its
void and cannot
transfer
ownership.
As to
effectivity
Effective during
the lifetime of the
donor
Effective after the
death of the
donor
As to
acceptance
Acceptance must
be made during
the lifetime of the
donor
Acceptance must
be made after the
death of the
donor, the
donation being
effective only
after the death of
donor.
Acceptance
during the donors
lifetime is
premature and
ineffective
because there
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can be no
contract regarding
future inheritance
As to
transfer of
ownership
for right of
disposition
Ownership is
immediately
transferred.
Delivery of
possession is
allowed after
death
Ownership is
transferred after
death
As to
revocation
Irrevocable may
be revoked only
for the reasons
provided in CC
760, 764, 765
Revocable upon
the exclusive will
of the donor
As to
reduction or
suppression
When it is
excessive or
inofficious, being
preferred, it is
reduced only after
the donations
mortis causa had
been reduced or
exhausted
When it is
excessive or
inofficious, it is
reduced first, or
even suppressed
NATURE of the act, whether its one of disposition or
of execution, is CONTROLLING to determine whether
the donation is mortis causa or inter vivos.
What is important is the TIME of TRANSFER of
ownership even if transfer of property donated may be
subject to a condition or a term.
Whether the donation is inter vivos or mortis causa
depends on whether the donor intended to transfer
ownership over the properties upon the execution of
the deed. (Gestopa v. CA; Austria-Magat v. CA)
3. PROPTER NUPTIAS
Article 82, Family Code. When the donor intends
that the donation shall take effect during the lifetime of
the donor, though the property shall not be delivered
till after the donor's death, this shall be a donation
inter vivos. The fruits of the property from the time of
the acceptance of the donation, shall pertain to the
donee, unless the donor provides otherwise.
Article 87, Family Code. 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.
Requisites
o Must be made BEFORE the
celebration of marriage
o Made in CONSIDERATION of the
marriage
o Made in FAVOR of ONE or BOTH of
the future spouses
ORDINARY v. PROPTER NUPTIAS
Ordinary Propter nuptias
Express
acceptance
Necessary Not required
As to
minors
Cant be made by
minors
May be made by
minors (FC 78)
As to future
property
Cannot include
future property
May include
future property
(same rule as
wills)
Limit as to
donation of
present
property
No limit to
donation of
present property
provided legitimes
are not impaired
If present property
is donated and
property regime is
ACP, limited to
1/5
Grounds
for
revocation
Law on donations FC 86
______________
B. As to cause or consideration
1. SIMPLE made out of PURE LIBERALITY
or because of the MERITS of the done
2. REMUNERATORY made for SERVICES
already rendered to the donor
3. ONEROUS imposes a BURDEN inferior in
value to property donated
a. Improper burden EQUAL in value to
property donated
b. Sub-modo or modal imposes a
prestation upon donee as to how
property donated will be applied
c. Mixed donations ex: sale for price
lower than value of property
A simple or pure donation is one whose cause is pure
liberality, while an onerous donation is one subject to
burdens, charges, or future services equal to or more
in value than the thing donated. (Lagazo v. CA)
C. As to effectivity or extinguishment
1. PURE donation is without conditions or
periods
2. CONDITIONAL donation is subject to
suspensive or resolutory conditions
3. WITH A TERM
Article 735, Civil Code. All persons who may
contract and dispose of their property may make a
donation.
Article 737, Civil Code. The donor's capacity shall be
determined as of the time of the making of the
donation.
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Article 738, Civil Code. All those who are not
specially disqualified by law therefor may accept
donations.
Article 741, Civil Code. Minors and others who
cannot enter into a contract may become donees but
acceptance shall be done through their parents or
legal representatives.
Article 737, Civil Code. Donations made to
conceived and unborn children may be accepted by
those persons who would legally represent them if
they were already born.
Capacity to donate is required for donations
inter vivos and NOT mortis causa
o Donors capacity determined as of the
TIME of the DONATION. Subsequent
incapacity is immaterial
Capacity to accept donations ALL persons
NOT disqualified by law may be donees
Donations
Article 736, Civil Code. All persons who may
contract and dispose of their property may make a
donation.
Article 739, Civil Code. 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,
descedants 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.
Article 1027, Civil Code. The following are 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.
Article 1032, Civil Code. 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;
Article 740, Civil Code. Incapacity to succeed by will
shall be applicable to donations inter vivos.
Article 743, Civil Code. Donations made to
incapacitated persons shall be void, though simulated
under the guise of another contract or through a
person who is interposed.
Article 744, Civil Code. Donations of the same thing
to two or more different donees shall be governed by
the provisions concerning the sale of the same thing
to two or more different persons.
A. By reason of public policy (ART. 739)
1. Those made between persons guilty of
adultery or concubinage at the time of
donation
2. Those made between persons guilty of the
same criminal offense if the donation is
made in consideration thereof
3. Those made to a public officer, his spouse,
descendants, and/or ascendants by reason
of the office
B. By reason of donees unworthiness
(ART. 1032 and 1027 [except (4)])
C. By reason of prejudice to creditors or
heirs (voidable)
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VI. Acceptance
Donation is perfected upon the
DONORS LEARNING of the
acceptance
Acceptance may be made during the
LIFETIME of BOTH donor and donee
A. WHO MAY ACCEPT
Article 745, Civil Code. The donee must accept the
donation personally, or through an authorized person
with a special power for the purpose, or with a general
and sufficient power; otherwise, the donation shall be
void.
Article 747, Civil Code. Persons who accept
donations in representation of others who may not do
so by themselves, shall be obliged to make the
notification and notation of which Article 749 speaks.
Acceptance or consent must be
PERSONAL or through a person
AUTHORIZED generally or specifically
B. TIME of ACCEPTANCE
Article 746, Civil Code. Acceptance must be made
during the lifetime of the donor and of the donee.
The donation is perfected only upon the moment
the donor knows of the donees acceptance. If the
acceptance is made in a separate instrument, the
donor shall be notified thereof in an authentic form,
and this step shall be noted in both instruments.
(Lagazo v CA)
VII. Form
A. PERSONAL PROPERTY
Article 748 , The donation of a movable may be
made orally or in writing.
An oral donation requires the simultaneous delivery of
the thing or of the document representing the right
donated.
If the value of the personal property donated exceeds
five thousand pesos, the donation and the acceptance
shall be made in writing, otherwise, the donation shall
be void.
WITH simultaneous delivery of donated
property may be oral UNLESS it
exceeds P5k in which case its VOID if
NOT in writing
WITHOUT simultaneous delivery must
be in WRITING including the
ACCEPTANCE regardless of value
B. REAL PROPERTY
Article 749, Civil Code. In order that the donation of
an immovable may be valid, it must be made in a
public document, specifying therein the property
donated and the value of the charges which the
donee must satisfy.
The acceptance may be made in the same deed of
donation or in a separate public document, but it shall
not take effect unless it is done during the lifetime of
the donor.
If the acceptance is made in a separate instrument,
the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments.
Must be in PUBLIC INSTRUMENT
specifying donated property and
burdens assumed by the donee
regardless of value
Acceptance must be EITHER:
o In the SAME INSTRUMENT OR
o In ANOTHER PUBLIC
INSTRUMENT notified to the donor
in authentic form and noted in both
deeds
Title to immovable property does not pass from donor
to donee by virtue of a deed of donation until and
unless it has been accepted in a public instrument
and the donor duly notified thereof. Where the deed
fails to show the acceptance, or where the formal
notice of the acceptance made in a separate
instrument is not given to the donor or else not noted
in the deed of donation and in the separate
acceptance, the donation is null and void. (Sumipat v
Banga)
Exceptions:
o Donations propter nuptias need
NO express acceptance
o Onerous donations form governed
by the rules of contracts
VIII. What May Be Donated
A. ALL PRESENT PROPERTY or PART
THEREOF of THE DONOR
1. Provided he RESERVES, in full ownership
or usufruct, sufficient means for support of
himself and all relatives entitled to be
supported by donor at the time of
acceptance
Article 750, Civil Code. The donations may
comprehend all the present property of the donor, or
part thereof, provided he reserves, in full ownership or
in usufruct, sufficient means for the support of himself,
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and of all relatives who, at the time of the acceptance
of the donation, are by law entitled to be supported by
the donor. Without such reservation, the donation
shall be reduced in petition of any person affected.
2. Provided that NO PERSON may give or
receive by way of donation, more than he
may give or receive by will (ART. 752); also,
reserves property sufficient to pay donors
debts contracted before donation, otherwise,
donation is in FRAUD of creditors (ARTS.
759, 1387)
Article 752, Civil Code. The provisions of Article 750
notwithstanding, no person may give or receive, by
way of donation, more than he may give or receive by
will.
The donation shall be inofficious in all that it may
exceed this limitation.
Article 759, Civil Code. There being no stipulation
regarding the payment of debts, the donee shall be
responsible therefor only when the donation has been
made in fraud of creditors
.
The donation is always presumed to be in fraud of
creditors, when at the time thereof the donor did not
reserve sufficient property to pay his debts prior to the
donation.
Article 1387, Civil Code. All contracts by virtue of
which the debtor alienates property by gratuitous title
are presumed to have been entered into in fraud of
creditors, when the donor did not reserve sufficient
property to pay all debts contracted before the
donation.
Alienations by onerous title are also presumed
fraudulent when made by persons against whom
some judgment has been issued. The decision or
attachment need not refer to the property alienated,
and need not have been obtained by the party
seeking the rescission.
In addition to these presumptions, the design to
defraud creditors may be proved in any other manner
recognized by the law of evidence.
3. If donation EXCEEDS the disposable or free
portion of his estate, donation is inofficious
4. EXCEPTIONS
a. Donations provided for in marriage
settlements between future spouses
not more than 1/5 of present property
FC Article 84. 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.
CC Article 130. The future spouses may give each
other in their marriage settlements as much as one-
fifth of their present property, and with respect to their
future property, only in the event of death, to the
extent laid down by the provisions of this Code
referring to testamentary succession.
b. Donation propter nuptias by an
ascendant consisting of jewelry,
furniture or clothing not to exceed 1/10
of disposable portion
Article 1070, Civil Code. Wedding gifts by parents
and ascendants consisting of jewelry, clothing, and
outfit, shall not be reduced as inofficious except
insofar as they may exceed one-tenth of the sum
which is disposable by will.
B. WHAT MAY NOT BE DONATED
FUTURE PROPERTY
Article 751, Civil Code. Donations cannot
comprehend future property.
By future property is understood anything which the
donor cannot dispose of at the time of the donation.
Includes ALL property that belongs to
others at the time the donation is made
although it may or may not later belong
to the donor
IX. Effect
A. IN GENERAL
1. Donee may demand actual delivery of thing
donated
2. Donee is SUBROGATED to rights of donor
in the property donated
Article 754, Civil Code. The donee is subrogated to
all the rights and actions which in case of eviction
would pertain to the donor. The latter, on the other
hand, is not obliged to warrant the things donated,
save when the donation is onerous, in which case the
donor shall be liable for eviction to the concurrence of
the burden.
The donor shall also be liable for eviction or hidden
defects in case of bad faith on his part.
3. Donor NOT obliged to warrant things
donated EXCEPT in onerous donations in
which case donor is liable for eviction up to
extent of burden (ART. 754)
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4. Donor is liable for EVICTION or HIDDEN
DEFECTS in case of BF on his part (ART.
754)
5. In donation propter nuptias, donor must
RELEASE property donated from mortgages
and other encumbrances UNLESS the
contrary has been stipulated
Article 131, Civil Code. The donor by reason of
marriage shall release the property donated from
mortgages and all other encumbrances upon the
same, with the exception of easements, unless in the
marriage settlements or in the contracts the contrary
has been stipulated.
6. Donations to several donees jointly NO
right of accretion EXCEPT:
a. Donor provides otherwise
b. Donation to husband and wife jointly
with right of accretion UNLESS donor
provides otherwise
Article 753, Civil Code. When a donation is made to
several persons jointly, it is understood to be in equal
shares, and there shall be no right of accretion among
them, unless the donor has otherwise provided.
The preceding paragraph shall not be applicable to
donations made to the husband and wife jointly,
between whom there shall be a right of accretion, if
the contrary has not been provided by the donor.
B. SPECIAL PROVISIONS
1. Reservation by donor of power to dispose
(in whole or in part) or to encumber property
donated
Article 755, Civil Code. The right to dispose of some
of the things donated, or of some amount which shall
be a charge thereon, may be reserved by the donor;
but if he should die without having made use of this
right, the property or amount reserved shall belong to
the donee.
2. Donation of naked ownership to one donee
and usufruct to another
may also be donated to one person and the usufruct
to another or others, provided all the donees are living
at the time of the donation.
3. Conventional reversion in favor of donor or
other person
Article 757, Civil Code. Reversion may be validly
established in favor of only the donor for any case
and circumstances, but not in favor of other persons
unless they are all living at the time of the donation.
Any reversion stipulated by the donor in favor of a
third person in violation of what is provided in the
preceding paragraph shall be void, but shall not nullify
the donation.
4. Payment of donors debt
Article 758, Civil Code. When the donation imposes
upon the donee the obligation to pay the debts of the
donor, if the clause does not contain any declaration
to the contrary, the former is understood to be liable
to pay only the debts which appear to have been
previously contracted. In no case shall the donee be
responsible for the debts exceeding the value of the
property donated, unless a contrary intention clearly
appears.
If expressly stipulated donee to pay
only debts contracted BEFORE the
donation UNLESS specified otherwise.
But in no case shall donee be
responsible for debts exceeding value of
property donated unless clearly intended
If theres NO stipulation donee
answerable only for donors debt ONLY
in case donation is in fraud of creditors
5. Illegal or impossible conditions
Article 272, Civil Code. Children who are legitimated
by subsequent marriage shall enjoy the same rights
as legitimate children.
Article 1183, Civil Code. Impossible conditions,
those contrary to good customs or public policy and
those prohibited by law shall annul the obligation
which depends upon them. If the obligation is
divisible, that part thereof which is not affected by the
impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon.
X. Revocation and Reduction
A. DISTINCTIONS
Revocation Reduction
Total, whether the
legitime is impaired or not
Made insofar as the
legitime is prejudiced
Benefits the donor
Benefits the donors heirs
(except when made on
the ground of the
appearance of a child)
B. CAUSES of REVOCATION OR
REDUCTION
1. Inofficiousness
Article 752, Civil Code. The provisions of Article 750
notwithstanding, no person may give or receive, by
way of donation, more than he may give or receive by
will.
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The donation shall be inofficious in all that it may
exceed this limitation.
Article 771, Civil Code. Donations which in
accordance with the provisions of Article 752, are
inofficious, bearing in mind the estimated net value of
the donor's property at the time of his death, shall be
reduced with regard to the excess; but this reduction
shall not prevent the donations from taking effect
during the life of the donor, nor shall it bar the donee
from appropriating the fruits.
For the reduction of donations the provisions of this
Chapter and of Articles 911 and 912 of this Code shall
govern.
Article 773, Civil Code. If, there being two or more
donations, the disposable portion is not sufficient to
cover all of them, those of the more recent date shall
be suppressed or reduced with regard to the excess.
Who may ask for reduction
Article 772, Civil Code.Only those who at the time of
the donor's death have a right to the legitime and their
heirs and successors in interest may ask for the
reduction or inofficious donations.
Those referred to in the preceding paragraph cannot
renounce their right during the lifetime of the donor,
either by express declaration, or by consenting to the
donation.
The donees, devisees and legatees, who are not
entitled to the legitime and the creditors of the
deceased can neither ask for the reduction nor avail
themselves thereof.
Rule applied if disposable portion not
sufficient to cover 2 or more donations
(ART. 773)
2. Subsequent birth, reappearance of child
or adoption of minor by donor
Article 760, Civil Code. Every donation inter vivos,
made by a person having no children or descendants,
legitimate or legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as provided in
the next article, by the happening of any of these
events:
1. If the donor, after the donation, should have
legitimate or legitimated or illegitimate children,
even though they be posthumous;
2. If the child of the donor, whom the latter believed
to be dead when he made the donation, should
turn out to be living;
3. If the donor subsequently adopt a minor child.
Effects:
o Donation is VALID if not exceeding
the free part computed as of the
birth, adoption or reappearance of
the child
o Donee must return the property or
its value at the time of the donation
o Fruits to be returned from the filing
of the action
o Mortgages by the donee are valid
but may be discharged subject to
reimbursement from the donee
Extent of revocation only to the
extent of the presumptive legitime of the
child
Prescription 4yrs
C. REVOCATION ONLY
1. Ingratitude
Article 765, Civil Code. The donation may also be
revoked at the instance of the donor, by reason of
ingratitude in the following cases:
1. If the donee should commit some offense against
the person, the honor or the property of the
donor, or of his wife or children under his parental
authority;
2. If the donee imputes to the donor any criminal
offense, or any act involving moral turpitude,
even though he should prove it, unless the crime
or the act has been committed against the donee
himself, his wife or children under his authority;
2. If he unduly refuses him support when the donee
is legally or morally bound to give support to the
donor.
Applies to all donations EXCEPT:
o Mortis causa
o Propter nuptias
o Onerous
Founded on moral duty one who
received a donation must be grateful to
his benefactor
Conviction NOT necessary
Time to file action for revocation within
1yr from knowledge of the offense
Article 769, Civil Code. The action granted to the
donor by reason of ingratitude cannot be renounced
in advance. This action prescribes within one year, to
be counted from the time the donor had knowledge of
the fact and it was possible for him to bring the action.
Who may file donor must bring action
himself; NOT transmissible to his heirs
Article 770, Civil Code. This action shall not be
transmitted to the heirs of the donor, if the latter did
not institute the same, although he could have done
so, and even if he should die before the expiration of
one year.
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Neither can this action be brought against the heir of
the donee, unless upon the latter's death the
complaint has been filed.
Effect of revocation on alienations and
encumbrances
Article 766, Civil Code. Although the donation is
revoked on account of ingratitude, nevertheless, the
alienations and mortgages effected before the
notation of the complaint for revocation in the Registry
of Property shall subsist.
Later ones shall be void.
Article 767, , Civil Code.In the case referred to in the
first paragraph of the preceding article, the donor shall
have a right to demand from the donee the value of
property alienated which he cannot recover from third
persons, or the sum for which the same has been
mortgaged.
The value of said property shall be fixed as of the time
of the donation.
2. Violation of condition
D. Effect of revocation or reduction
Article 762, Civil Code. Upon the revocation or
reduction of the donation by the birth, appearance or
adoption of a child, the property affected shall be
returned or its value if the donee has sold the same.
If the property is mortgaged, the donor may redeem
the mortgage, by paying the amount guaranteed, with
a right to recover the same from the donee.
When the property cannot be returned, it shall be
estimated at what it was worth at the time of the
donation.
Article 764, par. 2, Civil Code. In this case, the
property donated shall be returned to the donor, the
alienations made by the donee and the mortgages
imposed thereon by him being void, with the
limitations established, with regard to third persons,
by the Mortgage Law and the Land Registration Laws.
Article 767, Civil Code. In the case referred to in the
first paragraph of the preceding article, the donor shall
have a right to demand from the donee the value of
property alienated which he cannot recover from third
persons, or the sum for which the same has been
mortgaged.
Effect as to fruits
Article 768, Civil Code. When the donation is
revoked for any of the causes stated in Article 760, or
by reason of ingratitude, or when it is reduced
because it is inofficious, the donee shall not return the
fruits except from the filing of the complaint.
If the revocation is based upon noncompliance with
any of the conditions imposed in the donation, the
donee shall return not only the property but also the
fruits thereof which he may have received after having
failed to fulfill the condition.
SUMMARY
What may be donated (Article 750)
All present property of the donor or
part thereof
Limitation:
1) He reserves in full ownership or
in usufruct, sufficient means for
his support and all relatives who
are at the time of the acceptance
of the donation are, by law,
entitled to be supported
Effect of non-reservation: reduction
of the donation
2) He reserves sufficient property
at the time of the donation for
the full settlement of his debts
Effect of non-reservation: considered
to be a donation in fraud of creditors,
and donee may be liable for
damages
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What may not be donated
1) Future property; those which the
donor cannot dispose of at the
time of the donation (Article 751)
2) More than what he may give or
receive by will (Article 752)
If exceeds: inofficious
Donations made to several
persons jointly
No accretion one donee does not
get the share of the other donees
who did not accept (Article 753)
Exception: those given to husband
and wife, except when the donor
otherwise provides
Donor
Who are allowed: All persons who
may contract (of legal age) and
dispose of their property (Article 735)
Donors capacity is determined at the
time of the making of donation
(Article 737)
Who are not allowed:
1) Guardians and trustees with
respect to the property entrusted
to them (Article 736)
2) Made between person who are
guilty of adultery and
concubinage (Article 739)
3) Made between persons found
guilty of the same criminal
offense, in consideration thereof
(Article 739)
Donee
Who are allowed to accept
donations: Those who are not
specifically disqualified by law
(Article 738)
Those who are allowed, with
qualifications:
1) Minors and others who are
incapacitated (see Article 38),
provided that their acceptance is
done through their parents or
legal representatives (Article
741)
2) Conceived and unborn children,
provided that the donation is
accepted by those who would
legally represent them if they
were already born
Who are not allowed:
1) Made between person who are
guilty of adultery and
concubinage (Article 739)
2) Made between persons found
guilty of the same criminal
offense, in consideration thereof
(Article 739)
3) Made to a public officer or his
wife, descendant and
ascendants, by reason of his
office (Article 739)
4) Those who cannot succeed by
will (Article 740)
5) Those made to incapacitated
persons, although simulated
under the guise of another
contract (Article 743)
Acceptance of the donation
Who may accept (Article 745):
1) Donee personally
2) Authorized person with a special
power for the purpose or with a
general sufficient power
When to accept: during the lifetime of
the donor or donee (Article 746)
What the donee acquires with the
thing
He shall be subrogated to all the
rights and actions that would pertain
to the donor in case of eviction
(Article 754)
Obligation of the donor No obligation to warrant (Article 754)
Exception: when the donation is
onerous
Obligation of the donee
If the donation so states, the donee
may be obliged to pay the debts
previously contracted by the donor
and in no case shall he be
responsible for the debts exceeding
the value of the thing donated (Article
758)
Exception: when contrary intention
appears
What may be reserved by the
donor
Right to dispose of some of the
things donated, or of dome amount
which shall be a charge thereon
If the donor dies without exercising
this right, the portion reserved shall
belong to the donee
Reversion
The property donated may be
restored or returned to
1) Donor or his estate; or
2) Another person
Limitation to (2): the third person
whoul be living at the time of the
donation
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REVOCATION/REDUCTION
Basis Time of Action Transmissibility Effect Liability (Fruits)
Birth, appearance,
adoption
Within 4 years from
birth, legitimation
and adoption
Transmitted to
children and
descendants upon
the death of donor
Property returned/
value (if sold)/
redeem mortgage
with right to recover
Fruits returned from
the filing of the
complaint
Non-compliance
with condition
Within 4 years from
non-compliance
May be transmitted to
donors heirs and
may be exercised
against donees heirs
Property returned,
alienations and
mortgages void
subject to rights of
third persons in
good faith
Fruits received after
having failed to fulfill
condition returned
Ingratitude
Within 1 year after
knowledge of the
fact
Generally not
transmitted to heirs of
donor/ donee
Property returned,
but alienations and
mortgages effected
before the notation
of the complaint for
revocation in the
registry of property
subsist
Fruits received from
the filing of the
complaint returned
Failure to reserve
sufficient means for
support
At any time, by the
donor or relatives
entitled o support
Not transmissible
Reduced to the
extent necessary to
provide support
Donee entitled
Inofficiousness for
being in excess of
what the donor can
give by will
Within 5 years from
the death of the
donor
Transmitted to
donors heirs
Donation takes
effect on the lifetime
of donor. Reduction
only upon his death
with regard to the
excess
Donee entitled
Fraud against
creditors
Rescission within 4
years from the
perfection of
donation/ knowledge
of the donation
Transmitted to
creditors heirs or
successors-in-interest
Returned for the
benefit of the
creditor who brought
the action
Fruits returned/ if
impossible,
indemnify creditor
for damages
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Chapter XII. Lease
I. GENERAL CHARACTERISTICS
II. KINDS
A. LEASE OF THINGS
B. LEASE OF WORK
C. LEASE OF SERVICES
III. LEASE OF THINGS
I. General Characteristics
a. Temporary duration
b. Onerous
c. Price is fixed according to contract
duration
II. Kinds
A. Lease of things Involves an obligation on
the part of the lessor to deliver the thing
which is the object thereof and the
correlative right of the lessee to peaceful
and adequate enjoyment thereof for a price
certain
B. Lease of work or contract of labor (Arts.
1700-1712)
C. Lease of services
1. Household service
2. Contract for a piece of work (ARTS.
1713-1731)
3. Lease of services of common carriers
(ARTS. 1732-1763)
III. Lease of Things
A. CONCEPT
Article 1643, Civil Code. In the 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.
Subject matter must be WITHIN THE
COMMERCE OF MAN
General rule: CONSUMMABLE things
CANNOT be the subject matter of lease;
EXCEPTIONS
o Lease of consumable property
NOT for purpose of consuming
it but for purpose of DISPLAY or
ADVERTISING it (lease ad
pompam et ostentationem)
o Lease of consumables which
are ACCESSORIES in the lease
of an industrial management
B. SPECIAL CHARACTERISTICS of LEASE
of THINGS
Essential purpose is to TRANSMIT the
USE or ENJOYMENT of a thing
Consensual
Onerous
Price is FIXED in relation to the period
of use/enjoyment
Temporary
C. LEASE DISTINGUISHED FROM SALE,
USUFRUCT, COMMODATUM
Lease Sale
Only the use or
enjoyment of the thing is
transferred and only for a
determinate period
Permanent transmission
of ownership of the thing
sold, unless subject to a
Lessor need not be the
owner of the thing leased
Seller must be the owner
or at least authorized by
the owner to transfer
ownership of the thing at
the time it is derived
Lease Usufruct
A real right only by
exception (When
registered and for more
than 1 year)
Always a real right
To constitute usufruct,
ownership is not required
in order to lease an
object
To constitute a usufruct,
one must be the owner of
the thing.
Lessor places and
maintains the lessee in
enjoymentof the thing.
Owner allows the
usufructuary to use and
enjoy the property
Lease may be limited to
particular uses by the
contract
Usufruct includes all
possible uses and
manner of enjoyment of
the property
Contract of lease must be
for a definite period,
absent stipulation of
such, court must fix such
period.
Usufruct may be for an
indefinite period of time
Lease Commodatum
Onerous Gratuitous
Not essentially personal
in character, therefore,
the right may be
transmitted to the heirs
Purely personal in
character and
consequently, the death
of either the bailor or
bailee extinguishes the
contract
Consensual contract
Real contract perfected
by the delivery of the
object therefor
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D. PERIOD of LEASE
MAXIMUM period is 99yrs
When period is INDEFINITE:
o RURAL land
Article 1682, Civil Code. 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.
o URBAN land
Article 1687, Civil Code. If the period for the lease
has not been fixed, it is understood to be from year to
year, if the rent agreed upon is annual; from month to
month, if it is monthly; from week to week, if the rent
is weekly; and from day to day, if the rent is to be paid
daily. However, even though a monthly rent is paid,
and no period for the lease has been set, the courts
may fix a longer term for the lease after the lessee
has occupied the premises for over one year. If the
rent is weekly, the courts may likewise determine a
longer period after the lessee has been in possession
for over six months. In case of daily rent, the courts
may also fix a longer period after the lessee has
stayed in the place for over one month.
E. ASSIGNMENT of LEASE
Article 1649, Civil Code. The lessee cannot assign
the lease without the consent of the lessor, unless
there is a stipulation to the contrary.
General Rule: lessee CANNOT assign the
lease WITHOUT the CONSENT of the
lessor
UNLESS theres a stipulation to the
contrary
ASSIGNMENT v. SUBLEASE
Assignment of Lease Sublease
Transfer to a third person
of the rights and
obligations arising from
the lease contract. It is in
fact a sale of the lessees
rights, and when the
lessor gives his consent
to it, the original lessee is
released from his
obligations under the
contract. The Express of
the lessor is either
express or implied. There
is a succession by
particular title to one
contract of lease.
Merely another contract
of lease, where the
original lessee becomes
in turn a lessor. Even
when the lessor consents
to the sublease, the
original lease contract
still subsists and is
binding on the lessee.
There is a juxtaposition of
two leases.
F. SUBLEASE
Article 1650
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.
There are 2 leases and 2 distinct
juridical relations:
o Between the LESSOR and
LESSEE
o Between the SUBLESSOR
(lessee) and the SUBLESSEE
Sublessee generally does not have any
direct action against the lessor to require
compliance with his or the lessees
obligations or vice versa
Sublessee is NOT a party to the contract
between the lessor and lessee
Obligation of sublessee to lessor
Article 1651, Civil Code. 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.
For RENTS
Article 1652, Civil Code. 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 extrajudicial 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.
G. RIGHTS and OBLIGATIONS of LESSOR
and LESSEE
1. Obligations of LESSOR
Article 1654, Civil Code. 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.
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Article 1661, Civil Code. The lessor cannot alter the
form of the thing leased in such a way as to impair the
use to which the thing is devoted under the terms of
the lease.
2. Obligations of LESSEE
Article 1657, Civil Code. 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.
Article 1662, Civil Code. 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.
Article 1663, Civil Code. 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.
Article 1665, Civil Code. 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.
Article 1668, Civil Code. The lessee is liable for any
deterioration caused by members of his household
and by guests and visitors.
Article 1667, Civil Code. 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.
SUMMARY of OBLIGATIONS
Lessors Obigations Lessees Obligations
Deliver the thing which is
the object of the contract
in a condition fit for the
use intended
Pay the price of the lease
according to the terms
stipulated
Make on the thing 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
Use the thing leased as a
diligent father of a family,
devoting it to the use
stipulated, and in the
absence of stipulation
according to the nature of
the thing leased and
custom of the place.
Maintain the lessee in the
peaceful and adequate
enjoyment of the lease
for the entire duration of
the contract.
Pay for the expenses for
the deed of lease.
3. Right of LESSEE to suspend payment of
rentals
Article 1658, Civil Code. 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.
4. Right to ask for RESCISSION
Article 1659, Civil Code. 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.
Article 1660, Civil Code. 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.
5. LESSOR not obliged to answer for mere
act of trespass by a 3
rd
person
Article 1664, Civil Code. The lessor is not obliged to
answer for a mere act of trespass which a third
person may cause on the use of the thing leased; but
the lessee shall have a direct action against the
intruder.
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H. GROUNDS for EJECTMENT of LESSEE
by LESSOR
Article 1673
The lessor may judicially eject the lessee for any of
the following causes:
(1) When the period agreed upon, or that which is
fixed for the duration of leases under Articles
1682 and 1687, has expired;
(2) Lack of payment of the price stipulated;
(3) Violation of any of the conditions agreed upon in
the contract;
(4) When the lessee devotes the thing leased to any
use or service not stipulated which causes the
deterioration thereof; or if he does not observe
the requirement in No. 2 of Article 1657, as
regards the use thereof.
The ejectment of tenants of agricultural lands is
governed by special laws
I. RIGHT to ASK for PRELIMINARY
MANDATORY INJUNCTION in
UNLAWFUL DETAINER CASES
Article 1674, Civil Code. In ejectment cases where
an appeal is taken the remedy granted in Article 539,
second paragraph, shall also apply, if the higher court
is satisfied that the lessee's appeal is frivolous or
dilatory, or that the lessor's appeal is prima facie
meritorious. The period of ten days referred to in said
article shall be counted from the time the appeal is
perfected.
Article 539 (2), Civil Code. 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.
J. IMPLIED EXTENSION of LEASE
Article 1679, Civil Code. If nothing has been
stipulated concerning the place and the time for the
payment of the lease, the provisions or Article 1251
shall be observed as regards the place; and with
respect to the time, the custom of the place shall be
followed.
the purpose.
Article 1675, Civil Code. Except in cases stated in
Article 1673, the lessee shall have a right to make use
of the periods established in Articles 1682 and 1687.
K. RIGHT of PURCHASER of LEASED LAND
Article 1676, Civil Code. The purchaser of a piece of
land which is under a lease that is not recorded in the
Registry of Property may terminate the lease, save
when there is a stipulation to the contrary in the
contract of sale, or when the purchaser knows of the
existence of the lease.
If the buyer makes use of this right, the lessee may
demand that he be allowed to gather the fruits of the
harvest which corresponds to the current agricultural
year and that the vendor indemnify him for damages
suffered.
If the sale is fictitious, for the purpose of extinguishing
the lease, the supposed vendee cannot make use of
the right granted in the first paragraph of this article.
The sale is presumed to be fictitious if at the time the
supposed vendee demands the termination of the
lease, the sale is not recorded in the Registry of
Property.
Article 1677, Civil Code. The purchaser in a sale
with the right of redemption cannot make use of the
power to eject the lessee until the end of the period
for the redemption.
L. USEFUL IMPROVEMENTS in GF MADE
by LESSEE
Article 1678, Civil Code. If the lessee makes, in
good faith, useful improvements which are suitable to
the use for which the lease is intended, without
altering the form or substance of the property leased,
the lessor upon the termination of the lease shall pay
the lessee one-half of the value of the improvements
at that time. Should the lessor refuse to reimburse
said amount, the lessee may remove the
improvements, even though the principal thing may
suffer damage thereby. He shall not, however, cause
any more impairment upon the property leased than is
necessary.
With regard to ornamental expenses, the lessee shall
not be entitled to any reimbursement, but he may
remove the ornamental objects, provided no damage
is caused to the principal thing, and the lessor does
not choose to retain them by paying their value at the
time the lease is extinguished.
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M. SPECIAL PROVISIONS for LEASES of
RURAL LANDS
Article 1680, Civil Code. 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.
Article 1681, Civil Code. 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 purpose.
Article 1683, Civil Code. 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.
Article 1684, Civil Code. 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.
Article 1685, Civil Code. The tenant on shares
cannot be ejected except in cases specified by law.
N. SPECIAL PROVISIONS for LEASES of
URBAN LANDS
Article 1686, Civil Code. In default of a special
stipulation, the custom of the place shall be observed
with regard to the kind of repairs on urban property for
which the lessor shall be liable. In case of doubt it is
understood that the repairs are chargeable against
him.
Article 1688, Civil Code. When the lessor of a
house, or part thereof, used as a dwelling for a family,
or when the lessor of a store, or industrial
establishment, also leases the furniture, the lease of
the latter shall be deemed to be for the duration of the
lease of the premises.
- end of Property-
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Table of Contents
Chapter I: Background, Basic Concepts and
General Principles........................................239
I. Definitions and Basic Concepts ........239
II. Nature and stages.............................240
III. Purpose of Registration.....................240
IV. Modes of Acquiring Land Titles.........240
V. Jurisdiction ........................................240
Chapter 2: Torrens Certificate of Title .......241
I. Original Certificate of Title or OCT....241
II. Transfer Certificate of Title................241
III. Patents ..............................................241
Chapter 3: Original Registration.................242
I. Laws Governing Land Registration...242
II. Effect of Registration.........................242
III. Original Registration Proceeding ......242
IV. Attributes of and Limitation In Certificate
of Title and Registered Land (FIIC) ...........247
Incomplete Titles............................249
Proceedings..................................................251
Proceedings...............................................252
Chapter 5: Subsequent Registration..........253
I. Two Types of Dealings......................253
253
III. Voluntary vs. Involuntary Dealings..253
IV. Registration of Voluntary Instruments in
General ......................................................254
Transfers....................................................255
VI. Mortgages and Leases......................256
VII. Powers of Attorney; Trusts ...........257
VIII. Involuntary Dealings .....................257
Unregistered Lands ..................................... 261
I. Key Points......................................... 261
II. Procedure ......................................... 261
Chapter 7: Registration of Public Lands ... 262
Domain ...................................................... 262
Conveyed .................................................. 262
III. Procedure of Conveying Public Land to
a Private Person........................................ 262
IV. Director of Lands: Quasi-judicial officer
263
V. Modes of Alienating Public Lands:.... 263
VI. Patents ......................................... 263
Chapter 8: Remedies of the Aggrieved Party
....................................................................... 264
Chapter 9: Reconstitution 0f Titles ........... 266
I. Grounds ............................................ 266
II. Petitions for Reconstitution............... 266
III. Duties of the Land Registration Authority
266
Machination in the Reconstitution of Titles 266
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Chapter I: Background, Basic Concepts
and General Principles
This 1
st
Chapter will give an overview of the definitions of
concepts relating to Land, Titles and Deeds. It also includes
a short discussion of what exactly is land registration.
There are FIVEMAJORLESSONSin this section:
I. Definitions of the Basic Concepts
II. Nature of Land Registration
III. Purpose of Registration
IV. Modes of Acquiring Land Titles
V. Jurisdiction
I. Definitions and Basic Concepts
A. THE TORRENS SYSTEM
A system for registration of land under
which, upon landowners application, the
court may, after appropriate proceedings,
direct the issuance of a certificate of title.
(Blacks Law Dictionary)
B. LAND TITLE
Evidence of the right of the owner or the
extent of his interest, and by which means
he can maintain control, and as a rule assert
right to exclusive possession and enjoyment
of property.
C. DEED
An instrument in writing which any real
estate or interest therein is created,
alienated, mortgaged or assigned or by
which title to any real estate may be affected
in law or equity. Necessarily includes:
1. The name of the Grantor
2. The name of the Grantee
3. Words of grant
4. Description of property
5. Signatue of grantor
6. Witnesses
D. FEE SIMPLE
Absolute title; absolute estate in perpetuity.
Land is conferred upon a man and his heirs
absolutely and without any limitation
imposed upon the state.
E. REGISTRATION
Process whereby the State provides a public
record of the title itself upon which a
prospective purchaser or someone else
interested may rely. It is a means to
guarantee the title
F. RECORDING
It is the process whereby Register of Deeds
writes information in his Registry Book. This
does not guarantee the title
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* This reviewer is a reproduction of the
2009 edition and was not updated by the
2010 Academics Committee.
Kat Aglibot
Lead Writer
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Patricia Tobias
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II. Nature and stages
Land registration is a proceeding in rem.
Roxas vs. Enriquez, (1914): A proceeding in rem,
dealing with a tangible res, may be instituted and
carried to judgment, without personal service.
PD1529
Sec. 2 Nature of registration proceedings; jurisdiction
of courts. Judicial proceedings for the registration of
lands throughout the Philippines shall be in rem and
shall be based on the generally accepted principles
underlying the Torrens system. xxx
3 Stages:
1. Production & delivery of deed by grantor to
grantee without registration
2. Deed of conveyance is recorded to bind 3rd
persons
3. Registration of title
III. Purpose of Registration
1. Serve as constructive notice
2. Prevent fraudulent claims
3. Protect interest of strangers to transaction
4. Grey Alba vs. CA, (1910): To establish and
certify to the ownership of an absolute and
indefeasible title to realty, and to simplify its
transfer.
5. SM Prime Holdings vs. Angela Madayag
(2009, Nachura): The fundamental purpose
of the Land Registration Law (Presidential
Decree No. 1529) is to finally settle title to
real property in order to preempt any
question on the legality of the title except
claims that were noted on the certificate
itself at the time of registration or those that
arose subsequent thereto. Consequently,
once the title is registered under the said
law, owners can rest secure on their
ownership and possession.
IV. Modes of Acquiring Land Titles
1. Title by public grant conveyance of public
land by government to a private individual
2. Title by acquisitive prescription open,
continuous, exclusive, notorious possession of a
property
3. Title by accretion alluvion
4. Title by reclamation filling of submerged land
by deliberate act and reclaiming title thereto;
government
5. Title by voluntary transfer private grant;
voluntary execution of deed of conveyance
6. Title by involuntary alienation no consent
from owner of land; forcible acquisition by state
(expropriation)
7. Title by descent or devise hereditary
succession to the estate of deceased owner
8. Title by emancipation patent or grant for
purpose of ameliorating sad plight of tenant-
farmers; not transferable except by hereditary
succession.
V. Jurisdiction
(Asked in 83)
PD1529
Sec. 2
Nature of registration proceedings; jurisdiction of
courts. xxx (Courts of First Instance) Regional Trial
Courts shall have exclusive jurisdiction over all
applications for original registration of title to lands,
including improvements and interests therein, and
over all petitions filed after original registration of title,
with power to hear and determine all questions arising
upon such applications or petitions. xxx
BP 129
Sec. 34
Delegated jurisdiction in cadastral and land
registration cases. Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts may be assigned by the Supreme Court to
hear and determine cadastral or land registration
cases covering lots where there is no controversy or
opposition, or contested lots the where the value of
which does not exceed One hundred thousand pesos
(P100,000.00), such value to be ascertained by the
affidavit of the claimant or by agreement of the
respective claimants if there are more than one, or
from the corresponding tax declaration of the real
property. Their decisions in these cases shall be
appealable in the same manner as decisions of the
Regional Trial Courts. (as amended by R.A. No.
7691)
GENERAL RULE:
Land registration proceedings and all
petitions after original registration of
titles are filed with the RTCs of the
province or city where the land or a
portion or it lies.
SM Prime Holdings vs. Angela Madayag
(2009, Nachura):
Presidential Decree (P.D.) No. 1529
eliminated the distinction between the
general jurisdiction vested in the RTC and
the latters limited jurisdiction when acting
merely as a land registration court. Land
registration courts, as such, can now hear
and decide even controversial and
contentious cases, as well as those involving
substantial issues. It may, therefore, hear
and determine all questions that arise from a
petition for registration.
EXCEPTIONS:
When the case involves -
o lots without controversy or opposition
o contested lots where the value does not
exceed P100,000.00, in which case, the
MTCs have jurisdiction.
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Chapter 2: Torrens Certificate of Title
This 2
nd
Chapter will explore the three major kinds of
Torrens certificate of title. These are:
I. Original Certificate of Title
II. Transfer Certificate of Title
III. Patents
I. Original Certificate of Title or OCT
It is the first certificate of title issued in the
name of a registered owner by the
Register of Deeds covering a parcel of land
which had been registered under the
Torrens System, by virtue of judicial or
administrative proceedings.
II. Transfer Certificate of Title
The subsequent certificate of title
pursuant to any deed of transfer or
conveyance to another person. The
Register of Deeds shall make a new
certificate of title and given him an owners
duplicate certificate. The previous certificate
(need not be an OCT) shall be stamped
cancelled.
PD 1529
Sec. 43
Transfer Certificate of Title. The subsequent
certificate of title that may be issued by the Register
of Deeds pursuant to any voluntary or involuntary
instrument relating to the same land shall be in like
form, entitled "Transfer Certificate of Title", and
likewise issued in duplicate. The certificate shall show
the number of the next previous certificate covering
the same land and also the fact that it was originally
registered, giving the record number, the number of
the original certificate of title, and the volume and
page of the registration book in which the latter is
found.
III. Patents
PD 1529
Sec. 103
Certificates of title pursuant to patents. Whenever
public land is by the Government alienated, granted
or conveyed to any person, the same shall be
brought forthwith under the operation of this
Decree.
It shall be the duty of the official issuing the
instrument of alienation, grant, patent or
conveyance in behalf of the Government to cause
such instrument to be filed with the Register of
Deeds of the province or city where the land lies,
and to be there registered like other deeds and
conveyance, whereupon a certificate of title shall be
entered as in other cases of registered land, and an
owner's duplicate issued to the grantee.
The deed, grant, patent or instrument of
conveyance from the Government to the grantee
shall not take effect as a conveyance or bind the
land but shall operate only as a contract between
the Government and the grantee and as evidence
of authority to the Register of Deeds to make
registration.
It is the act of registration that shall be the operative
act to affect and convey the land, and in all cases
under this Decree, registration shall be made in the
office of the Register of Deeds of the province or
city where the land lies. The fees for registration
shall be paid by the grantee. After due registration
and issuance of the certificate of title, such land
shall be deemed to be registered land to all intents
and purposes under this Decree.
NOTE:
Patents only involve public lands which
are alienated by the Government,
pursuant to the Public Land Act.
The patent (even if denominated as deed of
conveyance) is not really a conveyance but
a contract between the grantee and the
Government and evidence of authority to
the Register of Deeds to make registration.
The act of registration is the operative act
to affect and convey the land.
(Patents will be discussed more thoroughly in
Chapter 7.)
GENERAL RULE:
A Torrens Certificate of Title is valid
and enforceable against the whole
world. (Asked in 08)
Egao vs. CA, (1989): A Torrens title, once
registered, cannot be defeated, even by
adverse, open and notorious possession. A
registered title under the Torrens system
cannot be defeated by prescription. The
title, once registered, is notice to the whole
world. All persons must take notice. No one
can plead ignorance of the registration.
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Chapter 3: Original Registration
This 3
rd
Chapter will first give you everything you need
to know about original land registration: a summary of
pertinent laws, steps in original registration
proceedings, among others.
The chapter discusses FIVE MAJOR LESSONS:
I. Laws Governing Land Registration
II. Effect of Registration
III. Original Registration Proceedings
IV. Attributes of and Limitations on
Certificates of Title and
Registration
V. Judicial Confirmation of Imperfect
or Incomplete Titles
I. Laws Governing Land Registration
A. PD NO. 1529
The Property Registration Decree covers
both ordinary and cadastral registration
proceedings. It supersedes the Land
Registration Act and the Cadastral Act.
Application of the Land Registration Act, as
amended by the Property Registration
Decree: (Asked in 89 and 07)
B. CA 141
The Public Land Act governs the procedure
for the judicial confirmation of imperfect or
incomplete titles.
It applies to lands of the public domain
which have been declared open to
disposition or concession and officially
delimited and classified.
C. RA NO. 8371
The Indigenous Peoples Rights Act
recognizes the rights of ownership and
possession of indigenous cultural
communities to their ancestral domains and
lands on the basis of native title, and defines
the extent of these lands and domains. It
expressly converts ancestral lands into
public agricultural lands, and individuals
members of the cultural communicates shall
have the option to secure title to their
ancestral lands under the CA 141 or PD
1529.
NOTE: The IPRA still refers to the Land
Registration Act and not the Property
Registration Decree, which bolsters the
argument that the former was not repealed by
the latter.
II. Effect of Registration
Registration does not vest or give title to the
land, but merely confirms and thereafter
protects the title already possessed by the
owner, making it imprescriptible by
occupation of third parties. It does not give
the owner any better title than he has.
(Asked in 98)
Vagalidad vs. Vagalidad, (2006):
Registration is not a mode of acquiring
ownership. A certificate of title cannot be
used to protect a usurper from the true
owner or as a shield for the commission of
fraud.
Camitan and Lopez vs. Fidelity Investment
Corp.: (2008,Nachura):Possession of an
owners duplicate copy of a certificate of
title is not necessarily equivalent to
ownership the land covered by it. The
certificate by itself does not vest ownership.
It is merely an evidence of title over the
property.
III. Original Registration Proceeding
Steps in Original Registration
Proceedings:
1. Determine if the land is registrable
2. Determine if you are qualified to apply
3. Survey the land
4. File the application (survey attached) for land
registration with the appropriate court
5. Court sets initial hearing
6. Publication of the initial hearing
7. File an opposition to the application
8. Hearing
9. Judgment
10. Issuance of decree
A. WHAT LANDS ARE REGISTRABLE?
1. Registrable lands
a. Private Lands
b. Agricultural Lands
1987 CONSTITUTION
Art. XII
Sec. 2
xxx With the exception of agricultural lands, all other natural
resources shall not be alienated. xxx
Sec 3. Lands of the public domain are classified into
agricultural, forest or timber, mineral lands and national
parks. Agricultural lands of the public domain may be further
classified by law according to the uses to which they may
be devoted. Alienable lands of the public domain shall be
limited to agricultural lands. xxx
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Republic vs. CA and Naguit, (2005): If in the
public domain, the land must be classified
as alienable and disposable. It must be
classified as such at the time of filing the
application for registration.
2. Non- registrable lands: (Asked in 07)
1987, CONSTITUTION
Art. XII
Sec. 2
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 other natural resources are owned by the State. xxx
Civil Code
Art. 420
The following things are property of public dominion:
1. Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges constructed
by the State, banks, shores, roadsteads, and others
of similar character;
2. Those which belong to the State, without being for
public use, and are intended for some public service
or for the development of the national wealth.
The following lands cannot be registered:
Forest or timberlands
Lands for public use: roads, ports and
bridges, etc.
Lands which are owned by the State for
public service or development of
national wealth.
B. WHO MAY APPLY?
Constitutional Requirements and
Limitations:
Only Filipino Citizens:
1987, CONSTITUTION
Art. XII
Sec. 3
xxx Citizens of the Philippines may lease not more than five
hundred hectares, or acquire not more than twelve hectares
thereof by purchase, homestead, or grant. Xxx
Exceptions:
1. Aliens by way of hereditary succession
2. Natural born citizens who have
3. lost their citizenship- limited to
4. 5,000 sq. m. for urban land and 3
hectares for rural land (RA No. 7042 as
amended by RA No. 8179)
Private corporations may not hold alienable
lands of the public domain except by lease:
1987, CONSTITUTION
Art. XII
Sec. 3
xxx Private corporations or associations may not hold
alienable lands of the public domain except by lease,
for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and
not to exceed one thousand hectares in area. xxx
Private lands may be owned for as long as
the corporation is at least 60% Filipino. :
1987, CONSTITUTION
Art. XII
Sec. 2
xxx The State may directly undertake such activities,
or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per
centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding
twenty-five years, and under such terms and
conditions as may be provided by law. xxx
Additional Requirements: (OCEN-PAAL)
PD 1529
Sec. 14
Who may apply. The following persons may file in the
proper (Court of First Instance) Regional Trial Court
an application for registration of title to land, whether
personally or through their duly authorized
representatives:
(1) 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.
(2) Those who have acquired ownership of private
lands by Prescription under the provision of existing
laws.
(3) Those who have acquired ownership of private
lands or abandoned river beds by right of Accession
or accretion under the existing laws.
(4) 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 his principal may apply for
original registration of any land held in trust by him,
unless prohibited by the instrument creating the trust.
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Judicial Confirmation of Title: CA 141 vs.
PD 1529
Republic vs. Tsai, (2009): CA 141 has been
amended many times As the law now stands,
a mere showing of possession and occupation
for 30 years or more is not sufficient. Therefore,
since the effectivity of PD 1073 on 25 January
1977, it must now be shown that possession and
occupation of a piece of land by the applicant,
by himself or through his predecessors-in-
interest, started on 12 June 1945 or earlier.
This provision is in total conformity with Section
14(1) of PD 1529.
BUT take note:
There are still some cases that use CA
141 for judicial confirmation of imperfect
title:
Republic vs. Fabio, (2008): CA 141, also known
as the Public Land Act, remains to this day the
existing general law governing the classification
and disposition of lands of the public domain,
other than timber and mineral lands.
C. SURVEY
The survey may be done by a public or
private surveyor. When done by a private
surveyor it has to be approved by the Land
Management Bureau. PD 239 withdrew
the authority of the Land Registration
Authority to approve original survey
plans.
D. APPLICATION
PD 1529
Sec. 15
Form and contents. The application for land
registration shall be in writing, signed by the
application or the person duly authorized in his behalf,
and sworn to before any officer authorized to
administer oaths for the province or city where the
application was actually signed. If there is more than
one applicant, the application shall be signed and
sworn to by and in behalf of each.
The application shall contain a description of the land
and shall state the citizenship and civil status of the
applicant, whether single or married, and, if married,
the name of the wife or husband, and, if the marriage
has been legally dissolved, when and how the
marriage relation terminated. It shall also state the full
names and addresses of all occupants of the land and
those of the adjoining owners, if known, and, if not
known, it shall state the extent of the search made to
find them.
The application for land registration shall be:
in writing
signed and sworn to by the
applicant/duly authorized person, and if
more than one applicant, it shall be
signed and sworn to by and in behalf of
each
It shall contain:
a description of the land
citizenship and civil status of the
applicant
if married, the name of the wife or
husband
if the marriage has been legally dissolved,
when and how
full names and addresses of all
occupants and those of the adjoining
owners, if known
if not known, it shall state the extent of
the search made to find them.
Note: It must be accompanied by the original
tracing cloth plan, white or blue copies thereof,
the original and copies of the technical
description and geodetic engineers certification.
Special Cases:
PD 1529
Sec. 20
When land applied for borders on road. If the
application describes the land as bounded by a public
or private way or road, it shall state whether or not the
applicant claims any and what portion of the land
within the limits of the way or road, and whether the
applicant desires to have the line of the way or road
determined.
PD 1529
Sec. 16
Non-resident applicant. If the applicant is not a
resident of the Philippines, he shall file with his
application an instrument in due form appointing an
agent or representative residing in the Philippines,
giving his full name and postal address, and shall
therein agree that the service of any legal process in
the proceedings under or growing out of the
application made upon his agent or representative
shall be of the same legal effect as if made upon the
applicant within the Philippines. If the agent or
representative dies, or leaves the Philippines, the
applicant shall forthwith make another appointment
for the substitute, and, if he fails to do so the court
may dismiss the application.
If the land bounded by a road, the applicant
must state in his application if he claims any
portion of the land within the limits of the
road, or if he likes to have the boundaries
determined.
If the applicant is a non-resident, he shall
appoint an agent or representative who is a
Philippine resident.
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Intestate Estate of Don Mariano San Pedro
vs. CA, (1996): A person claiming ownership
of real property must clearly identify the land
claimed by him.
In re: Application for Land Registration vs.
Republic, (2008, Nachura): An applicant in a
land registration case must prove the facts
and circumstances evidencing the alleged
ownership of the land applied for. General
statements which are mere conclusions of
law and not factual proof of possession are
unavailing. The deeds in its favor only
proved possession of its predecessors-in-
interest as early as 1948. (The law now
stands that a mere showing of possession
for 30 years is not sufficient. OCEN
possession must be shown to have stated
on June 12, 1945 or earlier.)
E. INITIAL HEARING
PD 1529
Sec. 23
Notice of initial hearing, publication, etc. The court
shall, within five days from filing of the application,
issue an order setting the date and hour of the initial
hearing which shall not be earlier than forty-five days
nor later than ninety days from the date of the order.
xxx
The court shall issue an order setting the
date and hour of the initial hearing within
five days from filing of the application.
The initial hearing shall be 45-90 days from
the date of the order.
F. PUBLICATION
PD 1529
Sec. 23
xxx The public shall be given notice of the initial
hearing of the application for land registration by
means of (1) publication; (2) mailing; and (3) posting.
1. By publication.
Upon receipt of the order of the court setting the time
for initial hearing, the Commissioner of Land
Registration shall cause notice of initial hearing to be
published once in the Official Gazette and once in a
newspaper of general circulation in the Philippines:
Provided, however, that the publication in the Official
Gazette shall be sufficient to confer jurisdiction upon
the court. Said notice shall be addressed to all
persons appearing to have an interest in the land
involved including the adjoining owners so far as
known, and "to all whom it may concern".
Said notice shall also require all persons concerned to
appear in court at a certain date and time to show
cause why the prayer of said application shall not be
granted.
2. By mailing.
(a) Mailing of notice to persons named in the
application. The Commissioner of Land Registration
shall also, within seven days after publication of said
notice in the Official Gazette, as hereinbefore
provided, cause a copy of the notice of initial hearing
to be mailed to every person named in the notice
whose address is known.
(b) Mailing of notice to the Secretary of Public
Highways, the Provincial Governor and the Mayor. If
the applicant requests to have the line of a public way
or road determined, the Commissioner of Land
Registration shall cause a copy of said notice of initial
hearing to be mailed to the Secretary of Public
Highways, to the Provincial Governor, and to the
Mayor of the municipality or city, as the case may be,
in which the land lies.
(c) Mailing of notice to the Secretary of Agrarian
Reform, the Solicitor General, the Director of Lands,
the Director of Public Works, the Director of Forest
Development, the Director of Mines and the Director
of Fisheries and Aquatic Resources. If the land
borders on a river, navigable stream or shore, or on
an arm of the sea where a river or harbor line has
been established, or on a lake, or if it otherwise
appears from the application or the proceedings that a
tenant-farmer or the national government may have a
claim adverse to that of the applicant, notice of the
initial hearing shall be given in the same manner to
the Secretary of Agrarian Reform, the Solicitor
General, the Director of Lands, the Director of Mines
and/or the Director of Fisheries and Aquatic
Resources, as may be appropriate.
3. By posting.
The Commissioner of Land Registration shall also
cause a duly attested copy of the notice of initial
hearing to be posted by the sheriff of the province or
city, as the case may be, or by his deputy, in a
conspicuous place on each parcel of land included in
the application and also in a conspicuous place on the
bulletin board of the municipal building of the
municipality or city in which the land or portion thereof
is situated, fourteen days at least before the date of
initial hearing.
The court may also cause notice to be served to such
other persons and in such manner as it may deem
proper.
1. By Publication
The Commissioner of Land Registration
shall cause it to be published: once in the
Official Gazette (sufficient to confer
jurisdiction) and once in a newspaper of
general circulation in the Philippines
The notice is addressed to:
all persons appearing to have an
interest in the land the adjoining owners
so far as known "to all whom it may
concern"
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2. By Mailing
Within 7 days from publication in the OG,
the Commissioner of Land Registration shall
mail a copy of the notice to:
a. every person named in the notice whose
address is known.
b. the Secretary of Public Highways, to the
Provincial Governor, and to the Mayor of
the municipality or city, in which the land
lies, if the applicant requests to have the
line of a public way or road determined
c. Secretary of Agrarian Reform, the
Solicitor General, the Director of Lands,
the Director of Mines and/or the Director
of Fisheries and Aquatic Resources, (as
appropriate) if the land borders on a
river, navigable stream or shore, or on
an arm of the sea where a river or
harbor line has been established, or on
a lake, or if it otherwise appears from
the application or the proceedings that a
tenant-farmer or the national
government may have a claim adverse
to that of the applicant
3. By Posting
CLR shall cause the sheriff or his deputy to
post the notice at least 14 days before the
hearing: in a conspicuous place on each
parcel of land included in the application and
in a conspicuous place on the bulletin
board of the municipal building of the
municipality or city in which the land or
portion thereof is situated.
G. OPPOSITION (ASKED IN 89)
PD 1529
Sec. 23 Opposition to application in ordinary
proceedings. Any person claiming an interest,
whether named in the notice or not, may appear and
file an opposition on or before the date of initial
hearing, or within such further time as may be allowed
by the court. The opposition shall state all the
objections to the application and shall set forth the
interest claimed by the party filing the same and apply
for the remedy desired, and shall be signed and
sworn to by him or by some other duly authorized
person.
If the opposition or the adverse claim of any person
covers only a portion of the lot and said portion is not
properly delimited on the plan attached to the
application, or in case of undivided co-ownership,
conflicting claims of ownership or possession, or
overlapping of boundaries, the court may require the
parties to submit a subdivision plan duly approved by
the Director of Lands.
PD 1529
Sec 26. Order of default; effect. If no person appears
and answers within the time allowed, the court shall,
upon motion of the applicant, no reason to the
contrary appearing, order a default to be recorded
and require the applicant to present evidence. By the
description in the notice "To all Whom It May
Concern", all the world are made parties defendant
and shall be concluded by the default order.
Where an appearance has been entered and an
answer filed, a default order shall be entered against
persons who did not appear and answer.
Who may file? Any person claiming an
interest.
When to file? On or before the date of initial
hearing, or within such further time as may
be allowed by the court.
What shall it contain? It shall state all the
objections and the interest claimed by the
party the remedy desired.
How shall it be made? It shall be signed
and sworn to by him or by some other duly
authorized person.
NOTE:
If no one appears/files an answer, upon
motion, the court shall order a default to be
recorded.
By the description in the notice "To all
Whom It May Concern", all the world are
made parties defendant and shall be
concluded by the default order.
Where an appearance has been entered
and an answer filed, a default order shall be
entered against persons who did not appear
and answer.
Director of Lands vs. Agustin, (1921):
Absence of opposition does not justify
outright registration.
H. HEARING
Proof of Ownership:
1. Municipality of Santiago vs. CA, (1983):
Tax declaration and receipts are not
conclusive but have strong probative value
when accompanied by proof of actual
possession.
2. Republic vs. Tayag, (1984): Payment in
one lump sum to cover all past taxes is
irregular and affects the validity of the
applicants claim of ownership
3. Spanish titles are no longer admissible.
I. JUDGMENT
PD 1529
Sec 30. When judgment becomes final; duty to cause
issuance of decree. The judgment rendered in a land
registration proceedings becomes final upon the
expiration of thirty days to be counted from the data of
receipt of notice of the judgment. An appeal may be
taken from the judgment of the court as in ordinary
civil cases.
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After judgment has become final and executory, it
shall devolve upon the court to forthwith issue an
order in accordance with Section 39 of this Decree to
the Commissioner for the issuance of the decree of
registration and the corresponding certificate of title in
favor of the person adjudged entitled to registration.
Judgment becomes final upon expiration of
30 days from receipt of notice of judgment.
Forms of Judgment:
1. Writ of possession
Vencilao vs. Vano, (1990): The writ may
be issued not only against the person
defeated in the registration case but
also against any one adversely
occupying the land during the
proceedings.
Bernas vs. Nuevo, (1984): The writ does
not lie against a person who entered the
land after the issuance of the decree
and who was not a party in the case.
He can only be proceeded against in a
separate action for ejectment or
reinvindicatory action.
2. Writ of demolition
Gawaran vs. IAC, (1988): This writ is a
complement of the writ of possession.
J. ISSUANCE OF DECREE
PD 1529
Sec 39. Preparation of decree and Certificate of Title.
After the judgment directing the registration of title to
land has become final, the court shall, within fifteen
days from entry of judgment, issue an order directing
the Commissioner to issue the corresponding decree
of registration and certificate of title. The clerk of court
shall send, within fifteen days from entry of judgment,
certified copies of the judgment and of the order of the
court directing the Commissioner to issue the
corresponding decree of registration and certificate of
title, and a certificate stating that the decision has not
been amended, reconsidered, nor appealed, and has
become final.
Thereupon, the Commissioner shall cause to be
prepared the decree of registration as well as the
original and duplicate of the corresponding original
certificate of title.
The original certificate of title shall be a true copy of
the decree of registration. The decree of registration
shall be signed by the Commissioner, entered and
filed in the Land Registration Commission. The
original of the original certificate of title shall also be
signed by the Commissioner and shall be sent,
together with the owner's duplicate certificate, to the
Register of Deeds of the city or province where the
property is situated for entry in his registration book.
PD 1529
Sec 40. Entry of Original Certificate of Title. Upon
receipt by the Register of Deeds of the original and
duplicate copies of the original certificate of title the
same shall be entered in his record book and shall be
numbered, dated, signed and sealed by the Register
of Deeds with the seal of his office. Said certificate of
title shall take effect upon the date of entry thereof.
The Register of Deeds shall forthwith send notice by
mail to the registered owner that his owner's duplicate
is ready for delivery to him upon payment of legal
fees.
Preparation of the Decree:
Court directs the Land Registration
Authority to issue a decree of
registration and certificate of Title within
15 days from entry of judgment.
o Appeal reckoned from the
Solicitor Generals receipt of
the decision
o Becomes final 15 days from
receipt
Commissioner signs the decree
Decree is entered and filed with the LRC
OCT and owners duplicate certificate
are sent to the Register of Deeds where
property is situated.
Register of Deeds enters the information
in his registration book.
Register of Deeds sends notice by mail
to owner that his duplicate is ready for
delivery upon payment of legal fees.
Gomez vs. CA, (1988): Court retains
jurisdiction over the case until after the
expiration of 1 year from the issuance of the
decree of registration.
IV. Attributes of and Limitation In
Certificate of Title and Registered
Land (FIIC)
PD 1529
Sec 44. Statutory liens affecting title. Every registered
owner receiving a certificate of title in pursuance of a
decree of registration, and every subsequent
purchaser of registered land taking a certificate of title
for value and in good faith, shall hold the same free
from all encumbrances except those noted in said
certificate and any of the following encumbrances
which may be subsisting, namely:
First. Liens, claims or rights arising or existing under
the laws and Constitution of the Philippines which are
not by law required to appear of record in the Registry
of Deeds in order to be valid against subsequent
purchasers or encumbrancers of record.
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Second. Unpaid real estate taxes levied and
assessed within two years immediately preceding the
acquisition of any right over the land by an innocent
purchaser for value, without prejudice to the right of
the government to collect taxes payable before that
period from the delinquent taxpayer alone.
Third. Any public highway or private way established
or recognized by law, or any government irrigation
canal or lateral thereof, if the certificate of title does
not state that the boundaries of such highway or
irrigation canal or lateral thereof have been
determined.
Fourth. Any disposition of the property or limitation on
the use thereof by virtue of, or pursuant to,
Presidential Decree No. 27 or any other law or
regulations on agrarian reform.
A. FREE FROM LIENS AND
ENCUMBRANCES
EXCEPT those noted in the certificate and
CATH:
1. Liens, claims or rights existing under the
laws and Constitution which are not required
to appear of record in the Registry of Deeds
2. Unpaid real estate Taxes levied and
assessed within 2 yrs preceding the
acquisition of any right over the land
3. Any public Highway or private way
established or recognized by law, or any
government irrigation canal or lateral
thereof, if the certificate of title does not
state that the boundaries of such have been
determined.
4. Any disposition of the property or limitation
on the use thereof by virtue of, or pursuant
to, Presidential Decree No. 27 or any other
laws on Agrarian reform.
B. INDEFEASIBLE (ASKED IN08)
PD 1529
Sec 32. Review of decree of registration; Innocent
purchaser for value. The decree of registration shall
not be reopened or revised by reason of absence,
minority, or other disability of any person adversely
affected thereby, nor by any proceeding in any court
for reversing judgments, subject, however, to the right
of any person, including the government and the
branches thereof, deprived of land or of any estate or
interest therein by such adjudication or confirmation of
title obtained by actual fraud, to file in the proper
Court of First Instance a petition for reopening and
review of the decree of registration not later than one
year from and after the date of the entry of such
decree of registration, but in no case shall such
petition be entertained by the court where an innocent
purchaser for value has acquired the land or an
interest therein, whose rights may be prejudiced.
Whenever the phrase "innocent purchaser for value"
or an equivalent phrase occurs in this Decree, it shall
be deemed to include an innocent lessee, mortgagee,
or other encumbrancer for value.
Upon the expiration of said period of one year, the
decree of registration and the certificate of title issued
shall become incontrovertible. Any person aggrieved
by such decree of registration in any case may pursue
his remedy by action for damages against the
applicant or any other persons responsible for the
fraud.
Ground for reopening and reviewing the
decree of registration: actual fraud (Asked
in 92)
Periods:
Must be reopened not later than 1 yr
from and after the date of the entry of
such decree. (Asked in 90 and 03)
Upon the expiration of said period of
one year, the decree of registration and
the certificate of title issued shall
become incontrovertible. The only
remedy left is an action for damages.
Prohibitions:
Cannot be reopened because of
absence, minority, or other disability of
any person adversely affected thereby
Cannot be reopened where an innocent
purchaser for value may be prejudiced
(includes an innocent lessee,
mortgagee, or other encumbrancer for
value.)
Arguelles vs. Timbancaya, (1976): The rule
on the incontrovertible nature of a certificate
of title applies when what is involved is the
validity of the OCT, not when it concerns
that of the TCT.
C. IMPRESCRIPTIBLE
PD 1529
Sec 47. Registered land not subject to prescriptions.
No title to registered land in derogation of the title of
the registered owner shall be acquired by prescription
or adverse possession.
Barcelona vs. Barcelona, (1956):
Prescription is unavailing not only against
the registered owner but also against his
hereditary successors because the latter
merely step into the shoes of the decedent
by operation of law and are merely the
continuation of the personality of their
predecessor-in-interest.
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D. NOT SUBJECT TO COLLATERAL
ATTACK
PD 1529
Sec 48. Certificate not subject to collateral attack. A
certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or canceled
except in a direct proceeding in accordance with law.
Spouses Padilla vs. Velasco, et. al, G.R. No.
169956 (2009, Nachura)
Facts: Velasco et al (respondents) are the heirs
of Artemio who died, leaving a parcel of land.
He acquired it by virtue of a deed of sale in his
favor. The Padilla sps (petitioners) entered the
land as trustees by virtue of a deed of sale
executed by a bank in favor of the Solomon sps.
Velascos demanded that the Padillas vacate the
property.
Padillas cut trees, built a house and harvested
crops. Velascos filed a complaint for accion
publiciana before the RTC. Velascos presented
deed of sale in favor of Artemio, while Padillas
presented deed of sale between bank and
Solomons.
The Padillas also argue that the Solomon sps
acquired the land in good faith and for value and
that they argue that Lot 2161 (the one they are
occupying) and Lot 76-pt (the lot the Solomon
spouses bought) are one and the same.
Held: The Velascos have a better right to the
land. The instant case is for accion publiciana,
or for recovery of the right to possess.
Accion publiciana is also used to refer to an
ejectment suit where the cause of dispossession
is not among the grounds for forcible entry and
unlawful detainer, or when possession has been
lost for more than one year and can no longer
be maintained under Rule 70 of the Rules of
Court.
The objective of the plaintiffs in accion
publiciana is to recover possession only, not
ownership. The Velascos were able to establish
lawful possession of the land when the Padillas
occupied the property. The OCT was issued to
the original owners who then sold the land to
Artemio.
From then on, he was in continuous possession
of the land until his death. It was only in 1987,
when the Padillas occupied the property. The
argument that the lots are one and the same
is a collateral attack on the title over the
property which is registered in the name of
Artemio, which cannot be countenanced.
Incomplete Titles
CA 141
Sec 57
No title or right to, or equity in, any lands of the public
domain may hereafter be acquired by prescription or
by adverse possession or occupancy, or under or by
virtue of any law in effect prior to American
occupation, except as expressly provided by laws
enacted after said occupation of the Philippines by the
United States.
General Rule: No title or right to, or equity in,
any lands of the public domain may be
acquired by prescription or by adverse
possession or occupancy except as
expressly provided by law. The Public Land
Act recognizes the concept of ownership
under the civil law. This ownership is based
on adverse possession and the right of
acquisition is governed by the Chapter on
judicial confirmation of imperfect or
incomplete titles.
This applies only to alienable and
disposable agricultural lands of the public
domain. Under Sec. 6 of CA 141, the
classification of public lands into alienable
and disposable forest lands, or mineral
lands is the prerogative of the Executive
Department.
Bracewell vs. CA, (2000): The rule on
confirmation of imperfect title does not apply
unless and until the land classified as, say,
forest land, is released in an official
proclamation to that effect so that if may
form part of the disposable agricultural lands
of the public domain.
A. PERIOD OF FILING
RA No. 9176 extended the period to file an
application for judicial confirmation of
imperfect or incomplete title to December
31, 2020. It further limited the area applied
for to 12 hectares.
B. REQUISITES:
Filipino citizen
He must have, by himself, or thru his
predecessors in - interest, possessed and
occupied an alienable and disposable
agricultural portion of the public domain
Such possession and occupation must have
been OCEN and in the concept of owner
since June 12, 1945
Application filed with proper court
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C. PRIVATE CORPORATIONS
Director Of Lands vs. IAC and Acme
Plywood and Veneer Co., (1986): Where at
the time the corporation acquired the land,
its predecessor-in-interest had been in
possession and occupation thereof in the
manner and for the period prescribed by law
as to entitle him to registration in his name,
then the proscription against corporation
acquiring alienable lands of the public
domain does not apply for the land was no
longer public land but private property. Since
the land is private, the corporation can
institute confirmation proceedings.
NOTE:
MAXIMUM LAND THAT CAN BE APPLIED
FOR: 144 hectares
In case of foreigner, it sufficient that he is
already Filipino citizen at the time of his
application.
Corporation who has less than 60% Filipino
ownership cannot apply confirmation of
imperfect title; can only lease
PERSONS COMPETENT TO QUESTION
LAND GRANT: Persons who obtained title
from State or thru persons who obtained title
from State.
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Proceedings
This 4
th
Chapter deals with processes involved in
Cadastral Registration.
Only one lesson is discussed in this Chapter.
I. Steps in Cadastral Registration Proceedings
Unlike other kinds of registration, this is
compulsory as it is initiated by the
government.
PD 1529
Sec 35. Cadastral Survey preparatory to filing of
petition.
(a) When in the opinion of the President of the
Philippines public interest so requires that title to any
unregistered lands be settled and adjudicated, he
may to this end direct and order the Director of Lands
to cause to be made a cadastral survey of the lands
involved and the plans and technical description
thereof prepared in due form.
(b) Thereupon, the Director of Lands shall give notice
to persons claiming any interest in the lands as well
as to the general public, of the day on which such
survey will begin, giving as fully and accurately as
possible the description of the lands to be surveyed.
Such notice shall be punished once in the Official
Gazette, and a copy of the notice in English or the
national language shall be posted in a conspicuous
place on the bulletin board of the municipal building of
the municipality in which the lands or any portion
thereof is situated. A copy of the notice shall also be
sent to the mayor of such municipality as well as to
the barangay captain and likewise to the
Sangguniang Panlalawigan and the Sangguniang
Bayan concerned.
(c) The Geodetic Engineers or other employees of the
Bureau of Lands in charge of the survey shall give
notice reasonably in advance of the date on which the
survey of any portion of such lands is to begin, which
notice shall be posted in the bulletin board of the
municipal building of the municipality or barrio in
which the lands are situated, and shall mark the
boundaries of the lands by monuments set up in
proper places thereon. It shall be lawful for such
Geodetic Engineers and other employees to enter
upon the lands whenever necessary for the purposes
of such survey or the placing of monuments.
(d) It shall be the duty of every person claiming an
interest in the lands to be surveyed, or in any parcel
thereof, to communicate with the Geodetic Engineer
upon his request therefor all information possessed
by such person concerning the boundary lines of any
lands to which he claims title or in which he claims
any interest.
(e) Any person who shall willfully obstruct the making
of any survey undertaken by the Bureau of Lands or
by a licensed Geodetic Engineer duly authorized to
conduct the survey under this Section, or shall
maliciously interfere with the placing of any
monument or remove such monument, or shall
destroy or remove any notice of survey posted on the
land pursuant to law, shall be punished by a fine of
not more than one thousand pesos or by
imprisonment for not more than one year, or both.
PD 1529
Sec 36. Petition for registration. When the lands have
been surveyed or plotted, the Director of Lands,
represented by the Solicitor General, shall institute
original registration proceedings by filing the
necessary petition in the Court of First Instance of the
place where the land is situated against the holders,
claimants, possessors, or occupants of such lands or
any part thereof, stating in substance that public
interest requires that the title to such lands be settled
and adjudicated and praying that such titles be so
settled and adjudicated:
The petition shall contain a description of the lands
and shall be accompanied by a plan thereof, and may
contain such other data as may serve to furnish full
notice to the occupants of the lands and to all persons
who may claim any right or interest therein.
Where the land consists of two or more parcels held
or occupied by different persons, the plan shall
indicate the boundaries or limits of the various parcels
as accurately as possible. The parcels shall be known
as "lots" and shall on the plan filed in the case be
given separate numbers by the Director of Lands,
which numbers shall be known as "cadastral lot
numbers".
The lots situated within each municipality shall, as far
as practicable, be numbered consecutively beginning
with number "one", and only one series of numbers
shall be used for that purpose in each municipality.
However in cities or townsites, a designation of the
landholdings by blocks and lot numbers may be
employed instead of the designation by cadastral lot
numbers.
The cadastral number of a lot shall not be changed
after final decision has been entered decreasing the
registration thereof, except by order of court. Future
subdivisions of any lot shall be designated by a letter
or letters of the alphabet added to the cadastral
number of the lot to which the respective subdivisions
pertain. The letter with which a subdivision is
designated shall be known as its "cadastral letter":
Provided, however, that the subdivisions of cities or
townsites may be designated by blocks and lot
numbers.
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Proceedings
1. Determination of the President that public
interest requires title to unregistered lands
be settled
2. Director of lands shall make a cadastral
survey
3. Director of Lands gives notice to interested
persons
4. Publication of notice
5. A copy of the notice shall also be sent to the
mayor and the sanggunian
6. Geodetic engineers/ Bureau of Land
employees shall notify (re: survey) by
posting at the municipal building
7. Interested persons should communicate with
the geodetic engineer if he requests for any
information about the land
8. Actual survey/ plotting of the land
9. Director of Lands represented by Solicitor
General shall institute original registration
proceedings
10. Publication, mailing posting
11. Hearing
12. Decision
13. Issuance of the decree and certificate of title
NOTE: In voluntary registration proceedings,
there is no res judicata when the applicant fails
to prove his title. In cadastral registration, if the
applicant cannot prove that he is entitled to the
land, the land becomes public land. There is res
judicata.
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Chapter 5: Subsequent Registration
This 5
th
Chapter tackles the subsequent registration
pursuant to dealings such as conveyances or
transfers. These dealings may be voluntary (sale,
lease etc.) or involuntary (writs, orders etc.)
There are EIGHT MAJOR LESSONS in this chapter:
I. Two Types of Dealings
II. The Necessity and Effects of
Registration
III. Voluntary vs. Involuntary
Dealings
IV. Registration of Voluntary
Instruments in General
Transfers
VI. Mortgages and Leases
VII. Powers of Attorney, Trusts
VIII. Involuntary Dealings
I. Two Types of Dealings
A. VOLUNTARY DEALINGS
Deeds, instruments, documents which are
the results of free and voluntary acts of
parties thereto.
B. INVOLUNTARY DEALINGS
Writ, order, or process issued by the court of
record affecting registered land, also other
instruments which are not willful acts of the
registered owner, executed without his
knowledge or consent.
PD 1529
Sec 51. Conveyance and other dealings by registered
owner. An owner of registered land may convey,
mortgage, lease, charge or otherwise deal with the
same in accordance with existing laws. He may use
such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law.
But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect
registered land shall take effect as a conveyance or
bind the land, but shall operate only as a contract
between the parties and as evidence of authority to
the Register of Deeds to make registration.
The act of registration shall be the operative act to
convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register
of Deeds for the province or city where the land lies.
NOTE: The deed, mortgage, lease, or other
voluntary instrument, except a will shall ONLY
operate as:
1. A contract between the parties and
2. Evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the
operative act to convey or affect the land
insofar as third persons are concerned.
A forged deed is an absolute nullity and
conveys no title. (Asked in 85, 89, 00 and
05)
EXCEPTION: If there is good faith, a
TCT has already been issued to the
purchaser, the latter being an innocent
purchaser for value according to Sec.
39, PD 1529, then the title is good.
PD 1529
Sec 52. Constructive notice upon registration. Every
conveyance, mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting registered land
shall, if registered, filed or entered in the office of the
Register of Deeds for the province or city where the
land to which it relates lies, be constructive notice to
all persons from the time of such registering, filing or
entering.
Every entry affecting registered land shall, if
registered, filed or entered in the office of
the Register of Deeds be constructive notice
to all persons from the time of registering.
III. Voluntary vs. Involuntary Dealings
VOLUNTARY
DEALINGS
INVOLUNTARY
DEALINGS
Sale, mortgage, lease,
patent, powers of
attorney, trusts
Attachment, injunction,
mandamus, levy on
execution, notice of lis
pendens
Presentation of the
owners duplicate
certificate of title is
required to notify;
mere entry insufficient
Entry in the day book is
sufficient notice to all
persons
An innocent purchaser
for value of registered
land becomes the
registered owner the
moment he presents
and files a duly
notarized and valid
deed of sale and the
same is entered in the
day book and at the
same time he
surrenders or presents
the owners duplicate
certificate of title
Lenin vs. Bass, (1952):
Entry thereof in the day
book of the ROD is
sufficient
notice to all persons even if
certificate of title is not
presented to the ROD.
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VOLUNTARY
DEALINGS
INVOLUNTARY
DEALINGS
covering the land sold
and pays
the registration fees.
(Asked in 98)
Villasor vs. Camon,
(1951):
It is necessary to
register the deed or
instrument in the entry
book and a
memorandum thereof
shall also be made in
certificate and its
original
Dir. Of Lands vs. Reyes,
(1976):
Entry in the day book is
sufficient notice to all
persons of an adverse
claim without the same
being annotated at the back
of the certificate of title
Spouses Labayen vs.
Leonardo Serafica,
(2008, Nachura): At
the time of the filing of
the petition for
cancellation of
encumbrance, the
lease contract already
lost its efficacy. Thus,
there is no basis to
save its annotation on
defendants title. The
fact that the
cancellation of the
lease contract was
forged is of no
moment, for there was
no violation of a right.
AFP Mutual Benefit
Association vs. Santiago,
(2008, Nachura): Entry of
the attachment in the books
is sufficient notice to all
persons. Hence, the fact
that the deed of sale was
already annotated is of no
moment with regard to third
persons. The preference
created by the levy on
attachment is not
diminished by the
subsequent registration of
the deed of sale.
General Rule:
Campillo vs. PNB. (1969): A person dealing
with registered property need not go
beyond, but only has to rely on, the title.
(Asked in 86 and 04)
He is charged with notice only of such
burdens and claims which are annotated on
the title, for registration is the operative act
that binds the property. (Asked in 84 and
04)
When should a purchaser investigate?
Banks are required to exercise more
care and prudence in dealing with
registered lands for their business is one
affected with public interest. The general
rule does not apply.
Leung Yee vs. Strong Machinery,
(1918): When party concerned has
actual knowledge of facts and
circumstances that would impel a
reasonably cautious man to make
inquiry.
Jamoc vs. CA, (1991): When purchaser
is in bad faith; e.g. he had full
knowledge of a previous sale.
Quiniano vs. CA, (1971): When a
person buys land from one whose rights
over the land is evidenced only by a
deed of sale and an annotation in the
certificate of title but no TCT.
IV. Registration of Voluntary Instruments
in General
PD 1529
Sec 54. Dealings less than ownership, how
registered. No new certificate shall be entered or
issued pursuant to any instrument which does not
divest the ownership or title from the owner or from
the transferee of the registered owners.
All interests in registered land less than ownership
shall be registered by filing with the Register of Deeds
the instrument which creates or transfers or claims
such interests and by a brief memorandum thereof
made by the Register of Deeds upon the certificate of
title, and signed by him.
A similar memorandum shall also be made on the
owner's duplicate. The cancellation or extinguishment
of such interests shall be registered in the same
manner.
PD 1529
Sec 55. Grantee's name, nationality, etc., to be
stated. Every deed or other voluntary instrument
presented for registration shall contain or have
endorsed upon it the full name, nationality, residence
and postal address of the grantee or other person
acquiring or claiming an interest under such
instrument, and every deed shall also state whether
the grantee is married or unmarried, and if married,
the name in full of the husband or wife.
If the grantee is a corporation or association, the
instrument must contain a recital to show that such
corporation or association is legally qualified to
acquire private lands. Any change in the residence or
postal address of such person shall be endorsed by
the Register of Deeds on the original copy of the
corresponding certificate of title, upon receiving a
sworn statement of such change. All names and
addresses shall also be entered on all certificates.
Notices and processed issued in relation to registered
land in pursuance of this Decree may be served upon
any person in interest by mailing the same to the
addresses given, and shall be binding, whether such
person resides within or without the Philippines, but
the court may, in its discretion, require further or other
notice to be given in any case, if in its opinion the
interest of justice so requires.
PD 1529
Sec 56. Primary Entry Book; fees; certified copies.
Each Register of Deeds shall keep a primary entry
book in which, upon payment of the entry fee, he shall
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enter, in the order of their reception, all instruments
including copies of writs and processes filed with him
relating to registered land.
He shall, as a preliminary process in registration, note
in such book the date, hour and minute of reception of
all instruments, in the order in which they were
received. They shall be regarded as registered from
the time so noted, and the memorandum of each
instrument, when made on the certificate of title to
which it refers, shall bear the same date:
Provided, that the national government as well as the
provincial and city governments shall be exempt from
the payment of such fees in advance in order to be
entitled to entry and registration.
Every deed or other instrument, whether voluntary or
involuntary, so filed with the Register of Deeds shall
be numbered and indexed and endorsed with a
reference to the proper certificate of title. All records
and papers relative to registered land in the office of
the Register of Deeds shall be open to the public in
the same manner as court records, subject to such
reasonable regulations as the Register of Deeds,
under the direction of the Commissioner of Land
Registration, may prescribe.
All deeds and voluntary instruments shall be
presented with their respective copies and shall be
attested and sealed by the Register of Deeds,
endorsed with the file number, and copies may be
delivered to the person presenting them.
Certified copies of all instruments filed and registered
may also be obtained from the Register of Deeds
upon payment of the prescribed fees
A. PROCESS OF REGISTRATION:
1. File instrument creating or transferring
interest and certificate of title with
Register of Deeds together with:
!" Owners duplicate
#" Payment of fees & documentary stamp
tax
$" Evidence of full payment of real estate
tax
%" Document of transfer 1 copy additional
for city/provincial assessor
2. Register of Deeds shall make a
memorandum on the certificate of title,
signed by him
3. TCT shall then be issued.
NOTE:
If the grantee is a corporation or association,
it must show that it is qualified to acquire
private lands.
PNB vs. Fernandez, (1935): The issuance of
a new transfer certificate without
presentation of an owners duplicate is
unwarranted and confers no right on the
purchaser
RA 456 prohibits registration of documents
affecting real property which is delinquent in
the payment of real estate taxes. Further, if
evidence of such payment is not presented
with 15 days form the date of entry of said
document in the primary entry book of the
register of deeds the entry shall be deemed
cancelled.
Pay fees and DST (government is exempt)
The instruments are regarded as registered
from the time ROD enters them in his book.
Transfers
PD 1529
Sec 57. Procedure in registration of conveyances. An
owner desiring to convey his registered land in fee
simple shall execute and register a deed of
conveyance in a form sufficient in law.
The Register of Deeds shall thereafter make out in
the registration book a new certificate of title to the
grantee and shall prepare and deliver to him an
owner's duplicate certificate.
The Register of Deeds shall note upon the original
and duplicate certificate the date of transfer, the
volume and page of the registration book in which the
new certificate is registered and a reference by
number to the last preceding certificate. The original
and the owner's duplicate of the grantor's certificate
shall be stamped "canceled".
The deed of conveyance shall be filled and indorsed
with the number and the place of registration of the
certificate of title of the land conveyed.
PD 1529
Sec 58. Procedure where conveyance involves
portion of land. If a deed or conveyance is for a part
only of the land described in a certificate of title, the
Register of Deeds shall not enter any transfer
certificate to the grantee until a plan of such land
showing all the portions or lots into which it has been
subdivided and the corresponding technical
descriptions shall have been verified and approved
pursuant to Section 50 of this Decree.
Meanwhile, such deed may only be annotated by way
of memorandum upon the grantor's certificate of title,
original and duplicate, said memorandum to serve as
a notice to third persons of the fact that certain
unsegregated portion of the land described therein
has been conveyed, and every certificate with such
memorandum shall be effectual for the purpose of
showing the grantee's title to the portion conveyed to
him, pending the actual issuance of the corresponding
certificate in his name.
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Upon the approval of the plan and technical
descriptions, the original of the plan, together with a
certified copy of the technical descriptions shall be
filed with the Register of Deeds for annotation in the
corresponding certificate of title and thereupon said
officer shall issue a new certificate of title to the
grantee for the portion conveyed, and at the same
time cancel the grantor's certificate partially with
respect only to said portion conveyed, or, if the
grantor so desires, his certificate may be canceled
totally and a new one issued to him describing therein
the remaining portion: Provided, however, that
pending approval of said plan, no further registration
or annotation of any subsequent deed or other
voluntary instrument involving the unsegregated
portion conveyed shall be effected by the Register of
Deeds, except where such unsegregated portion was
purchased from the Government or any of its
instrumentalities.
If the land has been subdivided into several lots,
designated by numbers or letters, the Register of
Deeds may, if desired by the grantor, instead of
canceling the latter's certificate and issuing a new one
to the same for the remaining unconveyed lots, enter
on said certificate and on its owner's duplicate a
memorandum of such deed of conveyance and of the
issuance of the transfer certificate to the grantee for
the lot or lots thus conveyed, and that the grantor's
certificate is canceled as to such lot or lots.
PD 1529
Sec 59. Carry over of encumbrances. If, at the time of
any transfer, subsisting encumbrances or annotations
appear in the registration book, they shall be carried
over and stated in the new certificate or certificates;
except so far as they may be simultaneously released
or discharged.
A. IF ENTIRE PROPERTY IS SUBJECT
Owner executes and registers the deed
which must be sufficient in form.
A new certificate of title is issued and
Register of Deeds prepares and delivers to
grantee his owner's duplicate certificate
Register of Deeds notes upon the OCT and
the duplicate certificate the date of transfer,
the volume and page of the registration
book where the new certificate is registered
The original and the owner's duplicate of the
grantor's certificate shall be stamped
"canceled".
The deed of conveyance shall be filed and
indorsed with the number and the place of
registration of the certificate of title of the
land conveyed.
B. IF ONLY A PORTION OF PROPERTY IS
SUBJECT
Include a plan which shows all the portions
already subdivided with verified and
approved technical descriptions.
That plan with the certified copy of the
technical descriptions shall be filed with the
Register of Deeds for annotation in the TCT.
Register of Deeds hall issue a TCT and
cancel the grantor's certificate partially OR
it may be canceled totally and a new one
issued describing therein the remaining
portion
C. IF THERE ARE SUBSISTING
ENCUMBRANCESANDANNOTATIONS
They shall be carried over in the new
certificate or certificates; except when they
have been simultaneously discharged.
VI. Mortgages and Leases
PD 1529
Sec 60. Mortgage or lease of registered land.
Mortgage and leases shall be registered in the
manner provided in Section 54 of this Decree.
The owner of registered land may mortgage or lease
it by executing the deed in a form sufficient in law.
Such deed of mortgage or lease and all instruments
which assign, extend, discharge or otherwise deal
with the mortgage or lease shall be registered, and
shall take effect upon the title only from time of
registration.
No mortgagee's or lessee's duplicate certificate of title
shall hereafter be issued by the Registers of Deeds,
and those issued prior to the effectivity of this Decree
are hereby deemed canceled and the holders thereof
shall immediately surrender the same to the Register
of Deeds concerned.
PD 1529
Sec 61. Registration. Upon presentation for
registration of the deed of mortgage or lease together
with the owner's duplicate, the Register of Deeds shall
enter upon the original of the certificate of title and
also upon the owner's duplicate certificate a
memorandum thereof, the date and time of filing and
the file number assigned to the deed, and shall sign
the said memorandum.
He shall also note on the deed the date and time of
filing and a reference to the volume and page of the
registration book in which it is registered
Mortgage and leases shall be registered in
the manner provided for in Section 54.
When a deed of mortgage or lease is
presented, ROD will enter upon the OCT
and upon the owners duplicate a
memorandum thereof and shall sign.
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VII. Powers of Attorney; Trusts
PD 1529
Sec 64. Power of attorney. Any person may, by power
of attorney, convey or otherwise deal with registered
land and the same shall be registered with the
Register of Deeds of the province or city where the
land lies. Any instrument revoking such power of
attorney shall be registered in like manner.
PD 1529
Sec 65. Trusts in registered land. If a deed or other
instrument is filed in order to transfer registered land
in trust, or upon any equitable condition or limitation
expressed therein, or to create or declare a trust or
other equitable interests in such land without transfer,
the particulars of the trust, condition, limitation or
other equitable interest shall not be entered on the
certificate; but only a memorandum thereof shall be
entered by the words "in trust", or "upon condition", or
other apt words, and by a reference by number to the
instrument authorizing or creating the same.
A similar memorandum shall be made upon the
original instrument creating or declaring the trust or
other equitable interest with a reference by number to
the certificate of title to which it relates and to the
volume and page in the registration book in which it is
registered.
PD 1529
Sec 66. Trust with power of sale, etc., how
expressed. If the instrument creating or declaring a
trust or other equitable interest contains an express
power to sell, mortgage or deal with the land in any
manner, such power shall be stated in the certificate
of title by the words "with power to sell", or "power to
mortgage", or by apt words of description in case of
other powers.
No instrument which transfers, mortgages or in any
way deals with registered land in trust shall be
registered, unless the enabling power thereto is
expressly conferred in the trust instrument, or unless
a final judgment or order of a court of competent
jurisdiction has construed the instrument in favor of
the power, in which case a certified copy of such
judgment or order may be registered.
PD 1529
Sec 68. Implied, trusts, how established. Whoever
claims an interest in registered land by reason of any
implied or constructive trust shall file for registration
with the Register of Deeds a sworn statement thereof
containing a description of the land, the name of the
registered owner and a reference to the number of the
certificate of title. Such claim shall not affect the title
of a purchaser for value and in good faith before its
registration.
Powers of attorney and revocations shall be
registered with the Register of Deeds of the
province or city where the land lies.
To transfer registered land in trust without
transfer, the particulars of the trust shall not
be entered on the certificate. Only a
memorandum shall be entered by the words
"in trust", or "upon condition".
Power must be expressly conferred in the
trust instrument.
If implied of constructive trust, person
claiming such must execute a sworn
statement. But such claim doesnt affect the
title of a purchaser for value and in good
faith before its registration.
VIII. Involuntary Dealings
A. ATTACHMENT - a writ issued at the
institution or during progress of an action
commanding the sheriff to attach the
property, rights, credits or effects of the
defendant to satisfy demands of the plaintiff
Kinds:
a. Preliminary
b. Garnishment
c. Levy on execution
PD 1529
Sec 69. Attachments. An attachment, or a copy of any
writ, order or process issued by a court of record,
intended to create or preserve any lien, status, right,
or attachment upon registered land, shall be filed and
registered in the Registry of Deeds for the province or
city in which the land lies, and, in addition to the
particulars required in such papers for registration,
shall contain a reference to the number of the
certificate of title to be affected and the registered
owner or owners thereof, and also if the attachment,
order, process or lien is not claimed on all the land in
any certificate of title a description sufficiently
accurate for identification of the land or interest
intended to be affected.
A restraining order, injunction or mandamus issued by
the court shall be entered and registered on the
certificate of title affected, free of charge.
1. REGISTRATION OF ATTACHMENT/
OTHER LIENS
a. Copy of writ in order to preserve any lien,
right or attachment upon registered land
may be filed with Register of Deeds where
land lies, containing number of certificate of
title of land to be affected or description of
land
b. Register of Deeds to index attachment in
names of both plaintiff & defendant or name
of person whom property is held or in whose
name stands in the records
c. If duplicate of certificate of title is not
presented:
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Register of Deeds shall within 36 hours
send notice to registered owner by mail
stating that there has been registration
& requesting him to produce duplicate
so that memorandum be made
If owner neglects or refuses Register
of Deeds shall report matter to court.
Court after notice shall enter an order to
owner to surrender certificate at time &
place to be named therein.
d. Although notice of attachment is not noted in
duplicate, notation in book of entry of
Register of Deeds produces effect of
registration already
2. EFFECT OF REGISTRATION OF
ATTACHMENT:
a. Creates real right
b. Has priority over execution sale
c. But between 2 attachments
d. one that is earlier in registration is
preferred
3. DUTY OF REGISTER OF DEEDS
Ministerial but may refuse registration in
following circumstances:
1. Title to land is not in the name of
defendant
2. No evidence is submitted to show that
he has present or possible future
interest in land
Exception: If petitioner is an heir
B. EXECUTION AND TAX DELINQUENCY
SALES
1. EXECUTION SALE
a. To enforce a lien of any description on
registered land, any execution or
affidavit to enforce such lien shall be
filed with Register of Deeds where land
lies
b. Register in registration book &
memorandum upon proper certificate of
title as adverse claim or as an
encumbrance
c. To determine preferential rights between
2 liens: priority of registration of
attachment
2. TAX SALE
a. Sale of land for collection of delinquent
taxes and penalties due the
Government
b. In personam (all persons interested
shall be notified so that they are given
opportunity to be heard)
c. Notice to be given to delinquent tax
payer at last known address
d. Publication of notice must also be made
in English, Spanish & local dialect &
posted in a public & conspicuous place
in place wherein property is situated &
at main entrance of provincial building
e. Sale cannot affect rights of other lien
holders unless given right to defend
their rights: due process must be strictly
observed
f. Tax lien superior to attachment
g. No need to register tax lien because it is
automatically registered once the tax
accrues
h. But sale of registered land to foreclose a
tax lien need to be registered.
PD 1529
Sec 74. Enforcement of liens on registered land.
Whenever registered land is solved on execution, or
taken or sold for taxes or for any assessment or to
enforce a lien of any character, or for any costs and
charges incident to such liens, any execution or copy
of execution, any officer's return, or any deed,
demand, certificate, or affidavit, or other instrument
made in the course of the proceedings to enforce
such liens and required by law to be recorded, shall
be filed with the Register of Deeds of the province or
city where the land lies and registered in the
registration book, and a memorandum made upon the
proper certificate of title in each case as lien or
encumbrance.
3. PROCEDURE OF REGISTRATION OF
TAX SALE
a. Officers return shall be submitted to
Register of Deeds together with
duplicate title
b. Register in registration book
c. Memorandum shall be entered in
certificate as an adverse claim or
encumbrance
d. After period of redemption has expired
& no redemption (2 years from
registration of auction sale) cancellation
of title & issuance of new one
e. Before cancellation, notice shall be sent
to registered owner: to surrender title &
f. show cause why it shall not be
cancelled
NOTE: Actual knowledge is equivalent to
registration.
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C. NOTICE OF LIS PENDENS
PD 1529
Sec 76. Notice of lis pendens. No action to recover
possession of real estate, or to quiet title thereto, or to
remove clouds upon the title thereof, or for partition,
or other proceedings of any kind in court directly
affecting the title to land or the use or occupation
thereof or the buildings thereon, and no judgment,
and no proceeding to vacate or reverse any judgment,
shall have any effect upon registered land as against
persons other than the parties thereto, unless a
memorandum or notice stating the institution of such
action or proceeding and the court wherein the same
is pending, as well as the date of the institution
thereof, together with a reference to the number of the
certificate of title, and an adequate description of the
land affected and the registered owner thereof, shall
have been filed and registered.
Section 77. Cancellation of lis pendens. Before final
judgment, a notice of lis pendens may be canceled
upon order of the court, after proper showing that the
notice is for the purpose of molesting the adverse
party, or that it is not necessary to protect the rights of
the party who caused it to be registered. It may also
be canceled by the Register of Deeds upon verified
petition of the party who caused the registration
thereof.
At any time after final judgment in favor of the
defendant, or other disposition of the action such as
to terminate finally all rights of the plaintiff in and to
the land and/or buildings involved, in any case in
which a memorandum or notice of lis pendens has
been registered as provided in the preceding section,
the notice of lis pendens shall be deemed canceled
upon the registration of a certificate of the clerk of
court in which the action or proceeding was pending
stating the manner of disposal thereof.
PD 1529
Sec 77. Cancellation of lis pendens. Before final
judgment, a notice of lis pendens may be canceled
upon order of the court, after proper showing that the
notice is for the purpose of molesting the adverse
party, or that it is not necessary to protect the rights of
the party who caused it to be registered. It may also
be canceled by the Register of Deeds upon verified
petition of the party who caused the registration
thereof.
At any time after final judgment in favor of the
defendant, or other disposition of the action such as
to terminate finally all rights of the plaintiff in and to
the land and/or buildings involved, in any case in
which a memorandum or notice of lis pendens has
been registered as provided in the preceding section,
the notice of lis pendens shall be deemed canceled
upon the registration of a certificate of the clerk of
court in which the action or proceeding was pending
stating the manner of disposal thereof.
1. PURPOSE: Keep subject matter within the
power of the court until the entry of final
judgment. It therefore creates merely a
contingency & not a lien.
2. EFFECT OF REGISTRATION
a. Impossibility of alienating the property in
dispute during the pendency of the suit
may be alienated but purchaser is
subject to final outcome of pending suit
b. Register of Deeds duty bound to carry
over notice of lis pendens on all new
titles to be issued
3. CANCELLATION OF LIS PENDENS
a. Before final judgment court may order
cancellation after showing that notice if
only for purpose of molesting an
adverse party or it is not necessary to
protect rights of party who caused it to
be registered
b. Register of Deeds may also cancel by
verified petition of party who caused
such registration
c. Deemed cancelled when certificate of
clerk of court stating manner of disposal
of proceeding is registered
3. OTHER PARTIES WHO NEED TO
REGISTER
a. Assignee in involuntary proceeding for
insolvency
o Duty of the officer serving notice to
file copy of notice to Register of
Deeds where the property of debtor
lies
o Assignee elected or appointed by
court shall be entitled to entry of
new certificate of registered land
upon presentment of copy of
assignment with bankrupts
certificate of title (duplicate)
o New certificate shall not that it is
entered to him as assignee or
trustee in insolvency proceedings
b. Government in eminent domain
o Copy of judgment file in Register of
Deeds which states description of
property, certificate number, interest
expropriated, nature of public use
o Memorandum shall be made or new
certificate of title shall be issued
D. ADVERSE CLAIM
Section 70. Adverse claim. Whoever claims any part
or interest in registered land adverse to the registered
owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this
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Decree for registering the same, make a statement in
writing setting forth fully his alleged right or interest,
and how or under whom acquired, a reference to the
number of the certificate of title of the registered
owner, the name of the registered owner, and a
description of the land in which the right or interest is
claimed.
The statement shall be signed and sworn to, and shall
state the adverse claimant's residence, and a place at
which all notices may be served upon him. This
statement shall be entitled to registration as an
adverse claim on the certificate of title. The adverse
claim shall be effective for a period of thirty days from
the date of registration. After the lapse of said period,
the annotation of adverse claim may be canceled
upon filing of a verified petition therefor by the party in
interest: Provided, however, that after cancellation, no
second adverse claim based on the same ground
shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in
interest may file a petition in the Court of First
Instance where the land is situated for the
cancellation of the adverse claim, and the court shall
grant a speedy hearing upon the question of the
validity of such adverse claim, and shall render
judgment as may be just and equitable. If the adverse
claim is adjudged to be invalid, the registration thereof
shall be ordered canceled.
If, in any case, the court, after notice and hearing,
shall find that the adverse claim thus registered was
frivolous, it may fine the claimant in an amount not
less than one thousand pesos nor more than five
thousand pesos, in its discretion. Before the lapse of
thirty days, the claimant may withdraw his adverse
claim by filing with the Register of Deeds a sworn
petition to that effect.
1. WHEN IS A CLAIM ADVERSE?
When a person claims any part or interest in
registered land adverse to the registered
owner, after date of the original registration.
2. DURATION OF AN ADVERSE CLAIM
30 days from the date of registration. After
that the annotation of adverse claim may be
cancelled upon filing of a verified petition by
the party in interest. When cancelled no
second adverse claim based on the same
ground may be registered by the same
claimant. (Asked in 98)
3. REQUISITES
The adverse claimant must give a statement
signed and sworn before a notary public, the
ff in writing:
a. his alleged right or interest
b. how and under whom such alleged right
or interest is acquired
c. the description of the land in which the
right or interest is claimed and
d. the number of the certificate of title
e. his residence or the place to which all
notices may be served upon him.
NOTE: Non-compliance with the above
requisites renders the adverse claim non-
registrable and ineffective.
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Unregistered Lands
This 6
th
chapter will discuss the process of registration
of unregistered lands.
There are TWO MAJOR LESSON is included in this
Chapter.
I. Key Points in the Registration of Unregistered
Lands
II. Procedure in the Registration of Unregistered
Lands
PD 1529
Sec 113. Recording of instruments relating to unregistered
lands. 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.
I. Key Points
A. The system of registration for unregistered
land is under the torrens system.
B. Before: covers voluntary dealings, now
includes involuntary dealings
C. Effect if prospective; binds 3rd persons after
registration but yields to better rights of 3rd
person prior to registration (limited effect to
3rd parties) reason: no strict investigation
involved
D. Subsequent dealings also valid if recorded
E. Register of deeds keeps day book & a
register; index system is also kept
II. Procedure
A. Presentment of instrument dealing in
unregistered land
B. If found in order registered
C. If found defective registration is refused
writing his reason for refusal
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Chapter 7: Registration of Public Lands
This 7
th
Chapter will discuss the process of
registration of public lands. It includes also the
different modes of alienating public lands.
There are SIX MAJOR LESSONS in this chapter:
Domain
II. Nature of Public Lands
III. Procedure
IV. Role of Director of Lands
V. Modes of Alienating Public Lands
VI. Patents
Domain
A. UNDER THE CONSTITUTION
1. Agricultural- only type of land that is
alienable
2. Forest or timber
3. Mineral lands
4. National Park
B. UNDER THE PUBLIC LAND ACT
1. Alienable/disposable
!" Agricultural
#" Residential, commercial, industrial
$" Educational, charitable
%" Town sites and for public and quasi-
public uses
2. Timber lands inalienable
3. Mineral lands inalienable
NOTE:
If patent of title is issued for inalienable
lands, such patent or title is void ab initio
Not subject to acquisitive prescription; even
if in possession for long time, will not ripen
into ownership.
EXCEPT: mineral lands and forest lands
acquired before inauguration of
Commonwealth in November 15, 1935;
vested rights which are protected
is exclusive prerogative of executive &
not by judiciary
Anyone who applies for confirmation of
imperfect title has burden of proof to
overcome the presumption that the land
sought to be registered forms part of
public domain (Regalian doctrine)
Before, fishponds are included in the
definition of agriculture, conversion of
agricultural land to fishponds does not
change character of land.
Now: restricted meaning; fishponds
has distinct category; cannot be
alienated but maybe leased from
government
Republic vs. Imperial, (2000): The
classification of public lands is a function
of the executive branch of government.
Conveyed
Indefeasible and Conclusive
In absence of registration, title to public
land is not perfected and therefore not
Indefeasible
In case of 2 titles obtained on same date,
the one procured through the decree of
registration is superior than patent issued
by director of lands
2 titles procured by one person one from
homestead patent, one from judicial
decree & sold to 2 different persons, the
one who bought it for value and in good
faith & one who register first shall have
preference
III. Procedure of Conveying Public Land
to a Private Person
A. Official issuing instrument of conveyance to
issue instrument
B. File instrument with Register of Deeds
C. Instrument to be entered in books and owners
duplicate to be issued
D. Instrument only contract between
Government and private person and does not
take effect as conveyance if unregistered, it is
registration which is operative act of conveying
land; evidence of authority for Register of
Deeds to register
E. Fees to be paid by grantee
PUBLIC
LANDS
Inalienable
Lands of the
Public Domain
Alienable
Public
Agricultural
Land
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F. After issuance of certificate of title, land is
deemed registered land within the purview of
the Torrens system
IV. Director of Lands: Quasi-judicial
officer
A. Findings of fact conclusive on higher court with
absence of fraud, mistake other than error of
judgment; but not with regards to finding of law.
B. Empowered to alienate and dispose lands.
V. Modes of Alienating Public Lands:
A. Homestead settlement
B. Sale
C. Confirmation of Imperfect or incomplete title,
supra.
1. Judicial legalization
2. Administrative legalization
NOTE:
Lease is not included since lease does not
transfer ownership
Free-title grant: free distribution of public
lands to encourage people to cultivate:
government furnishes the applicant with tolls
plus cash allowance to enable him to cultivate
VI. Patents
A. WHEN IS GOVERNMENT GRANT
DEEMED ACQUIRED BY OPERATION OF
LAW
1. Deed of conveyance issued by government
patent/grant
2. Registered with Register of Deeds
mandatory: operative act to convey & transfer
title
3. Actual physical possession, open & continuous
NOTE:
Land ceased to be part of public domain &
now ownership vests to the grantee
Any further grant by Government on same
land is null & void
Upon registration, title is indefeasible
B. TITLE ISSUED PURSUANT TO
REGISTRATION OF PATENT
1. Indefeasible when registered, deemed
incorporated with Torrens system; 1 year after
issuance of patent
2. May not be opened one year after entry by
Land Registration Authority; otherwise,
confusion, uncertainty & confusion on
government system, of distribution of public
lands may arise & this must be avoided
EXCEPT: Annullable on ground of fraud,
may be reopened even after 1 year because
registration does not shield bad faith
3. Court in exercise of equity jurisdiction may
direct reconveyance even without ordering
cancellation of title
C. AIM OF HOMESTEAD PATENT
1. Benevolent intention of government to
distribute disposable agricultural land to
destitute citizens for their home and cultivation
2. As a matter of public policy, may be
repurchased even if after 5 years provided not
for profit
3. Right of repurchase not allowed if sold within
family & not for cultivating or living but for
speculation purpose
D. RESTRICTIONS
1. Cannot be alienated within 5 years after
approval of application for patent
2. Cannot be liable for satisfaction of debt within
5 years after approval of patent application
3. Subject to repurchase of heirs within 5 years
after alienation when allowed already
4. No corporation, partnership, association may
acquire unless solely for commercial,
industrial, educational, religious or charitable
purpose or right of way subject to consent of
grantee & approval of Secretary of Natural
resources
EXCEPTIONS:
1. Action for partition because it is not a
conveyance
2. Alienations or encumbrances made in favor of
the government
NOTE:
Erring homesteader not barred by pari delicto
Pari delicto rule does not apply in void contract
Violation of prohibitions results in void contract
Action to recover does not prescribe
If the homesteader dies, heirs succeed him in
this application
Legal restriction in disposition by non-
Christians (Cultural Minorities)
Conveyance is valid if able to read and can
understand language where deed is written
Otherwise, not valid unless approved by
Commission on National Integration
Safeguard is to protect them against
fraud/deceit
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Chapter 8: Remedies of the Aggrieved
Party
The remedies listed here are:
I. Motion For New Trial
II. Appeal
III. Relief from Judgment
IV. Petition for Review
V. Action for Reconveyance
VI. Damages
VII. Action for Compensation from the Assurance
Fund
VIII. Annulment of Judgment
IX. Reversion
X. Criminal Action
Motion for New Trial 15 days from notice of judgment
Grounds:
Fraud, accident, mistake, excusable negligence
Newly discovered evidence
Awarded excessive damages, or insufficiency of evidence, or that the decision is
against law
Appeal 15 days from notice
appealable to the CA or to the SC in the same manner as in ordinary actions
Relief from Judgment 60 days after petitioner learns of judgment, but not more than 6 months after
judgment was entered
Grounds: Fraud, accident, mistake, excusable negligence
Petition for Review Requisites:
Walstrom vs. Mapa,, (1990):
petitioner must have an estate or interest in the land
he must show actual fraud
petition must be filed within one year form the issuance of the decree by LRA
property has not yet passed to an innocent purchaser for value.
Grounds:
extrinsic fraud,
void decision for want of due process
lack of jurisdiction
Calalang vs. Register of Deeds (1992): Under the Torrens system of registration,
the Torrens still becomes indefeasible and incontrovertible one year form the
issuance of the final decree and is generally conclusive evidence of the ownership
Iglesia ni Cristo vs. CFI, (1983):
This applies as well to title acquired through homestead or free patents
Action for
Reconveyance
before issuance of decree, or within/after 1 year from entry
if based on implied trust, 10 years;
if based on expressed trust and void contract, imprescriptible
if based on fraud, 4 years from the discovery
it is not available if the property has already been transferred to an innocent
purchaser for value.
Esconde vs. Barlongay, (1987): It does not reopen proceedings but a mere
transfer of the land from registered owner to the rightful owner
Huang vs. CA,1994:
It is available in case of fraud thereby creating a constructive trust between parties
Damages Ching vs. CA, 1990:
It can be availed of when reconveyance is no longer possible as when the land
has been transferred to an innocent purchaser for value
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Action for Compensation
from the Assurance
Fund
1
Requisites:
A person sustains loss or damage or is deprived by any estate or interest in land
On account of bringing of land under the Torrens system
Through (FEMOM) fraud, error, mistake, omission, or misdescription in the
certificate of entry in the registration book
Without negligence on his part
And is barred from bringing an action for recovery of the land.
The action has not prescribed. It must be instituted within 6 years from the time
the right to bring such action first occurred--> date of issue of the certificate of title
Against whom filed: against the Register of Deeds and the National Treasurer if
FEMOM is caused by court personnel, Register of Deeds, his deputy or other
employees of the Registry
If other those above mentioned: the Register of Deeds, the National Treasurer
and other person or persons, as co-defendants.
Annulment of Judgment Grounds: extrinsic fraud and lack of jurisdiction.
Galicia vs. Marquez (2007): Ordinary remedies of appeal, motion for new trial etc
should no longer be available. If based on extrinsic fraud, file 4 within years from
discovery.
If based on lack of jurisdiction, before it is barred by laches or estoppel
Reversion Instituted by the government, thru Solgen in all cases where lands of public
domain are held in violation of the Constitution or were fraudulently conveyed.
Indefeasibility of title, prescription, laches, and estoppel do not bar reversion suits.
Criminal Action Perjury, Forgery, Others involving fraud
&
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Chapter 9: Reconstitution 0f Titles
(Asked in 96)
I. Grounds
II. Petitions For Reconstitution
III. Duties of the Land Registration
Authority
IV. Effects of Fraud in the
Reconstitution
I. Grounds
A. LOSS
B. DESTRUCTION
II. Petitions for Reconstitution
A. WHO MAY FILE?
1. Registered owner
2. His assigns
3. Other persons, both natural and juridical,
having an interest in the property
B. WHAT DOES IT CONTAIN?
A statement, among other things:
1. That no deed or other instrument affecting the
property had been presented for registration.
If there is, include its particulars.
2. That the owner's duplicate certificate or co-
owner's duplicate is in due form;
3. That the certificate of title is not the subject of
litigation or investigation, administrative or
judicial, regarding its genuineness or due
execution or issuance;
4. That the certificate of title was in full force and
effect at the time it was lost or destroyed;
5. That the certificate of title is covered by a tax
declaration regularly issued by the Assessor's
Office; and
6. That real estate taxes have been fully paid up
to at least two (2) years prior to the filing of the
petition for reconstitution.
NOTE:
The procedure relative to administrative
reconstitution of lost or destroyed certificate
prescribed in said Act may be availed of only in
case of substantial loss or destruction of land
titles due to fire, flood or other force majeure
as determined by the Administrator of the Land
Registration Authority:
Provided, that the number of certificates of
titles lost/damaged should be at least 10 % of
the total number in the possession of the
Office of the Register of Deeds, and that the
number of certificates of titles lost or damaged
be less than 500.
C. WHAT IF IT IS SUBSEQUENTLY FOUND
BUT IT IS NOT IN THE NAME OF THE
SAME PERSON IN WHOSE FAVOR THE
RECONSTITUTED CERTIFICATE OF
TITLE HAS BEEN ISSUED?
The ROD or party concerned should notify the
proper RTC. After which, shall order the
cancellation of the reconstituted certificate of
title and render, with respect to the
memoranda of new liens and encumbrances, if
any, made in the reconstituted certificate of
title, after its reconstitution, such judgment as
justice and equity may require:
Provided, however, That if the reconstituted
certificate of title has been cancelled by virtue
of any deed or instrument, whether voluntary
or involuntary, or by an order of the court, and
a new certificate of title has been issued, the
procedure prescribed above, with respect to
the memorandum of new liens and
encumbrances made on the reconstituted
certificate of title, after its reconstitution, shall
be followed with respect to the new certificate
of title, and to such new liens and
encumbrances, if any, as may have been on
the latter, after the issuance thereof.
III. Duties of the Land Registration
Authority
A. Keep a true, complete and faithful inventory of
all books, titles, cash and property of the
Register of Deeds.
B. Produce three image copies in whatever
means the original can be produced.
C. Surrender the owners duplicate to ROD and
prepare and deliver a new owners duplicate to
the registered owner.
D. Issue rules and regulations
E. Review, revise decisions of the reconstituting
officer of the Register of Deeds.
Machination in the Reconstitution of
Titles
A. A reconstituted title obtained by means of
fraud, deceit or other machination is void ab
initio as against the party obtaining the same
and all persons having knowledge thereof.
B. Any person who by means of fraud, deceit or
other machination obtains or attempts to obtain
a reconstituted title shall be subject to criminal
prosecution
C. Any public officer or employee who knowingly
approves or assists in securing a decision
allowing reconstitution in favor of any person
not entitled thereto shall be subject to criminal
prosecution.
- end of Land titles and Deeds -
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Table of Contents
Chapter I. The Contract of Sale ..................269
I. Definition (Art 1458, CC) ...................269
II. Elements ...........................................269
III. Stages ...............................................274
IV. Kinds of Sale.....................................275
V. Form..................................................276
Contracts....................................................276
Buyer .............................................................278
I. Obligations of the Seller ....................278
II. Obligations of the Buyer....................284
Chapter III. Double Sales.............................286
I. General Rule.....................................286
II. Requisites .........................................286
Immovables and Unregistered Lands........286
Chapter IV. Risk of Loss..............................288
I. General Rule.....................................288
II. Exceptions.........................................288
Chapter V. Documents of Title....................289
I. In General .........................................289
II. Negotiable Documents of Title..........289
III. Non-Negotiable Documents of Title..289
Chapter VI. Remedies of the Seller and Buyer
.......................................................................291
I. General Remedies (Art. 1191, CC) ...291
II. Remedies of the Seller......................291
III. Remedies of the Buyer......................295
Chapter VII. Extinguishment of Sale ..........298
I. In General .........................................298
II. Conventional Redemption.................298
III. Equitable Mortgage...........................299
IV. Legal Redemption.............................300
Chapter VIII. Philippine Bulk Sales Law (Act
3952) ..............................................................303
I. Purpose.............................................303
II. Coverage...........................................303
III. Duty of Seller.....................................303
IV. Effect of non-compliance...................304
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Chapter I. The Contract of Sale
I. DEFINITION
II. ELEMENTS
A. CONSENT
B. SUBJECT MATTER
C. PRICE
III. STAGES
A. PREPARATION/NEGOTIATION
B. PERFECTION
C. CONSUMMATION
IV. KINDS
A. ABSOLUTE
B. CONDITIONAL
V. FORM
VI. SALE DISTINGUISHED FROM OTHER
CONTRACTS
A. DONATION
B. BARTER
C. CONTRACT FOR A PIECE OF WORK
D. LEASE OF THINGS
E. AGENCY TO BUY AND SELL
F. DACION EN PAGO
G. CONTRACT TO SELL
H. BILATERAL PROMISE TO BUY AND SELL
I. Definition (Art 1458, CC)
Contract where one of the parties (Seller)
obligates himself to:
Transfer ownership of and
to deliver a determinate thing;
and the other (Buyer) to pay a price certain in
money or its equivalent.
II. Elements
The case of (Coronel v CA, 1996) enumerates
the 3 elements of a valid contract of sale
namely:
Consent
Subject matter
Price
_______
A. CONSENT
Meeting of minds upon the thing which is the
object of the contract and the price. (Art 1475,
CC)
Requisites
1. Capacity
2. Offer and acceptance
3. No vitiation
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Prof. Roberto N. Dio
Faculty Editor
Jaim Mari M. Crisostomo
Lead Writer
Jessa Mary Ann C. Cedeo
Eva Marie Guttierez
Kristoffer Gabriel L. Madrid
Ros Jean Nonato
Writers
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Subject Editors
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Michelle Dy
Patrich Leccio
Editors-in-Chief
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Kae Guerrero
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Pat Hernandez
Viktor Fontanilla
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Romualdo Menzon Jr.
Rania Joya
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Volunteers
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Head
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Members
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CAPACITY
All persons who have capacity to enter into
obligations may enter into a contract of sale (Art
1489, CC)
Kinds of Incapacity
1. Absolute Incapacity (MInD-CI) (Art. 1327,
CC)
a. Minors
b. Insane or Demented
c. Deaf-mutes who do not know how to
write
d. Civil Interdiction
e. Judicially-declared Incompetents(Art.
39)
Prodigals
Imbeciles
Absence & presumption of death
Persons not of unsound mind but by
reason of age, disease, weak mind,
and other similar causes, cannot
take care of themselves and
manage their property without
outside aid (Easy prey for deceit
and exploitation)
2. Relative Incapacity
a. Husband and Wife (Art 1490, CC)
(Asked in 75, 76, 00, 02, 06)
General Rule: Cannot sell property to
each other
Exceptions:
1. Separation of property in marriage
settlement, OR
2. Judicial separation of property.
b. Alienage (Art. 39, CC)
Aliens disqualified to purchase or
acquire property.
Exception: if acquisition is through
hereditary succession
c. Trusteeship (Art. 39)
3. Specific Incapacity (Art. 1491, CC) (AGE-
PLJ)
a. Agents
Property whose administration or sale
was entrusted to them
Exception: principal gives consent.
b. Guardian
Cannot purchase property of person
under his guardianship
Rationale: Guardianship is a trust of the
highest order, and the trustee can not be
allowed to have any inducement o
neglect his wards interest. (Phil Trust
Co v Roldan, 1956)
c. Executors and Administrators
Property of estate under their
administration
d. Public Officers and Employees
Property of State/any of its
subdivisions/GOCC, the administration
of which was entrusted to them.
e. Lawyers
Property or rights in litigation in which
they take part because of their
profession
Rationale: Lawyer may have undue
influence over client. Greed may get the
better of the sentiments of loyalty and
disinterestedness. (Valencia v
Cabanting, 1991)
Prohibition is definite and permanent,
cannot be cured by ratification. (Rubias
v Batiller, 1973)
Exceptions: An assignment to a lawyer
by his client of an interest in the property
does not violate Art 1491, where
A judgment has been rendered and
has become final; and
In case of contingency fee
arrangements. The interest of the
lawyer maybe annotated as an
adverse claim on the property
awarded to his client (Director of
Lands v Ababa, 1979)
f. Justices, Judges, prosecuting attorneys,
clerks
Property or rights in litigation or levied
upon on execution
Rationale: to prevent fraud and to
surround their profession with prestige
Prohibition applies only on sales or
assignment during the pendency of
litigation involving the property.
(Macariola v Asuncion, 1963)
Effects of Incapacity
1. Absolute Incapacity
If both parties are incapacitated:
UNENFORCABLE (Art. 1403 (3))
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If only 1 party is incapacitated:
VOIDABLE
-If necessaries are sold and delivered to
an incapacitated person: must pay a
reasonable price therefore. (Art 1489,
CC)
Necessaries those which are
indispensable for sustenance, dwelling,
clothing, medical attendance, education
and transportation. (Art 194, Family
Code)
2. Relative Incapacity
Sale between spouses is VOID.
Rationale: (as provided in the case of
Medina v CIR, 1961)
To protect 3
rd
persons who may
have contracted with the spouse
To avoid undue advantage of the
dominant spouse over the weaker
spouse.
To avoid indirect prohibition against
donations between spouses.
Such prohibition shall likewise apply to
common law spouses. (Calimlim-
Canulas v Fortun, 1984) BUT if
already sold to a third person who relied
on the title of his immediate seller,
reconveyance to the seller spouse is no
longer available (Cruz v CA, 1997)
3. Specific Incapacity
Contracts expressly prohibited by law
are void and cannot be ratified. Neither
can the right to set-up the defense of
illegality be waived. (Art. 1409 (7), CC)
Sales entered into by guardians,
administrators, and agents (specific
incapacities) in violation of Art. 1491
may be ratified by means of and in the
form of a new contract when the cause
of nullity has ceased to exist. Ratification
is valid only from date of execution of
the new contract and does not retroact.
Those entered into by public
officer/employees, justices and judges,
and lawyers also in violation of Art. 1491
are inexistent and void from the
beginning. (Rubias v Batiller, 1973).
OFFER AND ACCEPTANCE
In General
The contract of sale is perfected at the
moment there is meeting of the 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 law governing the form of
contracts. (Art. 1475, CC)
A private instrument signed by the
defendant reciting that he bought from the
plaintiff a property at a specific address for a
specific price to be paid as soon as a bill of
sale is signed is not a mere draft but a
perfected agreement and hence, obligatory,
even if there was no statement as to area or
price per meter. (Goyena v. Tambunting,
1902)
Form and Offer
Offer must be certain as to the object and
price (Art. 1319, CC)
Business advertisements of things for sale
are not offers but mere invitations to make
an offer
Exception: If otherwise provided (Art.
1325, CC)
Advertisements for bidders are simply
invitations to make proposals (Asked in 80)
Advertiser not bound to accept the
highest or lowest bid
Exception: Unless the contrary appears
(Art. 1326, CC)
Form of Acceptance
unconditional
Qualified acceptance = counter-offer (Art.
1319, CC)
May be express or implied (Art. 1320, CC)
Acceptance must be in accordance with the
terms and conditions of the offer. There is
no meeting of the minds if the offer lapsed
even though the offeree later on was willing
to accept the terms and conditions of the
offer. (Beaumont vs. Prieto, 1916)
MUST NOT BE VITIATED
A contract where consent is given through
mistake, violence, intimidation, undue
influence, or fraud is voidable. (Art. 1330,
1390 (2), CC)
There is fraud where through insidious
words or machinations of one of contracting
parties, the other is induced to enter into a
contract which, without them, he would not
have agreed to. (Art. 1338, CC)
_______
B. SUBJECT MATTER
Requisites
1. Licit
2. Existing, future or contingent
3. Determinate or determinable
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MUST BE LICIT (ART. 1459)
The thing is licit when
1. Within the commerce of man (Art 1347, CC)
Example of properties that are not within the
commerce of man:
a. Those belonging to the State or its
political subdivisions intended for public
use or public service. (Art 420, CC).
b. Church
c. Narcotics or dangerous drugs except
upon prescription (RA 6425, the
dangerous drugs act of 1972)
2. Rights are also licit when not intransmissible
(Art 1347, CC)
Sale of future inheritance is void. (Art. 1347,
CC)
1. The rights to succession are transmitted
from the moment of the death of the
decedent (Art. 777, CC). Thus, one cannot
sell or promise to sell what he expects to
inherit from a living person. (Rivero v.
Serrano, 1950)
2. -Heir may sell his hereditary rights (which
have accrued).
When the subject matter is illicit, the contract of
sale is void (Art. 1409 (7))
EXISTING, FUTURE, CONTINGENT
The goods which form the subject of a
contract of sale may be either
1. existing goods owned or possessed by the
seller;
2. goods to be manufactured, raised, acquired
by the seller, also called future goods;
3. whose acquisition of the seller depends
upon a contingency which may or may not
happen. (Art 1462, CC)
4. Things having potential existence may be
the object of a contract of sale. (Art 1461,
CC)
Sale of MERE hope or
expectancy
Sale of VAIN hope or
expectancy
Valid BUT subject to
condition that the thing
will come into existence
Example: Next catch of
a fisherman.
Void
Example: Sale of a
falsified raffle ticket
which will never win.
Emptio Rei Speratei Emptio Spei
Valid Void
Parties make the
contract depend upon
the existence of a thing,
If the thing does not
Parties intend the
contract to exist at all
events
Buyer will have to pay
come into existence:
contract is considered as
not made and there is no
obligation to pay the
price
the price even if the
thing does not actually
came into existence
In case of doubt the presumption is in favor of
emptio rei speratae since it is more in keeping with
the commutative character of the contract.
DETERMINATE OR DETERMINABLE
A thing is determinate when it is particularly
designated or physically segregated from all
others of the same class. (Art 1460, CC)
A thing is determinable when it is capable
of being made determinate at the time
the contract was entered into without the
necessity of a new or further agreement
between the parties. (Art 1460, CC)
Failure to state the exact location of the land
does not make the subject matter
indeterminate, so long as it can be located.
(Camacho v C,A 2007)
The fact that the exact area of subject land
in the contract of sale is subject to the result
of a survey does not render the subject
matter indeterminate. (Heirs of Juan San
Andres v. Rodriguez (2000))
Particular Kinds
1. Future Goods
Sale of future goods or those goods which
are to be manufactured, raised, or acquired
by seller after the perfection of the sale is
valid (Art 1462, CC). Future goods are
those capable of future existence.
2. Sale of Undivided Interest or Share
a. Sole owner of a thing may sell an
undivided interest therein. (Art
1463,CC) Ex., a fraction (! or half) or
percentage (50%), or my share in the
property.
b. The sale of an undivided share in a
specific mass of fungible goods makes
the buyer a co-owner of the entire mass
in proportion to the amount he bought.
(Art 1464,CC)
c. Co-owner cannot sell more than his
share (Yturralde v CA, 1972) (Asked
in 01, 02)
3. Sale of Things in Litigation
a. Sale of things under litigation entered
into by defendant, without the approval
of the litigants or the court is
rescissible. (Art 1381 (4))
b. NO RESCISSION where the thing is
legally in the possession of 3
rd
persons
who did not act in bad faith (Art 1385
(2))
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4. Things Subject to Resolutory Condition
Sale of things subject to a resolutory
condition, i.e. things acquired under legal or
conventional right of redemption, or subject
to reserva troncal, may be the object of a
contract of sale. (Asked in 99) (Art 1465,
CC)
5. Quantity of Subject Matter not determinate
The fact that the quantity is not determinate
shall not be an obstacle to the existence of
the contract provided it is possible to
determine the same, without the need of
new contract. (Art. 1349, CC)
_______
C. PRICE
Requisites (Ce-MoRe)
1. Certain or ascertainable at the time of
perfection
2. In Money or its equivalent
3. Real
CERTAIN OR ASCERTAINABLE AT THE TIME
OF PERFECTION
Price considered certain in the following
cases
1. Fixed by agreement of the parties
a. Fixing of price cannot be left to
discretion of one of the parties
b. BUT if such is accepted by the other,
sale is perfected. (Art 1473, CC)
2. Determination is left to the judgment of a
specified person
a. If unable or unwilling: Sale is
inefficacious UNLESS parties
subsequently agree about the price.
b. If in bad faith/by mistake: Courts may fix
price
c. If 3
rd
person is prevented from fixing
price by fault of seller or buyer: Innocent
party may avail of remedies.
3. It be so in reference to another thing, or
when the price fixed is that which the thing
have on a definite day, or in a particular
exchange or market, OR when the amount
fixed is above or below the price on such
day, exchange or market. (Art 1472, CC)
If price cannot be determined (Asked in 76)
1. Sale is inefficacious (Art. 1474, CC)
2. But if thing or part thereof has been
delivered and appropriated by the buyer, he
must pay a reasonable price therefore.
a. What is reasonable price? A question
of fact dependent on circumstances.
(Art 1474, CC)
b. In the case of Philippine Free Press v
CA (2005), the court held that the price
was reasonable based on factual
determination predicated on offered
evidence (Companys Balance
Sheet showed the book value or fair
market value of its shares)
IN MONEY OR ITS EQUIVALENT
Example of equivalent: Letters of credit
If price is partly in money and partly in
another thing: Determine manifest intention
of the parties to see whether it was barter or
sale. (Art 1468,CC)
If intention does not clearly appear, it shall
be considered a barter if the value of the
thing exceed the amount of money or its
equivalent.(Art 1468,CC)
REAL
Meaning of Real
When buyer has an intention to pay and the
seller has an expectation to receive the price
1. If simulated: Sale is VOID; BUT act may be
shown to have been a donation or some
other act or contract. (Art 1471, CC)
2. In Labagala vs. Santiago (2001), Petitioner
admittedly did not pay any centavo for the
property. Hence, the sale is void.
If Price is false (real consideration is not the
same as that stated in the contract)
1. Sale is void
2. UNLESS proved to be founded on another
true and lawful price (Art 1353, CC)
_______
Gross Inadequacy of Price
1. General Rule: Does not affect a contract of
sale. (Art 1470,CC)
The stipulation in a contract of sale
which states that the consideration is
P1 and other valuable considerations
does not make the contract void. Gross
inadequacy of price does not affect the
contract of sale except that it may
indicate a defect in consent. (Bagnas v.
C.A., 1989)
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2. Exceptions:
a. It may indicate a defect in consent such
as fraud, mistake, or undue influence
b. It may indicate that the contract was in
reality a donation or some other act or
contract
c. Inadequacy would make the contract of
sale rescissible where a contract was
entered into by the guardian of a ward or
a representative of an absentee, without
the courts approval, and the owner
suffers lesion by more than " of the
value of the thing sold. (Art 1381 (1) (2),
CC)
Manner of Payment
Disagreement on the manner of payment is
tantamount to a failure to agree on the price.
(Toyota Shaw vs. CA, 1995)
III. Stages
A. Negotiation/Preparation
From the time the parties indicate interest in the
contract up to the time said contract is perfected
1. Offer
a. General Rule: Offer may be withdrawn
at any time without even communicating
such withdrawal to the interested buyer.
b. Exception: 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. (Art
1324, CC)
c. Exception to the exception: Cannot be
withdrawn within the period if offer is
founded upon a consideration. (Art 1324
and 1479, CC)
2. Option Contract (Asked in 75, 77, 80, 93,
02)
a. Definition
An accepted unilateral promise to
buy or sell supported by a
consideration distinct from the price
(Art 1479, CC)
An optional contract is a privilege
existing in one person, for which he
had paid a consideration, which
gives him the right to buy, for
example, certain merchandise or
certain specified property, if he
chooses, at any time within the
agreed period, at a fixed price. (De
la Cavada vs. Diaz, 1918)
An option is not of itself a purchase,
but merely secures the privilege to
buy.
A consideration for an optional
contract is just as important as the
consideration for any other kind of
contract. If there was no
consideration for the option, then it
cannot be enforced any more that
any other contract where no
consideration exists. (Baviera)
b. Difference from Sale:
SALE OPTION CONTRACT
Bilateral Unilateral: gives a right to buy
or to sell, but imposes no
obligation on the part of the
option-holder, aside from the
consideration for the offer
Sale of property Sale of right to purchase
c. Right of first refusal (Asked in 93, 96,
98, 02, 08)
As to enforceability
Equatorial Realty Development
vs. Mayfair, (1996): If the right to
the first offer is embodied in the
contract, it should be executed
according to the terms
stipulated. The right should be
enforced according to the law
on contracts and not on the
panoramic and indefinite rule on
human relations. This juridical
relation is not amorphous nor is
it merely preparatory.
When the grantee fails to exercise
the right
Paranaque Kings vs. CA,
(1997): Only after the grantee
fails to exercise its right of 1
st
priority under the same terms
and conditions within the period
agreed upon, could the grantor
validly offer to sell the property
to a 3
rd
person under the same
terms as offered to the grantee.
As to the effects of the violation
of the right
Rosencor Devt. Corp. Vs.
Inquing (2001): A sale made in
violation of a right of first refusal
is valid but rescissible, and
may be the subject of an action
for specific performance.
However, before the sale to the
3
rd
person may be rescinded, he
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must have been actually or
constructively aware of the
right of 1
st
refusal at the time
he bought it.
The sanction for the
enforcement of the right of first
refusal against third persons is
based on Art. 19 of NCC, as no
real right was created on the
property.
Difference from sale:
SALE RIGHT OF 1
ST
REFUSAL
Bilateral Unilateral
Price and other
terms of payment
are certain
Price and other terms are yet to
be agreed upon
the thing to be sold must be determinate
Distinction from Option Contract
OPTION
CONTRACT
RIGHT OF 1
ST
REFUSAL
Separate
consideration is
necessary
No need for a separate
consideration
Grantee has the
right to buy or sell
No right to buy or sell, only a
right to match the 1
st
offer to
buy should the grantor decide
to sell
_______
B. Perfection
(Asked in 88 and 91)
When Perfected
1. Contract of sale is a consensual contract,
hence perfected at the moment of the
meeting of the minds of the parties as to the
object of the contract and the price. (Art
1475,CC)
2. It is the proof of all the essential elements of
the contract of sale, and not the mere giving
of earnest money, which establishes the
existence of a perfected sale. (Platinum
Plans Phils. vs. Cucueco, 2006)
Effect of Perfection
From the moment of the perfection of the
contract of sale, the parties may reciprocally
demand performance, subject to the provisions
of the Statute of Frauds. (Art 1475,CC)
Earnest Money
Definition- paid in advance of the purchase
price agreed upon by the parties in a contract of
sale, given by the buyer to the seller, to bind the
latter to the bargain. (Asked in 93, 02)
Option Money vs. Earnest Money (Limson vs.
Ca, 2001)
OPTION MONEY EARNEST MONEY
Separate and distinct
consideration from the
purchase price
Part of purchase price
(Art 1482, CC)
Given when sale is not
yet perfected
Given only when there
is already a sale
When given, the would-
be-buyer is not required
to buy, but may even
forfeit it depending on
the terms of the option
When given, the buyer
is bound to pay the
balance
Grantee of option is still
undecided whether or
not to buy or sell the
property (Baviera)
Buyer manifests his
earnest desire to buy
the property
_______
C. Consummation
Begins when the parties perform their respective
undertakings under the sale. It culminates in the
extinguishment of the sale. (See obligations of
seller and buyer, Chapter II)
IV. Kinds of Sale
(Asked in 97, 00)
A. Absolute Sale
Sale is not subject to any condition
whatsoever; title passes to the buyer upon
delivery of thing sold
B. Conditional Sale
Contract is subject to certain conditions
(usually the payment of the purchase price);
title will only pass once the conditions have
been fulfilled
In some cases, the Court makes finer
distinctions between a conditional sale and a
contract to sell:
a. Contract to sell- The fulfilment of the
suspensive condition, which is the full
payment of the price, will not
automatically transfer ownership to the
buyer although the property may have
been previously delivered to him.
b. Conditional Sale: The fulfilment of the
suspensive condition renders the sale
absolute and affects the sellers title
thereto such that if there was previous
delivery of the property, the sellers
ownership or title the property is
automatically transferred to the buyer.
(Ursal vs. CA, 2005)
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V. Form
General rule: No form required as to validity
since sale is perfected by consent of the parties.
The sale may be (Art.1483,CC):
1. Written
2. Oral
3. Partly written and partly oral
4. Inferred from the conduct of the parties
Exceptions:
1. Statute of Frauds (Art,1403 (2),CC)
a. Contract or some memorandum thereof
must be in writing and subscribed by
the party or his agent, otherwise
contract is unenforceable. Unless
ratified by failure to object to oral
evidence or acceptance of benefits
under the contract
b. What are under the Statute of Frauds:
Sale of goods, chattels, or things in
action at a price not less than P500
Sale not to be performed within 1
year
Sale of real property or an interest
therein (Art 1358, CC)
c. Applies only to executory contracts, not
to contracts either totally or partially
performed. (Iigo v. Estate of Maloto,
1967)
2. Sale of realty by an agent
Agents authority must be in writing,
otherwise the sale is void (Art.1874, CC)
3. Sale of large cattle
To be valid, transfer of large cattle must be
registered with the municipal treasurer
(Sec.529, Revised Administrative Code)
Electronic Commerce Act (RA 8792)
1. Electronic documents have the legal effect,
validity or enforceability of any other
document or legal writing
2. As long as electronic document maintains its
integrity and reliability and is capable of
being displayed to the person to whom it is
to be presented, containing the electronic
signature of the person sending it. (Sec 7, 8
of RA 8792)
Contracts
A. DONATION
SALE DONATION
Onerous Gratuitous
Perfected by mere
consent
Must comply with the
formalities required by
law. (Art 745, CC)
When the price of the contract of sale is
simulated, the sale may be void but the act may
be shown to have been in reality a donation or
some other contract. (Art.1471.CC)
B. BARTER
SALE BARTER
Consideration is price
in money or its
equivalent
Consideration is
another thing
Barter is a contract where one of the parties
binds himself to give one thing in consideration
of the others promise to give another thing
(Art.1638, CC)
If consideration consists partly in money and
partly in another thing, the intention of the
parties determines whether the contract is one of
sale or barter:
If manifest intention is not clear: Barter
when the value of thing is more than the
amount of money or its equivalent,
otherwise, sale. (Art.1468)
C. CONTRACT FOR A PIECE OF WORK
SALE CONTRACT FOR A
PIECE OF WORK
Goods are manufactured
or procured in the
ordinary course of
business
Goods are manufactured
for customer upon his
special order
For the general market,
whether on hand or not
Specifically for customer
The fact that the object were made by the seller
only when customers placed their orders, does
not alter the nature of the contract of sale, for it
only accepted such orders as called for the
employment of such materials as it ordinarily
manufactured or was in a position habitually to
manufacture such. (Celestino Co & Co vs.
Collector, 1956)
When each product or system executed is
always UNIQUE and could not mass-produce
the product because of its very nature, such is a
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contract for a piece of work. (Commissioner vs.
Engineering Equipment and Supply Co.,
1975)
D. LEASE OF THINGS
SALE DACION EN PAGO
No pre-existing debt Pre-existing debt
Creates an obligation Extinguishes the
obligation (mode of
payment)
Price is more freely
agreed upon, fixed by the
parties
Price is value of the thing
given
There is a novation of the contract of loan into a
contract of sale when the creditor agrees to
accept a thing in payment of the debt. Hence, if
the thing given in payment turns out to belong to
another, the creditors remedy should be
governed by the law on sales, not loan.
(Baviera)
E. CONTRACT TO SELL
(Asked in 97, 01, 03)
Contract of Sale Contract to Sell
Ownership is transferred
upon delivery
Ownership is only
transferred upon full
payment of price
Non-payment is a
Full payment is a positive
suspensive condition,
hence non payment
would not give rise to the
obligation to transfer
ownership
Conditional Contract of
Sale
Contract to sell
Sale is already perfected No perfected sale yet
A subsequent buyer is
presumed to be a buyer
in bad faith
A subsequent buyer is
presumed to be a buyer
in good faith
NOTE: Contract to Sell is an executory contract,
while a Contract of Sale is a consummated
contract.
F. BILATERAL PROMISE TO BUY AND
SELL
(Asked in 80, 91)
A promise to buy and sell a determinate thing for
a price certain is reciprocally demandable. (Art
479, CC)
Like a sale, the thing must be determinate and
the price certain.
SALE BILATERAL PROMISE TO BUY
AND SELL
Consideration
Buyer: thing
Seller: price
Consideration is the promise
made by the other (Baviera)
Title passes to
the buyer
No transfer of title
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Buyer
I. OBLIGATIONS OF THE SELLER
A. TO TRANSFER OWNERSHIP
B. TO WARRANT AGAINST EVICTION AND
HIDDEN DEFECTS
C. TO PRESERVE THE THING
D. TO PAY FOR THE EXPENSES FOR THE
EXECUTION AND REGISTRATION OF
THE DEED OF SALE
II. OBLIGATIONS OF THE BUYER
A. TO ACCEPT DELIVERY
B. TO PAY THE PRICE OF THE THING SOLD
I. Obligations of the Seller
Obligations of the Seller (TWPP)
1. Transfer ownership
2. Warrant against eviction and hidden defects
3. Preserve the thing
4. Pay for the expensed for the execution and
registration of the deed of sale
A. To transfer ownership
(Asked in 84, 98, 99, 03)
Obligation to transfer ownership and to deliver is
really implied in every contract of sale (Arts.
1458-1459)
Transfer of ownership requires delivery (Art.
1495)
General Concepts
1. Delivery comprises 2 obligations in Art.
1495:
a. Actual duty to deliver
b. Transfer of ownership can only be
accomplished via delivery
2. What to Deliver
a. Thing sold (Art. 1495)
b. Fruits (Art. 1164 & 1537)
c. Accessions and accessories (Art. 1166
& 1537)
Improvements by seller at his
expense grants him a usufructuary
right.
No indemnification
But he may remove it to the extent
that there is no damage (Art. 1538)
3. Where to Deliver
a. A hierarchy is followed (STOR):
Stipulation
Usage of trade
Sellers place of business (office)
Sellers residence
b. In case of specific goods, which the
parties knew to be at some other place
when the contract was perfected, that
place is the place of delivery
c. If goods are at the time of sale
possessed by a third person, then there
is no delivery until he acknowledges to
the buyer that he holds the goods for
buyer.
4. When to Deliver
Absent a stipulation as to time, delivery must
be made within a reasonable time; demand
or tender of delivery shall be made at a
reasonable hour.
Ways of Effecting Delivery
1. Actual Delivery
a. When deemed made: when the thing
sold is placed in the control and
possession of the vendee (Art. 1497)
b. Not always essential to passing of title
(Art. 1475)
c. Parties may agree when and on what
conditions the ownership in the subject
of the contract shall pass to the buyer
(example: Art 1478 where ownership will
only pass after full payment of the price)
2. Constructive Delivery
a. Execution of public instrument (Art
1498, par. 1)
General rule: produces the same
legal effects of actual delivery.
Exceptions:
The intention of the parties is
otherwise.
At the time of execution, the
subject matter was not subject
to the control of the seller which
must subsist for a reasonable
length of time after execution.
(Pasagui v Villablanca, 68
SCRA 18)
Control over thing sold must be
such that seller is capable of
physically transferring it to buyer
b. Symbolic Delivery
Delivery of keys of the place or
depositary where the movable is
stored or kept. (Art 1498, CC)
Unless otherwise agreed, when
symbolic delivery has been made,
the seller is not obliged to remove
tenants to place the buyer in actual
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possession of the property as he
has already complied with his
obligation to transfer ownership of
and deliver the thing sold. (Power
Commercial and Industrial Corp.
v. CA, 1997; Sabio v. The
International Corporate Bank,
Inc., 2001)
c. Tradition Longa Manu (Long Hand)
Delivery of thing by mere
agreement.
Example: Seller points to the
property without actually transferring
physical possession thereof.
When an employer assigned all its
rights and title to all surplus property
salvaged by the contractor, tradition
longa manu takes place. Delivery is
upon the moment a thing is
salvaged. (Board of Liquidators v.
Floro, 1960)
d. Tradition Brevi Manu (Short Hand)
MOVABLE is delivered when the buyer
had the thing already in his possession
before the sale took place, not as owner
but as lessee, borrower, or depositary.
e. Tradition Constitutum Possessorium
Seller continues to be in possession of
the property sold, by virtue of a lease
contract agreement with the vendee.
f. Delivery to a Common Carrier
General Rule: Delivery to the
courier or carrier tantamount to
delivery to buyer.
Exceptions
Seller reserved title by the form
of the bill of lading, with intent to
remain the owner, not merely for
the purpose of securing
payment, OR
Contrary intent appears in the
contract (i.e. seller is required to
deliver goods to buyer at the
point of destination)
F.O.B.: Free on Board
When seller bears the expenses
of transportation up to the
F.O.B. point.
C.I.F.: Cost, Insurance,
Freight
Price quoted includes the costs
of the goods, insurance, and
freight charges on the goods up
to the point of destination.
F.A.S.: Free Alongside
Seller bears the expenses of
transportation until he delivers
the goods alongside a vessel at
a named port.
Completeness of Delivery
1. When may the seller refuse to deliver:
a. No payment yet or no period for
payment has been fixed in the contract
(Art.1524);
b. The buyer loses the right to make use
of the term, as when:
He becomes insolvent UNLESS he
gives a guaranty or security for the
debt;
He does not does not furnish the
seller the guaranties or securities he
promised;
He impairs the guaranties or
securities or they disappear
fortuitously UNLESS he immediately
gives new ones equally satisfactory;
He violates any undertaking, in
consideration of which the seller
agreed to the period;
He attempts to abscond. (Art.1536)
2. Rules on Sales of Goods
a. When Quantity less than expected
Buyer may reject all
Buyer accepts with knowledge of
sellers inability to deliver the rest
buyer pays at contract price
Buyer has used or disposed prior to
knowing sellers inability to deliver
the rest buyer pays fair value
b. Quantity more than expected
If divisible, buyer may reject excess
If indivisible, buyer may reject all
c. Quality different or different goods
If divisible, buyer may accept the
goods compliant with contract and
reject those that are not
If indivisible, buyer may reject all
(Art. 1522)
d. Sale of specific mass of goods
In the sale of fungibles where the
measure or weight has not been
agreed upon nor is there a fixed rate
based upon a measurement, the
subject matter of the sale is a
determinate object the specific
mass; seller is merely required to
deliver such mass even if actual
quantity falls short of parties
estimate (Art. 1480)
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e. Delivery by installments
By default, buyer is not bound to
accept delivery of goods by
instalments
In a contract of delivery by
installment to be paid for via
installment as well, delay or breach
may not necessarily mean breach of
the entire contract; depending on
the circumstances, breach may be
severable and the aggrieved party
is entitled to damages and not
rescission. (Art. 1583)
3. Rules on Sales of Immovables
a. Sale at a fixed rate per unit of measure
Seller bound to deliver entire land
If the area is less than that stated,
buyer may rescind or demand a
proportionate reduction in price
If a part of the land is not of the
quality stated in the contract, buyer
may rescind or demand a
proportionate reduction in price
Buyer may only avail of rescission if
the area deficiency is 10% or more
of total area or if the inferior value of
the part of the land exceeds 10% of
the price agreed upon. (Art. 1539)
If the area turns out to be greater
than that stated, buyer may accept
area included and reject the excess
or accept all and pay a
proportionate increase in price (Art.
1540)
b. Sale for lump sum
Follows the same rule as the sale of
a specific mass which is explained
above
There is no change in price even if
area or number turns out to be
greater or lesser than that stated
(Art. 1542)
Exception: when the excess or
deficiency is no longer reasonable;
in Asian v Jalandoni, 1923, 644 sq
m was found to be unreasonable.
Exception to the exception: when
buyer expressly assumes risk on
actual area of the land. (Garcia v
Veloso, 1941)
If the price per unit or measure is
not provided for in the contract, then
the rules of lump sum sale should
prevail. (Sta. Ana v Hernandez,
1966)
Effect of Delivery
1. Delivery, generally, results in transfer of
ownership from seller to buyer.
2. As such, it also transfers the risk of loss of
the thing sold to the buyer.
3. Acceptance is not a condition for the
completeness of delivery; even with such
refusal of acceptance, delivery will be
deemed completed and produce its legal
effects.
4. By default, expenses of and incidental to
putting the goods into a deliverable state
must be borne by seller. (Art. 1521)
When delivery does not transfer title
1. Sale on approval, trial, or satisfaction
General Rule: Title remains with the seller
Exceptions:
a. Buyer signifies his approval or
acceptance to the seller or does any
other act adopting the transaction
b. Retains the goods without giving notice
of rejection after the time fixed has
expired, if no time has been fixed, after
the expiration of a reasonable time (Art
1502, CC)
Difference between sale on approval and
sale on return
Sale on Approval Sale on Return
Ownership does not pass
upon delivery
Ownership passes upon
delivery, but buyer may revest
ownership in the seller by
returning or tendering the
goods within the time fixed in
the contract
Depends on the character
or quality of goods
Depends on the will of the
buyer
Subject to a suspensive
condition
Subject to a resolutory
condition
Risk of loss remains with
the seller
Risk of loss remains with the
buyer
2. Express Reservation
If it was stipulated that ownership in the
thing shall not pass to the purchaser until he
has fully paid the price. (Art 1478, CC)
3. Implied Reservation
The following are instances when there is an
implied reservation of ownership
a. Goods are shipped, but by the bill of
lading goods are deliverable to the seller
or his agent, or to the order of the seller
or his agent
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b. Bill of lading is retained by the seller or
his agent.
c. When the seller of the goods draws on
the buyer for the price and transmits the
bill of exchange and bill of lading to the
buyer, and the latter does not honor the
bill of exchange by returning the bill of
lading to the seller.
4. When sale not valid
eg. When the thing sold is a public property
5. When Seller is not the owner
(Asked in 77, 78, 86, 87)
General Rule: Ownership is not acquired by
the buyer. One cannot give what one does
not have. (Art 1505, CC)
Exceptions: (RE-ROM)
a. Seller has a Right to transfer ownership
Seller need not be the owner of the
thing at the time of perfection of the
contract It is sufficient that seller has
a right to transfer ownership thereof
at the time it is delivered (Art. 1459)
One who sells something he does
not own yet is bound by the sale
when he acquires the thing later
(Bucton vs Gabar, 55 SCRA 469)
b. Estoppel: Owner is by his conduct
precluded from denying the sellers
authority to sell. (Art. 1434)
c. Registered land bought in good faith
General rule: Buyer need not go
beyond the Torrens title
Exception: When he has actual
knowledge of facts and
circumstances that would impel a
reasonably cautious man to make
further inquiry
d. Order of courts Statutory Sale
In execution sale, the buyer merely
steps into the shoes of the judgment
debtor (Rule 39, sec. 33, ROC)
e. When goods are purchased in
Merchants store, Fair, or Market (Art
1505, CC)
The policy of the law has always
been that where the rights and
interest of the vendor clash with that
of an innocent buyer for value, the
latter must be protected. (Sun
Brothers and Co. V. Velasco,
(1958)
6. Sale by person having a voidable title
a. True owner may recover the thing when
provided the ff. requisites concur:
Subject matter is movable
Owner has either lost the thing or
has been unlawfully deprived. (Art
559, CC)
b. Reimbursement is necessary before
owner can recover when:
Buyer acted in good faith
Acquired at a public auction (Art
559, CC)
c. Recovery no longer possible when:
Buyer in good faith
Acquired it at a merchants store,
fair or market. (Art 1506, CC)
__________
B. To warrant against eviction & hidden
defects (Art. 1495; 1547)
Warranties
A statement or representation made by the seller
contemporaneously and as 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 ensure that certain
facts are or shall be as he then represents.
Effects of Warranties
1. Natural tendency is to induce buyer to
purchase the subject matter
2. Buyer purchases subject matter relying
thereon
3. Seller liable for damages in case of breach
Effects of Waivers
Only applicable to waiver of warranty against
eviction (see the following section) parties may
increase or decrease warranty against eviction
but the effect depends on good/bad faith of the
seller
1. Seller in bad faith and there is warranty
against eviction null and void
2. buyer without knowledge of a particular risk,
made general renunciation of warranty not
waiver but merely limits liability of seller in
case of eviction (pay value of subject matter
at time of eviction)
3. buyer with knowledge of risk of eviction
assumed its consequences and made a
waiver vendor not liable
4. waiver to a specific case of eviction wipes
out warranty as to that specific risk but not
as to eviction caused by other reasons
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Condition v. Warranty
Condition Warranty
Pertains to and affects
the existence of the
obligation
Goes into the
performance of an
obligation and may, in
itself, be an obligation
Non-happening does not
amount to breach of
contract
Non-fulfillment
constitutes breach of
contract
Must be stipulated Stipulation or operation
of law
May attach to either to
the sellers duty to
deliver thing or some
other circumstance
Always relates to the
subject matter or the
sellers obligations as to
the subject matter
If seller has promised that the condition
should happen or be performed, the
buyer may treat the nonperformance of
the condition as a breach of warranty.
(Art.1545)
Form
1. Express Warranty (APIR)
For there to be express warranty, the
following requisites must concur:
a. An affirmation of fact or any promise
relating to the thing sold;
b. The natural tendency of such affirmation
or promise is to induce the buyer to buy;
c. The buyer buys the thing relying
thereon. (Art. 1546)
d. Made before the sale not upon delivery
or any other point
An express warranty can be made by and
also be binding on the seller even in the sale
of a second hand article. (Moles v. IAC,
1989)
Express Warranty Dealers or Traders
Talk
What is specifically
represented as true in
said document cannot be
considered as mere
dealer's talk. (Moles v.
IAC, 1989)
Affirmation of the
value of the thing or
statement of the
sellers opinion only
is not a warranty
unless:
- The seller made
it as an expert;
- It was relied upon
by the buyer.
(Art.1546)
Ordinarily, what does
not appear on the face
of the written
instrument (Moles v.
IAC, 1989)
Express Warranty False Representation
Concealment of facts
does not necessarily
amount to false
representation
When concealment of
facts comes with an
active misstatement of
fact or a partial
statement of fact such
that withholding of that
unsaid portion makes
that which is stated
absolutely false
However, buyer who
fails to inspect condition
of property despite
ample opportunity to do
so and no opposition on
the part of seller cannot
later on allege false
representation. (Phil
Mftg Co. v Go Jucco,
1926) This is because
buyers duty to inspect
remains despite false
representation by the
seller. Buyer has the
duty to exercise due
diligence.
2. Implied Warranty
a. Implied Warranty of Title
b. Implied Warranty against Encumbrance
/ Non-Apparent Servitudes
c. Implied Warranty against Hidden
Defects (Art. 1547)
Implied warranty as to
Merchantable Quality and Fitness
of Goods
Implied warranty against
Redhibitory Defect in the Sale of
Animals (Art. 1572)
Quality and Fitness of Goods in
Sale by Sample or Description
d. Other Warranties
Implied Warranty of Title
1. Implied warranty arises by operation of law
and need not be stipulated in the contract of
sale.
2. Warranty of Sellers Right to Sell: seller
warrants his right to sell at the time the
ownership is to pass.
Inapplicable to a sheriff, auctioneer,
mortgagee, pledgee, or other person
professing to sell by virtue of authority in
fact or law. (Art. 1547)
3. Warranty against Eviction: seller warrants
that buyer, from the time ownership passes,
shall have and enjoy legal and peaceful
possession of the thing. Its requisites are:
a. Buyer is deprived of the whole or a part
of the thing sold;
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b. Eviction is by final judgment
c. Final judgment based on a right prior to
the sale or an act imputable to the
vendor
d. Seller is summoned and made co-
defendant in the suit for eviction at the
instance of the buyer. (Power
Commercial and Industrial Corp. v.
CA, 1997)
Implied Warranty against Encumbrance /
Non-Apparent Servitudes
Requisites for breach:
1. Thing sold is an immovable
2. Burden or servitude encumbering the thing
sold is
a. Non-apparent to the naked eye
b. Not mentioned in the agreement
c. Of such nature that it must be presumed
that the buyer would not have bought it
had he been aware thereof
d. Not recorded in the Registry of Property
unless there is an express warranty that
the thing is free from all burdens and
encumbrances (Art.1560)
Implied warranty against Hidden Defects
Requisites for breach:
1. The defect renders the thing sold unfit for
the use for which it was intended OR
diminishes its fitness for such use to such an
extent that had the buyer been aware
thereof, he would not have bought it or
would have paid a lower price;
2. The defect is not patent or visible;
3. The buyer is not an expert who, by reason of
his trade or profession, should have known
the defect
4. The seller is aware of the hidden fault or
defect, OR even he is not aware thereof, if
there is no stipulation to the contrary
(Arts.1561 &1566)
Implied warranty as to Merchantable Quality
and Fitness of Goods
Merchantable Quality:
1. Where the goods are brought by description
from a seller who deals in goods of that
description (Art.1562)
2. In a sale by sample, if the seller is a dealer
in goods of that kind and the defect is not
apparent on reasonable examination of the
sample (Art.1566)
Fitness for a particular purpose: Where the
buyer expressly or impliedly makes known to the
seller the particular purpose for which the goods
are acquired AND it appears that the buyer
relies on the sellers skill or judgment
(Art.1562(1))
Implied warranty against Redhibitory Defect
in the Sale of Animals (Art. 1572)
Redhibitory defect- a hidden defect of
animals of such nature that expert
knowledge is not sufficient to discover it,
even in case a professional inspection has
been made
No warranty in case of (Art. 1574):
a. Animals sold at fairs or public auctions
b. Livestock sold as condemned
The following sales are void (Art. 1575):
a. Sale of animals suffering from
contagious diseases
b. Sale of animals unfit for the purpose for
which they are acquired as stated in the
contract
Veterinarian liable if he fails to discover or
disclose the hidden defect through
ignorance or bad faith (Art 1576)
Seller liable if animal dies within 3 days after
its purchase due to a disease that existed at
the time of sale. (Art 1578)
Other Warranties
1. Warranty in Sale of Consumer Goods
Consumer goods goods primarily for
personal, family, household or agricultural
purposes, which shall include but not limited
to food, drugs, cosmetics, and devices
(Sec.4(q), RA 7493
:
Consumer Act of the
Phil)
Kinds:
a. Full warranty- if the written warranty
meets the minimum standards
b. Limited warranty- if the written warranty
does not meet the minimum standards
(Sec.6(c), RA7394)
Minimum standard for warranties that the
warrantor shall:
a. Remedy such consumer product within
a reasonable time and without charge in
case of a defect, malfunction or failure to
conform to such written warranty;
b. Permit the consumer to elect whether to
ask for a refund or replacement without
charge of such product or part, as the
case may be, where after reasonable
number of attempts to remedy the defect
or malfunction, the product continues to
have the defect or to malfunction
The warrantor will not be required to perform
the above duties if he can show that the
defect, malfunction or failure to conform to a
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written warranty was caused by damage due
to unreasonable use thereof. (Sec.68(d), RA
7394)
2. Warranty in sale of Subdivision Lot or
Condominium Units
The owner or developer shall be 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. (Sec.19, PD 957: The
Subdivision and Condominium Buyers
Protective Decree)
__________
C. To preserve the thing, pending delivery,
with proper diligence (Art. 1163)
Duration: From the perfection of sale until
delivery (Art 1480)
Default standard of care: Diligence of a good
father of a family
General rule: seller is liable for loss or
deterioration (Art. 1174)
Exception: fortuitous event (Art. 1174)
Exception to exception: seller is still liable for
fortuitous event if
1. Law provides for it (e.g. delay or promising
to deliver the same thing to 2 or more
persons with different interests Art. 1165)
2. By stipulation
3. Nature of obligation requires assumption of
risk
Fungibles sold for a price fixed according to
weight, number or measure: duty to preserve
begins only after the things are weighed,
counted or measured except when seller is
already in delay.
__________
D. To pay for the expenses for the execution
and registration of the deed of sale (Art.
1487)
General rule: The seller has the duty to pay for
the expenses for the execution and registration
of the deed of sale
Exception: if there is a stipulation to the
contrary (Art. 1487)
Expenses incurred subsequent to the transfer of
title are to be borne by the buyer, unless caused
by the fault of the seller
II. Obligations of the Buyer
Obligations of the Buyer
1. To Accept delivery
2. To Pay the price of the thing sold
Pertinent Rules
1. In a contract of sale, the seller is not
required to deliver the thing sold until the
price is paid nor is the buyer required to pay
the price before the thing is delivered in the
absence of an agreement to the contrary
(Art 1524)
2. If stipulated, then the buyer is bound to
accept delivery and to pay the price at the
time and place designated
3. If there is no stipulation as to the time and
place of payment and delivery, the buyer is
bound to pay at the time and place of
delivery
4. In the absence also of stipulation, as to the
place of delivery, it shall be made wherever
the thing might be at the moment the
contract was perfected (Art. 1521)
5. If only the time for delivery of the thing sold
has been fixed in the contract, the vendee is
required to pay even before the thing is
delivered to him.
First Obligation: accept delivery
1. Form
a. Express: buyer intimates acceptance
b. Implied:
Goods delivered to the buyer and he
does any act in relation to them that
is inconsistent with the ownership of
the seller.
After the lapse of a reasonable time,
the buyer retains the goods without
intimating to the seller that he has
rejected them. (Art.1585)
2. Manner
Right of Inspection: reasonable
opportunity to examine the goods upon
delivery. If there is a stipulation that delivery
is preconditioned on payment, then buyer
has no right of inspection until he has paid.
(Art.1584) Exception: in case such right of
inspection is permitted by agreement or
usage trade.
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3. Effect of Refusal to accept
a. If buyer refuses to accept goods, having
the right to do so, he is not bound to
return them to the seller; it being
sufficient that he notifies the seller of his
refusal to accept
If he voluntarily constitutes himself a
depositary of the goods, he shall be
liable as such. (Art.1587)
b. Unjust refusal to accept still results to
transfer of ownership; title to the goods
passes to the buyer from the moment
they are placed at his disposal, except if
ownership has been reserved by the
seller (Art.1588)
Second Obligation: pay the price of the thing
sold (Art. 1582)
1. Payment of interest
Buyer is liable for interest when: (SFD)
a. Interest is stipulated;
b. Thing sold produces fruits or income;
c. Buyer is in default - interest accrues
from the time of judicial or extrajudicial
demand for payment
2. Suspension of payments
Buyer may suspend payment when:
a. his ownership or possession of the thing
is disturbed or
b. he has reasonable grounds to fear such
disturbance by a vindicatory action or a
foreclosure of mortgage
Exceptions: buyer cannot suspend
payment when:
a. seller gives security for the return of the
price in a proper case
b. it has been stipulated that,
notwithstanding any such contingency,
the buyer shall be bound to pay (Art.
1590)
Suspension may continue until the seller has
caused the disturbance or danger to cease
A mere act of trespass shall not
authorize the suspension of the
payment. (Art.1590)
3. Sale of real property
In the sale of immovable property, buyer
may pay even beyond the expiration of
the period agreed upon, as long as no
demand for rescission of the contract
has been made upon him either
judicially or by a notarial act, despite a
stipulation providing for ipso jure
rescission (Art.1592) (Asked in 88, 00)
After demand, court may not grant him a
new term (Heirs of Escanlar, et.al. v.
CA, 1997)
R.A. 6552 (Maceda Law) applies to
sale or financing of real estate on
installment (Rillo v. Court of
Appeals,1997)
Buyer is awarded a grace period of
1 month per year of installments
paid or 60 days, whichever is
higher, within which he may pay
without additional interest
o may be used once every 5
years of the life of the contract
or any of its extensions
If contract is to be cancelled, seller
must first:
o 30 day notice of cancellation,
and
o refund cash surrender value to
buyer; amount is equivalent to
50% of total payments made
including deposits, options and
down-payments plus 5% for
every year in excess of 5 years
of the life of the contract or any
of its extensions
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Chapter III. Double Sales
(Asked in 77, 87, 89, 98, 01, 04)
I. General Rule
II. Requisites
III. Rules governing sale of movables,
immovables and unregistered lands
IV. Purchaser in good faith
I. General Rule
Prior tempore, potior jure (he who is first in time
is preferred in right) applies.
II. Requisites
Requisites (Cheng v Genato, 1998)
1. 2 or more valid sales;
2. Same subject matter;
3. 2 or more buyers with conflicting interests at
odds over the rightful ownership of the thing
sold;
4. Same seller
Immovables and Unregistered Lands
A. Sale of Movables
Ownership shall be transferred to the person
who may have first taken possession in
good faith.
B. Immovables
1. Ownership belongs to the person who:
a. In good faith first recorded in the
Registry of Property; OR
b. If there is no inscription, ownership
passes to the person who in good faith
was first in possession; OR
c. In the absence thereof, to the person
who presents the oldest title,
PROVIDED there is good faith. NOTE:
good faith is required all the time.
NOTE:
a. Oldest Title any public document
showing acquisition of the land in good
faith. To constitute title, the
transmission of ownership must appear
in a public document [Art. 1358 (1)]
b. Examples: Deed of Sale, Deed of
Donation, Deed of Trust
2. Registration includes any entry made in the
Primary Entry Book of the registry, including
both registration in its ordinary and strict
sense and cancellation, annotation, and
even marginal notes. (Cheng v. Genato,
1998)
NOTE: Pencilled entries on the title are not
considered registration (AFPMBAI v.
Court of Appeals, 1999).
C. Sale by Virtue of Execution and
Attachment
Art. 1544 does NOT apply to the sale of
unregistered land at an execution sale
because a buyer of unregistered land at a
execution sale only steps into the shoes of
the judgment debtor, and merely acquires
the latter's interest in the property sold as of
the time the property was levied upon.
(Carumba v. CA, 1970)
D. Sale of Unregistered Land
1. Instrument or deeds establishing,
transmitting, acknowledging, modifying or
extinguishing rights with respect to lands not
registered under the Land Registration Act
or the Spanish Mortgage Law, are required
to be registered in the Registry of Property
to prejudice 3
rd
persons, although such
registration is understood to be w/o
prejudice to a 3
rd
party with a better right.
(PD 1528 Sec 113)
2. Art. 1544 applies to unregistered land
subject to a conventional sale (because of
Art. 1358) but NOT to unregistered land
subject to judicial sale.
E. Purchaser in good faith
(Asked in 76, 86, 08)
1. General Characteristics
a. One who buys the property of another,
without notice that some other person
has a right to or interest in such
property, and who pays a full and fair
price for the sale, at the time of the
purchase or before he has notice of the
claim/interest of some other person in
the property. (Agricultural and Home
Extension Development Group v CA,
1992)
b. A buyer could not have failed to know or
discover that the land sold to him was in
adverse possession; hence he is
deemed to have acted in bad faith.
(Heirs of Ramon Duran v Uy, 344
SCRA 238)
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2. Presumption
Gen Rule: As a rule, he who asserts the
status of a purchaser in good faith and for
value, has the burden of proving such
assertion. This onus probandi cannot be
discharged by mere invocation of the legal
presumption of good faith, i.e., that everyone
is presumed to act in good faith (Mathay v
CA, 295 SCRA 556)
When buyer is presumed to be in bad
faith:
a. Annotation of adverse claim: Places
any subsequent buyer of the registered
land in bad faith. (Balatbat v CA, 261
SCRA 128)
b. Annotation of Lis Pendens: Buyer
cannot be considered an innocent
purchaser for value where it ignored the
lis pendens on the title.
Lis Pendens Annotation of Adverse
Claim
maybe cancelled even
before the action is
finally terminated for
causes which may not
be attributable to the
claimant
may be cancelled only in
one instance, i.e., after the
claim is adjudged invalid
or unmeritorious by the
Court
Both are intended to protect the interest of a
claimant by posing as notices and caution to those
said with the property that same is subject to a
claim.
NOTE: The two are not contradictory or
repugnant to one another; nor does the
existence of one automatically nullify the
other, and if any of the registrations should
be considered unnecessary or superfluous,
it would be the notice of lis pendens (A.
Doronila Resources Development Inc v CA,
1988)
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Chapter IV. Risk of Loss
I. GENERAL RULE
II. EXCEPTION
I. General Rule
Res perit domino: Owner bears risk of
loss
Ownership is not transferred until delivery
II. Exceptions
2. An obligation to deliver a generic thing is
not extinguished by loss. (Art 1263, CC)
3. Risk of loss of specific things is subject to
the ff:
a. When loss occurs before perfection,
such loss is borne by seller
b. When loss occurs at time of perfection,
loss must have occurred before the
contract was entered into, without the
knowledge of both parties
TOTAL LOSS PARTIAL LOSS (Or loss
which results in
substantial change in
character)
Contract is
ineffective.
Because there
can be no contract
without an object
Buyer may withdraw from
the contract
OR
Buy the remainder at a
proportionate price
c. When loss occurs after perfection but
before delivery
Seller bears risk of loss
Buyer does not bear risk of loss until
goods are delivered to him
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Chapter V. Documents of Title
I. IN GENERAL
II. NEGOTIABLE DOCUMENTS OF TITLE
III. NON-NEGOTIABLE DOCUMENTS OF TITLE
I. In General
Definition
A 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 endorsement or by delivery,
goods represented by such document. (Art.
1636)
Examples: bill of lading, quedan, warehouse
receipts, trust receipts
Purpose
1. Evidence of possession or control of goods
described therein
2. Medium of transferring title and possession
over the goods described therein without
having to effect actual delivery thereof
(Villanueva)
3. The custody of a negotiable warehouse
receipts issued to the order of the owner, or
to bearer, is a representation of title upon
which bona fide purchasers for value are
entitled to rely, despite breaches of trust or
violations of agreement on the part of the
apparent owner. (Siy Cong Bieng vs.
HSBC, 56 Phil 598)
II. Negotiable Documents of Title
Definition
Document of title which states that the goods
referred to therein will be delivered to the bearer,
or to the order of any person named in such
document (Art. 1508, CC).
TERMS OF THE
DOCUMENT
HOW NEGOTIATED
Goods are deliverable to
bearer
Endorsed in blank by the
person to whose order the
goods were deliverable
By delivery of the
document to another
Goods are deliverable to
the order of a specified
person
By indorsement of
such person (Art.
1509,CC)
Who may negotiate it? (Art.1512,CC)
1. Owner
2. Person to whom the possession or custody
of the document has been entrusted by the
owner
a. If bailee undertakes to deliver the goods
to such person
b. If document is in such form that it may
be negotiated by delivery
A person to whom a document has been
negotiated acquires
1. Rights of the vendor
2. Rights of the original consignee
A person who negotiates a document of title
warrants
1. Genuineness of document
2. Legal right to negotiate or transfer
3. No knowledge of fact which would impair the
validity or worth of the document
4. Right to transfer the title to the goods and
merchantability or fitness for a particular
purpose, whenever such warranties would
have been implied had the contract been
transfer the goods without a document
He does not warrant that
1. Common carrier will fulfill its obligation to
deliver the gods
2. Previous indorsers will fulfill their obligation
(Art. 1516-1517, CC)
Goods in the hands of the carrier covered by
a negotiable document cannot be attached or
levied upon, UNLESS
1. Document is first surrendered to the carrier;
or
2. Impounded by the court; or
3. Its negotiation is enjoined. (Art. 1519-
1520,CC)
III. Non-Negotiable Documents of Title
Goods described in a non-negotiable
document of title are deliverable only to a
specified person
Carrier will not deliver the goods to any
holder of the document or to whom such
document may have been endorsed by the
consignee
Must present the deed of sale or donation in
his favor
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Negotiation [negotiable document of
title] VS. Transfer [non-negotiable
document of title]:
Negotiation (Art. 1508) Transfer
Delivery of a negotiable
document of title to
another if by the terms
thereof, the goods are
deliverable to bearer, or
when the document was
endorsed in blank by
the person to whose
order the goods are
deliverable.
In a negotiable
document of title, the
buyer may acquire a
better title.
The assignment of rights
of the consignee of a
non-negotiable document
of title to another; or
Document of title was
ordered sold or assigned,
without indorsement.
Transferee does not
acquire a better title than
his transferor
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Chapter VI. Remedies of the Seller and
Buyer
I. GENERAL REMEDIES
A. SPECIFIC PERFORMANCE
B. RESCISSION
C. DAMAGES
II. REMEDIES OF THE SELLER
A. IN THE SALE OF MOVABLES
1. EXTRAJUDICIAL REMEDIES
2. JUDICIAL REMEDIES
B. IN THE SALE OF IMMOVABLES
1. RESCISSION FOR ANTICIPATORY
BREACH
2. SPECIFIC PERFORMANCE WITH
DAMAGES
3. RESCISSION WITH DAMAGES
4. MACEDA LAW
III. REMEDIES OF THE BUYER
A. FOR BREACH OF OBLIGATION TO
PRESERVE
B. FOR BREACH OF OBLIGATION TO
DELIVER
C. FOR BREACH OF WARRANTY
I. General Remedies (Art. 1191, CC)
The following remedies arise from the bilateral
nature of the contract of sale:
1. Specific performance (Asked in 02)
2. Rescission (Asked in 03, 08)
General rule is that rescission of a
contract will not be permitted for a slight
or casual breach, but only for such
substantial and fundamental breach
as would defeat the very object of the
parties in making the agreement. (Song
Fo & Co. vs. Hawaiian-Philippine Co.,
(1925))
3. Damages
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 (Art
1169, CC)
Prescriptive periods
1. 10 years if based on written contract
2. 6 years if based on oral contract
II. Remedies of the Seller
A. In the Sale of Movables
1. Extrajudicial or Self-Help Remedies
[NOTE: No need to resort to the courts; as
long as possession of the goods has not yet
passed to the buyer]
a. Possessory lien over the goods
Right to retain possession of goods until
payment or tender of the whole price, or
unless he agrees to sell on credit (1526-
1529, 1503, 1535)
When available:
Goods are sold without stipulation
as to credit
Goods are sold on credit, but term
of credit has expired
Buyer becomes INSOLVENT
When lost:
Seller delivers goods to carrier or
other bailee for transmission to the
buyer under a straight or non-
negotiable bill of lading
Buyer/his agent lawfully obtains
possession of goods
Seller waives it
Not lost in remainder of goods
when only partial delivery is
made (unless such is symbolic
delivery of the whole)
Not lost by mere fact that seller
obtained a judgment for the
price
When revived: Goods are returned by
the buyer in a wrongful repudiation of
the contract
b. Right of stoppage in transitu
An extension of the lien for the price;
entitles unpaid seller to resume
possession of the goods while they are
in transit before the goods come in
possession of the vendee (1530-1532,
1535, 1636[2])
Available when: Vendee becomes
INSOLVENT
When are goods in transit?
From time of delivery to the
carrier or other bailee by the seller,
for the purpose of transmission to
the buyer, until the buyer or his
agent takes such delivery from the
carrier.
Even when goods have reached
their ultimate destination, if buyer
rejects them and carrier retains
possession
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To terminate transit by delivery
to a middleman, delivery must
be to keep, not to transport.
When are goods no longer in transit?
Buyer obtained delivery of the
goods before such have reached
their ultimate destination
Goods have arrived at ultimate
destination, but carrier refuses to
deliver
Carrier enters into a new contract
with the buyer upon arrival of the
goods at their ultimate destination
How exercised?
By obtaining actual possession of
the goods
By giving notice of his claim to the
carrier/other bailee who has
possession of the goods
Carrier must redeliver goods to
seller, or according to his
instructions
Carrier not obliged to redeliver
until the negotiable document of
title, if any, has been
surrendered for cancellation
Sellers right to stoppage in transitu not
affected even if buyer has sold or
disposed of the goods; Unless the seller
assented
c. Special right of resale
Available to unpaid seller who has a
right of lien or who has stopped the
goods in transitu (1533)
Purpose: For seller to liquidate his
damages
He must do so within a reasonable
time and in such manner as to
obtain the best price possible.
Resale = fair sale if in accordance
with established business practices,
with no attempt to take advantage of
the original buyer.
Resale may be in a private or public
sale, but seller cannot buy indirectly
or directly.
For resale to be valid, buyer need
not be notified of an intention to
resell or the time and place of the
resale.
Effects:
Seller is no longer liable to the
original buyer upon the contract of
sale or for any profit made by the
resale
Buyer at resale acquires good title
as against the original owner
In case resale is at a loss, seller
entitled to recover the difference
from the original buyer
Seller may recover damages from
original buyer for breach of contract
d. Special right to rescind:
RETURN of the title over the
undelivered goods to the seller, and
right to recover DAMAGES for breach of
contract (1534)
Available to unpaid seller who has a
right of lien or who has stopped the
goods in transitu
When available:
Seller expressly reserved right to
rescind in case buyer defaults
Buyer has been in default in
payment for an unreasonable time
Transfer of title shall not be held to have
been rescinded by the unpaid seller until
he manifests by notice to the buyer or
some other overt act an intention to
rescind.
2. Judicial Remedies of an unpaid seller
a. Action for the price or specific
performance (1595)
Conditions:
the goods has passed to the buyer
Price is payable on a certain day,
irrespective of delivery of the goods
Buyer can set up the defense that
seller could not or did not intend to
deliver the goods
Seller was notified by the buyer of
his repudiation of the contract after
the seller has completed the
manufacture of the goods/had
procured the goods to be delivered
and the goods could not readily be
resold for a reasonable price
b. Action for damages for non-
acceptance, if buyer wrongfully neglects
or refuses to accept and pay for the
goods (1596)
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Measure of damages: Estimated loss
directly and naturally resulting in the
ordinary course of events from the
buyers breach
Where there is available market for
goods: Difference between the
contract price and the market price
at the time the goods ought to have
been accepted or if no time was
fixed, at the time of refusal to accept
If the resale was made with
diligence, resale price is evidence of
market value, taking into account
whether or not the goods could be
readily sold
Where labor/expense was
necessary for seller to fulfill his
obligation: Labor performed and
expenses made by seller before
receiving notice of buyers
repudiation or countermand
Profit that the seller would have
made if sale had been fully
performed
c. Rescission by giving the buyer notice of
the election to rescind (1597)
Under this rule, rescission would bar an
action on the contract because it means
cancellation of the contractual
obligations between the parties.
(Baviera)
d. Special rule for sale of movables by
instalments Recto Law (1484, 1485)
(Asked in 99)
Applies in cases of:
Sale of movables in installment
Levy Hermanos vs. Gervacio,
(1939): The rule is intended to
apply to sales of movables, the
price of which is payable in 2 or
more installments, but not to
straight-term sales where the
price is payable in full, after
making a down payment
because the law aims to protect
improvident buyers who may be
tempted to buy beyond their
means.
Lease of personal property with
option to buy
When lessor has deprived the
lessee of the possession or
enjoyment of the thing (Ex.
When lessor files a complaint
for replevin against lessee)
Also applies when seller assigns
his credit to someone else
Alternative Remedies of the unpaid
seller under Recto Law
Specific Performance
Cancellation of sale: If vendee fails
to pay 2 or more installments
When the seller cancels the sale
by repossessing the property
sold, he is barred from exacting
payment for its price.
Foreclosure of Chattel Mortgage: If
vendee fails to pay 2 or more
installments
If seller chooses this remedy, he
shall have no further action to
recover any unpaid balance,
and any stipulation to the
contrary shall be void
Motors vs. Sapinoso, (1970):
What Art 1484 (3) prohibits is
further action against the
purchaser to recover any unpaid
balance of the price; and
although this Court has
construed the word action to
mean any judicial or
extrajudicial proceeding by
virtue of which the vendor may
lawfully be enabled to exact
recovery of the supposed
unsatisfied balance of the
purchase price from the
purchaser or his privy, there is
no occasion at this stage to
apply the restrictive provision of
the said article because there
has not yet been a foreclosure
sale resulting in a deficiency.
The payment of the sum of
P1,250 of Sapinoso was a
voluntary act on his part and did
not result from a further action
instituted by Northern Motors.
Bachrach Motor Co., Inc. v.
Millan, (1935): Purpose of the
law is to remedy the abuses
committed in foreclosure of
chattel mortgages. It prevents
mortgagees from seizing the
mortgaged property, buying it at
foreclosure sale for a low price
and then bringing the suit
against the mortgagor for a
deficiency judgment. The
almost invariable result of this
procedure was that the
mortgagor found himself minus
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the property and still owing
practically the full amount of his
original indebtedness.
Nonato vs. IAC (1985): Remedies are
ALTERNATIVE, not cumulative, i.e.
exercise of one bars exercise of the
others
NOTE: Unpaid Seller (1525):
e. When the whole of the price has not
been paid or tendered;
f. When a bill of exchange or other
negotiable instrument has been received
as conditional payment, and the
condition on which it was received has
been broken by reason of the dishonor
of the instrument, the insolvency of the
buyer, or otherwise.
_________
B. In the Sale of Immovables
1. Rescission for Anticipatory Breach
(1591)
a. Available when seller has reasonable
grounds to fear the loss of the
immovable property sold and its price
b. Example: Buyer destroys the building
sold, there being no security therefor,
and buyer becomes insolvent
c. Court has no discretion to compel the
seller to wait for the expiration of the
period to pay, or to grant the buyer more
time to pay
2. Specific Performance + Damages (1191)
a. Seller may choose between specific
performance and rescission, with
damages in either case
b. Court has discretion, for a just cause, to
give the buyer more time to pay even if
the seller chooses rescission
3. Rescission + Damages (1191)
a. If seller chose specific performance, and
such becomes impossible, he may still
avail of rescission
b. If absolute sale, seller must make a
demand for rescission
Judicially, OR
By a notarial act
c. Necessary even if automatic rescission
is stipulated
d. Effect of lack of demand: Buyer can still
pay
e. Effect of demand: Court may not grant
buyer a new term
4. Maceda Law: Sale of Residential Realty
on Installments
(Asked in 77, 89, 99, 00)
RA 6552: An Act To Provide Protection for
Buyers of Real Estate on Installment
Payments
DOES not apply to:
a. Industrial lots
b. Commercial buildings
c. Sale to tenants under Agricultural
Reform Code (RA 3844)
Imposes ADDITIONAL REQUIREMENTS
FOR A VALID RESCISSION:
a. If buyer has paid at least 2 years of
installments: GRN
Grace period: 1 month per year of
installment payments made. BUT
buyer may only avail of it only once
in every 5 years
Refund of Cash Surrender Value
(CSV): 50% of total amount paid +
5% for every year after the 1
st
5
years of installments
BUT not greater than 90% of
total amount paid
Notice of cancellation of demand for
rescission by notarial act, effective
30 days from the buyers receipt
thereof and upon full payment of
CSV
b. If buyer has paid less than 2 years: GN
Grace period: at least 60 days
Notice of cancellation or demand for
rescission by notarial act, effective
30 days upon receipt thereof
c. Down payments, deposits, or options on
the contract shall be included in the total
number of installments made
d. Seller may go to court for judicial
rescission in lieu of a notarial act of
rescission
e. During the grace period, buyer shall
have the right:
To sell or assign his rights, to be
evidenced in a notarial instrument
To update his account
To pay in advance any installment,
or the full unpaid balance of the
price, without any interest
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III. Remedies of the Buyer
General rule: Courts will refuse to decree
specific performance with respect to
chattels, because damages are a sufficient
remedy
Exception: Buyer is entitled to the specific
thing which to him has special value and
which he cannot readily obtain in the market
OR where damages would not furnish a
complete and adequate remedy (Baviera)
_________
A. Remedy for breach of obligation to
preserve
If thing is lost
1. Without fault of seller: No breach; Obligation
is extinguished
2. Through fault of seller (or through fortuitous
event, if seller is liable): Damages
A thing is lost when it
1. Perishes
2. Goes out of commerce
3. Disappears in such a way that its existence
is unknown or it cannot be recovered
If thing deteriorates
Without fault of seller Through fault of seller
No breach
Impairment shall be
borne by buyer
Rescission + damages
Or
Specific performance +
damages
_________
B. Remedy for breach of obligation to
deliver
Delivery of wrong quantity (1522)
Goods are less than what
was contracted
More
Reject the goods
OR
Accept and pay
At contract rate if buyer
accepts knowing that seller
wont perform in full
At fair value: If goods were
used before knowing that
seller wont be able to
perform in full
Reject the excess (Or
the whole, if
indivisible)
OR
Accept the whole and
pay at contract rate
Art. 1464. Civil Code. In the sale of an undivided
share of a specific mass of fungible goods, 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.
Real Estate (1539-1543)
1. If at the rate of a certain price per unit of
measure or number:
Less (in area or quality) than
what was agreed upon:
More
Proportional reduction of price
OR
Rescission, if:
Lack in area is at least 1/10
of what is stated, or inferior
value of thing sold exceeds
1/10 of price
Buyer would not have
bought the property has he
been aware of the inferior
quality or smaller area
Reject the excess
OR
Accept the whole
and pay at contract
rate
[NOTE: Also applies to judicial sales (1541)]
2. If for a lump sum:
Everything is within
boundaries, even if less or
more than stated area
Not everything is
within boundaries
No remedy
Rudolf Lietz, Inc. v. CA,
(2005): Where both the area
and the boundaries of the
immovable are declared, the
area covered within the
boundaries of the immovable
prevails over the stated area.
Proportional
reduction in price
OR
Rescission
Prescriptive period: 6 months, counted from
date of delivery
_________
C. Remedy for breach of warranty
Express Warranty
1. Prescriptive period: Period specified in
express warranty OR 4 years, if no period is
specified (following the general rule on
rescission of contracts)
2. Remedies:
a. Accept goods + demand
diminution/extinction of price
b. Accept goods + damages
c. Refuse to accept goods + damages
d. Rescind (Refuse to accept or return or
offer to return) + recover price paid
3. Rescission not available when buyer:
a. Knew of breach of warranty when he
accepted the goods without protest
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b. Fails to notify the seller about election to
rescind within a reasonable period of
time
c. Fails to return or offer to return the
goods to the seller in substantially a
good condition as they were when
delivered, unless deterioration was due
to breach of warranty
4. Measure of damages: Difference between
value of goods at time of delivery and the
value they would have had if they had
answered to the warranty
5. Effects of rescission:
a. Buyer no longer liable for price
Entitled to return of any part of price
paid, concurrently with or
immediately after an offer to return
the goods
b. If seller refuses to accept offer to return
goods: buyer deemed bailee for seller
and has right of lien to secure payment
of part of price paid
Implied warranty against eviction
(1555,1556)
TOTAL EVICTION PARTIAL EVICTION
Enforce liability for
eviction
- Demand from seller:
VICED
Value of thing sold at
time of eviction
Income or fruits, if he
has been ordered to
deliver them to the
party who won the
eviction suit
Costs of eviction suit
and in a proper case,
suit against seller for
warranty
Expenses of the
contract, if buyer has
paid them
Damages and
interests, and
ornamental
expenses, IF sale
was made in bad
faith
Enforce liability (demand
VICED)
OR
Rescind
If he would not have
bought the thing sold
without the part lost BUT
he must return the thing
without other
encumbrances than
those which it had when
he acquired it
1. Rules:
a. Buyer need not appeal from decision to
hold seller liable for eviction
b. When adverse possession commenced
before sale, but prescription period
completed after transfer: seller is not
liable
c. If property sold for nonpayment of taxes
due and not made known to the buyer
before the sale: seller liable
d. Judgment debtor also responsible for
eviction in judicial sales, unless it is
otherwise decreed in the judgment
2. If there is waiver of warranty:
a. Seller acted in bad faith: Waiver is void,
seller liable for eviction
b. Buyer made waiver without knowledge
of risks of eviction: Seller liable only for
the value of thing sold at time of eviction
c. Buyer made waiver with knowledge of
risks: Seller not liable, buyer assumed
the consequences
Implied warranty against encumbrances
(1560)
1. Rescission: Within 1 year from execution of
deed of sale OR
2. Damages: Within 1 year from execution of
deed of sale or discovery of the burden or
servitude
Implied warranty against hidden defects
(1567-1571)
1. If thing is not lost:
a. Withdraw from contract (accion
redhibitoria) + damages
b. Demand a proportionate reduction of the
price (accion quanti minoris) + damages
2. If thing is lost:
Due to hidden
fault
Due to fortuitous event
or fault of buyer
If seller aware of
defect, buyer may
demand:
- Return of price
- Refund of
expenses of
contract
- Damages
Demand:
- Price paid minus value of
thing when it was lost
- Damages, if seller acted
in bad fait
If seller not aware
of defect:
Buyer may demand
price and expenses
BUT NOT damages
Prescriptive period: 6 months from delivery
Implied warranty against redhibitory defects
of animals
1. Remedies
a. Withdraw from contract + damages
b. Demand a proportionate reduction of the
price + damages
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2. If sale is rescinded:
a. Buyer must return animal in condition in
which it was sold and delivered
b. Buyer shall be liable for injury due to his
negligence.
3. Prescriptive period: 40 days from delivery
Warranty in sale of consumer goods (RA
7394, Sec.68)
If implied warranty accompanies express
warranty, both will be of equal duration.
EXPRESS WARRANTY IMPLIED WARRANTY
1. Demand repair within
30 days
Extendible for
causes beyond the
control of the
warrantor
2. Demand refund of
price minus amount
directly attributable to
the use of the
consumer prior to the
discovery of the non-
conformity
1. Retain the goods
and recover
damages
OR
2. Reject the goods,
cancel contract and
recover from seller
so much of the
purchase price as
has been paid +
damages
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Chapter VII. Extinguishment of Sale
I. IN GENERAL
II. CONVENTIONAL REDEMPTION
III. EQUITABLE MORTGAGE
IV. LEGAL REDEMPTION
I. In General
Generally, extinguished by the same causes as
all other obligations (Arts.1600 &1231) (P-
PLAN-C
3
-R
3
)
1. Payment/performance
2. Prescription
3. Loss of thing due
4. Annulment
a. Novation
5. Condonation/remission
6. Confusion/merger
7. Compensation
8. Rescission
9. Resolutory condition fulfilled
10. Redemption (Conventional or Legal)
II. Conventional Redemption
Definition
1. Vendor reserves the right to repurchase the
thing sold, with the obligation to comply with
the provisions of Article 1616 and other
stipulations which may have been agreed
upon. (Art 1601,CC)
2. Available when the seller reserves the right
to repurchase the thing sold in the same
instrument of sale as one of the stipulations
of the contract (Villarica v CA, 1968)
Period (Asked in 77)
General Rule: Follow period stipulated in
contract, but should not exceed 10 years.
1. If no period stipulated, then it shall be four
years from the execution of the contract
2. But vendor may still exercise the right to
repurchase within thirty days from the time
final judgment was rendered in a civil action
on the basis that the contract was a true
sale with right to repurchase
By whom exercised
1. Vendor
2. His heirs, assigns or agents
3. Creditor, if he has exhausted the property of
the vendor
4. Co-owners of an immovable, if they sold
their interests to the same person, may only
redeem their respective shares
a. Vendee cannot be compelled to agree to
a partial redemption
b. If the co-owners sold their interest to the
same person who previously bought the
share of a co-owner subject to a right of
redemption, then the latter may be
compelled to redeem the whole property
From whom to redeem
1. Vendee a retro
2. His heirs, assigns or agents
3. Subsequent purchaser of property, even if
the right to redeem was not mentioned in the
subsequent contract; except if registered
land, where the right to redeem must be
annotated in the title
4. If several heirs, then the right of redemption
can be exercised against each heir for his
share of the property
How exercised
1. Returning the ff. to the buyer: (PEN)
a. Price of the sale;
b. Expenses of the contract and other
legitimate payments made by reason of
the sale;
c. Necessary and useful expenses made
on the thing sold
2. Complying with any other stipulation agreed
upon, if any.
NOTE:
1. BPI Family Savings Bank, Inc. v. Veloso,
(2004): The general rule in redemption is
that it is not sufficient that a person offering
to redeem manifests his desire to do so. The
statement of intention must be accompanied
by an actual and simultaneous tender of
payment for the full amount of the
repurchase price.
2. Paez v. Magno, (1949):Tender of payment
is enough (i.e., consignation is not
necessary), if made on time, as a basis for
action against the buyer to compel him to
resell. But that tender does not in itself
relieve the buyer from his obligation to pay
the price when redemption is allowed by the
court.
Effect of redemption
1. The seller shall receive the thing free from
all charges or mortgages constituted by the
buyer BUT he shall respect leases executed
by the buyer in good faith and in accordance
with local custom.
2. If there are growing fruits at the time of sale
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and at the time of redemption: no
reimbursement or prorating if the buyer did
not pay indemnity at the time of sale
3. If there were no growing fruits at the time of
sale, but some exist at the time of
redemption: fruits prorated (buyer entitled to
part corresponding to time he possessed the
land in the last year, counted from the
anniversary of the date of sale)
Effect of non-redemption
Ownership is consolidated in the buyer BUT
the consolidation shall not be recorded in
the Registry of property w/o a judicial order,
after the vendor has been duly heard.
Right to Redeem vs. Option to Purchase
(Villanueva)
Right to Redeem Option to Purchase
Not a separate contract
but part of a main
contract of sale, and
cannot exist unless
reserved at the time of
the perfection of the main
contract of sale
Generally a principal
contract and may be
created independent of
another contract
Does not need its
separate consideration to
be valid and effective
Must have a
consideration separate
and distinct from the
purchase price to be valid
and effective (Arts. 1324
and 1479)
The maximum period for
the exercise of the right
to repurchase cannot
exceed 10 years
The period of the option
contract may be beyond
the 10-year period
Requires in addition a
tender of payment of the
amount required by law,
including consignment
thereof if tender of
payment cannot be made
effectively on the buyer
May be exercised by
notice of its exercise to
the offeror
III. Equitable Mortgage
(Asked in 79, 80, 82, 84, 86, 89, 91, 05)
Definition
Molina v. CA, (2003): An equitable mortgage is
defined as one which, although lacking in some
formality, or form or words, or other requisites
demanded by a statute, nevertheless reveals the
intention of the parties to charge real property
as security for a debt, and contains nothing
impossible or contrary to law.
Tan v. Valdehueza, (2003): The Valdehuezas
having remained in possession of the land and
the realty taxes having been paid by them, the
contracts which purported to be pacto de retro
transactions are presumed to be equitable
mortgages, whether registered or not, there
being no third parties involved.
Legaspi v. Spouses Ong, (2005): A pactum
commissorium is a stipulation enabling the
mortgagee to acquire ownership of the
mortgaged properties without need of
foreclosure proceedings which is a nullity being
contrary to the provisions of Article 2088 of the
Civil Code. The inclusion of such stipulation in
the deed shows the intention to mortgage rather
than to sell.
A pactum commissorium is contrary to the
nature of a true pacto de retro sale since
ownership of the property sold is immediately
transferred to the vendee a retro upon execution
of the sale, subject only to the repurchase of a
vendor a retro within the stipulated period.
Presumption that a contract is an equitable
mortgage arises when (5P-R)
1. Price unusually inadequate;
2. Possession retained by the seller as lessee
or otherwise;
3. Period of redemption extended (or granted
anew) upon or after the expiration of the
right to repurchase;
4. Part of the purchase price retained by the
seller;
5. Payment of taxes on the thing sold borne by
the seller;
6. Any other case where it may be fairly
inferred that the Real intention of the parties
is for the transaction to secure a debt or
other obligation.
For the presumption of an equitable
mortgage to arise under Art. 1602, 2
requisites must concur (Molina v. CA,
2003)
1. That the parties entered into a contract
denominated as a contract of sale, and
2. That their intention was to secure an existing
debt by way of a mortgage.
Sale with right to
repurchase
Equitable mortgage
Right to repurchase the
thing sold granted to
the vendor in a
separate instrument
from the deed of sale
When any of the
cases in Art. 1602
arise
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In case of doubt, a contract purporting to be a
sale with right to repurchase shall be construed
as an equitable mortgage (Art. 1603)
Rationale behind provision on equitable
mortgage
1. Circumvention of usury law
2. Circumvention of prohibition against pactum
commissorium creditor cannot appropriate
the things given by way of pledge or
mortgage since remedy here is foreclosure.
Remedies of apparent vendor
1. If the instrument does not reflect the true
agreement, the remedy is reformation
2. If decreed to be an equitable mortgage, then
any money, fruits or other benefit to be
received by the buyer as rent or otherwise
considered as interest.
3. If decreed as a true sale with right to
purchase- seller may redeem w/in 30 days
from finality of judgment, even if the period
for redemption has expired.
IV. Legal Redemption
Definition
Right to be subrogated:
a. upon the same terms and conditions
stipulated in the contract,
b. in the place of one who acquires a thing
by purchase or dation in payment, or by
any other transaction whereby
ownership is transmitted by onerous title
(Art 1619, CC)
Applies to transfers of ownership by onerous
title where subrogation is possible. Hence, it
cannot apply to barter or to transfer by
gratuitous title or hereditary succession.
Applies to sales with pacto de retro
(BAVIERA citing MANRESA)
Manner
1. a formal offer to redeem or
2. filing of an action in court together with the
consignation of the redemption price within
the reglementary period
Period to Redeem
To whom granted Period
a. Co-owner (Art 1620)
b. Adjoining owner of
Rural Land (Article
1621)
c. Adjoining owner of
urban land (Art. 1622)
30 days from notice
- In writing
- By the seller
- Of the actual execution
and delivery of the deed
of sale
Doromal v. CA: Actual
knowledge of the sale is
immaterial
Conejero v. CA: the law
did not provide for a
particular mode of written
notice, thus any
compliance with written
notice should suffice,
including the giving of a
copy of the deed of sale
Debtor in case a
credit or
incorporeal right in
litigation is sold
(Art.1634)
30 days from the date the
assignee demands
payment from debtor
Applicant or his widow
or legal heirs in case of
sale of homestead
(Sec.119, Public
Land Act)
5 yrs. from date of
conveyance
Taxpayer in case of tax
sale (Sec. 215,
NIRC)
1 year from date of
forfeiture
Judgment debtor,
successorin- interest,
or creditor with
subsequent lien, in case
of execution sale
(Rule 39, Sec.27,
ROC)
1 year from the date of
registration of the
certificate of sale
Debtor-mortgagor,
successors-in- interest,
judicial/judgment
creditor, any person
having a lien on the
property, in case of
extrajudicial foreclosure
of mortgage (Act No.
3135. Sec. 6. )
1 year from the date of
the sale
Debtor-mortgagor in
case of judicial
foreclosure of real
estate mortgage IF the
mortgagee is a bank or
a banking institution.
(The
General Banking
Law of 2000)
90 days from finality of
judgment
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Agricultural lessee w/o
knowledge of sale of
landholding
(Agrarian Land
Reform Code,
Sec.12)
2 years from the
registration of the sale
Instances of Legal Redemption
1. Redemption by Co-owners (Art. 1621)
A co-owner of a thing may exercise the right
of redemption in case the shares of all the
co-owners or any of them are sold to a third
person
a. Third person refers to all persons who
are not heirs of the vendor, by will or
b. The right is available not only to original
co-owners, but to those who had later
acquired the share of the co-owner
c. But the right of redemption may be
exercised by a co-owner only when part
of the community property is sold to a
stranger. When the portion is sold to
another co-owner, the right does not
arise because a new participant is not
added to the co-ownership (Fernandez
v. Taun)
If the price of the alienation is grossly
excessive, the redemptioner shall pay only a
reasonable one
Should two or more co-owners desire to
exercise the right, they may also do so in
proportion to the share they may
respectively have in the thing owned in
common
Rationale: Public Policy, since co-
ownership is a hindrance to the
development and administration of the
property (BAVIERA)
2. Redemption by Adjoining Land-owners
of rural land (Art. 1621)
The ff. Requisites must concur:
a. A piece of rural land is alienated
b. Area does not exceed one hectare
When not applicable:
a. The grantee does not own any rural land
b. Adjacent lands are separated by brooks,
drains, roads and other apparent
servitudes for the benefit of other
estates
Order of preference if two or more wish to
exercise the right:
a. Owner with smaller land area
b. If same land area, then the one who first
requested the redemption
Ortega v. Orcine, (1971): What constitutes
rural or urban is to be determined from
the character of the community or vicinity in
which it is found, and NOT from the nature
of the land itself nor the purpose to which it
is devoted
3. Redemption by adjoining land-owners of
urban land (applies only to small
portions of urban land) (Art. 1621)
4. Redemption of Credit
Available when it is sold while in litigation
(From the time the complaint is answered)
NOT available when the assignment in favor
of:
a. Co-heir/co-owner of right assigned
b. Creditor in payment of his credit
c. Possessor of a tenement or piece of
land which is subject to the right
assigned
How exercised: reimburse the assignee for
the:
a. Price paid
b. Judicial expenses incurred
c. Interest on the price from date of
payment
Right of Pre-emption Right of Redemption
Owner of any adjoining
land has a right of pre-
emption at a reasonable
price when:
-Urban land is so small
and so situated that a
major portion of it cannot
be used for any practical
purpose w/in a
reasonable time;
-Was bought merely for
speculation;
-Was resold
If the resale has been
perfected, the owner of
the adjoining land shall
have a right of
redemption, also at a
reasonable price
Priority if 2 or more
adjoining owners want to
redeem: owner whose
intended use of the land
appears to be best
justified
Arises before sale Arises after sale
No rescission because
no sale exists yet
There can be rescission
of the original sale
The action is directed
against prospective
seller
Action is directed against
buyer
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5. Under the Public Land Act
Coverage:
a. Every conveyance of land acquired
under a free patent or homestead
b. The ownership of the land must have
been transferred to another. If the
transaction is a mere promise to sell,
there is no right yet to redeem
c. This refers to conveyances made after
the prohibited 5 years from the issuance
of the patent or grant
Period:
a. Within 5 years from the date of
conveyance
b. If pacto de retro sale, the period to
redeem cannot be less than 5 years
Who may redeem:
a. Gen Rule: Applicant, widow, or heirs
b. Exception: land is sold to another
member of the family of the applicant, or
his direct descendant or heir
c. From whom: Subsequent purchasers
6. Redemption in Foreclosure and
Execution Sales
Who may redeem In extra judicial
foreclosure
-Debtor
-Successor in interest
-Judicial or judgment
creditor of said debtor
-Junior encumbrancer
In execution sales
-Judgment debtor
-Successor in interest
-Creditor having a lien
on the property sold by
attachment, judgment or
mortgage on the
property subsequent to
the judgment
Period to redeem Extra judicial foreclosure
- within 1 year from the
date of the sale
Execution sale
- within 12 months after
the sale
If land is mortgaged in
favor of a bank
- within 1 year after the
sale (not available in
case of a corporate
mortgagor)
Amount of redemption -Amount of the purchase
-Interest at 1% per
month from the time of
the sale up to the time of
redemption
-Any assessment or
taxes which the
purchaser may have
paid
7. Under the Agrarian Land Reform Code
Lessees right of pre-emption
a. The agricultural lessee shall have the
preferential right to buy under the same
reasonable terms and conditions, in
case the lessor decides to hold the
landholding
b. Conditions:
The landholding must be pre-
empted by the DAR
When two or more lessees, each
shall have preferential right only to
the extent of the area cultivated by
him
c. Period: 180 days from notice in writing
Lessees right of redemption
a. Sec. 12 RA 3844: In case landholding is
sold to 3
rd
person without the knowledge
of the lessee, the latter shall have the
right to redeem the same at a
reasonable price and consideration
b. Period: within 180 days from notice in
writing
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Chapter VIII. Philippine Bulk Sales Law
(Act 3952)
I. PURPOSE
II. COVERAGE
III. DUTY OF SELLER
IV. EFFECT OF NON-COMPLIANCE
I. Purpose
Purpose (Villanueva)
To compel the seller in bulk to execute
and deliver a verified list of his creditors
to his buyer, and notice of intended sale
to be sent in advance to said creditors
and to use the proceeds to cover
payment of outstanding liabilities
To protect creditor of merchant stores
The Law is constitutional as a valid exercise of
police power of the State. (Liwanag v.
Menghraj, (1941))
II. Coverage
The Law covers all transactions, whether done
in good faith or not, that fall within the
description of what is bulk sale (Villanueva)
Transactions Covered
Applies to sales and transfers in bulk,
including any sale, transfer, mortgage or
assignment of:
1. A stock of goods, wares, merchandise,
provisions or materials NOT in the ordinary
course of trade and the regular prosecution
of the business of the seller, transferor,
mortgagor, or assignor
2. All, or substantially all, of the business or
trade theretofore conducted by the seller,
transferor, mortgagor, or assignor
3. All, or substantially all, of the fixtures and
equipment used in and about the business
of the seller, transferor, mortgagor, or
assignor
When not applicable
1. Written waiver by vendor, transferor,
mortgagor or assignor, as shown by verified
statements
2. To executors, administrators, receivers,
assignees in insolvency, or public officers,
acting under judicial process.
III. Duty of Seller
1. Sworn statement of list of creditors
Contents:
o Names + addresses of all
creditors
o Amount of indebtedness due or
owing
When delivered: Before any part of
the purchase price is received, or
any promissory note or evidence of
indebtedness therefor
Delivered to:
o Buyer, mortgagee or agent
o If corporation: president, vice-
president, treasurer or secretary
o If partnership firm: a member
thereof
2. Pro-rata application of the purchase or
mortgage money to the payment of
listed creditors
3. Inventory of the goods, wares,
merchandise, provisions or materials
When made: at least 10 days before
sale or mortgage
Contents:
Quantity
Cost price of each article (as far as
possible)
4. Notice to listed creditors
When made: at least 10 days before
transfer of possession
How: personally or by registered
mail
Contents: Price, terms and
conditions of sale, transfer,
mortgage or assignment
5. Consideration for the sale, transfer,
mortgage or assignment
Must not be nominal
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IV. Effect of non-compliance
On Transaction Itself
If the purchase or mortgage money is not
applied pro-rata to the bona fide claims of listed
creditors: Sale, transfer or mortgage shall be
FRAUDULENT and VOID.
On Seller, Mortgagor, Transferor or
Assignor
Violation Sanction
Failure to comply with
the obligation to
prepare and deliver the
sworn statement listing
his creditors and the
application pro-rata of
the proceeds to the
creditors. (Sec 4)
criminal liability
Section 7: Transfer by any
person, firm or corporation
as owner of any stock of
goods, wares,
merchandise, provisions
or materials, in bulk of
title to the same without
consideration or for a
nominal consideration
only, subjects him to
criminal liability
On Buyer, Mortgagee, Transferee or
Assignee
The Law imposes no direct obligation, thus a
buyer in bulk sale cannot be deemed to be
subject to the criminal liability under the Law
[NOTE: Criminal liability: 6 months to 5 years
imprisonment, or fine of P5K or less, or both.]
- end of Sales -
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Table of Contents
Chapter I. General Principles......................307
I. Types of Credit Transactions ............307
II. Security .............................................307
III. Bailment ............................................307
Chapter II. Loan (Arts. 1933-1961, CC).......309
I. Definition ...........................................309
II. Characteristics of a Loan ..................309
III. Kinds of Loan: In General .................309
IV. Commodatum....................................309
Commodatum ............................................310
Commodatum ............................................311
VII. Mutuum or Simple Loan................311
VIII. Interests ........................................312
IX. The Usury Law..................................312
Chapter III. Deposit ......................................314
I. Definition ...........................................314
II. Kinds of Deposit ................................314
III. Characteristics of Deposit .................314
and Commodatum.....................................314
V. Obligations of the Depositary............314
VI. Obligations of the Depositor..............317
317
VIII. Necessary Deposit........................317
IX. Judicial Deposit .................................318
Chapter IV. Guaranty ...................................319
I. Definition ...........................................319
III. Classification.....................................319
IV. Rules Governing Guaranty ...............319
V. Guaranty Distinguished from Others.322
VI. The Guarantor (Arts. 2056-2057)......322
VII. Effects of Guaranty.......................322
VIII. Extinguishment of Guaranty .........325
Chapter V. Legal and Judicial Bonds.........326
Chapter VI. Suretyship.................................327
Chapter VII. Pledge, Mortgage, Antichresis
.......................................................................328
I. Essential Requisites Common to Pledge
and Mortgage (Art. 2085)...........................328
II. Pledge...............................................329
III. Mortgage ...........................................332
IV. Foreclosure of Mortgage (Art. 2085).334
V. Antichresis.........................................336
VI. Chattel Mortgage...............................336
Chapter VIII. Concurrence and Preference of
Credits........................................................... 338
I. General Provisions............................ 338
II. Classification of Credits .................... 338
III. Preference of Credits........................ 338
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Chapter I. General Principles
I. TYPES OF CREDIT TRANSACTIONS
II. SECURITY
III. BAILMENT
CREDIT TRANSACTIONS - include all
transactions involving the purchase or loan of
goods, services or money in the present with a
promise to pay or deliver in the future (contract
of security)
I. Types of Credit Transactions
Secured transactions or contracts of real
security Those supported by collateral or an
encumbrance of property
Unsecured transactions or contracts of
personal security Those the fulfillment of
which by the principal debtor is secured or
supported only by a promise to pay or the
personal commitment of another such as a
guarantor or surety
II. Security
SECURITY - something given, deposited or
serving as a means to ensure the fulfillment or
enforcement of an obligation or of protecting
some interest in property.
2 TYPES OF SECURITY
1. Personal Security as when an individual
becomes a surety or a guarantor
2. Real Security - as when a mortgage,
pledge, antichresis, charge or lien or other
device used to have property held, out of
which the person to be made secure can be
compensated for loss. Thus, a secured
creditor is one who holds a security from his
debtor for payment of the latters debts.
III. Bailment
BAILMENT - the delivery of property of one
person to another in trust for a specific purpose,
with a contract, express or implied, that the trust
shall be faithfully executed and the property
returned or duly accounted for when the special
purpose is accomplished or kept until the bailor
reclaims it.
[NOTE: The word bailment comes from the
French word bailer, meaning to deliver]
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Faculty Editor
Katrina Elena Guerrero
Lead Writer
Diana Gervacio
Patricia Andrea Hernandez
Mark Luciano
Ixara Maroto
Writers
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Kristine Bongcaron
Patricia Tobias
Subject Editors
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Kristine Bongcaron
Michelle Dy
Patrich Leccio
Editors-in-Chief
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Kae Guerrero
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Pat Hernandez
Viktor Fontanilla
Rusell Aragones
Romualdo Menzon Jr.
Rania Joya
$(!)@'(/ !->>"))((
Michelle Arias
Camille Maranan
Angela Sandalo
Heads
Katz Manzano
Sam Nuez
Arianne Cerezo
Mary Rose Beley
Krizel Malabanan
Marcrese Banaag
Volunteers
>-!B *%' !->>"))((
Lilibeth Perez
*%' !%.3"3%)(/ &($C%'(
Dahlia Salamat
$-;"/)"!/
Charisse Mendoza
/(!'()%'"%) !->>"))((
Jill Hernandez
Head
Loraine Mendoza
Mary Mendoza
Faye Celso
Joie Bajo
Members
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PARTIES IN BAILMENT
1. Bailor the giver, the party who delivers
possession/custody of the thing bailed
2. Bailee the recipient, the party who
receives the possession/custody of the thing
delivered
KINDS OF CONTRACTUAL BAILMENT
(With Reference to Compensation)
1. Those for the sole benefit of the bailor,
e.g. gratuitous deposit (Art.1965) and
mandatum, i.e., where the mandatory or
person to whom the property is delivered
undertakes to do some act with respect to
the same
2. Those for the sole benefit of the bailee,
e.g. commodatum and gratuitous simple
loan or mutuum (Art.1933)
3. Those for the benefit of both parties, e.g.
deposit for a compensation, involuntary
deposit, pledge and bailments for hire
a. Hire of things for the temporary use
of the hirer (i.e. lease, Arts.1642-1643)
b. Hire of service for work or labor upon
the goods delivered (i.e. contract for
piece of work, Art.1713)
c. Hire for carriage of goods for goods
delivered to be carried from place to
place by a common carrier (Art.1732) or
private person
d. Hire of custody for storage of goods
delivered (Arts.1507-1520, Warehouse
Receipts Law)
Contract where one of the parties (Seller)
obligates himself to:
Transfer ownership of and
to deliver a determinate thing;
and the other (Buyer) to pay a price certain in
money or its equivalent.
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Chapter II. Loan (Arts. 1933-1961, CC)
I. DEFINITION
II. CHARACTERISTICS OF A LOAN
III. KINDS OF LOAN: IN GENERAL
IV. COMMODATUM
V. OBLIGATIONS OF THE BAILEE IN
COMMODATUM
VI. OBLIGATIONS OF THE THE BAILOR IN
COMMODATUM
VII. MUTUUM OR SIMPLE LOAN
VIII. INTERESTS
IX. THE USURY LAW
I. Definition
LOAN - a contract by which 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 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. (Art.1933)
II. Characteristics of a Loan
Real contract
1. delivery is essential for perfection of the
contract of loan.
2. An accepted promise to loan, is
nevertheless binding on the parties, it being
a consensual contract.
Unilateral contract
1. creates obligations on only one party, i.e.,
the borrower
2. In a contract of loan, the cause is, as to the
borrower, the acquisition of the thing, and as
to the lender, the right to demand its return
or its equivalent. (Monte de Piedad v. Javier)
III. Kinds of Loan: In General
Commodatum Mutuum
Ordinarily involves
something not
consumable*
(Art.1936)
Involves money or
other consumable thing
Ownership of the thing
loaned is retained by
lender (Art.1933)
Ownership is
transferred to the
borrower
Essentially gratuitous
(Art.1933)
Maybe gratuitous or it
maybe onerous, i.e.
with stipulated interest
Borrower must return
the same thing loaned
(Art.1933)
Borrower need only
pay the same amount
of the same kind and
quality
May involve real or
personal property
(Art.1937)
Refers only to personal
property
Loan for use or
temporary possession
(Art.1935)
Loan for consumption
Bailor may demand the
return of the thing
loaned before the
expiration of the term
in case of urgent need
(Art.1946)
Lender may not
demand its return
before the lapse of the
term agreed upon
Bailor suffers the loss
of the subject matter
since he is the owner
(Art.1942; Art.1174)
Borrower suffers the
loss even if caused
exclusively by a
fortuitous event and he
is not, therefore,
discharged from his
duty to pay
Not purely personal in
character
Purely personal in
character
A thing is consumable when it is used in a
manner appropriate to its purpose or nature.
(Art 418)
GENERAL RULE: If the subject of the contract
is a consumable thing, such as money, the
contract would be a mutuum.
EXCEPTION: Consumable goods may be the
subject of commodatum if the purpose of the
contract is not the consumption of the object, as
when it is merely for exhibition. (Art.1936)
[Producers v. CA, 397 SCRA 651]
IV. Commodatum
2 KINDS OF COMMODATUM
1. Ordinary commodatum - See Art.1933
2. Precarium one whereby the bailor may
demand the thing loaned at will; exists in
cases where:
a. neither the duration of the contract nor
the use to which the thing loaned should
be devoted has been stipulated
b. if the use of the thing is merely tolerated
by the owner (Art 1947)
GENERAL RULE: In a commodatum, the right
to use is limited to the thing loaned, and not to
its fruits
EXCEPTION: When there is stipulation to the
contrary (Art.1940). In cases where there is
such a stipulation, enjoyment of the fruits must
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be incidental to the use of the thing itself.
Otherwise, if the use of the fruits is the main
cause, the contract may be one of usufruct.
(Art.562)
What is the effect of an accepted promise to
deliver by way of commodatum or mutuum?
It is binding upon the parties, but the
contract of loan shall not be perfected until
delivery of the contract. (Art.1934)
Who may be bailor in commodatum?
1. Anyone. The bailor in commodatum need
not be the owner of the thing loaned.
(Art.1938)
2. But the bailee himself may not lend nor
lease the thing loaned to him to a third
person (Art 1939(2))
_______
GENERAL RULE: Commodatum is purely
personal in character (Art.1939) such that:
1. Death of either party extinguishes the
contract
2. Bailee can neither lend nor lease the thing
lent to him to a third person
EXCEPTION: Members of the bailees
household may make use of the thing loaned
EXCEPTION TO EXCEPTION: Bailees
household may NOT use it when:
1. There is stipulation to the contrary, or
2. The nature of the thing forbids such use
Commodatum
OBLIGATIONS OF THE BAILEE
1. Obligation to pay for the ordinary expenses
for the use and preservation of the thing
loaned (Art.1941)
2. Obligation to take good care of the thing with
the diligence of a good father of a family
(Art.1163)
3. Liability for loss, even if loss through
fortuitous event, in certain circumstances
(Art.1942)
4. Liability for deterioration of thing loaned,
except under certain circumstances
(Art.1943)
5. Obligation to return the thing upon expiration
of term or upon demand in case of urgent
need
6. Solidary obligation where there are 2 or
more bailees to whom a thing was loaned in
the same contract (Art.1945)
_______
GENERAL RULE: Bailee is not liable for loss or
damage due to a fortuitous event (Art.1174),
since the bailor retains ownership of the thing
EXCEPTION: Bailee is liable even for loss due
to a fortuitous event when: (Art 1942)
1. He devotes the thing to any purpose
different from that for which it was loaned
2. He keeps it longer than the period
stipulated, or after the accomplishment of
the use for which the commodatum has
been constituted
3. The thing loaned has been delivered with
appraisal of its value, unless there is
stipulation exempting the bailee from
responsibility in case of a fortuitous event
4. He lends or leases the thing to a third
person who is a not a member of his
household
5. Being able to save either the thing borrowed
or his own thing, he chose to save the latter.
_______
GENERAL RULE: Bailee is liable for
deterioration of thing loaned.
EXCEPTION: The deterioration of the thing is
due only to the use thereof and without his fault
(Art.1943)
_______
GENERAL RULE: Bailee has no right of
retention of the thing loaned, on the ground that
the bailor owes him something.
EXCEPTION: Bailee has a right of retention for
damages for known hidden flaws mentioned in
Art 1951. (Art.1944)
REQUISITES FOR THE APPLICATION OF
ART.1951
1. There is a flaw or defect in the thing loaned
2. The flaw or defect is hidden
3. The bailor is aware thereof
4. He does not advise the bailee of the same
5. The bailee suffers damages by reason of
said flaw or defect
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Commodatum
1. To allow the bailee the use of the thing
loaned for the duration of period stipulated
or until the accomplishment of the purpose
for which commodatum was constituted.
EXCEPTIONS:
a. Urgent need during which time the
commodatum is suspended (Art.1946)
b. Precarium (Art.1947)
If duration of the contract has not
been stipulated
If use or purpose of the thing has
not been stipulated
If use of thing is merely tolerated by
the bailor
c. Bailee commits an act of ingratitude
specified in Art. 765 (Art.1948):
Commission of offenses against the
person, the honor, or the property of
the bailor, or of his wife or children
under his parental authority
Imputing to the bailor any criminal
offense, or any act involving moral
turpitude, even though he should
prove it, unless the crime or the act
has been committed against the
bailee himself, his wife, or children
under his authority
Undue refusal to give the bailor
support when the bailee is legally or
morally bound to
[NOTE: Article 765 is applicable, because
like donation, commodatum is essentially
gratuitous. (Art.1933, par.2)]
2. To refund extraordinary expenses for the
preservation of the thing loaned provided
bailor is notified before the expenses were
incurred. (Art.1949)
EXCEPTION: Urgent need hence no
notice is necessary.
3. To refund 50% of the extraordinary
expenses arising from actual use of bailee of
the thing loaned (Art.1949)
EXCEPTION: Contrary stipulation
4. To pay damages to bailee for known hidden
flaws in the thing loaned.
[NOTE: Bailor has no right of abandonment;
he cannot exempt himself from payment of
expenses to bailee by abandoning the thing to
the latter. (art. 1952)]
VII. Mutuum or Simple Loan
A mutuum or simple loan is a contract by
which a person (creditor) delivers to another
(debtor) money or other consumable thing with
the understanding that the same amount of the
same kind and quality shall be paid. (Art.1953)
MUTUUM AND LEASE DISTINGUISED
MUTUUM LEASE
Object is money or any
consumable (fungible)
thing
Object may be any
thing, whether movable
or immovable, fungible
or non-fungible
Thing loaned becomes
property of debtor
Owner does not lose
his right of ownership
Relationship created is
that of creditor and
debtor
Relationship created is
that of landlord and
tenant or lessor and
lessee (Tolentino v.
Gonzales, 50 Phil 558)
MUTUUM AND COMMODATUM
DISTINGUISHED FROM BARTER
1. In mutuum, subject matter is money or any
other fungible things; in barter, non-fungible
(non-consumable) things.
2. In commodatum, the bailee is bound to
return the identical thing borrowed when the
time has expired or the purpose has been
served. In barter, the equivalent thing is
given in return for what has been received.
3. Mutuum may be gratuitous and
commodatum is always gratuitous. Barter
on the other hand is an onerous contract. It
is really a mutual sale.
[NOTE: BARTER contract where by one of the
parties binds himself to give one thing in
consideration of the others promise to give
another thing. (Art.1968)]
CONSUMABLE AND FUNGIBLE
DISTINGUISHED
Whether a thing is consumable or not
depends on its nature and whether it is
fungible or not depends on the intention of
the parties.
Example: Wine is consumable by nature, but
it may be non-fungible if the intention is
merely for display or exhibition.
[NOTE: Fixed, savings, and current deposits of
money in banks and similar institutions shall be
governed by the provisions concerning simple
loan. (Art.1980)]
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VIII. Interests
INTEREST is the compensation allowed by
law or fixed by the parties for the loan or
forbearance of money, goods or credits
KINDS OF INTEREST
1. Simple interest Paid for the principal at a
certain rate fixed or stipulated by the parties.
2. Compound Interest that which is
imposed upon interest due and unpaid.
3. Legal Interest that which the law directs
to be charged in the absence of any
agreement as to the rate between the
parties.
4. Lawful Interest that which the laws allow
or do not prohibit
5. Unlawful or Usurious Interest paid or
stipulated to be paid beyond the maximum
fixed by law. However, by virtue of CB
Circular 905, usury has become legally
inexistent.
When is compound interest allowed?
1. When there is an express written stipulation
to that effect (Art.1959)
2. Upon judicial demand. HOWEVER, debtor
is not liable to pay compound interest even
after judicial demand when there is no
stipulation for payment of interest. (Art.2212)
REQUISITES FOR INTEREST TO BE
CHARGEABLE
1. Must be expressly stipulated
2. Agreement must be in writing (Art.1956)
3. Must be lawful
EXCEPTIONS TO REQUISITE OF EXPRESS
STIPULATION
1. The debtor in delay is liable to pay legal
interest (6% or 12%) as indemnity for
damages (Art.2209)
2. Interest accruing from unpaid interest
Interest demanded shall earn interest from
the time it is judicially demanded (Art.2212)
or where there is an express stipulation
(Art.1959)
RULES FOR AWARD OF INTEREST IN THE
CONCEPT OF ACTUAL & COMPENSATORY
DAMAGES (Eastern Shipping Lines v. CA, 234
SCRA 78)
1. When obligation is breached consists in
the payment of a sum of money, i.e., a
loan or forbearance of money, the interest
due should be that which may have been
stipulated in writing. Furthermore, the
interest due shall itself earn legal interest
from the time it is judicially demanded. In
the absence of stipulation, the rate of
interest shall be 12% per annum to be
computed from default, i.e., from judicial or
extrajudicial demand under and subject to
the provisions of Art.1169.
2. When an obligation, not constituting a
loan or forbearance of money, is
breached, an interest on the amount of
damages awarded may be imposed at the
discretion of the court at the rate of 6% per
annum. No interest, however, shall be
adjudged on unliquidated claims or
damages except when or until the demand
can be established with reasonable
certainty. Accordingly, where the demand is
established with reasonable certainty, the
interest shall begin to run from the time the
claim is made judicially or extrajudicially (Art.
1169) but when such certainty cannot be so
reasonably established at the time the
demand is made, the interest shall begin to
run only from the date the judgment of the
court is made (at which time the
quantification of damages may be deemed
to have been reasonably ascertained). The
actual base for the computation of legal
interest shall, in any case, be on the amount
finally adjudged.
3. When the judgment of the court awarding a
sum of money becomes final and executory,
the rate of legal interest, whether the case
falls under paragraph 1 or paragraph 2,
above, shall be 12% per annum from such
finality until its satisfaction, this interim
period being deemed to be by then an
equivalent to a forbearance of credit.
IX. The Usury Law
THE USURY LAW (Act No.2566) is an act fixing
rates of interests upon loans and declaring the
effect of receiving or taking usurious rates and
for other purposes. (Arevalo v. Dimayuga 49
Phil 894)
CB Circular No. 905 abolished interest rate
ceilings. Conversely, with the promulgation of
such circular, usury has become legally
inexistent as the parties can now legally agree
on any interest that may be charged on the loan.
ELEMENTS OF USURY
1. A loan or forbearance of money
2. An understanding between parties that the
loan shall and may be returned
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3. An unlawful intent to take more than the
legal rate for the use of money or its
equivalent
4. The taking or agreeing to take for the use of
the loan of something in excess of what is
allowed by law
MACALINAO v BPI (Sept 2009):
Regarding the credit card interest rate, We
are of the opinion that the interest rate and
penalty charge of 3 percent per month
should be equitably reduced to 2 percent
per month or 24 percent per annum we
had affirmed in a plethora of cases that
stipulated interest rates of 3 percent per
month and higher are excessive, iniquitous,
unconscionable and exorbitant. Such
stipulations are void for being contrary to
morals, if not against the law. While the
Bangko Sentral ng Pilipinas C.B. Circular
No. 905-82 dated Jan. 1, 1983 effectively
removed the ceiling on interest rates for both
secured and unsecured loans, regardless of
maturity, nothing in the said circular could
possibly be read as granting carte blanche
authority to lenders to raise interest rates to
levels which would either enslave their
borrowers or lead to a hemorrhaging of their
assets.
[NOTE: The case of Chua vs. Timan involving
promissory notes NOT credit cards transactions,
which stated that the said 3% interest per month
is unconscionable, was cited in this case.]
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Chapter III. Deposit
I. DEFINITION
II. KINDS OF DEPOSIT
III. CHARACTERISTICS OF DEPOSIT
IV. DEPOSIT DISTINGUISHED FROM MUTUUM
AND COMMODATUM
V. OBLIGATIONS OF THE DEPOSITARY
VI. OBLIGATIONS OF THE DEPOSITOR
VII. EXTINGUISHMENT OF DEPOSIT
VIII. NECESSARY DEPOSIT
IX. JUDICIAL DEPOSIT
I. Definition
DEPOSIT is constituted from the moment a
person receives a thing belonging to another,
with the obligation of safely keeping it and of
returning the same. If the safekeeping of the
thing delivered is not the principal purpose of the
contract, there is no deposit but some other
contract. (Art.1962)
II. Kinds of Deposit
Judicial takes place when an attachment or
seizure of property in litigation is ordered
(Arts.2005-2008)
Extrajudicial (Art. 1967)
1. Voluntary- delivery is made by the will of
the depositor or by two or more persons
each of whom believes himself entitled to
the thing deposited;
2. Necessary- made in compliance with a legal
obligation, or on the occasion of any
calamity, or by travelers in hotels and inns
(Arts.1996-2004) or by travelers with
common carriers (Arts.1734-1735)
III. Characteristics of Deposit
Characteristics
1. Real Contract because it is perfected by the
delivery of the subject matter.
2. Principal purpose of the contract of deposit
is the safekeeping of the thing delivered.
3. If gratuitous, it is unilateral because only the
depository has an obligation. If onerous, it is
bilateral.
The principal purpose is safekeeping of the
thing delivered, so that if it is only an accessory
or secondary obligation, deposit is not
constituted but some other contract.
Contract of deposit is generally gratuitous.
(Art.1965), subject to the following exceptions:
1. There is a contrary stipulation
2. Depository is in the business of storing
goods
3. Property saved from destruction during
calamity without owners knowledge; just
compensation should be given the
depository. (Art.1996[2] and Art.1997, par.2)
Only movable things may be the object of a
deposit (Art.1966) if the deposit is either
voluntary (Art.1968) or necessary (Art.1995).
HOWEVER, a judicial deposit may cover
movable as well as immovable property, its
purpose being to protect the rights of parties to
the suit.
and Commodatum
DEPOSIT AND MUTUUMDISTINGUISHED
DEPOSIT MUTUUM
Principal purpose is
safekeeping
consumption of the
subject matter
Depositor can demand
return of subject matter
at will
Lender must wait until
expiration of the period
granted to the debtor
Both movable and
immovable may be the
object
Only money or any
other fungible thing
may be the object
DEPOSIT AND COMMODATUM
DISTINGUISHED
DEPOSIT COMMODATUM
safekeeping
transfer of use
May be gratuitous Always and essentially
gratuitous
In extrajudicial deposit,
only movable
(corporeal) things may
be the object. But for
judicial deposits, object
may be movable or
immovable.
Both movable and
immovable may be the
object.
V. Obligations of the Depositary
OBLIGATIONS
1. Depositary is obliged to keep the thing
safely and to return it when required, even
though a specified term may have been
stipulated in the contract. (Art.1972)
2. Depositary is liable if the loss occurs
through his fault or negligence. (Art.1972
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in rel. to Art.1163) Loss of thing while in the
depositarys possession raises a
presumption of fault. (Art.1265) Required
degree of care is greater if the deposit is for
compensation than when it is gratuitous.
3. Depositary is not allowed to deposit the
thing with a third person. (Art.1973)
EXCEPTION: There is a contrary stipulation
NOTE: Depositary is liable for the loss of the
thing deposited if:
a. He transfers the deposit with a third
person without authority although there
is no negligence on his part and the third
person;
b. He deposits the thing with a third person
who is manifestly careless or unfit
although authorized, even in the
absence of negligence; or
c. The thing is lost through the negligence
of his employees whether the latter are
manifestly careless or not.
EXEMPTION FROM LIABILITY: Depositary
is not responsible for loss of thing without
negligence of the third person with whom he
was allowed to deposit the thing if such third
person is not manifestly careless or unfit.
4. Depositary is obliged not to change way
of deposit. He may change the way or
manner of deposit only if there are
circumstances indicating that the depositor
would consent to the change and notice is
given to depositor. HOWEVER, notice is not
required if delay will cause danger.
(Art.1974)
5. If thing deposited should earn interest, the
depositary is under obligation (1) to collect
the interest as it becomes due and (2) to
take such steps as may be necessary to
preserve its value and the rights
corresponding to it. The depositary is bound
to collect not only the interest but also the
capital itself when due. (Art.1975)
6. Depositary has the obligation not to
commingle things deposited if so
stipulated, even if they are of the same kind
and quality. (Article 1976)
GENERAL RULE: The depositary is
permitted to commingle grain or other
articles of the same kind and quality.
EXCEPTION: When there is a stipulation to
the contrary
EFFECT OF COMMINGLING:
a. The various depositors of the mingled
goods shall own the entire mass in
common
b. Each depositor shall be entitled to such
portion of the entire as the amount
deposited by him bears the whole.
7. Depositary is under obligation not to
make use of the thing deposited;
otherwise he shall be liable for damages.
(Art.1977)
EXCEPTIONS:
a. Express permission of the depositor
b. Preservation of the thing deposited
required its use
8. Depositary is liable for loss of the thing
through a fortuitous event:
a. If it is so stipulated;
b. If he uses the thing without the
depositors permission;
c. If he delays its return;
d. If he allows others to use it, even though
he himself may have been authorized to
use the same (Art.1979)
9. Where thing deposited is delivered
closed and sealed, depositary has
obligation to:
a. Return the thing deposited when
delivered closed and sealed
b. Pay for damages should seal or lock be
broken through his fault, which is
presumed unless proven otherwise
c. Keep secret of the deposit when the
seal or lock is broken, with or without his
fault (Art.1982)
10. Depositary is obliged to return the
products, accessories and accessions of
the thing deposited. (Art.1983)
11. Depositary is obliged to pay interest on
sums converted to personal use.
(Art.1983)
12. Depositary who receives the thing in
deposit cannot require that the depositor
prove his ownership over the thing (Art.
1984)
13. Where the thing appears to be stolen and
the depositary knows the true owner, he
must advise the true owner about the
deposit. If the owner, in spite of such
information, does not claim it within the
period of one month, the depositary is
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relieved from liability. (Art.1984, pars.2 and
3) If the depositary has reasonable grounds
to believe that the thing has not been
lawfully acquired by the depositor, he may
return the same. (Art.1984, par.4)
RIGHT OF TWO OR MORE DEPOSITORS
(Art.1985)
1. Where the thing is divisible and depositors
not solidary each one of the depositors
can demand only his share proportionate
thereto.
2. Where the thing is not divisible or the
obligation is solidary rules on active
solidarity must apply
a. Each one of the depositors may do
whatever may be useful to the others
but not anything which may be
prejudicial to the latter. (Art.1212)
b. The depositary may return the thing to
any one of the solidary depositors
UNLESS a demand for its return has
been made by one of them in which
case delivery should be made to him.
(Art. 1214)
3. Where there is a stipulation of return to one
of the depositors, the depositary is bound to
return it only to the person designated
although he has not made any demand for
its return.
PERSONS TO WHOM RETURN MUST BE
MADE
1. The depositary is obliged to return the thing
deposited, when required, to:
a. The depositor;
b. To his heirs or successors; or
c. To the person who may have been
designated in the contract. (Art.1972)
2. If the depositor was incapacitated at the time
of making the deposit, the property must be
returned to:
a. His guardian or administrator;
b. To the person who made the deposit;
c. To the depositor himself should he
acquire capacity. (Art.1970)
3. Even if the depositor had capacity at the
time of making the deposit but he
subsequently loses his capacity during the
deposit, the thing must be returned to his
legal representative. (Art.1986)
PLACE OF RETURN (Art.1987)
1. At the place agreed upon by the parties
2. In the absence of stipulation, at the place
where the thing deposited might be even if it
should not be the same place where the
original deposit was made, provided that
there was no malice on the part of the
depositary
TIME OF RETURN (Art.1988)
1. GENERAL RULE: The thing deposited must
be returned to the depositor upon demand,
even though a specified period or time for
such return may have been fixed.
2. EXCEPTIONS:
a. When the thing is judicially attached
while in the depositarys possession
b. When notified of the opposition of a third
person to the return or the removal of
the thing deposited
RIGHT OF THE DEPOSITARY TO RETURN
THE THING (Art.1989)
1. GENERAL RULE: The depositary may
return the thing deposited notwithstanding
that a period has been fixed for the deposit
if:
a. The deposit is gratuitous;
b. The reason is justifiable.
[NOTE: If the depositor refuses to receive
the thing, the depositary may deposit the
thing at the disposal of the judicial authority.]
2. EXCEPTION: When the deposit is for a
valuable consideration, the depositary has
no right to return the thing before the
expiration of the time designated even if he
should suffer inconvenience as a
consequence.
Is the depositary liable for loss by force
majeure or government order?
The depositary is not liable in cases of loss
by force majeure or by government order.
HOWEVER, he has the duty to deliver to the
depositor money or another thing he
receives in place of the thing. (Art.1990)
ALIENATION IN GOOD FAITH BY
DEPOSITARYS HEIR
When alienation is done in GOOD FAITH, the
heir is obliged to:
1. Return the value of the thing deposited
2. Assign the right to collect from the buyer.
NOTE: The heir does not need to pay the
actual price of the thing deposited.
When alienation is done in BAD FAITH, the heir
must:
1. Be liable for damages;
2. Pay the actual price of the thing deposited.
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DEPOSITARYS RIGHT OF RETENTION
The depositary may retain the thing in
pledge until the full payment of what may be
due him by reason of the deposit. (Art.1994)
NOTE: This is an example of a pledge
created by operation of law. (Art.2121)
VI. Obligations of the Depositor
1. Depositor is obliged to reimburse the
depositary for expenses incurred for
preservation if deposit is gratuitous.
(Art.1992)
2. Depositor is obliged to pay losses
incurred due to character of thing
deposited. (Art. 1993)
GENERAL RULE: The depositary must be
reimbursed for loss suffered by him because of
the character of the thing deposited.
EXCEPTIONS:
1. Depositor was not aware of the danger;
2. Depositor was not expected to know the
dangerous character of the thing;
3. Depositor notified the depositary of such
dangerous character;
4. Depositary was aware of the danger without
advice from the depositor.
A deposit is extinguished:
1. Upon the loss or deterioration of the thing
deposited;
2. Upon the death of the depositary, ONLY in
gratuitous deposits;
3. By other modes provided in the Civil Code,
e.g. novation, merger, etc. (See Art.1231)
EFFECT OF DEATH OF DEPOSITOR OR
DEPOSITARY (Art. 1995)
1. Where deposit gratuitous death of either of
the depositor or depositary extinguishes the
deposit (personal in nature). By the word
extinguished, the law really means that the
depositary is not obliged to continue with the
contract of deposit.
2. (2) Where deposit for compensation not
extinguished by the death of either party.
VIII. Necessary Deposit
KINDS OF NECESSARY DEPOSITS
1. It is made in compliance with a legal
obligation, in which case it is governed by
the law establishing it, and in case of
deficiency, the rules on voluntary deposit
e.g. Arts. 538, 586 and 2104
2. It takes place on the occasion of any
calamity, such as fire, storm, flood, pillage,
shipwreck, or other similar events. There
must be a causal relation between the
calamity and the constitution of the deposit.
In this case the deposit is governed by the
rules on voluntary deposit and Art. 2168
3. Made by passengers with common carriers.
(Art.1754)
4. Made by travelers in hotels or inns. (Art.
1998)
DEPOSITS BY TRAVELLERS IN HOTELS
AND INNS
Before keepers of hotels or inns may be held
responsible as depositaries with regard to the
effects of their guests, the following must concur:
1. They have been previously informed about
the effects brought by the guests; and
2. The latter have taken the precautions
prescribed regarding their safekeeping.
EXTENT OF LIABILITY UNDER ART.1998
1. Liability in hotel rooms which come under
the term baggage or articles such as
clothing as are ordinarily used by travelers
2. Include those lost or damages in hotel
annexes such as vehicles in the hotels
garage.
2. In the following cases, the hotel- keeper is
liable
WHEN HOTEL-KEEPER LIABLE
Regardless of the amount of care exercised -
1. The loss or injury to personal property is
caused by his servants or employees as well
as by strangers (Art. 2000).
2. The loss is caused by the act of a thief or
robber done without the use of arms and
irresistible force. (Art. 2001)
WHEN HOTEL-KEEPER NOT LIABLE
1. The loss or injury is cause by force majeure,
like flood, fire, (Art.2000) theft or robbery by
a stranger - not the hotel-keepers servant or
employee with the use of firearms or
irresistible force (Art.2001)
EXCEPTION: Hotel- keeper is guilty of fault
or negligence in failing to provide against the
loss or injury from his cause. (Arts.1170 and
1174)
2. The loss is due to the acts of the guests, his
family, servants, visitors (Art.2002)
3. The loss arises from the character of the
things brought into the hotel (Ibid.)
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[NOTE: The hotel-keeper cannot free himself
from responsibility by posting notices to the
effect that he is not liable for the articles brought
by the guest. Such kind of stipulation shall be
VOID. (Art. 2003)]
TRIPLE-V FOOD SERVICES v. FILIPINO
MERCHANTS INSURANCE COMPANY:
Regarding the legal deposit of a vehicle that
was stolen while parked with Saisaki
restaurant, the depositary may not exempt
itself from responsibility or loss or damage of
the thing deposited with it, by exclusionary
stipulation. Such stipulations are void for
being contrary to law.
HOTEL-KEEPERS RIGHT TO RETENTION
The hotel-keeper has a right to retain the
things brought into the hotel by the guest, as
a security for credits on account of (a)
lodging, and (b) supplies usually furnished to
hotel guests.
NOTE: The right of retention recognized in
this article is in the nature of a pledge
created by operation of law.
IX. Judicial Deposit
JUDICIAL DEPOSIT - Judicial deposit takes
place when an attachment or seizure of property
in litigation is ordered by a court. (Art. 2005)
NATURE AND PURPOSE
It is auxiliary to a case pending in court. The
purpose is to maintain the status quo during
pendency of the litigation or to insure the
right of the parties to the property in case of
a favorable judgment.
EXTRAJUDICIAL AND JUDICIAL DEPOSITS
DISTINGUISHED
EXTRAJUDICIAL JUDICIAL
(Voluntary) deposit made
by free will of the
depositor.
Constituted by virtue of a
court order
Object must be movable
property
Object may be either
movable or immovable
property
Purpose is safekeeping
of the thing deposited
Purpose is to secure or
protect the owners right;
to maintain status quo
during pendency of case
Generally gratuitous Always onerous
Depositary is obliged to
return the thing deposited
upon demand made by
the depositor
Thing shall be delivered
only upon order of the
court
DEPOSITARY OF SEQUESTERED
PROPERTY
A person appointed by the court (Art. 2007) with
the obligations:
1. To take care of the property with the
diligence of a good father of the family. (Art.
2008)
2. To continue in his responsibility until the
litigation is ended or the court so orders.
(Art. 2007)
APPLICABLE LAW
The law on judicial deposit is remedial or
procedural in nature. Hence, the
Rules of Court are applicable. (Art. 2009)
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Chapter IV. Guaranty
I. DEFINITION
II. CHARACTERISTICS
III. CLASSIFICATION
IV. RULES GOVERNING GUARANTY
V. GUARANTY DISTIGUISHED FROM OTHERS
VI. THE GUARANTOR
VII. EFFECTS OF GUARANTY
VIII. EXTINGUISHMENT OF GUARANTY
I. Definition
GUARANTY is a contract whereby a person,
called the guarantor, binds himself to the creditor
to fulfill the obligation of the principal debtor in
case the latter should fail to do so. (Art. 2047)
While a surety undertakes to pay if the principal
does not pay, the guarantor only binds himself
to pay if the principal cannot pay (See benefit of
excussion, 2058).
II. Characteristics
1. Accessory dependent for its existence
upon the principal obligation guaranteed by
it;
2. Subsidiary and conditional takes effect
only when the principal debtor fails in his
obligation
3. Unilateral
a. It gives rise only to a duty on the part of
the guarantor in relation to the creditor
and not vice versa
b. It may be entered into even without the
intervention of the principal debtor.
4. Guarantor must be a person distinct from
the debtor a person cannot be the
personal guarantor of himself
III. Classification
CLASSIFICATION OF GUARANTY
1. Guaranty in the broad sense:
a. Personal guaranty is the credit given
by the person who guarantees the
fulfillment of the principal obligation; or
b. Real guaranty is property, movable, or
immovable
Real mortgage (2124) or antichresis
(2132) guaranty is immovable
Chattel mortgage (2140) or pledge
(2093) guaranty is movable
2. As to its origin:
a. Conventional constituted by
agreement of the parties (2051[1])
b. Legal imposed by virtue of a provision
of law
c. Judicial required by a court to
guarantee the eventual right of one of
the parties in a case.
3. As to consideration:
a. Gratuitous guarantor does not receive
any price or remuneration for acting as
such (2048)
b. Onerous one where the guarantor
receives valuable consideration for his
guaranty
4. As to person guaranteed:
a. Single constituted solely to guarantee
or secure performance by the debtor of
the principal obligation;
b. Double or sub-guaranty constituted to
secure the fulfillment by the guarantor of
a prior guaranty
5. As to its scope and extent:
a. Definite where the guaranty is limited
to the principal obligation only, or to a
specific portion thereof;
b. Indefinite or simple where the
guaranty included all the accessory
obligations of the principal, e.g. costs,
including judicial costs.
IV. Rules Governing Guaranty
1. A guaranty is generally gratuitous (2048)
a. General Rule: Guaranty is gratuitous
b. Exception: When there is a stipulation to
the contrary
2. On the cause of a guaranty contract
SEVERINO v SEVERINO: A guarantor or
surety is bound by the same consideration that
makes the contract effective between the
principal parties thereto.
a. Presence of cause which supports
principal obligation: Cause of the
contract is the same cause which
supports the obligation as to the
principal debtor. The consideration
which supports the obligation as to the
principal debtor is a sufficient
consideration to support the obligation of
a guarantor or surety.
b. Absence of direct consideration or
benefit to guarantor: Guaranty or surety
agreement is regarded valid despite the
absence of any direct consideration
received by the guarantor or surety,
such consideration need not pass
directly to the guarantor or surety; a
consideration moving to the principal will
suffice.a
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3. A married woman who is a guarantor
binds only her separate property,
generally (2049)
Exceptions:
a. With her husbands consent, bind the
community or conjugal partnership
property
b. Without husbands consent, in cases
provided by law, such as when the
guaranty has redounded to the benefit of
the family.
4. A guaranty need not be undertaken with
the knowledge of the debtor (2050)
a. Guaranty is unilateral exists for the
benefit of the creditor and not for the
benefit of the principal debtor
b. Creditor has every right to take all
possible measures to secure payment of
his credit guaranty can be constituted
even against the will of the principal
debtor
However, as regards payment made by a
third person:
a. Payment without the knowledge or
against the will of the debtor:
Guarantor can recover only insofar
as the payment has been beneficial
to the debtor
Guarantor cannot compel the
creditor to subrogate him in his
rights
b. Payment with knowledge or consent of
the debtor: Subrogated to all the rights
which the creditor had against the
debtor
5. The guaranty must be founded on a valid
principal obligation (2052[1])
Guaranty is an accessory contract: It is
an indispensable condition for its
existence that there must be a principal
obligation. Hence, if the principal
obligation is void, it is also void.
6. A guaranty may secure the performance
of a voidable, unenforceable, and natural
obligation (2052[2])
A guaranty may secure the performance of
a:
a. Voidable contract such contract is
binding, unless it is annulled by a proper
court action
b. Unenforceable contract because such
contract is not void
c. Natural obligation the creditor may
proceed against the guarantor although
he has no right of action against the
principal debtor for the reason that the
latters obligation is not civilly
enforceable. When the debtor himself
offers a guaranty for his natural
obligation, he impliedly recognizes his
liability, thereby transforming the
obligation from a natural into a civil one.
7. A guaranty may secure a future debt
(2053)
Continuing Guaranty or Suretyship:
DIO v. CA: Under the Civil Code, a guaranty
may be given to secure even future debts, the
amount of which may not known at the time the
guaranty is executed. This is the basis for
contracts denominated as continuing guaranty or
suretyship.
Future debts, even if the amount is not yet
known, may be guaranteed but there can be
no claim against the guarantor until the
amount of the debt is ascertained or fixed
and demandable
Rationale: A contract of guaranty is
subsidiary.
a. To secure the payment of a loan at
maturity surety binds himself to
guarantee the punctual payment of a
loan at maturity and all other obligations
of indebtedness which may become due
or owing to the principal by the
borrower.
b. To secure payment of any debt to be
subsequently incurred a guaranty shall
be construed as continuing when by the
terms thereof it is evident that the object
is to give a standing credit to the
principal debtor to be used from time to
time either indefinitely or until a certain
period, especially if the right to recall the
guaranty is expressly reserved.
c. To secure existing unliquidated debts
refers to debts existing at the time of the
constitution of the guaranty but the
amount thereof is unknown and not to
debts not yet incurred and existing at
that time.
d. The surety agreement itself is valid and
binding even before the principal
obligation intended to be secured
thereby is born, any more than there
would be in saying that obligations
which are subject to a condition
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precedent are valid and binding before
the occurrence of the condition
precedent.
A continuing guaranty is one which is not limited to a
single transaction, but which contemplates a future
course of dealing, covering a series of transactions,
generally for an indefinite time or until revoked. It is
prospective in its operation and is generally intended
to provide security with respect to future transactions
within certain limits, and contemplates a succession of
liabilities, for which, as they accrue, the guarantor
becomes liable.
A continuing guaranty is one which covers all
transactions, including those arising in the future,
which are within the description or contemplation of
the contract, of guaranty, until the expiration or
termination thereof. A guaranty shall be construed as
continuing when by the terms thereof it is evident that
the object is to give a standing credit to the principal
debtor to be used from time to time either indefinitely
or until a certain period, especially if the right to recall
the guaranty is expressly reserved.
Where the contract of guaranty states that the same is
to secure advances to be made "from time to time"
the guaranty will be construed to be a continuing one.
8. A guaranty may secure the performance
of a conditional obligation (2053)
a. Principal obligation subject to a
suspensive condition the guarantor is
liable only after the fulfillment of the
condition.
b. Principal obligation subject to a
resolutory condition the happening of
the condition extinguishes both the
principal obligation and the guaranty
9. A guarantors liability cannot exceed the
principal obligation (2054)
General Rule: Guaranty is a subsidiary and
accessory contract guarantor cannot bind
himself for more than the principal debtor
and even if he does, his liability shall be
reduced to the limits of that of the debtor.
But the guarantor may bind himself for less
than that of the principal.
Exceptions:
a. Interest, judicial costs, and attorneys
fees as part of damages may be
recovered creditors suing on a
suretyship bond may recover from the
surety as part of their damages, interest
at the legal rate, judicial costs, and
attorneys fees when appropriate, even
without stipulation and even if the surety
would thereby become liable to pay
more than the total amount stipulated in
the bond.
Interest runs from:
Filing of the complaint (upon judicial
demand); or
The time demand was made upon
the surety until the principal
obligation is fully paid (upon extra-
judicial demand)
Rationale: Surety is made to pay, not by
reason of the contract, but by reason of
his failure to pay when demanded and for
having compelled the creditor to resort to
the courts to obtain payment.
b. Penalty may be provided a surety may
be held liable for the penalty provided
for in a bond for violation of the condition
therein.
Principals liability may exceed
guarantors obligations
The amount specified in a surety bond
as the suretys obligation does not limit
the extent of the damages that may be
recovered from the principal, the latters
liability being governed by theobligations
he assumed under his contract
10. The existence of a guaranty is not
presumed (2055)
Guaranty requires the expression of consent
on the part of the guarantor to be bound. It
cannot be presumed because of the
existence of a contract or principal
obligation.
Rationale:
a. There be assurance that the guarantor
had the true intention to bind himself;
b. To make certain that on making it, the
guarantor proceeded with
consciousness of what he was doing.
11. Contract of guaranty is covered by the
Statute of Frauds (See Art. 1403(2(a))
Guaranty must not only be expressed
but must so be reduced into writing.
Hence, it 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
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its contents. However, It need not
appear in a public document
V. Guaranty Distinguished from Others
GUARANTY DISTINGUISHED FROM
WARRANTY
Guaranty Warranty
Guaranty is a contract
by which a person is
bound to another for the
fulfillment of a promise
or engagement of a third
party
Warranty is an
undertaking that the title,
quality, or quantity of the
subject matter of a
contract is what is has
been represented to be,
and relates to some
agreement made
ordinarily by the party
who makes the warranty
GUARANTY DISTINGUISHED FROM
SURETYSHIP
Guaranty Suretyship
Guarantors liability
depends upon an
independent agreement
to pay the obligation
Surety assumes liability
as a regular party to the
undertaking
Guarantors engagement
is a collateral
undertaking
Surety is an original
promissor
Guarantor is subsidiarily
liable i.e. only obliged to
pay if the principal
cannot pay
Surety is primarily liable
i.e. bound to pay if the
principal does not pay
Guarantor not bound to
take notice of default of
his principal
Surety ordinarily held to
know every default of his
principal
Guarantor often
discharged by the mere
indulgence of the
creditor and is usually
not liable unless notified
of the principals default
Surety not discharged
either by the mere
indulgence of the
creditor or by want of
notice of default of the
principal
VI. The Guarantor (Arts. 2056-2057)
Qualifications:
1. He possesses integrity;
2. He has capacity to bind himself;
3. He has sufficient property to answer for the
obligation which he guarantees.
Exception: The creditor waives the
requirements
The qualifications above need only be present at
the time of the perfection of the contract.
The subsequent loss of integrity or property or
supervening incapacity of the guarantor would
not operate to exonerate the guarantor of the
eventual liability he has contracted, and the
contract of guaranty continues. The creditor can
merely demand another guarantor with the
proper qualifications except that the creditor may
waive such remedy if he chooses and hold the
guarantor to his bargain.
Selection of Guarantor:
1. Specified person stipulated as guarantor:
Substitution of guarantor may not be
demanded
Reason: The selection of the guarantor is:
a. Term of the agreement;
b. As a party, the creditor is, therefore,
bound thereby.
2. Guarantor selected by the principal debtor:
Debtor answers for the integrity, capacity,
and solvency of the guarantor.
3. Guarantor personally designated by the
creditor: Responsibility of the selection
should fall upon the creditor because he
considered the guarantor to have the
qualifications for the purpose.
VII. Effects of Guaranty
EFFECTS OF GUARANTY BETWEEN THE
GUARANTOR AND THE CREDITOR
1. The guarantor has the right to benefit
from excussion/ exhaustion (2058)
Exceptions to the benefit of excussion
(2059)
a. As provided in Art. 2059:
If the guarantor has expressly
renounced it; waiver is valid but it
must be made in express terms.
If he has bound himself solidarily
with the debtor, the liability assumed
is that of a surety. The guarantor
becomes primarily liable as a
solidary co- debtor. In effect, he
renounces in the contract itself the
benefit of exhaustion.
In case of insolvency of the debtor
guarantor guarantees the solvency
of the debtor. If the debtor becomes
insolvent, the liability of the
guarantor as the debtor cannot fulfill
his obligation
When he (debtor) has absconded,
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or cannot be sued within the
Philippines the creditor is not
required to go after a debtor who is
hiding or cannot be sued in our
courts, and to incur the delays and
expenses incident thereto. The
exception is when the debtor has
left a manager or representative;
If it may be presumed that an
execution on the property of the
principal debtor would not result in
the satisfaction of the obligation if
such judicial action including
execution b would not satisfy the
obligation, the guarantor can no
longer require the creditor to resort
to all such remedies against the
debtor as the same would be but a
useless formality. It is not necessary
that the debtor be judicially declared
insolvent.
SOUTHERN MOTORS, INC. v BARBOSA: The
right of guarantors to demand exhaustion of
the property of the principal debtor, exists only
when a pledge or a mortgage has not been
given as special security for the payment of the
principal obligation.
LUZON STEEL CORP. v SIA: The surety in the
present case bound itself "jointly and severally"
(in solidum) with the defendant; and excussion
(previous exhaustion of the property of the
debtor) shall not take place "if he (the guarantor)
has bound himself solidarily with the debtor".
b. If he does not comply with Art. 2060: In
order that the guarantor may make use
of the benefit of excussion, he must:
Set it up against the creditor upon
the latters demand for payment
from him;
Point out to the creditor:
o Available property of the debtor
the guarantor should facilitate
the realization of the excussion
since he is the most interested
in its benefit.
o Within the Philippine territory
excussion of property located
abroad would be a lengthy and
extremely difficult proceeding
and would not conform with the
purpose of the guaranty to
provide the creditor with the
means of obtaining the
fulfillment of the obligation.
o Sufficient to cover the amount of
the debt
c. If he is a judicial bondsman and sub-
surety (2084)
d. Where a pledge or mortgage has been
given by him as a special security
e. If he fails to interpose it as a defense
before judgment is rendered against
him.
2. The creditor has the right to secure a
judgment against the guarantor prior to
the excussion
General rule: An ordinary personal
guarantor (NOT a pledgor or mortgagor),
may demand exhaustion of all the property
of the debtor before he can be compelled to
pay.
Exception: The creditor may, prior thereto,
secure a judgment against the guarantor,
who shall be entitled, however, to a
deferment of the execution of said judgment
against him, until after the properties of the
principal debtor shall have been exhausted,
to satisfy the latters obligation.
3. The creditor has the duty to make prior
demand for payment from the guarantor
(2060)
a. The demand is to be made only after
judgment on the debt
b. Joining the guarantor in the suit against
the principal debtor is not the demand
intended by law. Actual demand has to
be made.
4. The guarantor has the duty to set up the
benefit of excussion (2060)
As soon as he is required to pay,
guarantor must also point out to the
creditor available property (not in
litigation or encumbered) of the debtor
within the Philippines.
5. The creditor has the duty to resort to all
legal remedies (2061)
a. After the guarantor has fulfilled the
conditions required for making use of
the benefit of exhaustion, it becomes the
duty of the creditor to:
b. Exhaust all the property of the debtor
pointed out by the guarantor;
c. If he fails to do so, he shall suffer the
loss but only to the extent of the value of
the said property, for the insolvency of
the debtor
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6. The creditor has the duty to notify the
guarantor in the action against the debtor
(2062)
Under this article, notice to the guarantor is
mandatory in the action against the principal
debtor. The guarantor, however, is not duty
bound to appear in the case, and his non-
appearance shall not constitute default, w/
its consequential effect.
Rationale: The purpose of notification is to
give the guarantor the opportunity to allege
and substantiate whatever defenses he may
have against the principal obligation, and
chances to set up such defenses as are
afforded him by law if he so desires
7. A compromise shall not prejudice the
person not party to it (2063)
a. A compromise between creditor and
principal debtor benefits the guarantor
but does not prejudice him.
b. A compromise between guarantor and
the creditor benefits but does not
prejudice the principal debtor.
8. Co-guarantors are entitled to the benefit
of division (2065)
The benefit of division applies only when
there are several guarantors and one
debtor for a single debt. Except when
solidarity has been stipulated among the
co-guarantors, a co- guarantor is liable
only to the extent of his share in the
obligation as divided among all the co-
guarantors.
EFFECTS OF GUARANTY BETWEEN THE
DEBTOR AND THE GUARANTOR
1. The guarantor has the right to be
subrogated to the rights of the creditor
(2067)
A guarantor who pays the debt is entitled to
every remedy which the creditor has against
the principal debtor, to enforce every
security and all means of payments; to stand
in the place of the creditor not only through
the medium of the contract, but even by
means of the securities entered into w/out
the knowledge of the surety; having the right
to have those securities transferred to him
though there was no stipulation for it, and to
avail himself of all securities against the
debtor
The need to enforce the provisions on
indemnity in Article 2066 forms the basis for
the subrogation clause of Article 2067. The
assumption, however, is that the guarantor
who is subrogated to the rights of the
creditor, has the right to be reimbursed for
his answering for the obligation of the
debtor. Absent this right of reimbursement,
subrogation will not be proper.
2. The guarantor has the duty to notify the
debtor before paying the creditor (2068).
Should payment be made without notifying
the debtor, and supposing the debtor has
already made a prior payment, the debtor
would be justified in putting up the defense
that the obligation has already been
extinguished by the time the guarantor made
the payment.
In this case, the guarantor will lose the right
of reimbursement and consequently the right
of subrogation as well.
3. The guarantor cannot make payment
before the obligation has become due
(2069).
General rule: Since a contract of guaranty is
only subsidiary, the guarantor cannot be
liable for the obligation before the period on
which the debtors liability will accrue. Any
payment made by the guarantor before the
obligation is due cannot be indemnified by
the debtor.
Exception: Prior consent or subsequent
ratification by the debtor
4. The guarantor may proceed against the
debtor even before payment has been made
(2071)
General rule: Guarantor has no cause of
action against the debtor until after the
former has paid the obligation.
Exceptions:
a. When he is sued for the payment;
b. In case of insolvency of the principal
debtor;
c. When the debtor has bound himself to
relieve him from the guaranty within a
specified period, and this period has
expired;
d. When the debt has become
demandable, by reason of the expiration
of the period for payment;
e. After the lapse of 10 years, when the
principal obligation has no fixed period
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for its maturity, unless it be of such
nature that it cannot be extinguished
except within a period longer than 10
years;
f. If there are reasonable grounds to fear
that the principal debtor intends to
abscond;
g. If the principal debtor is in imminent
danger of becoming insolvent.
Rationale: To enable the guarantor to take
measures for the protection of his interest in
view of the probability that he would be
called upon to pay the debt. As such, he
may, in the alternative, obtain release from
the guaranty; or demand security that shall
protect him from any proceedings by the
creditor; and against the insolvency of the
debtor.
EEFECTS OF GUARANTY AS BETWEEN CO-
GUARANTORS
Requisites for the applicability of Art. 2073:
1. Payment has already been made by one
guarantor;
2. The payment was made because
a. Of the insolvency of the debtor, or
b. By judicial demand
3. The paying guarantor seeks to be
indemnified only to the extent of his
proportionate share in the total obligation.
For purposes of proportionate
reimbursement, the other guarantors may
interpose such defenses against the paying
guarantor as are available to the debtor
against the creditor, except those that are
personal to the debtor.
VIII. Extinguishment of Guaranty
1. Once the obligation of the debtor is
extinguished in any manner provided in the
Civil Code, the obligation of the guarantor is
also extinguished (2076). However, there
may be instances when, after the
extinguishment of the guarantors obligation
(as in the case of a release from the
guaranty), the obligation of the debtor still
subsists.
2. Although the guarantor generally has to
make payment in money, any other thing of
value, if accepted by the creditor, is valid
payment and therefore releases the
guarantor (2077).
3. If one guarantor is released, the release
would benefit the co-guarantors to the extent
of the proportionate share of the guarantor
released (2078).
4. A guarantor is also released if the creditor,
without the guarantors consent, extends the
time within which the debtor may perform his
obligation (2079). This is to protect the
interest of the guarantor should the debtor
be insolvent during the period of extension
and deprive the guarantor of his right to
reimbursement.
5. If through the fault of the creditor the
guarantors are precluded from being
subrogated to the formers rights, the latter
are released from the obligation. (2080)
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Chapter V. Legal and Judicial Bonds
Bond an undertaking that is sufficiently
secured, and not cash or currency.
Bondsman a surety offered in virtue of a
provision of law or a judicial order.
Qualifications of personal bondsman (2082 in
relation to Art. 2056):
1. He possesses integrity;
2. He has capacity to bind himself;
3. He has sufficient property to answer for
the obligation which he guarantees.
PLEDGE OR MORTGAGE IN LIEU OF BOND
(2083)
Guaranty or suretyship is a personal
security.
Pledge or mortgage is a property or real
security. If the person required to give a
legal or judicial bond should not be able to
do so, a pledge or mortgage sufficient to
cover the obligation shall be admitted in lieu
thereof.
BONDSMAN NOT ENTITLED TO
EXCUSSION (2084)
A judicial bondsman and the sub-surety are not
entitled to the benefit of excussion.
Reason: They are not mere guarantors, but
sureties whose liability is primary and
solidary.
Effect of negligence of creditor: Mere
negligence on the part of the creditor in
collecting from the debtor will not relieve the
surety from liability.
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Chapter VI. Suretyship
SURETYSHIP is a relation which exists where
one person (principal) has undertaken an
obligation and another person (surety) is also
under a direct and primary obligation or other
duty to the obligee, who is entitled to but one
performance, and as between the two who are
bound, the second, rather than the first should
perform.
If a person binds himself solidarily with the
principal debtor, the contract is called suretyship
and the guarantor is called a surety.
NATURE OF SURETYS UNDERTAKING
1. Liability is contractual and accessory but
direct
2. Liability is limited by terms of contract
3. Liability arises only if principal debtor is
held liable
a. In the absence of collusion, the surety is
bound by a judgment against the
principal event though he was not a
party to the proceedings;
b. The creditor may sue, separately or
together, the principal debtor and the
surety;
c. A demand or notice of default is not
required to fix the suretys liability
d. Exception: Where required by the
provisions of the contract of suretyship
e. A surety bond is void where there is not
principal debtor because such an
undertaking presupposes that the
obligation is to be enforceable against
someone else besides the surety, and
the latter can always claim that it was
never his intention to be the sole person
obligated thereby.
NOTE: Surety is not entitled to exhaustion
4. Undertaking is to creditor, not to debtor
The surety makes no covenant or
agreement with the principal that it will fulfill
the obligation guaranteed for the benefit of
the principal. The suretys undertaking is
that the principal shall fulfill his obligation
and that the surety shall be relieved of
liability when the obligation secured is
performed.
Exception: Unless otherwise expressly
provided.
NOTE: Surety is not entitled to notice of
principals default
5. Prior demand by the creditor upon
principal not required. Surety is not
exonerated by neglect of creditor to sue
principal.
STRICTISSIMI JURIS RULE APPLICABLE
ONLY TO ACCOMMODATION SURETY
Reason: An accommodation surety acts
without motive of pecuniary gain and hence,
should be protected against unjust
pecuniary impoverishment by imposing on
the principal, duties akin to those of a
fiduciary. This rule will apply only after it has
been definitely ascertained that the contract
is one of suretyship or guaranty.
STRICTISSIMI JURIS RULE NOT
APPLICABLE TO COMPENSATED SURETIES
Reasons:
1. Compensated corporate sureties are
business association organized for the
purpose of assuming classified risks in large
numbers, for profit and on an impersonal
basis.
2. They are secured from all possible loss by
adequate counter-bonds or indemnity
agreements.
3. Such corporations are in fact insurers and in
determining their rights and liabilities, the
rules peculiar to suretyship do not apply.
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Chapter VII. Pledge, Mortgage,
Antichresis
I. ESSENTIAL REQUISITES COMMON TO
PLEDGE AND MORTGAGE
II. PLEDGE
III. MORTGAGE
IV. FORECLOSURE OF MORTGAGE
V. ANTICHRESIS
VI. CHATTEL MORTGAGE
I. Essential Requisites Common to
Pledge and Mortgage (Art. 2085)
ESSENTIAL REQUISITES COMMON TO
PLEDGE AND MORTGAGE (Art. 2085)
1. Constituted to secure the fulfillment of a
2. Pledgor or mortgagor must be the absolute
owner of the thing pledged or mortgaged.
3. The persons constituting the pledge or
mortgage have the free disposal of their
property, and in the absence thereof, that
they be legally authorized for the purpose.
4. Cannot exist without a valid obligation.
5. Debtor retains the ownership of the thing
given as a security.
6. When the principal obligation becomes due,
the thing pledged or mortgaged may be
alienated for the payment to the creditor.
IMPORTANT POINTS
1. Future property cannot be pledged or
mortgaged.
2. Pledge or mortgage executed by one who is
not the owner of the property pledged or
mortgaged is without legal existence and
registration cannot validate it.
3. Mortgage of a conjugal property by one of
the spouses is valid only as to ! of the
entire property.
4. In case of property covered by Torrens title,
a mortgagee has the right to rely upon what
appears in the certificate of title and does
not have to inquire further.
5. Pledgor or mortgagor has free disposal of
property.
6. Thing pledged or mortgaged may be
alienated.
7. Creditor not required to sue to enforce his
credit.
8. Pledgor or mortgagor may be a third person.
RIGHT OF CREDITOR WHERE DEBTOR
FAILS TO COMPLY WITH HIS OBLIGATION
1. Creditor is merely entitled to move for the
sale of the thing pledged or mortgaged with
the formalities required by law in order to
collect.
MANILA SURETY V VELAYO: The accessory
character is of the essence of pledge and
mortgage. As stated in Art 2085 CC, an
essential requisite of these contracts is that they
be constituted to secure the fulfillment of a
principal obligation
2. Creditor cannot appropriate to himself the
thing nor can he dispose of the same as
owner.
PROHIBITION AGAINST PACTUM
COMMISSORIUM (Art. 2088)
1. Stipulation is null and void: Stipulation where
thing or mortgaged shall automatically
become the property of the creditor in the
event of nonpayment of the debt within the
term fixed.
2. Requisites of pactum commissorium:
a. Pledge or mortgage.
b. A stipulation for an automatic
appropriation by the creditor of the
property in the event of nonpayment.
3. Effect on security contract: Nullity of the
stipulation does not affect validity and
efficacy of the principal contract.
IMPORTANT POINTS
1. Debtor-owner bears the risk of loss of the
property.
2. Pledge or mortgage is indivisible (2089,
2090).
Exceptions:
a. Where each of several things
guarantees a determinate portion of the
credit.
b. Where only a portion of loan was
released.
c. Where there was failure of
consideration.
3. Rule that real property, consisting of several
lots should be sold separately, applies to
sales in execution, and not to foreclosure of
mortgages.
4. The mere embodiment of a real estate
mortgage and a chattel mortgage in one
document does not have the effect of fusing
both securities into an indivisible whole.
UY TONG v CA: The 2 elements for pactum
commissorium to exist:
(1) that there should be a pledge or mortgage
wherein a property is pledged or mortgaged by
way of security for the payment of the principal
obligation; (2) that there should be a stipulation
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for an automatic appropriation by the creditor of
the thing pledged or mortgaged in the event of
non-payment of the principal obligation within
the stipulated period.
5. Pledge or mortgage may secure all kinds of
obligation, be they pure or subject to
suspensive or resolutory conditions (2091).
6. A promise to constitute pledge or mortgage
creates no real right, only a personal right
binding upon the parties, only right of action
to compel the fulfillment of the promise but
there is no pledge or mortgage yet (2092).
7. Under the RPC, estafa is committed by a
person who, pretending to be the owner of
any real property, shall convey, sell,
encumber or mortgage the same knowing
that the real property is encumbered and
shall dispose of the same as
unencumbered. It is essential that fraud or
deceit be practiced upon the vendee at the
time of the sale.
II. Pledge
PLEDGE is a contract by virtue of which the
debtor delivers to the creditor or to a third person
a movable or document evidencing incorporeal
rights for the purpose of securing the 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. (Art.2085 in rel to 2093)
KINDS
1. Voluntary or conventional Created by
agreement of parties.
2. Legal Created by operation of law.
CENTRAL BANK vs. CA: The consideration of
the accessory contract of real estate mortgage is
the same as that of the principal contract. For
the debtor, the consideration of his obligation to
pay is the existence of a debt. Thus, in the
accessory contract of real estate mortgage, the
consideration of the debtor in furnishing the
mortgage is the existence of a valid, voidable, or
unenforceable debt (Art. 2086, in relation to Art.
2052, of the Civil Code).
It is not necessary that any consideration should
pass at the time of the execution of the contract
of real mortgage. It may either be a prior or
subsequent matter. But when the consideration
is subsequent to the mortgage, the mortgage
can take effect only when the debt secured by it
is created as a binding contract to pay. And,
when there is partial failure of consideration, the
mortgage becomes unenforceable to the extent
of such failure. Where the indebtedness actually
owing to the holder of the mortgage is less than
the sum named in the mortgage, the mortgage
cannot be enforced for more than the actual sum
due.
The rule of indivisibility of the mortgage as
outlined by Article 2089 above-quoted
presupposes several heirs of the debtor or
creditor which does not obtain in this case.
Hence, the rule of indivisibility of a mortgage
cannot apply.
BELO vs. PNB: From Art. 2089 is excepted the
case in w/c, there being several things given in
mortgage or pledge, each one of them
guarantees only a determinate portion of the
credit. The debtor, in this case, shall have a right
to the extinguishment of the pledge or mortgage
as the portion of the debt for w/c each thing is
specially answerable is satisfied. From the
wordings of the law, indivisibility arises only
when there is a debt, that is, there is a debtor-
creditor relationship.
CHARACTERISTICS
1. Real Perfected by delivery.
2. Accessory Has no independent existence
of its own.
3. Unilateral Creates obligation solely on the
part of the creditor to return the thing subject
upon the fulfillment of the principal
obligation.
4. Subsidiary Obligation incurred does not
arise until the fulfillment of the principal
obligation.
CAUSE OR CONSIDERATION
1. Principal obligation In so far as the pledgor
is concerned.
2. Compensation stipulated for the pledge or
mere liberality of the pledgor If pledgor is
not the debtor.
PROVISIONS APPLICABLE ONLY TO
PLEDGE
1. Transfer of possession to the creditor or to
third person by common agreement is
essential in pledge (2093).
a. Actual delivery is important.
b. Constructive or symbolic delivery of the
key to the warehouse is sufficient to
show that the depositary appointed by
common consent of the parties was
legally placed in possession.
2. All movables within the commerce of man
may be pledged as long as they are
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susceptible of possession (2094).
3. Incorporeal rights may be pledged. The
instruments representing the pledged rights
shall be delivered to the creditor; if they be
negotiable instruments, they must be
indorsed (2095).
4. Pledge shall take effect against 3rd persons
only if the following appear in a public
instrument:
a. Description of the thing pledged.
b. Date of the pledge (2096).
5. The thing pledged may be alienated by the
pledgor or owner only with the consent of
the pledgee. Ownership of the thing pledged
is transmitted to the vendee or transferee as
soon as the pledgee consents to the
alienation, but the latter shall continue to
have possession (2097).
6. Pledge gives the creditor the right to retain
the thing in his possession or in that of a
third person to whom it has been delivered,
until the debt is paid (2098).
7. Special Laws apply to pawnshops and
establishments engaged in making loans
secured by pledges. Provisions of the Civil
Code shall apply subsidiarily to them.
RIGHTS AND DUTIES OF CREDITOR IN A
PLEDGE
1. Shall take care of the thing pledged with the
diligence of a good father of a family (2099).
2. Has right to reimbursement of the expenses
made for preserving the thing. Shall be liable
for loss or deterioration of the thing by
reason of fraud, negligence, delay or
violation of the terms of the contract, but not
for fortuitous events (2099).
3. May bring actions pertaining to the owner of
the thing in order to recover it from, or
defend it against, a 3rd person (2103).
4. Cannot use the thing without the authority of
the owner. If he uses the thing without
authority, or if he misuses the thing when he
was authorized to use it, the owner may ask
that it be judicially or extrajudicially
deposited (2104).
5. May use the thing if necessary for its
preservation (2104).
6. May either claim another thing in pledge or
demand immediate payment of the principal
obligation if he is deceived on the substance
or quality of the thing (2109).
THE PLEDGEE
1. Cannot deposit the thing pledged with a 3rd
person, unless there is a contrary stipulation
(2100).
2. Is responsible for the acts of his agents or
employees with respect to the thing pledged
(2100).
3. Has no right to use the thing or to
appropriate its fruits without authority from
the owner (2104)
4. May cause the public sale of the thing
pledged if, without fault on his part, there is
danger of destruction, impairment or
dimunition in value of the thing. The
proceeds of the auction shall be a security
for the principal obligation (2108).
RIGHTS AND DUTIES OF THE PLEDGOR
1. Takes responsibility for the flaws of the thing
pledged (2101 in relation to Art. 1951).
2. Cannot ask for the return of the thing against
the will of the creditor, unless and until he
has paid the debt and its interest, with
expenses in proper cases (2105).
YULIONGSIU vs. PNB: There is authority
supporting the proposition that the pledgee can
temporarily entrust the physical possession of
the chattels pledged to the pledgor without
invalidating the pledge. In such a case, the
pledgor is regarded as holding the pledged
property merely as trustee for the pledgee. The
type of delivery will depend upon the nature and
the peculiar circumstances of each case.
PNB vs. ATENDIDO: according to law, a
pledgee cannot become the owner of, nor
appropriate to himself, the thing given in pledge.
If by the contract of pledge the pledgor continues
to be the owner of the thing pledged during the
pendency of the obligation, it stands to reason
that in case of loss of the property, the loss
should be borne by the pledgor.
3. Subject to the right of the pledge under article
2108, pledgor is allowed to substitute the
thing which is in danger of destruction or
impairment without any fault on the part of
the pledgee with another thing of the same
kind and quality (2107).
4. May require that the thing be deposited with
a 3rd person, if through the negligence or
willful act of the pledgee the thing is in danger
of being lost or impaired (2106).
EXTINGUISHMENT OF A PLEDGE
1. Ways to extinguish a pledge:
a. Payment of the debt.
b. Sale of the thing pledged at public
auction.
c. Thing pledged is returned by the
pledgee to the pledgor or owner (2110).
d. Written statement by the pledgee that he
renounces or abandons the pledge.For
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this purpose, neither the acceptance by
the pledgor or owner nor the return of
the thing pledged is necessary, and the
pledgee becomes a depositary (2111).
2. Presumptions:
a. If, subsequent to the perfection of the
pledge, the thing is found in the
possession of the pledgor or owner,
there is prima facie presumption that the
thing has been returned by the pledge
(2110).
b. If the thing is in the possession of a 3rd
person who received it from the pledgor
or owner after the constitution of the
pledge, there is prima facie presumption
that the thing has been returned by the
pledge (2110).
REQUIREMENTS IN SALE OF THE THING
PLEDGED BY A CREDITOR, IF CREDIT IS
NOT PAID ON TIME (Art 2112)
1. Debt is due and unpaid.
2. Sale must be at a public auction.
3. Notice to the pledgor and owner, stating the
amount due.
4. Sale must be made with the intervention of a
notary public.
5. If at the first auction the thing is not sold, a
second one with the same formalities shall
be held.
6. If at the second auction, there is no sale
either, the creditor may appropriate the thing
pledged but he shall give an acquittance
(release) for his entire claim.
EFFECT OF THE SALE OF THE THING
PLEDGED (Art 2115)
1. Extinguishes the principal obligation,
whether the price of the sale is more or less
than the amount due.
2. if the price is more than amount due, the
debtor is not entitled to the excess unless
the contrary is provided.
3. If the price of the sale is less, neither is the
creditor entitled to recover the deficiency. A
contrary stipulation is void.
MANILA BANKING v TEODORO:
In case of doubt as to whether a transaction is a
pledge or a dation in payment, the presumption
is in favor of pledge, the latter being the lesser
transmission of rights and interests (as earlier
established in Lopez v. Court of Appeals)
LEGAL PLEDGES (Article 2121)
1. Necessary expenses shall be refunded to
every possessor, but only a possessor in
good faith may retain the thing until he has
been reimbursed.
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 and by reason thereof
(Art. 546)
2. He who has executed work upon a movable
has a right to retain it by way of pledge until
he is paid. This is called the mechanics
lien. (Art. 1731)
3. 3) The agent may retain the things which are
the objects of agency until the principal
effects the reimbursement and pays the
indemnity. This is called the agents lien.
(Art. 1914)
4. 4) The laborers wages shall be a lien on the
goods manufactured or the work done.
5. (Art. 1707)
NOTE:
1. In legal pledges, the remainder of the price
of the sale shall be delivered to the obligor.
2. Public auction of legal pledges may only be
executed after demand of the amount for
which the thing is retained. It shall take
place within one month after the demand,
otherwise the pledgor may demand the
return of the thing pledged, provided s/he is
able to show that the creditor did not cause
the public sale without justifiable grounds.
(Article 2122)
PAWNSHOP REGULATION ACT PD 114
SEC 9: Loans granted by pawnshops shall not
be less than 30% of the value of the security
offered, UNLESS the pawner manifests in
writing the desire to borrow a lesser amount.
SEC 10:
a. Interests not to exceed usury law
b. Pawn broker prohibited from dividing the
pawn offered to collect greater interest
c. Pawn broker prohibited from requiring
additional charge for safekeeping /
insurance
d. Maximum service charge: Php5 to not
more than 1% of the principal loan
SEC 13: Pawner who fails to pay his obligation
on the date it falls due may WITHIN 90 DAYS
from the date of the maturity of the obligation,
REDEEM the pawn by payment of the principal
debt and interest
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SEC 15: Requisites of public auction of pawned
articles
a. Public auction must be held at the place
of business of the pawn shop, or within
the municipality or city where it is
located
b. Must be under the control and direction
of a licensed auctioneer
c. Prior publication one week before the
sale
III. Mortgage
MORTGAGE is a contract whereby the debtor
secures to the creditor the fulfillment of a
principal obligation, immediately making
immovable property or real rights over
immovable property answerable to the principal
obligation in case it is not complied with at the
time stipulated.
OBJECTS OF REAL MORTGAGE (Art. 2124)
1. Immovables
2. Alienable real rights over immovables.
Future property cannot be object of mortgage;
however, a stipulation subjecting to the
mortgage improvements which the mortgagor
may subsequently acquire, install or use in
connection with real property already mortgaged
belonging to the mortgagor is valid.
KINDS
1. Voluntary constituted by the will of the
owner of the property on which it is created
2. Legal required by law to be executed in
favor of certain persons:
a. Persons in whose favor the law
establishes a mortgage have no other
right than to demand the execution and
recording of the document in which the
mortgage is formalized (Article 2125)
b. The bondsman who is to be offered in
virtue of a provision of law or of a judicial
order shall have the qualifications
prescribed in Art 2056 (integrity,
capacity to bind himself, and sufficient
property to answer the obligation), an in
other laws (Article 2082)
c. If the person bound to give a bond
should not be able to do so, a pledge or
mortgage considered sufficient to
recover his obligation shall be admitted
in lieu thereof (Article 2083)
3. Equitable One which, although lacking the
proper formalities of a mortgage, shows the
intention of the parties to make the property
as a security for a debt.
a. lien created through equitable mortgage
ought not to be defeated by requiring
compliance with formalities necessary
to the validity of a voluntary real estate
mortgage. Ex.: Pacto de retro
b. ovisions governing equitable mortgage:
Arts. 1365, 1450, 1454, 1602, 1603,
1604 and 1607.
PRINCIPLE OF INDIVISIBILITY OF PLEDGE /
MORTGAGE
(ART. 2089 TO 2090)
DAYRIT v CA: A mortgage directly and
immediately subjects the property upon which it
is imposed. It is indivisible even though the debt
may be divided, and such indivisibility is likewise
unaffected by the fact that 'the debtors are not
solidarity liable.
Central Bank v CA: Where only a portion of the
loan is released, the mortgage becomes
enforceable only as to the proportionate value of
the loan
Indivisibility applies only as to
pledgors/mortgagors who are themselves
debtors in the principal obligation, and not to
accommodation pledgors / mortgagors
"When several things are pledged or mortgaged,
each thing for a determinate portion of the debt,
the pledges or mortgage, are considered
separate from each other. But when the several
things are given to secure the same debt in its
entirety, all of them are liable for the debt, and
the creditor does not have to divide his action by
distributing the debt among the various things
pledged or mortgaged. Even when only a part of
the debt remains unpaid, all the things are still
liable for such balance." (Tolentino)
ESSENTIAL REQUISITES
1. Constituted to secure the fulfillment of a
2. Mortgagor must be the absolute owner of
the thing mortgaged.
3. The persons constituting the mortgage have
free disposal of the property; in the absence
thereof, they should be legally authorized for
the purpose. (Article 2085)
4. Cannot exist without a valid obligation. (Art.
2086 cf 2052)
5. When the principal obligation becomes due,
the thing in which the mortgage consists
may be alienated for payment to the
creditor. (Art. 2087)
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6. Must appear in a public document duly
recorded in the Registry of Property, to be
validly constituted. (Art. 2125)
In a legal mortgage, the persons in whose
favor the law establishes a mortgage
have the right to demand the execution
and recording of a document formalizing
the mortgage. (Art. 2125, par. 2)
EFFECTS
1. Creates real rights, a lien inseparable from
the property mortgaged, enforceable against
the whole world.
2. Creates merely an encumbrance.
LAWS GOVERNING MORTGAGE
1. New Civil Code.
2. PD 1952.
3. Revised Administrative Code.
4. RA 4882, regarding aliens becoming
mortgagees
5. Act 3135, as amended
6. Property Registration Decree
7. General Banking Act of 2000
EFFECTS OF A MORTGAGE
1. It creates a real right, a lien inseparable from
the property mortgaged
2. If a person is the first mortgagee over a
property sold in an auction sale by the
second mortgagee, the only right left to him
is to collect his mortgage credit from the
proceeds of the sale (by virtue of merger of
rights, Art 1275).
3. The first mortgagee has superior rights over
junior mortgagees / attaching creditors
IMPORTANT POINTS
1. As a general rule, the mortgagor retains
possession of the property. He may deliver
said property to the mortgagee without
altering the nature of the contract of
mortgage.
2. It is not an essential requisite that the
principal of the credit bears interest, or that
the interest as compensation for the use of
the principal and the enjoyment of its fruits
be in the form of a certain percentage
thereof.
3. Mortgage creates an encumbrance over the
property, but ownership of the property is
not parted with. It merely restricts the
mortgagors jus disponendi over the
property. The mortgagor may still sell the
property, and any stipulation to the contrary
is void (Art. 2130)
4. Mortgage extends to the natural accessions,
to the improvements of growing fruits and
the rents or income NOT YET RECEIVED
when the obligation becomes DUE,
including indemnity from insurance, and / or
amount received from expropriation for
public use (Art. 2127)
a. Applies only when the accessions and
accessories subsequently introduced
belongs to the mortgagor.
b. To exclude them, there must be an
express stipulation, or the fruits must be
collected before the obligation becomes
due.
c. Third persons who introduce
improvements upon the mortgaged
property may remove them at any time
Registration ministerial act by which deed,
contract or instrument is sought to be inscribed
in the office of the Register of Deeds and
annotated at the back of the certificate of title
covering the land subject of the deed, title, or
contract
SAMANILLA v CAJUCOM: A mortgage,
whether registered or not, is binding between the
parties, registration being necessary only to
make the same valid against third persons (Art.
2125, CC).
Registration only operates as a notice of the
mortgage to others, but neither adds to its
validity nor convert an invalid mortgage into a
valid one between the parties. In Gurbax Singh
Pabla vs. Reyes, SC ruled that "if the purpose of
registration is merely to give notice, the
questions regarding the effect or invalidity of
instruments are expected to be decided after,
not before, registration. It must follow as a
necessary consequence that registration must
first be allowed and validity or effect litigated
afterwards".
INCIDENTS OF REGISTRATION OF
MORTGAGE
1. Mortgagee is entitled to registration of
mortgage as a matter of right.
2. Proceedings for registration do not
determine validity of the mortgage or its
effect
3. Registration is without prejudice to better
rights of third parties.
4. Mortgage deed, once duly registered, forms
part of the records for the registration of the
mortgaged property.
5. Mortgage by a surviving spouse of his/her
undivided share in the conjugal property can
be registered.
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EFFECT OF INVALIDITY OF MORTGAGE
ON THE PRINCIPAL OBLIGATION
1. Principal obligation remains valid.
2. Mortgage deed remains evidence of a
personal obligation.
MOJICA v CA: Mortgages given to secure future
advancements are valid and legal contracts; that
the amounts named as consideration in said
contract do not limit the amount for which the
mortgage may stand as security if from the four
corners of the instrument the intent to secure
future and other indebtedness can be gathered.
A mortgage given to secure advancements is a
continuing security and is not discharged by
repayment of the amount named in the
mortgage, until the full amount of the
advancements are paid (as established earlier in
Lim Julian v. Lutero).
IV. Foreclosure of Mortgage (Art. 2085)
FORECLOSURE OF MORTGAGE
It is the remedy available to the mortgagee by
which he subjects the mortgaged property to the
satisfaction of the obligation secured by the
mortgage.
In General: An action for foreclosure of a
mortgage is limited to the amount mentioned
in the mortgage, EXCEPT when the
mortgage contract intends to secure future
loans or advancements
BLANKET mortgage / DRAGNET
mortgage that subsumes all debts of past or
future origin
Mortgage may be used as a continuing
security which secures future
advancements and is not discharged by the
repayment of the amount in the mortgage
Alienation or assignment of mortgage credit
is valid even if it is not registered
ACCELERATION CLAUSE, or the stipulation
stating that on the occasion of the mortgagors
default, the whole sum remaining unpaid
automatically becomes due and demandable, is
ALLOWED
KINDS OF FORECLOSURE
1. Judicial Foreclosure
2. Extrajudicial Foreclosure
JUDICIAL FORECLOSURE
Rule 68, ROC:
May be availed of by bringing an action in
the proper court which has jurisdiction over
the area wherein the real or personal (in
case of chattel mortgage) property involved
or a portion thereof is situated.
If the court finds the complaint to be well-
founded, it shall order the mortgagor to pay
the amount due with interest and other
charges within a period of not less than 90
days nor more than 120 days from the entry
of judgment. If the mortgagor fails to pay at
the time directed, the court, upon motion,
shall order the property to be sold to the
highest bidder at a public auction.
Upon confirmation of the sale by the court,
also upon motion, it shall operate to divest
the rights of all parties to the action and to
vest their rights to the purchaser subject to
such rights of redemption as may be allowed
by law.
Before the confirmation, the court retains
control of the proceedings
Execution of judgment subject to APPEAL
but not annulment
The foreclosure of the property is completed
only when the sheriffs certificate is
executed, acknowledged and recorded
The proceeds of the sale shall be applied to
the payment of the:
a. Costs of the sale;
b. Amount due the mortgagee;
c. Claims of junior encumbrancers or
persons holding subsequent mortgages
in the order of their priority; and
d. Balance, if any shall be paid to the
mortgagor.
NATURE OF JUDICIAL FORECLOSURE
PROCEEDINGS:
1. Quasi in rem action. Hence, jurisdiction may
be acquired through publication.
2. Foreclosure is only the result or incident of
the failure to pay debt.
3. Survives death of mortgagor.
EXTRAJUDICIAL FORECLOSURE(Act No.
3135)
1. Applies to mortgages where the authority to
foreclose is granted to the mortgagee.
2. Authority is not extinguished by death of
mortgagor or mortgagee. This is an agency
coupled with interest.
3. Public sale should be made after proper
notice to the public, otherwise it is a
jurisdictional defect which could render the
sale voidable.
4. There is no need to notify the mortgagor.
Proper notice consists of:
a. posting notice in three public places
and / or
b. publication in newspaper of general
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circulation
c. purpose of notice is to obtain the best
bid for the foreclosed property
5. Surplus proceeds of foreclosure sale belong
to the mortgagor.
6. Debtor (who must be a NATURAL
PERSON) has the right to redeem the
property sold within 1 year from and after
the date of sale.
a. If the mortgagee is a bank and the
debtor is a juridical person, then there
is no right of redemption. However, it
may redeem the property BEFORE the
registration of the TCT to the buyer,
which is similar to the equity of
redemption. The TCT must be
registered within THREE MONTHS
after the foreclosure.
b. The mortgagor can only legally transfer
the right to redeem and the use of the
property during the period of
redemption.
7. Remedy of party aggrieved by foreclosure is
a petition to set aside sale and cancellation
of writ of possession. However, if the
mortgagee is a bank, the mortgagor is
required to post a bond equal to the value of
the mortgagees claim.
8. Republication is of the notice of sale
necessary for validity of postponed
extrajudicial sale
9. In foreclosure of real estate mortgage under
Act 3135, the buyer at auction may petition
the land registration court for a writ of
possession pending the one-year period of
redemption of the foreclosedproperty.
Nature of power of foreclosure by
extrajudicial sale:
1. Conferred for mortgagees protection.
2. An ancillary stipulation.
3. A prerogative of the mortgagee.
Note:
a. Both should be distinguished from
execution sale governed by Rule 39,
ROC.
b. Foreclosure retroacts to the date of
registration of mortgage.
c. A stipulation of upset price, or the
minimum price at which the property
shall be sold to become operative in the
event of a foreclosure sale at public
auction, is null and void.
RIGHT OF MORTGAGEE TO RECOVER
DEFICIENCY
1. Mortgagee is entitled to recover deficiency.
2. If the deficiency is embodied in a judgment,
it is referred to as deficiency judgment.
3. Action for recovery of deficiency may be
filed even during redemption period.
4. Action to recover prescribes after 10 years
from the time the right of action accrues.
EFFECT OF INADEQUACY OF PRICE IN
FORECLOSURE SALE
1. Where there is right to redeem, inadequacy
of price is immaterial because the judgment
debtor may redeem the property.
Exception: Where the price is so inadequate
as to shock the conscience of the court,
taking into consideration the peculiar
circumstances.
2. Property may be sold for less than its fair
market value, upon the theory that the lesser
the price the easier it is for the owner to
redeem.
3. The value of the mortgaged property has no
bearing on the bid price at the public
auction, provided that the public auction was
regularly and honestly conducted.
WAIVER OF SECURITY BY CREDITOR
1. Mortgagee may waive right to foreclose his
mortgage and maintain a personal action for
recovery of the indebtedness.
2. Mortgagee cannot have both remedies.
REDEMPTION
1. It is a transaction by which the mortgagor
reacquires the property which may have
passed under the mortgage or divests the
property of the lien which the mortgage may
have created
2. Kinds:
a. Equity of redemption: in judicial
foreclosure of real estate mortgage
under the ROC, it is the right of the
mortgagor to redeem the mortgaged
property by paying the secured debt
within the 120 day period from entry of
judgment or after the foreclosure sale,
but before the sale of the mortgaged
property or confirmation of sale
formal offer to redeem preserves the
right of redemption, e.g., by filing an
action to enforce the right to redeem
b. Right of redemption: in extrajudicial
foreclosure of real estate mortgage, the
right of the mortgagor to redeem the
property within a certain period after it
was sold for the satisfaction of the debt.
For natural persons one year from
the registration of the TCT
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For juridical persons three months
from the foreclosure
Formal offer to redeem must be with
tender of redemption price to
preserve right of redemption
NOTE: There is no right of redemption in
pledge and chattel mortgage.
MEDIDA v CA: The rule up to now is that
the right of a purchaser at a foreclosure sale
is merely inchoate until after the period of
redemption has expired without the right
being exercised. The title to land sold under
mortgage foreclosure remains, in the
mortgagor or his grantee until the expiration
of the redemption period and conveyance by
the master's deed
V. Antichresis
ANTICHRESIS is a contract whereby the
creditor acquires the right to receive the fruits of
an immovable of the debtor, with the obligation
to apply then to the payment of the interest, if
owing, and thereafter to the principal of the
credit (Art 2132)
CHARACTERISTICS
1. Accessory contract it secures the
performance of a principal obligation
2. formal contract it must be in a specified
form to be valid (Art. 2134)
SPECIAL REQUISITES:
1. it can cover only the fruits of an immovable
property
2. delivery of the immovable is necessary for
the creditor to receive the fruits and not that
the contract shall be binding
3. amount of principal and interest must be
specified in writing
4. express agreement that debtor will give
possession of the property to creditor and
that the latter will apply the fruits to the
interest, if any, then to the principal of his
credit
5. NOTE: The obligation to pay interest is not
of the essence of the contract of antichresis;
there being nothing in the Code to show that
antichresis is only applicable to securing the
payment of interest-bearing loans. On the
contrary, antichresis is susceptible of
guaranteeing all kinds of obligations, pure or
conditional
OBLIGATIONS OF ANTICHRETIC CREDITOR
1. to pay taxes and charges on the estate,
including necessary expenses. Creditor may
avoid said obligation by:
a. compelling debtor to reacquire
enjoyment of the property
b. by stipulation to the contrary
2. to apply all the fruits, after receiving them, to
the payment of interest, if owing, and
thereafter to the principal
3. to render an account of the fruits to the
debtor
4. to bear the expenses necessary for its
preservation and repair
REMEDIES OF CREDITOR IN CASE OF NON-
PAYMENT OF DEBT
1. action for specific performance
2. Petition for the sale of the real property as in
a foreclosure of mortgages under Rule 68 of
the Rules of Court
a. The parties, however, may agree on an
extrajudicial foreclosure in the same
manner as they are allowed in contracts
of mortgage and pledge (Tavera v. El
Hogar Filipino, Inc. 68 Phil 712)
b. A stipulation authorizing the antichretic
creditor to appropriate the property upon
the non-payment of the debt within the
agreed period is void (Art. 2088)
VI. Chattel Mortgage
CHATTEL MORTGAGE is a contract by virtue
of which a personal property is recorded in the
Chattel Mortgage Register as security for the
performance of an obligation.
If the movable, instead of being recorded, is
delivered to the creditor, it is pledge and not
chattel mortgage.
LAWS GOVERNING CHATTEL MORTGAGE
1. Chattel Mortgage Law (Act.1508, as
amended).
2. New Civil Code.
3. Revised Administrative Code.
4. Revised Penal Code.
5. Ship Mortgage Decree of 1978 (PD 1521)
governs mortgage of vessels of domestic
ownership.
AFFIDAVIT OF GOOD FAITH
An oath in a contract of chattel mortgage
wherein the parties "severally swear that the
mortgage is made for the purpose of
securing the obligation specified in the
conditions thereof and for no other purposes
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and that the same is a just and valid
obligation and one not entered into for the
purpose of fraud.
EFFECT OF REGISTRATION
1. Creates real rights.
2. Adds nothing to mortgage.
Note: Registration of assignment of mortgage is
not required.
RIGHT OF REDEMPTION OF MORTGAGE
1. When the condition of a chattel mortgage is
broken, the following may exercise
redemption:
a. Mortgagor.
b. Person holding a subsequent mortgage.
c. Subsequent attaching creditor.
2. 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 as a mortgagee.
3. Redemption is made by paying or delivering
to the mortgagee the amount due on such
mortgage and the costs and expenses
incurred by such breach of condition before
the sale.
FORECLOSURE OF CHATTEL MORTGAGE
1. Public sale.
2. Private sale There is nothing illegal,
immoral or against public order in an
agreement for the private sale of the
personal properties covered by chattel
mortgage.
PERIOD TO FORECLOSE
1. After 30 days from the time of the condition
is broken.
2. The 30-day period is the minimum period
after violation of the mortgage condition for
the creditor to cause the sale at public
auction with at least 10 days notice to the
mortgagor and posting of public notice of
time, place, and purpose of such sale, and is
a period of grace for the mortgagor, to
discharge the obligation.
3. After the sale at public auction, the right of
redemption is no longer available to the
mortgagor.
CIVIL ACTION TO RECOVER CREDIT
1. Independent action to recover debt is not
required.
2. However, mortgage lien is deemed
abandoned by obtaining a personal
judgment.
RIGHT OF MORTGAGEE TO RECOVER
DEFICIENCY
1. Where mortgage foreclosed: Creditor may
maintain action for deficiency although the
Chattel Mortgage Law is silent on this point,
because a chattel mortgage is given only as
a security and not as payment of the debt.
2. Where mortgage constituted as security for
purchase of personal property payable in
installments: No deficiency judgment can be
asked and any contrary agreement shall be
void.
3. Where mortgaged property subsequently
attached and sold: Mortgagee is entitled to
deficiency judgment in an action for specific
performance.
APPLICATION OF PROCEEDS OF SALE
1. Costs and expenses of keeping and sale.
2. Payment of the obligation.
3. Claims of persons holding subsequent
mortgages in their order.
4. Balance, if any, shall be paid to the
mortgagor, or person holding rights under
him.
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Chapter VIII. Concurrence and
Preference of Credits
II. CLASSIFICATION OF CREDITS
III. PREFERENCE OF CREDITS
CONCURRENCE OF CREDIT implies
possession by two or more creditors of equal
right or privileges over the same property or all
of the property of a debtor.
PREFERENCE OF CREDIT is the right held by
a creditor to be preferred in the payment of his
claim above other out of the debtors assets.
I. General Provisions
1. The debtor is liable with all his property,
present and future, for the fulfillment of his
obligations, subjects to exemptions provided
by law.
Exempted property:
a. Present property:
Family home. (Arts. 152, 153 and
155, CC)
Right to receive support, as well as
money or property obtained by such
support, shall not be levied upon on
attachment or execution. (Art. 205,
CC)
Sec. 13, Rule 39, ROC.
Sec 118, Public Land Act. (CA 141,
as amended)
b. Future property: A debtor who obtains a
discharge from his debts on account of
insolvency, is not liable for the
unsatisfied claims of his creditors with
said property. (Sec. 68 and 69,
Insolvency Law, Act 1956)
c. Property in custodia legis and of public
dominion.
2. Insolvency shall be governed by the
Insolvency Law. (Act 1956, as amended)
3. Exemption of conjugal property or absolute
community or property, provided that:
a. Partnership or community subsists.
b. Obligations of the insolvent spouse have
not redounded to the benefit of the
family.
4. If there is co-ownership, and one of the co-
owners is the insolvent debtor, his undivided
share or interest in the property shall be
possessed by the assignee in insolvency
proceedings because it is part of his assets.
5. Property held by the insolvent debtor as a
trustee of an express or implied trust, shall
be excluded from the insolvency
proceedings
II. Classification of Credits
1. Special preferred credits. (Art. 2241 and
2242, CC)
a. Considered as mortgages or pledges of
real or personal property or liens within
the purview of legal provisions
governing insolvency.
b. Taxes due to the State shall first be
satisfied.
2. Ordinary preferred credits (Art. 2244)
Preferred in the order given by law.
3. Common credits (Art. 2245) Credits of any
other kind or class, or by any other right or
title not comprised in Arts. 2241- 2244 shall
enjoy no preference.
III. Preference of Credits
1. Credits which enjoy preference with respect
to specific movables exclude all others to
the extent of the value of the personal
property to which the preference refers.
2. If there are 2 or more credits with respect to
the same specific movable property, they
shall be satisfied pro rata, after the payment
of duties, taxes and fees due the State or
any subdivision thereof
3. 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.
4. If there are 2 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 assessment of the
taxes and assessments upon the immovable
property or real right.
5. 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 other
credits.
6. 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:
a. Order established by Art 2244
b. Common credits referred to in Art 2245
shall be paid pro rata regardless of
dates
-end of Credit Transactions -
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%3(.!4
Table of Contents
Chapter I. Nature, Form, and Kinds of Agency
.......................................................................341
I. Definition [Art. 1868, CC] ..................341
II. Purpose.............................................341
III. Characteristics [CNPPBF].................342
IV. Essential Elements............................342
342
VI. Agency v Similar Contracts...............343
VII. Kinds.............................................344
Chapter II. Obligations of the Agent...........348
I. To Carry Out the Agency ..................348
III. To Advance the Necessary Funds [Art.
1886, CC] ...................................................349
Instructions.................................................349
Personal Interest........................................349
VI. To Render Accounts and Deliver Things
Received by Virtue of the Agency..............349
VII. To Be Responsible for Substitutes350
VIII. To Pay Interest .............................350
IX. To Answer for His Negligence or Fraud
[Art. 1909, CC] ...........................................350
Commission Agents...................................350
Chapter III. Liabilities of the Agent .............352
I. Liability to Third Persons...................352
II. Liability to the Principal .....................352
III. Liability of Two or More Agents.........353
Chapter IV. Obligations of the Principal ...354
contracted by the agent .............................354
Reimburse the Agent .................................355
III. To Indemnify the Agent for Damages355
IV. To Pay the Agents Compensation ...356
V. To Be Solidarily Liable ......................356
Chapter V. Extinguishment of Agency......357
Extinguishment of Agency [EDWARD] ......357
I. Expiration of the period for which it was
constituted..................................................357
insolvency ..................................................357
III. Withdrawal of the agent ....................357
agency .......................................................357
V. Revocation ........................................357
entrusted/accepted the agency..................358
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Chapter I. Nature, Form, and Kinds of
Agency
I. DEFINITION
II. PURPOSE
III. CHARACTERISTICS
IV. ESSENTIAL ELEMENTS
V. DETERMINATION OF EXISTENCE
VI. AGENCY V SIMILAR CONTRACTS
VII. KINDS
I. Definition [Art. 1868, CC]
By the contract of agency,
1. a person (agent) binds himself
2. to render some service or to do something in
representation or on behalf of another
(principal),
3. with the consent or authority of the latter.
II. Purpose
The purpose of agency is to extend the
principals personality.
The personality of the principal is extended
through the facility of the agent. In so doing,
the agent, by legal fiction, becomes the
principal, authorized to perform all acts
which the latter would have him do. The
relationship can only be effected with the
consent of the principal, which must not, in
any way, be compelled by law or by any
court. (Litonjua, Jr. v. Eternit Corp.)
What acts may be authorized
1. General Rule: What a man may do in
person, he may do thru another.
2. Exceptions
a. Personal acts
b. Criminal acts
c. Unlawful acts
Theory of Imputed knoweldge
1. General Rule: For knowledge of agent to be
imputed to the principal, there must be:
a. Actual notice to the agent;
b. The notice must pertain to a matter of
fact and not of law; and
c. The fact must be within the scope of the
agents authority.
2. Exceptions
a. Agents interests are adverse to those of
the principal;
b. Agents duty is not to disclose
information;
c. 3rd person claiming the benefit of the
rule colludes with agent to defraud
principal.
%3(.!4 E F%').('/G"F )(%?
Faculty Editor
Genevieve E. Jusi
Lead Writer
Joyce Anne C. Roldan
Writer
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Kristine Bongcaron
Patricia Tobias
Subject Editors
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Kristine Bongcaron
Michelle Dy
Patrich Leccio
Editors-in-Chief
F'".)".3 E C"/)'"*<)"-.
Kae Guerrero
C(/"3. E $%4-<)
Pat Hernandez
Viktor Fontanilla
Rusell Aragones
Romualdo Menzon Jr.
Rania Joya
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Michelle Arias
Camille Maranan
Angela Sandalo
Heads
Katz Manzano
Sam Nuez
Arianne Cerezo
Mary Rose Beley
Krizel Malabanan
Marcrese Banaag
Volunteers
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Lilibeth Perez
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Dahlia Salamat
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Charisse Mendoza
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Jill Hernandez
Head
Loraine Mendoza
Mary Mendoza
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Members
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NoteThe theory of imputed knowledge
ascribes the knowledge of the agent, to the
principal, not the other way around. The
knowledge of the principal cant be imputed to its
agent. (Sunace Internatl Mgt. Services v. NLRC,
2006)
III. Characteristics [CNPPBF]
1. Consensual: perfected by mere consent
2. Nominate: has its own name
3. Preparatory: purpose is the execution of a
juridical act in relation to a third person
4. Principal: can stand by itself without need of
another contract
5. Bilateral: gives rise to reciprocal rights and
obligations
6. Fiduciary: since it is based on trust and
confidence
IV. Essential Elements
Essential Elements [CORS] (Rallos v Felix Go
Chan, 1978)
1. Consent, express or implied, of the parties
to establish the relationship
2. Object is the execution of a juridical act in
relation to a third person
3. Agent acts as a Representative and not for
himself
4. Agent acts within the Scope of his authority
Intent to establish agency essential
General Rule
1. On the part of the principal there must be an
intention to appoint or an intention naturally
inferable from his words or actions; and
2. On the part of the agent, there must be an
intention inferable from words or deeds to
accept the appointment and act on it.
Exception
1. Agency by estoppel; and
2. Agency by operation of law
Agency by Estoppel
1. The principal manifested a representation of
the agents authority or knowlingly allowed
the agent to assume such authority;
2. The third person, in good faith, relied upon
such representation;
3. Relying upon such representation, such third
person has changed his position to his
detriment. (Litonjua vs. Eternit Corporation,
G.R. No. 144806)
Apparent Authority
It imposes liability, not as the result of the
reality of a contractual relationship, but
rather because of the actions of a principal
or an employer in somehow misleading the
public into believing that the relationship or
the authority exists.
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. (Professional
Services Inc. vs. Agana, G.R. No. 126297)
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 to act as
his agent, to the prejudice of innocent third
parties dealing with such person in good
faith. (Macke v Camps, 1907)
Capacity of the parties
The principal must be capacitated to give
consent.
The agent must have the capacity to enter
into contracts although he/she may not have
the capacity to enter into the particular
contract subject of the agency
However, as between the principal and the
agent, the agent can set up his incapacity
provided he is not estopped. [Paras, Civil
Code of the Philippines Annotated]
Designation by partiesis not controlling.
Fact of existence
If relations that constitute agency exist, there
is agency regardless of whether or not the
parties understood the exact nature of the
relation.
No presumption of existence
1. General Rule: Agency must exist as a fact.
2. Exceptions:
a. When agency arises ipso jure
b. To prevent unjust enrichment
Intention of the parties to create
The nature of the contract depends on the
intention of the parties as gathered from
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their words and actions and the
circumstances of the case.
As between principal and 3rd person,
however, agency may exist without the
express consent of the agent.
Keeler Rule (Harry Keeler Electric v
Rodriguez, 1922)
1. Against the principal, the third party has the
obligation to determine existence and scope
of agency and has the burden of proof in
case the principal denies it
2. Against the agent, the third person deals
with him at his own peril. A third person may
require the presentation of the POA or the
principals instructions as regards the
agency (Art. 1902)
3. The person dealing with the agent must also
act with ordinary prudence and reasonable
diligence. If he knows or has good reason to
believe that the agent is exceeding his
authority, he cannot claim protection.
VI. Agency v Similar Contracts
Partnership
1. An agent acts not for himself, but for his
principal; a partner can act for himself, for
his firm, and for his partners
2. Parity of Standing Test
A partnership generally presupposes a
parity of standing between the partners, in
which each party has an equal proprietary
interest in the capital or property contributes
& where each party exercises equal rights in
the conduct of the business. (Sevilla v CA,
1988)
Independent Contractor (IC)
Agency IC
1. Control
The agent acts under
the control and
instruction of the
principal.
The IC is authorized to
do the work according
to his own method,
without being subject
to the other partys
control, except insofar
as the result of the
work is concerned
2. Liability for tort
Principal is liable for
torts committed by the
agent within the scope
of his authority.
Employer not liable for
torts committed by the
independent
contractor.
3. Subagents
Agents of the agent
can be controlled by
the principal
The employees of the
contractor are not the
employees of the
employer of the
contractor
Lease of Service
Agency Lease of Service
1. Basis
Basis is
representation
Basis is employment
2. Purpose
Execution of a juridical
act in relation to a
third person
Execution a piece of
work or rendering of
service
3. Authorized Acts
The agent is destined
to execute juridical
acts (creation,
modification or
extinction of relations
with third parties)
Lease of services
contemplate only
material acts.
4. Discretion
Agent exercises
discretionary powers.
Lessor ordinarily
performs only
ministerial functions.
5. Parties
3 parties: Principal,
agent and the 3rd
person with whom the
agent contracts
2 parties: Lessor and
lessee.
Lease of Property
Agency Lease of Property
1. Control
the control and
instruction of the
principal.
Lessee is not
controlled by the
lessor
2. Things involved
Agency may involve
things other than
property
Lease of property only
involves property
3. Binding power
Agent can bind the
principal
Lessee cannot bind
the lessor
Agency to Sell v Sale
Agency to Sell Sale
1. Ownership of goods
Agent receives the
goods as the goods of
the principal
Buyer receives the
goods as owner
2. Payment
Agent delivers
proceeds of the sale to
the principal
Buyer pays the price
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3. Return of goods
Generally, the agent
can return the goods
in case he is unable to
sell them to a third
person
generally, buyer
cannot return the
goods bought
4. Discretion
Agent exercises
Lessor ordinarily
performs only
5. Parties
Agent in dealing with
thing received is
bound to act according
to the instructions of
his principal;
Buyer can deal with
the thing as he
pleases, being the
owner.
Agency to Buy v Sale
Agency to Buy Sale
1. Ownership of goods
The agent acquires
ownership in behalf of
the principal
The buyer acquires
ownership for himself.
2. Changes in price
Generally, any change
in the price should be
borne by the principal
Buyer cannot adjust
the price already
agreed upon.
3. Payment
The agent pays the
purchase price in
behalf of the principal
Buyer pays the price
Guardianship
Agency Guardianship
1. Person represented
Agent represents a
capacitated person
A guardian represents
an incapacitated
person.
2. Source of authority
Agent is appointed by
the principal and can
be removed by the
latter.
Guardian is appointed
by the court or by law.
3. Control
the control of the
principal.
Guardian is not subject
to the directions of the
ward but must act for
the benefit of the latter.
4. Discretion
Agent exercises
Lessor ordinarily
performs only
5. Binding power
Agent can make the
principal personally
liable.
Guardian has no
power to impose
personal liability on the
ward.
VII. Kinds
As to Manner of Creation
1. Express
a. Agent has been actually authorized by
the principal
b. Agency may be oral or in writing, unless
the law requires a specific form. [Art.
1869, CC]
2. Implied
a. On the part of the principal:
From his acts
his silence or lack of action;
his failure to repudiate the agency
knowing that another person is
acting on his behalf without authority
[Art. 1869, CC]
b. On the part of the agent:
from his acts which carry out the
agency;
from his silence or inaction
according to the circumstances [Art.
1870, CC]
Acceptance of the Agency
Between persons who are present
Principal delivers his power of
attorney to the agent; and
Agent receives it without
objection [Art. 1871, CC]
Between persons who are absent:
General Rule: Acceptance
cannot be implied from the
silence of the agent
Exceptions
i. when the principal transmits
his POA to the agent, who
receives it without any
objection;
ii. when the principal entrusts to
him by letter or telegram a
POA with respect to the
business in which he is
habitually engaged as an
agent, and he did not reply to
the letter [Art. 1872, CC]
c. Agency by estoppel
If a person specially informs another
or states by public advertisement
that he has given a power of
attorney to a third person, the latter
becomes a duly authorized agent,
even if previously there was never a
meeting of minds between them.
The power shall continue to be in
full force until the notice is rescinded
in the same manner in which it was
given. [Art. 1869, CC]
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d. In Litonjua, Jr. v. Eternit Corp. (2006),
the following must be present for agency
by estoppels to exist:
the principal manifested a
representation of the agents
authority or knowingly allowed the
agent to assume such authority;
the third person, in good faith, relied
upon such representation;
relying upon such representation,
such third person has changed his
position to his detriment.
As to Formalities
General Rule
Agency may be oral or in writing [Art. 1869,
CC]
Exceptions
a. When the law requires a specific form
[Art. 1869, CC]
b. Sale of a piece of land or any interest
therein
When a sale of a piece of land or any
interest therein is through an agent, the
authority of the latter shall be in writing;
otherwise, the sale shall be void. [Art.
1874, CC]
It is not necessary that the real property
to be sold be precisely described in the
written authority of the agent. It is
sufficient if the authority is so expressed
as to determine without doubt the limits
of the agents authority. [Jimenez v
Rabot, 1918]
As to Cause or Consideration
Agency may be onerouse or gratuitous
a. General RuleAgency is presumed to
be for compensation [Art. 1875, CC]
b. ExceptionThere is proof to the
contrary [Art. 1875, CC]
As to Extent of Business Covered
1. Universal
A universal agent is one authorized to
do all acts for his principal which can
lawfully be delegated to an agent.
[Siasat v. IAC (1985)]
2. General
It comprises all the business of the
principal [Art. 1876, CC]
3. Special
It comprises one or more specific
transactions [Art. 1876, CC]
General Agency Special Agency
1. Scope of authority
All acts connected with
the business or
employment in which he
is engaged.
Specific acts in
pursuance of particular
instructions or with
restrictions necessarily
implied from the act to be
done.
2. Nature of service authorized
Involves continuity of
service.
No continuity of service.
3. Extent to which agent may bind principal
May bind his principal by
an act within the scope of
his authority although it
may be contrary to the
latters special
instructions.
Cannot bind his principal
in a manner beyond or
outside the specific acts
which he is authorized to
perform.
4. Termination of authority
Apparent authority does
not terminate by the mere
revocation of his authority
without notice to the 3rd
party.
Duty imposed upon the
3rd party to inquire
makes termination of the
relationship as between
the principal and agent
effective as to such 3rd
party, unless the agency
has been entrusted for
the purpose of
contracting with such 3rd
party.
5. Construction of principals instructions
Merely advisory in nature. Strictly construed as they
limit the agents authority.
As to Authority Conferred
1. Agency may be couched in general or
specific terms
a. Couched in general terms [Art. 1877,
CC]
If couched in general terms, it comprises
only acts of administration, EVEN IF:
the principal states that he withholds
no power; or
he states that the agent may
execute such acts as he may
consider appropriate; or
the agency should authorize a
general and unlimited management
b. Couched in specific termsauthorizing
only the performance of specific act/acts
2. Power of Attorney
Definition
Written authorization to an agent to
perform specified acts in behalf of his
principal which acts, when performed,
shall have binding effect on the principal
[2 Am. Jur. 30]
Purpose
Not to define the agents authority, but to
evidence such authority to 3rd parties
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Interpretation
General Rule: Power of Attorney should
be strictly construed
Exception: When strict construction will
destroy the very purpose of the power
Special Power of Attorney
A special power of attorney is an
authority granted by the principal to the
agent where the act for which it is drawn
is expressly mentioned. [Strong v.
Repide, 1906]
A special power can be included in a
general power of attorney, either by
giving authority for all acts of a particular
character or by specifying therein the
act/transaction for which a special power
is needed. [Tolentino]
3. When special powers are necessary [Art.
1878, CC] (PNC-WIG-LLB-PORIRS):
a. to make such Payments as are not
usually considered acts of administration
b. to effect Novations which put an end to
obligations already in existence at the
time the agency was constituted
a. Compromise, to submit questions to
arbitration, to renounce the right to
appeal from a judgment, to waive
objections to the venue of an action or to
abandon a prescription already acquired
b. to Waive any obligation gratuitously
c. to enter into any contract by which the
ownership of an Immovable is
transmitted or acquired either
gratuitously or for a valuable
consideration
d. to make Gifts, except customary ones
for charity or those made to employees
in the business managed by the agent;
e. to Loan or borrow money, unless the
latter act be urgent and indispensable
for the preservation of the things which
are under administration
f. to Lease any real property to another
person for more than one year
g. to Bind the principal to render some
service without compensation
h. to bind the principal in a contract of
Partnership
i. to Obligate the principal as a guarantor
or surety
j. to create or convey Real rights over
immovable property
k. to accept or repudiate an Inheritance
l. to Ratify or recognize obligations
contracted before the agency
m. any other act of Strict dominion
Note
a. Art. 1878 refers to the nature of the
authorization, not to its form. Even if a
document is titled as a general power of
attorney, the requirement of special
power of attorney is met if there is a
clear mandate from the principal
specifically authorizing the performance
of the act (Bravo-Guerrero v Bravo,
2005)
b. What SPA to sell/mortgage does not
include [Art. 1879, CC]
A special power to sell excludes the
power to mortgage;
Special power to mortgage does not
include the power to sell.
c. A special power to compromise does not
authorize submission to arbitration. [Art.
1880, CC]
d. The power to legally compel the
payment of debts owing to the principal
is an express grant of the right to bring
suit for the collection of such debts.
(Germann & Co v Donaldson, 1901)
e. A power of attorney to loan and borrow
money and to mortgage the principals
property does not carry with it or imply
that that the agent has a legal right to
make the principal liable for the personal
debts of the agent. (BPI v De Coster,
1925)
f. Unless the contrary appears, the
authority of an agent must be presumed
to include all the necessary and usual
means of carrying the agency into effect.
(Macke v Camps, 1907)
g. If agent is empowered to borrow
moneythe agent may be the lender at
the current rate of interest.
h. If agent is empowered to lend money at
interestthe agent cannot borrow the
money without the consent of the
principal
i. Effect of lack of SPA where one is
required It is neither accurate not
correct to conclude that the absence of
SPA (where one is required by law)
renders the contract entered into by
virtue of said SPA void. The contract is
merely unenforceable. (Dungo v
Lopena, 1962, citing Art. 1403(1), CC)
As to Nature and Effects
1. Ostensible or Representativeagent acts in
the name and representation of the principal
2. Simple or Commissionagent acts in his
own name but for the principals account
3. Agency by Estoppelthere is no agency,
and the alleged agent seemed to have
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apparent or ostensible, but not real,
authority to represent another
Apparent Authority Agency by Estoppel
Though not actually
granted, principal
knowingly permits or
holds out the agent as
possessing the
necessary powers to act
in a certain way.
Where the principal, by
his acts or omission,
permits his agent to
exercise powers not
granted to him, even
though the principal may
have no notice or
knowledge of the conduct
of the agent.
Implied Agency Agency by Estoppel
Principal alone is liable. If caused by the principal,
he is responsible. If
caused by the agent, he
is responsible. Provided,
3
rd
person in good faith.
4. When the principal ratifies the acts of the
agent
a. Conditions for ratification (CaP-DECK)
i. The principal must have Capacity
and Power to ratify
ii. The act must be Done in behalf of
the principal
iii. He must ratify the acts in its Entirety
iv. The act must be Capable of
ratification
v. He must have had Knowledge of
material facts.
b. Effects of ratification
i. With respect to the agent: It relieves
the agent from liability. He may also
recover compensation
ii. With respect to the principal: He
assumes responsibility for the
unauthorized act, as fully as if the
agent had acted under original
authority; but he is not liable for acts
outside the authority approved by
his ratification.
iii. With respect to 3rd persons: They
are bound by ratification. They
cannot question agents authority.
Ratification Estoppel
Rests on intention Rests on prejudice
Affects the entire
transaction from the
beginning.
Affects only relevant
parts of the transaction.
The substance of
ratification is confirmation
of unauthorized acts or
conduct after it has been
done.
The substance of
estoppel is the principals
inducement to another to
act to his prejudice.
As to Kinds of Principal
1. Principal may be:
a. Disclosed
b. Partially disclosedthird persons are
unaware of principals identity
c. Undisclosedagent acts in his own
name
2. General Rule [Art. 1883, CC]
If the principal is undisclosed (agent acts in
his own name):
a. the agent is the one directly bound in
favor of the person with whom he has
contracted, as if the transaction were his
own
b. the principal has no right of action
against the persons with whom the
agent has contracted; neither have such
persons against the principal.
Exception [Art. 1883, CC]
a. When the contract involves things
belonging to the principal
b. Exception qualified by National Bank v
Agudelo, 1933
For the principal to be bound by the
act of an agent who contracted in
his [agents] own name, it is not
sufficient that the contract involved
things belonging to the principal.
The agent should also have acted
within his scope of authority.
[National Bank v Agudelo, 1933;
Rural Bank of Bombon v CA, 1992]
3. Agent may still be sued even if principal is
undisclosed and contract involved things
belonging to the principal.
Even if the principal is undisclosed and
the contract involved things belonging to
the principal, the third person who
contracted with the agent has a right of
action not only against the principal but
also against the agent, when the rights
and obligations which are the subject
matter of the litigation cannot be legally
and juridically determined without
hearing both of them. In such case, the
agent being a necessary party to the full
and complete determination of the case
which originated from his act should be
included in the case as defendant.
[Beaumont v Prieto, 1921]
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Chapter II. Obligations of the Agent
I. TO CARRY OUT THE AGENCY
II. TO ACT WITHIN THE SCOPE OF HIS
AUTHORITY
III. TO ADVANCE NECESSARY FUNDS
IV. TO ACT IN ACCORDANCE WITH
INSTRUCTIONS
V. TO PREFER PRINCIPALS INTEREST OVER
PERSONAL INTEREST
VI. NOT TO LOAN TO HIMSELF WITHOUT
PRINCIPALS CONSENT
VII. TO RENDER ACCOUNT AND DELIVER
THINGS RECEIVED BY VIRTUE OF AGENCY
VIII. TO BE RESPONSIBLE FOR SUBSTITUTES
IX. TO PAY INTEREST
X. TO ANSWER FOR HIS FRAUD/NEGLIGENCE
XI. SPECIAL OBLIGATIONS OF
FACTOR/COMMISSION AGENTS
I. To Carry Out the Agency
Obligation to carry out the agency he
accepted [Art. 1884, CC]
1. The agent is bound by his acceptance to
carry out the agency own
2. He shall be liable for damages that the
principal may suffer due to his non-
performance [Art. 1884, CC]
Exception: An agent shall not carry out an
agency if its execution would manifestly result in
loss or damages to the principal. [Art. 1888, CC]
Obligation to finish business began on
principals death [Art. 1884, CC]
The agent must finish the business already
begun on the death of the principal, should
delay entail any danger
Obligation should he decline the agency [Art.
1885, CC]
1. He is bound to observe the diligence of a
good father of a family in the custody and
preservation of the goods forwarded to him
by the owner until the latter should appoint
an agent or take charge of the goods
2. However, the owner must act as soon as
practicable either by appointing an agent or
by taking charge of the property
Obligation to continue agency should he
withdraw [Art. 1929, CC]
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.
II. To Act Within the Scope of His
Authority [Art. 1881, CC]
Authority is the power of the agent to affect the
legal relations of his principal by acts done in
accordance with the principals manifestations of
consent.
When agent acting within the scope of his
authority
1. When he is performing acts which are
conducive to the accomplishment of the
purpose of the agency [Art. 1881, CC]
2. If the agency has been performed in a
manner more advantageous to the principal
than that specified by him [Art. 1882, CC]
3. Insofar as third persons, when the agents
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. [Art. 1900, CC]
Note:
1. A 3
rd
person with whom the agent wishes to
contract on behalf of the principal may
require the presentation of a power of
attorney or the principals instructions [Art.
1902, CC]
2. 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. [Siredy Enterprises, Inc. v CA,
2002]
Effect when agent acts within the scope of
his authority
1. General Rule The agent who acts as such
is not personally liable to the party with
whom he contracts
2. Exceptions
a. If he expressly bound himself [Art. 1897,
CC]
b. If he exceeds the limits of his authority
without giving such party sufficient
notice of his powers [Art. 1897, CC]
c. If he acted in his own name; except if
the contract involves things belonging to
the principal [Art. 1883, CC]
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III. To Advance the Necessary Funds
[Art. 1886, CC]
General Rule
The agent is bound to advance necessary
funds, should there be a stipulation to do so.
Exception
When the principal is insolvent
Instructions
Obligation to act in accordance with
principals instructions
In the execution of the agency, the agent
shall act in accordance with the instructions
of the principal. [Art. 1887, CC]
Obligation in the absence of instructions
Agent shall do all that a good father of a
family would do, as required by the nature of
the business [Art. 1887, CC]
When private orders and instructions not
binding to third persons
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. [Art. 1902, CC]
Effect when agent acts in accordance with
principals orders
Principal cannot set up the ignorance of the
agent as to circumstances whereof he
himself was, or ought to have been aware
[Art. 1899, CC]
Authority v Instructions
Authority Instructions
The sum total of the
powers committed or
permitted to the agent
Only a private rule of
guidance to the agent
Relates to the subject
(biz/transaction) with
which the agent is
empowered to deal or
act.
Refers to the manner
or mode of agents
action with respect to
matters within the
permitted scope of
action.
Limits of authority to
operate vs those who
have/are charged with
knowledge of them.
Binding only on the
principal and agent
Personal Interest
Rule in case of conflict of interest
1. General Rule
The agent shall be liable for damages if,
there being a conflict between his
interests and those of the principal, he
should prefer his own. [Art. 1889, CC]
2. Exceptions
a. The principal waives the benefit of the
rule, provided he does so with full
knowledge of the facts.
b. The interests of the agent are superior,
ex., agency coupled with an interest.
Agent prohibited from purchasing property
of principal
1. General Rule
The agent cannot acquire by purchase,
even at a public or judicial auction,
either in person or through the mediation
of another property whose
administration or sale may have been
entrusted to them.
2. Exception
The principal has consented to the
purchase. [Art. 1491(2), CC]
VI. To Render Accounts and Deliver
Things Received by Virtue of the
Agency
Obligation to account and deliver [Art. 1891,
CC]
Every agent is bound to:
1. render an account of his transactions; and
2. deliver to the principal whatever he may
have received by virtue of the agency, even
though it may not be owing to the principal.
Effect of failure to comply
If he fails to do so or uses the
money/property for his own use, the agent is
liable for estafa [Art. 315, RPC]
Contrary stipulation void
Every stipulation exempting the agent from
the obligation to render an account shall be
void [Art. 1891, CC]
When not applicable (LIM)
1. A right of Lien exists in favor of the agent.
2. The agent or broker Informed the principal of
the gift or bonus or profit he received from
the vendee, and the principal did not object.
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3. If the agent or broker acted only as a
Middleman with the task of merely bringing
together the vendor and vendee (Domingo v
Domingo)
VII. To Be Responsible for Substitutes
The agent shall be responsible for the acts of
his substitute:
1. when he was not given the power to appoint
one; or
2. when he was given such power, but without
designating the person, and the person
appointed was notoriously incompetent or
insolvent.
The agent may appoint a substitute if the
principal has not prohibited him from doing so.
All acts of the substitute appointed against the
prohibition of the principal shall be void
Principal may also bring an action against the
substitute with respect to the obligations which
the latter has contracted under the substitution.
[Art. 1893, CC]
VIII. To Pay Interest
The agent owes interest on:
1. the sums he has applied to his own use from
the day on which he did so
2. those which he owes after the
extinguishment of the agency
IX. To Answer for His Negligence or
Fraud [Art. 1909, CC]
The agent is responsible not only for fraud, but
also for negligence
Liability shall be judged with more or less rigor
by the courts, according to whether the agency
was or was not for a compensation
Commission Agents
Definition
one whose business is to receive & sell
goods for a commission, and is entrusted by
the principal with its possession [Mechem
on Agency]
Obligations of a commission agent
1. For goods received [Art. 1903, CC]
a. He shall be responsible for the goods
received by him in the terms and
conditions and as described in the
consignment
b. To avoid liability, he should make a
written statement of the damage and
deterioration suffered by the same upon
receiving them
2. When handling goods of the same kind and
mark with different owners [Art. 1904, CC]
He should distinguish the goods by
countermarks, and designate the
merchandise respectively belonging to
each principal.
3. Not to sell on credit without express consent
[Art. 1905, CC]
The commission agent cannot, without
the express or implied consent of the
principal, sell on credit.
Should he do so:
a. the principal may demand from him
payment in cash
b. but the commission agent shall be
entitled to any interest or benefit,
which may result from such sale
4. To inform the principal of sale made on
credit, if authorized to do so [Art. 1906,
CC]
a. Should the commission agent, with
authority of the principal, sell on credit,
he shall so inform the principal, with a
statement of the names of the buyers
b. Should he fail to do so, the sale shall be
deemed to have been made for cash
insofar as the principal is concerned.
5. To indemnify principal for damages for
failure to collect the credits of his principal
when they fall due [Art. 1908, CC]
General Rule:
The commission agent who does not
collect the credits of his principal at the
time when they become due and
demandable shall be liable for damages
Exception
If he proves that he exercised due
diligence for that purpose
6. When he receives a guarantee commission
(del credere commission) [Art. 1907, CC]
a. Bear the risk of collection
b. Pay the principal the proceeds of the
sale on the same terms agreed upon
with the purchaser
Ordinary Agent v Commission Agent
Ordinary Agent Commission Agent
Acts for and in
behalf of the
principal.
Acts in his own name or
in that his principal.
Need not have
possession of the
goods of the
principal.
Must be in possession
of the goods of the
principal.
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Broker v Commission Agent (Pacific
Commercial v Yatco, 1939)
Broker Commission Agent
Has no custody or
possession of the
thing he disposes;
merely acts as an
intermediary between
the sellers and the
buyer.
Engaged in the
purchase and sale, for
a principal, of personal
property which has to
be placed in his
possession and
disposal.
Maintains no relation
with the thing which
he purchases or sells.
Has a relation with the
principal (buyers or
sellers) and the
property which is the
object of the
transaction.
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Chapter III. Liabilities of the Agent
I. LIABILITITY TO THIRD PERSONS
II. LIABILITY TO THE PRINCIPAL
III. LIABILITY OF TWO OR MORE AGENTS
I. Liability to Third Persons
Agent not personally liable as a general
rule
General Rule
An agent who acts as such is not personally
liable to the party with whom contracts [Art.
1897, CC]
Exceptions
1. When he acts in his own name, except when
the contract involves things belonging to the
2. If he expressly binds himself [Art. 1897, CC]
3. If he exceeds the limits of his authority
without giving such party sufficient notice of
his powers [Art. 1897, CC]
NoteWhen an agent contracts in his
own name and without the express
authority of his principal, the obligation
so contracted by him is personal and is
not binding on his principal. [PNB v.
Agudelo]
BUT Third persons 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
agents acts [Art. 1901, CC]
4. Under Art. 1898, CC
a. Agent contracts in the name of the
principal;
b. He exceeds the scope of his authority;
c. The party with whom he contracted with
is aware of the limits of his powers; AND
d. The agent undertook to secure the
principals ratification.
Note Under Art. 1898, CC, the contract
shall be void if the principal does not ratify
the contract and the party with whom the
agent has contracted is aware of the limits of
the powers granted by the principal.
Agent liable for damages to third persons
under Art. 1916 & 1917, CC
1. When two persons contract with regard to
the same thing, one of them with the agent
and the other with the principal;
2. the two contracts are incompatible with each
other
3. the agent acted in bad faith
4. agent shall be liable for damages to third
person whose contract must be rejected
II. Liability to the Principal
Agent is liable for damages
1. Due to non-performance of agency
The agent is liable for the damages which,
thru his non-performance, the principal
may suffer [Art. 1884, CC]
2. For preferring personal interest to that of
principal
The agent shall be liable for damages if,
there being a conflict between his interests
and those of the principal, he should
prefer his own. [Art. 1889, CC]
3. Damages due to his withdrawal [Art. 1928,
CC]
The agent must indemnify the principal for
any damage that the principal may suffer
by reason of the withdrawal of the agent;
Exception: The agent should base his
withdrawal upon the impossibility of
continuing the performance of the agency
without grave detriment to himself.
Liability of agent for acts of substitute under
Art. 1892, CC
The agent shall be responsible for the acts of the
substitute:
1. when he was not given the power to appoint
one; or
2. when he was given such power, but without
designating the person, and the person
appointed was notoriously incompetent or
insolvent.
Principal may bring an action against the
substitute with respect to the obligations which
he has contracted under the substitution. [Art
1893, CC]
All acts of the substitute appointed against the
prohibition of the principal is void. [Art 1893, CC]
Responsibility for fraud or negligence
The agent is responsible not only for fraud,
but also for negligence, which shall be
judged with more or less rigor by the courts,
according to whether the agency was or was
not for compensation. [Art. 1909, CC]
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Interest under Art. 1896, CC
The agent owes interest on:
1. the sums he has applied to his own use from
the day on which he did so
2. those which he owes after the
extinguishment of the agency
a. If he converted for personal use, his
liability is without prejudice to a criminal
action that may be brought against him.
b. If for the sum he owes after
extinguishment, demand is not
necessary because the agent is required
to deliver to the principal whatever he
may have received by virtue of the
agency. [Art 1891, CC]
Liablity of Commission Agents
1. For any damage or deterioration of the
goods in the terms and conditions and as
described in the consignment
Exception: Upon receiving the goods, the
agent makes a written statement of the
damage and deterioration suffered [Art
1903, CC]
2. For commingling goods belonging to
different owners [Art 1904, CC]
3. For selling on credit without the express or
implied consent of the principal [Art 1905,
CC]
III. Liability of Two or More Agents
Liability is joint as a general rule [Art. 1894,
CC]
General Rule: Responsibility of two or more
agents, even though they have been appointed
simultaneously, is joint
Exception: Solidarity is expressly stipulated
Liability of two or more agents [Art. 1895,
CC]
If solidarity has been agreed upon, each of the
agents is responsible for:
1. the non-fulfillment of agency; and
2. for the fault or negligence of his fellows
agents, except: When the fellow agents
acted beyond the scope of their authority in
case of fault or negligence.
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Chapter IV. Obligations of the Principal
I. TO COMPLY WITH THE OBLIGATIONS
CONTRACTED BY THE AGENT
II. TO ADVANCE NECESSARY SUMS AND
REIMBURSE THE AGENT
III. TO INDEMNIFY AGENT FOR DAMAGES
IV. TO PAY THE AGENTS COMPENSATION
V. BE SOLIDARILY LIABLE
General Rule: THE ACT OF THE AGENT IS
THE ACT OF THE PRINCIPAL
Principal is bound by the acts of his agent.
He has an obligation to deal fairly and in
good faith with his agent
SPECIFIC OBLIGATIONS OF THE PRINCIPAL
[CARICS]
3. to Comply with the obligations contracted by the
agent
4. To Advance necessaty sums and Reimburse the
agent
5. To Indemnify agent for damages
6. To pay the agents Compensation
7. be Solidarily liable
contracted by the agent
Obligations principal is bound to comply
with
1. obligations which the agent may have
contracted within the scope of his authority
[Art. 1910, CC]
Note: Principal is directly liable to creditor for
debt incurred by agent acting within the
scope of his authority. That the agent also
bound himself personally does not relieve
principal from liability if the debt was
incurred for his benefit. [Tuason v. Orozco]
2. obligations which the agent may have
contracted beyond the scope of his authority
but were ratified expressly or tacitly by the
Note: Conditions for ratification (CaP-DECK)
a. The principal must have Capacity and
Power to ratify.
b. The act must be Done in behalf of the
principal
c. He must ratify the acts in its Entirety
d. The act must be Capable of ratification
e. He must have had Knowledge of
material facts.
3. When an agent acts in his own name, but
the contract involves things belonging to the
principal, the contract must be considered
as entered into between the principal and
the third person. [Art. 1883, CC; Sy-Juco
and Viardo v Sy-Juco, 1920]
4. The principal is solidarily liable with the
agent who has exceeded his authority if the
former allowed the latter to act as though he
had full power. [Art. 1911, CC]
5. If two persons contract simultaneously with
agent & principal for the same thing:
a. Contract of prior date prevails
b. If applicable, follow the rule on double
sales in Art. 1544, CC. [Art. 1916, CC]
Liability of Principal for Tort of Agent [Art.
1910, CC]
The principal is civilly liable to third persons
for torts of an agent if he commit such in the
course and within the scope of the agency.
Agents negligence or disobedience to the
principal does not relieve him from liability,
even if he had no knowledge about the tort.
Agent and principal are solidarily liable to
third persons.
Liability of Joint Principals: Solidary [Art
1915]
Each principal may be sued by the agent for
the entire amount due, not just for
proportionate shares.
Any of the principals may revoke the agency
Requisites of Solidary Liability:
a. Two or more principals
b. All principals concurred in the
appointment of the same agent
c. Agent was appointed for a common
undertaking
Rules on Double Sale by Principal and Agent
[Art. 1916-1917]
General Rule:
1. When two persons contract with regard to
the same thing, one of them with the agent
and the other with the principal
2. two contracts are incompatible with each
other
3. the agent acted in good faith
4. the principal shall be liable for damages to
the third person whose contract must be
rejected
In case of double sale, which contracts are
incompatible with each other, that of PRIOR
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DATE shall be preferred, without prejudice to Art
1544.
Art. 1544 provides that:
a. If the same movable property is sold to
different persons, ownership is
transferred to whoever first took
possession in good faith.
b. If it be immovable, ownership belongs to
the person who in good faith first
recorded it in the Registry of Property.
c. If there is no inscription, ownership shall
belong to the person who, in good faith
was first in possession; and in the
absence of such, to the one who
presents the oldest title, provided there
is good faith.
Principal not liable in the following cases
1. Void or inexistent contracts under Art. 1409,
CC
2. Sale of a piece of land or any interest
therein & the authority of the agent is not in
writing [Art. 1874, CC]
3. Acts of the substitute appointed against the
prohibition of the principal [Art. 1892, CC]
4. Art. 1898, CC
Requisites:
a. agent contracts in the name of the
principal
b. he exceeds the scope of the his
authority
c. the principal does not ratify the contract
d. the party with whom the agent
contracted is aware of the limits of the
powers granted by the principal; and
i. the agent did not undertake to
secure the principals ratification
5. Agent has no authority or acted beyond the
scope of his authority [Arts. 1403(1); 1910,
CC; Dungo v Lopena, 1962]
6. When the agent acts in his own name,
persons with whom the agent has
contracted have no right of action against
the principal, except when the contract
involves things belonging to the principal.
[Art. 1883, CC]
7. Unenforceable contracts under Art. 1403,
CC
Reimburse the Agent
Obligation to advance sums [Art. 1912, CC]
The principal must advance to the agent,
should the latter so request, the sums
necessary for the execution of the agency.
Obligation to reimburse [Art. 1912, CC]
1. Should the agent have advanced sums, the
principal must reimburse him even if the
business or undertaking was not successful,
provided the agent is free from all fault.
2. The reimbursement shall include interest on
the sums advanced, from the day on which
the advance was made.
Exceptions to obligation to reimburse
[Art.1918] (FCKS)
1. When the expenses were due to the Fault of
the agent;
2. 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;
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.
Note: Under Art. 1236(2), CC:
whoever pays for another may demand
from the debtor what he has paid, except
that if he paid without the knowledge or
against the will of the debtor, he can recover
only insofar as the payment has been
beneficial to the debtor.
Agents right to retain in pledge object of
agency should principal fail to reimburse him
1. The agent may retain in pledge the things
which are the object of the agency until the
principal:
a. effects the reimbursement set forth in
Art. 1912, CC; and
b. pays indemnity set forth in Art. 1913, CC
2. But agent is not entitled to the excess in
case the thing was sold to satisfy his claim,
and the proceeds are more than his claim
[Arts. 2115, 2121, CC]. Also he must
possess the thing lawfully in his capacity as
agent [2 C.J.S. 457]
III. To Indemnify the Agent for Damages
Obligation to pay indemnity for damages
[Art. 1913, CC]
The principal must 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.
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The agents has the right to retain in pledge the
object of the agency should principal fail to pay
the indemnity set forth in Art. 1913, CC.
IV. To Pay the Agents Compensation
Agency is presumed to be for a compensation,
unless there is proof to the contrary. [Art. 1875,
CC]
General Rule on Commission
The agent must be the efficient procuring
cause in order to be entitled to
compensation [Inland Realty v. Court of
Appeals]. His efforts must have resulted in
finding a ready, able and willing buyer of the
goods.
But for equity purposes, commission may be
granted if the agent, even if he is not the
procuring cause, nonetheless took diligent
steps to bring back the parties which led to
the consummation of the sale [Prats v. Court
of Appeals]
Compensation of Brokers
Since the brokers only job is to bring
together the parties to a transaction, it
follows that if the broker does not succeed in
bringing the mind of the purchaser and the
vendor to an agreement with reference to
the terms of a sale, he is not entitled to a
commission. [Rocha v Prats, 1922]
Doctrine of Procuring Cause
When a party is not the efficient
procuring cause in bringing about a sale,
he is not entitled to the stipulated
brokers commission. [Inland Realty v
CA, 1997]
If the principal breaks off from negotiations
with a buyer brought by the agent in order to
deliberately deal later with the buyer
personally, this is evident bad faith. In such
case, justice demands compensation for the
agent. [Infante v Cunanan, 1953]
V. To Be Solidarily Liable
With agent, if agent acted beyond scope of
authority and principal allowed him to act as
though he had full powers
Even 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. [Art. 1911,
CC]
With person who appointed an agent with
him for a common transaction
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. [Art. 1915, CC]
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Chapter V. Extinguishment of Agency
I. EXPIRATION OF THE PERIOD FOR WHICH IT
WAS CONSTITUTED
II. DEATH, CIVIL INTERDICTION, INSANITY,
INSOLVENCY
III. WITHDRAWAL OF THE AGENT
IV. ACCOMPLISHMENT OF THE OBJECT OF THE
AGENCY
V. REVOCATION
VI. DISSOLUTION OF THE FIRM/CORPORATION
WHICH ENTRUSTED/ACCEPTED THE
AGENCY
Extinguishment of Agency [EDWARD]
1. Expiration of the period for which it was
constituted
2. Death, civil interdiction, insanity, insolvency
3. Withdrawal of the agent
4. Accomplishment of the object of the agency
5. Revocation
6. Dissolution of the firm/corp. Which
entrusted/accepted the agency
I. Expiration of the period for which it
was constituted
If created for fixed period, expiration of the
period extinguishes agency even if the
purpose was not accomplished
If no time is specified, Art. 1197 shall apply.
The courts may fix the period as under the
circumstances have been probably
contemplated by the parties.
Period may be implied from terms of
agreement, purpose of agency, and the
circumstances of the parties
insolvency
Death extinguishes agency
General Rule: Death extinguishes agency
Exceptions:
1. Agency coupled with an interest
a. Interest common to principal and agent;
or
b. Interest of a 3
rd
person who has
accepted the stipulation in his favor. [Art.
1930, CC]
2. Anything done by the agent, without
knowledge of the death of the principal or of
any other cause which extinguishes the
agency, is valid and fully effective with
respect to 3
rd
persons who may have
contracted with him in good faith. [Art. 1931,
CC]
3. Agent must finish business already begun
on the death of the principal, should delay
entail any danger. [Art. 1884, CC]
Obligation of heirs of agent upon agents
death [Art. 1932, CC]
1. They must notify the principal of the agents
death
2. They should adopt such measures as the
circumstances may demand in the interest
of the principal in the meantime.
3. The law does not impose a duty on the
principals heirs to notify the agent of the
principals death. [Rallos vs Felix Go Chan]
III. Withdrawal of the agent
1. General Rule: Agent may withdraw from the
agency by giving due notice to the principal
[Art. 1928, CC]
But: If the principal should suffer any
damage by reason of the withdrawal, the
agent must indemnify him;
Exception: If the agent based his withdrawal
upon the impossibility of continuing
performance of the agency without grave
detriment to himself. [Art. 1928, CC]
2. 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. [Art. 1929, CC]
agency
Between principal and agent, the fulfilment
of the purpose for which agency was
created ipso facto terminates agency even if
it be expressly made irrevocable. If the
purpose has not been accomplished, the
agency continues indefinitely for as long as
the intent to continue is manifested through
words or actions of the parties
V. Revocation
Principal may revoke the agency at will as a
general rule
General Rule:
The principal may revoke the agency at will,
and compel the agent to return the
document evidencing the agency. Such
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revocation may be express or implied. [Art.
1920, CC]
Exceptions:
1. The right of the principal to terminate the
authority of his agent is absolute and
unrestricted, except only that he may not do
so in bad faith [Danon v Brimo, 1921]
2. Agency is coupled with an interest [Art.
1927, CC]
a. A bilateral contract depends upon it
b. It is the means of fulfilling an obligation
already contracted;
c. Partner is appointed manager of a
partnership in the contract of partnership
and his removal from the management
is unjustifiable.
Note:
1. Powers of attorney falling under 1927
cannot be revoked at the pleasure of the
principal, but may be revoked for a just
cause, such as when the attorney-in-fact
betrays the interest of the principal.
(Coleongco v Claparols, 1964)
2. A mere statement in the power of attorney
that it is coupled with an interest is not
enough. In what does such interest consist
must be stated in the power of attorney. (Del
Rosario v Abad, 1958)
3. Irrevocability of the contract cannot affect
3rd persons and is obligatory only on the
principal who executed the agency. (New
Manila Lumber v Republic, 1960)
Revocation may be express or implied
1. Expressprincipal clearly and directly
makes a cancellation of the authority of the
agent in writing or orally
2. Implied
a. The appointment of a new agent for the
same business or transaction revokes
the previous agency from the day on
which notice thereof was given to the
former agent, without prejudice to the
provisions Art. 1921 and Art. 1922, CC
[Art. 1923, CC]
b. The agency is revoked if the principal
directly manages the business entrusted
to the agent, dealing directly with third
persons. [Art. 1924, CC]
c. A general power of attorney is revoked
by a special one granted to another
agent, as regards the special matter
involved in the latter [Art. 1926, CC]
d. In all three cases, there is implied
revocation only where the new
appointment is incompatible with the
previous one.
When revocation makes principal liable for
damages
1. If there is a period stipulated in the agency
contract, the agent may still revoke the
agents authority at will; but principal will be
liable for damages.
2. No period fixed: principal liable if the agent
can prove the former acted in bad faith.
Effect of revocation with respect to 3
rd
persons [Arts. 1921-1922,CC]
Agency to contract
with specific
persons
Agency to contract
with general public
Wont prejudice 3
rd
persons until notice is
given them.
Wont prejudice those
in good faith & w/o
knowledge.
Notice must be
personal.
Notice must be
published (Arts. 1873,
1922).
Revocation in case of solidary principals
[Art. 1925, CC]
When two or more principals have granted a
power of attorney for a common transaction,
any one of them may revoke the same
without the consent of others.
Notice of Revocation as against third
persons
1. If agent had general powers:
Revocation DOES NOT prejudice third
persons who acted in good faith and
without knowledge of the revocation
Notice of revocation in a newspaper of
general circulation is a sufficient warning
to third persons
2. If agency is for the purpose of contracting
specified persons: to prejudice persons
specified, they must be given actual notice.
entrusted/accepted the agency
- end of Agency -
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Table of Contents
Partnership ...................................................361
I. Essential Features ............................361
III. Distinctions........................................362
IV. Rules to Determine Existence...........363
V. How Partnership is Formed ..............363
VI. Partnership Term ..............................363
VII. Kinds of Partnerships....................363
Partnership/Partners Among Themselves 366
CRRAMP-LS..............................................366
I. Make Contributions as Promised......366
III. Manage the Partnership....................367
IV. Render Full Information.....................368
V. Account for benefits ..........................368
VI. Reimburse expenses ........................368
VII. Liable for Partnership Contracts ...368
VIII. Solidarily Liable with Partnership.369
Partnership/Partners as to Third Persons.370
LANN .........................................................370
I. Operate Under a Firm Name (Art. 1815,
CC) 370
II. Bound by Partnership Admission......370
III. Bound by Notice Partner ...................370
IV. Liable for Acts of the Partnership......370
Chapter IV. Rights of Partners...................371
I. Share in Losses and Profits ..............371
II. Associate Another in His Interest ......371
III. Access to Partnership Books ............371
IV. Obtain Formal Account .....................371
V. Property Rights .................................371
372
Chapter V. Rights of the Partnership........374
I. Acquire Immovables..........................374
II. Preference of Creditors.....................374
Chapter VI. Dissolution and Winding Up..375
I. Definitions .........................................375
II. Causes for Dissolution ......................375
III. Consequences of Dissolution ...........375
IV. Partners Liability...............................376
Dissolution....................................................377
I. Right to Wind Up...............................377
Business on Wrongful Dissolution .............377
Place of Creditor, to be Indemnified .......... 377
IV. Right of Retiring/Deceased Partner (Art.
1841, CC) .................................................. 377
V. Right of Account (Art. 1842, CC) ...... 378
Chapter VIII. Rules on Settlement (Art. 1839,
CC)................................................................. 379
Chapter IX. Limited Partnership................ 380
I. Definition ........................................... 380
Partnership (Art. 1844, CC) ....................... 381
III. Limited Partner.................................. 382
IV. General Partner ................................ 384
V. Dissolution ........................................ 384
VI. Settling Accounts for Dissolution ...... 385
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Partnership
I. ESSENTIAL FEATURES
II. CHARACTERISTICS
III. DISTINCTIONS
IV. RULES TO DETERMINE EXISTENCE
V. HOW PARTNERSHIP IS FORMED
VI. PARTNERSHIP TERM
VII. CLASSES OF PARTNERS
VIII.KINDS OF PARTNERSHIPS
Art. 1767. 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.
(1665a)
I. Essential Features
1. A mutual contribution of money, property, or
industry to a common fund;
2. With the intention of dividing profits among
themselves
Note: The object must be for profit and
not merely for common enjoyment;
otherwise only a co-ownership has been
formed.
3. The parties must have legal capacity.
Exception: corporation cannot become a
partner on grounds of public policy.
4. It has a separate juridical personality (Art.
1768, CC) apart from the separate
personality of each of the member.
Note: Associations and societies, whose
articles are kept secret among the
members, and wherein any one of the
members may contract in his own name
with third persons, shall have no
juridical personality, and shall be
governed by the provisions relating
to co-ownership. (Art. 1775, CC)
Although not a juridical entity, it may still
be sued by third persons under the
common name it uses. (Sec. 15, Rule 3,
Rules of Court)
%D(.!E G 3%').('/4"3 )(%?
Faculty Editor
Genevieve E. Jusi
Lead Writer
Joyce Anne C. Roldan
Writer
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Kristine Bongcaron
Patricia Tobias
Subject Editors
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Kristine Bongcaron
Michelle Dy
Patrich Leccio
Editors-in-Chief
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Kae Guerrero
C(/"D. G $%E-<)
Pat Hernandez
Viktor Fontanilla
Rusell Aragones
Romualdo Menzon Jr.
Rania Joya
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Michelle Arias
Camille Maranan
Angela Sandalo
Heads
Katz Manzano
Sam Nuez
Arianne Cerezo
Mary Rose Beley
Krizel Malabanan
Marcrese Banaag
Volunteers
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Lilibeth Perez
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Dahlia Salamat
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Charisse Mendoza
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Jill Hernandez
Head
Loraine Mendoza
Mary Mendoza
Faye Celso
Joie Bajo
Members
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5. Has a lawful object (Art. 1770, CC)
a. A partnership must have a lawful object
or purpose, and must be established for
the common benefit or interest of the
partners.
Note: When an unlawful partnership
is dissolved by a judicial decree, the
profits shall be confiscated in favor
of the State, without prejudice to the
provisions of the Penal Code
governing the confiscation of the
instruments and effects of a crime
II. Characteristics
1. Fiduciary
2. Nominate designated by a specific name
3. Consensual perfected by mere consent
4. Bilateral/Multilateral entered into between
two or more persons
5. Principal - existence does not depend on
another contract
6. Onerous money, property or industry must
be contributed
1. Preparatory other contracts essential in
the carrying out of its purposes can be
entered into
III. Distinctions
Partnership Corporation
Created by mere
agreement of the
parties;
Created by operation of law
May be organized by
only two persons
Requires at least 5
incorporators;
Juridical personality
commences from
the moment of
execution of the
contract of
partnership
Personality commences from
SECs issuance of the
certificate of incorporation
May exercise any
power authorized by
the partners as long
as it is not contrary
to law, etc.
Can exercise such powers
expressly granted by law or
incident to its existence
If no agreement as
to mgt. - every
partner is an agent
of the partnership
Power to do business is
vested in the board of
directors/ trustees
A partner as such
may sue a co-
partner who
mismanages
Suit against the board/director
who mismanages must be
brought in the corp.s name
Has no right of
succession
Has right of succession
The partners are
liable personally and
subsidiarily for
partnership debts
The stockholders are liable to
the extent of the shares
subscribed by them
Partnership Corporation
Based on delectus
personam*
Not based on delectus
personam
May be established
for any period of
time stipulated
May not be formed for a
period exceeding 50 years
May be dissolved at
anytime by the will of
any or all partners
May be dissolved only with
the consent of the state
Governed by the
Civil Code
Governed by the Corporation
Code
*Delectus personam: the right of partners to
exercise their choice and preference as to the
admission of any new members to the
partnership, and as to the persons to be so
admitted, if any.
Partnership Co-ownership
Creation Always
created by a
contract
General,
created by law,
may exist even
without a
contract
Juridical
Personality
Has a
separate,
distinct
juridical
personality
Has no juridical
personality
Purpose Realization of
profits
Common
enjoyment of a
thing or right
Duration No limitation
upon the
duration is set
by law
An agreement
to keep the
thing
undivided, not
exceeding ten
years, shall be
valid. (Art. 494,
CC)
Transfer of
Interests
Need
unanimous
consent of
partners to
make
assignee of
interest a
partner
A co-owner can
dispose of his
share without
the consent of
the others
Power to
act with
Third
Persons
A partner may
bind the
partnership
A co-owner
cant represent
the co-
ownership
Dissolution Death or
incapacity of a
partner
dissolves the
partnership
Death or
incapacity of a
co-owner does
not dissolve the
co-ownership
Representa-
tion
There is
mutual agency
There is no
mutual agency
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Partnership Co-ownership
Profits Must be
stipulated
upon
Must always
depend upon
proportionate
shares and any
stipulation to
the contrary is
void.
IV. Rules to Determine Existence
Art. 1769. In determining whether a partnership
exists, these rules shall apply:
1. General Rule: Persons who are not partners
to each other are not partners as to third
persons
Exception: partnership by estoppel.
2. Co-ownership or co-possession and sharing
of gross returns DO NOT establish a
partnership
3. Prima facie evidence of partnership: receipt
of a share of the business profits
Except if received in payment as:
a. A debt by instalment or otherwise;
b. As wages to an employee or rent to a
landlord;
c. An annuity to a widow or representative
of a deceased partner;
d. As Interest on a loan, though the
amount of payment vary with the profits
of the business; and
e. As the consideration for the sale of
goodwill of a business or other property
by instalment or otherwise.
V. How Partnership is Formed
1. Form of Contract
General Rule: The contract may be
constituted in any form (Art. 1771, CC)
Exceptions
a. Where immovable property or real rights
are contributed (Art. 1771, CC)
i. The contract must appear in a public
instrument (1771)
ii. It must have an inventory of such
immovable property signed by the
parties and attached to the
instrument (1773)
b. Where the capital is at least P3,000, in
money or property
i. The contract must appear in a public
instrument which must be recorded
in the Securities and Exchange
Commission (SEC). (Art. 1772, CC)
ii. FAILURE to comply with this
requirement shall NOT affect the
liability of the partnership and the
members to third persons.
VI. Partnership Term
Commencement of the partnership
1. General Rule: A partnership begins from the
moment of the execution of the contract
2. Exception: When otherwise agreed upon by
the parties (Art. 1784, CC)
A Partnership may either be for
1. Fixed term or particular undertaking
2. at will
Extension of Life of Partnership
1. By express renewal of the agreement
2. By implied renewalRequisites:
a. A partnership is for a fixed term or
particular undertaking
b. It is continued after the termination of
such term or particular undertaking
without any express agreemen
Note: Prima facie evidence of continuation
a. Continuation of the business by the
partners without any settlement or
liquidation of the partnership affairs
(1785)
b. Effect: The rights and duties of the
partners remain the same as they were
at such termination, so far as is
consistent with a partnership at will
(1785)
VII. Kinds of Partnerships
As to legality of existence
1. De jure has complied with all the
necessary requisites for lawful
establishment (Arts. 1772, 1773, CC)
2. De facto failed to comply with the
requisites
As to its object
1. Universal (Art. 1777, CC)
a. As to all present property (Art. 1778,
CC)
Partners contribute all their properties to
a common fund with the intention of
dividing them among themselves as well
as all the profits they may acquire
Includes all properties which belonged
to each partner at the time of the
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constitution of the partnership
Partners may stipulate that all may enjoy
all other profits made except those
properties which may be acquired
subsequently through inheritance,
legacy or donation
b. As to profits (Art. 1780, CC)
Partners contribute all that they may
acquire by their industry or work during
the existence of the partnership
Does not include properties which each
partner may possess at the time of the
celebration of the contract
Articles of Universal Partnership
If the Articles of a universal partnership
do not state its nature, it only constitutes
a universal partnership of profits. (Art.
1781, CC)
Persons prohibited to enter into a universal
partnershipThose persons who are
prohibited from giving donation (Art. 133
and 739, CC):
a. Between husband and wife
b. Those guilty of adultery or concubinage
c. Those guilty of a criminal offense, if the
partnership was entered into in
consideration of the same
d. A person and a public officer (or his
wife, descendants, ascendants) by
reason of his office
2. Particular (Art. 1783, CC)
The object may be determinate things, their
use or fruits, or specific undertaking or the
exercise of a profession or vocation.
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As to partners liability
1. General
2. Limited
General Limited
All partners are general
partners liable for
partnership obligations
pro rata with all their
property after exhaustion
of partnership assets
Formed by two or more
partners, with one or
more general partners
and one or more limited
partners
Industrialist Partner v Capitalist Partner
Industrialist
Partner
Capitalist
Partner
Contribution Contributes his
industry
Contributes
money or
property
Prohibition to
engage in
other
business
Cannot engage
in any business
for himself
Cannot
engage in
the same or
similar
enterprise
Profits Receives a just
and equitable
share
Shares in
profits
according to
agreement
thereon; if
none, pro
rata to his
contribution
Losses Exempted as to
losses as
between
partners but it
is liable to 3rd
persons without
prejudice to
reimbursement
from the
capitalist
partners
1. stipulation
as to losses
2. if none,
the
agreement
as to profits
3. if none,
pro rata to
contribution
Partnership by Estoppel
1. Requisites of Partner By Estoppel:
a. The person
represents himself as a partner of
an existing partnership or of two or
more persons not actual partners, or
consents to another representing
him as a partner of an existing
partnership or of two or more
persons not actual partners
b. Third person relied on the
misrepresentation, unaware of the
deception.
c. On the faith of the misrepresentation,
the 3
rd
person gave credit to the
actual/apparent partnership.
d. The person representing or consenting
to the representation is liable:
as an actual member if a
partnership liability results
pro rata with other persons when no
partnership liability results (Art.
1825, CC)
2. No real partnership is created by estoppel. It
is only insofar as 3
rd
persons are involved
and for the purpose of protecting them that
the principal of estoppel is recognized.
3. As to liability resulting from the
representation:
a. when all the members consent,
partnership obligation results
b. if not all consent, only a joint obligation
of the one representing and of those
who consented results
Note: Corporation by estoppel
All persons are liable as general partners
(Sec. 21, Corp. Code). A de facto
partnership is created.
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Partnership/Partners Among Themselves
I. MAKE THE CONTRIBUTIONS AS PROMISED
II. PAY DAMAGES
III. MANAGE THE PARTNERSHIP
IV. RENDER FULL INFORMATION
V. ACCOUNT BENEFITS
VI. REIMBURSE EXPENSES
VII. LIABILITY FOR PARTNERSHIP CONTRACTS
VIII. SOLIDARY LIABILITY WITH PARTNERSHIP
CRRAMP-LS
1. Make Contributions as promised
2. Render full information
3. Account benefits
4. Manage the partnership
5. Pay damages
6. Liability for partnership contracts
7. Solidary liability with partnership
I. Make Contributions as Promised
A partner is a debtor: for whatever he had
promised to contribute thereto (Art. 1786, CC)
When promised contribution is property: in
general
1. Partner is a warrantor in case of eviction
with regard to specific and determinate
things he may have contributed (Art. 1786,
CC)
Note: If breached
Partnership may recover indemnity from
contributing partner.
2. Liable for fruits from the time they should
have been delivered without need of any
demand (Art. 1786, CC)
3. Other duties of contributing partners:
a. to preserve the property with the
diligence of a good father of a family
(Art. 1163, CC)
b. to indemnify the partnership for
damages caused to it by delay in
contribution of property (Art. 1170, CC)
4. Risk of loss of things contributed (Art. 1795,
CC)
a. Borne by the partner who owns them
If they are not fungible, so that only
their use and fruits may be for the
common benefit
b. Borne by the partnership
If the things contributed are:
i. fungible;
ii. cannot be kept without deteriorating;
iii. if they were contributed to be sold
But in the absence of stipulation, the risk
of things brought and appraised in the
inventory, shall also be borne by the
partnership, and in such case the claim
shall be limited to the value at which
they were appraised.
When promised contribution is goods (Art.
1787, CC)
1. Appraisal must be made in a manner
prescribed in the contract of partnership
2. In the absence of stipulation
a. Made by experts chosen by the partners
b. Made by experts chosen by the partners
When promised contribution is immovable
property (Art. 1771-1773, CC)
1. An inventory of the property is signed by the
parties, and attached to the public
instrument
2. The public instrument must be filed with the
SEC if the capital is more than P3,000.00.
When promised contribution is a sum of
money
Sanctions:
1. Partner becomes the firms debtor for
interest and damages from the time of his
failure to contribute or from time of
conversion (Art. 1788, CC)
2. When money or property has been received
by a partner for a specific purpose and he
later misappropriated it, such partner is
guilty of estafa. (Liwanag v CA, 2008)
Bring to partnership capital credit received
Equal contribution by general partners:
capitalist partners shall contribute equal
shares to the capital of the partnership (Art.
1790, CC).
Obligation of capitalist partner to contribute
additional capital
1. To contribute additional capital in case of
imminent loss, requisites:
a. There is an imminent loss of the
business
b. There is a need to contribute additional
capital to save the venture
c. Capitalist partner refuses deliberately to
contribute an additional share
d. There is no agreement to the contrary
2. If refused to contribute: the partner must sell
his interest in the partnership to the other
partners (Art. 1791, CC)
3. Industrial partner is exempted from
contributing.
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Obligation of managing partner who is also a
creditor of the same partnership debtor
1. Requisites:
a. 2 separate credits, both demandable,
b. one credit is owed to the partnership,
c. the other to the collecting partner whos
a managing partner.
2. Managing partner should:
a. If issued receipt for own account only
apply the sum to the 2 credits in
proportion to their amounts
b. Issued receipt for partnerships account
apply whole sum to partnerships
credit (Art. 1792, CC)
When the partner who has received, in whole
or in part, his share of a partnership credit
Partner shall give to the partnership what he
received if:
1. a debtor made a partial payment of his debt
to the partnership
2. a partner received his share of the credit
and the others havent
3. the debtor later becomes insolvent, (Art.
1793, CC).
4. Cf. 1792: in 1793 theres only 1 debt where
the partnership is the creditor
II. Pay Damages
Liability for damages due to partners fault
The damages cannot be compensated with
the profits and benefits he may have earned
for the partnership by his industry (Art.
1794, CC).
Mitigation of liability
The courts may equitably lessen his
responsibility if through his extraordinary
efforts in other activities unusual profits have
been realized (Art. 1794, CC)
Before a partner may sue another for
alleged fraudulent management and
resultant damages, a liquidation must first
be effect to determine the extent of the
damage. Without liquidation of partnership
affairs, partner cannot claim damages.
(Soncuya v. De Luna)
III. Manage the Partnership
General Rules
1. Right of management is primarily governed
by agreement of the partners as provided in
the articles of partnership (Art. 1800, CC)
2. Right to manage may either be:
a. exercised by all the partners, or
b. limited to a certain number of partners
called managing partners
If a specific person has been appointed as
manager (Art. 1800, CC)
1. If right is conferred in the articles of
partnership
a. Manager may execute all acts of
administration despite the opposition of
other partners unless he is in bad faith
b. Power is irrevocable without just or
lawful cause.
Note: The vote of the controlling
interest of the partners is necessary
for revocation.
2. If power is granted after constitution of
partnership, it may be revoked at anytime
If two or more partners are appointed as
managers
1. Without specification of their duties or
without a stipulation of how each one will
act-- (Art. 1801, CC)
a. Each one may separately execute all
acts of administration
b. If opposed, decision of majority prevails
c. In case of a tie, the matter is to be
decided by the controlling interest.
2. If there is a stipulation that managers must
act jointly (Art. 1802, CC)
a. The concurrence of all managers is
necessary for validity of the acts
b. Their absence or disability cannot be
alleged as a defense unless there is
imminent danger or grave or irreparable
injury to the partnership.
If the manner of management has not been
agreed upon (Art. 1803, CC)
1. All partners are considered agents and the
act of anyone bind the partnership without
prejudice to Art. 1801
2. To make important alterations in the
immovable property of the partnership, even
if useful, need the consent of all the partners
If refusal to give consent is manifestly
prejudicial to the partnership, the courts
intervention may be sought
Every partner is considered an agent (Art.
1818, CC)
General Rule:
Every partner is considered an agent of the
partnership for the purpose of its business
and any act of the agent for apparently
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carrying on the usual business of the
partnership binds the partnership.
Exception:
If the partner has no authority to act; AND
the third person dealing with him knew that
the partner had no authority
If the acts are not for carrying out the
business of the partnership(Art. 1818, CC)
General Rule:
Acts of the partner not apparently for
carrying out the business of the partnership
do not bind the partnership.
Exceptions:
When authorized by other partners; OR other
partners have abandoned the business
Acts not usual in the business of partnership
(Art. 1818, CC) [ADD-CRES]
1. Assign the partnership property in trust for
creditors or on the assignee's promise to
pay the debts of the partnership;
2. Dispose of the good-will of the business;
3. Do any other act which would make it
impossible to carry on the ordinary business
of a partnership;
4. Confess a judgment;
5. Renounce a claim of the partnership.
6. Enter into a compromise concerning a
partnership claim or liability;
7. Submit a partnership claim or liability to
arbitration;
IV. Render Full Information
Duty to give information:
1. On demand, to give true and full information
of all things affecting the partnership to any
partner or their legal representatives (Art.
1806, CC).
2. Voluntary disclosure of material facts within
his knowledge relating to/affecting
partnership affairs (Art. 1821, CC).
V. Account for benefits
Duty to account (Art. 1807, CC)
Every partner must:
1. Account to the partnership for any benefit;
AND
2. 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 or liquidation of the
partnership
VI. Reimburse expenses
The partnership is responsible to every
partner for:
1. Amounts disbursed on behalf of the
partnership plus interest from the time the
expense is made
2. Obligations contracted in good faith in the
interest of the business
3. Risks in consequence of management
VII. Liable for Partnership Contracts
Liability of partnership and partners for
partnership contracts-- (Art. 1816, CC)
1. All partners shall be liable pro rata with all
their property but
The private property of the partners
cannot be seized for satisfaction of
partnership debts until all the
partnership assets have been exhausted
2. For the contracts which may be entered into:
a. in the name and for the account of the
partnership
b. under its signature and
c. by a person authorized to act for the
partnership.
The exemption of an industrial partner from
paying losses relates exclusively to the
settlement of the partnership affairs among the
partners themselves, and not to the partners
subsidiary liability to 3
rd
persons (La Compania
Maritima v Munoz, 1907).
While the liability of the partners is joint in
transactions entered into by the partnership, a
3
rd
person who transacted with the partnership
can hold partners solidarily liable for the whole
obligation if the 3
rd
persons case falls under
Arts. 1822-1823 (Muasque v. CA, 1985)
However, any party may enter into a separate
obligation to perform a partnership contract.
(Art. 1816, CC)
Stipulation against pro-rata liability void
1. General Rule: Stipulation against pro rata
liability is void
2. Exception:such stipulation is valid among
the partners (Art. 1817, CC)
Art. 1817 vs. 1799
it is permissible to stipulate among partners
that a capitalist partner will be exempted
from liability in excess of the original capital
contributed; but wont be exempted insofar
as his capital is concerned (Paras).
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Liability of a newly-admitted partner
1. Obligations contracted before his admission:
liable only up to his share in the partnership
property unless theres a contrary stipulation
(Art. 1826, CC).
2. Obligations contracted after admission:
liable as an ordinary original partner
Liability of outgoing partner
1. When he gives notice of his retirement or
withdrawal, hes freed from liability on
contracts entered into thereafter but still
liable on existing incomplete contracts
2. He is liable for goods sold and delivered
after his retirement/withdrawal if the sale
was pursuant to a contract made before
such retirement/withdrawal
VIII. Solidarily Liable with Partnership
The partnership and the partner are solidarily
liable in the following cases
1. Vicarious liability, requisites:
a. the partner committed a wrongful
act/omission;
b. he acted in the ordinary course of the
partnership business or with the
authority of the co-partners even if the
act wasnt connected with the
partnership business;
c. loss/injury is caused to a 3
rd
person by
the wrongful act/omission;
d. 3
rd
person is not a partner (Art. 1822,
CC);
2. Misappropriation of one partner (Art. 1824,
CC)
a. partner acts within the scope of his
apparent authority
b. when partner in the course of business,
receives money or property and the
same is misapplied by the partner while
in the custody of the said partner.
Exceptions are without prejudice to the guilty
partner being liable to the other partners, but as
far as third partners are concerned, the
partnership is answerable.
Liability for money misappropriated covers
1. Interest
2. Damages
Extent of liability
firm is liable to the same extent as the
partner (Art. 1822, CC) and all partners are
solidarily liable with the firm (Art. 1824, CC)
The liability of partners under the Workmens
Compensation Act also solidary. If their
responsibility was merely joint and one became
insolvent, the amount awarded would only be
partially satisfied, which is contrary to the laws
purpose (Liwanag v. Workmens
Compensation Commission, 1959)
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Partnership/Partners as to Third Persons
I. OPERATE UNDER A FIRM NAME
II. BOUND BY PARTNERSHIP ADMISSION
III. BOUND BY NOTICE TO PARTNER
IV. LIABLE FOR ACTS OF THE PARTNERSHIP
LANN
1. Liable for acts of the Partnership
2. Bound by partnership Admission
3. Operate under a Firm name
4. Bound by Notice to partner
I. Operate Under a Firm Name (Art.
1815, CC)
The firm name may or may not include the name
of one or more of the partners.
Persons, not being members of the partnership,
who include their names in the firm name, are
liable as partners (Art. 1825, CC)
Use of deceased partners name in law firm
permissible as long as its indicated in the firms
communications that the partner is deceased
(Rule 3.02, CPR)
Limited partners surname shall not appear
in the firm name unless
1. It is also the surname of a general partner
2. Before the limited partner became such, the
business had been carried on under a name
in which his surname appeared (Art. 1846,
CC)
II. Bound by Partnership Admission
Requisites to be admissible against the
partnership
1. it must be connected with partnership affairs
2. it is within the scope of the partners
authority (Art. 1820, CC)
3. it is made during the firms existence
Exception: when a partner makes
admissions for himself only without
purporting to act for the partnership
Admission by a former partner not admissible in
evidence against the partnership. (Congco vs.
Trillana, 1909)
III. Bound by Notice Partner
Notice to the partner relating partnership
affairs
Knowledge acquired by a partner who is
acting in a particular matter (acting partner),
acquired while he was still a partner or then
present in his mind
Knowledge of a partner who reasonably
could and should have communicated it to
the acting partner (Art. 1821, CC)
Exception: In case of fraud on the
partnership, committed by or with the
consent of the partner (Art. 1821)
IV. Liable for Acts of the Partnership
All partners, including the industrial partner,
are liable pro rata with their own properties
after partnership properties have been
exhausted (Art. 1816, CC)
1. General Rule: liability is joint
2. However, liability is solidary in the following:
a. Wrongful acts and omissions causing
loss to a non-partner.
b. Conversion or misappropriation of funds
committed in the usual course of
business or consented to by all partners
Any stipulation against this liability is void as
against third persons but valid among the
An industrial partner is liable to third persons
but as between the partners, he is not liable
for losses (Art. 1797, CC)
Partners are individually liable after
partnership assets are exhausted
Contracts for which partners are liable pro
rata with their individual property
1. those entered into in the name and account
of the partnership
2. entered into under its signature
3. entered into by a person authorized to act
for the partnership
Exception: partner may enter into a
separate obligation to perform a
partnership contract.
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Chapter IV. Rights of Partners
I. SHARE IN LOSSES AND PROFITS
II. ASSOCIATE ANOTHER IN HIS SHARE
III. ACCESS PARTNERSHIP BOOKS
IV. OBTAIN FORMAL ACCOUNT
V. PROPERTY RIGHTS
VI. CONVEY REAL PROPERTY
BASCOP
1. Access to partnership Books
2. Associate another in his share
3. Share in losses and profits
4. Convey real property
5. Obtain formal account
6. Property rights
I. Share in Losses and Profits
The distribution shall be in conformity with the
agreement. (Art. 1797, CC)
PROFITS LOSSES
With
agreement
According to
agreement
According to
agreement
Without
agreement
1. Share of
capitalist partner
is in proportion
to his capital
contribution
2. Share of
purely industrial
partner is not
fixed - as may
be just and
equitable under
the
circumstances
1. If sharing of
profits is
stipulated - apply
to sharing of
losses
2.If no profit
sharing
stipulated -
losses shall be
borne according
to capital
contribution
3.Purely
industrial partner
not liable for
losses
If the partners agreed to entrust to a third
person the designation of the share in profits
and losses (Art. 1798, CC)
Designation may only be impugned if
manifestly inequitable
Even if manifestly inequitable, the
designation cannot be impugned in the
following instances:
a. The aggrieved partner has already
begun to execute the decision
b. If he has not impugned within three
months from the time he had knowledge
of it
Stipulation excluding one or more partners from
any share in the profits or losses is void. (Art.
1799, CC)
II. Associate Another in His Interest
Every partner may associate another person
with him in his share, but the associate shall not
be admitted into the partnership without the
consent of all the other partners, even if the
partner having an associate should be a
manager. (Art. 1804, CC)
III. Access to Partnership Books
Partnership books: open to inspection of all the
partners at a reasonable hour (Art. 1805, CC).
The books shall be kept at:
1. The place agreed upon
2. If without agreement, at principal place of
business (Art. 1805, CC)
Reasonable hours on business days throughout
the year, not merely during some arbitrary period
of a few days chosen by the managing partners
(Pardo v. Lumber Co., 1924)
IV. Obtain Formal Account
Any partner shall have the right to a formal
account as to partnership affairs
1. If he is wrongfully excluded from the
business/possession of the property by his
co-partners
2. If the right exists by agreement
3. When the partner derives any profit as
provided in Art. 1807
4. Whenever other circumstances render it just
and reasonable (Art. 1809, CC)
The right of a partner to demand an accounting
exists as long as the partnership exists. The
prescription period begins to run only upon the
dissolution when the final accounting is done
(Fue Leung v. IAC,1989).
V. Property Rights
Property rights (Art. 1810, CC)
1. In the specific partnership property
2. In the partnership, and
3. To participate in the management
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Partnership capital vs. partnership
property
Capital Property
With a constant value Value varies, in
accordance with market
value
Includes only the actual
capital contributed and
promised to the
partnership
Includes the contribution
and all property later
acquired on the
partnerships account
Partners are co-owners of specific
partnership property: the incidents are
1. A partner has an equal right with his co-
partners to possess specific property for
partnership purposes
if excluded from this, can seek a formal
accounting (Art. 1809, CC) or judicial
dissolution (Art. 1831, CC)
2. A partners right in specific property cant be
assigned except when all partners assign
their rights in that property
3. A partners right in specific property is not
subject to attachment/execution except on a
claim against the partnership
4. A partners right in specific property is not
subject to support payment (Art.1811, CC)
Property used by the partnership: a partner
may
1. contribute only the use of property
2. allow partnership to use his separate
property
3. hold the title to partnership property in his
own name without having it belong to him
Property acquired by a partner with
partnership funds
General Rule: partnership property
Exceptions:
1. contrary intention appears
2. property was acquired after dissolution but
before winding up
Partners interest in the partnership
his share in the profits and surplus (Art. 1812,
CC). This may be assigned, attached, subject to
payment of support as there was already a
liquidation of the partnership affairs. The
assignee is only entitled to the profits assigned.
Conveyance of partners entire interest
It does not dissolve the partnership (Art. 1813,
CC)
Rights of the
transferee or
assignee
What assignees
cannot do
To receive in
accordance with his
contract the profits
accruing to the
assigning partner
Interfere in the
management;
To avail of the usual
remedies provided by
law in the event of
fraud in the
management
Require any information
or account
To receive the
assignors interest in
case of dissolution;
may require an account
from the date only of
the last account agreed
to by all the partners.
Inspect any of the
partnership books.
Enforcement of a judgment vs. a debtor-
partners interest (Art. 1814, CC)
The judgment creditor may:
1. Apply for an order charging the partners
interest with payment of the unsatisfied
amount of the final judgment with interest
2. Have a receiver appointed
3. Have the court make an order as the
circumstances render it necessary
Redemption
A partner or more may redeem the interest
charged at any time before the foreclosure with:
1. their separate property
2. with partnership property, with the consent
of all partners whose interests are not
charged/sold (Art. 1814, CC)
Title in
partnership
name:
Any partner
may convey
under
partnership
name
Conveyance passes title but
partnership can recover unless:
1. The partner who sold it
was carrying on in the
usual way the business of
the partnership hence
binding the partnership; or
2. Buyer had no knowledge
of the lack of authority of
the seller
Title in
partnership
name:
Conveyance in
partner's name
Conveyance does not pass title
but only equitable interest.
Provided that: The partner who
sold it was carrying on in the
usual way the business of the
partnership hence binding the
partnership
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Title in the
name of one or
more but not all
the partners and
the record does
not disclose the
right of the
partnership -
The partners in
whom the title
stands may
convey
Conveyance passes title but
partnership can recover unless:
1. he partner who sold it was
carrying on in the usual
way the business of the
partnership hence binding
the partnership; or
2.
3. Buyer had no knowledge
of the lack of authority of
the seller
Title in the
name of one or
more or all
partners or in
third person in
trust for the
partnership -
Conveyance in
partner's name
or in partners
name
Conveyance does not pass title
but only equitable interest.
Provided that: The partner who
sold it was carrying on in the
usual way the business of the
partnership hence binding the
partnership
Title in the
names of all the
partners
Conveyance by
all partners
Passes all their rights in such
property
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Chapter V. Rights of the Partnership
I. ACQUIRE IMMOVABLES
II. PREFERENCE OF CREDITORS
I. Acquire Immovables
An immovable property or any interest
therein may be acquired in the partnership
name, and title so acquired can only be
conveyed in the partnership name (Art.
1774, CC).
Cf Art. 1819: see table
II. Preference of Creditors
Preference: partnership creditors preferred
to creditors of individual partners (Art. 1827,
CC).
Remedy of private creditors of partners:
seek the attachment/public sale of the
shares
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Chapter VI. Dissolution and Winding Up
I. DEFINITIONS
II. CAUSES FOR DISSOLUTION
III. CONSEQUENCES OF DISSOLUTION
IV. PARTNERS LIABILITY
I. Definitions
Dissolution (Art. 1828, CC)
Change in the partners relation caused by
any partner ceasing to be associated in the
carrying on of the business
Winding Up (JBL Reyes)
Process of liquidation of partnership affairs,
between dissolution and termination
Termination (JBL Reyes)
When all the affairs of the partnership are
liquidated and the partnership is definitely
ended. It is the final settlement of accounts
of the partnership
Effect of dissolution
Partnership continues until winding up is
completed (Art. 1829, CC).
Effect of dissolution on the partners
1. they cannot evade prior obligations
2. Generally, they are spared from new
obligations to which they didnt consent,
unless these are essential for the winding up
(Testate Estate of Mota v. Serra, 1925)
II. Causes for Dissolution
Voluntary
1. without violation of the agreement between
the partners (Art. 1830, CC)
a. termination of the term or particular
undertaking
b. express will of any partner in good faith,
when the partnership is at will
c. express will of all partners who have not
assigned their interests or suffered them
to be charged
d. bona fide expulsion of any partner in
accordance with the agreement
2. in contravention of the agreement, by
express will of one partner
effects partner is liable for damages;
other partners may continue the
business
Involuntary (Grounds)
1. business becomes unlawful
2. specific thing promised perishes before
delivery to the partnership, the use and
enjoyment of which has been transferred to
the partnership
3. death of a partner
4. insolvency of any partner or the partnership
5. civil interdiction of any partner
Judicial
1. Decree of court upon application (Art. 1831,
CC)
a. application by partner (grounds)
insanity of any partner
incapacity of any partner to perform
his part of the contract
partner guilty of conduct prejudicial
to the partnership business
wilfull breach of agreement by any
partner
business can only be carried out
with loss
b. application by purchaser of partnership
interest may be allowed in the following
cases:
termination of term or undertaking
partnership is at will and interest of
partnership is assigned
III. Consequences of Dissolution
Except as necessary for winding up, dissolution
terminates all authority of the partners to act for
the partnership (Art. 1832, CC)
Partnership is not bound by any act of a
partner when
1. dissolution is not by the act, insolvency or
death of a partner
2. dissolution is by such act, insolvency or
death and the partners acting have
knowledge thereof
3. acts not connected with winding up
Partnership is not bound with respect to
third persons (Art. 1834, CC)
1. business becomes unlawful
2. partner dealing with third party becomes
insolvent
3. partner has no authority to wind up
Partner can bind the partnership even after
dissolution (Art. 1834, CC)
1. acts appropriate to winding up
2. third person is in good faith and without
knowledge of dissolution:
a. third person who extended credit to the
partnership
b. third person who knew the existence of
the partnership
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IV. Partners Liability
If partner transacts business with third
persons notwithstanding death or insolvency
of a co-partner, liability shall be satisfied out
of partnership assets alone if
1. Partner was unknown as partner to third
person
2. Partner is unknown and inactive in
partnership affairs
A partner still has existing liabilities to the
partnership at the time of the dissolution
(Art. 1835, CC)
1. Dissolution does not discharge a partner
2. Discharged only by agreement among
partner, creditor and the person or
partnership continuing the business
3. In case of death:
Individual property is liable for obligation
of the partnership incurred while he was
a partner, subject to prior payments of
individual debts.
Liability of partner or partnership continuing
the business (Art. 1840,CC)
1. Contemplates seven situations:
a. When any partner is admitted into an
existing partnership
b. When any partner retires and assigns
his rights in partnership property to two
or more partners or third persons
c. When all but one partner retire and
assign their rights to the remaining
partner
d. Any partner retires or dies without any
assignment of his right in partnership
property
e. All the partners or their representatives
assign their rights in partnership
property to one or more third persons
who promise to pay the debts and who
continue the business of the dissolved
partnership
f. Any partner wrongfully causes a
dissolution
g. When a partner is expelled
2. When applicable: a partnership is dissolved
due to change in membership but the
remaining partners continue the business
without liquidation.
3. Effect: unpaid old creditors of the dissolved
partnership automatically become creditors
of the new partnership.
4. New partners liability: satisfied out of
partnership property only, unless with a
contrary stipulation
5. Not only the retiring partners but also the
new partnership itself which continued the
business of the dissolved one, are liable for
the debts of the prior partnership. A
withdrawing partner remains liable to a 3
rd
party creditor of the old partnership
(Singsong vs. Isabela Sawmill, 1979).
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Dissolution
I. RIGHT TO WIND UP
II. RIGHT TO DAMAGES FOR/TO CONTINUE
BUSINESS ON WRONGFUL DISSOLUTION
III. RIGHT TO LIEN OR RETENTION, TO STAND
IN PLACE OF CREDITOR, TO BE
INDEMNIFIED
IV. RIGHT OF RETIRING/DECEASED PARTNER
V. RIGHT TO ACCOUNT
I. Right to Wind Up
Who has the right to wind up?
1. By agreement
2. If there is no agreement
a. Partners who have not wrongfully
dissolved the partnership
b. The legal representative of the last
surviving partner, not insolvent
Any partner, his legal representative or his
assignee, upon cause shown, may obtain
winding up by the court.
Business on Wrongful Dissolution
General Rule
1. Each partner may have the partnership
property applied to the payment of the firms
debt
2. Surplus is applied to payment in cash of the
net amount owed to the respective partners
Each partner who has not caused
dissolution wrongfully shall have the right, as
against each partner who has caused the
dissolution wrongfully, to damages for
breach of the agreement.
The partners who have not caused the
dissolution wrongfully, if they all desire to
continue the business in the same name
either by themselves or jointly with others,
may do so, during the agreed term for the
partnership and for that purpose may
possess the partnership property, provided
a. they secure the payment by bond
approved by the court, or
b. pay any partner who has caused the
dissolution wrongfully, the value of his
interest in the partnership at the
dissolution, less any damages
recoverable
c. In like manner indemnify him against all
present or future partnership liabilities.
A partner who has caused the dissolution
wrongfully shall have the right to
1. If the business is not continued
a. Each partner may have the partnership
property applied to the payment of the
firms debt
b. Surplus is applied to payment in cash of
the net amount owed to the respective
partners subject to payment of damages
2. If the business is continued
a. the right as against his co-partners and
all claiming through them in respect of
their interests in the partnership,
b. to have the value of his interest in the
partnership, less any damage caused to
his co-partners by the dissolution,
ascertained and paid to him in cash, or
the payment secured by a bond
approved by the court,
c. to be released from all existing liabilities
of the partnership; but in ascertaining
the value of the partner's interest the
value of the good-will of the business
shall not be considered.
Place of Creditor, to be Indemnified
Where a partnership contract is rescinded
on the ground of the fraud or
misrepresentation of one of the parties
thereto, the party entitled to rescind is,
without prejudice to any other right, entitled:
a. To a lien on, or right of retention of, the
surplus of the partnership property after
satisfying the partnership liabilities to
third persons for any sum of money paid
by him for the purchase of an interest in
the partnership and for any capital or
advances contributed by him;
b. To stand, after all liabilities to third
persons have been satisfied, in the
place of the creditors of the partnership
for any payments made by him in
respect of the partnership liabilities; and
c. To be indemnified by the person guilty of
the fraud or making the representation
against all debts and liabilities of the
partnership.
IV. Right of Retiring/Deceased Partner
(Art. 1841, CC)
Factual Situation
1. any partner retires or dies, and
2. the business is continued without any
settlement of accounts as between him or
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his estate and the person or partnership
continuing the business
Rights
1. he or his legal representative as against
such person or partnership may have the
value of his interest at the date of dissolution
ascertained
2. either:
a. receive as an ordinary creditor an
amount equal to the value of his interest
in the dissolved partnership with
interest; or,
b. at his option or at the option of his legal
representative, receive in lieu of interest,
the profits attributable to the use of his
right in the property of the dissolved
partnership;
The provision shall not apply if there is an
agreement between the parties.
V. Right of Account (Art. 1842, CC)
The right to an account of his interest shall
accrue to any partner, or his legal
representative as against
1. the winding up partners or the surviving
partners or
2. the person or partnership continuing the
business,
When right accrues
At the date of dissolution, in the absence of
any agreement to the contrary.
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Chapter VIII. Rules on Settlement (Art.
1839, CC)
The rules for distribution will not apply if there is
a contrary agreement between the partners.
Rule of preference in the payment of
partnership liabilities
1. those owed to creditors other than partners
2. those owed to partners other than capital
and profits
3. those owed to partners in respect of capital
4. those owed to partners in respect of profits
When assets are insufficient to satisfy
liabilities
1. If refuses to contribute a petition in court
may be filed for its enforcement.
2. If partner is dead contribution may be
enforced against his private property
through the administrator
Doctrine of Marshalling of Assets
If there are claims over both partnership assets
and partners individual properties, both in
custody of the court for distribution:
1. Partnership creditors are preferred with
regard to partnership property
2. Individual creditors are preferred with
respect to individual properties of partners.
3. Anything left from either goes to the other.
Order in case of insolvency of a partner or
his estate (in case of death)
1. Separate creditors
2. Partnership creditors
3. Partners who gave contributions
Liquidation needed
The business profits cant be determined by
taking into account the result of 1 transaction
instead of all the transactions had, thus the need
for a general liquidation before a partner may
claim a specific sum as his share of the profits
(Sison v. McQuaid, 1953).
No return of shares without dissolution and
liquidation
Because the firms outside creditors have
preference over the firms assets and the firms
property cant be diminished to their prejudice
(Magdusa v. Albaran, 1962).
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Chapter IX. Limited Partnership
I. DEFINITION
II. FORMING/AMENDING A LIMITED
PARTNERSHIP
III. LIMITED PARTNER
A. CONTRIBUTION
B. LIABILITIES OF A LIMITED PARTNER
1. TO THE PARTNERSHIP
2. AS TRUSTEE FOR THE
PARTNERSHIP
3. LIABILITIES TO PARTNERSHIP
CREDITORS AND OTHER
PARTNERS
i. CONTRIBUTES SERVICES
ii. SURNAME IN FIRM NAME
iii. FALSE STATEMENT
iv. CONTROL OF BUSINESS
v. PROHIBITED TRANSACTIONS
vi. NON-COMPLIANCE WITH
REQUISITES FOR
FORMATION
4. LIABILITIES TO SEPARATE
CREDITORS
C. RIGHTS OF LIMITED PARTNERS
1. COMMON RIGHTS OF LIMITED
AND GENERAL PARTNERS
2. LOAN MONEY AND TRANSACT
BUSINESS
3. RETURN OF CONTRIBUTION
4. SHARE OF PROFITS
5. ASSIGN INTERESTS
6. EFFECT OF DEATH OF A LIMITED
PARTNER
7. PERSON ERRONEOUSLY
BELIEVING HES A LIMITED
PARTNER
IV. GENERAL PARTNER
V. DISSOLUTION
VI. SETTLING OF ACCOUNTS AFTER
DISSOLUTION
I. Definition
Limited Partnership
1. formed by two or more persons;
2. in accordance with the requirements of law;
and
3. composed of one or more general partners
and one or more limited partners (Art. 1843,
CC).
Limited partners are not bound by the
partnerships obligations (Art. 1843, CC).
Characteristics
1. Complied with the statutory requirement of
form (Art. 1844 CC)
2. The business is controlled by one or more
general partners who are personally liable to
creditors (Arts. 1848, 1850 CC)
3. One or more limited partners contribute to
the capital and share in the profits but do not
manage the business
4. The limited partners are not personally liable
for obligations beyond their contribution
(Arts. 1845, 1848, 1856 CC)
5. Obligations or debts are paid out of
partnership assets and the general partners
separate assets
6. Limited partners may get back their capital
contributions subject to conditions
prescribed by law (Arts. 1844, 1857 CC)
Advantages of limited partnerships
1. For general partners: secure capital from
others while retaining control and
supervision of the business
2. For limited partners: share in the profits
without the risk of personal liability
General
Partner
Limited Partner
Extent of
liability
Personally
liable for
partnership
obligations
Only to the
extent of his
capital
contributions
Right to
participate in
management
If manner of
mgt. not agreed
upon, all
general
partners have
an equal right in
business mgt
No participation
in management
Contribution Cash, property
or industry
Cash or
property only,
not industry
Proper party
to
proceedings
by or against
the
partnership
Proper party to
proceedings
by/against
partnership
Not proper party
to proceedings
by/against
partnership
unless:
1. he is also a
general partner
2. where the
object of the
proceedings is
to enforce a
limited partner's
right against or
liability to the
partnership
Name in firm
name
Name may
appear in firm
name
Name must
appear in firm
name
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General
Partner
Limited Partner
Prohibition to
engage in
other
business
Prohibited No prohibition
Effect of
retirement
death insanity
or insolvency
Dissolves the
partnership
Different effect;
rights
transferred to
legal rep.
Assignability
of interest in
partnership
Not assignable Assignable
General
Partnership
Limited
Partnership
Creation May be constituted
in any form, except
where immovable
property or real
rights are
contributed, a
public instrument
shall be necessary
Partners must:
(1) Sign and swear
to a certificate
which shall state
the items
enumerated in Art.
1844 and
(2) File for record
the certificate in the
Office of the
Securities and
Exchange
Commission
Compos
ition
Only general
partners
1/more general
partners and
1/more limited
partners
Firm
name
Must contain the
word Company
(SEC Memo Circ.
#14-00) unless its
a professional
partnership
Every partnership
shall operate under
a firm name, which
may or may not
include the name of
one or more of the
partners.
Name must include
the word Limited
(SEC Memo Circ.
#14-00)
The surname of a
limited partner shall
not appear in the
partnership name
unless:
(1) It is also the
surname of a
general partner, or
(2) Prior to the time
when the limited
partner became
such, the business
has been carried on
under a name in
which his surname
appeared.
General
Partnership
Limited
Partnership
Dissoluti
on and
Winding
Up
Rules governing
are Art. 1828-1842
Rules governing
are Art. 1860-1863
Partnership (Art. 1844, CC)
Two or more persons desiring to form a
partnership shall
1. Sign and swear to a certificate which shall
state the following items enumerated in Art.
1844
2. File for record the certificate in the Office of
Securities and Exchange Commission
A limited partnership is formed if there has been
substantial compliance in good faith with Art.
1844
When the cert. of partnership may be
amended (CSAAG CFCTM)
1. Change in partnership name or in the
amount/character of contribution of any
limited partner
2. Substitution of a limited partner
3. Additional limited partner is admitted
4. Admission of a general partner
5. General partner retires, dies, becomes
insolvent or insane, or under civil interdiction
and the business is continued:
a. Under a right so to do stated in the
certificate, or
b. With the consent of all members
6. Change in the character of business
7. False/erroneous statement in the cert.
8. Change in the time as stated in the cert. for
the dissolution of the partnership or return of
a contribution
9. Time is fixed for dissolution or return of a
contribution
10. The Members want to change a statement in
the cert. to make it more accurate (Art.
1864, CC)
Requirements to amend
1. Must be in writing, under oath, and set forth
clearly the change desired
2. Signed and sworn to by all the members,
including the new members and assigning
members
3. The cert., as amended, must be filed in the
SEC (Art. 1865, CC)
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When the certificate shall be cancelled
1. When the partnership is dissolved
2. When all limited partners cease to be such
(Art. 1864, CC)
Requirements to cancel
1. Must be in writing
2. Signed by all the members
3. Filed with the SEC; if cancellation is court-
ordered, a certified copy of the order shall
also be filed (Art.1865, CC)
III. Limited Partner
Who may be limited partners
1. A partnership no
2. A general partnership may be changed into
a limited one, and a partner in the former
general partnership may be a limited partner
in the limited partnership formed.
Contribution
May be cash or property, but not services.
Liabilities of a Limited Partner
General rule: He is not liable as a general
partner. His liability is limited to the extent of
his contribution to the partnership.
Liabilities to the partnership (Art. 1858, CC)
1. Difference between his actual contribution
and that stated in the certificate as having
been made
2. Unpaid contributions which he agreed to
make at specified future time and on the
conditions stated in the certificate
Liabilities as Trustee for the Partnership
1. Specific property which he committed but
did not contribute, or which he contributed
but was wrongfully returned to him
2. Money or property wrongfully paid or
conveyed to him
Liabilities of a limited partner can be waived
or compromised only by the consent of all
the members. However, this too shall not
affect the right of the creditor who:
a. Extended credit; or
b. Whose claim arose after the filing and
before a cancellation or amendment of
the certificate.
Even if a limited partner rightfully received
back his contribution to capital, he remains
liable to the partnership for any sum
necessary to discharge the liabilities of the
partnership to creditors who:
a. Extended credit or
b. Whose claims arose before such return.
Liabilities to partnership creditors and other
partners
1. Contributes services (Art. 1845, CC); Effect
a. The limited partner:
o Will be considered an industrial and
general partner; or
o If the certificate states that hes a
limited partner, he will be a general
partner and limited partner at the
same time.
b. He divests himself of the privilege of
limited liability and will be exposed to all
the liabilities of a general partner.
2. Surname in firm name (Art.1846, CC)
General rule: the surname of a limited
partner shall not appear in the partnership
name
If used in firm name, he is liable as a
general partner to creditors who did
not know that he is not a general
partner.
3. False statement (Art. 1847, CC)
If a person suffers loss by reliance on the
false statement in the certificate, he may
hold liable any party to the certificate who
knew the statement to be false:
a. At the time he signed the certificate, or
b. Subsequently but within a sufficient time
before the reliance to enable him to
amend or cancel the certificate
4. Control of business (Art. 1848, CC)
a. He becomes liable as a general partner
without acquiring the rights of one.
b. Control here contemplates active
participation in the business and not just
having the option to exercise control.
5. Prohibited Transactions (Art. 1854, CC)
a. Prohibited transactions of limited
partners:
Receiving or holding as collateral
security any partnership property
Receiving any payment,
conveyance, or release from liability
if it will prejudice the rights of 3
rd
persons
b. If prohibited acts are performed
Presumption of fraud on the
creditors.
But the law does not absolutely
prohibit the taking as collateral
security of the property, as the
prohibitions are modified by the
requirement of sufficient assets to
discharge the partnership
obligations.
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6. Non-compliance with requisites for formation
(Art. 1844 par.2, CC)
If there is no substantial compliance:
The partnership becomes a general
partnership with respect to 3
rd
persons
The members are liable as general
partners.
Liabilities to separate creditors
1. Right of creditors of a limited partner to
petition a court of competent jurisdiction to:
a. Charge the interest of the indebted
limited partner with the payment of the
unsatisfied amount of the claim
b. Appoint a receiver to preserve the
interest
c. Make all other orders as the
circumstances would require
2. The interest may be redeemed with the
separate property of any general partner but
not with partnership property. (Art. 1862,
CC)
This is different from the rule in general
partnership where the interest can also
be redeemed with partnership property.
(Art. 1814, CC)
Rights of Limited Partners
1. Common rights of limited and general
a. Demand that partnership books be kept
at the principal place of business
b. Inspect and copy any of the books
c. Demand true and full info of all things
affecting the partnership
d. Demand a formal account whenever
circumstances render it just and
reasonable
e. Resort to the court for the dissolution
and winding up of the business
f. Receive a share of the profits or other
compensation by way of income
g. Demand the return of his contribution
provided assets are more than the
liabilities
2. Loan money and transact business (Art.
1854, CC)
a. Limited partner allowed to loan money,
transact business because the
relationship between the limited partner
and partnership is not based on trust
and confidence. There is no conflict of
interests.
b. Unless he is also a general partner, he
is entitled to a pro rata share of the
partnership assets together with the
general creditors.
3. Return of contribution (Art.1857,CC)
a. Conditions for return:
All liabilities to non-partner creditors
had been paid, or there are
sufficient assets to satisfy them, or
All members consent, unless the
limited partner desiring the return
has lawfully demanded the return of
his contribution, or
The certificate had been cancelled
or amended as to reflect the
withdrawal or reduction of
contribution.
b. When return may be demanded:
On the dissolution of the partnership
On the arrival of the date specified
in the certificate
On the lapse of 6 months from
notice in writing to all other
members if no time is specified
c. General rule: return of contribution is in
cash, except:
if there is a statement to that effect
in the certificate or all partners
consent
d. Dissolution, upon petition of limited
partner:
When he rightfully but
unsuccessfully demands the return
of his contribution
The other liabilities of the
partnership have not been paid pr
property is insufficient for payment
and the limited partner would
otherwise be entitled to the return of
his contribution
e. In case of several limited partners:
Members may agree to give priority
to one or more limited partners, and
This must be stated in the certificate
of partnership. The preference
covers
o Return of contributions;
o Compensation; and
o Other matters where some
benefit is granted (Art. 1855,
CC).
f. In the absence of such statement, all the
limited partners shall stand upon equal
footing.
4. Share of profits (Art. 1856, CC)
When the assets exceed liabilities
(except those to limited and general
partners), a limited partner may recover
his share in the profits or compensation
by way of income stipulated in the
certificate.
5. Assign interests (Art. 1859, CC)
a. A limited partners interest is assignable.
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b. Substituted limited partner: a person
admitted to all the rights of a limited
partner who has died or assigned his
interest in a partnership
He has all the rights and powers of
a limited partner
Subject to all restrictions and
liabilities of his assignor except:
o those he was ignorant of when
he became a limited partner and
could not be ascertained in the
certificate
c. An assignee who does not become a
substituted limited partner has:
No right to require any information
or account of partnership
transactions
No right to inspect partnership
books
Only entitled to receive the
assignors share of the profits or
other compensation by way of
income
Only entitled to the return of the
assignors contribution
d. The assignee shall have the right to
become a substituted limited partner if
All the members consent, or
The assignor is empowered in the
articles of partnership, and he gave
the assignee the right to be a
substituted limited partner.
In either case, it is still required that the
certificate be amended (Art. 1865, CC)
and registered with the SEC.
e. That the assignee has become a
substituted limited partner does not
relieve the assignor from liabilities to the
partnership under Art. 1858, as a
trustee, or for false statement in the
certificate.
6. Effect of death of a limited partner (Art.
1861, CC)
a. Rights of executors or administrators:
All the rights of a limited partner for
the purpose of settling the estate
If the deceased had assigned his
interest in the partnership, the
executor or administrator may
constitute the assignee a substituted
limited partner if the deceased was
empowered to do so
b. The deceased limited partners estate is
liable for all the deceaseds obligations
and liabilities to the partnership as a
limited partner
7. Person erroneously believing he is a limited
partner (Art. 1852, CC)
a. A person who has contributed capital
erroneously believing that he has
become a limited partner:
Does not become a general partner,
or
Become bound by the obligations of
the partnership, if:
o he exercises the rights of a
limited partner
o on ascertaining his mistake he
promptly renounces his interest
in the profits of the business
IV. General Partner
A general partner shall have all the rights and
powers and is subject to all the restrictions and
liabilities of a partner in a partnership without
limited partners.
General partners cannot, without the written
consent or written ratification of all limited
partners, do the ff. (ACAP-ACA)
1. Any act in contravention of the certificate
2. Confess judgment
3. Any act which would make it impossible to
carry on the partnership business
4. Possess partnership property, or assign
their rights in specific partnership property
for other than a partnership purpose
5. Admit a person as a general partner
6. Continue the business with partnership
property on the death, retirement, insanity,
civil interdiction or insolvency of a general
partner, unless the power is granted in the
certificate
7. Admit a person as a limited partner, unless
the right is granted in the certificate (Art.
1850, CC)
V. Dissolution
When a limited partnership may be
dissolved
1. The misconduct of a general partner
2. Fraud on the limited partner by the general
partner
3. The retirement, death, insolvency, insanity,
or civil interdiction of a general partner,
except: if the business is continued by the
remaining general partners
a. Under a right stated in the certification
b. When all members consented to the
continuation (Art. 1860, CC)
4. When all the limited partners ceased to be
such (Art. 1864, CC)
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5. End of the term for which it was to exist (Art.
1844, CC)
6. By mutual consent of the partners before the
end of the firms original term
7. When the limited partner demanded the
return of his contribution but was
unjustifiably denied (Art. 1857, CC)
8. The causes in Arts. 1830 and 1831.
If dissolved by expiration of the fixed term, the
notice of dissolution need not be given since the
papers filed in the SEC are notice to the world.
If dissolved by express will of the partners, the
certificate should be cancelled, and dissolution is
not effected until there has been compliance
with this requirement.
VI. Settling Accounts for Dissolution
Order of priority in the payment of liabilities
(Art. 1863, CC)
1. Those owed to creditors, in the order of
priority provided by law (Arts. 2236-2251,
CC), except those to limited partners on
account of their contribution and to general
partners
2. Those to limited partners in respect to their
share of the profits and other compensation
by way of income in their contributions
3. Those to limited partners in respect of their
capital contributions
4. Those to general partners other than for
capital and profits
5. Those to general partners in respect to
profits
6. Those to general partners in respect to
capital
General partners have the duty and power to
wind up the partnerships affairs
If there is no agreement, the limited partners
shall share in the partnership assets and
profits in proportion to the respective
amounts of their claims (Art. 1863, CC)
- end of Partnership -
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Table of Contents
Chapter I. Introduction, Definitions............388
A. Tort and Quasi-Delict ........................388
B. Damages...........................................389
Chapter II. Concept of Quasi-Delict............390
A. Elements ...........................................390
B. Distinguished.....................................390
Chapter III. Negligence ................................392
A. Concept of Negligence......................392
B. Degrees of Negligence......................393
C. Proof of Negligence...........................393
D. Defenses ...........................................394
Chapter IV. Causation..................................396
A. Proximate Cause...............................396
Chapter V. Persons Liable...........................399
A. The Tortfeasor...................................399
B. Vicarious Liability ..............................399
C. Specific Liability.................................403
D. Joint and Solidary Liability ................407
E. Civil Liability Arising From Crime...........407
F. Prescription .......................................408
Contract.........................................................409
Action ............................................................410
A. Violation of Civil and Political Rights.410
B. Defamation, Fraud, Physical Injuries 410
Chapter VIII. Human Relations Provisions 413
A. Abuse of Rights.................................413
B. Acts Contra Bonus Mores .................413
Other Torts ...............................................414
C. Dereliction of Duty.............................414
D. Illegal Acts.........................................414
E. Unfair Competition ............................414
F. Violation of Human Dignity................414
Chapter IX. Damages ...................................415
A. Definition and Concept......................415
B. Kinds of Damages.............................415
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Chapter I. Introduction, Definitions
A. Tort and Quasi-Delict
B. Damages
A. Tort and Quasi-Delict
1. Tort
Essentially, "tort" consists in the violation of
a right given or the omission of a duty
imposed by law. Tort is a breach of a legal
duty. (Naguiat vs. NLRC, 1997)
A tort is civil wrong, other than breach of
contract, for which a court of law will afford a
remedy in the form of an action for
damages. [Prosser, Handbook of the Law of
Torts]
Elements:
A legal duty
Breach
Causation
Damage
2. Quasi-Delict
Art. 2176. Whoever by act or omission causes
damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict
and is governed by the provisions of the Civil Code
Chapter on quasi-delicts.
Barredo vs. Garcia (1952): A quasi-delict or
"culpa aquiliana" is a separate legal institution
under the Civil Code, entirely independent from
a delict or crime. A concurrence of scope in
regard to negligent acts does not destroy the
distinction between the civil liability arising from
a crime and the responsibility for cuasi- delitos
or culpa extra-contractual. The same negligent
act causing damages may produce civil liability
arising from a crime under article 100 of the
Revised Penal Code, or create an action for
cuasi-delito or culpa extra-contractual.
Elcano vs. Hill (1977): Article 2176, where it
refers to "fault or negligence, covers not only
acts "not punishable by law" but also acts
criminal in character, whether intentional and
voluntary or negligent.
[There is also the other view which states
otherwise. To make it balanced you should
include the other view]
)-')/ 3 4%5%6(/ )(%5
Prof. Gwen Grecia-De Vera
Faculty Editor
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Lead Writer
Darwin Angeles
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Members
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B. Damages
1. Damage, Damages, Injury
Custodio v. CA (1996): (Damage vs. Injury)
Injury is the illegal invasion of a legal right.
Damage is the loss, hurt, or harm which results
from the injury. Damages are the recompense
or compensation awarded for the damage
suffered.
People vs. Ballesteros (1998): Damages may be
defined as the pecuniary compensation,
recompense or satisfaction for an injury
sustained or as otherwise expressed, the
pecuniary consequences which the law imposes
for the breach of some duty or the violation of
some right.
2. Damnum Absque Injuria
Custodio vs. CA (1996): To warrant damages
there must be a right of action for a legal wrong
inflicted by the defendant and damage resulting
to plaintiff. Mere fact that plaintiff suffered loss
does not give rise to a right to recover damages.
Proper exercise of a lawful right cannot
constitute a legal wrong.
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Chapter II. Concept of Quasi-Delict
A. Elements
B. Distinguished
1. Quasi-Delict vs. Delict
2. Quasi-Delict vs. Breach of
Contract
A. Elements
Act or omission amounting to fault or
negligence
Damage or injury is caused to another
Causal connection between damage done
and act/omission. (Art. 2176)
There is no pre-existing contractual relations
between the parties
1
In order that liability under Article 2176 of the
Civil Code will arise the following requisites must
exist:
a. There must be damage or prejudice which
must be proven by the party claiming it;
b. There must be an unlawful act or omission
amounting to fault or negligence; and
c. There must be a direct causal connection
between the damage or prejudice and the
act or omission. (Manresa; Taylor vs. Manila
Electric Co.; Jarencio, Torts and Damages)
B. Distinguished
I. Quasi-Delict vs. Delict
Quasi-Delict Delict
private concern public interest
CC repairs the damage by
indemnification
RPC punishes and
corrects the act
includes all acts in which
"any kind of fault or
negligence intervenes."
Punishes only when
there is a penal law
covering the act
solidary liability of
employer
Subsidiary liability of
employer
ERs defense is that
accused observed due
diligence of a good father
of a family
ERs defense is that
employees resources
must first be exhausted
(Barredo vs. Garcia)
Padilla vs. CA (1997): The extinction of the civil
action by reason of acquittal in the criminal case
refers exclusively to civil liability ex delicto
founded on Article 100 of the Revised Penal
Code. The same punishable act or omission can
1
However, the court has held that there can be a tort even
where there is a pre-existing contract between the parties.
(Far East vs. CA, infra)
create two kinds of civil liabilities against the
accused and, where provided by law, his
employer. Civil liability is not extinguished by
acquittal where the acquittal is based on
reasonable doubt. However, the offended party
cannot recover damages under both types of
liability. (Asked in the 1990 and 2003 bar exams)
II. Quasi-Delict vs. Breach of Contract
Cangco vs. Manila Railroad (1918): The field of
non- contractual obligation is much broader than
that of contractual obligations. These two fields
are concentric: the mere fact that a person is
bound to another by contract does not relieve
him from extra-contractual liability to such
person. When such a contractual relation exists
the obligor may break the contract under such
conditions that the same act constitutes the
source of an extra-contractual obligation, had no
contract existed between the parties.
Air France vs. Carrascoso (1966): The act that
breaks the contract of carriage may also be a
tort.
Far East v. CA (1995): The doctrine that a
quasi-delict can be the cause for breaching a
contract that might thereby permit the application
of applicable principles on tort even where there
is a pre-existing contract between the plaintiff
and the defendant can aptly govern only where
the act or omission complained of would
constitute an actionable tort independently of the
contract. Where, without a pre-existing contract
between two parties, an act or omission can
nonetheless amount to an actionable tort by
itself, the fact that the parties are contractually
bound is no bar to the application of quasi-delict
provisions.
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CONTRACT QUASI DELICT DELICT
Vinculum Juris Contract Negligent act/ omission (culpa,
imprudence)
Act committed by means
of dolo (deliberate,
malicious, in bad faith)
Proof Needed Preponderance of evidence Preponderance of evidence Proof beyond reasonable
doubt
Defense available Exercise of extraordinary
diligence (in contract of
carriage), Force Majeure
Exercise of diligence of good
father of a family in the
selection and supervision of
employees
Pre-existing
contract
There is pre-existing contract No pre-existing contract [not
necessarily]
No pre-existing contract
Burden of proof Contractual party. Prove the ff:
1. existence of a contract
2. breach
Victim. Prove the ff.:
1. damage
2.negligence 3. causal
connection between negligence
and damage done
Prosecution. Accused is
presumed innocent until
the contrary is proved.
(Asked in the 2003 bar exams)
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Chapter III. Negligence
A. CONCEPT OF NEGLIGENCE
1. DEFINITION; ELEMENTS
2. STANDARD OF CONDUCT
i. SPECIAL CASES
a. CHILDREN
b. EXPERTS/PROFESSIONALS
c. INSANITY
ii. EMERGENCY RULE
B. DEGREES OF NEGLIGENCE
C. PROOF OF NEGLIGENCE
1. BURDEN OF PROOF
2. PRESUMPTIONS
3. RES IPSA LOQUITUR
D. DEFENSES
1. PLAINTIFF'S NEGLIGENCE
2. CONTRIBUTORY NEGLIGENCE
3. FORTUITOUS EVENT
4. ASSUMPTION OF RISK
5. DUE DILIGENCE
6. PRESCRIPTION
7. DOUBLE RECOVERY
A. Concept of Negligence
1. Definition; Elements
Art. 1173. 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.
Elements:
Legal duty
Breach
Causation
Damage
Layugan vs. IAC (1988): Negligence is the
omission to do something which a reasonable
man, guided by those considerations which
ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a
prudent and reasonable man would not do.
2. Standard of Conduct
Picart vs. Smith (1918): Test: Did the defendant
in doing the alleged negligent act use that
reasonable care and caution which an ordinarily
prudent man would have used in the same
situation? If not, then he is negligent. Negligence
in a given case is not determined by reference to
the personal judgment of the actor in the
situation before him, but is determined in the
light of human experience the facts involved in
the particular case.
i. Special cases
a) Children
Taylor vs. Manila Railroad (1910)
Children must be expected to act upon
childlike instincts and impulses and
others chargeable with a duty of care
and caution toward them must take
precautions accordingly. If they leave
exposed to the observation of children
anything which would be tempting to
them, and which they in their immature
judgment might naturally suppose they
were at liberty to play with, they should
expect that liberty to be taken. (But the
child in this case was still negligent
because of his experience).
Jarco v. CA (1999): The rule, therefore,
is that a child under nine years of age
must be conclusively presumed
incapable of contributory negligence as
a matter of law. The presumption of lack
of discernment or incapacity for
negligence in the case of a child over
nine but under fifteen years of age is a
rebuttable one.
Ylarde vs. Aquino (1988): The degree of
care required to be exercised must vary
with the capacity of the person
endangered to care for himself. A minor
should not be held to the same degree
of care as an adult, but his conduct
should be judged according to the
average conduct of persons of his age
and experience: that degree of care
ordinarily exercised by children of the
same age, capacity, discretion,
knowledge and experience under the
same or similar circumstances.
b) Experts/Professionals
Culion vs. Philippine(1930): When a
person holds himself out as being
competent to do things requiring
professional skill, he will be held liable
for negligence if he fails to exhibit the
care and skill of one ordinarily skilled in
the particular work which he attempts to
do.
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Cruz vs. CA (1997): Whether or not a
physician has committed an
"inexcusable lack of precaution" in the
treatment of his patient is to be
determined according to the standard of
care observed by other members of the
profession in good standing under
similar circumstances bearing in mind
the advanced state of the profession at
the time of treatment or the present
state of medical science.
c) Insanity
Art. 2180. Guardians are liable for damages caused
by the minors or incapacitated persons who are under
their authority and live in their company
Art. 2182. If the minor or insane person causing
damage has no parents or guardian, the minor or
insane person shall be answerable with his own
property in an action against him where a guardian ad
litem shall be appointed.
US vs. Baggay (1911): A lunatic or
insane person who, in spite of his
irresponsibility on account of the
deplorable condition of his deranged
mind, is still reasonably and justly liable
with his property for the consequences
of his acts.
ii. Emergency Rule
Valenzuela vs. CA (1996): An individual who
suddenly finds himself in a situation of
danger and is required to act without much
time to consider the best means that may be
adopted to avoid the impending danger, is
not guilty of negligence if he fails to
undertake what subsequently and upon
reflection may appear to be a better solution,
unless the emergency was brought by his
own negligence.
B. Degrees of Negligence
Art. 2231. In quasi-delicts, exemplary damages may
be granted if the defendant acted with gross
negligence.
Amedo vs Rio (1952): Gross negligence is a
want of even a slight care or diligence; an entire
want of care that raises the presumption that the
person at fault is conscious of the probable
consequence thereof, and is indifferent or worse,
to the danger or injury to persons or property.
Marinduque vs. Workmen's (1956): "Notorious"
negligence, is the same thing as "gross"
negligence: pursuing a course of conduct which
would naturally and probably result in injury, or
utter disregard of consequences.
Benguet vs. CA (1999): Acting or omitting to act
in a situation where there is duty to act, not
inadvertently but willfully and intentionally, with a
conscious indifference to consequences in so far
as other persons may be affected.
C. Proof of Negligence
1. Burden of Proof (ROC)
Rule 131, Sec. 3(c and d)
(c) That a person intends the ordinary consequences
of his voluntary act;
(d) That a person takes ordinary care of his concerns:
2. Presumptions
Art. 2184. In motor vehicle mishaps, the owner is
solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of due diligence,
prevented the misfortune. It is disputable presumed
that the driver was negligent, if he had been found
guilty of reckless driving or violating traffic regulations
at least twice within the next preceding two months.
Art. 2185. Unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was
violating any traffic regulation.
Art. 2188. There is prima facie presumption of
negligence if the death or injury results from his
possession of dangerous weapons or substances,
such as firearms and poison, except when the use or
possession thereof is indispensable in his occupation
or business.
Art. 1735. In all cases other than those mentioned in
Nos. 1, 2, 3, 4, and 5 of the preceding article
(calamity, act of public enemy in war, act of owner of
the goods, character of the goods, order of competent
public authority), if the goods are lost destroyed or
deteriorated, common carriers are presumed to have
been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as
required under Art. 1733.
3. Res Ipsa Loquitur
Layugan vs. IAC 1988): Res ipsa loquitur (The
thing speaks for itself): Where the thing which
causes injury is shown to be under the
management of the defendant, and the accident
is such as in the ordinary course of things does
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not happen if those who have the management
use proper care, it affords reasonable evidence,
in the absence of an explanation by the
defendant, that the accident arose from want of
care.
Ramos vs. CA (1999): The injury itself, taken
together with the circumstances raises the
presumption of negligence that the defendant
must meet with an explanation.
Elements:
The accident is such that it would not
have happened in the ordinary course of
events without the negligence of
someone;
The defendant exercises control and
management.
There is no contributory negligence on
the part of the plaintiff.
DM Consunji vs. CA (2001): The res ipsa
loquitur doctrine is based in part upon the theory
that the defendant in charge of the
instrumentality which causes the injury either
knows the cause of the accident or has the best
opportunity of ascertaining it and that the plaintiff
has no such knowledge, and therefore is
compelled to allege negligence in general terms
and to rely upon the proof of the happening of
the accident in order to establish negligence.
(NOTE: For the res ipsa loquitur doctrine to
apply, it must appear that the injured party had
no knowledge as to the cause of the accident, or
that the party to be charged with negligence has
superior knowledge or opportunity for
explanation of the accident.)
D. Defenses
1. Plaintiffs Negligence
Art. 2179. When the plaintiffs own negligence was the
immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was
only contributory, the immediate and proximate cause
of the injury being the defendants lack of due care,
the plaintiff may recover damages, but the courts shall
mitigate the damages to be awarded.
Manila Electric vs. Remonquillo (1956): Even if
Manila Electric is negligent, in order that it may
be held liable, its negligence must be the
proximate and direct cause of the accident.
Bernardo vs. Legaspi (1914): Both of the parties
contributed to the proximate cause; hence, they
cannot recover from one another.
2. Contributory Negligence
Art. 2214. In quasi-delicts, the contributory negligence
of the plaintiff shall reduce the damages that he may
recover.
Genobiagon vs. CA (1989): The alleged
contributory negligence of the victim, if any, does
not exonerate the accused in criminal cases
committed through reckless imprudence, since
one cannot allege the negligence of another to
evade the effects of his own negligence.
Rakes vs. Atlantic (1907): If so, the
disobedience of the plaintiff in placing himself in
danger contributed in some degree to the injury
as a proximate, although not as its primary
cause.
(Supreme Court in this case cited numerous
foreign precedents, mostly leaning towards the
doctrine that contributory negligence on the part
of the plaintiff did not exonerate defendant from
liability, but it led to the reduction of damages
awarded to the plantiff.)
3. Fortuitous Event
Art. 1174. 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 seen
responsible for those events which, could not
foreseen, or which, though foreseen, were inevitable.
Juntilla vs. Fontanar (1985): The elements of
caso fortuito are:
1. the cause of the unforeseen and unexpected
occurrence, or of the failure of the debtor to
comply with his obligation, must be
independent of the human will;
2. It must be impossible to foresee the event or
if it can be foreseen, it must be impossible to
avoid;
3. The occurrence must be such as to render it
impossible for the debtor to fulfill his
obligation in a normal manner;
4. The obligor must be free from any
participation in the aggravation of the injury
resulting to the creditor.
Hernandez vs. COA (1984): The robbery that
happened to him cannot be said to be the result
of his imprudence and negligence. This was
undoubtedly a fortuitous event covered by the
said provisions, something that could not have
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been reasonably foreseen although it could have
happened.
4. Assumption of Risk
Afialda vs. Hisole (1958): It is the caretaker's
business to try to prevent the animal from
causing injury or damage to anyone, including
himself. It was a risk he voluntarily assumed.
Exception:
Ilocos Norte vs. CA (1989): A person is excused
from the force of the rule (volenti non fit injuria),
that when he voluntarily assents to a known
danger he must abide by the consequences, if
an emergency is found to exist or if the life or
property of another is in peril or when he seeks
to rescue his endangered property.
5. Due Diligence
MMTC vs. CA (1998): Due diligence in the
supervision of employees, on the other hand,
includes the formulation of suitable rules and
regulations for the guidance of employees and
the issuance of proper instructions intended for
the protection of the public and persons with
whom the employer has relations through his or
its employees and the imposition of necessary
disciplinary measures upon employees in case
of breach or as may be warranted to ensure the
performance of acts indispensable to the
business of and beneficial to their employer.
6. Prescription
4 years for QD
1 year for defamation
Kramer vs. CA (1989): It is clear that the
prescriptive period must be counted from the
time of the commission of an act or omission
violative of the right of the plaintiff, which is the
time when the cause of action arises.
Allied Banking vs. CA (1989): Relations Back
Doctrine (footnote 17 of Allied Banking case):
That principle of law by which an act done at one
time is considered by a fiction of law to have
been done at some antecedent period.
7. Double Recovery
Art. 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct
from the civil liability arising from negligence under the
Penal Code. But the plaintiff cannot recover damages
twice for the same act or omission of the defendant.
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Chapter IV. Causation
A. PROXIMATE CAUSE
1. DEFINITION
2. DISTINGUISHED FROM OTHER
KINDS
i. REMOTE
ii. CONCURRENT
3. TESTS TO DETERMINE THE
PROXIMATE CAUSE
4. EFFICIENT INTERVENING CAUSE
5. LAST CLEAR CHANCE
A. Proximate Cause
1. Definition
Bataclan vs. Medina (1960): that acting first and
producing the injury, either immediately or by
setting other events in motion, all constituting a
natural and continuous chain of events, each
having a close causal connection with its
immediate predecessor, the final event in the
chain immediately effecting the injury as a
natural and probable result of the cause which
first acted, under such circumstances that the
person responsible for the first event should, as
an ordinarily prudent and negligent person, have
reasonable ground to expect at the moment of
his act or default that an injury to some person
might probably result therefrom.
Lambert v. Heirs of Ray Castillon (2005):
Proximate cause is defined as that which, in the
natural and continuous sequence unbroken by
any efficient, intervening cause, produces the
injury, and without which the result would not
have occurred.
Pilipinas Bank vs. CA (1994): ...and from which it
ought to have been foreseen or reasonably
anticipated by a person of ordinary care that the
injury complained of or some similar injury,
would result therefrom as a natural and probable
consequence.
(NOTE: Same definition as in the Bataclan case,
except that the SC added the element of
FORESEEABILITY.)
Quezon City vs. Dacara (2005): Proximate
cause is determined from the facts of each case,
upon a combined consideration of logic,
common sense, policy or precedent.
2. Distinguished from Other Kinds
i. Remote
Manila Electric Co. v. Remonquillo (1956): A
prior and remote cause cannot be made the
basis of an action if such remote cause did
nothing more than furnish the condition or give
rise to the occasion by which the injury was
made possible, if there intervened between such
prior or remote cause and the injury, a distinct,
successive, unrelated and efficient cause of the
injury, even though such injury would not have
happened but for such condition or occasion.
If no danger existed in the condition except
because of the independent cause, such
condition was not the proximate cause. And if an
independent negligent act or defective condition
sets into operation the circumstances which
result in injury because of the prior defective
condition, such act or condition is the proximate
cause.
ii. Concurrent
Far Eastern vs. CA (1998): Where the
concurrent or successive acts of 2 or
more persons, although done
independently, constitute in combination
the proximate cause of the injury to the
3
rd
person, either shall be responsible
for the whole injury.
3. Tests to determine the proximate cause
Cause in fact: The first step is to determine
whether the defendants conduct, in point of fact,
was a factor in causing plaintiffs damage.
Effectiveness of the cause; but for rule:
whether such negligent conduct is a cause
without which the injury would not have taken
place (sine qua non rule) or is the efficient cause
which set in motion the chain of circumstances
leading to the injury. (Bataclan v. Medina)
1. Substantial factor test under
Restatement: If the actors conduct is a
substantial factor in bringing about harm
to another, the fact that the actor neither
foresees nor should have foreseen the
harm or the manner in which it occurred,
does not prevent him from being liable.
(Philippine Rabit v. IAC)
2. Foreseeability test: Anticipation of
consequence is a necessary element in
determining not only whether a
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particular act or omission was negligent,
but also whether the injury complained
of was proximately caused by such act
or omission.
3. Natural and probable consequence
test: A natural consequence of an act is
the consequence which ordinarily
follows it. A probable consequence is
one that is more likely to follow than fail
to follow its supposed cause but it need
not be one which necessarily follow
such cause.
4. Ordinary and natural or direct
consequence test: if negligence is a
cause in fact of the injury , the liability of
the wrongdoer extends to all the
injurious consequences.
5. Hindsight test: A party guilty of
negligence or omission of duty is
responsible for all the consequences
which a prudent and experienced party,
fully acquainted with all the
circumstances which in fact exist,
whether they could have been
ascertained by reasonable diligence, or
not, would have thought at the time of
the negligent act as reasonably possible
to follow, if they had been suggested to
his mind.
6. Orbit of the risk test: If the foreseeable
risk to plaintiff created a duty which the
defendant breached, liability is imposed
for any resulting injury within the orbit or
scope of such injury. It is not the
unusual nature of the act resulting in
injury to plaintiff that is the test of
foreseeability, but whether the result of
the act is within the ambit of the hazards
covered by the duty imposed upon the
defendant.
4. Efficient Intervening Cause
Teague vs. Fernandez (1973): The test is not in
the number of intervening causes, but in their
character and in the natural and probable
connection between the wrong done and the
injurious consequence.
5. Last Clear Chance
Also known as: "doctrine of discovered peril or
doctrine of supervening negligence.
Elements:
1) Plaintiffs own negligence put himself
in a dangerous situation
2) Defendant saw/discovered, by
exercising reasonable care, perilous
position of plaintiff
3) In due time to avoid injuring him
4) Despite notice and imminent peril,
defendant failed to employ care to
avoid injury
5) Injury of plaintiff resulted.
Doctrine covers successive acts of
negligence:
Primary negligence of the defendant
contributory negligence of the plaintiff
subsequent negligence of the defendant in
failing to avoid the injury to the plaintiff
The doctrine cannot be extended into the field of
joint tortfeasors as a test of whether only one of
them should be held liable to the injured person
by reason of his discovery of the latters peril,
and it cannot be invoked as between defendants
concurrently negligent.
As against third persons, a negligent actor
cannot defend by pleading that another had
negligently failed to take action which could have
avoided the injury.
Picart vs. Smith (1918): If both parties are found
to be negligent; but, their negligence are not
contemporaneous, the person who has the last
fair chance to avoid the impending harm and
fails to do so is chargeable with the
consequences, without reference to the prior
negligence of the other party.
Bustamante vs. CA (1991): The doctrine of last
clear chance, as enunciated in Anuran v. Buno,
applies in a suit between the owners and drivers
of colliding vehicles. It does not arise where a
passenger demands responsibility from the
carrier to enforce its contractual obligations. It
will be inequitable to exempt the negligent driver
of the jeepney and its owners on the ground that
the other driver was likewise guilty of negligence
Phoenix vs. IAC (1987): Doctrine of last clear
chance does not seem to have a role to play in a
jurisdiction where the common law concept of
contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected,
as it has been in 2179 of CC
(NOTE: Interpretation of 2179: It is not just the
relative location in the continuum of time of the
negligence of both parties but also the weighing
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and assessing of other factors such as the
nature of the negligent act/omission and the
character and gravity of the risks created by
such for the rest of the community.
a) If plaintiff IS the proximate cause: NO
RECOVERY can be made.
b) If plaintiff is NOT the proximate cause:
Recovery can be made but such will be
mitigated.
c) If negligence of parties are equal in degree,
then each bears his own loss.)
Pantranco vs. Baesa (1989): Last clear chance
applies only if the person who allegedly had the
last opportunity to avert the accident was aware
of the existence of peril or should, with exercise
of due care, have been aware of it.
Ong vs. Metropolitan (1958): Last clear chance
does not apply where the party charged is
required to act instantaneously, and if the injury
cannot be avoided by the application of all
means at hand after the peril is or should have
been discovered.
Emergency rule: McKee v. IAC (1992): One
who suddenly finds himself in a place of danger,
and is required to act without time to consider
the best means that may be adopted to avoid
the impending danger, is not guilty of
negligence, if he fails to adopt what
subsequently and upon reflection may appear to
have been a better method, unless the
emergency in which he finds himself is brought
about by his own negligence.
Consolidated Bank vs. CA (2003): This is a case
of culpa contractual where neither contributory
negligence nor last clear chance will exonerate
defendant from liability. (NOTE: This means that
Last Clear Chance is not a defense in culpa
contractual.)
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Chapter V. Persons Liable
A. THE TORTFEASOR
B. VICARIOUS LIABILITY
1. PARENTS
2. GUARDIANS
3. TEACHERS AND HEADS OF
INSTITUTIONS
4. OWNERS AND MANAGERS OF
ESTABLISHMENTS
5. EMPLOYERS
6. STATE
C. SPECIFIC LIABILITY
1. Possessor of Animals
2. Things Thrown or Falling from a Building
3. Death/Injuries in the Course of Employment
4. Product Liability
5. Inference with Contractual Relations
6. Liability of Local Government Units
D. JOINT AND SOLIDARY LIABILITY
E. CIVIL LIABILITY ARISING FROM CRIME
F. PRESCRIPTION
A. The Tortfeasor
Worcester vs. Ocampo (1958): (Refers to) All
the persons who command, instigate, promote,
encourage, advise, 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.
Each joint tortfeasor is not only
individually liable for the tort in which he
participates, but is also jointly liable with his
tortfeasors.
B. Vicarious Liability
Art. 2180, par 1. The obligation imposed by Article
2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one
is responsible.
Art. 2180, par 8. The responsibility treated of in this
article shall cease when the persons herein
mentioned prove that they observed all the diligence
of a good father of a family to prevent damage.
Art. 2181. Whoever pays for the damage caused by
his dependents or employees may recover from the
latter what he has paid or delivered in satisfaction of
the claim.
NOTE:
Common defense: exercise of the diligence
of a good father of a family.
Exception: common carriersextraordinary
diligence.
Were the liability subsidiary and not primary
and solidary, the defense of due diligence
would not be available
Basis of Liability
Arises by virtue of a presumption juris tantum of
negligence on the part of the persons made
responsible under the article, derived from their
failure to exercise due care and vigilance over
the acts of the subordinates to prevent them
from causing damage.
The non-performance of certain duties of
precaution and prudence imposed upon the
persons who become responsible by civil bond
uniting the actor to them.
Underlying Basis of Vicarious Liability of
parents: Tamargo v. CA (1992): The basis of
this vicarious, although primary, liability is, as in
Article 2176, fault or negligence, which is
presumed from that which accompanied the
causative act or omission. The presumption is
merely prima facie and may therefore be
rebutted
2 Requisites According to Chironi:
1. The duty of supervision
2. The possibility of making such
supervision effective
Respondeat superior
It means nothing more than look to the man
higher up, (usually the employer or person
under whose control the tortfeasor was under)
which is a manifestation of vicarious liability.
Bonus paterfamilias.
The relationship of pater familias (good father of
the family) is the basis of civil law liability,
particularly for an employer. It is a defense for all
instances of vicarious liability based on Art.
2180. (Most frequently asked topic in Torts,
1975-2003)
Liability of Author
Article does not exempt the author who are the
only ones liable if there are no persons who will
be held liable if there are no person having
authority over him or if due diligence of the
persons having authority over him. He may be
sued alone or with the person responsible for
him.
Strict Interpretation
The liability under this article cannot be
extended to those persons not enumerated
because this is an extraordinary responsibility
created by way of exception to the rule that no
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person can be liable for the acts or omissions of
another.
1. Parents
Based on the presumption of failure on their part
to properly exercise their parental authority for
the good education of their children and exert
adequate vigilance over them.
Imposed only when children are living with the
parents
If there is just cause for separation, the
responsibility ceases.
The responsibility of the father and mother is not
simultaneous but alternate.
When Responsibility Ceases
When parent is not in the position to exercise
authority and supervision over the child
Illegitimate Children
Responsibility is with the mother whom the law
vests parental authority
Exconde vs. Capuno (1957): The civil liability
which the law imposes upon the father and, in
case of his death or incapacity, the mother, for
any damages that may be caused by the minor
children who live with them, is obvious. This is a
necessary consequence of the parental authority
they exercise over them which imposes upon
the parents the 'duty of supporting them,
keeping them in their company, educating them
in proportion to their means', while, on the other
hand, gives them the 'right to correct and punish
them in moderation.'
Tamargo vs. CA (1992): The basis of parental
authority for the torts of a minor child is the
relationship existing between the parents and
the minor child living with them and over whom,
the law presumes, the parents exercise
supervision and control. To hold that parental
authority had been retroactively lodged in the
adoptive parents so as to burden them with the
liability for a tortious act that they could not have
foreseen and prevented would be unfair.
Parental liability is, in other words,
anchored upon parental authority coupled with
presumed parental dereliction in the discharge
of the duties accompanying such authority. The
parental dereliction is, of course, only presumed
and the presumption can be overturned under
Article 2180 of the Civil Code by proof that the
parents had exercised all the diligence of a good
father of a family to prevent the damage
(NOTE: Art 2180, par 2 of the Civil Code which
holds the father liable for damages has been
modified by the Family Code and PD 603. Art.
211 of the FC declares joint parental authority of
the mother and father over common children.
The parent(s) exercising parental authority are
liable for the torts of their children. Despite the
lowering of the age of majority from 21 to 18,
parents are still liable for the torts committed by
their children below 21 years of age. Art 236, par
3 FC, as amended by RA 6809)
Art. 2180, par 2. The father and, in case of his death
or incapacity, the mother, are responsible for the
damages caused by the minor children who live in
their company.
Art 58 (PD 603). Torts Parents and guardians are
responsible for the damage caused by the child under
their parental authority in accordance with the civil
code.
Art 221 (FC). 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.
Art. 101 (RPC). Rules regarding civil liability in certain
cases. The exemption from criminal liability
established in subdivisions 1, 2, 3, 5 and 6 of Article
12 and in subdivision 4 of Article 11 of this Code does
not include exemption from civil liability, which shall
be enforced subject to the following rules:
First. In cases of subdivisions 1, 2, and 3 of
Article 12, the civil liability for acts committed by an
imbecile or insane person, and by a person under
nine years of age, or by one over nine but under
fifteen years of age, who has acted without
discernment, shall devolve upon those having such
person under their legal authority or control, unless it
appears that there was no fault or negligence on their
part.
Should there be no person having such insane,
imbecile or minor under his authority, legal
guardianship or control, or if such person be
insolvent, said insane, imbecile, or minor shall
respond with their own property, excepting property
exempt from execution, in accordance with the civil
law.
Libi vs. IAC (1992): The parent's liability under
2180 should be primary and not subsidiary. If it
were subsidiary, the parents cannot invoke due
diligence as a defense. Such interpretation
reconciles 2180 with 2194 which calls for
solidary liability of joint tortfeasors.
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Guardians
Art. 2180, par 3. Guardians are liable for damages
caused by the minors or incapacitated persons who
are under their authority and live in their company.
Art. 216. In default of parents or a judicially appointed
guardian, the following person shall exercise
substitute parental authority over the child in the order
indicated:
The surviving grandparent, as provided in Art.
214;
The oldest brother or sister, over twenty-one
years of age, unless unfit or disqualified; and
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.
Art. 217. 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.
REQUISITES FOR LIABILITY TO ATTACH:
Parents - (mnemonic: 21 + Authority &
Company):
1. The child is below 21 years old
2. The child is under the parental authority
of the parents
3. The child is living in the company of the
parents
Guardians - (mnemonic: Authority & Company)
1. The ward if minor is below 21 years
old. If incapacitated, the guardian is
liable for the acts of the ward regardless
of the latters age.
2. The child is under the parental
authority of the parents.
3. The tortfeasor is under his authority.
4. The tortfeasor is living in his
company.
Is a minor or insane tortfeasor with NO parent or
guardian liable?
Yes. He shall be answerable with his own
property in an action against him where a
guardian ad litem shall be appointed. (Art. 2182)
2. Teachers and Heads of Institutions
Who are liable For whose Acts Requisite for Liability to Attach
Teacher- in- charge (the one
designated to exercise supervision
over students)
Pupils and students pupils and students remain in
teachers custody regardless of the
age
Head of establishment of arts and
trades
Apprentices custody regardless of the age
School (generally not held liable) If the tortfeasor is a student of
the school (Art 218 FC)
If the tortfeasor is a teacher/
employee of the school, it is
liable as employer under 2180
(5) of CC (St. Francis vs. CA)
If the tortfeasor is a stranger, it
is liable for breach of contract.
(PSBA vs. CA)
must be below 18
Palisoc vs, Brillantes (1971): Custody means
the protective and supervisory custody that the
school and its heads and teachers exercise over
the pupils and students for as long as they are at
attendance in the school and includes recess
time.
There is nothing in the law that
requires that for such liability to attach, the pupil
or student who commits the tortious act must
live and board in the school, as erroneously held
by the lower court, and in the dicta in Mercado
(as well as in Exconde) on which it relied, must
now be deemed to have been set aside by this
decision
Amadora vs. CA (1988): Art. 2180 should apply
to ALL schools, academic as well as non-
academic. Where the school is academic rather
than technical or vocational in nature,
responsibility for the tort committed by the
student will attach to the teacher in charge of
such student. In establishments of arts and
trades, it is the head thereof, and only he, who
shall be held liable as an exception to the
general rule.
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Teachers in general shall be liable for acts of
their students except where the school is
technical in nature, in which case it is the head
thereof who shall be answerable.
Salvosa v. IAC (1988): A student not at
attendance in the school cannot be in recess
thereat. A recess, as the concept is embraced
in the phrase at attendance in the school,
contemplates a situation of temporary
adjournment of school activities where the
student still remains within call of his mentor and
is not permitted to leave the school premises, or
the area within which the school activity is
conducted. Recess by its nature does not
include dismissal.
Mere fact of being enrolled or being in the
premises of a school without more does not
constitute attending school or being in the
protective and supervisory custody of the
school, as concemplated by law.
Ylarde vs. Aquino (1988): The principal of the
school cannot be held liable for the reason that
the school he leads is an academic school and
not a school of arts and trades. (Teachers
liability has been asked four times from 1975-
1990, and four times from 2004- 2007)
3. Owners and Managers of
Establishments
Who are liable For whose
acts
Requisites for
liability to attach
Owners and
managers of an
establish-ment
or enterprise
Their
employees
The damage was
caused in the
service of the
branches in which
the employees
are employed
-OR-
The damage was
caused on the
occasion of their
functions
Philippine Rabbit vs. Philam Forwarders (1975):
Owners and managers of an establishment or
enterprise does not include a manager of a
corporation. (Spanish term directores connotes
employer. But manager of a corporation is not
an employer, merely an employee of the owner.)
4. Employers
Art 2180, par 5. Employers shall be liable for the
damages caused by their employees and household
helpers acting within the scope of their assigned
tasks, even though the former are not engaged in any
business or industry.
3 Essential Requisites:
1. That the employee was chosen by the
employer, personally or through another
2. That the services are to be rendered in
accordance with orders which the employer
has the authority to give at all times
3. That the illicit act of the employees was on
the occasion or by reason of the entrusted to
him
Presumption of negligence
The presentation of proof of the negligence of its
employee gives rise to the presumption that the
defendant employer did not exercise the
diligence of a good father of a family in the
selection and supervision of its employees
Nature of liability of the employer
The employer is primarily and solidarily liable for
the tortious act of the employee. The employer
may recover from the employee, the amount it
will have to pay the offended partys claim.
Such recovery, however, is NOT for the entire
amount. To allow such would be as if to say that
the employer was not negligent.
Necessity of presumption of negligence
It is difficult for any person injured to prove the
employers negligence as they would be proving
negative facts. (Here comes in the fabrication of
documents, etc.)
Independent contractor
Master not generally liable for the fault or
negligence of an independent contractor
performing some work for him
A contractor may at the same time be so
situated that he would be regarded as an
employee for whose negligence the employer is
liable
Cuison vs. Norton & Harrison (1930): Basis for
civil liability of employers is pater familias
The existence of the employer-employee
relationship must first be established before an
employer may be made vicariously liable under
Art. 2180, CC.
Philtranco vs. CA (1997): The liability of the
registered owner and driver is solidary, primary
and direct.
Filamer vs. IAC (1992): Within the scope of
their assigned task in Art. 2180 includes any act
done by an employee in furtherance of the
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interests, or for the account of the employer at
the time of the infliction of the injury or damage.
De Leon Brokerage v. CA (1962): Employer
need not be riding in the vehicle to become
liable for a drivers negligence. Article 2184
mandating that the owner is only held solidarily
liable if he is riding in the vehicle at the time of
the mishap, only applies to those owners of
vehicles, who do not come within the ambit of
Article 2180 (as owners of an establishment or
enterprise.)
5. State
Sec 3, Art XVI, 1987 Constitution. The State may not
be sued without its consent.
Art 2180, par 6. The State is responsible in like
manner when it acts through a special agent; but not
when the damage has been caused by the official to
whom the task done properly pertains, in which case
what is provided in Article 2176 shall be applicable.
Merrit vs. Government of the Philippine Islands
(1960): A special agent is one who receives a
definite and fixed order or commission, foreign
to the exercise of the duties of his office if he is a
special official.
This concept does not apply to any executive
agent who is an employee of the active
administration and who on his own responsibility
performs the functions which are inherent in and
naturally pertain to his office.
The responsibility of the state is limited to that
which it contracts through a special agent, duly
empowered by a definite order or commission to
perform some act or charged with some definite
purpose which gives rise to the claim and not
where the claim is based on acts or omissions
imputable to a public official charged with some
administrative or technical office who can be
held to the proper responsibility in the manner
laid down by the law of civil responsibility.
General Rule: The State cannot be sued.
Exceptions:
a. There is express legislative consent
b. The State filed the case
Instances where the state gives its consent to be
sued:
a. Art. 2180 (6) is an example of an express
legislative consent. Here, the State assumes
a limited liability for the acts of its special
agents.
b. Art. 2189 provides for state liability for
damages caused by defective condition of
public works.
c. Local Government Code provides for the
liability of local government units for
wrongful exercise of its proprietary (as
opposed to its governmental) functions. The
latter is the same as that of a private
corporation or individual. (Mendoza vs. De
Leon, 1916)
The state agencies or subdivisions, in the
pursuance of proprietary functions, are akin to
any other private corporation. They may be sued
for:
torts committed by them (Art. 2176) or
torts committed by their employees (art
2180).
As long as it is performing proprietary functions,
it can be held liable for the acts of its employees,
both regular and special.
Quick Glance
o As a governmental entity: Liable only for
acts of its special agents
o As a corporate entity: May be held liable
just as any other employer for the acts of its
employees
o Special Agent: One duly empowered by a
definite order or commission to perform
some act or one charged with some definite
purpose which give rise to the claim; if he is
a government employee or official, he must
be acting under a definite and fixed order or
commission, foreign to the exercise of the
duties of his office
C. Specific Liability
1. Possessor of Animals
Art. 2183 (CC). The possessor of an animal or
whoever may make use of the same is responsible for
the damage which it may cause, although it may
escape or be lost. This responsibility shall cease only
in case the damage should come from force majeure
or from the fault of the person who has suffered
damage.
Applicability of provision
Since the law makes no distinction, this is
applicable to both wild (in case the wild animal is
kept) and domestic animals. It is enough that
defendant is the possessor, owner, or user of
the animal at the time it caused the damage
complained of, to hold him liable therefor.
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Basis
Negligence is immaterial. It is based on natural
equity and on the principle of social interest that
he who possesses animals for his utility,
pleasure, or service, must answer for any
damage which such animal may cause.
Possible defenses against this liability:
1. Force Majeure
2. Fault of person suffering damage
3. Act of third persons
Vestil vs. IAC (1989): Possession of the animal,
not ownership, is determinative of liability under
Art. 2183. The obligation imposed by said article
is not based on the negligence or on the
presumed lack of vigilance of the possessor or
user of the animal causing damage. It is based
on natural equity and on the principle of social
interest that he who possesses animals for his
utility, pleasure, or service, must answer for any
damage which such animal may cause.
Scope of provision
Contention that the defendant could not be
expected to exercise remote control of the
animal is not acceptable. In fact, Art. 2183 holds
the possessor liable even if the animal should
escape or be lost and so be removed from his
control.
It is likewise immaterial that the animal was
tame and was merely provoked by the victim.
The law does not speak only of vicious animals
but covers even tame ones as long as they
cause injury.
2. THINGS THROWN OR FALLING
FROM A BUILDING
Art 2193 (CC). The head of a family that lives in a
building or a part thereof, is responsible for damages
caused by things thrown or falling from the same.
Purpose of the law
To relieve the injured party of the
difficulty of determining and proving who threw
the thing or what caused it to fall, or that either
was due to the fault or negligence of any
particular individual.
Dingcong vs. Kanaan (1941): Lessee is
considered as the head of the family. It is
enough that he lives in and has control over it.
3. DEATH/INJURIES IN THE COURSE
OF EMPLOYMENT
Art 1711: Owners of enterprises and other employers
are obliged to pay compensation for the death or
injuries ti their laborers, workmen, mechanics or other
employees even though the event may be purely
accidental or entirely due to a fortuitous cause, if the
death or personal injury arose out of and in the course
of employment. The employer is also liable for
compensation if the employee contracts any illness or
disease caused by such employment or as a result of
the nature of the employment. If the mishap was due
to the employee's own notorious negligence, or
voluntary act, or drunkenness, the employer shall not
be liable for compensation. When the employee's lack
of due care contributed to his death or injury, the
compensation shall be equitable reduced.
Art. 1712: If the death or injury is due to the
negligence of a fellow-worker, the latter and the
employer shall be solidarily liable for compensation. If
a fellow worker's intentional or malicious act is the
only cause of the death or injury, the employer shall
not be answerable, unless it should be shown that the
latter did not exercise due diligence in the selection or
supervision of the plaintiff's fellow worker.
Afable vs Singer (1933): The injury must be
received while engaged in the furtherance of the
affairs of the employer.
4. PRODUCT LIABILITY
Art 2187 (CC). Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar goods
shall be liable for death or injuries caused by any
noxious or harmful substances used, although no
contractual relation exists between them and the
consumers.
Consumer Act Provisions
Art. 4. n) "Consumer" means a natural person who is
a purchaser, lessee, recipient or prospective
purchaser, lessor or recipient of consumer products,
services or credit.
(as) "Manufacturer" means any person who
manufactures, assembles or processes consumer
products, except that if the goods are manufactured,
assembled or processed for another person who
attaches his own brand name to the consumer
products, the latter shall be deemed the
manufacturer. In case of imported products, the
manufacturer's representatives or, in his absence, the
importer, shall be deemed the manufacturer.
Art. 97. Liability for the Defective Products. - 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.
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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.
Art. 99. Liability for Defective Services. - 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:
the manner in which it is provided;
the result of hazards which may reasonably be
expected of it;
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:
that there is no defect in the service rendered;
that the consumer or third party is solely at
fault.
Art. 106. Prohibition in Contractual Stipulation. - 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.
Coca-Cola v. CA (1993): While it may be true
that the pre-existing contract between the
parties may, as a general rule, bar the
applicability of the law on quasi-delict, the
liability may itself be deemed to arise from
quasi-delict if the act which breaks the contract
is also a quasi-delict.
5. INTERFERENCE WITH
CONTRACTUAL RELATIONS
Art 1314: Any third person who induces another to
violate his contract shall be liable for damages to the
other contracting party.
Gilchrist vs. Cuddy (1915): Everyone has a right
to enjoy the fruits of his enterprise. He has no
right to be protected from competition, but he
has the right to be free from malicious and
wanton interference. If the injury is a result of
competition, it is a case of damnum absque
injuria, unless superior right by contract is
interfered with.
So Ping Bun vs. CA (1999): Elements of
Interference are:
Existence of a valid contract;
Knowledge of the third person of the
existence of such contract;
Interference without legal justification or
excuse.
Lagon vs. CA (2005): If there in no bad faith,
there is no tortious interference; Actual
knowledge of the contract is not required so long
as there are facts leading one to investigate.
6. LIABILITY OF LOCAL GOVERNMENT
UNITS
Art 2189: Provinces, cities and municipalities shall be
liable for damages for the death of, or injuries suffered
by, any person by reason of the defective condition of
roads, streets, bridges, public buildings, and other
public works under their control or supervision.
Guilatco vs Dagupan: It is not necessary that the
defective road belongs to the LGU, only that the
LGU exercises control and supervision over it.
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QUICK GLANCE
Person Strictly Liable For What Defenses or Exceptions
Possessor of an animal or whoever
makes use of them even if the
animal is lost or escaped
For the damage it may cause Force majeure
Fault of the person who suffered
damage
Owner of Motor Vehicle Motor vehicle mishaps Solidary liability only if the owner was
in the vehicle and if he could have
prevented it thru due diligence
If not in vehicle 2180
Manufacturers and Processors of
foodstuffs, drinks, toilet articles and
similar goods (FDTAS)
death and injuries caused by any
noxious or harmful substances used
Absence on contractual relation NOT
a defense
Defendant in possession of
dangerous weapons/ substances
such as firearms and poison
death or injury results from such
possession
possession or use thereof is
indispensable in his occupation or
business
Provinces, Cities and Municipalities the death or injuries suffered by any
person by reason of the defective
condition of roads, streets, bridges,
public buildings, and other public
works
Public works must be under their
supervisions
Proprietor of building/ structure total or partial collapse of
building or structure if due to
lack of necessary repairs
explosion of machinery which
has not been taken cared of
with due diligence, and the
inflammation of explosive
substances which have not
been kept in a safe and
adequate place
by excessive smoke, which
may be harmful to persons or
property
by falling of trees situated at or
near highways or lanes, if not
caused by force majeure
by emanations from tubes,
canals, sewers or deposits of
infectious matter, constructed
without precautions suitable to
the place
Responsibility for collapse should be
due to the lack of necessary repairs
Engineer, Architect or Contractor if damage of building or structure is
caused by defect in construction
which happens within 15 years from
construction; action must be
brought within 10 years from
collapse
Head of the Family that lives in a
building or any part thereof
Liable for damages caused by
things thrown or falling from the
same
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BAR QUESTION: MOTOR VEHICLE MISHAPS
A van owned by Orlando and driven by Diego,
while negotiating a downhill slope of a city road,
suddenly gained speed, obviously beyond the
authorized limit in the area, and bumped a car in
front of it, causing severe damage to the car and
serious injuries to its passengers. Orlando was
not in the car at the time of the incident. The car
owner and the injured passengers sued Orlando
and Diego for damages cause by Diegos
negligence. In their defense, Diego claims that
the downhill slope caused the van to gain speed
and that, as he stepped on the brakes to check
the acceleration, the brakes locked, causing the
van to go even faster and eventually to hit the
car in front of it. Orlando and Diego contend that
the sudden malfunction of the vans brake
system is a fortuitous event and that, therefore,
they are exempt from any liability.
(a) Is this contention tenable? Explain.
(b) Explain the concept of vicarious
liability in quasi-delicts.
(c) Does the presence of the owner
inside the vehicle causing damage
to a third party affect his liability
for his drivers negligence? Explain.
Suggested Answer:
(a) No. Mechanical defects of a motor vehicle
do not constitute fortuitous event, since the
presence of such defects would have been
readily detected by diligence maintenance
check. The failure to maintain the vehicle in
safe running condition constitutes
negligence.
(b) The doctrine of vicarious liability is that
which renders a person liable for the
negligence of others for whose acts or
omission the law makes him responsible on
the theory that they are under his control
and supervision.
(c) In motor vehicle mishaps, the owner is made
solidarily liable with his driver if he (the
owner) was in the vehicle and could have,
by the use of due diligence, prevented the
mishap (Caedo vs. Yu Khe Thai, 26 SCRA
410 [1968]). However, this question has no
factual basis in the problem given, in view of
the express given fact that Orlando was not
in the car at the time of the incident.
D. Joint and Solidary Liability
Art. 2194. The responsibility of two or more persons
who are liable for quasi-delict is solidary. (n)
E. Civil Liability Arising From Crime
Art. 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct
from the civil liability arising from negligence under the
Penal Code. But the plaintiff cannot recover damages
twice for the same act or omission of the defendant.
(n)
1. Distinguished from Independent Civil
Actions and Liability for QD
(Arts. 31-34, 2176)
Rule 111, Rules of Court
Sec. 3. When civil action may proceed independently.
In the cases provided in Articles 32, 33, 34 and
2176 of the Civil Code of the Philippines, the
independent civil action may be brought by the
offended party. It shall proceed independently of the
criminal action and shall require only a preponderance
of evidence. In no case, however, may the offended
party recover damages twice for the same act or
omission charged in the criminal action.
Sec. 5. Judgment in civil action not a bar. A final
judgment rendered in a civil action absolving the
defendant from civil liability is not a bar to a criminal
action against the defendant for the same act or
omission subject of the civil action.
2. Effect of Acquittal
Art. 29. When the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for
damages for the same act or omission may be
instituted. Such action requires only a preponderance
of evidence. Upon motion of the defendant, the court
may require the plaintiff to file a bond to answer for
damages in case the complaint should be found to be
malicious.
If in a criminal case the judgment of acquittal is based
upon reasonable doubt, the court shall so declare. In
the absence of any declaration to that effect, it may be
inferred from the text of the decision whether or not
the acquittal is due to that ground.
3. Prejudicial Questions
Art. 36. Pre-judicial questions which must be decided
before any criminal prosecution may be instituted or
may proceed, shall be governed by rules of court
which the Supreme Court shall promulgate and which
shall not be in conflict with the provisions of this Code.
Rule 111, Rules of Court
Sec. 6. Suspension by reason of prejudicial question.
A petition for suspension of the criminal action
based upon the pendency of a prejudicial question in
a civil action may be filed in the office of the
prosecutor or the court conducting the preliminary
investigation. When the criminal action has been filed
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in court for trial, the petition to suspend shall be filed
in the same criminal action at any time before the
prosecution rests.
Sec. 7. Elements of prejudicial question. The
elements of a prejudicial questions are: (a) the
previously instituted civil action involves an issue
similar or intimately related to the issue raised in the
subsequent criminal action, and (b) the resolution of
such issue determines whether or not the criminal
action may proceed.
Zapanta vs. Montesa (1962): A civil case for the
annulment of marriage is an example of a
prejudicial question for a criminal charge of
bigamy.
F. Prescription
Art. 1146. The following actions must be instituted
within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict;
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Contract
Art. 1314. Any third person who induces another to
violate his contract shall be liable for damages to the
other contracting party. (n)
Elements:
a) existence of a valid contract
b) knowledge of the third person of the
existence of the contract
c) interference of the third person WITHOUT
legal justification or excuse
(So Ping Bun vs. CA, 1999)
So Ping Bun vs. CA (1999): Bad faith/Malice is
required to make the defendant liable for
DAMAGES in cases of tortuous interference.
Gilchrist vs. Cuddy (1915): Injunction is the
proper remedy to prevent wrongful interference
with contracts by strangers, where other legal
remedies are insufficient and the resulting injury
is irreparable.
Lagon vs. CA (2005): Proper business interest
provides a legal justification to negate the
presence of the third element.
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Action
A. VIOLATION OF CIVIL AND POLITICAL RIGHTS
B. DEFAMATION, FRAUD, PHYSICAL INJURIES
1. DEFAMATION
2. FRAUD
3. PHYSICAL INJURIES
A. Violation of Civil and Political Rights
Art 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs any of
the following rights and liberties of another person
shall be liable to the latter for damages:
1. Freedom of religion
2. Freedom of speech
3. Freedom to write for the press or to maintain
a periodical publication
4. Freedom from arbitrary or illegal detention
5. Freedom of suffrage
6. The right against deprivation of property
without due process of law
7. The right to just compensation when property
is taken for public use
8. The right to equal protection of the laws
9. The right to be secure in ones person,
house, papers and effects against
unreasonable searches and seizures
10. The liberty of abode and of changing the
same
11. The right to privacy of communication and
correspondence
12. The right to become a member of
associations and societies for purposes not
contrary to law
13. The right to take part in a peaceable
assembly and petition the government for
redress of grievances
14. The right to be free from involuntary
servitude in any form
15. The right of the accused against excessive
bail
16. The right of the accused to be heard by
himself and counsel, to be informed of the
nature and the cause of the accusation
against him, to have a speedy and public
trial, to meet the witnesses face to face, to
have compulsory process to secure the
attendance of witnesses on is behalf;
17. Freedom form being compelled to be a
witness against ones self, or from being
forced to confess his guilt, or from being
induced by a promise of immunity or reward
to make such confession, except when the
person confessing becomes a State witness.
18. Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a
statute which has not been judicially
declared unconstitutional;
19. Freedom of access to the courts
In any of the cases referred to in this article, whether
or not the defendants act or omission constitutes a
criminal offense, the aggrieved party has a right to
commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil
action shall proceed independently of any criminal
prosecution (if the latter be instituted) and may be
proved by a preponderance of evidence. The
indemnity shall include moral damages. Exemplary
damages may also be adjudicated. The responsibility
herein set forth is not demandable from a judge
unless his act or omission constitutes a violation of
the Penal code or any other penal statute.
Cojuangco vs. CA (1999): The purpose of article
32 is to remind us that basic rights are
immutable. Thus, absence of bad faith or malice
is not a defense.
Vinzons- Chato vs. Fortune (2007): A public
officer may be sued under Art. 32 even if his
acts were not so tainted with malice, as long as
there is a violation of a constitutional right. Its
precise object is to put an end to official abuse,
done on the plea of good faith.
B. Defamation, Fraud, Physical Injuries
Art. 33: In case of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate
and distinct from the criminal action, may be brought
by the injured party. Such civil action shall proceed
independently of the criminal prosecution, and shall
require only a preponderance of evidence.
Marcia vs. CA (1983): Reckless imprudence is
not one of the three crimes mentioned in Art. 33;
no independent civil action may be filed because
what is punished is reckless imprudence is the
negligent or careless act, not the result thereof.
(However, in the contrary ruling in People vs.
Faller, court discussed reckless imprudence
under art. 33 not as a crime, but as a way of
committing it, such that it punishes BOTH the act
and the resulting damage, wherein an
independent action could be allowed.)
1. Defamation
Cojuangco vs. CA (1991): Separate civil action
may be consolidated with the criminal action.
MVRS vs. Islamic Da'wah (2003): Defamation is
that which tends to injure reputation or diminish
esteem, respect, good will, or confidence of the
plaintiff, or excite derogatory feelings about him.
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It must be personal. (What is definitive is not the
level of hurt, but the effect of the statement on
the reputation or standing of the person.)
2. Fraud
Salta vs. De Veyra (1982): Independent civil
actions are permitted to be filed separately
regardless of the result of the criminal action.
Samson vs. Daway (2004): Unfair competition
under the Intellectual Property Code and fraud
under Art. 33 are independent actions. Art. 33
does not operate as a prejudicial question to
justify the suspension of the criminal cases at
bar.
3. Physical Injuries
Capuno vs Pepsi (1965): The institution of
criminal action cannot have an effect of
interrupting the running of the period for the filing
of independent civil actions.
Dulay vs. CA (1995): Homicide is included in Art.
33, where a separate action is availing.
NOTE:
Civil liability arising from crime
Art. 2177. Responsibility for fault or negligence is
entirely separate and distinct from the civil liability
arising from negligence under the RPC. But double
recovery is not allowed.
Art. 100 of the Revised Penal Code provides
that every person who is criminally liable for a
felony is also civilly liable. This general rule
however presupposes that the felony had
resulted in damage or injury to anothers person
or property. To create an obligation or give rise
to civil liability, an act or omission, whether
intentional or negligent, must have caused
damage or injury to another, otherwise only
criminal liability will attach. Though the general
rule provides that one who is not criminally liable
cannot be civilly liable, RPC Arts. 101-103
provide exceptions as they provide for vicarious
liability for certain types of offenders and
subsidiary liability in case of default of the
offender.
The civil liability established by RPC Arts. 100-
103 include:
a. Restitution;
b. Reparation of the damage caused;
and
c. Indemnification for consequential
damages.
Neplum vs. Orbeso (2002): Deemed instituted in
every criminal prosecution is the civil liability
arising from the crime or delict per se (civil
liability ex delicto), but not those liabilities from
quasi-delicts, contracts or quasi-contracts.
Sps. Benito Lo Bun Tiong etc. vs. Vicente
Balboa (2008): The criminal action for violation
of Batas Pambansa Blg. 22 shall be deemed to
include the corresponding civil action and that no
reservation to file such civil action separately
shall be allowed. But a separate proceeding for
the recovery of civil liability in cases of violations
of B.P. No. 22 is allowed when the civil case is
filed ahead of the criminal case.
For independent civil actions:
Physical injuries unqualifiedly refer to an
independent cause of action, whether
caused by a deliberate or negligent act.
Jurisprudence is mixed, but Sangco
discusses that the reservation
requirement should only be for civil
actions based on crime. What will
prevent double recovery is the election
of any of the civil actions, being an
implicit waiver of the others.
Madeja vs. Caro (1983): Article 33 is ex
delicto, but it is an exception to the
reservation requirement, as it allows the
citizen to enforce his right to damages
independent of the prosecutor. Physical
injuries, fraud and defamation are used
in their ordinary, generic sense (and not
within RPC context).
BAR QUESTION
As a result of a collision between a taxicab owned by
A and another taxicab owned by B, X, a passenger of
the first taxicab, was seriously injured. X later filed a
criminal action against both drivers.
(a) Is it necessary for X to reserve his right to institute
a civil action for damages against both taxicab owners
before he can file a civil action for damages against
them? Why?
(b) May both taxicab owners raise the defense of due
diligence in the selection and supervision of their
drivers to be absolved from liability for damages to X?
Reason.
Suggested Answer:
(a) It depends. If the separate civil action is to
recover damages arising from the criminal act,
reservation is necessary. If the civil action
against the taxicab owners is based on culpa
contractual or on quasi-delict, there is no need for
reservation.
(b) It depends. If the civil action is based on quasi-
delict, the taxicab owners may raise the defense
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of diligence of a good father of a family in the
selection and supervision of the driver; if the
action against them is based on culpa contractual
or civil liability arising from a crime, they cannot
raise the defense.
Alternative Answer:
No such reservation is necessary. Under Section 1
Rule 111 of the 2000 Rules on Criminal Procedure,
what is deemed instituted with the criminal action is
only the action to recover civil liability arising from the
crime or ex delicto. All the other civil actions under
Articles 32, 33, 34, 2176 of the New Civil Code are no
longer deemed instituted, and may be filed
separately and prosecuted independently even
without any reservation in the criminal action (Section
3, Rule 111, 2000 Rules on Criminal Procedure). The
failure to make a reservation the criminal action is not
a waiver of the right to file a separate and
independent civil action based on these articles of the
New Civil Code (Casupanan vs. Laroya, G.R. No.
145391, August 26, 2002)
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Chapter VIII. Human Relations
Provisions
A. ABUSE OF RIGHTS
B. ACTS CONTRA BONUS MORES
1. ELEMENTS
2. EXAMPLES
i. BREACH OF PROMISE TO MARRY,
SEDUCTION AND SEXUAL ASSAULT
ii. MALICIOUS PROSECUTION
iii. PUBLIC HUMILIATION
iv. UNJUSTIFIED DISMISSAL
OTHER TORTS
C. DERELICTION OF DUTY
D. UNFAIR COMPETITION
E. VIOLATION OF HUMAN DIGNITY
Art. 19. 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.
A. Abuse of Rights
Velayo vs. Shell (1959): It may be said that Art
19 only contains a mere declaration of principles
and while such statement may be essentially
correct, yet we find that such declaration is
implemented by Art 21. There is no belief of
more baneful consequences upon the social
order than that a person may with impunity
cause damage to his fellowmen so long as he
does not break the law though he may be
defying the most sacred postulates of morality.
Globe vs. CA (1989): A right, though by itself
legal because recognized or granted by law as
such, may nevertheless become the source of
some illegality. When a right is exercised in a
manner which does not conform with the norms
enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for
which the wrongdoer must be held responsible.
Albenson vs. CA (1993): The elements of an
abuse of right under Article 19 are the following:
(1) There is a legal right or duty;
(2) Which is exercised in bad faith;
(3) For the sole intent of prejudicing or injuring
another.
University of the East vs. Jader (2000): Educational
institutions are duty-bound to inform the students of
their academic status and not wait for the latter to
inquire from the former. The conscious
indifference of a person to the rights or welfare
of the person/persons who may be affected by
his act or omission can support a claim for
damages.
B. Acts Contra Bonus Mores
Art. 21. Any person who willfully 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.
1.Elements
Albenson vs. CA ((1993): This provision has
broadened the scope of civil wrongs; it is more
supple and adaptable than tort. Elements:
1. legal action;
2. contrary to morals, public policy, good
customs;
3. intent to injure.
2. Examples
i. Breach of Promise to Marry,
Seduction and Sexual Assault
Wassmer vs. Velez (1964): Mere breach
of promise to marry is not an actionable
wrong. But to formally set a wedding
and go through all the above-described
preparation and publicity, only to walk
out of it when the matrimony is about to
be solemnized, is quite different. This is
palpably and unjustifiably contrary to
good customs for which defendant must
be held answerable in damages in
accordance with Article 21.
Baksh vs. CA (1993): Where a man's
promise to marry is in fact the proximate
cause of the acceptance of his love by a
woman and his representation to fulfill
that promise thereafter becomes the
proximate cause of the giving of herself
unto him in a sexual congress, proof that
he had, in reality, no intention of
marrying her and that the promise was
only a subtle scheme or deceptive
device to entice or inveigle her to accept
him and to obtain her consent to the
sexual act, could justify the award of
damages pursuant to Article 21 not
because of such promise to marry but
because of the fraud and deceit behind
it and the willful injury to her honor and
reputation which followed thereafter. It is
essential, however, that such injury
should have been committed in a
manner contrary to morals, good
customs or public policy.
ii. Malicious Prosecution
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Que vs. IAC (1989): To constitute
malicious prosecution, there must be
proof that the prosecution was prompted
by a sinister design to vex and humiliate
a person that it was initiated deliberately
by the defendant knowing that his
charges were false and groundless.
Concededly, the mere act of submitting
a case to the authorities for prosecution
does not make one liable for malicious
prosecution.
Drilon vs. CA: Malicious Prosecution
defined: An action for damages brought
by one against whom a criminal
prosecution, civil suit, or other legal
proceeding has been instituted
maliciously and without probable cause,
after the termination of such
prosecution, suit or other proceeding in
favor of the defendant herein. The gist of
the action is the putting of legal process
in force, regularly, for the mere purpose
of vexation or injury.
Concurring requisites:
1. The fact of the prosecution and the
defendant was himself the prosecutor
and then action was terminated with
an acquittal;
2. The prosecutor acted without
probable cause;
3. That the prosecutor was impelled by
legal malice, that is by improper or
sinister motive.
iii. Public Humiliation
Grand Union vs. Espino: It is against
morals, good customs and public policy
to humiliate, embarrass and degrade the
dignity of a person. Everyone must
respect the dignity, personality, privacy
and peace of mind of his neighbors and
other persons (Article 26, Civil Code).
iv. Unjustified Dismissal
Quisaba vs. Sta. Ines: The complaint in
this case is not grounded on his
dismissal per se, as in fact he does not
ask for reinstatement, but on the manner
of his dismissal and the consequent
effects of such dismissal. If the dismissal
was done anti-socially or oppressively,
as the complaint alleges, then the
respondents violated Art. 1701 of the
CC and Art 21 of the CC.
Other Torts
C. Dereliction of Duty
Art. 27: Any person suffering material or moral loss
because a public servant or employee refuses or
neglects, without just cause, to perform his official
duty may file an action for damages and other relief
against he latter, without prejudice to any disciplinary
administrative action that may be taken.
Amaro vs. Samanguit: Requisites:
(1) Defendant is a public officer charged with a
performance of a duty in favor of the plaintiff;
(2) He refused or neglected without just cause to
perform the duty;
(3) Plaintiff sustained material or moral loss as a
consequence of such non-performance;
(4) The amount of such damages, if material.
D. Illegal Acts
Art. 20. Every person who, contrary to law, willfully or
negligently causes damage to another, shall
indemnify the latter for the same
E. Unfair Competition
Art. 28: Unfair competition in agricultural, commercial
or industrial enterprises or in labor through the use of
force, intimidation, deceit, machination or any other
unjust, oppressive or highhanded method shall give
rise to a right of action by the person who thereby
suffers damage.
F. Violation of Human Dignity
Art. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a criminal
offense, shall produce a cause of action for damages,
prevention and other relief:
1. Prying into the privacy of another's residence
2. Meddling with or disturbing the private life or
family relations of another
3. Intriguing to cause another to be alienated from
his friends
4. Vexing or humiliating another on account of his
religious beliefs, lowly station in life, place of
birth, physical defect, or other personal condition.
St. Louis Realty Corporation vs. CA (Illustration of
a similar act): The acts and omissions of the
firm fall under Article 26. Persons who know the
residence of Doctor Aramil, were confused by the
distorted, lingering impression that he was renting
his residence from Arcadio or that Arcadio had
leased it from him. Either way, his private life was
mistakenly and unnecessarily exposed.
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Chapter IX. Damages
A. DEFINITION AND CONCEPT
B. KINDS OF DAMAGES
1. ACTUAL/COMPENSATORY DAMAGES
i. KINDS OF ACTUAL DAMAGES
ii. GENERAL PRINCIPLES FOR
RECOVERY
iii. DAMAGES FOR PERSONAL INJURY &
DEATH
iv. ATTORNEYS FEES
2. MORAL DAMAGES
i. GENERAL PRINCIPLES OF
RECOVERY
ii. MORAL DAMAGES IN MALICIOUS
PROSECUTION
iii. MORAL DAMAGES IN RAPE
iv. MORAL DAMAGES IN MURDER
v. LABOR CASES
3. NOMINAL DAMAGES
i. REQUISITES
4. TEMPERATE/MODERATE DAMAGES
i. REQUISITES
5. LIQUIDATED DAMAGES
6. EXEMPLARY/CORRECTIVE DAMAGES
i. REQUISITES TO RECOVER
EXEMPLARY DAMAGES AND
LIQUIDATED DAMAGES AGREED
UPON IN ADDITION TO EXEMPLARY
ii. GENERAL PRINCIPLES
A. Definition and Concept
People vs. Ballesteros (supra): Damages may
be defined as the pecuniary compensation,
recompense, or satisfaction for an injury
sustained, or as otherwise expressed, the
pecuniary consequences which the law imposes
for the breach of some duty or the violation of
some right.
Ocena vs. Icamina: The obligation to repair the
damages exists whether done intentionally or
negligently and whether or not punishable by
law.
Elements for recovery of damages:
1. Right of action
2. For a wrong inflicted by the defendant
3. Damage resulting to the plaintiff
B. Kinds of Damages
(1) ACTUAL/COMPENSATORY- for loss
actually suffered
(2) MORAL- mental anguish, etc.
(3) NOMINAL- for rights recognized and
violated
(4) TEMPERATE/MODERATE- for damages
proved but the amount was not proven
(5) LIQUIDATED- stipulated damages in the
contract
(6) EXEMPLARY/CORRECTIVE- to serve as
an example for the common good
1. Actual or Compensatory
When is a person entitled to actual or
compensatory damages? (Art. 2199)
When there is a pecuniary loss suffered
by him;
When he has alleged and prayed for
such relief (Manchester Devt Corp vs.
CA);
When he has duly proved it;
When provided by law or by stipulation.
No proof of pecuniary loss is necessary for:
moral, nominal, temperate, liquidated or
exemplary damages. The assessment of such
damages is discretionary upon the court, except
liquidated ones. (Art. 2216)
i. Kinds of Actual Damages
CC
Art.
2200 A. Damnum emergente- value of the
loss suffered
B. Lucro cessante- profits which the
obligee failed to obtain
2205 A. Loss of earning capacity due to
injury (temporary or permanent)
B. Damage to Business Standing or
Commercial Credit
2206 A. Fixed indemnity for death = Php
50,000 (as of 2005)
B. Loss of Earning Capacity of the
Deceased
2209 Interest
2208 Attorneys Fees & Expenses of Litigation
ii. General Principles for Recovery
(1) The amount of damages must be fair
and just and commensurate to the loss.
- In case of contracts, only those
injuries which could have been
reasonably foreseen by the parties
by the parties at the time the
contract was entered into are
recoverable.
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(2) The damages must be proximate and
not remote or speculative.
(3) The damages must be proven by
competent evidence (admissible or
probative)
- Integrated Packaging Corp. vs. CA;
Fuentes vs. CA: It is necessary to
prove with a reasonable degree of
certainty, premised upon competent
proof and on the best evidence
obtainable by the injured party, the
actual amount of loss.
(4) Circ. No. 7, Mar. 24, 1988; Manchester
Devt. Corp. vs. CA, 1987: Complaint
and prayer must specify amount of
damages and pay filing fees before it
may be accepted and admitted for filing.
(5) The requirement of certainty does not
prevent the drawing of reasonable
inferences from the fact and
circumstance in evidence.
(6) Events which occur after the wrong
complained of may serve to render the
damage sufficiently certain.
(7) The damages must be susceptible of
ascertainment in some manner other
than by mere speculation, conjecture or
surmise and by reference to some fairly
definite standard, such as market value,
established experience or direct
inference from known circumstances.
Talisay-Silay vs. Associacion: Where,
however, it is reasonably certain that
injury consisting of failure to realize
otherwise reasonably expected profits
had been incurred, uncertainty as to the
precise amount of such unrealized
profits will not prevent recovery or the
award of damages.
The extent of recovery:
Recovery of all proximately traceable to the
primary negligence, including subsequent
aggravations, the probability of which the law
regards as a consequence and natural result
likely to flow form the original injury. However,
note that if the subsequent aggravations are due
to his own negligence then the tortfeasor shall
not be liable for such since Art. 2203 imposes a
duty on the injured party to avoid loss or
minimize resulting damages.
Art.
2201
Contracts and
quasi contracts
Liability extends to those:
1. natural and probable consequences
of the breach
2. those that have been foreseen
3. those that could have been
reasonably foreseen
Provided: obligor in good faith
Note:
Liability extends to all damages which may be
reasonably attributed to the non-performance
of the obligation in case of fraud, bad faith,
malice or wanton attitude
(FBM-WA).
Art.
2202
Crimes and
quasi-delicts
Liability extends to all damages which
are the natural and probable
consequence
Note:
WON damage is foreseen is irrelevant
Algarra vs. Sandejas: Actual damages for a
negligent act or omission are confined to those
which "were foreseen or might have been
foreseen," or those which were "the natural and
probable consequences" or "the direct and
immediate consequences" of the act or
omission. (Asked eight times from 1990 to 2008)
Daywalt vs. Recoletos et al.: The damages
recoverable upon breach of contract are,
primarily, the ordinary, natural and in a sense
the necessary damage resulting from the
breach. Other damages, known as special
damages, are recoverable where it appears that
the particular conditions which made such
damages a probable consequence of the breach
were known to the delinquent party at the time
the contract was made.
What must be proved:
Proof
Fact of
Injury
Reasonable certainty only that the fact
and cause of injury must be taken out of
the area of speculation. Usual burden of
proof required in a negligence case,
prove the substantive right, its breach and
the amount of damages flowing from the
breach.
Cause Proximate cause the cause, which, in a
natural and continuous sequence,
unbroken by any efficient intervening
cause, produces the injury, and without
which the injury would not have occurred.
(without which test of cause in fact)
Amount Need not be proved with the same
degree of certainty. Fair and reasonable
estimate of the amount of damage.
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When pecuniary loss need not be proved
1) Liquidated damages previously agreed
upon
2) If damages other than actual are sought
(Art. 2216)
3) Loss is presumed (ex: loss of a child or
spouse)
4) Forfeiture of bonds in favor of the
government for the purpose of
promoting public interest or policy (ex:
bond for temporary stay of alien
iii. Damages for Personal Injury & Death
(Art. 2206)
Recoverable damages for death
caused by a crime or quasi-delict:
(a) At least three thousand pesos, even
though there may have been
mitigating circumstances.
- (People vs. Robert Brodett y
Pajaro, Jan. 18, 2008: so as of
2008, it is P75,000
(b) Loss of the earning capacity of the
deceased,
- paid to his heirs
- unless the deceased on account
of permanent physical disability
not caused by the defendant,
had no earning capacity at the
time of death;
(c) Support according to the provisions
of Article 291
- the recipient who is not a testate
or intestate heir may demand
support from the person causing
the death, for a period not
exceeding five years
(d) Moral damages
- demanded by the spouse,
legitimate and illegitimate
descendants and ascendants of
the deceased
Factors:
1. Earning Capacity
2. Obligation to Support
3. Moral Damages to heirs
Compensation should be allowed for
loss of earning capacity resulting from
the death of a minor who has not yet
commenced employment or training for
a specific profession if sufficient
evidence is presented to establish the
amount thereof.
The argument for allowing
compensation for loss of earning
capacity of a minor is even stronger if he
or she was a student, whether already
training for a specific profession or still
engaged in general studies. Formula
established in decided cases for
computing net earning capacity:
MMTC v. CA: Net earning capacity (X) =
life expectancy * [gross annual income
reasonable, necessary living expenses]
Life expectancy = 2/3 (80- age of
deceased)
iv. Attorneys Fees
Attorneys Fees is the exception NOT
the general rule.
Art. 2208: can be recovered:
(1) If there is a stipulation to that effect
(2) When exemplary damages are
awarded;
(3) When the defendant's act or omission
has compelled the plaintiff to litigate with
third persons or to incur expenses to
protect his interest;
(4) In criminal cases of malicious
prosecution against the plaintiff;
(5) In case of a clearly unfounded civil
action or proceeding against the plaintiff;
(6) Where the defendant acted in gross and
evident bad faith in refusing to satisfy
the plaintiff's plainly valid, just and
demandable claim;
(7) In actions for legal support;
(8) In actions for the recovery of wages of
household helpers, laborers and skilled
workers;
(9) In actions for indemnity under
workmen's compensation and
employer's liability laws;
(10) In a separate civil action to recover civil
liability arising from a crime;
(11) When at least double judicial costs are
awarded;
(12) In any other case where the court
deems it just and equitable that
attorney's fees and expenses of
litigation should be recovered.
In all cases, the attorney's fees and expenses
of litigation must be reasonable.
Kinds:
(1) Retainers agreement between the
lawyer and the client (in writing).
(2) Award as an indemnity to the client.
Quirante vs. IAC: BELONGS to the
client hence the litigant is the judgment
creditor who may enforce the judgment
by execution.
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INTEREST accrues when:
- the obligation consists in the payment of
a sum of money
- debtor incurs in delay
- there being no stipulation to the contrary
If there is no stipulated interest the
legal interest of 6%. (Art. 2209)
Interest
due
From
Art. 2210 Breach of
contract
Discretion
of the court
Interest
imposed
on
damages
awarded
Art. 2211 Crimes and
quasi-
delicts
Discretion
of the court
Interest is
awarded
as part of
damages
When shall interest earn legal
interest?
- from judicial demand
- even if the obligation is silent upon this
point. (Art. 2212)
When is interest not recovered?
- When claims/ damages are unliquidated
- EXCEPT when the demand can be
established with reasonably certainty.
(Art. 2213)
Determination of legal interest:
1. When an obligation, regardless of its
source (i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts) is
breached, the contravenor can be held
liable for damages.
2. With regard particularly to an AWARD
OF INTEREST in the concept of actual
and compensatory damages, the RATE
of interest, as well as the ACCRUAL
thereof, is imposed, as follows(Eastern
Shipping Lines vs. CA, 1994):
BASE RATE ACCRUAL
a. When the obligation is breached,
and it consists in the PAYMENT OF
A SUM OF MONEY, i.e., a loan or
forbearance of money, the interest
due should be
a) That which may have been
stipulated in writing.
b) In the absence of stipulation,
the rate of interest shall be 12%
per annum (legal interest)
to be computed from default, i.e., from
JUDICIAL or EXTRAJUDICIAL demand
under and subject to the provisions of
Article 1169 of the Civil Code.
b. Furthermore, the INTEREST
DUE shall itself earn
legal interest from the time it is JUDICIALLY demanded.
c. When an obligation, NOT
constituting a loan or forbearance
of money, is breached, an interest
on the AMOUNT OF DAMAGES
awarded may be imposed at the
discretion of the court.
The actual base for the
computation of legal interest shall
be on the amount finally adjudged.
at the rate of 6% per annum. If claim or damages are LIQUIDATED,
from default, i.e., from judicial or
extrajudicial demand. (Art. 1169, Civil
Code)
If UNLIQUIDATED, from the time the
demand can be established with
reasonable certainty. Hence, the interest
shall begin to run only FROM THE DATE
THE JUDGMENT OF THE COURT IS
MADE (at which time the quantification of
damages may be deemed to have been
reasonably ascertained).
d. When the JUDGMENT of the
court awarding a sum of money
becomes final and executory,
the rate of legal interest, whether
the case falls under a,b, or c,
above, shall be 12% per annum
from FINALITY UNTIL ITS
SATISFACTION, this period being
deemed to be an equivalent to a
forbearance of credit.
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Start of Delay
(1) Extrajudicial: demand letter
(2) Judicial: Filing of complaint
(3) Award
When damages mitigated:
1. In quasi-delicts contributory
negligence (Art. 2214)
2. Doctrine of avoidable consequences
a) This refers to the duty to
minimize damages once a
cause of action has accrued.
Standard: good father of a
family (Art. 2203)
3. In contracts, quasi-contracts and quasi-
delict (C-BELL):
a) plaintiff has contravened the
terms of contract
b) plaintiff derived some benefit as
result of contract
c) in case where exemplary
damages are to be awarded,
that the defendant acted upon
the advise of counsel
d) that the loss would have
resulted in any event
e) that since the filing of the action,
the defendant has done his best
to lessen the plaintiff's loss or
injury (Art. 2215)
4. In crimes mitigating circumstances
(Art. 2204) (increased, for aggravating)
2. Moral Damages
Visayan Sawmill vs. CA: Moral damages are
emphatically not intended to enrich a
complainant at the expense of the defendant. Its
award is aimed at the restoration, within the
limits of the possible, of the spiritual status quo
ante, and it must be proportional to the suffering
inflicted.
Art. 2217: Awarded when injury consists of:
(PBMF-MWSSS)
a. Physical suffering
b. Besmirched reputation
c. Mental anguish
d. Fright
e. Moral shock
f. Wounded feelings
g. Social humiliation
h. Serious anxiety
i. Similar injury
- Though incapable of pecuniary
computation
- If such is the proximate result of
defendants act or omission.
Villanueva vs. Salvador: Requisites for awarding
moral damages:
(1) there must be an injury, whether
physical, mental or psychological,
clearly sustained by the claimant;
(2) there must be a culpable act or omission
factually established;
(3) the wrongful act or omission of the
defendant must be the proximate cause
of the injury sustained by the claimant;
and
(4) the award of damages is predicated on
any of the cases stated in ART. 2219
NCC.
i. General Principles of Recovery
1. Moral damages must somehow be
proportional to the suffering inflicted.
2. In culpa contractual or breach of
contract, moral damages may be
recovered when the defendant acted in
bad faith or was guilty of gross
negligence (amounting to bad faith) or in
wanton disregard of his contractual
obligation and, exceptionally, when the
act of breach of contract itself is
constitutive of tort resulting in physical
injuries.
3. By special rule in Article 1764, in relation
to Article 2206, moral damages may
also be awarded in case the death of a
passenger results from a breach of
carriage.
4. In culpa aquiliana, or quasi-delict,
(a) when an act or omission causes
physical injuries, or
(b) where the defendant is guilty of
intentional tort, moral damages may
aptly be recovered. This rule also
applies to contracts when breached
by tort.
5. In culpa criminal, moral damages could
be lawfully due when the accused is
found guilty of physical injuries,
lascivious acts, adultery or concubinage,
illegal or arbitrary detention, illegal
arrest, illegal search, or defamation.
6. Malicious prosecution can also give rise
to a claim for moral damages. The term
"analogous cases," referred to in Article
2219, following the ejusdem generis
rule, must be held similar to those
expressly enumerated by the law.
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7. Although the institution of a clearly
unfounded civil suit can at times be a
legal justification for an award of
attorney's fees, such filing, however, has
almost invariably been held not to be a
ground for an award of moral damages.
(Expertravel& Tours vs. CA, 1 to 7)
8. The burden rests on the person claiming
moral damages to show convincing
evidence for good faith is presumed. In
a case involving simple negligence,
moral damages cannot be recovered.
(Villanueva vs. Salvador)
9. Failure to use the precise legal terms or
"sacramental phrases" of "mental
anguish, fright, serious anxiety,
wounded feelings or moral shock" does
not justify the denial of the claim for
damages. It is sufficient that these exact
terms have been pleaded in the
complaint and evidence has been
adduced (Miranda-Ribaya vs. Bautista)
10. Even if the allegations regarding the
amount of damages in the complaint are
not specifically denied in the answer,
such damages are not deemed
admitted. Raagas, et al. vs. Traya et al.
11. An appeal in a criminal case opens the
whole case for review and this 'includes
the review of the penalty, indemnity and
damages. Even if the offended party had
not appealed from said award, and the
only party who sought a review of the
decision of said court was the accused,
the court can increase damages
awarded. Sumalpong vs. CA
Cases where recovery of moral damages are
allowed
(1) A criminal offense of 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, defamation;
(8) Malicious prosecution;
(9) Article 309;
(10) Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35. (Art. 2219)
(11) wilful injury to property (Art. 2220)
(12) breach of contract (Art. 2220)
(13) death of passenger from breach a
breach of carriage (Art. 1764 in relation
to Art. 2206 and (Expertravel & Tours
vs. CA)
Art. 2219. Moral damages may be recovered in
the following and analogous cases: (not an
exclusive list; 2PI-SALAMI-309-Others)
(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;
(disrespect for the dead)
(10) Acts and actions referred to in Articles
21, 26, 27, 28, 29, 30, 32, 34, and 35.
Who else can recover moral damages?
- Parents of the female seduced,
abducted, raped, or abused, referred to
in No. 3
- The spouse, descendants, ascendants,
and brothers and sisters (SDABS) may
bring the action mentioned in No. 9 in
the order named.
What are the other legal grounds for
awarding moral damages?
- Willful injury to property if such
damages are justly due.
- Breaches of contract where the
defendant acted fraudulently or in bad
faith. (Art. 2220)
(asked five times from 1990 to 2008)
BAR QUESTION
Ortillo contracts Fabricato, Inc. to supply and install
tile materials in a building he is donating to his
province. Ortillo pays 50% of the contract price as per
agreement. It is also agreed that the balance would
be payable periodically after every 10% performance
until completed. After performing about 93% of the
contract, for which it has been paid an additional 40%
as per agreement, Fabricato, Inc. did not complete the
project due to its sudden cessation of operations.
Instead, Fabricato, Inc. demands payment of the last
10% of the contract despite its non-completion of the
project. Ortillo refuses to pay, invoking the stipulation
that payment of the last amount of 10% shall be upon
completion. Fabricato, Inc. brings suit for the entire
10% plus damages. Ortillo counters with claims for
(a) moral damages for Fabricato, Inc.s unfounded suit
which has damaged his reputation as a philanthropist
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and respected businessman in his community, and (b)
attorneys fees.
(a) Does Ortillo have a legal basis for his claim for
moral damages?
(b) How about his claim for attorneys fees, having
hired a lawyer to defend him?
Suggested Answer:
(a) There is no legal basis to Ortillos claim for moral
damages. It does not fall under the coverage of
Article 2219 of the New Civil Code.
(b) Ortillo is entitled to attorneys fees because
Fabricatos complaint is a case of malicious
prosecution or a clearly unfounded civil action
(Art. 2208 [4] and [11], NCC).
ii. Moral Damages in Malicious
Prosecution
Mijares vs. CA: Moral damages cannot
be recovered from a person who has
filed a complaint against another in good
faith, or without malice or bad faith. If
damage results from the filing of the
complaint, it is damnum absque injuria.
Castillo vs. Castillo: The adverse result
of an action does not per se make the
act wrongful and subject the actor to the
payment of moral damages. The law
could not have meant to impose a
penalty on the right to litigate; such right
is so precious that moral damages may
not be charged on those who may
exercise it erroneously.
iii. Moral Damages in Rape
People vs. Calongui: Anent the award of
damages, civil indemnity ex delicto is
mandatory upon finding of the fact of
rape while moral damages is awarded
upon such finding without need of
further proof because it is assumed that
a rape victim has actually suffered moral
injuries entitling the victim to such
award. If without factual and legal
bases, no award of exemplary damages
should be allowed.
iv. Moral Damages in Murder
People vs. Barcena: TC correctly
awarded P75K as civil indemnity which
is awarded if the crime is qualified by
circumstances which warrant the
imposition of the death penalty.
However, the award of P50K as moral
damages must be increased to P75K in
line with prevailing jurisprudence. In
addition, the presence of the qualifying
circumstances of minority and
relationship entitles the offended party to
exemplary damages in the amount of
P25K.
People vs. Teodorico Cleopas and
Pirame (2000): The award of P50,000
from each accused as moral and
exemplary damages, however, is
unsupported. The widow of the victim
did not testify on any mental anguish or
emotional distress, which she suffered
as a result of her husband's death.
Arcona vs. CA: As borne out by human
nature and experience, a violent death
invariably and necessarily brings about
emotional pain and anguish on the part
of the victims family. Such violent death
or brutal killing not only steals from the
family of the deceased his precious life,
deprives them forever of his love,
affection and support, but often leaves
them with the gnawing feeling that an
injustice has been done to them. For this
reason, moral damages must be
awarded even in the absence of any
allegation and proof of the heirs
emotional suffering.
v. Labor Cases
Triple Eight Interated Services, Inc. vs.
NLRC: Moral damages are recoverable
where the dismissal of the employee
was attended by bad faith or fraud or
constituted an act oppressive to labor, or
was done in a manner contrary to
morals, good customs, or public policy.
Likewise, exemplary damages may be
awarded if the dismissal was effected in
a wanton, oppressive or malevolent
manner.
Factors in determining amount:
(1) Political, social, financial status, of
the person offended as well as the
business and financial standing of
the offender.
(2) Degree of anguish
(3) Sentimental value where applicable
ILLUSTRATIONS:
Kierulf et al. vs. CA : The social and financial
standing of a claimant of moral damages may be
considered in awarding moral damages only if
he or she was subjected to contemptuous
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conduct despite the offender's knowledge of his
or her social and financial standing.
PNB vs. CA: Petitioner has not presented
adequate evidence to show that private
respondent is indeed a big time gambler.
Petitioner has besmirched private respondent's
reputation and has considerably caused him
undue humiliation. The records further show that
plaintiff is a prominent businessman, licensed
and engaged in the real estate business. He is
at the same time a consultant of Dizon-Esguerra
Real Estate Company. Defendant treated him as
a valued and VIP client. Because of the bank's
refusal to encash the entire one million face
amount of his manager's checks, he was so
embarrassed for he was not able to purchase a
house and lot in Baguio City.
Lopez, et al. vs. Pan American World Airways:
International carriers like defendant know the
prestige of such an office. For the Senate is not
only the Upper Chamber of the Philippine
Congress, but the nation's treaty-ratifying body.
And he was former Vice-President of the
Philippines. An award of P100,000,000 is
appropriate. Mrs. Maria J. Lopez, as wife of
Senator Lopez, shared his prestige and
therefore his humiliation. Mr. and Mrs. Alfredo
Montelibano, Jr. were traveling as immediate
members of the family of Senator Lopez. As
such they likewise shared his prestige and
humiliation.
Producers Bank vs. CA: In the case of Leopoldo
Araneta v. Bank of America, we held that: "The
financial credit of a businessman is a prized and
valuable asset, it being a significant part of the
foundation of his business. Any adverse
reflection thereon constitutes some financial loss
to him. The damage to private respondents'
reputation and social standing entitles them to
moral damages.
Strebel vs. Figueras, et al.: As a general rule,
the right of recovery for mental suffering
resulting from bodily injuries is restricted to the
person who has suffered the bodily hurt, and
there can be no recovery for distress caused by
sympathy for another's suffering, or for fright due
to a wrong against a third person. A husband or
wife cannot recover for mental suffering caused
by his sympathy for the other's suffering.
For Corporations:
ABS-CBN vs. CA: The award of moral damages
cannot be granted in favor of a corporation
because, being an artificial person and having
existence only in legal contemplation, it has no
feelings, no emotions, no senses, It cannot,
therefore, experience physical suffering and
mental anguish, which call be experienced only
by one having a nervous system. The statement
in People vs. Manero and Mambulao Lumber
Co. vs. PNB that a corporation may recover
moral damages if it "has a good reputation that
is debased, resulting in social humiliation" is an
obiter dictum.
NAPOCOR vs. Philipp Brothers: While it is true
that besmirched reputation is included in moral
damages, it cannot cause mental anguish to a
corporation, unlike in the case of a natural
person, for a corporation has no reputation in the
sense that an individual has, and besides, it is
inherently impossible for a corporation to suffer
mental anguish.
BAR QUESTION
Rosa was leasing an apartment in the city. Because
of the Rent Control Law, her landlord could not
increase the rental as much as he wanted to, nor
terminate her lease as long as she was paying her
rent. In order to force her to leave the premises, the
landlord stopped making repairs on the apartment,
and cause the water and electricity services to be
disconnected. The difficulty of living without electricity
and running water resulted in Rosas suffering a
nervous breakdown. She sued the landlord for actual
and moral damages. Will the action prosper?
Explain.
Answer:
Yes, based on quasi-delict under the human relations
provisions of the New Civil Code (Articles 19, 20 and
21) because the act committed by the lessor is
contrary to morals. Moral damages are recoverable
under Article 2219 (10) in relation to Article 21.
Although the action is based on quasi-delict and not
on contract, actual damages may be recovered if the
lessee is able to prove the losses and expenses she
suffered.
Alternative Answers:
(a) Yes, based on breach of contract. The lessor
has the obligation to undertake repairs to make
the apartment habitable and to maintain the
lessee in the peaceful and adequate enjoyment
of the lease for the entire duration of the contract
(Article 1654, NCC). Since there was willful
breach of contract by the lessor, the lessee is
entitled to moral damages under Article 2220,
NCC. She is also entitled to actual damages,
e.g. loss of income, medical expenses, etc.,
which she can prove at trial.
(b) Yes, based on contract and/or on tort. The lessor
willfully breached his obligations under Article
1654, NCC, hence, he is liable for breach of
contract. For such breach, the lessee may
recover moral damages under Art. 2220 of the
NCC, and actual damages that she may have
suffered on account thereof. And since the
conduct of the lessor was contrary to morals, he
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may also be held liable for quasi-delict. The
lessee may recover moral damages under Article
2219 (10) in relation to Article 21, and all actual
damages which she may have suffered by reason
of such conduct under Articles 9, 20 and 21.
(c) Yes, the action should prosper for both actual
and moral damages. In fact, even exemplary
damages and attorneys fees can be claimed by
Rosa, on the authority of Magbanua vs. IAC (137
SCRA 328), considering that, as given, the
lessors willful and illegal act of disconnecting the
water and electric services resulted in Rosas
suffering a nervous breakdown. Art. 20 NCC and
Art. 21 NCC authorize the award of damages for
such willful and illegal conduct.
3. Nominal Damages
Art. 2221. 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.
Art. 2222. The court may award nominal damages:
- in every obligation in Article 1157, or
- where any property right has been invaded.
Art. 2223. Adjudication of nominal damages
precludes:
- further contest upon the right involved
- all accessory questions between the parties
or their respective heirs and assigns.
i. Requisites:
(1) A legal right has been violated.
(2) There is no loss or damage suffered or
such cannot be proven or was not
proved.
(3) The award is to vindicate the right
violated.
General Rule: One does not ask for nominal
damages, and it is in lieu of the actual, moral,
temperate, or liquidated damages.
Nominal damages are incompatible with: actual,
temperate and exemplary damages.
Armovit vs. CA: Nominal damages cannot co-
exist with actual or compensatory damages.
Francisco v. Ferrer: No moral or exemplary
damages was awarded. Nevertheless, when
confronted with their failure to deliver on the
wedding day the wedding cake ordered and paid
for, petitioners gave the lame excuse that
delivery was probably delayed because of the
traffic, when in truth, no cake could be delivered
because the order slip got lost. For such
prevarication, petitioners must be held liable for
nominal damages for insensitivity, inadvertence
or inattention to their customer's anxiety and
need of the hour.
4. Temperate Damages
Temperate or moderate damages are more than
nominal but less than compensatory damages.
It may be recovered when some pecuniary loss
has been suffered but its amount can not be
provided with certainty. (Art. 2224)
Temperate damages must be reasonable under
the circumstances. (Art. 2225)
i. Requisites:
(1) There is actual damage.
(2) The pecuniary amount of the damage
cannot be proved.
(3) Amount must be reasonable.
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.
Citytrust Bank vs. IAC: Temperate damages are
incompatible with nominal damages hence,
cannot be granted concurrently.
Pleno vs. CA: Temperate damages are included
within the context of compensatory damages
(RCPI vs. CA). ". . . There are cases where from
the nature of the case, definite proof of
pecuniary loss cannot be offered, although the
court is convinced that there has been such loss.
For instance, injury to one's commercial credit or
to the goodwill of a business firm is often hard to
show certainty in terms of money. (NOTE: In this
case actual and temperate damages were
awarded. It is postulated that the actual
damages is for the car while the temperate
damages is for the lost actual income not
sufficiently proved.)
5. Liquidated Damages
Those agreed upon by the parties to a contract,
to be paid in case of breach thereof. (Art. 2226)
Grounds for equitable reduction:
- iniquitous or
- unconscionable. (Art. 2227)
Stipulation is not controlling:
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When the breach of the contract is not the one
contemplated by the parties in agreeing upon
the liquidated damages. In this case, the law
shall determine the measure of damages. (Art.
2228)
These damages are agreed upon in a
contract in case of breach thereof.
There is no need to prove the amount,
only the fact of the breach.
The amount can be reduced if:
- unconscionable as determined by
the court
- partial or irregular performance.
General Rule: The penalty shall substitute the
indemnity for damages and the payment of the
interests in case or breach.
Exceptions
(1) When there is a stipulation to the contrary.
(2) When the obligor is sued for refusal to pay
the agreed penalty.
(3) When the obligor is guilty of fraud.
6. Exemplary/Corrective Damages
Art. 2229. Nature of 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.
Exemplary damages cannot be recovered as a
matter of right; discretion of the court. (Art.
2233)
i. Requisites to recover exemplary
damages and liquidated damages
agreed upon in addition to exemplary
(Art.2234):
The plaintiff must show that he is
entitled to moral, temperate or
compensatory damages:
If arising from When exemplary
damages are granted
Art.
2230
Crimes the crime was
committed with an
aggravating
circumstance/s
Art.
2231
Quasi-delicts defendant acted with
gross negligence
Art.
2232
Contracts and
Quasi- contracts
defendant acted in a
wanton, fraudulent,
reckless, oppressive, or
malevolent manner
(WFROMM)
A stipulation whereby exemplary
damages are renounced in advance
shall be null and void. (Art. 2235)
ii. General Principles
(1) Amount need not be proven.
(2) Cannot be recovered as a matter or
right; may be waived.
(3) An employer may be subsidiarily liable
to pay moral, actual, temperate or
liquidated damages arising from an
employees criminal offense, but NOT as
to exemplary damages because
aggravating circumstances are personal
to the accused.
PNB vs. CA: However, the award of
P1,000,000 exemplary damages is also
far too excessive and should likewise be
reduced to an equitable level.
Exemplary damages are imposed not to
enrich one party or impoverish another
but to serve as a deterrent against or as
a negative incentive to curb socially
deleterious actions.
- end of Torts & Damages -
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Table of Contents
Chapter I. Introduction.................................427
Chapter II. Jurisdiction ................................429
I. Bases of Exercise of Judicial Jurisdiction
429
II. Exercise of Jurisdiction .....................429
Conflicts Problem.......................................430
Chapter III. Choice of Law...........................431
I. Approaches to Choice of Law...........431
Chapter IV. Characterization.......................433
I. Types of Characterization .................433
II. Depecage..........................................433
Chapter V. Renvoi ........................................434
I. Definition ...........................................434
II. Ways of Dealing with Renvoi ............434
Chapter VI. Notice and Proof of Foreign Law
.......................................................................435
I. Proof of Foreign Law.........................435
II. Exceptions to the Application of Foreign
Law 435
Chapter VII. Nationality................................436
I. Determination of Nationality..............436
II. Procedure for Naturalization .............436
III. Loss of Philippine Citizenship ...........437
Principle .....................................................438
Chapter VIII. Domicile ..................................439
I. Domicile ............................................439
Domicile and Nationality ............................440
Chapter IX. Principles on Personal Status
and Capacity.................................................441
I. Definition ...........................................441
II. Beginning and End of Personality.....441
III. Absence ............................................441
IV. Name.................................................442
V. Age of Majority ..................................442
VI. Capacity ............................................442
Chapter X. Family Relations........................443
I. Marriage............................................443
II. Divorce and Separation.....................445
III. Annulment and Declaration of Nullity445
IV. Parental Relations.............................446
V. Adoption ............................................446
Chapter XI. Property .................................... 447
Sitae447
II. Exceptions to Lex Situs..................... 447
III. Situs of Certain Properties................ 447
Chapter XII. Contracts ................................. 449
I. Extrinsic Validity of Contracts ........... 449
II. Extrinsic Validity of Contracts ........... 449
III. Capacity to Enter Into Contracts....... 449
Contracts Cases ........................................ 449
V. Limitation Choice of Law................... 450
Effective Choice......................................... 450
Chapter XIII. Succession............................. 451
451
II. Intrinsic Validity................................. 451
III. Interpretation of Wills ........................ 451
IV. Revocation ........................................ 451
V. Probate.............................................. 451
VI. Administration of Estates .................. 452
VII. Trusts............................................ 452
Chapter XIV. Torts and Crimes................... 453
I. Torts.................................................. 453
II. Crimes............................................... 454
Chapter XV. Torts and Crimes.................... 455
I. Personal Law of Corporations .......... 455
II. Domicile/Residence of Corporations 455
455
IV. Right of Foreign Corporations to Bring
Suit 456
Chapter XVI. Foreign Judgments............... 457
I. Recognition v. Enforcement.............. 457
II. Bases of Recognition and Enforcement
457
Recognition and Enforcement ................... 457
Enforcement .............................................. 457
V. Procedures for Enforcement ............. 457
Philippines ................................................. 458
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Chapter I. Introduction
PRIVATE INTERNATIONAL LAW:
It is a branch or part of Philippine Law which
regulates the application of foreign law
within Philippine jurisdiction in the resolution
of cases involving foreign elements.
It is that part of municipal law which governs
cases involving a foreign element.
more commonly known in other jurisdictions
as conflict of laws
General Nature of Private International Law
It is a method or technique. It is not a
system of substantive rules. It has no
material content in terms of rights and
duties, and hence it does not provide
immediate solution to the issue at hand. It
only points out the legal system which rules
are to be applied to a particular dispute.
It is a modus vivendi among the private law
systems of the world by which they may
apply one anothers laws.
The principles of conflict of laws
incorporated in municipal laws of many
states are based on comity of nations.
COMITY: is neither a matter of absolute
obligation nor of mere courtesy and good
will, it is the recognition which one nation
allows within its territory to the legislative,
executive, or judicial acts of another nation
having due regard both to international duty
and convenience, and to the rights of its own
citizens or of other persons who are under
the protection of its laws (Hilton v. Guyot,
1895)
FOREIGN ELEMENT may refer to parties,
property, events, or transactions.
PRIVATE INTERNATIONAL LAW vs.PUBLIC
INTERNATIONAL LAW
Basis PRIL PIL
Parties
Individuals or
corporations
Primarily states
and international
organizations
Exception:
Human rights
cases
Transactions state-to-state or
government-to-
government
matters
private
transactions
between
individuals
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Lyvette San Diego
Lead Writer
Viktor Fontanilla
Writer
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Patricia Tobias
Subject Editors
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Kristine Bongcaron
Michelle Dy
Patrich Leccio
Editors-in-Chief
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Kae Guerrero
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Pat Hernandez
Viktor Fontanilla
Rusell Aragones
Romualdo Menzon Jr.
Rania Joya
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Michelle Arias
Camille Maranan
Angela Sandalo
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Katz Manzano
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Mary Rose Beley
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Loraine Mendoza
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Members
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Sources Custom
Treaty
general
principles of
law
recognized by
civilized
nations
judicial
decisions
teachings of
the most
highly
qualified
publicists
National
conflict rule
International
conflict rules
Remedies
resort to forum
court or
administrative
tribunals (as
provided by
municipal laws
of the state)
diplomatic
protest
negotiation,
conciliation,
arbitration
adjudication
before
international
tribunal
use of force
war
PRIL v. Municipal law: presence of foreign
element
SOURCES
1. Codes and statutes
2. Treaties and international conventions
3. Treatises, commentaries, and studies of
learned societies
4. Judicial decisions
Examples of Conflict of Law Rules in the
Philippines
1. Art. 15 CC: Lex Patriae
2. Art. 1251 (par. 3) CC: Lex Domicili
3. Art. 16 CC: Lex Situs/ Lex Rei Sitae
4. Art. 17 (par. 1) CC: Lex Loci Contractus
5. Art. 71 CC: Lex Loci Celebrationis
6. Art. 26 (par. 1) FC: Lex Loci Celebrationis
7. Art. 1306 CC: Lex Loci Intentionis
General Process in the Resolution of Conflict
Problem
1. Jurisdiction
Where can or should litigation be
initiated?
2. Characterization of Cause of Action
Which legal category does the case fall
into?
3. Choice of law
Which law will the court apply?
4. Recognition and enforcement of
judgments
Where can the resulting judgment be
enforced?
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Chapter II. Jurisdiction
I. BASES OF JURISDICTION
II. EXERCISE OF JURISDICTION
III. WAYS OF DEALING WITH JURISDICTION IN
A CONFLICTS PROBLEM
JURISDICTION
1. Judicial jurisdiction - the power or
authority of a court to try a case, render
judgment and execute it in accordance
with law.
2. Legislative jurisdiction- the ability of
the state to promulgate laws and
enforce them on all persons and
property within its territory.
I. Bases of Exercise of Judicial
Jurisdiction
A. Jurisdiction over the PERSON
Acquisition
1. Over plaintiff: filing of suit
2. Over defendant:
a. entry of appearance, or
b. service of legal process/summons
In rem proceeding: service of summons by
publication
Asiavest Limited v. CA, 1998: Jurisdiction
over the person of the defendant is not a
prerequisite to confer jurisdiction on the
court provided that the court acquires
jurisdiction over the res. Nonetheless
summons must be served upon the
defendant not for the purpose of vesting the
court with jurisdiction but merely for
satisfying the due process requirement.
In personam proceeding:
1. General Rule: Personal service of
summons or substituted service,
PROVIDED, the defendant is within the
territorial jurisdiction of the court
2. Exception: In Gemperle v. Schenker
wherein a non-resident was served with
summons through his wife, who was a
resident of the Philippines and who was his
representative and attorney-in-fact in a prior
civil case filed by him; moreover, the second
case was a mere offshoot of the first case.
B. Jurisdiction over the PROPERTY
1. Acquisition
a. seizure of property under a legal
process
b. institution of legal proceedings wherein
the courts power over the property is
recognized and made effective
2. Basis of jurisdiction: the presence of the
property within the territorial jurisdiction of
the forum
C. Jurisdiction over the SUBJECT MATTER
Acquisition
1. competence of the court to hear, try and
decide the case is conferred by law
2. necessary that said power be properly
invoked by the filing of petition
3. cannot be conferred by mere consent of
parties
II. Exercise of Jurisdiction
TRADITIONAL BASIS:
1. States PHYSICAL POWER over persons
and property within its territory
2. This explains the distinctions made between
actions in personam
1
and actions in rem or
quasi in rem
2
, dating back to the case of
Pennoyer v. Neff (1878).
In the US: The conceptual basis for the exercise
of jurisdiction has shifted from territorial power to
considerations of MINIMUM CONTACTS and
FUNDAMENTAL FAIRNESS.
1. International Shoe Co. v. Washington
(1945): Due process only requires that the
defendant who is not present within the
territory of the forum have minimum contacts
with it such that the maintenance of the suit
does not offend traditional notions of fair
play and substantial justice.
2. Mullane v. Central Hanover Bank & Trust
Co. (1950): The standard for adequate
notice is WON it is reasonably certain to
inform those affected or, where conditions
do not reasonably permit such notice, WON
the form chosen is not substantially less
likely to bring home notice than other of the
feasible and customary substitutes.
3. Shaffer v. Heitner (1977): The minimum
contacts and fundamental fairness test
should be satisfied regardless of whether
the proceedings are in rem, quasi in rem, or
in personam, and the minimum contacts
1
Actions in personam are directed against specific
persons and seek personal judgments.
2
Actions in rem or quasi in rem are directed against
the thing or property or status of a person and seek
judgments with respect thereto as against the whole
world and against particular persons, respectively.
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must exist among the forum, defendant, and
the cause of action.
4. Long-arm statutes: statutes that allow the
forum state to exercise jurisdiction over a
non-resident defendant, provided that the
prospective defendant has sufficient
minimum contacts with the forum state.
Conflicts Problem
A. Dismiss the Case
Grounds
1. For Lack of jurisdiction over the subject
matter or over the parties to the suit
2. On the ground of FORUM NON
CONVENIENS
Doctrine of Forum Non Conveniens
(Asked in 94, 04 BAR EXAMINATIONS)
1. This literally means the forum is
inconvenient.
2. This doctrine requires the court to dismiss
the case on the ground that the controversy
may be suitably tried elsewhere.
The doctrine of forum non conveniens
should NOT be used as a ground for a
motion to dismiss because Sec. 1, Rule
16 of the Rules of Court does not
include said doctrine as a ground.
The propriety of dismissing a case
based on the principle of forum non
conveniens requires a factual
determination; hence it is more properly
considered as a matter of defense.
(Bank of America NT&SA v. CA, 2003)
3. Reasons for applying forum non conveniens:
a. To prevent abuse of courts processes
b. Burdensome on the court or taxpayers
c. Local machinery is inadequate to
effectuate a right (no way for the court to
secure evidence and attendance of
witnesses)
d. Avoid global forum shopping
B. Assume Jurisdiction
1. Proceed to Characterization (discussed
under CHARACTERIZATION)
2. Apply either: Forum Law or Foreign Law (will
be discussed more on the CHOICE OF
LAW)
When the court assumes jurisdiction, it
may apply forum law or foreign law.
Forum law should be applied whenever
there is good reason to do so because
forum law is the basic law.
Factors which justify the application of forum law
1. A specific law of the forum decrees that
internal law should apply.
2. The proper foreign law was not properly
pleaded and proved.
3. The case falls under any of the exceptions
to the application of foreign law:
a. The foreign law is contrary to an
IMPORTANT PUBLIC POLICY of the
forum
b. The foreign law is PROCEDURAL in
nature
c. The foreign law is PENAL in nature
d. The case involves real or personal
PROPERTY SITUATED IN THE
FORUM (Lex Situs)
e. The issue involved in the enforcement of
foreign claim is FISCAL or
ADMINISTRATIVE
f. The foreign law is contrary to GOOD
MORALS (contra bonus mores)
g. The application of foreign law will work
UNDENIABLE INJUSTICE to citizens of
the forum
h. The application of foreign law might
endanger the VITAL INTERESTS of the
state
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Chapter III. Choice of Law
I. APPROACHES TO CHOICE OF LAW
A. TRADITIONL; APPROACHES
B. MODERN APPROACHES
CHOICE OF LAW
The determination by the court of whether to
apply forum law or foreign law
The factors that justify exercise of judicial
jurisdiction may be the same factors used to
determine choice of law.
BUT, jurisdiction and choice of law are two
different concepts. A court may exercise
jurisdiction but apply foreign law OR not
exercise jurisdiction, although its internal law
may be applied as the proper law.
I. Approaches to Choice of Law
Ideally, all choice of law theories should advance
the notions of JUSTICE and PREDICTABILITY.
A. Traditional Approaches: emphasize
simplicity, convenience and uniformity
1. Vested Rights Theory
An act done in a foreign jurisdiction
gives rise to the existence of a right if
the laws of that state provide so. This
right vests in the plaintiff and he carries
it with him to be enforced in any forum
he chooses to bring suit
The applicable law is the law of the
place of occurrence of the LAST ACT
necessary to complete the cause of
action.
If the place of the last act creates no
legal right, there is nothing for the forum
to recognize and enforce, even if its own
law creates such a right.
Illustration: Carroll is an employee of
Alabama Corp. Both EE and ER are
residents of Alabama. Carroll was
injured in the course of work in
Mississippi due to negligent conduct of
co-employees in Alabama. Mississippi
bars recovery. Alabama makes ER
liable. Carroll files suit in Alabama.
There can be no recovery in this case.
Although it is claimed that the negligent
conduct was done in Alabama, the law
of Mississippi should be applied which
bars recovery since the injury was
sustained in that state and such injury
created the cause of action. It is the law
of the place of the LAST ACT necessary
to complete the cause of action.
(Alabama Great Southern Railroad v.
Carroll, 1892)
Criticism: Failure to resolve conflicts
cases with considerations of policy and
fairness as it is too technical.
2. Cooks Local Law Theory
Treats conflicts cases as a purely
domestic case that does not involve a
foreign element
Criticism: narrow-minded by favoring an
exaggerated local policy
3. Cavers Principle of Preference
Choice of law should be determined by
considerations of justice and social
expediency and should not be the result
of mechanical application of the rule or
principle of selection.
B. Modern Approaches: relate to reaching
appropriate results in particular cases
1. Place of the Most Significant Relationship
Factual contacts evaluated depending
on their relative importance and
relevance to the issue at hand
Identifies a plurality of factors that must
be considered in the light of choice of
law principles
Among these factors are: needs of the
interstate and international system,
relevant policies of the concerned and
interested states, justified expectations
of the parties, basic policies underlying a
particular field of law, certainty,
predictability and uniformity of result and
ease in the determination of law to be
applied
Criticism: No standard to evaluate
significance of each contact
In applying the grouping of contacts theory,
courts, instead of regarding as conclusive
the intention of the parties or the place of the
making or performance, lay emphasis rather
on the law of the place which has the most
significant contacts with the matter in
dispute. (Auten vs. Auten, 1954)
2. Interest Analysis
Looks at the policy behind the laws of
the involved states and the interest each
state has in applying its own law.
Factual contacts alone do not determine
outcome of the case UNLESS they
reflect a state policy which would be
advanced by the application of the
substantive state law.
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Court determines whether the case
involves APPARENT, TRUE or FALSE
conflict.
a. True Conflict If there is an
apparent conflict, the court takes a
second look on the policies and
interests of each state. If both have
real interests in applying their law,
then apparent conflict is a true
conflict.
b. False Conflict If only one state has
an actual interest in having its law
applied and the failure to apply the
other state law will not impair its
policy
Criticisms:
a. Conflicts cases were ordinarily
concerned only with private and not
governmental interests.
b. ii.Not all state legislatures publish
reports that explain background and
purpose of laws, thus courts are left
to speculate.
Illustration:
B and J, NY residents, met a car
accident in Ontario thru Js fault. B sued
J in NY for damages. Ontario bars
recovery under a guest statute. NY does
not have a similar rule. B should be
allowed to recover. NY had a greater
and more direct interest than Ontario.
NYs policy is to afford compensation to
a guest tortfeasor host while Ontarios
policy is to prevent fraudulent collusion
to the prejudice of Ontario defendants
and insurance companies. Ontario had
no interest in denying a remedy to a NY
guest against a NY host. (Babcock vs.
Johnson, 1963)
3. Comparative Impairment
Court weighs conflicting interests and
apply the law of the state whose interest
would be more impaired it its laws were
not followed
4. Trautmans Functional Analysis
Looks into the general policies of the
state beyond those reflected in its
substantive law and to policies and
values relating to effective and
harmonious intercourse between states.
Looks at the policies and considers their
relative weight (policy-weighing)
Considers whether the law of a state
reflects an emerging or regressing
policy
5. Leflars Choice Influencing Considerations
(BOPIS)
a. Predictability of results;
b. Maintenance of interstate and
international order;
c. Simplification of the judicial task;
d. Application of the better rule of law;
e. Advancement of the forums
governmental interests
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Chapter IV. Characterization
I. TYPES OF CHARACTERIZATION
II. DEPECAGE
CHARACTERIZATION (Asked in 94)
The process by which a court at the
beginning of the choice of law process
assigns a disputed question to an area
of substantive law.
I. Types of Characterization
A. Subject-Matter Characterization
Classification of a factual situation into a
legal category
Illustration: Principal authorizes a person to
act as his agent in another country. Agent
commits a negligent act. The law that will
determine the principals liability depends on
the courts characterization of the case as:
a. Contractual: Law of the place where the
contract of agency was entered into; or
b. Tortious: Law of the place where tortious
conduct or injury occurred
B. Substance-Procedure Dichotomy
Classification of a factual situation into either
procedural or substantive
It directs the court to the extent it will apply
foreign law.
1. If issue substantive: court MAY apply
foreign law or forum law
2. If issue procedural: court will apply forum
law
REASON: It would be too burdensome
and inconvenient on the part of the
forum to apply procedural laws of
another country
3. Two issues whose classification (as
procedural or substantive) is debatable:
a. Statute of Frauds
Substantive: if it forbids the creation of
obligation (e.g., void contracts)
Procedural: if it forbids the enforcement
of the obligation(e.g., unenforce-able
contracts, Art. 1403 of Civil Code)
b. Statutes of Limitations
Procedural: traditionally classified as
procedural because they only bar the
legal remedy without impairing the
substantive right involved.
Substantive: when limitation is directed
to a newly created liability so
specifically as to warrant saying that it
qualified the right. (SPECIFICITY TEST)
A law on prescription of actions is sui
generis in Conflict o Laws in the sense
that it may be viewed either as
procedural or substantive, depending on
the characterization given such a law.
(Cadalin v. POEA Administrator, 1994)
BORROWING STATUTE: (Asked in 94
BAR EXAMINATIONS)
Bars the filing of a suit in the forum
if it is already barred by the statute
of limitations in the place where the
cause of action arose
Characterization of a statute into
procedural or substantive becomes
irrelevant when country of forum
has Borrowing Statute
Many states including the
Philippines have passed borrowing
statutes to eliminate forum-
shopping
Section 48 of Code of Civil
Procedure: If the laws of the state
or country where the cause of
action arose, the action is barred, it
is also barred in the Philippine
Islands.
II. Depecage
Literally means to dissect
Different aspects of a case involving a
foreign element may be governed by
different systems of law.
Depecage is the process of cutting up the
case issue by issue and applying the
pertinent laws to the different aspects
Merits of Depecage: Allows the other
relevant interests of the parties to be
addressed; permits the court to arrive at a
functionally sound result without rejecting
the methodology of the traditional approach.
Illustration: A man dies intestate domiciled in
State A and with movable properties in State B.
The conflict rules of State A refer to the laws of
the domicile to determine how the mans estate
should be divided. The intestate law of State B
gives the widow a definite share in the estate of
the deceased. But the determination of the WON
the woman who claims a share in the estate is a
wife is referred to family law, not the laws of
succession.
Application of Depecage in the case:
Law governing movable properties and
successional rights of spouse: embody
substance of claim
Validity of marriage: affects solution
because it answers a preliminary or
incidental question.
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Chapter V. Renvoi
(Asked in 97 BAR EXAMINATIONS)
I. DEFINITION
II. WAYS OF DEALING WITH RENVOI
I. Definition
A. Definition
A procedure whereby a jural matter
presented is referred by the conflict of
laws rules of the forum to a foreign
state, the conflict of laws rule of which,
in turn, refers the matter to the law of the
forum or third state.
Does not apply to a false conflict
problem
Remission: reference is made back to
the law of the forum
Transmission: reference to a third state
B. Usefulness
Used to avoid unjust results
C. Criticisms
1. If both courts follow the same theory, there
would be no end to the case since the courts
would be referring it back to each other.
2. Courts may be unnecessarily burdened with
the task of identifying the choice of law rules
of another state.
Illustration:
There is Renvoi through Remission.
II. Ways of Dealing with Renvoi
A. Reject the Renvoi
Conflict Rules of the forum court refer
the case only to the INTERNAL LAW of
another state.
Internal Law of the foreign state is
applied by the forum court.
B. Accept the Renvoi
The court may refer not just to another
states internal law but to the whole law
which includes choice of law rules
applicable in multi-state cases.
Internal Law of the forum court or a third
state is applied.
Has the same effect as applying
Single Renvoi
Aznar vs. Garcia, (1963): Art. 16 of the
Philippine Civil Code provides that the
national law of the decedent governs the
validity of his testamentary dispositions.
Such national law means the conflict of
laws of the California Code, which
authorizes the reference or return of the
question to the law of the testators
domicile. The conflict of laws rule in
California refers back the case, when a
decedent is not domiciled in California,
to the law of his domicile (the Philippines
in CAB). The Philippine court must apply
its own law as directed in the conflict of
laws rule of the state of the decedent.
C. Desistance or Mutual Disclaimer
The forum court upon reference to
another states law sees that such law is
limited in application to its own national
and has no provision for application to a
non-national.
The same result as the acceptance of
renvoi but the process used by the
forum court is to desist applying the
foreign law.
Internal Law of the forum court or a third
state is applied.
D. Foreign Court Theory
The forum court would assume the same
position the foreign court would take were it
litigated in the foreign state.
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Chapter VI. Notice and Proof of Foreign
Law
I. PROOF OF FOREIGN LAW
II. EXCEPTIONS TO THE APPLICATION OF
FOREIGN LAW
I. Proof of Foreign Law
General Rule: Foreign law must be pleaded and
proved as a fact
The party whose cause of action or
defense depended on the foreign law
has the burden of proving the foreign
law.
Exception: Court may take judicial notice of
foreign laws which are already within its
ACTUAL KNOWLEDGE such as when:
they are well and generally known OR
they have been actually ruled upon in
other cases before it and none of the
parties concerned claim otherwise
(PCIB v. Escolin, 1974)
Foreign law proved by
1. an OFFICIAL PUBLICATION of the law; OR
2. a COPY of the law attested by the officer
having the legal custody of the record, or by
his deputy.
If such record is not kept in the
Philippines, it must be accompanied by
a certificate that such officer has the
custody
3 Alternatives in case of failure to plead and
prove foreign law
1. DISMISS the case for failure to establish a
cause of action
2. Apply FORUM LAW, conclude that parties
acquiesce to its application.
3. PROCESSUAL PRESUMPTION (Asked in
85, 86, 87, 88,89, 90, 91, 92, 93 and
94)
Forum presumes that the foreign law is
the same as the forum law.
Factors in deciding whether to apply
domestic law or decide against the party who
has the burden of proving the contents of
foreign law
1. degree of PUBLIC INTEREST involved
2. ACCESSIBILITY of the foreign law
materials to the parties
3. probability that the plaintiff is merely
FORUM-SHOPPING
4. SIMILARITIES between the forum law and
foreign law
II. Exceptions to the Application of
Foreign Law
1. Local law expressly so provides
2. Failure to plead and prove the foreign law or
judgment
3. Exceptions to the rule of comity (4P-FAG-
UV):
o The foreign law is contrary to an
IMPORTANT PUBLIC POLICY of the
forum
o The foreign law is PROCEDURAL in
nature
o The foreign law is PENAL in nature
o The case involves real or personal
PROPERTY SITUATED IN THE
FORUM (Lex Situs)
o The issue involved iin the enforcement
of foreign claim is FISCAL or
ADMINISTRATIVE
o The foreign law is contrary to GOOD
MORALS (contra bonus mores)
o The application of foreign law will work
UNDENIABLE INJUSTICE to citizens of
the forum
o The application of foreign law might
endanger the VITAL INTERESTS of the
state
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Chapter VII. Nationality
I. DETERMINATION OF NATIONALITY
II. PROCEDURE FOR NATURALIZATION
III. LOSS OF PHILIPPINE CITIZENSHIP
IV. PROBLEMS IN APPLYING THE NATIONALITY
PRINCIPLE
Most civil law countries such as the
Philippines follow the NATIONAL LAW
THEORY: (Asked in 98, 04, BAR
EXAMINATIONS)
It is the nationality or citizenship of the
individual, which regulates the following:
Civil status
Capacity
Condition
Family rights and duties
Laws on Succession
Capacity to succeed
According to the Supreme Court, it is a
conflict of laws theory by virtue of which
jurisdiction over the particular subject matter
affecting a person is determined by the
latters nationality. (Ellis vs. Republic, 1963)
In the Philippines, the nationality principle is
expressed in Art. 15 of the Civil Code as
follows:
Article 15, Civil Code. Laws relating to family rights
and duties, or to status, condition and capacity of
persons are binding upon citizens of the Philippines
even though living abroad.
I. Determination of Nationality
Each state has the prerogative and authority to
determine by its own municipal law who are its
nationals or citizens.
The Hague Convention on Conflict of National
Laws states this principle in the following
provisions:
1. Article 1. It is for each State to determine
who are its nationals. This law shall be
recognized by other States insofar as it is
consistent with international convention,
international customs, and the principles of
law generally recognized with regard to
nationality.
2. Article 2. Any question as to whether a
person possesses the nationality of a
particular State shall be determined in
accordance with the law of that State.
The Constitution enumerates who are
FILIPINO CITIZENS
Sec.1, Art IV. The following are citizens of the
Philippines:
(1) Those who are citizens of the Philippines at the
time of the adoption of this Constitution;
(2) Those whose fathers or mothers are citizens of
the Philippines;
(3) Those born before January 17, 1973, of Filipino
mothers, who elect Philippine citizenship upon
reaching the age of majority; and
(4) Those who are naturalized in accordance with
law.
1. Natural-Born Citizens
DEFINITION: Those who are citizens of
the Philippines without having to perform
any act to acquire or perfect citizenship.
Two principles:
JUS SOLI looks to the PLACE of
BIRTH to determine ones
nationality
JUS SANGUINIS
5 means rule of DESCENT OR
BLOOD
5 Principle followed in the
Philippines
2. Citizens by Naturalization
NATURALIZATION: confers to an
alien a nationality after birth by any
means provided by law.
In the Philippines, this is done by
judicial method under CA No. 73 as
amended by RA 530.
II. Procedure for Naturalization
[NOTE: N.B. This is a proper subject matter of
Political Law but is important to know as
background if the Conflicts question asks you to
decide the Choice of Law involving nationality.
This was asked in the bar exams as part of
PRIL.]
Qualifications for Naturalization
1. Must not be less than 21 years old on the
date of the hearing of the petitions
2. Resided in the Philippines for a continuous
period of not less than 10 years
EXCEPTION: may be reduced to 5 years in
the ff. cases:
a. Honorably held office under the
Government or any of its subdivisions
b. Established a new industry or introduced
a useful invention
c. Married to a Filipino woman/man
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d. Engaged as a teacher in a public/private
school, not exclusive for a particular
nationality, for 2 years
e. Born in the Philippines
3. Of good moral character, believes in the
Constitution, and conducted himself in a
proper and irreproachable manner during
the entire period of his residence
4. Own real estate in the Phils. worth not less
than P5,000 or have a lucrative trade,
profession or lawful occupation
5. Must be able to speak and write English or
Spanish and any one of the principal
Philippine languages
6. Enrolled his minor children in any of the
public or private schools recognized by the
Bureau of Private Schools where Phil.
history, government and civics are taught
during the entire period of the residence
required of him, prior to the hearing of his
petition
Disqualifications for Naturalization
1. Convicted of a crime involving moral
turpitude
2. That the applicants state of origin does
not grant reciprocal rights to Filipino
citizens at the time of the hearing of his
application
Procedure for Naturalization
1. DECLARATION OF INTENT 1 year prior to
the filing of the petition, unless the applicant
is exempted
EXEMPTIONS:
a. Persons born in the Philippines and who
have received their primary and
secondary education in schools
recognized by the Government here and
are not limited to any race or nationality
b. Resided continuously in the Philippines
for 30 years or more
c. Widow and minor children of an alien
who declared his intention to become a
citizen and dies before he is actually
naturalized
2. PETITION FOR NATURALIZATION
3. PUBLICATION in the Official Gazette or
newspaper of general circulation
4. HEARING
5. If the petition is approved, there will be a
REHEARING two years after the
promulgation of the judgment awarding
naturalization
6. Taking of the OATH of ALLEGIANCE
III. Loss of Philippine Citizenship
A Filipino citizen may lose his citizenship in the
following ways:
1. By NATURALIZATION in foreign countries;
2. By EXPRESS RENUNCIATION of
citizenship;
3. By subscribing to an OATH of
ALLEGIANCE to support the constitution or
laws of a foreign country upon reaching 21
years of age or more, subject to certain
exceptions;
4. By rendering service to, or accepting
COMMISSION IN THE ARMED FORCES of
a foreign country, subject to certain
exceptions;
5. By having been declared by competent
authority, a DESERTER of the Phil. armed
forces in time of war, unless pardoned or
granted amnesty
6. A WOMAN, who upon her MARRIAGE TO
A FOREIGNER, if by virtue of the laws in
force in her husbands country, she
ACQUIRES HIS NATIONALITY; and
7. By CANCELLATION of the certificate of
naturalization for the ff. reasons:
i. Certificate was obtained fraudulently or
illegally
ii. Within 5 years of issuance of certificate,
returns to his native country or foreign
country to establish a permanent
residence therein;
5 Remaining for more than 1 year in
his native country; or
5 Two years in any foreign country,
considered prima facie evidence of
intention of taking up his permanent
residence
iii. Petition made on an invalid declaration of
intention
iv. Minor children failed to graduate from a
public or private schools recognized by
the Bureau of Private Schools where Phil.
history, government and civics are
taught, through the fault of their parents
v. Naturalized citizens has allowed himself
to be used as a dummy
NOTE: A judgment directing the issuance of
certificate of NATURALIZATION IS A MERE
GRANT OF POLITICAL PRIVILEGE, and that
neither estoppel nor res judicata may be invoked
to bar the State from initiating an action for its
cancellation
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Principle
1. Dual or Multiple Citizenship
Since each state determines its own
nationals, it is possible that an individual
may be CLAIMED AS A NATIONAL
OF TWO OR MORE STATES.
In the case of Nottebohm (1955), the
ICJ applied the principle of EFFECTIVE
NATIONALITY to determine the rights
of an individual who may claim multiple
nationality
DEFINITION: a genuine bond of
attachment between the individual
and the State
NOTE: The Philippine Constitution
discourages dual or multiple citizenship as
inimical to the national interest and shall be
dealt with by law.
2. Statelessness
Two senses:
a. DE JURE statelessness: A person has
been stripped of his nationality by his
former government without having an
opportunity to acquire another
b. DE FACTO statelessness: A person
possessed of a nationality but whose
country does not give him protection
outside its own territory (refugees)
NOTE: the 1951 Geneva Convention of the
Status of Refugees and the UN Conference on
the Elimination or Reduction of Future
Statelessness was convened to reduce
statelessness. It provides:
Conditions such as marriage, divorce,
adoption, naturalization, expatriation,
would not cause an individual to lose his
nationality upon the risk of being stateless
States cannot deprive their nationals of
their identity as punishment or as
instrument of discrimination
Jus sanguinis country shall grant its
nationality to a person born within its
territory, if he would otherwise be stateless
Jus soli country shall grant its nationality
to a person who would otherwise be
considered stateless when one of his
parents is a citizen of the contracting
state.
NOTE: As long as stateless persons possess all
of the qualifications, they can be naturalized as
Philippine citizens without the requirement of
reciprocity.
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Chapter VIII. Domicile
I. DOMICILE
II. COMPARATIVE MERITS AND DEMERITS OF
DOMICILE AND NATIONALITY
I. Domicile
A. Municipal Law/Philippine Law Definition:
PERSON DOMICILE
Natural persons Art. 50. For the exercise
of civil rights and the
fulfillment of civil
obligations, the domicile
of natural persons is the
PLACE OF THEIR
HABITUAL REDENCE.
Juridical persons Domicile is determined
by the LAW CREATING
OR RECOGNIZING IT.
In the absence
thereof, place where
legal representation
or place of business
is.
CONFLICTS of LAW DEFINITION
(Restatement):
The place with which a person has a
SETTLED CONNECTION for certain
legal purposes, either because:
His home is there; or
Place is assigned to him by law
To acquire a domicile, there must be a
concurrence of TWO ELEMENTS:
i. INTENTION to make it ones
domicile; and
ii. PHYSICAL PRESENCE
Residence, on the other hand, simply
requires bodily presence of an inhabitant
in a given place.
B. General Rules on Domicile
1. No person shall be without domicile
A persons domicile of origin prevails
until he acquires anew domicile
2. A person cannot have two simultaneous
domiciles for a given purpose or a given
time under the law of a particular state
3. Domicile establishes a connection
between a person and a particular
territorial unit
4. The burden of proving a change of
domicile is on the person alleging it
C. Kinds of Domicile
1. Domicile of Origin
A persons DOMICILE AT BIRTH
LEGITIMATE CHILD ILLEGITIMATE CHILD
Follow the FATHERs
domicile
Follow the MOTHERs
domicile
2. Domicile of Choice
i. A persons VOLUNTARY
DOMICILE
The place freely chosen by a
person sui juris (of full age and
capacity)
ii. To acquire it, there must be a
concurrence of:
ACTUAL RESIDENCE; and
ANIMO MANENDI - intent to
make it ones home
DISTINCTION
Domicile of
Origin
Domicile of
Choice
As to:
condition
necessary for
its
abandonment
Stronger
presumption in
favor of its
continuance
NOT lost by
mere
abandonment
and remains until
replaced by a
domicile of
choice
As compared to
domicile of
origin, less
presumption in
favor of its
continuance
As to: capacity
for revival
Presumed to be
revived once the
domicile of
choice is given
up and before a
new one is
acquired
(reverter or
revival doctrine)
Deemed
extinguished by
removal of
intent even prior
to the
acquisition of a
new domicile
3. Constructive Domicile
Domicile assigned by operation of
law to persons legally incapable of
choosing their own domicile:
Minors
Domicile automatically
changes when their fathers
domicile changes
Take the domicile of their
mother upon their fathers
death
Mentally disabled
If capable of understanding
his act and its
consequences, he may be
able to acquire a domicile of
choice although he may not
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be considered competent
enough to enter into all
aspects of civil life.
Married women
D. Special Problems in Domicile
1. People kept under physical or legal
compulsion
Military personnel
Prisoners
Persons with disabilities who are
confined in institutions
MODERN VIEW: A person under
compulsion should not be barred from
proving that he intended to establish
permanent abode in the same place,
even after compulsion has been
removed
2. Married women seeking to acquire a
separate domicile from her husband
Art. 69, Family Code. 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 such
exemption
MODERN VIEW: Dispenses with any
presumption that the wifes domicile is
the same as her husbands.
Domicile and Nationality
A. Nationality
1. Merits
a. logical since lawmakers considered the
qualities of its citizens in making the
laws
b. easily verifiable from documents
2. Demerits
a. does not provide solution with respect to
stateless persons
those with multiple nationalities
states with diverse legal systems
b. persons ties to his nation may be so
attenuated if he has lived in another
country most of his life
B. Domicile
1. Merits
a. genuine linkadequate basis for him to
exercise rights therein and the state to
impose duties on him
b. suitable for countries with a federal
system
2. Demerits
a. not ascertainable without first resorting
to the courts to establish whether or not
there is animo manendi
b. concept not clear-cut--- differs widely
with some states distinguishing between
residence and domicile or attributing
different meanings of domicile for
different purposes
c. if domicile of origin given much weight,
connection attenuated
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Chapter IX. Principles on Personal
Status and Capacity
I. DEFINITION
II. BEGINNING AND END OF PERSONALITY
III. ABSENCE
IV. NAME
V. AGE OF MAJORITY
VI. CAPACITY
I. Definition
Includes CONDITION and CAPACITY and
more specifically embraces:
1. beginning and end of human personality
2. juridical capacity
3. capacity to act
4. family relations
5. succession
Applicable Law
1. If Filipino: Philippine Law
2. If Alien: Law of nationality or domicile,
depending on the law applicable in the
aliens country
NOTE:
1. Laws relating to Family rights and
duties, Status, Condition or Legal
capacity of persons are binding on
citizens of the Philippines, even though
living abroad [Art. 15, CC]
2. Status, once established by the personal
law of the party, is given universal
jurisdiction. Hence, aliens can sue and
be sued in our courts subject to
Philippine procedural law even on
matters relating to their status, but the
law to be applied is their personal law.
II. Beginning and End of Personality
A. Governing Law
The determination of the exact moment
personality begins is governed by the
PERSONAL LAW of the individual.
B. Rule under Philippine Law
1. Beginning of personality: BIRTH
a. 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 by Art. 41, FC. [Art.
40, FC]
b. For civil purposes, the fetus is
considered born if it is alive at the time it
is delivered from the mothers womb.
However, if the fetus had an intra-
uterine life of less than 7 months, it is
not deemed born if it dies within 24
hours after its complete delivery from
the maternal womb. [Art. 41, FC]
2. End of personality: DEATH
a. A declaration of death issued by a
competent court is considered valid for
all purposes.
b. Upon death, some of the decedents
rights and obligations are totally
extinguished, while others are passed
on to his successors
III. Absence
A. Governing Law
Determined by the PERSONAL LAW of the
individual
B. Three Ways of Dealing with Absence
1. Rebuttable Presumption that a person is
dead when he has been absent for a
number of years
2. Judicially Instigated and established which
results in legal effect similar to those of
death
3. A Judicial Decree shall have to be issued
declaring the person dead before legal
effects of death take place
NOTE: Philippine laws follow the rebuttable
presumption.
C. Rule under Philippine Law
1. Ordinary Absence [Art. 391, CC]
a. After the absence of 7 years, it being
unknown whether the absentee still
lives, s/he shall be presumed dead for
all purposes.
b. EXCEPTIONS
i. For the purpose of opening his
succession, the absentee is
presumed dead after 10 years.
ii. If s/he disappeared after the age of
75 years, 5 years will be sufficient
c. Computation of Period
The computation of the 7 year period
begins not from the declaration of
absence, but from the date on which the
last news concerning the absentee is
received [Jones v. Hortiguela, 44 Phil
149]
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2. Extraordinary Absence [Art. 391, CC]
The following are presumed dead for ALL
purposes, including the division of estate
among the heirs: (VA-A-D)
a. A person on board a Vessel during a
sea voyage, or an Aeroplane which is
missing, who has not been heard of for
4 years since the loss of the vessel or
aeroplane;
b. A person in the Armed forces who has
taken part in war, and has been missing
for 4 years;
c. A person who has been in Danger of
death under other circumstances and
existence has not been known for 4
years. [Art. 391, CC]
3. Rule for purposes of remarriage [Art. 41, FC]
a. For purposes of remarriage, the spouse
present must first institute a summary
proceeding for the declaration of
presumptive death of the absentee
spouse, without which the subsequent
marriage is void ab initio.
b. The periods under Arts. 390 and 391,
CC have been reduced to 4 and 2 years.
IV. Name
A. Governing Law
Determined by PERSONAL LAW
B. Rule under Philippine Law
1. No person can change his name or surname
without judicial authority [Art. 376, CC]
2. Recognized justifiable causes for change of
name:
a. when the name is ridiculous, tainted with
dishonour, or is extremely difficult to
write or pronounce
b. when the request for change is a
consequence of change of status
c. when the change is necessary to avoid
confusion
d. a sincere desire to adopt a Filipino name
to erase signs of a former nationality
which unduly hamper social and
business life.
NOTE: RA 9048 (Change of first name and
correction of clerical/typographical errors)
V. Age of Majority
A. Governing LawDetermined by
PERSONAL LAW
B. Age of Majority under Philippine Law
Age of majority is 18 years old [RA 6809]
VI. Capacity
A. General Rule
Determined by PERSONAL LAW; it
attaches to a person wherever he is
B. Exceptions
1. Liability on Tortsubject to the law of the
place of tort
2. Restrictions on the contracting capacity
of a married womanin some jurisdictions,
subject to the law governing the personal
relations between spouses
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Chapter X. Family Relations
I. MARRIAGE
II. DIVORCE AND SEPARATION
III. ANNULMENT AND DECLARATION OF
NULLITY
IV. PARENTAL RELATIONS
V. ADOPTION
I. Marriage
A. Definition
Art. 1, FC. 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 within the limits provided
by this Code.
B. Extrinsic Validity of Marriage
1. Formal Requisites of Marriage under
Philippine Law [Art. 3, FC]
a. authority of the solemnizing officer
b. valid marriage license except in the
cases provided for in Chapter 2 of Title I
c. 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.
2. Determination of Extrinsic Validity
Art. 26, FC. 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. xxx
Art. 2, Hague Convention. Formal requirements for
marriage are governed by the law of the state of
celebration.
a. GENERAL RULE
LEX LOCI CELEBRATIONIS (law of the
place of celebration) [Art. 26, FC; Art. 2,
Hague Convention on Celebration and
Recognition of the Validity of Marriages]
b. EXCEPTIONS: The following marriages
are void even if valid in the country
where celebrated [Art. 26, FC]:
i. those contracted by any party below
18 years of age even with the
consent of parents or guardians [Art.
35(1), FC]
ii. bigamous or polygamous
marriages not falling under Art. 41,
FC [Art. 35 (4), FC]
iii. those contracted thru mistake of
one contracting party as to the
identity of the other [Art. 35(5), FC]
iv. those subsequent marriage without
recording in the civil registry the
judgment of annulment or
declaration of nullity, partition and
distribution of properties and the
delivery of the childrens
presumptive legitimes [Art. 35(6),
FC]
v. 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 solemnization [Art. 36, FC]
vi. incestuous marriages [Art. 37, FC]
marriages between ascendants
and ascendants of any degree,
whether legitimate or
illegitimate; and
marriages between brothers and
sisters, whether of the full or
half-blood
vii. void marriages for reasons of
public policy [Art. 38, FC]
marriages between collateral
blood relatives, whether
legitimate or illegitimate, up to
the 4
th
civil degree
marriages between step-parents
and step-children.
marriages between the adopting
parent and adopted child
marriages between the surviving
spouse of the adopting parent
and the adopted child
marriages between the surviving
spouse of the adopted child and
the adopter
marriages between an adopted
child and a legitimate child of
the adopter
marriages between adopted
children of the same adopter
marriages between parties
where one, with the intention to
marry the other, killed that other
person's spouse, or his or her
own spouse.
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NOTE: These exceptions put into issue the
capacity of the parties to enter into the marriage
and therefore relate to the substantive
requirement for marriage. Since the personal law
of the parties, e.g. the national law of Filipinos,
governs the questions of intrinsic validity of
marriages between Filipinos abroad, the above
enumerations are exceptions to lex loci
celebrationis precisely because they are
controlled by lex nationalii
C. Intrinsic Validity of Marriage [refers to
capacity of a person to marry]
1. Intrinsic validity is determined by the parties
personal law, which may be their
domiciliary or national law.
NOTE:
+6 Laws relating to Family rights and
duties, Status, Condition or Legal
capacity of persons are binding on
citizens of the Philippines, even though
living abroad [Art. 15, NCC]
76 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 [Art. 21, FC]
36 Marriages enumerated under Art. 26(2),
FC are void even if valid in the country
where celebrated.
2. Intrinsic requirements of marriage under
Philippine Law [Art. 2, FC]
a. legal capacity of the contracting parties
who must be male and female; and
b. consent freely given in the presence of
the solemnizing officer
3. The Hague Convention on Validity of
Marriages allows a contracting state to
refuse recognition of the marriage in the ff.
Cases [CR-M
3
]:
a. one of the parties did not freely Consent
b. spouses were Related, by blood or
adoption
c. one of the parties did not have the
Mental capacity to consent
d. one of the spouses was already Married
e. one of the parties has not attained the
Minimum age, nor acquired the
necessary dispensation
NOTE:
1. Rule on Proxy Marriages (Asked in 85-89
BAR EXAMINATIONS)
a. proxy marriages, where permitted by the
law of the place where the proxy
participates in the marriage ceremony,
are entitled to recognition in countries
adhering to the lex loci celebrationis
rule, at least insofar as formal validity is
concerned
b. internal Philippine law, however, does
not sanction proxy marriages.
2. Consular Marriages
Marriages between Filipino citizens abroad
may be solemnized by a consul-general,
consul or vice consul of the Republic of the
Philippines [Art. 10, FC].
D. Effects of Marriage
1. Personal relations between the spouses
a. governed by the national law of the
parties
NOTE: If the spouses have different
nationalities, generally the national law of
the husband may prevail as long as it is not
contrary to law, customs and good morals of
the forum.
b. Under Philippine law, personal relations
between the spouses include [Arts. 68,
70-71, FC]
i. mutual fidelity
ii. respect
iii. cohabitation
iv. support
v. right of the wife to use the
husbands family name
2. Property relations
a. The Hague Convention declares that the
governing law on matrimonial property
is:
i. the internal law designated by the
spouses before the marriage
ii. in the absence thereof, the internal
law of the state in which the
spouses fix their habitual residence
b. Rule under Philippine law [Art. 80, FC]
(Asked in 03 BAR EXAMINATIONS)
i. In the absence of a contrary
stipulation in the marriage
settlements, 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.
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ii. Rule is inapplicable:
if both spouses are aliens
with respect to the extrinsic
validity of the contracts affecting
property not situated in the
Philippines and executed in the
country where the property is
located
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.
c. Doctrine of Immutability of
Matrimonial Property RegimeThe
change of nationality on the part of the
husband or wife does not affect the
original property regime EXCEPT when
the law of the original nationality itself
changes the marital regime, hence, the
property regime has to change
accordingly.
II. Divorce and Separation
A. Rule under the Hague Convention (Asked
in 94 BAR EXAMINATIONS)
The granting of divorce or separation must
comply with the national law of the spouses
and lex fori (law of the place were the
application for divorce is made)
B. Divorce Decrees Obtained by Filipinos
1. General Rule: Decrees of absolute divorce
obtained by Filipinos abroad have no validity
and are not recognized in Philippine
Jurisdiction.
NOTE: Statutory Bases
a. 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 [Art. 15, CC]
b. 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, or by determinations or
conventions agreed upon in a foreign
country. [Art. 17(3), CC]
2. EXCEPTION: Art. 26(2), FC
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
NOTE: In the case of Republic v Obrecido,
G.R. No. 154380 (2005), the Supreme Court
interpreted the exception in Art. 26(2), FC as
applying to valid marriages between two Filipino
citizens, where one party is later naturalized as a
foreign citizen and obtains a valid divorce decree
capacitating him or her to remarry.
C. VALIDITY OF FOREIGN DIVORCE
BETWEEN FOREIGNERS (Asked in 75-79,
80-84, 85-89, 95-99,00-04, 05-08 BAR
EXAMINATIONS)
1. A foreign divorce will be recognized in all
contracting states if, at the date of the
institution of the proceedings [Hague
Convention on the Recognition of Divorce
and Legal Separation]:
a. either spouse had his habitual residence
there;
b. both spouses were nationals of that
state; or
c. if only the petitioner was a national, he
should have his habitual residence there
2. While there is no provision of law requiring
Philippine courts to recognize a foreign
divorce decree between non-Filipinos such
will ne recognized under the principle of
international comity, provided that it does
not violate a strongly held policy of the
Philippines.
III. Annulment and Declaration of Nullity
A. Jurisdiction to Annul
1. vested in the court of the domicile of the
parties
2. jurisdiction over the non-resident defendant
is not essential
B. Governing Law
1. Lex loci celebrationisdetermines the
consequences of any defect as to form
2. In general, the same applies with reference
to substantive or intrinsic validity. But with
regard to capacity of the parties to marry,
national law is determinative.
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IV. Parental Relations
A. Determination of Legitimacy of a Child
1. Legitimacy: personal law of the parents,
which may either be their domicile or
nationality
2. In the Philippines
a. the legitimacy of the child is governed by
the national law of the parents
b. if parents belong to different
nationalities, legitimacy of the child is
governed by the national law of the
father
c. personal law of the illegitimate child is
the mothers personal law
B. Parental Authority Over the Child
Personal law of the father controls and
rights and duties of parents and child
NOTE: Reference to the personal law of the
father may result in joint exercise of parental
authority over the property of the child by the
father and mother; or, in the case on the
illegitimate child, to the mother alone
V. Adoption
(Asked in 75-79, 95-99, 00-04, 05-08 BAR
EXAMINATIONS)
A. Definition
The act by which relations of paternity and
filiation are recognized as legally existing
between persons not so related by nature
B. Domestic Adoption Act of 1998
1. An alien may adopt, provided he is:
a. of legal age
b. in possession of all civil capacity and
legal rights
c. of good moral character
d. no conviction of any crime involving
moral turpitude
e. emotionally and psychologically capable
of caring for children
f. at least 16 years older than the adoptee
g. in a position to support and care for his
children
h. his country has diplomatic relations
i. residence in the Philippines for at least 3
continuous years prior to the filing of the
application for adoption and maintains
such residence until the adoption decree
is entered
j. certificate of legal capacity to adopt in
his country to be issued by his
diplomatic or consular office; and
k. his government allows the adoptee to
enter his country as his adopted
son/daughter
2. The requirement on residence and
certificate of qualification may be waived for
the following:
a. A former Filipino citizen who seeks to
adopt a relative within the 4
th
degree of
consanguinity or affinity; or
b. One who seeks to adopt the legitimate
son/daughter of his/her Filipino spouse;
or
c. One who is married to a Filipino citizen
and seeks to adopt jointly with his/her
spouse a relative within 4
th
degree of
consanguinity or affinity of the Filipino
spouse
3. The requirement of 16 years difference
between the adopter and the adoptee may
be waived if the adopter is:
a. The biological parent of the adoptee
b. The spouse of the adoptees parent
C. Inter-country Adoption
1. Definition
A 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.
2. This is an alternative means of childcare if
the child cannot be cared for in any suitable
manner in the Philippines
NOTE: Adoption is one of the ways prescribed
by law for the acquisition of Filipino citizenship
D. Effects of Adoption
Two different legal orders:
1. If the adopters personal law appliedsame
law governs the effects of the adoption
2. If the personal law of the child determined
the creation of the legal relationshipsuch
law will cease and yield to the personal law
of the adopting parents
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Chapter XI. Property
I. CONTROLLING LAWLEX SITUS/LEX REI
SITAE
II. EXCEPTIONS TO LEX SITUS/LEX REI SITAE
A. TRANSACTIONS NOT AFFECTING
TRANSFER OF TITLE OR OWNERSHIP
OF LAND
B. CONTRACTS WHERE REAL PROPERTY
OFFERED AS SECURITY
C. INTESTATE AND TESTAMENTARY
SUCCESSION
D. POLICY-CENTERED APPROACH
III. SITUS OF CERTAIN PROPERTIES
A. SITUS OF PERSONAL PROPERTY FOR
TAX PURPOSES
B. SITUS OF MONEY
C. SITUS OF DEBTS
D. SITUS OF CORPORATE SHARES
E. PATENTS, TRADEMARKS, TRADE NAME
AND COPYRIGHT
F. GOODS TRANSPORTED BY COMMON
CARRIERS
Sitae
A. General Rule: Real as well as personal
property is subject to the law of the country
where it is situated [Art. 15, NCC]
B. Application of the Doctrine of Lex
Situs/Lex Rei Sitae
1. The capacity to transfer or acquire property
is governed by Lex Situs.
NOTE: Transfer of property to a foreigner
who subsequently became a Filipino citizen
shall be recognized [Llantino v Co Liong
Chong] [Asked in 00-04, BAR
EXAMINATIONS]
2. The formalities of a contract to convey
property are governed by Lex Situs
II. Exceptions to Lex Situs
A. Transactions Not Affecting Transfer of
Title or Ownership of Land
Where the transaction does not affect
transfer of title to or ownership of the land:
Lex Intentionis or Lex Voluntatis
B. Contracts where Real Property Offered
as Security
In contracts where real property is offered by
way of a security for the performance of an
obligation such as loan, the principal
contract is the loan while the mortgage of
the land is only an accessory
+6 MortgageLex Situs
76 Loan Contractrules on ordinary
contracts
C. Intestate and Testamentary Succession
Intestate and testamentary successions
shall be regulated by the national law of the
decedent, with respect to the following [Art.
16(2); Art. 1039, NCC]
+6 Order of succession
76 Amount of succession rights
36 Intrinsic validity of the testamentary
provisions
86 Capacity to succeed
D. Under a Policy-centered Approach
Forum court is not bound to look to the law
of the situs when the situs of the movable
property is insignificant or accidental
Questions relating to the validity and effect
of the transfer of the movable property are
governed by the law of the place of
principal use
Where the issue involves considerations
other than the validity and effect of the
transfer itself, governing law is the law of
the state which has real interest
III. Situs of Certain Properties
A. Situs of Personal Property for Tax
Purposes
The principle of mobilia sequuntur personam
cannot be applied to limit the right of the
state to tax property within its jurisdiction. It
yields to established facts of legal
ownership, actual presence and control
elsewhere, and cannot be applied if it would
result in patent injustice [Wells Fargo Bank
and Union Trust Co. v. CIR, 70 Phil 325
(1940)]
B. Situs of Money
In Leon v. Manufacturers Life Insurance Co.,
90 Phil 459 (1951), the Supreme Court held
that the funds in question were outside the
jurisdiction of Philippine courts, it having
been endorsed in an annuity in Canada
under a contract executed in that country.
C. Situs of Debts
The debt is located where the debtor is
located because it is where he can be sued
and the debt collected.
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D. Situs of Corporate Shares
1. The situs of shares of stock of a corporation
is considered to be at the domicile of the
corporation.
2. There is a distinction between the situs of
shares of stock and the situs of the income
derived from the sale or exchange of such.
[CIR v Anglo California Bank, G.R. No. L-
12476(1960)]
E. Patents, Trademarks, Trade Name and
Copyright
1. Union Convention for the Protection of
Industrial Property: a trade name shall be
protected in all countries of the Union,
without the obligation of filing of registration,
whether or not it forms part of the trade
name.
2. RA 8923 (Intellectual Property Code): Any
foreign corporation which is a national or
domiciliary of a country which is a party to a
convention, treaty or agreement relating to
intellectual property rights to which the
Philippines is also a party or extends
reciprocal rights to our nationals by law shall
be entitled to benefits to the extent
necessary to give effect to any provision of
such convention.
F. Liability of the Common Carrier for Loss,
Destruction and Deterioration of Goods
Transported
Law of Destination
1. The law of the country to which the
goods are to be transported shall govern
the liability of the common carrier for
their loss, destruction or deterioration
[Art. 1753, NCC]
2. The law of the country of destination
applies even if the goods never reach
the destination, but does not apply if the
goods were never transported
3. If the country of destination is the
Philippines, it is Philippine internal law
on loss, destruction, or deterioration that
must governthe Civil Code principally,
and the Code of Commerce and special
laws like the Carriage of Goods by Sea
Act, suppletorily.
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Chapter XII. Contracts
I. EXTRINSIC VALIDITY OF CONTRACTS
II. INTRINSIC VALIDITY OF CONTRACTS
A. LEX LOCI CONTRACTUS
B. LEX LOCI SOLUTIONIS
C. LEX LOCI INTENTIONIS
III. CAPACITY TO ENTER INTO CONTRACTS
IV. CHOICE OF LAW ISSUES
A. CHOICE OF FORUM CLAUSE
B. CONTRACTS WITH ARBITRATION
CLAUSE
C. ADHESION CONTRACTS
D. SPECIAL CONTRACTS
V. LIMITATIONS TO CHOICE OF LAW
VI. APPLICABLE LAW IN THE ABSENCE OF
EFFECTIVE CHOICE
I. Extrinsic Validity of Contracts
General Rule: Lex Loci Celebrationis
The forms and solemnities of contracts xxx
shall be governed by the laws of the country
in which they are executed [Art. 17, CC]
NOTE:
1. Contracts Before Diplomatic/ Consular
Officials: The solemnities established by
Philippine laws shall be observed with
respect to contracts executed before
diplomatic or consular officials of the
Republic of the Philippines in a foreign
country [Art. 17(2), FC]
2. Contracts Entered Into by Letter/
Cablegram, etc.: A contract accepted by
letter or cablegram is presumed to have
been entered into the place where the offer
was made. [Art. 1319(2),CC]
II. Extrinsic Validity of Contracts
Three possible laws:
A. Lex Loci Contractus (Asked in 95, 02 BAR
EXAMINATIONS)
1. Law of the place where the contract is made
2. Merits
a. Relative ease in establishing
b. Certainty and stability
3. DemeritUnjust results when place of
making entirely incidental
NOTE: To determine where the contract is
made, we look to the place where the last act is
done which is necessary to bring the binding
agreement into being so far as the acts of the
parties are concerned.
B. Lex Loci Solutionis
1. Law of the place of performance governs
2. MeritAlways connected to the contract in a
significant way
3. DemeritNot helpful when the contract is
performed in 2 or more states with
conflicting laws
C. Lex Loci Intentionis
1. Law intended by the parties
2. Basis
The contracting parties may establish such
stipulations, clauses, terms and conditions
as they may deem convenient, provided
they are not contrary to law, morals, good
customs, public order, or public policy [Art.
1306, CC]
3. May be express or implied
a. Expresswhen the parties stipulate that
the contract be governed by a specific
law, such law will be recognized unless
there are cogent reasons for not doing
so.
b. Implied
i. Based on the contemporaneous and
subsequent acts of the parties
ii. Often upheld with reference to the
rule of validity of contracts which
presumes that the parties
contemplate to enter into a valid
contract
III. Capacity to Enter Into Contracts
Determined by the personal laws of the
contracting parties
NOTE: Laws relating to Family rights and
duties, Status, Condition or Legal capacity
of persons are binding on citizens of the
Philippines, even though living abroad [Art.
15, NCC]
Contracts Cases
A. Choice of Forum Clause
1. A case arising from a contract will be
litigated in the forum chosen by the parties if
the choice of forum clause specifically
identifies it as the only venue
2. When there is no fraud or overreaching, and
there is no showing that the choice-of-forum
clause would be unreasonable and unjust,
the clause must be given effect
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B. Contracts with Arbitration Clause
An arbitration clause, stipulating that the
arbitral award of an arbitral panel in a
foreign country is FINAL and BINDING, is
not contrary to public policy. It does not oust
our courts of jurisdiction as the international
arbitral award, the award of which is not
absolute and without exceptions, is still
judicially reviewable under certain conditions
provided for by the INCITRAL Model Law on
ICA as applied and incorporated in RA 9285
(Korea Technologies Co., Ltd. V Lerma,
2008)
C. Adhesion Contracts
1. Adhesion contracts are not entirely
prohibited. The one who agrees to the
contract is in reality free to reject it entirely; if
he adheres, he gives his consent.
2. It is void if there is UNDUE ADVANATGE on
the part of the dominant party
3. Any ambiguity is construed strictly against
the drafter
D. Special Contracts
1. Sale or barter of goods: lex situs
2. Simple loan granted by financial institutions:
law of the permanent place of business
3. Loan granted by a private individual or
where the subject matter of the loan is
personal: law of the place where the loan
was obtained
4. Pledge, Chattel Mortgage, Antichresis: Lex
Situs
5. Carriage of Goods by Sea
a. The law of the country to which the
goods are to be transported shall govern
the liability of the common carrier for
their loss, destruction or deterioration
[Art. 1753, NCC]
b. The law of the country of destination
applies even if the goods never reach
the destination, but does not apply if the
goods were never transported
c. If the country of destination is the
Philippines, it is Philippine internal law
on loss, destruction, or deterioration that
must governthe Civil Code principally,
and the Code of Commerce and special
laws like the Carriage of Goods by Sea
Act, suppletorily.
6. International Air Transportation: Warsaw
Convention
V. Limitation Choice of Law
(Asked in 90-94 BAR EXAMINATIONS)
1. Cannot be a law which has NO
CONNECTION at all with the transaction or
the parties
2. LAW AS CHANGED will govern EXCEPT if
the change is so revolutionary that it was
never contemplated by the parties
3. Choice of law should not be interpreted to
OUST THE JURISDICTION which the court
has already acquired over the parties and
the subject matter.
4. Cannot contract away provisions of law
especially peremptory provisions heavily
impressed with PUBLIC INTEREST
5. COGNOVIT CLAUSE (confession of
judgment) valid only if the parties were of
equal bargaining power and the defendant
agreed to it voluntarily.
Effective Choice
1. Law of the place of the MOST
SIGNIFICANT RELATIONSHIP with the
contract as a whole or with a specific issue
arising therefrom
2. Factors to consider
a. Place of contracting
b. Place of negotiating
c. Place of performance
d. Situs of the subject matter of the
contract
e. Parties domicile, residence, nationality,
place of incorporation, place of business
f. Place under whose local law the
contract will be most effective
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Chapter XIII. Succession
I. Extrinsic Validity
II. Intrinsic Validity
III. Interpretation of Wills
IV. Revocation
V. Probate
VI. Administration of Estates
VII. Trusts
(Asked in 75-79, 90-94, 95-99 BAR
EXAMINATIONS)
PLACE OF
EXECUTION
APPLICABLE LAW
F
i
l
i
p
i
n
o
T
e
s
t
a
t
o
r
Philippines Philippine Law
Foreign
Country
1. law of the place where
he may be (lex loci
celebrationis) [Art
815, CC]
2. Philippine law [see III
Tolentino 117]
A
l
i
e
n
T
e
s
t
a
t
o
r
Philippines 1. Philippine Law [Art. 17,
CC]
2. law of the country in
which he is a citizen or
subject [lex nationali]
(Art. 817, NCC)
Foreign
Country [Arts.
816, 17, NCC]
1. law of the place in
which he resides [lex
domicilii]
2. law of his country (lex
nationali)
3. Philippine law
4. law of the place where
they were executed
(lex loci
celebrationis)
NOTE: Rule re: Joint Wills
1. Joint wills prohibited under Art. 818, CC
executed by Filipinos in a foreign country
shall not be valid in the Philippines even
though authorized by the laws of the country
where they were executed. [Art. 819, CC]
(Asked in 00-04 BAR EXAMINATIONS)
2. Civil Code is silent as to the validity of a joint
will executed by an alien in the Philippines. It
is suggested that that it should not be
probated if it would affect the heirs in the
Philippines.
II. Intrinsic Validity
Intestate and testamentary successions shall be
regulated by the national law of the decedent,
with respect to the following [Art. 16(2); Art.
1039, NCC]
1. Order of succession
2. Amount of successional rights
3. Intrinsic validity of the testamentary
provisions
4. Capacity to succeed
III. Interpretation of Wills
Governed by the National Law of the
decedent
IV. Revocation
TESTATOR APPLICABLE LAW
W
i
l
l
i
s
r
e
v
o
k
e
d
i
n
t
h
e
P
h
i
l
i
p
p
i
n
e
s
Philippine
Domiciliary
Philippine Law
Non-domiciliary
[Art. 829, CC]
W
i
l
l
i
s
r
e
v
o
k
e
d
i
n
a
F
o
r
e
i
g
n
C
o
u
n
t
r
y
Philippine
Domiciliary
1. Philippine Law
2. Law of the place of
revocation (lex loci
actus)
Non-domiciliary
[Art. 829, CC]
1. law of the place
where the will was
made
2. law of the place in
which the testator
had his domicile at
the time of the
revocation
V. Probate
A. Controlling Law
The probate of a will being essentially
procedural in character, the law of the
forum (lex fori) governs.
B. Wills Proved and Allowed in a Foreign
Country
1. A will proved and allowed in a foreign
country in accordance with the laws of that
country may be allowed, filed, and recorded
in the proper Regional Trial Court in the
Philippines [RULES OF COURT, Rule 77,
Sec.1]
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2. Requisites for Reprobate (Vda de Perez v
Tolete, 232 SCRA 722)
The following must be proved by competent
evidence:
a. due execution of the will in accordance
with the foreign laws
b. the testator had his domicile in the
foreign country and not in the
Philippines
c. the will has been admitted to probate in
such country
d. the laws of the foreign country on
procedure and allowance of wills
VI. Administration of Estates
Territorial: governed by the law of the place
where the administration takes place, and that is
the law of the country from which the
administrator derives his authority.
VII. Trusts
Extrinsic Validity: rules governing wills apply
Intrinsic Validity: lex situs since a trust
involves property
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Chapter XIV. Torts and Crimes
I. Torts
A. Traditional Approach
1. Controlling Law
a. Matters Concerning Conduct and
Safety: Lex Loci Delicti
Commissi
b. Matters Concerning Loss and
Safety: Lex Domicilii
2. Characterization of Locus Delicti
a. Common Law Rule
b. Civil Law Rule
B. Modern Approaches
1. Most Significant Relationship
C. Foreign Torts Claims
1. Transitory Nature of Torts Claims
2. Conditions for Enforcement
3. Alien Torts Claims Acts (ATCA)
4. Rule under Philippine Law
II. Crimes
A. General Rule: Lex Loci Delicti
Commissi/Locus Regit Actum
B. Exceptions
1. Crimes Committed by Diplomatic
Officials; Doctrine of State Immunity
2. Crimes Committed in Foreign
Vessels
3. Art. 2, Revised Penal Code
I. Torts
A. Traditional Approach
1. Controlling Law
a. Lex Loci Delicti Commissi (law of the
place where the alleged tort was
committed) applies in matters
concerning conduct and safety
b. Lex Domicilii of the parties applies in
matters concerning loss distribution or
financial protection
2. Characterization of the place of wrong
(Locus Delicti)
a. Common Law: place where the last
event necessary to make an actor liable
for an alleged tort occurs (place of
injury)
b. Civil Law: place where the tortious
conduct was committed (place of
conduct)
B. Modern Approaches
1. Most Significant Relationship
a. The most significant relationship
approach considers the states contacts
with the occurrence and the parties
b. In the case of Saudi Arabian Airlines v
CA, 297 SCRA 469, the Supreme Court
had the occasion to apply the most
significant relationship rule. In the said
case the court laid down the following
factors which are to be taken into
account::
i. place where the injury occurred
ii. place where the conduct causing
the injury occurred
iii. the domicile, residence, nationality,
place of incorporation and place of
business of the parties
iv. place where the relationship, if any,
between the parties is centered
This approach considers the relevant
concerns the state may have in the case
and its interest in having its law applied on
that issue
a. Where the State of Injury provides for
higher standard of conduct or financial
protection against injury than the State
where the tortious act was done, the law
of the former shall govern
b. Where the State of injury and conduct
provides for lower standard of conduct
and financial protection than the home
State of the person suffering the injury,
the law of the State of conduct and
injury shall govern
c. Where the State in which the defendant
was engaged, the special controls and
benefits must be applied although the
State has no relationship to the
defendant
d. Where the law in which the relationship
has its seat imposed higher standards of
conduct or financial protection than the
law of the State of the injury, the former
law shall govern.
C. Foreign Torts Claims
1. Tort liability is transitory. Hence, an action
for tort may be brought wherever the
tortfeasor is subject to suit.
2. Conditions for enforcement of foreign tort
claims:
a. The foreign tort is based on civil action
and not on a crime
b. The enforcement of the tort would not
infringe the public policy of the forum
c. The judicial machinery of the forum is
adequate for its proper enforcement
3. Alien Tort Claims Act(ATCA) (Asked in 00-
04 BAR EXAMINATIONS)
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grants US District Courts original jurisdiction
over any civil action by an alien for a tort
omitted in violation of the law of nations or a
treaty of the US.
4. In the Philippines, no specific statutory law
governs the enforcement of claims arising
from foreign tort.
II. Crimes
A. General Rule
Lex Loci Delicti Commissi/ Locus Regit
Actum (law of the place where the act was
committed)
NOTE: Penal laws xxx shall be obligatory
upon all those who live and sojourn in
Philippine territory, subject to the principles
of public international law and to treaty
stipulations [Art. 14, CC]
B. Exceptions
1. Crimes committed by state officials,
diplomatic representatives and officials of
recognized international organizations
(based on the doctrine of state immunity
from suit.
2. Crimes committed on board a foreign vessel
even if it is within the territorial waters of the
coastal state, as long as the effect of such
crime does not affect the peace and order of
the coastal state.
3. Crimes which, although committed by
Philippine nationals abroad are punishable
under Philippine law as provided in Art. 2,
Revised Penal Code:
b. offenses committed in a Philippine
vessel or airship
c. forging or counterfeiting any coin or
currency note of the Philippines, or any
obligation issued by the government
d. introduction into the country of the
obligations and securities mentioned in
the preceding number
e. those committed by public officers or
employees in the exercise of their
functions
4. Crimes against national security and the law
of nations.
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Chapter XV. Torts and Crimes
I. Personal Law of Corporations
A. General Law: Law of Incorporation
B. Exceptions
1. Constitutional and Statutory
Restrictions
2. Control Test During War
II. Domicile/Residence of Corporations
A. General Rule
B. Exceptions
A. Consent Doctrine
B. Foreign Corporations Doing Business
Bound by Philippine Law
1. Art. 129, Corporation Code
2. Service Upon Foreign Corporations
Doing Business in the Philippines
IV. Right of Foreign Corporations to Bring Suit
A. General Rule
B. Exceptions
1. Isolated Transactions
2. Action to Protect Trademark, Trade
Name, Goodwill, Patent or for Unfair
Competition
3. Agreements Fully Transacted
Outside the Philippines
4. Petitions Filed Merely as Corollary
Defense in a Suit Against It
I. Personal Law of Corporations
A. General Rule
Law of the State where it is incorporated
[Art. 2, Corporation Code]
NOTE: Hence, if the law creating the corporation
does not give it authority to enter into certain
contracts, such contracts made by it in another
state shall be void despite the express
permission given by the laws of that other state.
B. Exceptions
1. Constitutional and Statutory Restrictions
(e.g. Art. XII, Sec. 2, 1987 Constitution)
2. Control Test During War
In wartime, the courts may pierce the veil of
corporate identity and look into the
nationality of the controlling stockholders to
determine the citizenship of the
corporation.
II. Domicile/Residence of Corporations
A. General Rule [Art. 51, CC]
that fixed by the law creating them,
recognizing them or any other provision of
law
B. Rule if the Same Not Fixed by Law
If the law does not fix the same, the domicile of
juridical persons shall be understood to be [Art.
51, CC]:
1. place where their legal representation is
established; or
2. place where they exercise their principal
functions
NOTE: A foreign corporation granted license to
operate in the Philippines acquires domicile
here.
III. Jurisdiction Over Foreign
Corporations
A. Consent Doctrine
A foreign corporation shall be recognized
and will be allowed to transact business in
any state which gives it consent. The
consent doctrine is established in Sections
125, 126, 127 and 128 of the Corporation
Code.
.
B. Foreign Corporations Doing Business in
Philippines Bound by Philippine Law
1. Under Art. 129 of the Corporation Code, all
foreign corporations lawfully doing business
in the Philippines shall be bound by all laws,
rules, and regulations applicable to domestic
corporations; EXCEPT:
a. provisions for the creation, formation,
organization or dissolution of
corporations
b. those which fix the relations, liabilities,
responsibilities, or duties of
stockholders, members, or officers of
corporations to each other or to the
corporation
2. Service upon foreign corporations doing
business in the Philippines may be made on
[Rule 14, Sec. 14, RULES OF COURT]:
c. its resident agent
a. in the absence thereof, process will be
served on the government official
designated by law or any of its officers
or agent within the Philippines
b. on any officer or agent of said
corporation in the Philippines
c. thru diplomatic channels (Far East
International v. Nankai Kogyo, 6 SCRA
725 (1962))
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IV. Right of Foreign Corporations to
Bring Suit
A. General Rule
License to transact business in the
Philippines is an essential prerequisite for
filing a suit before Philippine courts [Art. 133,
Corporation Code]
B. Exceptions
1. isolated transactions
2. action to protect trademark, trade name,
goodwill, patent or for unfair competition
3. agreements fully transacted outside the
Philippines
4. when the petition filed is merely a corollary
defense in a suit against the corporation
EFFECT OF FAILURE TO SECURE A
LICENSE TO TRANSACT BUSINESS
1. the foreign corporation has no right to sue in
the Philippines but it can still be sued
2. although the contracts entered into may be
valid as between the parties, it may not be
enforced in Philippine courts
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Chapter XVI. Foreign Judgments
I. RECOGNITION v. ENFORCEMENT
II. BASES OF RECOGNITION AND
ENFORCEMENT
III. POLICIES UNDERLYING
IV. REQUISITES
V. PROCEDURE FOR ENFORCEMENT
VI. EFFECTS OF FOREIGN JUDGMENTS
FOREIGN JUDGMENT: a decision rendered
outside the forum and encompasses judgments,
decrees and order of courts of foreign countries.
I. Recognition v. Enforcement
A. Recognition of Foreign Judgment
1. Passive act of giving the same effect that it
has in the State where it was rendered with
respect to the parties, the subject matter of
the action and the issues involved without
the necessity of filing an action in the forum
giving effect to the judgment
2. Examples of foreign judgments which can
only be recognized: declaratory judgments,
judgments which give no affirmative relief,
judgments which determine the parties
interests in a thing or status.
B. Enforcement of Foreign Judgment
1. A judgment is enforced when, in addition to
being recognized, a party is given affirmative
relief to which the judgment entitles him; it
necessarily requires the filing of an action.
2. This necessary implies recognition.
II. Bases of Recognition and
Enforcement
A. Comity
In order to obtain reciprocal treatment from
the courts of other countries, we are
compelled to take foreign judgments as they
stand and to give them full faith and credit.
B. Doctrine of Obligation
1. Considers a judgment of a foreign court of
competent jurisdiction as imposing a duty or
obligation on the losing litigant.
2. This is based on the vested rights theory.
Recognition and Enforcement
The policy of preclusion seeks to protect
party expectation resulting from previous
litigation, to safeguard against the
harassment of defendants, to insure that the
task of the courts not be increased by never-
ending litigation of the same disputes, and
in a larger senseto promote what Lord
Coke in the Ferrers Case of 1599 stated to
be the goal of all law: rest and quietness.
(Mijares v Ranada, 2005)
RELATED CONCEPTS
1. Res Judicata: once there is a final
judgment, resolution on the issues litigated
is binding on the parties and their privies.
2. Merger: plaintiffs cause of action is merged
in the judgment so that he may not relitigate
that exact claim.
3. Bar: successful defendant can interpose as
defense the judgment in his favor to avert a
2
nd
action by the plaintiff on the same claim.
4. Direct estoppel: relitigation of all matters
decided are precluded
5. Indirect estoppel: all essential issues of
fact actually litigated cannot be relitigated.
Enforcement
1. Foreign court had JURISDICTION over the
parties and the case
2. Judgment VALID under the laws of the
country that rendered it.
3. Judgment FINAL and EXECUTORY to
constitute res judicata in another action
4. RECIPROCITY: state where foreign
judgment was obtained allows recognition
and enforcement of Philippine judgments.
5. Judgment is for a FIXED SUM of money
6. Foreign judgment not contrary to PUBLIC
POLICY OR GOOD MORALS of country
where it is sought to be enforced
7. Judgment not obtained by EXTRINSIC
FRAUD, COLLUSION, MISTAKE of fact or
law.
V. Procedures for Enforcement
Three modes of enforcement:
A. Petition
1. Followed in most common law countries and
in the Philippines
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2. The rules are silent as to what initiatory
procedure must be undertaken in order to
enforce a foreign judgment in the
Philippines. But there is no question that the
filing of a
B. Summary Proceeding
1. Followed in most civil law countries
2. A summary proceeding for enforcement is
provided by statute.
C. Judgment Registration
An authenticated copy of the foreign
judgment is filed in the registrars office
together with other proofs required by
domestic laws and the foreign judgment is
converted into a local one that is
immediately executory.
Philippines
The effect of a judgment or final order of a
tribunal of foreign country, having jurisdiction to
render such is as follows [Sec. 48, Rule 39,
RULES OF COURT]:
1. In a judgment or final order upon a specific
thing, the judgment or final order is
conclusive upon the title to the thing; and
2. In a judgment or final order against a
person, the judgment or final order is
presumptive evidence of a right as between
the parties and their successors-in-interest
by a subsequent title.
3. In either case, the judgment or final order
may be repelled by evidence of
a. want of jurisdiction
b. want of notice to the party
c. collusion
d. fraud
e. clear mistake of law or fact
NOTE: It has been recognized that public
policy as a defense to the recognition of
judgment serves as an umbrella for a variety of
concerns in international practice which may
lead to a denial of recognition [Mijares v
Ranada, 2005]
- end of Private International Law
- end of Civil Law -

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