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Note: Under this theory the basis of


successionisasortoffamilycoownership
withtheresultthatlegalsuccessionisthe
normal procedure and testamentary
succession, the exception or one of the
limitations.

SUCCESSION

I.GENERALPROVISIONS

A.DEFINITION/WHATISTRANSMITTED

Q:Whatissuccession?

A:Successionisamodeofacquisitionbyvirtueof
which the property, rights and obligations to the
extentofthevalueoftheinheritanceofaperson,
are transmitted through his death to another or
others either by his will or by operation of law.
(Art.774)

Q:Whatisthebasisofsuccession?

A:
1. Negative Theories refer to those
which deny to succession any rational
basis and which have been formulated
by the individualistic and socialistic
schools.
a. There can be no testamentary
succession because these rights
aremerelythecreationsofthewill
of a person who is devoid of any
will,beingalreadydead.
b. There can be no intestate
successionbecausethecommunity
of property in the family can only
be conceived of as long as the
latterexists.

Note: According to this view, the


propertiesof the deceased are converted
intoresnulliuswhich,tothejudgmentof
others, fall under the ownership of the
firstoccupantwhogenerallyistherelative
nearestindegreeand,tothejudgmentof
others,belongtothestate.

2.

Positive Theories Those which base


succession on the right of property.
According to this view, succession is
based on individual ownership and the
power of the owner to dispose of the
same.
a. If an owner can freely dispose of
hispropertieswithsuchconditions
as he may deem convenient, then
itfollowsthathecandistributethe
sameafterhisdeathsincethewill
is nothing more than the
instrumentofalienationsubjectto
theconditionofdeath.
b. Those which base succession on
therightoffamily

3.

EclecticTheoryAccordingtothisview,
the basis of testamentary succession is
the right of ownership but the basis of
legal or intestate succession is the ties
of blood and the right of family co
ownership.(Caguioa,p.2)

Q:Whatarethecharacteristicsofsuccession?

A:
1. Itisamodeofacquisition;
2. Onlyproperty,rightsandobligationsto
the extent of the value of the
inheritancearetransmitted;
3. Thetransmissiontakesplaceonlyatthe
timeofdeath;
4. The transmission takes place either by
willorbyoperationoflaw.

Q:Whataretherequisitesofsuccession?

A:DATE
1. Deathofdecedent;
2. Acceptance of the inheritance by the
successor;
3. Transmissibleestate;
4. Existence and capacity of successor,
designatedbydecedentorlaw.

B.SUCCESSIONOCCURSATTHEMOMENTOF
DEATH

Q:Whenarerightstosuccessiontransmitted?

A: The rights to succession are transmitted from


the moment of the death of the decedent. (Art.
777)

Note: Although, the provision states that the rights


are transmitted upon the death of a person, it is
rathervestedupondeath.

Q:Whatistransferredbydeathinsuccession?

A: Only the property, rights and obligations not


extinguished by death are transmitted to the
heirs.

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SUCCESSION
Q:Areafteracquiredpropertiesofthedecedent
transmissible?

A:
GR: Property acquired during the period
between the execution of the will and the
deathofthetestatorisnotincluded.

XPN: When a contrary intention expressly


appearsinthewill.(Art.793)
Note:Appliesonlytolegaciesanddevisesand
nottoinstitutionofheirs.

Theinheritanceofapersonincludesnotonly
thepropertyandthetransmissiblerightsand
obligations existing at the time of his death,
but also those which have accrued thereto
sincetheopeningofthesuccession.(Art.781)

Q: What is the general rule as regards


transmissibilityofrights?

A:Iftherightorobligationisintuitupersonae,itis
intransmissible,otherwiseitistransmissible.

Note:Intuitupersonaemeansstrictlypersonal.

Q:Whatrightsarenottransferredbythedeath
ofaperson?

A:
1. Purelypersonalrights;
2. Rights which are made intransmissible
bystipulationoftheparties;
3. Rights which are intransmissible by
provisionoflaw.

Note: All other rights are transmissible to the heirs


uponthedeathofaperson.

Q: What are the rights that are extinguished by


death?

A:PAPULP
1. Partnershiprights
2. Agency
3. Personaleasements
4. Usufruct
5. Legalsupport
6. Parentalauthority

Q: What obligations or contracts are not


transmittedbydeath?

A:Thosewhicharemadeintransmissible:
1. bytheirnature;
2. bystipulation;or
3. byprovisionoflaw(Art.1311)

Note:Thisisanexceptiontothegeneralrulethat
contracts or obligations are binding upon the
parties,theirheirsorsuccessorsininterest.

Q: What are the obligations that are


extinguishedbydeath?

A:
1. Monetary
obligations
are
not
transmittedtotheheirs.
2. Nonmonetary
obligations
are
transmittedtotheheirs.

Q:Mayheirsbeheldliableforthedebtsor
obligationsofthedecedent?

A:
GR:No.Itistheestatethatpaysforthedebts
leftbythedecedent.

XPN: It is true that the heirs assume liability


for the debts of the decedent, although it is
limited only to the extent of the value of the
inheritance received. (Estate of Hemady v.
Luzon Surety Co., G.R. No. L8437, Nov. 28,
1956)

Note:Theheirsarenotpersonallyliablewith
theirownindividualpropertiesforthemonetary
obligations/debtsleftbythedecedent.

Q: Is a contract of guaranty extinguished by


death?

A: No, because a contract of guaranty does not


fall in any of the exceptions under Art. 1311
(relativityofcontracts).Aguarantorsobligationis
basicallytopaythecreditoriftheprincipaldebtor
cannot pay. Payment does not require any
personal
qualifications.
The
personal
qualifications become relevant only at the time
theobligationisincurredbutnotsoatthetimeof
discharge or fulfillment of the obligation. (Estate
of Hemady v. Luzon Surety Co., Inc., G.R. No. L
8437,Nov.28,1956)

Q: The wife died while the action for legal


separation waspending. Her children, however,
wanted to continue the action. They ask that
they be allowed to substitute their deceased
mother, arguing that the action should be
allowedtocontinue.Decide.

A:Thechildrencannotbesubstitutedinanaction
for legal separation upon the death of their
mother who filed the case. An action for legal
separation is purely personal on the part of the
innocent spouse because such an action affects

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the marital status of the spouses. (Bonilla v.


Barcena,G.R.No.L41715,June18,1976)

Q: Fortunata died while her action for quieting


oftitleofparcelsoflandwaspending.Doesher
deathresultintheextinguishmentoftheaction
ormayherheirssubstituteherinthecase?

A: Her heirs may substitute her because the


actionisnotextinguishedbyherdeath.Sincethe
rightstothesuccessionaretransmittedfromthe
momentofthedeathofthedecedent,fromthat
moment, the heirs become the absolute owners
of his property, subject to the rights and
obligations of the decedent, and they cannot be
deprived of their rights thereto except by the
methods provided for by law. The right of the
heirs to the property of the deceased vests in
them upon such death, even before judicial
declaration of their being heirs in the testate or
intestateproceedings.

When she died, her claim or right to the parcels


of land in litigation was not extinguished by her
deathbutwastransmittedtoherheirsuponher
death. Her heirs have thus acquired interest in
thepropertiesinlitigationandbecamepartiesin
interest in the case. (Bonilla v. Barcena, et al.,
G.R.No.L41715,June18,1976)

Q: Can the heir enter into a contract of sale,


conveyance or any disposition pertaining to his
interest in the inheritance even pending the
settlementoftheestate?

A: Yes, because his hereditary share/interest in


the decedents estate is transmitted or vested
immediately from the moment of decedents
death.Thisis,however,subjecttotheoutcomeof
thesettlementproceedings.

Q:Whatisthenatureofthetransactionentered
into by the heir pertaining to his hereditary
share in the estate pending the settlement of
theestate?

A:Theeffectofsuchtransactionistobedeemed
limited to what is ultimately adjudicated to the
heir. However, this aleatory character of the
contract does not affect the validity of the
transaction.

Q:Mayanheirconveyfutureinheritance?

A:Nocontractmaybeenteredintouponafuture
inheritance except in cases expressly authorized
bylaw(Art.1347).

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C.KINDSOFSUCCESSORS

Q:Whatarethekindsofheirs?

A:
1. Voluntary called to succeed either by
virtueofthewillofthetestator:
a. Devisee
b. Legatee

Note: An heir is one who succeeds to


the whole (universal) or aliquot part of
the estate. Devisee or legatee is one
who succeeds to definite, specific, and
individualizedproperties.

2. Compulsory called by law to succeed


to a portion of the testators estate
knownaslegitime.

3. LegalorIntestatebyoperationoflaw
throughintestatesuccession.

Q:Whoaredeviseesandlegatees?

A: Devisees are persons to whom gifts of real


property are given by virtue of a will. On the
other hand, Legatees are persons to whom gifts
ofpersonalpropertyaregivenbyvirtueofawill

Q: What are the distinctions between heirs and


legatees/devisees?

A:
HEIRS

DEVISEESORLEGATEES

Astorepresentationofdeceasedsjuridicalperson
Neverrepresentthe
Representthejuridical
personalityofthe
personalityofthe
deceasednomatter
deceasedandacquire
howbigthelegacyor
theirrights,withcertain
thedeviseis
exceptionstohis
obligations
Determinabilityofamountofinheritance
Arealwaysgivena
Inheritanundetermined
determinatethingora
quantitywhoseexact
fixedamount
amountcannotbe
knownaprioriand

whichcannotbefixed
untiltheinheritanceis
liquidated
Extentofsuccessionalright
Onlysucceedtothe
Succeedtothe
determinatethingor
remainderofthe
quantitywhichis
propertiesafterallthe
debtsandallthelegacies mentionedinthelegacy
ordevise
anddeviceshavebeen
paidorgiven
Astowhentheyexist

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SUCCESSION
Canexistwhetherthe
Onlyintestamentary
successionbetestateor
succession
intestate
Effectofpreterition
Theinstitutionofanheir
isentirelyannulled

Thelegaciesanddevises
remainvalidinsofaras
theyarenotinofficious.
Effectofdefectivedisinheritance
Incaseofimperfector
Thelegaciesand
defectivedisinheritance,
deviseesremainvalid
theinstitutionofanheir
insofarastheyarenot
isannulledtotheextent
inofficious.
thatthelegitimesare
impaired.

Q: Suppose a person is named tosucceed toan


entire estate. The estate, however, consists of
only one parcel of land. Is he an heir or a
devisee?
A:Itdependsonthemannerofhisdesignationin
thewill. Here,becauseheiscalledtoinheritthe
entireestate,heisanheir.
Q:Inwhatinstancesdothedistinctionsbetween
heirsanddevisees/legateesbecomesignificant?

Q:Whoarethecompulsoryheirs?

A:
1. Legitimate children and descendants
(LCD)
2. Legitimate parents and ascendants
(LPA)
3. Survivingspouse(SS)

Legitimatechildrenanddescendants(LCD)
Q:Isanadoptedchildacompulsoryheir?
A: Legitimate children includes adopted
childrenandlegitimatedchildren.
Under R.A. 8552 or the Domestic Adoption Law
adoptedchildrenhavethesamerightsgrantedto
the legitimate children. Adopted children, for all
intentsandpurposesareconsideredaslegitimate
children.
Hence,theadoptedchildrencanalreadyexclude
legitimateparents/ascendants.
Legitimateparentsandascendants(LPA)
Q: When do legitimate parents and ascendants
inherit?

A:
1.
2.
3.
4.

Preterition
Imperfect/defectivedisinheritance
Afteracquiredproperty
Acceptance
or
repudiation
successionalrights

of

Q: What are the classifications of compulsory


heirs?

A:
1. PrimarycompulsoryheirsTheyarenot
excluded by the presence of other
compulsoryheirs.

E.g. legitimate children, surviving


spouse
2. Secondary compulsory heirs Those
who succeed only in default of the
primarycompulsoryheirs.
E.g.legitimateascendants

3. Concurring compulsoryheirsTheyget
their legitimes together with the
primary or secondary heirs. Neither
excludes primary or secondary heirs,
noreachother.
E.g. Surviving spouse and illegitimate
childrenanddescendants.

A: Legitimate parents and ascendants inherit in


default of legitimate children and descendants.
Theyaresecondarycompulsoryheirs.
Q:Isthepresenceofillegitimatechildrenofthe
decedentexcludetheLPA?
A:No.Legitimateparentsandascendantsconcur
withtheillegitimatechildrenofthedecedent.
However, if the decedent is himself illegitimate,
his illegitimate children exclude the illegitimate
parentsandascendants.
Survivingspouse(SS)
Q: Can a common law spouse be a compulsory
heir?
A:No.Theremustbevalidmarriagebetweenthe
decedent and the surviving spouse. If the
marriage is null and void, the surviving spouse
cannotinherit.
Q: How can the heirs of the decedent use the
nullity of marriage to prevent the surviving
spousefrominheriting?
A: The heirs can raise the issue of nullity of the
marriage in the same proceeding for the

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settlementoftheestate.Thisisallowedbecause
amarriagethatisnullandvoidcanbecollaterally
attacked.

2.

3.
However, in case of voidable marriages, if the
marriage is not annulled before the decedent
died,thesurvivingspousecanstillinherit

4.

Reason:Voidablemarriagescanonlybeattacked
inadirectproceeding,i.e.annulmentproceeding.

5.

Note: The surviving spouse is not a compulsory


heirofhis/herparentinlaw.
Separationinfactwillnotdisqualifythesurviving
spouse from getting his/her legitime, regardless
ofhis/herguilt.

6.

Note: Mutual wills Separate wills


although containing reciprocal provisions
arenot prohibited, subjecttothe rule on
disposicioncaptatoria.

Illegitimatechildren
Note: Under the Family Code, there is no more
distinction between acknowledged natural children
andillegitimatechildren.Theyareallconsideredas
illegitimate.
Compulsoryheirsofapersonwhoisillegitimate:
1.
2.
3.
4.

Legitimatechildrenanddescendants;
Illegitimatechildrenanddescendants;
In default of the foregoing, illegitimate
parentsonly;
Survivingspouse.

Q:Inwhatwaysmaycompulsoryheirsinherit?
A:Compulsoryheirsinheriteither:
1. intheirownright;or
2. byrightofrepresentation

II.TESTAMENTARYSUCCESSION

WILLS

1.INGENERAL

A.DEFINITIONANDCHARACTERISTICS

Q:Whatisawill?

A:Awillisanactwherebyapersonispermitted,
withtheformalitiesprescribedbylaw,tocontrol
to a certain degree the disposition of his estate,
totakeeffectafterhisdeath.(Art.783)

Q:Whatarethecharacteristicsofawill?

A:Awillis:
1. StatutoryrightThemakingofawillis
only a statutory not a natural right.
Hence,awillshouldbesubordinatedto
boththelawandpublicpolicy.

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Unilateral act No acceptance by the


transferees is needed during the
lifetimeofthetestator.
StrictlypersonalactThedispositionof
property is solely dependent upon the
testator.
Ambulatory A will is essentially
revocable during the lifetime of the
testator.
FreefromvicesofconsentAwillmust
have been executed freely, knowingly
and voluntarily, otherwise, it will be
disallowed.
IndividualactAwillmustbeexecuted
only by one person. A joint will is not
allowedinthePhilippines.

7.

Solemn or formal act A will is


executedinaccordancewithformalities
prescribedbylaw.

(1)PERSONALACT;
NONDELEGABILITYOFWILLMAKING

Q:Whatismeantbystrictlypersonalact?

A:UnderArt.784,itmeansthatinthemakingof
a will, preparation thereof cannot be wholly or
partially entrusted to a third person or made
through an agent or attorney. It refers to the
disposition of property. This is so because the
essence of making a will is the disposition of
property, hence, it cannot be delegated to
another.

Q: Can the testator delegate to a third person


the power to determine whether or not a
testamentarydispositionistobeoperative?

A:No.Itisnotonlythedelegationwhichisvoid;
the testamentary disposition whose effectivity
will depend upon the determination of the third
person is the one that cannot be made. Hence,
the disposition itself is void. (Art. 787; Tolentino,
p.33)

Q:Whatcannotbedelegatedtothediscretionof
athirdperson?

A: The following cannot be delegated to a third


person because they comprise the disposing
powerofthetestator:
1. Duration or efficacy of designation of
heirs,legatees,ordevisees.

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SUCCESSION
2.

Determination of the portions which


the heirs are to receive when referred
tobyname.
3. Determination as to whether or not a
dispositionistobeoperative.(Art.785)

Q: What, on other hand, may be entrusted to


thirdpersons?
A:
1. Distributionofspecificpropertyorsums
ofmoneythatthetestatormayleavein
generaltospecifiedclassesorcauses
2. Designation of the persons, institutions
or establishments to which such
property or sums are to be given or
applied.(Art.786)

Reason: Here, there is really no delegation


because the testator has already set the
parametersrequiredbylaw,namely:
a. Thespecificationofpropertyorsumsof
money
b. Thespecificationofclassesorcauses.

Ineffect,thethirdpersonwillonlybecarryingout
the will of the testator as determined by these
parameters.

(2)RULESOFCONSTRUCTIONAND
INTERPRETATION/LAWGOVERNING
FORMALVALIDITY

Q: How should the provisions of a will be


construed?

A:Asageneralrule,thelanguageofawillshould
be liberally construed and as much as possible,
the intention of the testator should be given
effect.

Incaseofdoubt,thatinterpretationbywhichthe
dispositionistobeoperativeshallbepreferred.
Reason: Testacy is preferred over intestacy. (Art.
791)

Q: What are the rules in the construction of


Wills?
A:
1. Words of the will are to be taken in
their ordinary and grammatical sense
unless there is a clear intention to use
theminanothersensecanbegathered,
andthatcanbeascertained.(Art.790)

2. Technicalwordsaretobetakenintheir
technicalsense,unless:
a. The context clearly indicates a
contraryintentionor

b.

It satisfactorily appears that he


was unacquainted with such
technicalsense.(Ibid.)

3. The invalidity of one of several


dispositionscontainedinawilldoesnot
result in the invalidity of the other
dispositionsunlessitistobepresumed
that the testator would not have made
such other dispositions if the first
invalid disposition had not been made.
(Art.792)

4. Everydeviseorlegacyshallcoverallthe
interest in the property disposed of
unless it clearly appears from the will
that he intended to convey a less
interest.(Art.794)

Q:Whatarethekindsofambiguitiesinawill?
A:
1. Latent ambiguities Ambiguities which
are not apparent on the face of a will
buttocircumstancesoutsidethewillat
thetimethewillwasmade.
E.g.
a. If it contains an imperfect
descriptionofpersonorproperty;
b. A description of which no person
orpropertyexactlyanswers

2. Patent ambiguities Those which are


apparentonthefaceofthewill.
E.g.Uncertainty which arises upon the face
ofthewillastotheapplicationofanyofits
provisions.(Art.789)

Q: What are the steps in resolving the


ambiguities?
A:
1. Examinethewillitself;
2. Refer to extrinsic evidence or the
surrounding circumstances, except oral
declarations of the testator as to his
intention.

Reason: Because the testator can no longer


refutewhateverisattributedtohim.

2.TESTAMENTARYCAPACITYANDINTENT

Q:Whocanmakeawill?

A: All persons who are not expressly prohibited


bylawmaymakeawill.(Art.796)

Thelawpresumescapacitytomakeawill;hence,
in order that a person may be disqualified to

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make one, he must be expressly prohibited by


law.

Note:Theabilityaswellasthepowertomakeawill
mustbepresentatthetimeoftheexecutionofthe
will.

Supervening incapacity does not invalidate an


effectivewill,noristhewillbyanincapableperson
validatedbythesuperveningofcapacity.(Art.801)

Q: What are the requisites of testamentary


capacity?

A:
1. Atleast18yearsofage;and
2. Ofsoundmind

Note: 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
unshatteredbydisease,injuryorothercause.

Itshallbesufficientifthetestatorwasableatthe
timeofmakingthewilltoknowthe:
a. natureoftheestatetobedisposedof;
b. properobjectsofhisbounty;and
c. characterofthetestamentaryact.

Q:Whoarethosepersonsexpresslyprohibited
bylawtomakeawill?

A:
1. Personsofeithersexunder18yearsof
age(Art.797)
2. Persons who are not of sound mind
(Art.798)

Q: Is a person suffering from civil interdiction


qualifiedtomakeawill?

A: Yes. He is deprived only of the power to


dispose of his properties through acts inter vivos
but not through acts mortis causa. (Art. 34,
Revised Penal Code; Rabuya, Civil Law Reviewer,
p.527)

Q: Is a married woman required to obtain the


consentofthehusbandandtheauthorityofthe
courtbeforeshecanmakeawill?

A: No. She can make a will even without the


consent of her husband and the authority of the
court.(Art.802)

Note:Amarriedwomanmaydisposeofherseparate
property and her share in the conjugal or absolute
communityproperty.

286

A.AGEREQUIREMENT

Q:Canapersonundereighteenyearsoldmakea
will?

A:No.Personsofeithersexundereighteenyears
oldcannotmakeawill.(Art.797)

Q:Whenissoundnessofthemindrequired?

A:Itisessentialonlyatthetimeofthemaking(or
execution)ofthewill.(Art.798;AlsuaBettsv.CA,
92SCRA332;Rabuya,CivilLawReviewer,p.527)

Q:Whatisthestatusofthewillifthetestatoris
notofsoundmindatthetimeofitsexecution?

A: The will is invalid regardless of his state of


mind before or after such execution. In other
words,thewillofanincapableisnotvalidatedby
thesuperveningofcapacity.(Art.801;id.)

Note: Conversely, if the testator was of sound


mindatthetimeofthemakingofthewill,thewill
is valid even if the testator should later on
becomeinsaneanddieinthatcondition.Inother
words,superveningincapacitydoesnotinvalidate
aneffectivewill.(id.,pp.527528)

Q:Ifthereisnoproofastothesoundnessofthe
mindofthetestatoratthetimeheexecutedhis
will,whatisthestatusofhiswillassumingthat
he complies with all other requisites for its
validity?

A:Thewillisvalid.Thisissobecausegenerally,in
absence of proof to the contrary, the law
presumesthateverypersonisofsoundmind.

Such presumption of soundness of mind,


however,doesnotariseifthetestatorwas:
1. Publicly known to be insane, one
month,orless,beforemakinghiswill;
2. Under guardianship at the time of the
makingofthewill.

Note: Mere weakness of mind or partial imbecility


from disease of body or from age does not
necessarily render a person incapable of making a
will.

Q: Who has the burden of proving that the


testatoractedinlucidinterval?

A: The person who maintains the validity of the


willbasedonthesaidground.(Rabuya,CivilLaw
Reviewer,p.530)

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ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
Q: When Brenda was a baby, she was
accidentally dropped by her mother when her
mother saw a cockroach. As a result, she
suffered from insanity. When she was in her
thirties,sheexecutedawill.Aftersometime,her
brain damage was totally cured. What is the
statusofthewill?

A: Still void. The will of an incapable cannot be


validated by supervening capacity. What is
importantisthattheability,aswellasthepower
tomakeawillmustbepresentatthetimeofthe
executionofthewill.

Q:Willyouranswerbethesameifthesituation
was the reverse Brenda developed insanity
aftersheexecutedherwill?

A:No.Superveningincapacitydoesnotinvalidate
aneffectivewill,hencethewillisvalid.

Q:Mayanilliterateexecuteawill?

A:
GR:Yes,anilliteratecanmakeanordinaryor
notarial will because a person who does not
know how to read and write does not mean
hedoesnotunderstandthelanguage.

XPN:Theilliteratecannotmakeaholographic
will.

3.FORM

A.FORMALVALIDITYRULES

Q:Whatlawgovernstheformsandsolemnities
ofwills?

A:Itisthelawofthecountrywherethewillwas
executed that governs the form and solemnities
st
ofwills.(Art.17,1 paragraph;Art.815)

Q:Whataretheeffectsofawillexecutedbyan
alienabroad?

A: The will of an alien who is abroad produces


effect in the Philippines if made with the
formalities prescribed by the law of the place in
which he resides, or according to the formalities
observed in his country, or in conformity with
thosewhichtheCivilCodeprescribes.(Art.816)

Q:Whataretheeffectsofawillexecutedbyan
alieninthePhilippines?

A: It shall produce the same effect as if it was


executed in the Philippines if it is executed in

accordancewiththelawofthecountrywherehe
isacitizenorsubject,andwhichmightbeproved
and allowed by the law of his own country. (Art.
817)

Q: Is a joint will executed by a Filipino in a


foreigncountryvalid?

A:No.Thesameholdstrueevenifitisauthorized
bythelawofthecountrywherethejointwillwas
executed.(Art.819)

(1)LAWGOVERNINGSUBSTANTIVEVALIDITY

Q:WhatarethemattersmentionedinArticle15
of the New Civil Code which are governed by
Philippinelaws?

A:1.familyrightsandduties
2.status;
3.condition;and
4.legalcapacityofpersons.(Art.15)

Q: What are the matterspertaining to intestate


and testamentary successions which are
regulatedbythenationallawofthedeceased?

A:1.Orderofsuccession
2.amountofsuccessionalrights
3.intrinsicvalidityoftestamentaryprovisions
4.capacitytosucceed.(Art.16;Art.1039)

B.COMMONREQUIREMENTS

Q: What are the formal requirements common


tobothnotarialandholographicwills?

A:
1. Inwriting;
2. In a language or dialect known to the
testator.
3.
Note:Theobjectofthesolemnitiessurroundingthe
execution of wills is to close the door against bad
faith and fraud, to avoid substitution of wills and
testaments and to guarantee their truth and
authenticity.

(1)INWRITING

Q:Istherulethateverywillmustbeinwriting
mandatory?

A:Yes.Ifthewillisnotinwriting,itisvoidand
cannotbeprobated.(Rabuya,CivilLawReviewer,
p.531)

Note:Philippinelawsdonotrecognizethevalidityof
nuncupativewills,whichareoralwillsdeclaredor

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dictated by the testator and dependent merely on


oraltestimony.(id.)

Q: In case of a holographic will, what is the


requirementforitsvalidity?

A:Itmustbeentirelyhandwrittenbythetestator
himself.(Art.810)

Q: What are the rules in relation to notarial or


attestedwills?

A:Notarialorattestedwillmaybe:
1. entirely handwritten by a person other
thanthetestator;
2. partly handwritten by the testator
himself and partly handwritten by
anotherperson;
3. entirely
printed,
engraved
or
lithographed;or
4. partlyhandwritten(whetherbytestator
or another person) and partly printed,
engravedorlithographed.(Rabuya,Civil
LawReviewer,p.531)

(2)LANGUAGE/DIALECTREQUIREMENT

C.NOTARIALWILLS

Q: Is the rule every will must be executed in a


languageknowntothetestatormandatory?

A: Yes, otherwise, the will is void. (Suroza v.


Honrado,110SCRA388;id.)

Q: Is the fact that the will was executed in a


language known to the testator required to be
statedintheattestationclause?

A: No. This fact can be established by extrinsic


evidenceorevidencealiunde.(Lopezv.Liboro,81
Phil.429)

Note:Itwillbepresumedthatthewillwasexecuted
inalanguageordialectknowntothetestatorifthe
will was executed in a certain locality and that the
testatorwasaresidentofthatlocality.(Rabuya,Civil
LawReviewer,p.532)

Q: Is it presumed that the testator knows the


dialectofthelocalitywhereheresides?

A:Ifthetestatorresidesinacertainlocality,itcan
be presumed that he knows the dialect or the
language in the said locality. (Abangan v.
Abangan,G.R.No.13431,Nov.12,1919)

288

Note: The fact that the testator knew the language


need not appear on the face of the will. This fact
maybeprovenbyextrinsicevidence.

Q:Doesthisruleapplytowitnessesinanotarial
orattestedwill?

A: No. The rule only applies to the testator,


whether in notarial or holographic will. Further,
Art. 805 is clear that the attestation clause need
not be in the language known to the witnesses.
(SeeRabuya,CivilLawReviewer,supra)

(1)ARTS.805806

Q:Whataretheformalitiesintheexecutionofa
notarialwill?

A:WESAPNAN
1. InWriting;
2. Executedinalanguageordialectknown
tothetestator;
3. Subscribedbythetestatorhimselforby
the testators name written by some
otherpersoninhispresenceandunder
hisexpressdirectionattheendthereof,
atthepresenceofwitnesses;
4. Attestedtoandsubscribedbyatleast3
credible witnesses in the presence of
thetestatorandofoneanother;
5. EachandeveryPagemustbesignedby
thetestatororbythepersonrequested
by him to write his name, and by
instrumental witnesses in the presence
ofeachother,ontheleftmargin;
6. Eachandeverypageofthewillmustbe
Numberedcorrelativelyinlettersplaced
ontheupperpartofeachpage;
7. Must contain an Attestation clause,
statingthefollowing:
a. Thenumberofpagesofthewill,
b. Fact that the testator signed the
willandeverypageinthepresence
ofwitnesses,orcausedsomeother
persontowritehisnameunderhis
expressdirection,
c. All witnesses signed the will and
everypagethereofinthepresence
ofthetestatorandofoneanother;
8. MustbeacknowledgedbeforeaNotary
public.

Q: What is the effect if one or some of the


requisitesarelacking?

A: Lack of one of the requisites is a fatal defect


whichwillrenderthewillnullandvoid

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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SUCCESSION
Q: What is the rule in cases of omissions in the
will?

A: Omissions which can be supplied by an


examinationofthewillitself,withouttheneedof
resorting to extrinsic evidence, will not be fatal
and, correspondingly, would not obstruct the
allowancetoprobateofthewillbeingassailed.

However,evidencealiundearenotallowedtofill
a void in any part of the document or supply
missing details that should appear in the will
itself. They only permit a probe into the will, an
exploration into its confines, to ascertain its
meaning or to determine the existence or
absence of the requisite formalities of law.
(Caedav.CA,G.R.No.103554,May28,1993)

(2)SPECIALRULESFORHANDICAPPED
TESTATORS

Q: What are the special requirements if the


testatorisdeaformute?

A:
1. If the testator is able to read, he must
personallyreadthewill;or
2. If the testator is unable to read, he
must designate two persons to read it
and communicate to him, in some
practicable manner, the contents
thereof.(Art.807;seeRabuya,CivilLaw
Reviewer,p.559)

Note: The law does not require that the persons


readingandcommunicatingthecontentsofthewill
betheinstrumentalwitnesses.(id.,p.560)

Q: What are the special requirements if the


testatorisblind?

A:Thewillshallbereadtohimtwice,oncebyone
ofthesubscribingwitnesses,andanothertimeby
the notary public before whom the will is
acknowledged.(Art.808;id.)

Note:Art.808appliesnotonlytoblindtestatorsbut
alsotothosewho,foronereasonoranother,are
incapableofreadingtheirwills,eitherbecauseof
poorordefectiveeyesightorbecauseofilliteracy.
(id.)

(3)SUBSTANTIALCOMPLIANCE

Q:Whenisawillnotrenderedinvalidbyreason
of defects or imperfections in the form of
attestationorinthelanguageusedtherein?

A:Ifthewillisexecutedinsubstantialcompliance
with all the requirements of Article 805, in the
absence of bad faith, forgery, fraud, undue and
improperpressureorinfluence.(SeeArt.809)

(4)REQUISITES

WITNESSES

Q:Whatarethequalificationsofwitnesses?

A:Witnessestoawillmustbe:S18ABCD
1. OfSoundmind.
2. Atleast18yearsofage.
3. Abletoreadandwrite
4. NotBlind,deafordumb
5. Not have been Convicted by final
judgmentoffalsificationofadocument,
perjuryorfalsetestimony.
6. DomiciledinthePhilippines

Q: Will the beneficial interest of a witness in a


willdisqualifyhimassuch?

A: Beneficial interest in a notarial will does not


disqualify one as a subscribing witness, but it
may,ormaynotnullifythedeviseorlegacygiven
tothesaidwitness.

Awitnesswhoatteststheexecutionofawill,and
towhom,ortowhosespouse,parentorchild,or
anyoneclaimingtherightofsaidwitness,spouse,
parentorchild,adeviseorlegacygiven,shallbe
void, unless there are 3 other competent
witnessestosuchwill.(Art.823NCC)

Note: If the witness is instituted as heir, not as


devisee or legatee, the rule would still apply,
becauseundueinfluenceorpressureonthepartof
theattestingwitnesswouldstillbepresent.

Creditorsofthetestatorarenotdisqualifiedtobea
witnesstothewill.

Q:Steviewasbornblind.Hewenttoschoolfor
the blind, and learned to read in Braille
language.HespeaksEnglishfluently.Canhe:

1.Makeawill?

A:Steviemaymakeanotarialwill.Ablindmanis
notexpresslyprohibitedfromexecutingawill.In
fact, Art. 808 of NCC provides for additional
formality when the testator is blind. Stevie
however, may not make a holographic will in
Braille because the writing in Braille is not a
handwriting. A holographic will to be valid must
be entirely written, signed and dated by the
testatorinhisownhandwriting.

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2.Actasawitnesstoawill?

A: A blind man is disqualified by law to be a


witnesstoanotarialwill.

3. In either of the instances, must the will be


readtohim?

A:IncaseStevieexecutesanotarialwill,ithasto
be read to him twice. First by one of the
instrumentalwitnesses,andsecondbythenotary
public before whom the will was acknowledged.
(2008BarQuestion)

D.HOLOGRAPHICWILLS

(1)REQUIREMENTS

Q:Whatisaholographicwill?

A: A holographic will is one entirely written,


dated, and signed by the hand of the testator
himself.Itissubjecttonootherform,andmaybe
made in or out of the Philippines, and need not
bewitnessed.(Art.810)

Q: What are the formalities required in the


executionofholographicwill?

A:SEED
1. Signedbytestatorhimself
2. Executedinalanguageordialectknown
tohim(Art.804)
3. Entirelywritten
4. Dated;
5. Note: In case of any insertion,
cancellation, erasure or alteration in a
holographic will, the testator must
authenticate the same by his full
signature.(Art.814)

Q: What are the effects of insertions or


rd
interpolationsmadebya3 person?

A:
GR:Whenanumberoferasures,corrections,
cancellation, or insertions are made by the
testator in the will but the same have not
been noted or authenticated with his full
signature, only the particular words erased,
corrected,alteredwillbeinvalidated,notthe
entiretyofthewill.

XPN:
1. Where the change affects the essence
ofthewillofthetestator;

290

Note:Whentheholographicwillhadonly
one substantial provision, which was
altered by substituting the original heir
with another, andthesame did not carry
therequisitefullsignatureofthetestator,
the entirety of the will is voided or
revoked.

Reason: What was cancelled here was


the very essence of the will; it
amountedtotherevocationofthewill.
Therefore, neither the altered text nor
theoriginalunalteredtextcanbegiven
effect. (Kalaw v. Relova, G.R. No. L
40207,Sept.28,1984)

2. Wherethealterationaffectsthedateof
thewillorthesignatureofthetestator.

rd
3. If the words written by a 3 person
were contemporaneous with the
execution of the will, even though
authenticated by the testator, the
entire will is void for violation of the
requisitethattheholographicwillmust
be entirely in the testators
handwriting.

Q: Natividads holographic will, which had only


one substantial provision, as first written,
named Rosa as her sole heir. However, when
Gregorio presented it for probate, it already
contained an alteration, naming Gregorio,
instead of Rosa, as sole heir, but without
authentication by Natividads signature. Rosa
opposestheprobateallegingsuchlackofproper
authentication. She claims that the unaltered
form of the will should be given effect. Whose
claimshouldbegranted?

A: None. Both their claims should be denied. As


to Gregorios claim, the absence of proper
authentication is fatal to his cause. As to Rosas
claim,tostatethatthewillasfirstwrittenshould
be given efficacy is to disregard the seeming
change of mind of the testatrix. But that change
of mind can neither be given effect because she
failed to authenticate it in the manner required
by law by affixing her full signature. (Kalaw v.
Hon.Relova,etc.,etal.,G.R.No.L40207,Sept.28,
1984)

DATE

Q: Why is the date in a holographic will


important?

A:Toestablishiftherewastestamentarycapacity
at the time the will was executed. Also, should

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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SUCCESSION
there be conflicting wills, it can establish which
willwasexecutedlater.

Q:Isitrequiredthatthedateofthewillshould
include the day, month and year of its
execution?

A:
GR: The "date" in a holographic will should
include the day, month, and year of its
execution.

XPN: When there is no appearance of fraud,


bad faith, undue influence and pressure and
the authenticity of the will is established and
the only issue is whether or not the date
appearing on the holographic will is a valid
compliancewithArt.810,NCC,probateofthe
holographic will should be allowed under the
principleofsubstantialcompliance.

Note:Inthiscase,thedatewaswrittenas"FEB./61"
(Roxas v. De Jesus G.R. No. L38338 January 28,
1985).

Theexactdatethoughindicatedonlybyimplication,
mustbewithcertainty.

(2)WITNESSESREQUIREDFORPROBATE

Q: What are the rules governing the probate of


holographicwills?

A: In the post mortem probate of holographic


wills,thefollowingrulesaretobeobservedasto
thenumberofwitnessestobepresented:

1. If the will is not contested, it shall be


necessarythatatleastonewitnesswho
knowsthehandwritingandsignatureof
the testator explicitly declares that the
will and the signature are in the
handwritingofthetestator.
2. Ifthewilliscontested,atleastthreeof
suchwitnessesshallberequired.
3. In the absence of any competent
witness and if the court deems it
necessary, expert testimony may be
resortedto.(Art.811;Rabuya,CivilLaw
Reviewer,p.563)

Note: In an earlier case, it was held that even if


thegenuinenessoftheholographicwilliscontested,
Article 811 of the NCC cannot be interpreted as to
require the compulsory presentation of three
witnessestoidentifythehandwritingofthetestator,
underpenaltyofhavingtheprobatedenied.(Codoy
v.Calugay,312SCRA333;id.,pp.563564)

In a later case, however, the Court ruled that the


requirement of at least three witnesses in case the
will is contested is mandatory. The Court explained
that the possibility of a false document being
adjudged as the will of the testator cannot be
eliminated, which is why if the holographic will is
contested, the law requires three witnesses to
declare that the will was in the handwriting of the
deceased.(id,p.564)

The execution and contents of a lost or destroyed


holographic will may not be proved by the bare
testimonyofwitnesseswhohaveseenorreadsuch
will. The will itself mustbe presented; otherwise, it
shall produce no effect. (Gan v. Yap, 104 Phil. 509;
id.) But a photostatic copy or Xerox copy of the
holographic will may be allowed because
comparisoncanbemadewiththestandardwritings
ofthetestator.(Rodelasv.Aranza,119SCRA16;id.)

ALTERATIONS,REQUIREMENTS

Q: What are the rules in case of insertion,


cancellation,erasureoralteration?

A: In case of insertion, cancellation, erasure or


alterationinaholographicwill,thetestatormust
authenticate the same by his full signature. (Art.
814)

Note: Full signature refers to the testators


habitual,usualandcustomarysignature.(Rabuya,
CivilLawReviewer,p.565)

Q: What is the effect if the insertion,


cancellation, erasure or alteration is not
authenticatedwiththetestatorsfullsignature?

A:Itisconsideredasnotmade,butthewillisnot
invalidated.(id.)

Note:Wherethetestatorhimselfcrossedoutthe
name of the heir named, and substituted the
name of another, without authentication, it was
heldthatthisdidnotresultinmakingtheperson
whose name was crossed as heir. (Kalaw v.
Relova,132SCRA237;id.)

E.JOINTWILLS

Q:ArejointwillsallowedinthePhilippines?

A: Two or more persons cannot make a will


jointly,orinthesameinstrument,eitherfortheir
reciprocal benefit or for the benefit of a third
person.(Art.818)

Wills, prohibited by Article 818, executed by


Filipinosinaforeigncountryshallnotbevalidin
the Philippines, even though authorized by the

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laws of the country where they may have been


executed.(Art.819)

Q:Whatarethekindsofjointwills?

A:
1. MutualWillsexecutedpursuanttoan
agreement between two or more
personstodisposeoftheirpropertyina
particular
manner,
each
in
consideration of the other separate
wills of two persons, which are
reciprocalintheirprovisions.
2. Reciprocal Wills the testators name
each other as beneficiaries under
similartestamentaryplans.

Q: Manuel, a F ilipino, and his American wife


Eleanor, executed a Joint Will in Boston,
Massachusetts when they were residing in said
city. The law of Massachusetts allows the
execution of joint wills. Shortly thereafter,
Eleanor died. Can the said will be probated in
thePhilippinesforthesettlementofherestate?

A:Yes,thewillmaybeprobatedinthePhilippines
insofar as the estate of Eleanor is concerned.
While the Civil Code prohibits the execution of
joint wills here and abroad, such prohibition
applies only to Filipinos. Hence, the joint will
which is valid where executed is valid in the
Philippines but only with respect to Eleanor.
Under Article 819, it is void with respect to
Manuel whose joint will remains void in the
Philippinesdespitebeingvalidwhereexecuted.

AlternativeAnswer:Thewillcannotbeprobated
in the Philippines, even though valid where
executed, because it is prohibited under Article
818 of the Civil Code and declared void under
Article819.Theprohibitionshouldapplyevento
the American wife because the Joint will is
offensivetopublicpolicy.Moreover,itisasingle
juridical act which cannot be valid as to one
testator and void as to the other. (2000 Bar
Question)

JohnandPaula.Britishcitizensatbirth,acquired
Philippine citizenship by naturalization after
theirmarriage.Duringtheirmarriagethecouple
acquiredsubstantiallandholdingsinLondonand
inMakati.PaulaboreJohnthreechildren,Peter,
Paul and Mary. In one of their trips to London,
thecoupleexecutedajointwillappointingeach
otherastheirheirsandprovidingthatuponthe
death of the survivor between them the entire
estate would go to Peter and Paul only but the
two could notdispose of nordivide the London

292

estate as long s they live. John and Paula died


tragically in the London Subway terrorist attack
in 2005. Peter and Paul filed a petition for
probate of their parents will before a Makati
RegionalTrialCourt.

Q:Shouldthewillbeadmittedtoprobate?

A: No, the will cannot be admitted to probate.


JointwillsarevoidundertheNewCivilCode.And
evenifthejointwillexecutedbyFilipinosabroad
werevalidwhereitwasexecuted,thejointwillis
stillnotvalidinthePhilippines.

Q:Arethetestamentarydispositionsvalid?

A: If a will is void, all testamentary dispositions


contained in that will are also void. Hence, all
testamentary provisions contained in the void
jointwillarealsovoid.

Q: Is the testamentary prohibition against the


divisionoftheLondonestatevalid?

A: The testamentary prohibition against the


division by Peter and Paul of the London estate
for as long as they live, is not valid. Art. 494 of
NCC provides that a donor or testator may
prohibit partition for a period which may not
exceedtwenty(20)years.(2008BarQuestion)

4.CODICILS,DEFINITIONANDFORMAL
REQUIREMENTS

Q:Whatisacodicil?

A:Acodicilisa supplementoradditiontoawill,
madeaftertheexecutionofawillandannexedto
betakenaspartthereof,bywhichanydisposition
madeintheoriginalwillisexplained,addedto,or
altered.(Art.825)

Note: A codicil is executed after the execution of a


priorwill.
It must be executed in accordance with all the
formalitiesrequiredinexecutingawill.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
Q:Whatarethedistinctionsbetweenacodicil
andasubsequentwill?

A:
CODICIL

SUBSEQUENTWILL

Formsapartofthe
originalwill.

Itisaneworaseparate
will.

Supplementsthe
originalwill,
explaining,addingto,
oralteringanyofits
dispositions.

Makesdispositions
withoutreferencetoand
independentofthe
originalwill.

Doesnot,asarule,
revokeentirelythe
priorwill.

Ifitprovidesforafull
dispositionofthe
testatorsestate,may
revokethewholeprior
willbysubstitutinganew
andlastdispositionfor
thesame.

Awillandacodicil,
beingregardedasa
singleinstrumentare
tobeconstrued
together.

Apriorwillanda
subsequentwill,being
twoseparatewills,may
beconstrued
independentlyofeach
other.

5.INCORPORATIONBYREFERENCE

Q:Whatisincorporationbyreference?

A:Incorporationbyreferenceistheincorporation
of an extrinsic document or paper into a will by
referencesoastobecomeapartthereof.

Note:Thedocumentsorpapersincorporatedwill
be considered part of the will even though the
samearenotexecutedintheformofawill.
Thedoctrineofincorporationbyreferenceisnot
applicable in a holographic will unless the
documents or papers incorporated by reference
arealsointhehandwritingofthetestator.

Q: What are the requisites of incorporation by


reference?

A:EDIS
1. Document referred to in the will must
be in Existence at the time of the
executionofthewill;
2. The will must clearly Describe and
identifythesame;
3. It must be Identified by clear and
satisfactory proof as the document or
paperreferredtotherein;
4. It must be Signed by the testator and
the witnesses on each and every page,
except in case of voluminous books of
accountorinventories.(Art.827)

6.REVOCATION;KINDS

Q:Whatisrevocation?

A: An act of the mind terminating the potential


capacityofthewilltooperateatthedeathofthe
testator,manifestedbysomeoutwardandvisible
actorsign,symbolicthereof.

Q:Whenmaythetestatorrevokeawill?

A:Awillmayberevokedbythetestatoratany
timebeforehisdeath.Anywaiverorrestrictionof
thisrightisvoid.(Art.828)

Q:Maytherightofthetestatortorevokethe
willbewaivedorrestricted?

A:No,thetestatorsrighttorevokeduringhis
lifetimeisabsolute.Itcanneitherbewaivednor
restricted.

Reason:Becauseawillisambulatory.(Art.828)

Q:Whatlawgovernsincaseofrevocation?

A:
1. If the revocation takes place in the
Philippines, whether the testator is
domiciled in the Philippines or in some
othercountryPhilippinelaws

2. Iftherevocationtakesplaceoutsidethe
Philippines:
a. by a testator who is domiciled in
thePhilippinesPhilippinelaws
b. byatestatorwhoisnotdomiciled
inthiscountry
i. Laws of the place where the
willwasmade,or
ii. Lawsoftheplaceinwhichthe
testator had his domicile at
the time of revocation. (Art.
829)

Q:Whatarethemodesofrevokingawill?

A:
1. Byimplicationoflaw;
2. By the execution of a subsequent
document;
3. By physical destruction through
burning, cancelation or obliteration.
(Art.830)

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REVOCATIONBYIMPLICATIONOFLAW

Q:Discussrevocationbyimplicationoflaw.

A: Revocation is produced by implication of law


whencertainactsoreventstakeplaceafterawill
has been made, rendering void or useless either
the whole will or certain testamentary
dispositionstherein.
Rationale:Thelawpresumesachangeofmindon
the part of the testator due to certain changed
circumstancepertainingtothefamilyrelationsor
inthestatusoftheproperty.

Q:Howarewillsrevokedbyoperationoflaw?
A:
1. When after the testator has made a
will, he sells or donates the legacy or
devise;
2. Provisions in awill in favor ofa spouse
who has given cause for legal
separation;

Note: The revocation shall take place the


moment the decree of legal separation is
granted.

3.
4.

5.

When an heir, legatee or devisee


commitsanactofunworthiness;
Whenacreditthathasbeengivenasa
legacy is judicially demanded by the
testator;
When one, some or all the compulsory
heirshavebeenpreteritedoromitted

Note:Theinstitutionofheirsisvoid.

REVOCATIONBYEXECUTIONOFASUBSEQUENT
INSTRUMENT

Q: What are the requisites of revocation by


subsequentwillorcodicil?

A:
1. The subsequent instrument must
complywiththeformalrequirementsof
awill
2. Thetestatormustpossesstestamentary
capacity
3. Thesubsequentinstrumentmusteither
contain a revocatory clause or be
incompatible with the prior will (totally
orpartially)
4. The revoking will must be admitted to
probate.

Q:Inwhatwaysmayrevocationbyasubsequent
willbedone?

A:Revocationmaybe:
a. Express by providing for a revocatory
clause;
b. Implied provisions are completely
inconsistentwithpreviouswill.

Note:Thewillcontainingtherevocatoryclausemust
itself be valid, and admitted to probate, otherwise,
thereisnorevocation.

Q:WhatisthePrincipleofInstanter?

A:Theexpressrevocationofthe1stwillrendersit
nd
voidbecausetherevocatoryclauseofthe2 will,
not being testamentary in character, operates to
revokethe1stwillinstantlyupontheexecutionof
thewillcontainingit.

Q:Cantherebeaninstancewhereasubsequent
will, which is incompatible with the prior will,
andsuchpriorwillsubsistatthesametime?

A: Yes. The fact that the subsequent will is


posteriorandincompatiblewiththefirstdoesnot
mean that the first is entirely revoked because
therevocationmaybetotalorpartial.

Note: The execution of a subsequent will does not


ipsofactorevokeapriorwill.

In case of inconsistent wills, the subsequent will


prevails over the prior will because it is the latest
expressionoftestamentaryintentofthetestator.

The subsequent will which do not revoke the


previous will in an express manner, only annulsthe
dispositions in the previous will which are
inconsistent with or contrary to those contained in
thesubsequentwill.(Art.831)

Q: What is the effect if the revoking will


becomes inoperative by reason of incapacity or
renunciation?

A: A revocation made in a subsequent will shall


take effect even if the new will should become
inoperative by reason of the incapacity of the
heirs,deviseesorlegateesdesignatedtherein,or
bytheirrenunciation.(Art.832)

Note: The testator must have the testamentary


capacityatthetimeofthemakingofthesubsequent
will.

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ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
REVOCATIONBYPHYSICALDESTRUCTION

Q: What are the requisites of revocation by


physicalactofdestruction?

A:OTAP
1. Overtactofphysicaldestruction;
2. Testamentarycapacityofthetestatorat
the time of performing the act of
revocation;
3. AnimusRevocandiintentiontorevoke;
4. Performed by testator himself or other
person in the presence and express
directionofthetestator.

Note: The physical destruction may be done by the


testatorpersonallyorbyanotherpersonactinginhis
presenceandbyhisexpressdirection.
Itisnotnecessarythatthewillbetotallydestroyed.
It is sufficient if on the face of the will, there is
shown somesign of the physicalact of destruction.
(Malotov.CA,G.R.No.76464,Feb.29,1988)

Q: How can a will be revoked by physical


destruction?

A: The physical act of destruction of a will, like


burning, does not per se constitute an effective
revocation,unlessthedestructioniscoupledwith
animus revocandi on the part of the testator.
(Malotov.CA,G.R.No.76464,Feb.29,1988)

Q: What is required for a revocation done by a


person,otherthanthetestator,bevalid?

A:
1. Under the express direction of the
testator;and
2. Doneinthepresenceofthetestator.

Note: Elements for a valid revocation done by the


testator himself must be present even if the
revocationisdonebyanotherperson.
Itgoeswithoutsayingthatthedocumentdestroyed
mustbethewillitself.

Q: What is the effect if the person directed by


thetestatortorevokehiswillisincapacitatedto
makeawillsuchaswhenheisbelow18yearsof
age?

A:None.Inrevocationofwills,whatisessentialis
the capacity of the testator to revoke. The
capacityofthepersondirectedbythetestatorto
revokehiswillisimmaterial.

Q: In 1919, Miguel executed a will. In the post


mortem probate, there was a testimony to the
effect that the will was in the testators

possession in 1919, but it can no longer be


found.Isthewillrevoked?
A: Yes, the Doctrine of Presumed Revocation
applies, which provides that: where a will which
cannot be found, is shown to have been in the
possession of the testator when last seen, the
presumption is, in the absence of other
competentevidence,thatthesamewascancelled
or destroyed. The same presumption arises
where it is shown that the testator had ready
accesstothewillanditcannotbefoundafterhis
death.(Gagov.MamuyacG.R.No.26317,Jan.29,
1927)

Note:Thepresumptionis,however,notconclusive
andanyonewhohasprooftothecontrarymayrebut
thepresumption.

Q:WhatistheDoctrineofDependentRelative
Revocation?

A: Where the testators act of destruction is


connectedwiththemakingofanotherwill,soas
fairly to raise the inference that the testator
meanttherevocationoftheoldtodependupon
theefficacyofthenewdispositionintendedtobe
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
willremainsinfullforce.(Molov.Molo,G.R.No.
L2538,Sept.21,1951)

Simply put, for this doctrine to operate, the


testator must have intended that the revocation
ofhisfirstwillbedependentonthevalidityofhis
second will. In this case the intention of the
testator is clear: He does not want to die
intestate.

Note: Failure of the new testamentary disposition


upon whose validity the revocation depends is
equivalent to the nonfulfillment of a suspensive
condition and thus prevents the revocation of the
originalwill.

Revocationofawillbasedonafalsecauseoran
illegalcauseisnullandvoid.

Q:Mr.Reyesexecutedawillcompletelyvalidas
to form. A week later, however, he executed
another will which expressly revoked his first
will, which he tore his first will to pieces. Upon
the death of Mr. Reyes, his second will was
presented for probate by his heirs, but it was
denied due to formal defects. Assuming that a
copyofthefirstwillisavailable,mayitnowbe
admittedtoprobateandgiveneffect?Why?

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A: Yes, the first will may be admitted to probate


andgiveneffect.Whenthetestatortorethefirst
will, he was under the mistaken belief that the
secondwillwasperfectlyvalidandhewouldnot
have destroyed the first will had he known that
the second will is not valid. The revocation by
destructionthereforeisdependentonthevalidity
of the second will. Since it turned out that the
secondwillwasinvalid,thetearingofthefirstwill
did not produce the effect of revocation. This is
known as the doctrine of dependent relative
revocation (Molo v. Molo, G.R. No. L2538, Sept.
21,1951)(2003BarQuestion)

Alternative Answer: No, the first will cannot be


admittedtoprobate.Whileitistruethatthefirst
will was successfully revoked by the second will
becausethesecondwillwaslaterdeniedprobate,
thefirstwillwas,nevertheless,revokedwhenthe
testator destroyed it after executing the second
invalidwill.(Diazv.DeLeon,G.R.No.17714,May
31,1922).

Q: What is the rule in case of revocation based


onfalseorillegalcause?

A: Revocation based on a falseor illegal cause is


nullandvoid.
Requisites:
1. Thecausemustbeconcrete,factualand
notpurelysubjective
2. Itmustbefalse
3. Thetestatormustnotknowofitsfalsity
4. It must appear from the will that the
testator is revoking because of the
causewhichisfalse.

Q: The will contains a statement whereby the


testatorrecognizeshisillegitimatechild.Thiswill
was revoked. May the revoked will be used as
basisforprovingthesaidrecognition?

A:Yes.Recognitioninawillofanillegitimatechild
does not lose its legal effect even if the will is
revoked.

7.ALLOWANCEANDDISALLOWANCEOFWILLS

A.PROBATEREQUIREMENT

Q:Whatisprobate?

A:Itisaspecialproceedingmandatorilyrequired
for the purpose of establishing the validity of a
will.

296

Nowillshallpasseitherrealorpersonalproperty
unlessitisprovedandallowedinaccordancewith
theRulesofCourt.(Art.838)

Note: Probate does not deal with the intrinsic


validityofthetestamentaryprovisions.

Evenifonlyoneheirhasbeeninstituted,theremust
stillbeajudicialorderofadjudication.

Evenifawillhasalreadybeenprobated,iflaterona
subsequentwillisdiscovered,thelattermaystillbe
presented for probate, as long as two wills can be
reconciled.

Q:Doesprescriptionapplytoprobateofwills?

A: The statute of limitations is not applicable to


probateofwills(ImprescriptibilityofProbate)
Rationale: Probate proceedings are not established
intheinterestofthesurvivingheirs,butprimarilyfor
the protection of the expressed wishes of the
testator.

Q: What are the characteristics of a probate


proceeding?

A:
1. Specialproceeding;
2. Proceedinginrem;
3. Notcontentiouslitigation;
4. Mandatory;
5. Imprescriptible;

Q:Whatarethedifferentkindsofprobate?
A:
1. Antemortem testator himself
petitions the court for the probate of
hisownwill.
2. Postmortem another person applies
for probate of the will after the
testatorsdeath.

(1)ISSUESTOBERESOLVEDINPROBATE
PROCEEDINGS

(A)EXCEPTIONSWHENPRACTICAL
CONSIDERATIONS
DEMANDTHEINTRINSICVALIDITYOFTHEWILL
BERESOLVED

Q: What are the questions that can be


determinedbyaprobatecourt?

A:
GR: Probate courts cannot inquire into the
intrinsicvalidityofwill
Theonlyquestionsthatcanbedeterminedby
aprobatecourtarethe:

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SUCCESSION
1.
2.
3.

Dueexecution
Testamentarycapacity
Identityofthewill

XPN:Practicalconsiderations(E.g.whenthe
willisvoidonitsface)

Q:Thetestatordevisedapartofhisestatetohis
concubine,whichfactofconcubinagewasstated
in his will. On probate, the court ruled that the
willwasvalidlyexecutedbutthedeviseinfavor
of the concubine is null and void. Can the
probate court pass upon the intrinsic validity of
thetestamentaryprovisionstatedinthewill?

A: Yes. While as a general rule, in probate


proceedings,thecourtsareaofinquiryislimited
toanexaminationandresolutionoftheextrinsic
validity of the will, given exceptional
circumstances,theprobatecourtisnotpowerless
to do what the situation constrains it to do and
passuponcertainprovisionsofthewill,asinthis
case.(Nepomucenov.CA,G.R.No.62952,Oct.9,
1985)

Note:TheSCheldasbasisitsfindingthatinthe
eventofprobateofthewill,orifthecourtrejects
thewill,probabilityexiststhatthecasewillcome
up once again on the same issue of the intrinsic
validity or nullity of the will, the same will result
in waste of time, effort, expense plus added
anxiety.

Q:Canaprobatecourtdecideonquestionsof
ownership?

A:
GR:Aprobatecourthasnojurisdictionto
decidequestionsofownership.

XPN:
1. When the parties voluntary submit the
issueofownershiptothecourt;
2. When provisionally, the ownership is
passed upon to determine whether or
notthepropertyinvolvedispartofthe
estate.
3. The question of ownership is an
extraneous matter which the probate
courtcannotresolvewithfinality.

Q: When Vic died, he was survived by his


legitimate son, Ernesto, and natural daughter,
Rosario. Rosario, who had Vics will in her
custody, did not present the will for probate.
SheinstitutedanactionagainstErnestotoclaim
herlegitimeonthetheorythatVicdiedintestate
becausetheabsenceofprobate.Tosupporther

claim, she presented Vics will, not for its


probate, but for proving that Vic acknowledged
her. Is the procedure adopted by Rosario
allowed?

A: No. It is in violation of procedural law and an


attempttocircumventanddisregardthelastwill
andtestamentofthedecedent.Thepresentation
ofawilltothecourtforprobateismandatoryand
its allowance by the court is essential and
indispensabletoitsefficacy.

Note: SC held that the case of Leao v. Leao (25


Phil., 180), which sanctioned the extrajudicial
partition by the heirs of the properties left by a
decedent,butnotthenonpresentationofawillfor
probate, cannot be relied upon as an authority for
the unprecedented and unheard of procedure
adopted by Rosario in this case, in the face of
express mandatory provisions of the law requiring
her to present the will to the court for probate. It
doesnotaffirmativelyappearinthedecisioninthat
casethatthepartitionmadebytheheirswasnotin
accordance with the will or that they in any way
disregarded the will. No question of law was raised
and decided in that case. (Guevara v. Guevara G.R.
No.48840,Dec.29,1943)

Q: To put an end to the numerous litigations


involving decedent Franciscos estate, his heirs
enteredintoacompromiseagreementwhereby
theyagreedtopayTasiana,Franciscossurviving
spouse, P800,000 as her full share in the
hereditaryestate.

When submitted to the court for approval,


Tasiana attacked its validity on the ground that
the heirs cannot enter into a compromise
agreement without first probating Franciscos
will. Tasiana relied on Guevara v. Guevara (74
Phil. 479) where the court held that the
presentation of a will for probate is mandatory
and that the settlement and distribution of an
estate on the basis of intestacy when the
decedentleftawill,isagainstthelawandpublic
policy.Decide.

A:TheGuevararulingisnotapplicableinthiscase
because here, there was no attempt to settle or
distribute the estate among the heirs before the
probate of the will. The clear object of the
contractwasmerelyTasianasconveyanceofany
andallherindividualshareandinterest,actualor
eventual in the estate. There is no stipulation as
toanyotherclaimant,creditororlegatee.

As a hereditary share in a decedent's estate is


transmitted or vested immediately from the
moment of the death of such causante or

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predecessorininterest,thereisnolegalbartoa
successor (with requisite contracting capacity)
disposing of her or his hereditary share
immediately after such death, even if the actual
extent of such share is not determined until the
subsequentliquidationoftheestate.
Also,asFranciscossurvivingspouse,Tasianawas
his compulsory heir. Wherefore, barring
unworthiness or valid disinheritance, her
successional interest existed independent of
Francisco's last will and testament and would
exist even if such will were not probated at all.
Thus, the prerequisite of a previous probate of
the will, as established in the Guevara and
analogouscases,cannotapplytothecase.
Note:Neitherthealeatorycharacterofthecontract
nor the coetaneous agreement that the numerous
litigationsbetweenthepartiesaretobeconsidered
settled and should be dismissed, although such
stipulation gives the contract the character of a
compromise, affect the validity of the transaction.
(DeBorja,etal.v.Vda.deBorja,G.R.No.L28040,
Aug.18,1972)

Q:Whenapersondiestestate,mayhisheirsopt
for an extrajudicial partition instead of having
thewillprobated?

A: No. In the subsequent case of Riosa v. Rocha


(1926), 48 Phil. 737, the Court held that an
extrajudicial partition is not proper in testate
succession.

(2)EFFECTOFFINALDECREEOFPROBATE,RES
JUDICATAONFORMALVALIDITY

Q: What is the scope of a final decree of


probate?

A:Afinaldecreeofprobateisconclusiveastothe
due execution of the will, i.e., as to the extrinsic
orformalvalidityonly.

B.GROUNDSFORDENYINGPROBATE

Q: What are the grounds for disallowance of a


will?
A:FIFUSM
1. TheFormalitiesrequiredbylawhave
notbeencompliedwith;
2. ThetestatorwasInsaneormentally
incapableofmakingwill;
3. ThewillwasexecutedthroughForceor
underduress,orinfluenceoffearor
threats;
4. ThewillwasprocuredbyUndueand
improperpressureandinfluence,on
partofthebeneficiaryorsomeother
person;

298

5.
6.

TheSignatureoftestatorwasprocured
byfraud.
ThetestatoractedbyMistakeordidnot
intendthattheinstrumenthesigned
shouldbehiswill(Art.839,NCC)

Note:Thelistisexclusive.
Awilliseithervalidorvoid.Thereisnosuchthingas
avoidablewill.

Q:Whendothefollowingconstituteasgrounds
fordisallowance?
1. Violence
A:wheninordertocompelthetestatorto
executeawill,seriousorirresistibleforceis
employed

2. Intimidation
A:whenthetestatoriscompelledbya
reasonableandwellgroundedfearofan
imminentandgraveeviluponhispersonor
propertyofhisspouse,descendants,or
ascendants,toexecutethewill
3. UndueInfluence
A:whenapersontakesimproperadvantage
ofhispoweroverthewillofanother,
deprivingthelatterofareasonablefreedom
ofchoice.

4. Mistake
A:Pertainstothemistakeinexecution
whichmayeitherbe:
1. mistake as to the identity or character
oftheinstrumentwhichhesigned,or
2. mistake as to the contents of the will
itself.

Q: What other defects of the will, if any, can


causedenialofprobate?

A:Therearenootherdefectsofthewillthatcan
causedenialofprobate.Art.805oftheCivilCode
provides that the will must be subscribed at the
end thereof by the testator, and subscribed by
threeormorecrediblewitnessesinthepresence
ofthetestatorandofoneanother.Thedriver,the
cook and the lawyer who prepared the will are
credible witnesses. The testator and the
instrumentalwitnessesofthewill,shallalsosign,
eachandeverypageofthewillproper,exceptthe
last,ontheleftmargin,andallthepagesshallbe
numbered correlatively in letters placed of the
upperpartofeachpage.

It has been held, however, that the testators


signature is not necessary in the attestation
clause, and that if a will consists of two sheets,
the first of which contains the testamentary
dispositions, and is signed at the bottom by the

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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SUCCESSION
testatorandthethreewitnesses,andthesecond
sheet contains the attestation clause, as in this
case, signed by 3 witnesses, marginal signatures
andpagingarenotnecessary.Afterall,theobject
of the law is to avoid substitution of any of the
sheetsofthewill. (Abanganv. Abangan,40Phil.
476 [1919]; In Re: Will of Tan Diuco, 45 Phil 807
[1924]).

B.INSTITUTIONOFHEIRS

Q: How is institution of heir defined under


Article840?

A:Institutionofheirisanactbyvirtueofwhicha
testator designates in his will the person or
persons who are to succeed him in his property
andtransmissiblerightsandobligations(Art.840,
NCC).

Note:Institutioncannotbeallowedtoaffectthe
legitime.

Therecanbeaninstitutedheironlyintestamentary
succession.

Q:Whataretherequisitesofavalidinstitution?

A
1. Thewillmustbeextrinsicallyvalid;

Note: The testator must have the


testamentary capacity to make the
institution.
2. The institution must be intrinsically
valid;

Note: The legitime must not be


impaired,thepersoninstitutedmustbe
identifiedoridentifiable,andthereisno
preterition.
3. Theinstitutionmustbeeffective.

Note: No repudiation by the heir;


testatorisnotpredeceasedbytheheir.

Q:Whataretheeffectsifawilldoesnotcontain
aninstitutionofheir?

A:Thewillshallbevalideventhoughitdoesnot
contain an institution of heir, or such institution
should not comprise the entire estate, and even
thoughthepersonsoinstitutedshouldnotaccept
the inheritance or should be incapacitated to
succeed.(Art.841)

Note:Institutionofheirsisnotindispensableandits
absencewillnotrenderthewillvoid,providedthere
areothertestamentarydispositions,likedevisesand

legacies or where the will merely disinherits a


compulsoryheir.

Q: What are the three principles in the


institutionofheirs?

A:
1. Equality heirs who are instituted
without a designation of shares inherit
inequalparts.

Note: Applies only when the heirs are of


thesameclassorsamejuridicalcondition
andinvolvesonlythefreeportion.

As between a compulsory heir and a


voluntary heir and they are instituted
without any designation of shares, the
legitime must first be respected and the
free portion shall then be equally divided
betweenthem.

2.

Individuality heirs collectively


instituted are deemed individually
instituted unless contrary intent is
proven.

3. Simultaneity when several heirs are


instituted, they are instituted
simultaneously and not successively,
unlessthecontraryisproved.

Q:Whatarethekindsofinstitutionofheirs?

A:Institutionofheirmaybe:
1. withacondition
2. withaterm
3. for a certain purpose or cause (modal
institution)

Q: May a conceived child be instituted as an


heir?

A:Aconceivedchildmaybeinstituted,provided
theconditionsinArts.40and41arepresent
(Conceptuspronatohabetur).

Q: What is the effect if the institution of heir is


basedonafalsecause?

A:
GR: The institution of heir is valid. The false
cause shall be considered simply as not
written.

XPN:Iffromthewillitself,itappearsthatthe
testator would not have madethe institution
if he has known the falsity of the cause, the
institutionshallbevoid.

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Note: In case of illegal cause, the cause shall be


consideredasnotwritten,unlesstheillegalcauseis
theprincipalreasonormotiveforthedisposition,in
whichcasetheinstitutionshallbevoid.

Q: The testatrix devised a parcel of land to Dr.


Rabadilla.ItwasprovidedthatDr.Rabadillawill
acquire the property subject to the obligation,
until he dies, to give Maria 100 piculs of sugar,
andintheeventofnonfulfillment,theproperty
will pass to the nearest descendants of the
testatrix.

WhenDr.Rabadilladied,Mariafiledacomplaint
toreconveythelandallegingthattheheirsofDr.
Rabadilla violated the condition. Is the
institutionofDr.Rabadilla,amodalinstitution?

A: Yes, because it imposes a charge upon the


instituted heir without, however, affecting the
efficacyofsuchinstitution.

In a modal institution, the testator states the


object of the institution, the purpose or
applicationofthepropertyleftbythetestator,or
thechargeimposedbythetestatorupontheheir.
A mode imposes an obligation upon the heir or
legatee but it does not affect the efficacy of his
rights to the succession. The condition suspends
butdoesnotobligate;andthemodeobligatesbut
does not suspend. (Rabadilla v. CA, G.R. No.
113725,June29,2000)

1.PRETERITION

Q:Whatispreterition?

A: Preterition is the omission in testators will of


one, some or all of the compulsory heirs in the
directline,whetherlivingatthetimeofexecution
ofthewillorbornafterthedeathofthetestator.
(Art.854)

Q: What does born after the death of the


testatormean?

A: It simply means that the omitted heir must


alreadybeconceivedatthetimeofdeathofthe
testatorbutwasbornonlyafterthedeathofthe
testator.

Q:Whataretherequisitesofpreterition?

A:
1. There is a total omission in the
inheritance;
2. Thepersonomittedisacompulsoryheir
inthedirectline;

300

3.

4.

The omitted compulsory heir must


survive the testator, or in case the
compulsory heir predeceased the
testator, there is a right of
representation;
Nothing must have been received by
theheirbygratuitoustitle.

2.CONCEPT

Q:Whomaybepreterited?

A:Compulsoryheirsinthedirectline.

Q:Mayaspousebepreterited?

A: No. While a spouse is a compulsory heir,


he/she is not in the direct line (ascending or
descending).

Q:Maythedecedentsparentsbepreterited?

A: Yes, if there is an absence of legitimate


compulsory heirs in the descending line. This is
the effect of the application of the rule on
preferenceoflines.

Q: When is there a total omission of a


compulsoryheir?

A:Thereistotalomissionwhentheheir:
1. Receives nothing under the will
whetherasheir,legatee,ordevisee;

Note: If a compulsory heir is given a


shareintheinheritance,nomatterhow
small,thereisnopreterition.
However,ifacompulsoryheirgetsless
thanhislegitime,whilethisisnotacase
ofpreterition.Inthiscase,heisentitled
to a completion of his legitime under
Art.906.

2. Has received nothing by way of


donationintervivosorpropter nuptias;
and

Note: If a compulsory heir has already


received a donation from the testator,
thereisnopreterition.

Reason: A donation to a compulsory


heir is considered an advance of the
inheritance.

3. Willreceivenothingbywayofintestate
succession.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
Q:Whataretheeffectsofpreterition?

A:
1. Preterition annuls the institution of
heirs;
2. Devicesandlegaciesarevalidinsofaras
theyarenotinofficious;
3. If the omitted compulsory heir dies
before testator, institution shall be
effectual, without prejudice to right of
representation

3.COMPULSORYHEIRSINTHEDIRECTLINE

Q: Who are the compulsory heirs in the direct


line?

A:
1. Legitimate children and descendants
withrespecttotheirlegitimateparents
orascendants;
2. Legitimate parents ot ascendants, with
respect to their legitimate children and
descendants;
3. Illegitimatechildren
4. The father or mother of illegitimate
children
Note:Thesurvivingspouseisnotincluded.
According to Justice Jurado, an adopted child is by
legal fiction considered a compulsory heir in the
directline.

4.PRETERITIONVS.DISPOSITIONLESSTHAN
LEGITIME

Q: What are the distinctions and similarities


between
imperfect
disinheritance
and
preterition?
A:
IMPERFECT
PRETERITION
DISINHERITANCE
Distinctions
Theinstitutionofheirs
Theinstitutionremains
iscompletelyannulled.
valid,butmustbe
reducedinsofarasthe
legitimehasbeen
impaired.
Similarities
Inbothcases,theomittedheirandtheimperfectly
disinheritedheirgetatleasttheirlegitime
Bothlegaciesanddevisesremainvalidinsofarasthe
legitimehasnotbeenimpaired.
Bothlegaciesanddevisesrefertocompulsoryheirs.

5.EFFECTSOFPRETERITION,DEVISEESONLY
ENTITLEDTOCOMPLETIONOFLEGITIME

Q: What is the effect of preterition on the will


itself?

A:
GR: The effect of annulling the institution of
heirs will be, necessarily, the opening of a
totalintestacyexceptthatproperlegaciesand
devises must be respected. Here, the will is
notabrogated.

XPN:Ifthewillcontainsauniversalinstitution
of heirs to the entire inheritance of the
testator,thewillistotallyabrogated.
Reason: The nullification of such institution of
the universal heirs without any other
testamentarydispositioninthewillamountstoa
declarationthatnothingatallwaswritten.

Q:Whataretherightsofthepreteritedheirs?

A:Theyareentitlednotonlytotheirsharesofthe
legitime but also to those of the free portion
which was not expressly disposed of by the
testatorbywayofdevisesandlegacies.

Q:Whatistheeffectiftheheirpredeceasesthe
testator?

A: If the heir who predeceases the testator is a


voluntary heir, a devisee or a legatee, he shall
transmitnorighttohisownheirs.

Note: The rule is absolute with respect to a


voluntaryheirandadeviseeorlegatee.

Right of representation only applies to compulsory


heirs in the direct descending line, and in the
collateral line, only in favor of children of brothers
andsisters.

Thereisnorightofrepresentationintheascending
line.

The representative inherits directly not from the


person represented, but from the one whom the
personwouldhavesucceeded.

The rule also applies in case the heir becomes


incapacitatedtosucceed,orwasdisinherited.

Q: What is the effect if the heir repudiated or


renouncedhisinheritance?

A: An heir who renounced his inheritance,


whetherascompulsoryorasvoluntaryheir,does
nottransmitanyrighttohisownheirs.

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Note: An heir who repudiated his inheritance, may


represent the person whose inheritance he has
renounced.(Art976)

Q: What can the compulsory heir do if the


testatorlefttitlelessthanthelegitimebelonging
totheformer?

A:Anycompulsoryheirtowhomthetestatorhas
leftbyanytitlelessthanthelegitimebelongingto
himmaydemandthatthesamebefullysatisfied.
(Art.906)

Note: Testamentary dispositions that impair or


diminish the legitime of the compulsory heirs shall
bereducedonpetitionofthesame,insofarasthey
maybeinofficiousorexcessive.(Art.907)

C.SUBSTITUTIONOFHEIRS

1.DEFINITION

Q:Whatissubstitution?

A:Substitutionistheappointmentofanotherheir
so that he may enter into the inheritance in
defaultoftheoriginalheir.

2.KINDS

Q:Whatarethedifferentkindsofsubstitution?

A:
1. Simple/commontakesplacewhenthe
heirinstituted:
a. predeceasestestator;
b. repudiatestheinheritance;or
c. isincapacitatedtosucceed

Note:Simplesubstitutionwithouta
statementofthecauses,towhichit
refers,shallcomprisethe3above
mentionedsituations.

2. Brief/compendiouswhentwoormore
persons are substituted for one or for
twoormoreheirs.

3. Reciprocal one heir designated as


substituteforinstitutedheirwhilelatter
is simultaneously instituted as
substituteforformer.

Note:Thesubstituteentersintotheinheritancenot
asanheirsucceedingthefirstheir,butasanheirof
thetestator.

302

3.FIDEICOMMISSARYSUBSTITUTION

Q:Whatisfideicommissarysubstitution?

A: Also known as indirect substitution, it is a


substitution by virtue of which the fiduciary or
first heir instituted is entrusted with the
obligation to preserve and transmit to a second
heirthewholeorpartoftheinheritance.

Note: For its validity and effectivity, such


substitution does not go beyond one degree from
the heir originally substituted and provided further,
that the fiduciary or first heir and the second heir
arelivingatthetimeofdeathofthetestator.

Q: Who are the parties to a fideicommissary


substitution and what are their respective
obligations?

A:
PARTIES
Firstheiror
fiduciary
Secondheiror
fideicommissary
Testator

OBLIGATIONS
Hehastheobligationto
preserveandtransmitthe
inheritance.
Heeventuallyreceivesthe
propertyfromthefiduciary.
None

Q: What are the distinctions between direct


substitutionandindirectsubstitution?
A:
DIRECT
SUBSTITUTION
Thesubstitutereceives
thepropertyindefault
ofthefirstheir
institutedwhodoesnot
orcannotreceivethe
same.
Therearevarious
liberalities,onethatis
immediateandthe
otherorothers
eventual,butwithonly
oneofthemeffective
(becauseultimately
eithertheinstituted
heirsucceedsoritis
thesubstitute).
Thetestatorsodirects
thetransmissionofhis
propertythatoneor
moreheirsenjoyand
mayfreelydisposeof
thesame.

INDIRECT
SUBSTITUTION
(Fideicommissary
Substitution)
Thesubstitutereceives
thepropertyafterthe
heirfirstinstitutedhas
enjoyedthesamefor
sometime.

Therearetwo
liberalitieswhichare
botheffectivebut
successivelyenjoyed.

Thefirstheirinstituted
isobligedtopreserve
thepropertyforthe
benefitofoneormore
succeedingheirsand
hispowerofalienation
iscurtailedoratleast
limited.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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SUCCESSION

Nootherpurposethan
topreventthe
successionofthe
intestateheirs.

Hasafurthersocial
effectasitlimitsthe
freecirculationof
propertyandforsuch
reasonmanylaws
prohibitthesameor
limitit.

Thereisonlyone
transfer.

Thereare2transfers

Hasthefreeand
absolutedisposition
andcontroloverthe
property.

Theidentityofthe
substitutedoesnot
matter.

Noabsolutedisposition
becauseitissubjectto
theconditionthathe
willpreserveand
transmitthesameto
thefideicommissary.
Andalso,thereis
controlontheproperty
butthereisalimitto
thecirculationofthe
property.
Thefideicommissaryis
limitedtorelatives
withinonedegreefrom
thefirstheiror
fiduciary:parentchild.

Q: What are the conditions for a valid


fideicommissarysubstitution?

A:
1. Thattheinstitutiondoesnotgobeyond
one degree from the heir originally
instituted;
2. That the substitution be expressly
made;
3. That both the fiduciary and beneficiary
be living at the time of the testators
death;
4. That it should be imposed on the free
portionandnotonthelegitime.

Q: What are the elements/requisites of


fideicommissarysubstitution?

A:
1. Theremustbeafirstheirorfiduciary;
2. Anabsoluteobligationisimposedupon
the fiduciary to preserve and to
transmit to a second heir the property
atagiventime;
3. Thereisasecondheirwhomustbeone
degreefromthefirstheir;
4. The first andsecond heir mustboth be
living and qualified at the time of the
deathofthetestator.

1.

FIDUCIARY

Theremustbeafirstheirorfiduciary

Note: The first heir receives property, either upon


the death of the testator or upon the fulfillment of
anysuspensiveconditionimposedbythewill.

Thefirstheirisalmostlikeausufructuarywithright
to enjoy the property. Thus, like a usufructuary, he
cannotalienatetheproperty.Thefirstheirisobliged
to make an inventory but he is not required to
furnishabond.

Q:Whataretheobligationsofafiduciary?

A:
1. Topreservetheinheritance;
2. Todelivertheinheritance;
3. To make an inventory of the
inheritance.

Q: What is the effect of alienation of the


property subject to the fideicommissary
substitutionbythefirstheir?

A: The transfer is not valid. The fiduciary cannot


alienate the property either by an act inter vivos
or mortis causa. He is bound to preserve the
property and transmit it to the second heir or
fideicommissary.

Q:Whatistheperiodofthefiduciarystenure?

A:
1. Primary rule the period indicated by
thetestator
2. Secondary rule if the testator did not
indicate a period, then the fiduciarys
lifetime

Q: Is the fiduciary allowed to make deductions


totheinheritance?

A:
GR:Thefiduciaryshoulddelivertheproperty
intact
and
undiminished
to
the
fideicommisaryheiruponarrivaloftheperiod

XPN: The only deductions allowed, in the


absenceofacontraryprovisioninthewillare:
1. Legitimateexpenses;
2. Credits;
3. Improvements

Note: The coverage of legitimate expenses and


improvements are limited to necessary and useful
expenses,butnottoornamentalexpenses.

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2. ABSOLUTEOBLIGATION
TOPRESERVEANDTRANSMITPROPERTY

Anabsoluteobligationisimposeduponthe
fiduciarytopreserveandtotransmittoasecond
heirthepropertyatagiventime.

Q: How should an absolute obligation to


preserve and to transmit be imposed upon the
fiduciary?

A: The obligation to preserve and transmit must


begivenclearlyandexpresslybygivingitaname
fideicommissary substitution or by imposing
upon the first heir the absolute obligation to
preserve and deliver the property to the second
heir.

Note:"Giventime"meansthetimeprovidedbythe
testator;ifnotprovided,thenitisunderstoodthat
theperiodisthelifetimeofthefirstheir.

st
Q:Ifthetestatorprovidedthatthe1 heirshall
enjoythepropertyduringhislifeandthatupon
his death it shall pass to another expressly
designated by the testator, but without
imposing the obligation to preserve the
property, is there fideicommissary substitution
inthiscase?

A:None.Thereisnofideicommissarysubstitution
but merely a legacy of the usufruct of the
property.

3.FIDEICOMMISSARY

Thereisasecondheirwhomustbeonedegree
fromthefirstheir.
Q:Whatdoesonedegreemean?

A: "One degree" refers to the degree of


relationship;itmeansonegeneration.Assuch,
the fideicommissary can only be either a parent
orchildofthefirstheir.

Note: The relationship is always counted from the


first heir. However, fideicommissary substitutions
arealsolimitedtoonetransmission.Uponthelapse
oftimeforthefirstheir,hetransmitsthepropertyto
the second heir. In other words, there can only be
onefideicommissarytransmissionsuchthatafterthe
first, there can be no second fideicommissary
substitution.

304

CAPACITYTOSUCCEEDOFFIDUCIARYAND
FIDEICOMMISSARY

Thefirstandsecondheirmustbothbelivingand
qualifiedatthetimeofthedeathofthetestator.

Q:Whymustboththefirstandsecondheirbe
livingandqualifiedatthetimeofthedeathof
thetestator?

A:Thefideicommissaryinheritsnotfromthefirst
heirbutfromthetestator,thus,therequirement
that the fideicommissary be alive or at least
conceivedatthetimeofthetestatorsdeath.

Note:Thefideicommissarysubstitutionmustnotbe
imposedonthelegitime,onlyonthefreeportion.

Q:Dotheheirstoafideicommissarysubstitution
inheritsuccessively?

A:No.Boththefirstheirandthefideicommissary
inheritthepropertysimultaneously,althoughthe
enjoymentandpossessionaresuccessive.
Note:Fromthemomentofdeathofthetestator,the
rightsofthefirstheirandthefiduciaryarevested.

Q: What is the effect if the fideicommissary


predeceasesthefiduciary?

A: If the fideicommissary predeceases the


fiduciary,butsurvivesthetestator,hisrightspass
tohisownheirs.

Q:Whatistheremedyofthefideicommissaryto
protecthimselfagainstalienationtoaninnocent
thirdperson?

A: If the first heir was able to register the


property in his name, fideicommissary should
annotate his claim on the land on the title to
protect himself against any alienation in favor of
innocentthirdparties.

When the property passes to the


fideicommissary, there is no more prohibition to
alienate.

Q: What is the effect of the nullity of the


fideicommissarysubstitution?

A:Thenullityofthefideicommissarysubstitution
does not prejudice the validity of the institution
oftheheirsfirstdesignated;thefideicommissary
clauseshallsimplybeconsideredasnotwritten.

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SUCCESSION
Q: If the testator gives the usufruct to different
personssuccessively,whatruleswillapply?

A:Theprovisionsonfideicommissarysubstitution
alsoapplyinacasewherethetestatorgivesthe
usufructtovariouspersonssuccessively.

Q:Raymond,single,namedhissisterRuffainhis
will as a devisee of a parcel of land which he
owned. The will imposed upon Ruffa the
obligation of preserving the land and
transferring it, upon her death, to her
illegitimatedaughterScarletwhowasthenonly
one year old. Raymond later died, leaving
behindhiswidowedmother,RuffaandScarlet.
IstheconditionimposeduponRuffatopreserve
the property and to transmit it upon her death
toScarlet,valid?

A: When an obligation to preserve and transmit


thepropertytoScarletwasimposedonRuffa,the
testator Raymond intended to create a
fideicommissary substitution where Ruffa is the
fiduciary and Scarlet is the fideicommisary.
Having complied with the requirements of Art.
863 and 869 (NCC), the fideicomissary
substitutionisvalid.

Q:IfScarletpredeceasesRuffa,whoinheritsthe
property?

A: If Scarlet predeceases Ruffa, the


fideicommissary substitution is rendered null or
ineffectiveunderArt.863(NCC).AndapplyingArt.
868 (NCC), the fideicommissary clause is
disregarded without prejudice to the validity of
theinstitutionofthefiduciary.InsuchcaseRuffa
shallinheritthedevicefreefromthecondition.

If Ruffa predeceases Raymond, can Scarlet


inheritthepropertydirectlyfromRaymond?

A:Inafideicommissarysubstitution,theintention
of the testator is to make the second heir his
ultimate heir. The right of the second heir is
simply postponed by the delivery of the
inheritance to the first heir for him to enjoy the
usufruct over the inheritance. Hence, when the
first heir predeceased the testator, the first heir
did not qualify to inherit and the right of the
second heir to receive the inheritance will no
longer be delayed provided the second heir is
qualified to inherit at the time of the testators
death. In fideicommissary substitution, the first
andsecondheirsinheritfromthetestator,hence,
both should be qualified to inherit from the
testatoratthetimeofhisdeath.

In the problem, when Ruffa predeceased


Raymund, she did not qualify to receive the
inheritance to enjoy it usufruct, hence, the right
of Scarlet to receive the inheritance upon the
death of the testator will no longer be delayed.
However, Scarlet is not qualified to inherit from
RayondbecausesheisbarredbyArt.992ofNCC
being an illegitimate child of Raymonds
illegitimate father. The devise will therefore be
ineffective and the property will be disposed of
byintestacy.(2008BarQuestion)

D.CONDITIONALTESTAMENTARYDISPOSITIONS
ANDTESTAMENTARYDISPOSITIONSWITHA
TERM

Q:Whatisaterm?

A: It is any future and certain event upon the


arrival of which the validity or efficacy of a
testamentarydispositionsubjecttoitdepends.

Note:Adispositionwithasuspensivetermdoesnot
prevent the instituted heir from acquiring his rights
and transmitting them to his heirs even before the
arrivaloftheterm.
Reason: The right oftheheir institutedsubjecttoa
termisvestedatthetimeofthetestator'sdeathhe
willjustwaitforthetermtoexpire.
Iftheheirdiesafterthetestatorbutbeforetheterm
expires, he transmits his rights to his own heirs
becauseofthevestedright.

Q: When the disposition is subject to a term,


what should be done by the instituted heirs or
legal heirs so that they can enjoy possession of
theproperty?

A:Ifthedispositionissubjecttoa:
1. Suspensive term The legal heirs can
enjoy possession of the property until
the expiration of the period but they
must put up a bond (caucion muciana)
in order to protect the right of the
institutedheir.

2. Resolutory term The legal heirs can


enjoy possession of the property but
when the term arrives, he must give it
to the legal heirs. The instituted heir
doesnothavetofileabond.

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E.LEGITIME

1.DEFINITION

Q: In relation to Articles 908 to 910, how shall


thereductionfromthelegitimebemade?
A: After the legitime has been determined in
accordancewiththethreeprecedingarticles,the
reductionshallbemadeasfollows:

Q:Definelegitime.
A:Legitimeisthatpartofthetestator'sproperty
which he cannot dispose of because the law has
reserved it for certain heirs who are, therefore,
calledcompulsoryheirs.(Art.886)

1.

Note:Thereiscompulsiononthepartofthetestator
toreservethatpartoftheestatewhichcorresponds
tothelegitime.

2.

Q:Howislegitimedetermined?

If the testator has directed that a


certain devise or legacy be paid in
preference to others, it shall not suffer
anyreductionuntilthelatterhavebeen
applied in full to the payment of the
legitime.

A: To determine the legitime, the value of the


propertyleftatthedeathofthetestatorshallbe
considered, deducting all debts and charges,
whichshallnotincludethoseimposedinthewill.
3.

Tothenetvalueofthehereditaryestate,shallbe
added the value of all donations by the testator
thataresubjecttocollation,atthetimehemade
them.(Art.908)
Q: Cite the rules governing the donations made
bythetestatorinfavorofhischildren,legitimate
and illegitimate, and strangers and those which
areinofficious.

4.

A:
1.
2.

3.

4.

Donationsshallberespectedaslongas
thelegitimecanbecovered,reducingor
annulling, if necessary, the devises or
legaciesmadeinthewill;
Thereductionofthedevisesorlegacies
shall be pro rata, without any
distinctionwhatever.

Donations given to children shall be


chargedtotheirlegitime.
Donations made to strangers shall be
charged to that part of the estate of
whichthetestatorcouldhavedisposed
byhislastwill.
Insofar as they may be inofficious or
may exceed the disposable portion,
they shall be reduced according to the
rules established by this Code. (Art.
909)
Donations which an illegitimate child
may have received during the lifetime
ofhisfatherormother,shallbecharged
to his legitime. Should they exceed the
portion that can be freely disposed of,
they shall be reduced in the manner
prescribedbythisCode.(Art.910)

If the devise or legacy consists of a


usufruct or life annuity, whose value
maybeconsideredgreaterthanthatof
the disposable portion, the compulsory
heirs may choose between complying
with the testamentary provision and
deliveringtothedeviseeorlegateethe
part of the inheritance of which the
testatorcouldfreelydispose.(Art.911)
Ifthedevisesubjecttoreductionshould
consist of real property, which cannot
be conveniently divided, it shall go to
the devisee if the reduction does not
absorb onehalf of its value; and in a
contrary case, to the compulsory heirs;
but the former and the latter shall
reimburse each other in cash for what
respectivelybelongstothem.(Art.912)
Thedeviseewhoisentitledtoalegitime
may retain the entire property,
provideditsvaluedoesnotexceedthat
of the disposable portion and of the
sharepertainingtohimaslegitime.(id.)

Note:Iftheheirsordeviseesdonotchooseto
avail themselves of the right granted by the
preceding article, any heir or devisee who did
nothavesuchrightmayexerciseit;shouldthe
latternotmakeuseofit,thepropertyshallbe
soldatpublicauctionattheinstanceofanyone
oftheinterestedparties.(Art.913)
Thetestatormaydeviseandbequeaththefree
portionashemaydeemfit.(Art.914)

306

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SUCCESSION
RULESONLEGITIME

Q:Canthetestatordeprivethecompulsoryheirs
theirlegitimes?

A: No. The testator cannot deprive the


compulsory heirs of their legitimes, except
throughdisinheritance.

Note:Onlythelegitimeisreserved.Thefreeportion
maybedisposedofbywill.

Q:Mustcompulsoryheirsaccepttheirlegitimes?

A: No. There is no obligation on the compulsory


heirstoaccept.

Q:Whatarethekindsoflegitime?

A:
1. Fixed If the amount (fractional part)
does not vary or change regardless of
whether there are concurring
compulsoryheirsornot.
a. legitimate
children
and
descendants (legitimate childrens
legitimeisalways)
b. legitimateparentsandascendants

2. Variable If the amount changes or


varies in accordance with whom the
compulsoryheirconcur.
a. survivingspouse
b. illegitimatechildren
c. parentsoftheillegitimatechild

Note:Factorswhichaffectthelegitime:
1. Identity of the concurring compulsory
heirsand;
2. Numberofconcurringcompulsoryheirs.

Q: What are the limitations imposed on the


testatorregardinghisrightsofownership?

A:Thetestatorcannotmakedonationsintervivos
which impinge upon the legitime or which are
inofficious.

Note: The prohibition does not cover an onerous


disposition (sale) becausethis involves anexchange
ofvalues.

Q: What are the rules governing succession in


thedirectdescendingline?

A:
1. Rule of preference between lines
descending line is preferred over the
ascendingline;

2.
3.

Ruleofproximity;
Right of representation, in case of
predecease,
incapacity
and
disinheritance;
4. If all the legitimate children repudiate
their legitime, the next generation of
legitimatedescendants,succeedintheir
ownright.

Q: What are the rules governing succession in


theascendingline?

A:
1. Ruleofproximitynearerexcludesthe
moreremote;
2. Divisionbyline;
3. Equaldivisionwithintheline.

Q: What is/are the remedy(ies) available to a


compulsory heir whose legitime has been
impaired?

A:
1. In case of preterition annulment of
institution of heir and reduction of
devisesandlegacies
2. In case of partial impairment
completionoflegitime
3. In case of inofficious donation
collation

Q: Is the renunciation or compromise of future


legitimeallowed?

A: The renunciation or compromise is prohibited


andconsiderednullandvoid.

Q:Whatisthescopeoftheprohibition?

A:
1. Any renunciation of future legitimes,
whetherforavaluableconsiderationor
not;
2. Any waiver of the right to ask for the
reductionofaninnoficiousdonation;
3. Compromise between the compulsory
heirs themselves during the lifetime of
thetestator.

Note:Theprohibitionisnotapplicableincasesof:
1. Renunciationsorcompromisesmadeafter
thedeathofthetestator;
2. Donations or remissions made by the
testator to the compulsory heirs as
advancesoftheirlegitime.

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Q: What is the order of preference in reducing


testamentarydispositionsanddonations?

A:
1. Legitimeofcompulsoryheirs
2. Donationsintervivos
3. Preferentiallegaciesordevises
4. Allotherlegaciesordevisesprorata.

Note: The order of preference is applicable


when:
1. Thereductionisnecessarytopreservethe
legitime of compulsory heirs from
impairment whether there are donations
intervivosornot;or
2. Although,thelegitimehasbeenpreserved
by the testator himself there are
donationsintervivos.

Q: What are the steps in the distribution of the


estateofthetestator?
A:
1. Determinethevalueofthepropertyleft
at the death of the testator. (Gross
estate)
2. Deduct all debt and charges, except
thoseimposedinthewillfromthegross
estate.(Netasset)
3. Add the value of all donations by the
testatorthataresubjecttocollation.

(Nethereditaryestate=[Grossestate
DebtsandCharges]+donations)
4. Determine who are the compulsory
heirs and their corresponding legitimes
usingthetableoflegitimesbelow.
5. Determinethefreeportion.

Freeportion= nethereditaryestate
Less:
legitimes(totalamount)

6. Imputationofdonations
7. Distributionoftheremainingportionto
thelegateesanddevisees.

Q: What is the effect of donations to the


inheritanceofanheir?

A:Donationsintervivosgiventochildrenshallbe
charged to their legitime, unless otherwise
providedbythetestator.

Reason: Donations to the compulsory heirs are


advancestothelegitime.

TABLESOFLEGITIMES.

LegitimatechildrenorDescendants
Shareoflegitimate
childrenand
descendants

ofthenetestate

Freeportion

ofthenetestate

LegitimateParentsandAscendants
Shareof legitimate
parentsand
ascendants

ofthenetestate

Freeportion

ofthenetestate

OneLegitimatechildordescendantand
SurvivingSpouse
Shareofalegitimate
child

ofthenetestate

Shareofthesurviving
spouse

ofthenetestate

Freeportion

ofthenetestate

Illegitimatechildrenandlegitimatechildren
Shareoflegitimate
childrenand
descendants

ofthenetestate

Shareofeach
illegitimatechildren

ofthelegitimeof
eachlegitimate
childrenorascendant

Freeportion

Whateverremains

Twoormorelegitimatechildrenor
descendantandSurvivingSpouse
Shareofalegitimate
child

ofthenetestate

Portionequaltothe
Shareofthesurviving legitimeofeachofthe
legitimatechildrenor
spouse
descendant
Freeportion

Whateverremains

Note: Donations inter vivos to strangers shall be


chargedtothefreeportion.

308

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SUCCESSION

LegitimateParents;SurvivingSpouse;
IllegitimateChildren

LegitimateParentsorAscendantsand
SurvivingSpouse

Sharesand
of
legitimate
parents
and
ascendants

ofthenetestate

ofthenetestate

Surviving
spouse

1/8ofthenetestate

ofthenetestate

Illegitimate
children

ofthenetestate

Free
portion

1/8ofthenetestate

Shareof
legitimate
parentsor
ascendants

ofthenetestate

Shareofthe
surviving
spouse
Freeportion

IllegitimatechildrenandSurvivingSpouse
Shareof
illegitimate
children

1/3ofthenetestate

Shareof
the
surviving
spouse

1/3ofthenetestate

Free
portion

1/3ofthenetestate

SurvivingSpouseAlone;Exception:Marriagein
ArticuloMortis

LegitimateParentsorAscendantsand
IllegitimateChildren
Sharesand
of
legitimate
parents
and
ascendants

ofthenetestate

Illegitimate
children

ofthenetestate

Free
portion

ofthenetestate

SurvivingSpouse;LegitimateChildrenor
Ascendants;IllegitimateChildren
Shareof
legitimate
childrenand
descendants

ofthenetestate

Surviving
spouse

Equaltotheportionofthe
legitimeofeachlegitimatechild

Illegitimate
children

oftheshareofeachlegitimate
child

Freeportion

Whateverremains

Surviving
spouse
only

ofthenetestate

Free
portion

ofthenetestate

Surviving
spouse
only
(marriage
inarticulo
mortis,
testator
diedw/in3
months)

1/3ofthenetestate

Free
portion

2/3ofthenetestate

Surviving
spouse
only
(marriage
inarticulo
mortis,
testator
diedw/in
3mos.but
havebeen
livingas
H&Wfor
notless
than5yrs)

ofthenetestate

Free
portion

ofthenetestate

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IllegitimateParentsAlone;orWith
illegitimatechildrenorLegitimateChildrenor
Descendants;orWithSurvivingSpouse
Shareof
the
ofthenetestate
illegitimate
parents
alone
Free
ofthenetestate
portion
ofthenetestate
Shareof
illegitimate
parents
ofthenetestate
Shareof
the
surviving
spouse
Free
ofthenetestate
portion

IllegitimateChildrenAlone
Shareof
illegitimate
children

ofthenetestate

Free
portion

ofthenetestate

TABLEOFINTESTATESHARES

LEGEND:
Legit.ChildrenorDescendants
Legit.ParentsorAscendants
SurvivingSpouse

NephewsandNieces

LCD
LPA
SS
NN

Illegit.ChildrenorDescendants
Illegit.ParentsorAscendantsI
BrothersandSisters

ILCD
LPA
BS

INTESTATEHEIRS

SHAREINTHEFREEPORTION

AnyClassalone

ofthefreeportion

LCDalone
SS

(SS)

LCD

SS

Remainingportionofestateafterpayinglegitimes

LegitimestobedividedequallybetweentotalnumberofchildrenplustheSS

LCD

ILCD

Remainingportionofestateafterpayinglegitimes

Legitimestobedividedbytheratioof2:1

OneLCD

OneILCD

SS

Remainingportionofestateafterpayinglegitimestobedividedbytheratioof2:1

OnepartgoestotheILCD

Sameshareasalegitimatechild

LCD

ILCD

SS

Remainingportionofestateafterpayinglegitimestobedividedbytheratioof2:1
OnepartgoestotheILCD

Sameshareasalegitimatechild,providedlegitimesarenotimpaired

LPA

ILCD

(ILCD)

310

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SUCCESSION
LPA

SS

(SS)

LPA

SS

ILCD

(SS)

ILCD

SS

1/6

1/6

SS

or

ILPA

SS

BS,NN

SS

BS,NN

(BS,NN)

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StepsinDeterminingtheLegitimeofCompulsoryHeirs
Step 1: INVENTORY
(Gross Value of Estate)

Determination of the gross value of the estate at the time of


the death of the testator

Step 2: DEDUCT
OBLIGATIONS

Determination of all the debts and charges which are


chargeable against the estate

Step 3: Net Value

Step 4: Collation

Net Hereditary Estate

Determination of the net valueof the estate by deducting all


the debts and charges from the gross value of the estate

Collation or addition of all the value of all donations inter


vivos to the net value of the estate

Determination of the Net Hereditary Estate from the total


thus found
Imputation of all the value of donations inter vivos made to
compulsory heirs against their legitimes and of the value of
all donations inter vivos made to strangers against the
disposable free portion and restoration to the hereditary
estate if the donation is inofficious.
If the legitime is impaired, the following reductions shall be
made:
a. First, reduce pro rata non-preferred legacies and
devices, and the testamentary dispositions.
b. Second, reduce pro rata the preferred legacies and
devises
c. Third, reduce the donations inter vivos according to
the inverse order of their dates.
*** As to the remaining portion of the estate, it shall be
distributed to the devisees and legatees

312

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FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
2.COMPULSORYHEIRSANDVARIOUS
COMBINATIONS
Q:Whoarecompulsoryheirs?

A:Thefollowingarecompulsoryheirs:
1. Legitimate children and descendants,
withrespecttotheirlegitimateparents
andascendants;
2. In default of the foregoing, legitimate
parentsandascendants,withrespectto
their
legitimate
children
and
descendants;
3. Thewidoworwidower;
4. Acknowledged natural children, and
naturalchildrenbylegalfiction;
5. Otherillegitimatechildrenreferredtoin
article287.

NOTE:CompulsoryheirsmentionedinNos.3,4,and
5arenotexcludedbythoseinNos.1and2;neither
dotheyexcludeoneanother.

In all cases of illegitimate children, their filiation


mustbedulyproved.

The father or mother of illegitimate children of the


three classes mentioned, shall inherit from them in
the manner and to the extent established by this
Code.(Art.887)

Q: What are the classifications of compulsory


heirs?

A:
1. PrimarycompulsoryheirsTheyarenot
excluded by the presence of other
compulsoryheirs.

E.g. legitimate children, surviving


spouse
2. Secondary compulsory heirs Those
who succeed only in default of the
primarycompulsoryheirs.

E.g.legitimateascendants
3. Concurring compulsoryheirsTheyget
their legitimes together with the
primary or secondary heirs. Neither
excludes primary or secondary heirs,
noreachother.

E.g. Surviving spouse and illegitimate


childrenanddescendants.

Legitimatechildrenanddescendants(LCD)

Q:Isanadoptedchildacompulsoryheir?

A: Legitimate children includes adopted


childrenandlegitimatedchildren.

Under R.A. 8552 or the Domestic Adoption Law


adoptedchildrenhavethesamerightsgrantedto
the legitimate children. Adopted children, for all
intentsandpurposesareconsideredaslegitimate
children.

Hence,theadoptedchildrencanalreadyexclude
legitimateparents/ascendants.

Legitimateparentsandascendants(LPA)

Q: When do legitimate parents and ascendants


inherit?

A: Legitimate parents and ascendants inherit in


default of legitimate children and descendants.
Theyaresecondarycompulsoryheirs.

Q:Isthepresenceofillegitimatechildrenofthe
decedentexcludetheLPA?

A:No.Legitimateparentsandascendantsconcur
withtheillegitimatechildrenofthedecedent.

However, if the decedent is himself illegitimate,


his illegitimate children exclude the illegitimate
parentsandascendants.

Survivingspouse(SS)
Q: Can a common law spouse be a compulsory
heir?

A:No.Theremustbevalidmarriagebetweenthe
decedent and the surviving spouse. If the
marriage is null and void, the surviving spouse
cannotinherit.

Q: How can the heirs of the decedent use the


nullity of marriage to prevent the surviving
spousefrominheriting?

A: The heirs can raise the issue of nullity of the


marriage in the same proceeding for the
settlementoftheestate.Thisisallowedbecause
amarriagethatisnullandvoidcanbecollaterally
attacked.

However, in case of voidable marriages, if the


marriage is not annulled before the decedent
died,thesurvivingspousecanstillinherit

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Reason:Voidablemarriagescanonlybeattacked
inadirectproceeding,i.e.annulmentproceeding.

Note:Thesurvivingspouseisnotacompulsoryheir
ofhis/herparentinlaw.

Separationinfact will not disqualify the surviving


spouse from getting his/her legitime, regardless of
his/herguilt.

Illegitimatechildren

Note: Under the Family Code, there is no more


distinction between acknowledged natural children
andillegitimatechildren.Theyareallconsideredas
illegitimate.

Compulsoryheirsofapersonwhoisillegitimate:
1. Legitimatechildrenanddescendants;
2. Illegitimatechildrenanddescendants;
3. In default of the foregoing, illegitimate
parentsonly;
4. Survivingspouse.

Q:Inwhatwaysmaycompulsoryheirsinherit?

A:Compulsoryheirsinheriteither:
1. intheirownright;or
2. byrightofrepresentation

3.RESERVATRONCAL

Q:Whatisreservatroncal?

A: Reserva troncal The ascendant who inherits


from his descendant any property which the
lattermayhaveacquiredbygratuitoustitlefrom
another ascendant, or a brother or sister, is
obligedtoreservesuchpropertyashemayhave
acquired by operation of law for the benefit of
relativeswhoarewithinthethirddegreeandwho
belongtothelinefromwhichsaidpropertycame.
(Art.891)

Purpose: To prevent persons who are outsiders


to the family from acquiring, by chance or
accident, property which otherwise would have
remained with the said family. In short, to put
back the property to the line from which it
originallycame.

Note:Othertermsusedtorefertoreservatroncal:
1. Lineal
2. Familiar
3. Extraordinaria
4. Semitroncal
5. Pseudotroncal

Q: What are the requisites that must exist in


order that a property may be impressed with a
reservablecharacter?

A:
1. That the property was acquired by a
descendant (called praepositus or
propositus) from an ascendant or from
a brother or sister by gratuitous title
when the recipient does not give
anythinginreturn;
2. Thatsaiddescendant(praepositus)died
withoutanissue;
3. That the same property (called
reserva) is inherited by another
ascendant (called reservista) by
operation of law (either through
intestate or compulsory succession)
fromthepraepositus;and
4. Thattherearelivingrelativeswithinthe
third degree counted from the
praepositus and belonging to the same
line from where the property originally
came(calledreservatarios).(Art.891;
Chua v. CFI of Negros Occidental,
Branch V, 78 SCRA 412; Rabuya, Civil
LawReviewer,pp.634635)

Q:Doesreservatroncalexistinanillegitimateor
adoptiverelationship?

A: No. It only exists in the legitimate family.


(Centenov.Centeno,52Phil.322;id,p.635)

Q: What are the causes for the extinguishment


ofthereserva?

A:DDLRRP
1. Deathofthereservista
2. Death of all the relatives within the
third degree prior to the death of the
reservista
3. Accidental Loss of all the reservable
properties
4. Renunciation or waiver by the reserves
orreservatarios
5. Registration under Act 496 without the
reservablecharacterbeingannotatedif
itfallsintothehandsofabuyeringood
faithforvalue
6. By Prescription reservista seeks to
acquire(30yearsimmovable;8years
movable)

314

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SUCCESSION
Q:Differentiatereservaminimaandreserva
maxima.

A:
RESERVAMINIMA

RESERVAMAXIMA

Allofthepropertieswhich
thedescendanthad
previouslyacquiredby
gratuitoustitlefrom
anotherascendantorfrom
abrotherorsistermustbe
consideredaspassingto
theascendantreservista
partlybyoperationoflaw
andpartlybyforceofthe
descendantswill.

Alloftheproperties
whichthedescendant
hadpreviouslyacquired
bygratuitoustitlefrom
anotherascendantor
fromabrotherorsister
mustbeincludedinthe
ascendantslegitime
insofarassuchlegitime
cancontain.

Appliesintestate
succession.

Alwaysfollowedin
intestatesuccession

Q:Whoarethepartiesinreservatroncal?
A:
1. Origin
2. Propositus
3. Reservista
4. Reservatartios/Reservees

ORIGIN

Q:Whomustbetheorigininreservatroncal?

A: The origin of the property must be an


ascendant,brotherorsisterofthepropositus.
Note: The origin must be a legitimate relative
becausereservatroncalexistsonlyinthelegitimate
family.

Q:Inorderforreservatroncaltotakeplace,how
should the property be transmitted from the
origintothepropositus?

A: The transmission from the origin to the


propositusmustbebygratuitoustitle.

Q:Cantheoriginalienatetheproperty?
A:Yes.Whiletheoriginownstheproperty,there
is no reserva yet, and therefore, he has the
perfectrighttodisposeofit,inanywayhewants,
subject, however to the rule on inofficious
donations.

PROPOSITUS

Q:Whomustbethepropositus?

A: The propositus must be a legitimate


descendantorhalfbrother/sisteroftheoriginof
theproperty.

Note:Togiverisetoreservetroncal,thepropositus
must not have any legitimate children, otherwise,
the reservable property will be inherited by the
latter

The presence of illegitimate children of the


proposituswillnotpreventhislegitimateparentsor
ascendantsfrominheritingthereservedproperty.
Thepropositusisthedescendantwhosedeathgives
risetothereservatroncal,andfromwhomtherefore
thethirddegreeiscounted.

Q:Canthepropositusalienatetheproperty?

A: Yes. While propositus is still alive, there is no


reserva yet, therefore, he is the absolute owner
of the property, with full freedom to alienate or
disposeorencumber.

Inasmuch as the propositus is the full owner of


theproperty,hemayevendefeattheexistenceof
any possible reserve by simply not giving the
property involved to his ascendant, by way of
inheritancebyoperationoflaw.

Note:Thepropositusisreferredtoasthearbiterof
thereserva.

RESERVISTA

Q:Whoisthereservistainreservatroncal?

A: The reservista is the ascendant who inherits


from the propositus by operation of law. It is he
whohastheobligationtoreserve.

Note: The relationship between the reservista and


thepropositusmustbelegitimate.

Ifheinheritedthepropertyfromthepropositus,not
by legalsuccessionor by virtue of legitime, thereis
noobligationtoreserve.

Q: Does the reservista own the reservable


property?

A: The reservista is an absolute or full owner,


subjecttoaresolutorycondition.Iftheresolutory
conditionisfulfilled,thereservistasownershipof
thepropertyisterminated.

Resolutory condition: If at the time of the


reservistasdeath,thereshouldstillexistrelatives
within the third degree (reservatarios) of the
propositus and belonging to the line from which
thepropertycame.

Note:Thereservablepropertyisnotpartofthe
estateofthereservista.

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Q:Canthereservistaalienatetheproperty?

A:Thereservistacanalienatethepropertybeing
theownerthereofbutsubjecttothereservation.

Q:Isthereservistarequiredtofurnishabond?

A:
GR:Heisrequiredtofurnishabond,security
or mortgage to guarantee the safe delivery
laterontothereservatariosoftheproperties
concerned,inthepropercases.
XPN: The bond, security or mortgage is not
needed when the property has been
registered or annotated in the certificate of
titleassubjecttoreservatroncal.

Note:Uponthereservistasdeaththeownershipof
thereservedpropertiesisautomaticallyvestedto
thereservatarioswhoareexisting.Hence,the
reservistacannotdisposethereservedpropertyby
williftherearereservatariosexistingatthetimeof
hisdeath.

Q:Whataretheobligationsofthereservista?

A:
1. Tomakeaninventoryofthereservable
property;
2. Toannotatethereservablecharacterof
the real property in the Register of
Deedswithin90daysfromthetimehe
receivestheinheritance;
3. Tofurnishabond,security,ormortgage
toanswerforthereturnofpropertyor
itsvalue;
rd
4. To preserve the property for the 3
degreerelatives.

RESERVATARIOS

Q:Whoarethereservatarios?

A:Thereservatariosarerelativeswithinthethird
degreeofthepropositus,whobelongtothesame
linefromwhichthepropertyoriginallycame,who
will become the full owners of the property the
moment the reservista dies, because by such
death,thereservaisextinguished.

Q:Whoaretherelativeswithinthethirddegree
fromthepropositus?

A:
1. Parents;
2. Grandparents;

316

3.
4.
5.

Fullandhalfbrothersandsisters;
Greatgrandparents,
Nephewsandnieces.

Q:Whataretherequisitesforpassingoftitleto
thereservatarios?

A:
1. deathofthereservista;and
2. the fact that the reservatarios survived
thereservista.

Note:Thereservatariosinheritthepropertyfrom
thepropositus,notfromthereservista.

Thereservatariosmustbelegitimaterelativesofthe
originandthepropositus.

Reservatroncalisgovernedbythefollowingruleson
intestatesuccession:(Applicablewhenthereare
concurringrelativeswithinthethirddegree)
1. Proximity The nearer excludes the
farther
2. The direct line is preferred over the
collateralline
3. Thedescendinglineispreferredoverthe
ascendingline

Q:Whataretherightsofthereservatarios?

A:
1. Toaskfortheinventoryofallreservable
property
2. The appraisal of all reservable movable
property
3. The annotationin the registry of deeds
of the reservable character of all
reservableimmovableproperty
4. Constitutionofthenecessarymortgage.

Q:Whendoesthereservatarioacquiretheright
overthereservableproperty?

A: Upon the death of the reservista, the


reservatario nearest the decedent propositus
becomes, automatically and by operation of law,
the absolute owner of the reservable property.
(Canov.DirectorofLands)

Q: Is there right of representation in reserva


troncal?

A:Thereisrepresentationinreservatroncal,but
the representative must also be within the third
degree from the propositus. (Florentino v.
Florentino)

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
OPERATIONOFRESERVATRONCAL
Theoriginofthepropertyisthelegitimateascendant,brotherorsisterofthepropositus
UpondeathoftheORIGIN,hispropertyistransmittedtothePROPOSITUSeitherbydonationintervivos
ormortiscausa,aslongasitisbygratuitoustitle.

ORIGIN

PROPOSITUS

RESERVISTA

RESERVATARIO

ThePROPOSITUSisalegitimatedescendantorhalfbrother/sisteroftheORIGINoftheproperty.
Togiverisetoreservetroncal,thePROPOSITUSmustnot haveanylegitimate children,otherwise,the
reservablepropertywillbeinheritedbythelatter
ThePROPOSITUSisthedescendantwhosedeathgivesrisetothereservatroncal,andfromwhomthe
thirddegreeiscounted.

TheRESERVISTAistheascendantwhoinheritsfromthePROPOSITUSbyoperationoflaw.Itishewhohas
theobligationtoreserve.
TherelationshipbetweentheRESERVISTAandthePROPOSITUSmustbelegitimate.
TheRESERVISTAisanabsoluteorfullowner,subjecttoaresolutorycondition.
Resolutorycondition: IfatthetimeoftheRESERVISTASsdeath,thereshouldstillexistrelativeswithinthe
thirddegree(reservatarios)ofthepropositusandbelongingtothelinefromwhichthepropertycame.

TheRESERVATARIO'sarerelativeswithinthethirddegreeofthepropositus,whobelongtothesameline
fromwhichthepropertyoriginallycame,whowillbecomethefullownersofthepropertythemomentthe
reservistadies.
ThereservatariosinheritthepropertyfromthePROPOSITUS,notfromtheRESERVISTA.
UponthedeathoftheRESERVISTA,theRESERVATARIOnearestthedecedentPROPOSITUSbecomes,
automaticallyandbyoperationoflaw,theabsoluteownerofthereservableproperty.

4.DISINHERITANCE

A.DISINHERITANCEFORCAUSE

Q:Whatisdisinheritance?

A: Disinheritance is the process or act, thru a


testamentarydispositionofdeprivinginawillany
compulsoryheirofhislegitimefortrueandlawful
cause.

Note: The onlywayin which a compulsory heir can


be deprived of his legitime is through valid
disinheritance.

Disinheritance is not automatic. There must be


evidence presented to substantiate the
disinheritance and must be for a valid and sound
cause.

Effect of disinheritance: Total exclusion to the


inheritance, meaning, loss of legitime, right to
intestatesuccession,andofanydispositioninaprior
will.

Disinheritance,however,iswithoutprejudicetothe
right of representation of the children and
descendantsofthepersondisinherited.

But the disinherited parent shall not have the


usufruct or administration of the property which
constitutesthelegitime.

Q: What are the requisites of a valid


disinheritance?

A:Disinheritancemustbe:
1. Madeinavalidwill;
2. Identity of the heir is clearly
established;
3. Foralegalcause;
4. Expresslymade;
5. Causestatedinthewill;
6. Absoluteorunconditional;
7. Total;
8. Causemustbetrueandifchallengedby
theheir,itmustbeprovedtobetrue.

Note:Proponentofdisinheritancehastheburdenof
proof.

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(1)RECONCILIATION

Q: What is the effect of subsequent


reconciliation between the offender and the
offendedpartyonthelattersrighttodisinherit?

A: A subsequent reconciliation between the


offender and the offended person deprives the
latter of the right to disinherit, and renders
ineffectualanydisinheritancethatmayhavebeen
made.(Art.922)

(2)RIGHTSOFDESCENDANTSOFPERSON
DISINHERITED

Q:Whatisreconciliation?

A:Thereisreconciliationwhentwopersonswho
are at odds decide to set aside their differences
andtoresumetheirrelations.Theyneednotgo
backtotheiroldrelation.

Note:Ahandshakeisnotreconciliation.Ithastobe
somethingmore.Itmustbeclearanddeliberate.

In order to be effective, the testator must pardon


thedisinheritedheir.Thepardonwhetherexpressor
tacit, must refer specifically to the heir disinherited
and to the acts he has committed, and must be
acceptedbysuchheir.

In disinheritance, reconciliation need not be in


writing.

Q: What is the effect of reconciliation on a


personsrighttodisinherit?

A:
1. Ifmadebeforedisinheritancerightto
disinheritisextinguished.
2. If made after disinheritance
disinheritanceissetaside.

B.DISINHERITANCEWITHOUTCAUSE

Q: What is the effect of disinheritance without


cause?

A: Disinheritance without a specification of the


cause, or for a cause the truth of which, if
contradicted,isnotproved,orwhichisnotoneof
those set forth in this Code, shall annul the
institutionofheirsinsofarasitmayprejudicethe
person disinherited; but the devises and legacies
andothertestamentarydispositionsshallbevalid
tosuchextentaswillnotimpairthelegitime.(Art.
918)

318

Q:Whatarethegroundsfordisinheritance?

A:
1. Common causes for disinheritance of
children or descendants, parents or
ascendants,andspouse:

a. When the heir has been found


guiltyofanattemptagainstthelife
of
the
testator,
his/her
descendants or ascendants, and
spouse, in case of children or
parents.
b. When the heir by fraud, violence,
intimidation, or undue influence
causes the testator to make to
make a will or to change one
alreadymade.
c. When the heir has accused the
testator of a crime for which the
lawprescribesimprisonmentofsix
years or more, if the accusation
hasbeenfoundgroundless.
d. Refusalwithoutjustifiablecauseto
support the testator who
disinheritssuchheir.

2. PeculiarCausesforDisinheritance

a. ChildrenandDescendants:
i. Conviction of a crime which
carrieswithitapenaltyofcivil
interdiction
ii. Maltreatment of the testator
b word or deed by the
childrenordescendant
iii. When the children or
descendant
has
been
convicted of adultery or
concubinage with the spouse
ofthetestator
iv. When the children or
descendant
leads
a
dishonorable or disgraceful
life

b. ParentsorAscendants:
i. When the parent or
ascendanthasbeenconvicted
of adultery or concubinage
with the spouse of the
testator
ii. When the parents have
abandoned their children or
induced their daughters to
live a corrupt or immoral life,
or attempted against their
virtue

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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SUCCESSION
iii.
iv.

Loss of parental authority for


causesspecifiedintheCode
Attemptbyoneoftheparents
against the life of the other,
unless there has been
reconciliationbetweenthem

c.

Spouse:
When the spouse has given
causeforlegalseparation
ii.
When the spouse has given
grounds for the loss of
parentalauthority

5.LEGACIESANDDEVISES
i.

Q:Whatcanbebequeathedordevised?

A: Anything within the commerce of man or


whichisalienable.

Q:Whomaybechargedwithlegaciesand
devices?

A:
1. Anycompulsoryheir
2. Anyvoluntaryheir
3. Anylegateeordevisee
4. Theestate,representedbytheexecutor
oradministrator(Jurado,p.345)

Q:Canthetestatorbequeathordeviseathingor
propertybelongingtosomeoneelse?

A:Itdependsonwhether:
1. Thetestatorthoughtthatheownedit

GR: A legacy or devise of a thing


belonging to someone else when the
testator thought that he owned it is a
void legacy or devise because it is
vitiatedbymistake.

XPN: If the testator acquires it after


makinghiswill.

2. The testator knows that he does not


ownbutordereditsacquisition

If the thing given as devise or legacy is


not owned by the testator at the time
he made the will but he orders his
estatetoacquireit,itisavalidlegacyor
devise. The testator knew that he did
notownit.Thereisnomistake.

Q: What is the effect if the thing or property


bequeathed or devised belonged to the legatee
ordeviseeatthetimethewillwasexecuted?

A: The legacy or devise is ineffective even if the


legatee or devisee alienates the thing after the
willismade.

Q: Suppose the legatee or devisee acquired the


property after the will has been executed?
Supposeheacquiredthethingbyoneroustitle?
Whatwouldbetheeffect?

A:Ifatthetimethelegacyordeviseismade,the
thingdidnotbelongtothelegateeordeviseebut
lateronheacquiresit,then:

1. Ifheacquireditbygratuitoustitle,then
thelegacyordeviseisvoid.

Reason: The purpose of the testator that


the property would go to the devisee or
legatee has already been accomplished
withnoexpensetothelegateeordevisee.

2.

If he acquired it by onerous title, the


legacy or devise is valid and the estate
may be required to reimburse the
amount.

Q:Supposethepropertybequeathedordevised
has been pledged or mortgaged, who has the
obligation to free the property from such
encumbrance?

A:
GR:Thepledgeormortgagemustbepaidby
theestate.

XPN: If the testator provides otherwise.


However,anyotherchargesuchaseasements
and usufruct, with which the thing
bequeathed is burdened, shall be respected
bythelegateeordevisee.

Q:Whatisalegacyofcredit?

A:It takesplacewhenthetestatorbequeathsto
anotheracreditagainstathirdperson.Ineffect,
itisanovationofthecreditbythesubrogationof
thelegateeintheplaceoftheoriginalcreditor.

Q:Whatisalegacyofremission?

A: It is a testamentary disposition of a debt in


favorofthedebtor.Thelegacyisvalidonlytothe
extentoftheamountofthecreditexistingatthe
timeofthetestator'sdeath.Ineffect,thedebtis
extinguished.

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Note:
1.

2.
3.

Legacy applies only to the amounts


outstanding at the time of the testator's
death.
The legacy is revoked if the testator files
anaction(judicialsuit)againstthedebtor.
It applies only to credits existing at the
time the will was made, and not to
subsequentcredits.

Q:Isalegacyordeviseconsideredpaymentofa
debt,ifthetestatorhasastandingindebtedness
tothelegateeordevisee?

A:No,legacyordeviseisnotconsideredpayment
of a debt because if it is, then it would be a
uselesslegacyordevisesinceitwillreallybepaid.

Q:Whatistheorderofpaymentoflegaciesand
devises?

A:
1. Remuneratorylegaciesordevises
2. Legaciesordevisesdeclaredbytestator
tobepreferential
3. Legaciesforsupport
4. Legaciesforeducation
5. Legacies or devises of a specific
determinate thing which forms part of
theestate
6. Allothersprorata

Note: When the question of reduction is between


and among legatees and devisees themselves, Art.
950 governs; but when there is a conflict between
compulsory heirs and legatees/devisees, Art. 911
governs.

Q: What are the grounds for the revocation of


legacyordevise?
A:

1. Transformation of the thing in such a


manner that it does not retain either
theformorthedenominationithad.
2. Alienationofthethingbequeathed.

Note:
GR:Thealienationofthepropertyrevokes
thelegacyordevisenotwithstandingthe
nullityofthetransaction.
However,whetherornotthelegacyor
deviseisrevokedornotdependsonthe
basisforthenullityofthecontract:

Ifthenullityisbasedonvitiatedconsent,
thelegacyordeviseisnotrevoked
becausetherewasnointentiontorevoke.

Forallothergrounds,thelegacyordevise
isrevoked.

XPN:Ifthesaleispactoderetroandthe
testatorreacquireditduringhislifetime.

3.

Note:Theorderofpreferenceisapplicablewhen:
1. There are no compulsory heirs and the
entireestateisdistributedbythetestator
aslegacy/devise;or
2. There are compulsory heirs but their
legitimehasalreadybeenprovidedforby
the testator and there are no donations
intervivos.

Q:WhatisthedistinctionbetweenArt.911and
Art.950?

A:
Orderofpreference
Orderofpreference
underArt.911
underArt.950
LDPO:
1. Legitimeof
compulsoryheirs;
2. Donationsinter
vivos;
3. Preferential
legaciesor
devises;
4. AllOtherlegacies
ordevisesprorata

320

Totallossofthethingbequeathed.

Note:Thelossofthethingbequeathed
mustnotbeattributedtotheheirs.There
shouldbenofaultonthepartoftheheirs.

4.

If the legacy is a credit against a third


person or the remission of a debt, and
the testator, subsequent to the making
of the will, brings an action against the
debtorforpayment.

1.
2.
3.
4.
5.

RemuneratoryL/D;
PreferentialL/D;
Legacyforsupport;
Legacyforeducation;
L/Dofaspecific,
determinatething
whichformsapartof
theestate;
6. Allothersprorata

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

SUCCESSION
III.LEGALORINTESTATESUCCESSION

A.GENERALPROVISIONS

1.RELATIONSHIP

Q:Whatislegalorintestatesuccession?

A: Legal or intestate succession is that which is


effectedbyoperationoflawindefaultofawill.It
islegalbecauseittakesplacebyoperationoflaw;
it is intestate because it takes place in the
absence or in default of a last will of the
decedent.(Jurado,p.377)

Q: What is the formula for application of


inheritance?

A:Thefollowingareappliedsuccessively:ISRAI
1. Institution of an heir (Bequest, in case
oflegaciesordevises)
2. Substitution,ifproper
3. Representation,ifapplicable
4. Accretion,ifapplicable
5. Intestacy, if all of The above are not
applicable

Q: When can legal or intestate succession take


place?

A:Intestatesuccessiontakesplacewhen:
1. there is no will; the will is void, or the
willisrevoked;
2. the will does not dispose all the
property of the testator. (partial
intestacy);
3. the suspensive condition attached to
theinheritanceisnotfulfilled;
4. The heir predeceased the testator or
repudiates the inheritance and no
substitution and no right of accretion
takeplace.
5. The heir instituted is incapacitated to
succeed.

Note: The enumeration is not exclusive; there are


othercausesforintestacywhicharenotincludedin
theenumeration.

E.g.
1.
2.
3.
4.

Preterition;
Arrivaloftheresolutorytermorperiod;
Fulfillment of a resolutory condition
attachedtotheinheritance;
Noncompliance or impossibility of
complyingwiththewillofthetestator.

Q: Can there be a valid will which does not


instituteanheir?

A: Yes, a will is valid even if it contains only a


provisionfordisinheritanceorifonlylegaciesand
devisesarecontainedinthewill.

Q:Whoareintestateheirs?

A:
1. Legitimatechildrenordescendants
2. Illegitimatechildrenordescendants
3. Legitimateparentsorascendants
4. Illegitimateparents
5. Survivingspouse
6. Brothers and sisters, nephews and
nieces
th
7. Other collateral relatives up to the 5
degree
8. TheState.

2.RIGHTOFREPRESENTATION

Q:Whatisrightofrepresentation?

A: Right created by fiction of law where 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
livingorcouldhaveinherited.

Q:Whatistheeffectofrepresentation?

A: Whenever there is succession by


representation,thedivisionoftheestateshallbe
made per stirpes, in such manner that the
representativeorrepresentativesshallnotinherit
morethanwhatthepersontheyrepresentwould
inherit, if he were living or could inherit. (Art.
974)

Note:Perstirpesmeansinheritancebygroup,all
thosewithinthegroupinheritinginequalshares.
Representationissuperiortoaccretion.

Q:Whendoesrightofrepresentationarise?

A:Representationmayariseeitherbecauseof:
1. death,
2. incapacity,or
3. disinheritance.

Q:Whenisrightorrepresentationnotavailable?

A:
1. As to compulsory heirs: In case of
repudiation,theonewhorepudiateshis
inheritance cannot be represented.

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2.

Their own heirs inherit in their own


right.
As to voluntary heirs: Voluntary heirs,
legateesanddeviseeswho:
a. Predeceasethetestator;or
b. Renouncetheinheritance
cannotberepresentedbytheirown
heirs,withrespecttotheirsupposed
inheritance.

Q: Does the representative inherit from the


personrepresented?

A:No.Inrepresentation,therepresentativedoes
notinheritfromthepersonrepresentedbutfrom
thetestatorordecedent.

Q: Where does right of representation take


place?

A: Representation takes place in the direct


descendingline,neverintheascending.
Note:Therepresentativehimselfmustbecapableof
succeedingthedecedent.
An illegitimate child can represent his father,
providedthatthefatherwasalsoillegitimate.

Q: Does right of representation apply in the


collateralline?

A: Right of representation takes place only in


favor of children of brothers or sisters, whether
full or half blood and only if they concur with at
leastoneuncleoraunt.

Note:Thisruleappliesonlywhenthedecedentdoes
nothavedescendants.

Q:Whatistheeffectifthereisnouncleoraunt
uponwhomthechildren,whoseektoinvokethe
rightofrepresentation,canconcurwith?

A: There shall be no right of representation and


ultimately they shall not inherit following Art.
975.

Q:Mayanillegitimatesiblingofthedecedentbe
represented?

A: Yes. An illegitimate brother or sister of the


deceased can be represented by his children,
without prejudice to the application of the Iron
CurtainRule.(Tolentino,p.451)

Q: Does the right of representation apply to


adoptedchildren?

A: No. The right of representation cannot be


invokedbyadoptedchildrenbecausetheycannot

322

represent their adopting parents to the


inheritanceofthelattersparents.

Reason:Thelawdoesnotcreateanyrelationship
between the adopted child and the relatives of
the adopting parents, not even to the biological
orlegitimatechildrenoftheadoptingparents.

Note: Under R.A. 8552 or the Domestic Adoption


Law, the adopted child and the adopting parents
havereciprocalsuccessionalrights.

Q:Whatistheruleonequaldivisionoflines?

A:
GR: Intestate heirs equal in degree inherit in
equalshares.

XPN:
1. In the ascending line, the rule of
divisionbylineistothematernalline
and to the paternal line, and within
eachline,thedivisionispercapita.
2. In the collateral line, the fullblood
brothers/sisters will get double that of
thehalfblood.
3. The division in representation, where
division is per stirpes the
representative divide only the share
pertainingtothepersonrepresented.

Note: The share of an illegitimate child is of the


shareofalegitimateone.

Fullbloodbrotherorsisterisentitledtodoublethe
shareofhalfbrotherorsister(Art.1006).

Compulsoryheirsshall,innocase,inheritabintesto
lessthantheirlegitimeasprovidedintestamentary
succession.

IRONCURTAINRULE

Q:Whatistheironcurtainrule?

A: Art. 992 of the Civil Code provides that


illegitimate children cannot inherit ab intestato
from the legitimate children and relatives of his
mother or father. Legitimate children and
relativescannotinheritinthesamewayfromthe
illegitimatechild.

Note: The iron curtain rule only applies in intestate


succession.

Thereisabarrierrecognizedbylawbetweenthe
legitimate relatives and the illegitimate child so
that one cannot inherit from the other and vice
versa.

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ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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SUCCESSION
Rationale:Thelawpresumestheexistenceof
antagonismbetweentheillegitimatechildand
thelegitimaterelativesofhisparents.

Q:Distinguishtheapplicationofironcurtainrule
andrightofrepresentation.
A:
IRONCURTAINRULE

RIGHTOF
REPRESENTATION

Prohibitsabsolutelya
successionabintestato
betweenthe
illegitimatechildand
thelegitimatechildren
andrelativesofthe
fatherormotherof
saidillegitimatechild.

Note:Ironcurtainrule
imposesalimitationon
rightof
representation.

Rightcreatedbyfiction
oflawwherethe
representativeisraised
totheplaceand
degreeoftheperson
represented,and
acquirestherights
whichthelatterwould
haveifhewereliving
orcouldhave
inherited.

Appliesiftheonewho
diedfirstisthe
legitimateparentor
childofthe
illegitimatesparent.

Reason:illegitimate
inheritsfromhis
parentsestatewhich
includeshisparents
inheritancefromsaid
legitimaterelativeor
childwhodied.

Appliesiftheonewho
diedfirstisthe
illegitimatesparent.

Reason:illegitimate
willberepresentinghis
parentbecauseofthe
predecease,thebar
imposedbytheiron
curtainruleis
renderedoperativeto
preventsuch.

Appliestoboth
intestateandtestate
succession
Determiningfactor:whodiedfirst?Isitthe
parentoftheillegitimatechildorisitthe
legitimaterelativeorchildofhisparent?

Appliesonlyin
intestatesuccession

RightofRepresentationandIronCurtainRule
(D)

If the child to be represented is


LEGITIMATE only legitimate children/
descendants can represent him

If the child to be represented is


ILLEGITIMATE both legit & illegit
children/ descendants can represent him

Legit X

legit
(X1)

illegit
(X2)

Illegit Y

legit
(Y2)

illegit
(Y1)

Iron Curtain Rule applies

Since X and Y both predeceased D, only X1 can represent X. X2 cannot by virtue of the iron curtain
rule. Both Y1 and Y2 can represent Y

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B.ORDEROFINTESTATESUCCESSION
Q:Whatistheorderofpreferencebetweenlines
inlegalorintestatesuccession?

A:Successiontakesplace:
First,inthedirectdescendingline;
Second,inthedirectascendingline;
Finally,inthecollateralline.

Q:Whatistheorderofintestatesuccessiontoa
legitimatechild?

A: In general, and without prejudice to the


concurrent right of other heirs in proper cases,
the order of intestate succession to a legitimate
childisasfollows:
1. legitimatechildrenanddescendants;
2. legitimateparentsandascendants;
3. illegitimatechildren;
4. thesurvivingspouse;
5. collateralsuptothefifthdegree;and
6. the State. (Rabuya, Civil Law Reviewer,
p.678)

Q: What is the order of intestate succession to


anillegitimatechild?

A:
1. The
legitimate
children
and
descendants of a person who is an
illegitimate child are preferred over
other intestateheirs, without prejudice
to the right of concurrence of
illegitimate children and the surviving
spouse.

2. In the absence of legitimate children


and descendants, the illegitimate
children (of the illegitimate child) and
theirdescendantssucceedtotheentire
estate, without prejudice to the
concurrent right of the surviving
spouse.

3. In the absence of children and


descendants, whether legitimate or
illegitimate, the third in the order of
succession to the estate of the
illegitimate child is his illegitimate
parents.Ifbothparentssurviveandare
entitled to succeed, they divide the
estate share and share alike. Although
thelawissilent,ifthesurvivingspouse
oftheillegitimatechildconcurswiththe
illegitimate parents, the surviving
spouse shall be entitled to onehalf of

324

theestatewhiletheillegitimateparents
gettheotherhalf.

Note: In the ascending line, only the


illegitimateparents are entitledto inherit
from the illegitimate child; the other
illegitimate descendants are not so
entitled.

4.

5.

In default of children or descendants,


legitimate or illegitimate, and
illegitimate parents, the surviving
spouse shall inherit the entire estate.
But if the surviving spouse should
survive with brothers and sisters,
nephews and nieces, the surviving
spouse shall inherit onehalf of the
estate,andthelattertheotherhalf.The
brothers and sisters must be by
illegitimatefiliation,otherwise,theIron
CurtainRuleshallapply.

Although the law is silent, illegitimate


brothers and sisters who survive alone
shall get the entire inheritance. The
legitimate children of the illegitimate
parentsarenotentitledtoinheritfrom
theillegitimatechildbyvirtueofArticle
992oftheNCC.

6.

TheState.(id.,pp.691692)

IV.PROVISIONSCOMMONTOTESTATEAND
INTESTATESUCCESSION

A.RIGHTOFACCRETION

1.DEFINITIONANDREQUISITES

Q:Whatisaccretion?

A: Accretion is a right by virtue of which, when


two or more persons are called to the same
inheritance,deviseorlegacy,thepartassignedto
the one who renounces or cannot receive his
share, or who died before the testator, is added
orincorporatedtothatofhiscoheir,codevisees,
orcolegatees.

Basis:Accretionisarightbasedonthepresumed
will of the deceased that he prefers to give
certain properties to certain individuals rather
thantohislegalheirs.Accretionispreferredover
intestacy.

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SUCCESSION
Q:Whataretherequisitesofaccretion?

A:
1. Two or more persons must have been
called in the testators will to the same
inheritance, legacy or devise, or to the
sameportionthereof,proindiviso
2. There must be a vacancy in the
inheritance,legacyordeviseasaresult
ofpredecease,incapacityorrepudiation

Q:Intestamentarysuccession,inwhatinstances
mayaccretiontakeplace?

A:
1. Predecease
2. Incapacity
3. Renunciation
4. Nonfulfillment of suspensive condition
imposeduponinstitutedheir
5. Ineffectivetestamentarydisposition

Q:Inintestatesuccession,inwhatinstancesmay
accretiontakeplace?

A:
1. Predeceaseoflegalheir
2. Incapacityoflegalheir
3. Repudiationbylegalheir

Note: Accretion takes place only if there is no


representation.
Inrenunciation,thereisalwaysaccretion.

Reason:Norepresentationinrenunciation.
In intestacy, apply representation first. If there is
none,thenaccretionwillapply.
In testacy, apply substitution first. If there is no
substitution, then accretion will apply. However, in
testamentary succession, the inheritance must not
havebeenearmarked.Accretioncannottakeplaceif
theinheritanceisearmarked.

B.CAPACITYTOSUCCEEDBYWILLORINTESTACY

1.PERSONSINCAPABLEOFSUCCEEDING

Q: What does absolute incapacity to succeed


mean?

A:Itmeansthepersonisincapacitatedtosucceed
in any form, whether by testate or intestate
succession.

Q:Whoareabsolutelyincapacitatedtosucceed?

A:
1. Thosenotlivingatthetimeofdeathof
thetestator

2.
3.

Those who cannot be identified. (Art.


845)
Thosewhoarenotpermittedbylawto
inherit.(Art.1027)

Q: Who are incapacitated to succeed based on


moralityorpublicpolicy?

A:ACO
1. Persons guilty of Adultery or
concubinage with the testator at the
timeofthemakingofthewill;
2. Persons guilty of the same Criminal
offense,inconsiderationthereof;
3. Apublicofficerorhiswife,descendants
andascendants,byreasonofhisOffice.
(Art.739)

Q: Who are incapacitated to succeed by reason


ofunworthiness?

A:PCAVAFPF
1. Parents who have abandoned their
children or induced their daughters to
lead a corrupt or immoral life, or
attemptedagainsttheirvirtues;
2. Persons Convicted of an attempt
against the life of the testator, his or
herspouse,descendantsorascendants;
3. Persons who Accused the testator of a
crime for which the law prescribes
imprisonment for six years or more, if
the accusation has been found to be
groundless;
4. 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
authoritieshavealreadytakenaction.

Note: This prohibition shall not apply to


cases wherein, according to law, there is
noobligationtomakeanaccusation.

5.

6.

7.

8.

Person convicted of Adultery or


concubinage with the spouse of the
testator;
Person who by Fraud, violence,
intimidation,orundueinfluenceshould
cause the testator to make a will or to
changeonealreadymade;
Person who by the same means
Preventsanotherfrommakingawill,or
from revoking one already made, or
who supplants, conceals, or alters the
latter'swill;
Person who Falsifies or forges a
supposed will of the decedent. (Art.
1032)

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Note:Grounds1,2,3,5and6arethesamegrounds
asindisinheritance.
Numbers6,7and8coversix(6)actswhichrelateto
wills:
1. Causingthetestatortomakeawill
2. Causingthetestatortochangeanexisting
will
3. Preventing the decedent from making a
will
4. Preventing the testator from revoking his
will
5. Supplanting, concealing, or altering the
testator'swill.
6. Falsifyingorforgingasupposedwillofthe
decedent.

RELATIVEINCAPACITYTOSUCCEED

Q:Whatisrelativeincapacitytosucceed?

A:Itmeansthepersonisincapacitatedtosucceed
becauseofsomespecialrelationtothetestator.

Q: What are the grounds for relative incapacity


tosucceed?

A:UMA
1. Undueinfluenceorinterest(Art.1027)
2. Moralityorpublicpolicy(Art.739)
3. Actsofunworthiness(Art.1032)

Q: Who are incapacitated to succeed based on


undueinfluenceorinterest?

A:PRGWPI
1. ThePriestwhoheardtheconfessionof
thetestatorduringhislastillness,orthe
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,
thechurch,order,chapter,community,
organization, or institution to which
suchpriestorministermaybelong;

3. A Guardian with respect to


testamentary dispositions given by a
ward in his favor before the final
accountsoftheguardianshiphavebeen
approved, even if the testator should
die after the approval thereof;
nevertheless, any provision made by
thewardinfavoroftheguardianwhen
thelatterishisascendants,descendant,
brother,sister,orspouse,shallbevalid;

326

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;

Note:Numbers1to4donotapplytolegitimes.

5.

Any Physician, surgeon, nurse, health


officerordruggistwhotookcareofthe
testatorduringhislastillness;

Note:Number5isanabsolutedisqualification.

6.

Individuals,
associations
and
corporations not permitted by law to
inherit.

PRIESTS

Q:Whoarecoveredbythisdisqualificationto
inherit?

A:PMRC
1. Priest who heard the confession of the
testatorduringhislastillness;
2. Minister of the gospel who extended
spiritual aid to him during the same
period;
3. Relatives of such priest or minister of
thegospelwithinthefourthdegree;or
4. TheChurch,order,chapter,community,
organization, or institution to which
suchpriestorministermaybelong;

Q: What are the requisites for this


disqualificationtoapply?

A:
1. Thewillwasmadeduringthelastillness
ofthetestator;
2. The spiritual ministration must have
beenextendedduringthelastillness;
3. The will was executed during or after
thespiritualministration.

Q: If the confession was made before the will


wasmade,canthepriestinherituponthedeath
ofthesickperson,if:

1. Thepriestisthesonofthesickperson?
2. The priest was the sick persons
brother?
A:
1. Yes.Hecangetthelegitime.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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SUCCESSION
Note:Apriestisincapacitatedtosucceed
when the confession is made prior to or
simultaneouslywiththemakingofawill.

The disqualification applies only to


testamentarydispositions.

2.

Yes.Hecaninheritbyintestacy.

Note: Despite this apparent restriction to


Christian ministers, this applies to all
spiritualministers,e.g.,Buddhistmonks.

Reason: It is conclusively presumed that


the spiritual minister used his moral
influence to induce or influence the sick
person to make a testamentary
dispositioninhisfavor.

GUARDIANS

Q:Whatisthecoverageofthisdisqualification?

A: It applies to guardians, 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
testatorshoulddieaftertheapprovalthereof.

Q:Whendoesthedisqualificationapply?

A:
GR: The disqualification applies when the
disposition is made after the guardianship
beganorbeforeguardianshipisterminated
approval of final accounts or lifting of
guardianship.

XPN: It does not apply even when the


disposition is made after the guardianship
began or before it is terminated when the
guardianisan:ADBSS
1. Ascendant;
2. Descendant;
3. Brother;
4. Sister;or
5. Spouse.

ATTESTINGWITNESSES

Q:Whoarecoveredbythedisqualification?

A:
1. Attesting witness to the execution of a
will;
2. Theattestingwitness:
a. spouse,
b. parents,or
c. children,or

3.

Any one claiming under such witness,


spouse,parents,orchildren;

Q:Willthedisqualificationstillapplyifthereare
otherwitnessestothewill?

A:Itdependsuponcompliancewiththerequisite
number of witnesses. If, notwithstanding the
disqualified witness, the number of witnesses is
sufficient,theformerisnotdisqualified.

PHYSICIANS

Q:Uponwhomdoesthedisqualificationapply?

A:PSNHD
1. Physician;
2. Surgeon;
3. Nurse;
4. Healthofficer;or
5. Druggist

Note: For the disqualification to apply, the


aforementioned must have taken care of the
testatorduringhislastillness.

Q:Whatmustbepresentforthisdisqualification
toapply?

A:
1. Thewillwasmadeduringthelastillness
2. The sick person must have been taken
caredofduringhislastillness.Medical
attendancewasmade.
3. Thewillwasexecutedduringorafterhe
wasbeingtakencaredof.

PROHIBITEDBYLAWTOINHERIT

Individuals, associations and corporations not


permittedbylawtoinherit.

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2.UNWORTHINESSVS.DISINHERITANCE

Q:
Distinguish
Unworthiness
from
Disinheritance.

A:
DISINHERITANCE
UNWORTHINESS
Effectsontheinheritance
Exclusionfromthe
Deprivationofa
entireinheritance.
compulsoryheirofhis
However,donations
legitime.
intervivosarenot
affected.
Effectsofpardonorreconciliation
Reconciliationbetween
theoffenderandthe
Ifthetestatorpardons
offendedpartydeprives
theactofunworthiness,
thelatteroftherightto
thecauseof
disinherit,andrenders
unworthinessshallbe
ineffectualany
withouteffect.
disinheritancethatmay
havebeenmade.
Mannerofreconciliationorpardon
Expressorimplied
Grounds
Therearegroundsfordisinheritancewhicharealso
causesforincapacitybyreasonofunworthiness.
Effectofsubsequentreconciliationifdisinheritance
hasalreadybeenmadeonanyofthegrounds
whicharealsocausesforunworthiness
Themomentthetestatorusesoneofthecausesfor
unworthinessasagroundfordisinheritance,he
therebysubmitsittotheruleondisinheritance.
(Rabuya,CivilLawReviewer,pp.644649;704708)

C.ACCEPTANCEANDREPUDIATIONOFTHE
INHERITANCE

Q:Whatarethethreeprincipalcharacteristicsof
acceptanceandrepudiation?

A:
1. Itisvoluntaryandfree
2. Itisretroactive
3. Oncemade,itisirrevocable

Q: What are the requisites of acceptance and


repudiation?

A:
1. Certaintyofthedeathofthedecedent
2. Certaintyoftherightofinheritance

328

ACCEPTANCE

Q:Howmayinheritancebeaccepted?

A:
1. Express acceptance through a public
orprivateinstrument
2. Tacit acceptance through acts by
which the intention to accept is
necessarilyimpliedorwhichonewould
have no right to do except in the
capacityofanheir.

Q:Whenisinheritancedeemedaccepted?

A:
1. Whentheheirsells,donates,orassigns
hisrights
2. When the heir renounces it for the
benefitofoneormoreheirs
3. When renunciation is in favor of all
heirsindiscriminatelyforconsideration
4. Othertacitactsofacceptance:
a. Heir demands partition of the
inheritance
b. Heir alienates some objects of the
inheritance
c. Acts
of
preservation
or
administration if, through such
acts, the title or capacity of the
heirhasbeenassumed
d. Under Art. 1057, failure to signify
acceptance or repudiation within
30 days after an order of
distributionbytheprobatecourt.

REPUDIATION

Q:Whatarethewaysbywhichtherepudiation
of the inheritance, legacy or devise may be
made?

A:
1. Bymeansofapublicinstrument
2. Bymeansofanauthenticinstrument
3. Bymeansofapetitionpresentedtothe
court having jurisdiction over the
testamentaryorintestateproceedings.

Q:Whatistheeffectofrepudiationifanheiris
bothatestateandlegalheir?

A: If an heir is both a testate and legal heir, the


repudiation of the inheritance as a testate heir,
he is understood to have repudiated in both
capacities. However, should he repudiate as a
legal heir, without knowledge of being a testate

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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SUCCESSION
heir, he may still accept the inheritance as a
testateheir.

Q:Whatistheremedyiftheheirrepudiatesthe
inheritancetotheprejudiceofhiscreditors?

A: If the heir repudiates the inheritance to the


prejudice of his own creditors, the latter may
petition the court to authorize them to accept it
inthenameoftheheir.

Requisites:
1. Theheirwhorepudiatedhisinheritance
must have been indebted at the time
whentherepudiationismade
2. The heirdebtor must have repudiated
his inheritance according to the
formalitiesprescribedbylaw
3. Such act of repudiation must be
prejudicialtothecreditororcreditors.
4. There must be judicial authorization
(Art.1052)

D.COLLATION

Q:Whatiscollation?

A: It is the process of adding the value of thing


donatedtothenetvalueofhereditaryestate.

To collate is to bring back or return to the


hereditarymass,infactorfiction,propertywhich
camefromtheestateofthedecedent,duringhis
lifetime, but which the law considers as an
advancefromtheinheritance.

Collation is applicable to both donations to


compulsoryheirsanddonationstostrangers.
GR:Compulsoryheirsareobligedtocollate.
XPN:
1. Whentestatorshouldhavesoexpressly
provided;
2. When compulsory heir repudiates his
inheritance

Q: What are the properties that are to be


collated?
A:
1. Any property/right received by
gratuitoustitleduringtestatorslifetime
2. All that may have been received from
decedentduringhislifetime
3. All that their parents have brought to
collationifalive

Q: What are the properties not subject to


collation?

A:
1. Absolutely no collation expenses for
support, education (elementary and
secondary only), medical attendance,
even in extraordinary illness,
apprenticeship, ordinary equipment or
customarygifts.

2. Generallynotimputedtolegitime:
a. Expenses incurred by parents in
giving their children professional,
vocational, or other career unless
the parents so provide, or unless
theyimpairthelegitime.
b. Wedding gifts by parents and
ascendants consisting of jewelry,
clothing and outfit except when
they exceed 1/10 of the sum
disposablebywill.

Note: Only the value of the thing donated shall be


broughttocollation.Thisvaluemustbethevalueof
thethingatthetimeofthedonation.

E.PARTITIONANDDISTRIBUTIONOFESTATE

1.PARTITION

Q:Whatispartitionanddistribution?

A:Itistheseparation,divisionandassignmentof
athingheldincommonamongthosetowhomit
maybelong.

Q:Whomayeffectpartition?

A:Thepartitionmaybeeffectedeither:
1. By the decedent himself during his
lifetimebyanactintervivosorbywill
2. By a third person designated by the
decedentorbytheheirsthemselves
3. By a competent court in accordance
withtheNewRulesofCourt

Q:Whocandemandpartition?

A:Any:
1. Compulsoryheir
2. Voluntaryheir
3. Legateeordevisee
4. Person who has acquired an interest in
theestate

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Q:Whenpartitioncannotbedemanded?

A:Partitioncannotbedemandedwhen:PAPU
1. Expressly Prohibited by testator for a
periodnotmorethan20years
2. Coheirs Agreed that estate not be
divided for period not more than 10
years,renewableforanother10yrs
3. Prohibitedbylaw
4. To partition estate would render it
Unserviceable for use for which it was
intended

2.PARTITIONINTERVIVOS

Q:Cananestatebepartitionedintervivos?

A: Yes. Such partition shall be respected, insofar


as it does not prejudice the legitime of
compulsoryheirs.(SeeArt.1080)

3.EFFECTSOFPARTITION

Q:Whataretheeffectsofpartition?

A:
1. Confers upon each heir the exclusive
ownershipofpropertyadjudicated.

2. Afterthepartition,thecoheirsshallbe
reciprocally bound to warrant the title
to (warranty against eviction) and the
quality of (warranty against hidden
defects)eachpropertyadjudicated.

3. Theobligationofwarrantyshallceasein
thefollowingcases:
a. When the testator himself has
made the partition unless his
intention was otherwise, but the
legitime shall always remain
unimpaired.
b. When it has been expressly
stipulated in the agreement of
partition, unless there has been
badfaith.
c. When the eviction was due to a
cause subsequent to the partition,
orhasbeencausedbythefaultof
thedistributeeoftheproperty.

4. An action to enforce warranty among


coheirs must be brought within 10
years from the date the right of cause
ofactionaccrues.

330

Q: What are the effects of the inclusion of an


intruderinpartition?

A:
1. Between a true heir and several
mistakenheirspartitionisvoid.
2. Between several true heirs and a
mistaken heir transmission to
mistakenheirisvoid.
3. Through the error or mistake; share of
true heir is allotted to mistaken heir
partition shall not be rescinded unless
thereisbadfaithorfraudonthepartof
the other persons interested, but the
latter shall be proportionately obliged
topaythetrueheirofhisshare.

Q:Whenpartitioncannotbedemanded?

A:Partitioncannotbedemandedwhen:PAPU
1. Expressly Prohibited by testator for a
periodnotmorethan20years
2. Coheirs Agreed that estate not be
divided for period not more than 10
years,renewableforanother10yrs
3. Prohibitedbylaw
4. To partition estate would render it
Unserviceable for use for which it was
intended

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ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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PARTNERSHIP
PARTNERSHIP

I.CONTRACTOFPARTNERSHIP

A.DEFINITION

Q:Whatispartnership?

A:Acontractwherebytwoormorepersonsbind
themselves to contribute money, property, or
industrytoacommonfund,withtheintentionof
dividingtheprofitsamongthemselves.

Note: Two or more persons may also form a


partnership for the exercise of a profession. (Art.
1767,NCC)

B.ELEMENTS

Q: What are the essential elements of a


partnership?

A:
1. Agreement to contribute money,
propertyorindustrytoacommonfund
(mutual contribution to a common
stock);and
2. Intention to divide the profits among
thecontractingparties(jointinterestin
the profits). (Evangelista v. Collector of
Internal Revenue, G.R. No. L9996, Oct.
15,1987).

Q:Whataretherequisitesofapartnership?

A:ICJ
1. Intentiontocreateapartnership
2. Common
fund
obtained
from
contributions
3. Jointinterestindividingtheprofits(and
losses)

Q:Whatarethecharacteristicsofapartnership?

A:BONCCPP
1. Bilateral it is entered into by two or
more persons and the rights and
obligations arising therefrom are
reciprocal
2. Onerouseachofthepartiesaspiresto
procure for himself a benefit through
thegivingofsomething
3. Nominate it has a special name or
designationinourlaw
4. Consensual perfected by mere
consent
5. Commutativetheundertakingofeach
of the partners is considered as the
equivalentofthatoftheothers

6.

Principal its life does not depend on


theexistenceofanothercontract
7. Preparatorybecauseitisenteredinto
as a means to an end, i.e. to engage in
business
8. Fiduciary it is based on trust and
confidence

Q: Jose entered into a verbal agreement with


Franciscotoformapartnershipforthepurchase
ofcascoesforaproposedboatrentalbusiness.It
wasagreedthatFranciscowouldbuythecascoes
and each partner is to furnish such amount of
money as he could, and that the profits will be
divided proportionately. After Francisco
purchasedacascowiththemoneyadvancedby
Jose, they undertook to draft the articles of
partnership and embody the same in an
authentic document. However, they did not
come to an agreement. So, Francisco returned
the money advanced by Jose, which the latter
received with an express reservation of all his
rightsasapartner.
1. Was there a partnership formed
betweenJoseandFrancisco?
2. If such partnership existed, was it
terminated by the receipt of Jose of
themoneyheadvanced?

A:
1. Yes. Both elements in a contract of
partnership
exist:
a)
mutual
contributiontoacommonstock,andb)
a joint interest in the profits. If the
contractcontainsthesetwoelements,a
partnershiprelationresults,andthelaw
itself fixes the incidents of this relation
if the parties fail to do so. In this case,
therewasmoneyfurnishedbyJoseand
received by Francisco for the purchase
of the cascoes and there was also an
intention to divide the profits
proportionately between them. Thus,
there is a partnership by virtue of the
verbal agreement between Jose and
Francisco.

2. No. There was no clear intent on the


partofJose,inacceptingthemoney,to
relinquish his rights as a partner.
(Fernandez v. Dela Rosa, G.R. No. 413,
Feb.2,1903)

Q: Chim was the owner and manager of a


lumberyard.VicenteandTingparticipatedinthe
profitsandlosses.Acontractofsawinglumber
was entered into by Chim, acting in his own
name,with Frank. At the time thecontract was

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made, they were the joint proprietors and


operatorsofthesaidlumberyardengagedinthe
purchase and sale of lumber under the name
and style of Chim. In an action to recover the
balanceunderthecontractfiledbyFrankagainst
Chim, Vicente and Ting, the latter two alleged
that they are not Chims partners. Did Chim,
VicenteandTingformapartnership?

A: No. A simple business was formed by Chim


exclusively in his own name and under his
personal management and he effected every
transactioninhisnameandinthenamesofother
personsinterestedintheprofitsandlossesofthe
business.Whathasbeenformedisanaccidental
partnershipofcuentasenparticipacion.

Note: Under the Code of Commerce, cuentas en


participacion means a sort of an accidental
partnership constituted in such a manner that its
existence was only known to those who had an
interest in the same, there being no mutual
agreement between the partners, and without a
corporatenameindicatingtothepublicinsomeway
that there were other people besides the one who
ostensibly managed and conducted the business,
governed under article 239 of the Code of
Commerce.(Bournsv.Carman,G.R.No.L2880,Dec.
4,1906)

INTENTTOCREATEAPARTNERSHIP

Q: Henry and Lyons are engaged in real estate


business and are coowners of a parcel of land.
Henry,withtheconsentofLyons,mortgagedthe
propertytoraisethefundssufficienttobuyand
developtheSanJuanEstate.Lyonsexpressedhis
desire not to be part of the development
project, but Henry, nevertheless, pursued the
business alone. When the business prospered,
Lyons demanded for a share in the business. Is
LyonsentitledtothesharesinSanJuanEstate?
A:No.Lyonshimselfmanifestedhisdesirenotto
be part of the development project. Thus, no
partnership was formed. The mortgage of the
land was immaterial to the existence of the
partnership. It is clear that Henry, in buying the
San Juan Estate, was not acting for any
partnership composed of himself and Lyons, and
the law cannot be distorted into a proposition
whichwouldmakeLyonsaparticipantinthisdeal
contrary to his express determination. (Lyons v.
Rosenstock,G.R.No.35469,Mar.17,1932)
Q: Catalino and Ceferino acquired a joint
tenancy over a parcel of land under a verbal
contract of partnership. It was stipulated that
eachofthesaidpurchasersshouldpayonehalf

332

ofthepriceandthatanequaldivisionshouldbe
madebetweenthemofthelandthuspurchased.
Despite Catalinosdemand foran equaldivision
between them, Ceferino refused to do so and
even profited from the fruits of the land. Are
theypartnersorcoowners?
A:Theyarecoownersbecauseitdoesnotappear
thattheyenteredintoanycontractofpartnership
but only for the sole transaction of acquiring
jointlyorbymutualagreementofthelandunder
theconditionthattheywouldpayoftheprice
ofthelandandthatitbedividedequallybetween
them. (Gallemit v. Tabiliran, G.R. No. 5837, Sept.
15,1911)
COMMONFUND
Q: May a partnership be formed even if the
commonfundiscomprisedentirelyofborrowed
orloanedmoney?Whatwouldbetheliabilityof
thepartnersinsuchacase?
A: Yes. A partnership may be deemed to exist
among parties who agree to borrow money to
pursue a business and to divide the profits or
losses that may arise therefrom, even if it is
shownthattheyhavenotcontributedanycapital
of their own to a "common fund." Their
contribution may be in the form of credit or
industry, not necessarily cash or fixed assets.
Being partners, they are all liable for debts
incurred by or on behalf of thepartnership. (Lim
Tong Lim v. Philippine Fishing Gear Industries,
Inc.,G.R.No.136448,Nov.3,1999)
SHAREINPROFITSANDLOSSES
Q: Mariano and Isabelo entered into a
partnership agreement wherein they are to
contribute P15,000 each for the purpose of
printing 95,000 posters. Isabelo was unable to
printenoughposterspursuanttotheagreement,
thus he executed in favor of Mariano a
promissorynoteinanamountequivalenttothe
unrealizedprofitduetoinsufficientprinting.The
whole amount became due but Isabelo
defaultedpayment.IsMarianoentitledtofilea
casefortherecoveryoftheunrealizedprofitof
thepartnership?
A:No.Theessenceofapartnershipistosharein
the profits and losses, thus, Mariano should
shoulderthelosseswithIsabelo.(MoranJr.,v.CA,
G.R.No.L59956,Oct.31,1984)
Q: To form a lending business, it was verbally
agreedthatNoynoywouldactasfinancierwhile
CoryandKriswouldtakechargeofsolicitationof

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PARTNERSHIP
membersandcollectionofloanpayments.They
agreed that Noynoy would receive 70% of the
profitswhileCoryandKriswouldearn15%each.
Thepartiesexecutedthe'ArticlesofAgreement'
whichformalizedtheirearlierverbalagreement.
Later,NoynoyfiledacomplaintagainstCoryand
Kris for misappropriation of funds allegedly in
their capacitiesas Noynoys employees. In their
answer, Cory and Kris asserted that they were
partners and not mere employees of Noynoy.
What kind of relationship existed between the
parties?
A: A partnership was formed among the parties.
The "Articles of Agreement" stipulated that the
signatoriesshallsharetheprofitsofthebusiness
in a 701515 manner, with Noynoy getting the
lion's share. This stipulation clearly proved the
establishmentofapartnership.(Santosv.Spouses
Reyes,G.R.No.135813,Oct.25,2001)
Q:Joseconveyedhislotsinfavorofhisfoursons
in order for them to build their residences. His
sons sold the lots since they found the lots
impractical for residential purposes because of
high costs of construction. They derived profits
from the sale and paid income tax. The sons
were required to pay corporate income tax and
income tax deficiency, on the theory that they
formed an unregistered partnership or joint
venturetaxableasacorporation.Didthesiblings
formapartnership?
A:No.Theoriginalpurposewastodividethelots
for residential purposes. If later, they found out
thatitisnotfeasibletobuildtheirresidenceson
the lots, they can dissolve the coownership by
reselling said lots. The division on the profit was
merely incidental to the dissolution of the co
ownership which was in the nature of things a
temporary state. (Obillos, Jr. v. CIR, G.R. No. L
68118,Oct.29,1985)
C.RULESTODETERMINEEXISTENCE
Q:Whataretherulestodeterminetheexistence
ofpartnership?

A:
1. Personswhoarenotpartnersastoeach
other are not partners as to third
persons.
2. Coownership/copossession does not
ofitselfestablishapartnership.
3. Sharing of gross returns does not of
itselfestablishapartnership.
4. Receipt of a person of a share in the
profitsisaprimafacieevidencethathe

is a partner, but not when received as


paymentfor:
a. Debtasinstallment
b. Wages
c. Annuity
d. Interestinaloan
e. Considerationforthesaleofa
goodwill

Note: in subparagraphs a e, the profits in the


business are not shared as profits of a partner as a
partner, but in some other respects or for some
otherpurpose.

Q: Distinguish partnership
ownership/copossession.

A:

from

co

COOWNERSHIP/
COPOSSESSION
Intenttoderiveprofits
Theprofitsmustbe
derivedfromthe
Thecoownerssharein
operationofthe
theprofitsderived
businessorundertaking
incidenttothejoint
bythemembersofthe
ownership.
associationandnot
merelyfromproperty
ownership.
Existenceoffiduciaryrelationship
Thereisawelldefined
Thereisnofiduciary
fiduciaryrelationship
relationshipbetween
betweenthemas
theparties.
partners.
Remedyfordispute
Theremedyforadispute
Theremedywouldbe
ordifferencebetween
anaction,asfor
themwouldbeanaction
instance,fornon
fordissolution,
performanceofa
termination,and
contract.
accounting.
Intent
Theremustbean
Thereisnointentto
unmistakableintention
formapartnership.
toformapartnership.
PARTNERSHIP

Q: A and B are coowners of an inherited


properties.Theyagreedtousethesaidcommon
propertiesandtheincomederivedtherefromas
a common fund with the intention to produce
profitsfortheminproportiontotheirrespective
shares in the inheritance as determined in a
project of partition. What is the effect of such
agreementontheexistingcoownership?

A: The coownership is automatically converted


intoapartnership.Fromthemomentofpartition,
A and B, as heirs, are entitled already to their
respective definite shares of the estate and the
incomethereof,foreachofthemtomanageand

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dispose of as exclusively his own without the


intervention of the other heirs, and, accordingly,
hebecomesliableindividuallyforallthetaxesin
connectiontherewith.

If,aftersuchpartition,anheirallowshissharesto
be held in common with his coheirs under a
singlemanagementtobeusedwiththeintentof
making profit thereby in proportion to his share,
therecanbenodoubtthat,evenifnodocument
orinstrumentwereexecutedforthepurpose,for
tax purposes, at least, an unregistered
partnership is formed. (Ona v. Commissioner of
Internalrevenue,45SCRA74[1972])

Q:Whatarethetypicalincidentsofpartnership?

A:
1. Thepartnersshareinprofitsandlosses.
(Arts.1767,179798)
2. They have equal rights in the
management and conduct of the
partnershipbusiness.(Art.1803)
3. Every partner is an agent of
partnership, and entitled to bind the
other partners by his acts, for the
purposeofitsbusiness.(Art.1818)
4. Allpartnersarepersonallyliableforthe
debts of the partnership with their
separateproperty(Arts.1816,182224)
exceptlimitedpartners.
5. A fiduciary relationship exists between
thepartners.(Art.1807)
6. On dissolution, the partnership is not
terminated, but continues until the
windingupofpartnershipiscompleted.
(Art1828)

Q: What are the rules regarding distribution of


profitsandlosses?

A:
1. Distributionofprofits
a. Thepartnersshareintheprofits
accordingtotheiragreement
b. Intheabsenceofsuch:
i. Capitalistpartnerin
proportiontohiscontribution
ii. Industrialpartnerwhatis
justandequitableunderthe
circumstances

2. Distributionoflosses
a. The partners share in the losses
accordingtotheiragreement
b. In the absence of such, according
totheiragreementastoprofits

334

c.

In the absence of profit


agreement, in proportion to his
capitalcontribution

Q:Whatistheruleregardingastipulationwhich
excludes a partner in the sharing of profits and
losses?

A:
GR:Stipulationisvoid.

XPN:Industrialpartnerisnotliableforlosses
[Art. 1797(2), NCC]. However, he is not
exempted from liability insofar as third
personsareconcerned.

Note:Lossisdifferentfromliability
If,besideshisservicestheindustrialpartnerhas
contributedcapital,heshallalsoreceiveashare
intheprofitsinproportiontohiscapital.

D.HOWPARTNERSHIPISFORMED

Q:Howarepartnershipsformed?

A: It is created by agreement of the parties


(consensual).

Note: There is no such thing as a partnership


created by law or by operation or implication of
law alone. (De Leon, Comments and cases on
Partnership,AgencyandTrust,p.13,2005ed.

Q: What are the formalities needed for the


creationofapartnership?

A:
GR:Nospecialformisrequiredforitsvalidity
orexistence.(Art.1771,NCC)

XPN: If property or real rights have been


contributedtothepartnership:
1. Personalproperty
a. LessthanP3,000maybeoral
b. P3,000ormoremustbe:
i. inapublicinstrument;and
ii. registered with SEC (Art.
1772,NCC)

Note: Even if the partnership


isnotregisteredwithSEC,the
partnership is still valid and
possesses
a
distinct
personality (Paras, Civil Code
of the Philippines Annotated,
th
Volume5,p.412,19696 ed)
2. Realpropertyorrealrightsmustbe:

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PARTNERSHIP
a.

in a public instrument (Art. 1771,


NCC)
b. withaninventoryofsaidproperty
i. signedbytheparties
ii. attached to the public
instrument(Art.1773,NCC)

Note: Everything must be


complied with; otherwise,
partnershipisvoidandhasno
juridical personality even as
between the parties (Art.
1773,NCC)
iii. registered in the Registry of
Property of the province,
where the real property is
found to bind third persons
(Paras,p.412)

3. Limited partnership must be


registered as such with SEC, otherwise,
it is not valid as a limited partnership
but may still be considered a general
partnership with juridical personality
(Paras, Civil Code of the Philippines
th
Annotated, Volume 5, p. 412, 1969 6
ed)

Q: If the requirements under Art. 1773, as


regards contribution of real property to a
partnership,hasnotbeencompliedwith,whatis
thestatusofthepartnership?
A: It is void. Nonetheless, a void partnership
underArt.1773,inrelationtoArt.1771NCC,may
still be considered by the courts as an ordinary
contract as regards the parties thereto from
whichrightsandobligationstoeachothermaybe
inferred and enforced. (Torres v. CA, G.R. No.
134559,Dec.91999)
Note:Torresv.CAdoesnotinvolvethirdpersons.

Q: What must be done in order that the


partnership may be effective as against third
persons whenever immovable property is
contributed?
A:Tobeeffectiveagainst3rdparties,partnership
must be registered in the Registry of Property of
theprovincewheretherealpropertycontributed
islocated.(Art.1771,NCC)
Q:Cantherebeapartnershipbasedonaverbal
agreement, and without such agreement being
registeredwithSEC?
A: Yes. Article 1772 NCC requires that
partnerships with a capital of P3,000 or more

mustregisterwithSEC.However,thisregistration
requirement is not mandatory. Article 1768 NCC
explicitlyprovidesthatthepartnershipretainsits
juridicalpersonalityevenifitfailstoregister.The
failure to register the contract of partnership
does not invalidate the same as among the
partners,solongasthecontracthastheessential
requisites, because the main purpose of
registrationistogivenoticetothirdparties,andit
can be assumed that the members themselves
knew of the contents of their contract. Non
compliance with this directory provision of the
lawwillnotinvalidatethepartnership.
A partnership may be constituted in any form,
except where immovable property of real rights
are contributed thereto, in which case a public
instrument shall be necessary. Hence, based on
the intention of the parties, a verbal contract of
partnershipmayarise.(SungaChanv.Chua,G.R.
No.143340,Aug.15,2001)
Note: Registration is merely for administration and
licensing purposes; hence, it shall not affect the
liabilityofthepartnershipandthemembersthereof
tothirdpersons.[Art.1772,(2),NCC]

Q: A partnership was entered into between


Mauricio and Severino to operate a fishpond.
Neitherpartnercontributedafishpondorareal
right over any fish pond. Their capital
contributions were in cash in the amount of
P1,000each.Whilethepartnershipcontractwas
doneinapublicinstrument,noinventoryofthe
fishpondtobeoperatedwasattachedinthesaid
instrument. Is there a valid contract of
partnership?
A: Yes. There is a valid contract of partnership
despitethelackofinventory.Thepurposeofthe
partnership was not to engage in the fishpond
business but to operate a fishpond. Neither said
fishpond nor a real right to any fish pond was
contributedtothepartnershiporbecomepartof
the capital thereof. (Agad v. Mabato, G.R. No. L
24193,June28,1968)
E.PARTNERSHIPTERM
Q:Whatisapartnershipwithafixedterm?

A:Itisoneinwhichthetermofitsexistencehas
beenagreeduponbythepartnerseither:
1. Expresslythereisadefiniteperiod
2. Impliedly a particular enterprise or
transactionisundertaken

Note:Themereexpectationthatthebusinesswould
besuccessfulandthatthepartnerswouldbeableto

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recouptheirinvestmentisnotsufficienttocreatea
partnershipforaterm.

CLASSIFICATIONSOFPARTNERSHIP

Q: Can the partners fix any term in the


partnershipcontract?

A: Yes. The partners shall be bound to remain


undersuchrelationforthedurationoftheterm.

Q: What is the effect when the fixed term has


expired?

A: The expiration of the term fixed or the


accomplishment of the particular undertaking
specified will cause the automatic dissolution of
thepartnership.

Q:Whendoesapartnershipcommencetoexist?

Q:Statetheclassificationsofpartnership.
A:Asto:
1. Object
a. Universalpartnership
i. of all present property (Art.
1778, NCC) comprises the
following:

propertywhichbelonged
toeachofthepartnersat
the time of the
constitution of the
partnership

profits which they may


acquirefromallproperty
contributed
ii. ofallprofits(Art.1780,NCC)
comprises all that the
partnersmayacquirebytheir
industry or work during the
existenceofthepartnership
b. Particular partnership It is one
which has for its object,
determinate things, their use and
fruits, or a specific undertaking or
the exercise of a profession or a
vocation.(Art.1783,NCC)

2. Liabilityofpartners
a. General partnership One where
all partners are general partners
whoareliableevenwithrespectto
their individual properties, after
the assets of the partnership have
beenexhausted(Paras,p.411)
b. Limited partnership One formed
by 2 or more persons having as
members one or more general
partners and one or more limited
partners, the latter not being
personallyliablefortheobligations
ofthepartnership.

3. Duration
a. Partnership at will Partnership
for a particular undertaking or
venture which may be terminated
anytimebymutualagreement.
b. Partnership with a fixed period
Thetermforwhichthepartnership
is to exist is fixed or agreed upon
or one formed for a particular
undertaking.

4. Legalityofexistence
a. Dejurepartnership
b. Defactopartnership

A: A partnership commences from the time of


execution of the contract if there is no contrary
stipulation as to the date of effectivity of the
same.
NOTE: Registration to SEC is not essential to give it
juridicalpersonality.

There is no time limit prescribed by law for the


lifeofapartnership.
Q:Whatisafuturepartnership?
A: It is a kind of partnership where the partners
may stipulate some other date for the
commencementofthepartnership.Personswho
enter into a future partnership do not become
partners until or unless the agreed time has
arrivedorthecontingencyhashappened.
NOTE: It is a partnership created by implied
agreement, the continued existence of which will
depend upon the mutual desire and consent of the
partners.

Q:Whenisapartnershipatwillterminate?
A: It may be lawfully terminated at any time by
theexpresswillofallthepartnersoranyofthem.
Q:Howisapartnershipatwilldissolved?
A: Any one of the partners may dictate a
dissolutionofapartnershipatwill.
Note: The partner who wants the partnership
dissolved must do so in good faith, not that the
attendance of bad faith can prevent thedissolution
of the partnership, but to avoid the liability for
damagestootherpartners.

336

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
5.

6.

7.

Representationtoothers
a. Ordinaryorrealpartnership
b. Ostensible or partnership by
estoppel When two or more
persons attempt to create a
partnershipbutfailtocomplywith
thelegalpersonalitiesessentialfor
juridical personality, the law
considers them as partners, and
the association is a partnership
insofar as it is favorable to third
persons,byreasonoftheequitable
principle of estoppel (MacDonald
et. al. v. Natl. City Bank of New
York, G.R. No. L7991, May 21,
1956)

Publicity
a. Secret partnership Partnership
thatisnotknowntomanybutonly
astoitspartners.
b. NotoriousoropenpartnershipIt
is known not only to the partners,
buttothepublicaswell.

Purpose
a. Commercial or trading One
formed for the transaction of
business.

b. Professional or nontrading One


formed for the exercise of a
profession

Q:Whatarethedifferentkindsofpartnership
undertheSpanishCivilCode?

A:
1. Sociedad Anonima similar to
anonymouspartnership
2. SociedadColectivawhichisgeneralor
collectivepartnership
3. Sociedad de Cuentas en Participacion
jointaccountpartnership
4. SociedadMercantileRegularColectiva
mercantilepartnershipcompany
5. SociedadLeonilapartnershipbywhich
theentireprofitsshouldbelongtosome
ofthepartnersinexclusionoftherest

Q:Whomaybepartners?

A:
GR: Any person capacitated to contract may
enterintoacontractofpartnership.
XPNs:
1. Personswhoareprohibitedfromgiving
each other any donation or advantage

2.
3.

cannot enter into a universal


partnership.(Art.1782,NCC)
Personssufferingfromcivilinterdiction
Persons who cannot give consent to a
contract:
a. Minors
b. Insanepersons
c. Deafmuteswhodonotknowhow
towrite

Q:Whatistheprincipleofdelectuspersonae?

A:Thisreferstotherulethatisinherentinevery
partnership, that no one can become a member
of the partnership association without the
consentofallthepartners.

Note:Evenifapartnerwillassociateanotherperson
in his share in the partnership, the associate shall
not be admitted into the partnership without the
consent of all the partners, even if the partner
havinganassociateshouldbeamanager(Art.1804,
NCC).

Q: May a corporation enter into a partnership


withanothercorporation?

A: As a rule, it is illegal for two corporations to


enter into a partnership. Nevertheless, a
corporation may enter into a joint venture with
anotherifthenatureoftheventureisinlinewith
thebusinessauthorizedbyitscharter.(Tuasonv.
Bolaos,G.R.No.L4935,May28,1954)

Q:Whatarethedifferentkindsofpartners?

A:
1. CapitalistContributesmoneyor
propertytothecommonfund
2. Industrial Contributes only his
industryorpersonalservice
rd
3. General One whose liability to 3
persons extends to his separate or
personalproperty
rd
4. Limited One whose liability to 3
persons is limited to his capital
contribution
5. Managing Manages the affairs or
businessofthepartnership
6. Liquidating Takes charge of the
winding up of partnership affairs upon
dissolution
7. Partner by estoppel Is not really a
partnerbutisliableasapartnerforthe
rd
protectionofinnocent3 persons
8. Continuing partner Continues the
business of a partnership after it has
been dissolved by reason of the
admissionofanewpartner,retirement,

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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UST GOLDEN NOTES 2011

9.

10.

11.

12.

13.

14.

death or expulsion of one of the


partners
Surviving partner Remains after a
partnership has been dissolved by
deathofanypartner
Subpartner Is not a member of the
partnership; contracts with a partner
with reference to the latter's share in
thepartnership
Ostensible Takes active part and
known to the public as partner in the
business
Secret Takes active part in the
business but is not known to be a
partnerbyoutsideparties
SilentDoesnottakeanyactivepartin
thebusinessalthoughhemaybeknown
tobeapartner
DormantDoesnottakeactivepartin
the business and is not known or held
outasapartner

Q: What are the relations created by a contract


ofpartnership?

A:
1. PartnersPartners
2. PartnersPartnership
rd
3. Partnership3 persons with whom it
contracts
4. Partners3rd persons with whom
partnershipcontracts.

F.UNIVERSALVS.PARTICULAR;
GENERALVS.LIMITED

UNIVERSALPARTNERSHIP

Q: Distinguish the classes of universal


partnership.

A:
ALLPROFITS
ALLPRESENTPROPERTY
Whatconstitutescommonproperty
Onlyusufructof
Allpropertiesactually
thepropertiesof
belongingtothepartnersare
thepartners
contributedtheybecome
becomecommon
commonproperty
property
(ownedbyallofthepartners

andthepartnership)
Astoprofitsascommonproperty
Astoprofitsfromothersources:
Allprofits
acquiredbythe
GR:Asidefromthecontributed
industryofthe
properties,theprofitsofsaid
partnersbecome
propertybecomecommon
commonproperty
property
(whetherornot

theywere
XPN:Profitsfromother
obtainedthrough
sourcesmaybecomecommon

338

theusufruct
contributed)

ifthereisastipulationtosuch
effect
Astopropertiessubsequently
acquired:
GR: Propertiessubsequently
acquiredbyinheritance,legacy
ordonation,cannotbeincluded
inthestipulation

XPN:Onlyfruitsthereofcanbe
includedinthestipulation(Art.
1779,NCC)

Q:IftheArticlesofUniversalPartnershipfailto
specifywhetheritisoneofallpresentproperty
orofprofits,whatshallbethenatureofsuch?

A: Articles of Universal Partnership entered into


without specification of its nature only
constitutesauniversalpartnershipofprofits(Art.
1781,NCC),becauseitimposeslesserobligations
on the partners, since they preserve the
ownershipoftheirseparateproperty.

PARTICULARPARTNERSHIP

Q:Whatisparticularpartnership?

A: It is one which has for its object, determinate


things, their use and fruits, or a specific
undertaking or the exercise of a profession or a
vocation.(Art.1783,NCC)

Q:J,PandBformedalimitedpartnershipcalled
Suter Co., with P as the general partner and J
and B as limited partners. J and B contributed
P18,000andP20,000respectively.Later,JandB
got married and P sold his share of the
partnership to the spouses which was recorded
in the SEC. Has the limited partnership been
dissolvedbyreasonofthemarriagebetweenthe
limitedpartners?

A: No. The partnership is not a universal but a


particular one. As provided by law, a universal
partnershiprequireseitherthattheobjectofthe
association must be all present property of the
partners as contributed by them to a common
fund,orallelsethatthepartnersmayacquireby
their industry or work. Here, the contributions
were fixed sums of money and neither one of
them were industrial partners. Thus, the firm is
not a partnership which the spouses are
forbiddentoenterinto.Thesubsequentmarriage
cannotoperatetodissolveitbecauseitisnotone
of the causes provided by law. The capital
contributions were owned separately by them
before their marriage and shall remain to be
separate under the Spanish Civil Code. Their

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
individual interest did not become common
Q:Whoisageneralpartner?
property after their marriage. (Commissioner of

Internal Revenue v. Suter, G.R. No. L25532, Feb.


A:Onewhoseliabilitytothirdpersonsextendsto
28,1969)
his separate property; he may be either a

capitalist or an industrial partner. (De Leon,


Q:Whendoesapartnerbindthepartnership?
CommentsandCasesonPartnership,Agency,and
A:
Trust,p.77,2005ed)
1. When he is expressly or impliedly

authorized
Q:Whataretheobligationsofapartner?
2. Whenheactsinbehalfandinthename

ofthepartnership
A:

1. Obligationsamongthemselves
GENERALPARTNERSHIP
2. Obligationstothirdpersons

Q:Whatisgeneralpartnership?
Q:Whatisthebasisforsuchobligations?

A: One where all partners are general partners


A: These obligations are based on trust and
who are liable even with respect to their
confidence of the partners since partnership is
individual properties, after the assets of the
grounded on the fiduciary relationship of the
partnership have been exhausted (Paras, Civil
partnersandaswelltothirdpersons.
Code of the Philippines Annotated, Volume 5, p.

th
411,19696 ed)

Q:Whatarethedistinctionsbetweenageneralandalimitedpartner/partnership?

A:
GENERAL

LIMITED
ExtentofLiability
Personallyliableforpartnershipobligations
Liabilityextendsonly tohiscapitalcontributions
RightinManagement
Whenmannerofmanagementisnotagreedupon,
allgeneralpartnershaveanequalrightinthe
Noparticipationinmanagement
managementofthebusiness
Contribution
Contributecash,propertyorindustry
Contributecashorpropertyonly,notindustry
IfProperPartyto ProceedingsByorAgainstPartnership
Not proper party to proceedings by/against partnership,
unless:

Properpartytoproceedingsby/againstpartnership 1. Heisalsoageneralpartner;or
2. Where the object of the proceeding is to enforce a

limitedpartnersrightorliabilitytothepartnership
AssignmentofInterest
Interestisnotassignablewithoutconsentofother
Interestisfreelyassignable
partners
FirmName
GR: Namemustnot appearinfirmname

XPNs:

1. Itisalsothesurnameofageneralpartner;
Namemayappearinfirmname
2. Prior to the time when the limited partner became

such,thebusinesshadbeencarriedonunderaname
inwhichhissurnameappeared.
ProhibitiontoEngageinOtherBusiness
Prohibitedinengaginginbusiness
Noprohibition againstengaginginbusiness
EffectofDeath,Insolvency,Retirement,Insanity
Retirement,death,insolvency,insanityofgeneral
Doesnothavesameeffect;rightsaretransferredtolegal
partnerdissolvespartnership
representative
Creation
Asarule,itmaybeconstitutedinanyform,by
Createdbythemembersaftersubstantialcompliancein
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339

UST GOLDEN NOTES 2011

contractorconductofthepartnership
goodfaithoftherequirementssetforthbylaw
Composition/Membership
Composedofoneormoregeneralpartnersandoneor
Composedonlyofgeneralpartners
morelimitedpartners

G.PARTNERSHIPBYESTOPPEL

Q:Whoisapartnerbyestoppel?

A:Onewho,bywordsorconductdoesanyofthe
following:
1. Directlyrepresentshimselftoanyoneas
apartnerinanexistingpartnershiporin
anonexistingpartnership
2. Indirectly represents himself by
consentingtoanotherrepresentinghim
as a partner in an existing partnership
orinanonexistingpartnership

Q: What are the elements before a partner can


beheldliableonthegroundofestoppel?

A:
1. Defendant represented himself as
partner or is represented by others as
such, and did not deny/refute such
representation.
2. Plaintiffreliedonsuchrepresentation.
3. Statementofdefendantisnotrefuted.

Q:Whataretheliabilitiesincaseofestoppel?

A:
WhenPartnershipisLiable
Ifallactualpartnersconsentedtothe
representation,thentheliabilityofthepersonwho
representedhimselftobeapartnerorwho
consentedtosuchrepresentationandtheactual
partnerisconsideredapartnershipliability
WhenLiabilityisPRORATA
When there is no existing partnership and all those
represented as partners consented to the
representation, then the liability of thepersonwho
represented himself to be a partner and all who
madeandconsentedtosuchrepresentation,isjoint
orprorata
WhenLiabilityisSEPARATE
Whenthereisnoexistingpartnershipandnotallbut
only some of those represented as partners
consented to the representation, or none of the
partnership in an existing partnership consented to
such representation, then the liability will be
separate

340

H.PARTNERSHIPV.JOINTVENTURE

Q:Whatisajointventure?

A:Anassociationofpersonsorcompaniesjointly
undertaking some commercial enterprise;
generally,allcontributesassetsandsharerisks.It
requires a community of interest in the
performance of the subject matter, a right to
direct and govern the policy in connection
therewith, and a duty which may be altered by
agreementtosharebothinprofitsandlosses.

Partnership
JointVenture
Transactionsenteredinto
Thedurationofa
Limitedtotheperiodin
partnershipgenerally
whichthegoodsare
relatestoacontinuing
soldortheprojectis
businessofvarious
carriedonorasingle
transactionsofacertain
transaction.
kind.

Nature
Permanent,partnersare
interestedincarryingon
togetherofageneraland
continuingbusinessofa
Temporary,althoughit
particularkind.
maycontinuefora

numberofyears.
Note:Aparticular
partnershiphasalimited
andtemporaryoradhoc
nature,beingconfinedto
asingleundertaking.
FirmNameandLiablities
Theremustbea
partnershiporfirmname
Afirmnameisnot
underwhichthe
necessary,thusthe
partnershipshalloperate.
participatingpersons
Thenamesofthe
cantransactbusiness
partnersmayappearin
undertheirownname
thefirmnameandthe
andcanbeindividually
actofthepartnerswill
liabletherefore.
makethepartnership
liable.
Corporationaspartner
Corporationscan
Corporationcannotenter
engageinajoint
intoapartnership
venturewithothers
contract,thusitcannot
throughacontractof
beapartnerbyreasonof
publicpolicy;otherwise agreementifthenature
oftheventureinline
peopleotherthanits
withthebusinessofthe
officersmaybeableto
corporationanditis
bindit(Albano,CivilLaw

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
Reviewer,1998,p.570)

authorizedinits
charter.

LegalPersonality
A partnership acquires
personality
after
following the requisites
required by law. e.g. Art.
17711773,NCC
Ajointventurehasno

legalpersonality.
Note: SEC registration is
not required before a
partnershipacquireslegal
personality. (Art. 1768,
NCC)

I.PROFESSIONALPARTNERSHIP

Q:Whatisaprofessionalpartnership?

A: It is a partnership formed by persons for the


sole purpose of exercising their common
profession, no part of the income of which is
derivedfromengaginginanytradeorbusiness.

Q:Inaprofessionalpartnership,whoisdeemed
engagedinthepracticeofprofession?

A: It is the individual partners and not the


partnership. Thus, they are responsible for their
ownacts.

Q: What is prohibited in the formation of a


professionalpartnership?

A:Partnershipbetweenlawyersandmembersof
other profession or nonprofessional persons
should not be formed or permitted where any
partofthepartnershipsemploymentconsistsof
the practice of law. (Canons of Professional
Ethics)

Q:Whatarethecharacteristicsofapartnership
forthepracticeoflaw?

A:
a. A duty of public service, of which the
emolumentisabyproduct
b. Arelationasanofficerofcourttothe
administrationofjustice
c. A relation to clients in the highest
fiduciarydegree
d. A relationship to colleagues at the bar
characterized by candor, fairness, and
unwillingness to resort to current
business methods of advertising and
encroachment on their practice, or
dealingwiththeirclients.(IntheMatter

ofPetitionforAuthoritytoContinueUse
of Firm Name Sycip, Salazar, etc. /
Ozeata Romulo, etc., 92 SCRA 1
[1979], citing H.S. Drinker, Legal Ethics
[1953],pp45.)

Q: What is prohibited in the firm name of a


partnershipforthepracticeoflaw?

A:Intheselectionanduseoffirmname,nofalse,
misleading, assumed, or trade names should be
used.(CanonsofProfessionalEthics)

J.MANAGEMENTOFTHEPARTNERSHIP

Q: What are the modes of appointment of a


manager?

A:
Appointmentthrough
AppointmentOther
theArticlesof
ThanintheArticles
Partnership
Powerisirrevocable
withoutjustorlawful
cause

Note:Voterequiredfor
Powertoactisrevocable
removalofmanager
1. For just cause anytime,withorwithout
Vote
of
the cause(shouldbedoneby
thecontrollinginterest)
controlling

partners
(controlling
financialinterest)
2. Without cause or
for unjust cause
Unanimousvote
ExtentofPower
1. If he acts in good
faith,hemaydoall
Aslongasheisa
acts
of
manager,hecanperform
administration
allactsofadministration
(despite
opposition of his (ifothersoppose,hecan
beremoved)
partners)
2. If he acts in bad
faith,hecannot

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Q:Whatistherulewheretherearetwoormore
managers?
A:
Withoutspecificationoftheirrespectiveduties
andwithoutstipulationrequiringunanimityof
action
GR: Each may separately execute all acts of
administration
(unlimited
power
to
administer)

XPN:Ifanyofthemanagersopposes,decision
ofthemajorityprevails

Note:IncaseoftieDecisionofthecontrolling
interest(whoarealsomanagers)shallprevail

Nature
GR:Unanimousconsentofallthemanaging
partnersshallbenecessaryforthevalidityofthe
actsandabsenceorinabilityofanymanaging
partnercannotbealleged.

XPN:Wherethereisanimminentdangerofgrave
orirreparableinjurytothepartnership.

Q: What is the rule when the manner of


managementhasnotbeenagreedupon?

A:
1. All partners shall be considered
managersandagents
2. Unanimous consent is required for
alterationofimmovableproperty

Q:AzucenaandPedroacquiredaparcelofland
andabuilding.AzucenaobtainedaloanfromTai
Tong Co., secured by a mortgage which was
executed over the land and building. Arsenio,
representative of Tai Tong, insured it with
Travellers Multi Indemnity Corporation. The
buildingandthecontentsthereofwererazedby
fire. Travellers failed to pay the insurance.
Hence, Azucena and Pedro filed a case against
TravellerswhereinTaiTongintervenedclaiming
entitlement to the proceeds from Travellers.
Whoisentitledtotheproceedsofthepolicy?

A:TaiToingisentitledtotheinsuranceproceeds.
Arseniocontractedtheinsurancepolicyonbehalf
of Tai Tong. As the managing partner of the
partnership, he may execute all acts of
administration including the right to sue debtors
of the partnership in case of their failure to pay
their obligations when it became due and
demandable. Or at the very least, Arsenio is an
agent of the partnership. Being an agent, it is
understoodthatheactedforandinbehalfofthe

342

firm. (Tai Tong Chuache & Co. v. Insurance


Commissioner,G.R.No.L55397,Feb.29,1988)

Note:Ifrefusalofpartnerismanifestlyprejudicialto
theinterestofpartnership,courtsinterventionmay
besought.

Q: What are the remedies available to the


creditorsofapartner?

A:
1. Separate or individual creditors should
first secure a judgment on their credit;
and
2. Applytothepropercourtforacharging
order subjecting the interest of the
debtorpartner in the partnership for
thepaymentoftheunsatisfiedamount
of the judgment debt with interest
thereon.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
Q:Whataretheeffectsoftheactsofpartners?

A:
ACTSOFAPARTNER

Actsforapparentlycarryingonintheusualwaythe
businessofthepartnership

1.
2.

Actsnotintheordinarycourseofbusiness
1.
2.
3.
4.
5.
6.
7.

Actsofstrictdominionorownership:
Assigning partnership property in trust for
creditors;
Disposingofgoodwillofbusiness;
Doinganactwhichwouldmakeitimpossibleto
carryontheordinarybusinessofpartnership;
Confessingajudgment;
Entering into a compromise concerning a
partnershipclaimorliability;
Submitting partnership claim or liability to
arbitration;
Renouncingclaimofpartnership

EFFECT
Withbindingeffectexcept:
Whenthepartnersoactinghasinfactnoauthorityto
actforthepartnershipintheparticularmatter,and
Thepersonwithwhomheisdealinghasknowledgeof
thefactthathehasnosuchauthority
Donotbind partnershipunlessauthorizedbyother
partners(par.2,Art.1818,NCC)

GR:Oneormorebutlessthanallthepartnershaveno
authority

XPNs:
1. authorizedbytheotherpartners;or

2. p
3. artners have abandoned the business (par. 2, Art.
1818,NCC)
Partnershipisnotliable to3rdpersonshavingactualor
presumptiveknowledgeoftherestriction

Actsincontraventionofarestrictiononauthority

Q:Whatistheeffectofconveyanceofarealproperty?

A:
TYPEOFCONVEYANCE

Titleinthepartnershipsname;
Conveyanceinpartnershipname

Titleinthepartnershipsname;
Conveyanceinpartner'sname

Titleinthenameof1ormorepartners,and
therecorddoesnotdisclosetherightofthe
partnership;Conveyanceinnameof
partner/sinwhosenametitlestands
Titleinnameof1ormoreorallpartnersor
3rdpersonintrustforpartnership;
Conveyanceexecutedinpartnershipname
orinnameofpartners
Titleinthenamesofallthepartners;
Conveyanceexecutedbyallthepartners

EFFECT
Conveyancepassestitlebutpartnershipcanrecoverunless:

1.
a. Conveyancewasdoneintheusualwayofbusiness,and
b. The partner so acting has the authority to act for the
partnership;or
2. The property which has been conveyed by the grantee or a
person claiming through such grantee to a holder for value
without knowledge that the partner, in making the
conveyance,hasexceededhisauthority
Conveyancedoesnotpasstitlebutonlyequitableinterest,
provided:
1. Conveyancewasdoneintheusualwayofbusiness,or
2. The partner so acting has the authority to act for the
partnership
Conveyancepassestitlebutthepartnershipmayrecoversuch
propertyifthepartnersactdoesnotbindthepartnership:
1. The partner so acting has no authority to act for the
partnership,and
2. The person with whom he is dealing has knowledge of the
fact unless the purchaser of his assignee, is a holder for
value,withoutknowledge
1.
2.

Conveyancewillonlypassequitableinterest,provided:
Theactisonewithintheauthorityofthepartner,and
Conveyancewasdoneintheusualwayofthebusiness
Conveyancewillpassalltherightsinsuchproperty

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
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II.RIGHTSANDOBLIGATIONSOFPARTNERSHIP

Q:Whataretheresponsibilitiesofapartnership
topartners?

A:
1. Refund the amounts disbursed by
partnerinbehalfofthepartnershipplus
corresponding interest from the time
the expenses are made (e.g. loans and
advances made by a partner to the
partnership aside from capital
contribution)
2. Answer for obligations a partner may
have contracted in good faith in the
interestofthepartnershipbusiness
3. Answer for risks in consequence of its
management(Art.1796)

III.RIGHTSANDOBLIGATIONSOFPARTNERS
AMONGTHEMSELVES

Q: What are the obligations of partners among


themselves?

A:
1. Contributionofproperty(Art.1786)
2. Contribution of money and money
convertedtopersonaluse(Art.1788)
3. Prohibition in engaging in business for
himself(Art.1789)
4. Contributeadditionalcapital(Art.1791)
5. Managing partner who collects debt
(Art.1792)
6. Partner who receives share of
partnershipcredit(Art.1793)
7. Damagestopartnership(Art.1794)
8. Renderinformation(Art.1806)
9. Accountableasfiduciary(Art.1807)

CONTRIBUTIONOFPROPERTY

Q: What are the obligations of partners with


respecttocontributionofproperty?

A:ToCAFPI
1. Contribute at the beginning of the
partnership, or at the stipulated time,
the money, property or industry which
hemayhavepromisedtocontribute

2. Answer for eviction in case the


partnership is deprived of the
determinatepropertycontributed

3. AnswertothepartnershipfortheFruits
of the property the contribution of
which he delayed, from the date they

344

4.

5.

shouldhavebeencontributeduptothe
timeofactualdelivery

Preserve said property with the


diligence of a good father of a family,
pendingdeliverytothepartnership

Indemnify the partnership for any


damagecausedtoitbytheretentionof
the same or by the delay in its
contribution

Q: Who bears the risk of loss of things


contributed?

A:
KINDOFPROPERTY/THING

WHOBEARSTHE
RISK?

Specificanddeterminatethings
whicharenotfungiblewhere
onlytheuseiscontributed

partners

Specificanddeterminatethings
theownershipofwhichis
transferredtothepartnership
Fungiblethings(Consumable)

partnership

Thingscontributedtobesold
Thingsbroughtandappraisedin
theinventory

Q: What is the effect if a partner fails to


contribute the property which he promised to
delivertothepartnership?

A:
1. Partners become ipso jure a debtor of
the partnership even in the absence of
anydemand(Art.1786,NCC)
2. Remedy of the other partner is not
rescissionbutspecificperformancewith
damagesfromdefaultingpartner

CONTRIBUTIONOFMONEYANDMONEY
CONVERTEDTOPERSONALUSE

Q:Whataretherulesregardingcontributionof
moneytothepartnership?

A:CRIP
1. To Contribute on the date fixed the
amount the partner has undertaken to
contributetothepartnership
2. To Reimburse any amount the partner
may have taken from the partnership
coffersandconvertedtohisownuse
3. To Indemnify the partnership for the
damages caused to it by delay in the

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP

4.

contribution or conversion of any sum


forthepartnerspersonalbenefits
To Pay for the agreed or legal interest,
if the partner fails to pay his
contributionontimeorincasehetakes
anyamountfromthecommonfundand
convertsittohisownuse

CONTRIBUTEADDITIONALCAPITAL

Q:Whataretherulesregardingobligationsto
contributetopartnershipcapital?

A:
1. Partners must contribute equal shares
to the capital of the partnership unless
thereisstipulationtocontrary
2. Capitalist partners must contribute
additional capital in case of imminent
loss to the business of the partnership
when there is no stipulation to the
contrary; Refusal to do so shall create
anobligationontherefusingpartnerto
sellhisinteresttotheotherpartners

Q: What are the requisites before capitalist


partners are compelled to contribute additional
capital?

A:
1. Imminent loss of the business of the
partnership
2. Majorityofthecapitalistpartnersareof
the opinion that an additional
contribution to the common fund
wouldsavethebusiness
3. Capitalistpartnerrefusesdeliberatelyto
contribute (not due to financial
inability)
4. Thereisnoagreementtothecontrary

MANAGINGPARTNERWHOCOLLECTSDEBT

Q: What are the obligations of managing


partners who collect his personal receivable
fromapersonwhoalsoowesthepartnership?

A:
1. Apply sum collected to 2 credits in
proportiontotheiramounts
2. If he received it for the account of
partnership, the whole sum shall be
appliedtopartnershipcredit

Note:Requisites:
1. Atleast2debts,onewherethecollecting
partner is creditor and the other, where
thepartnershipisthecreditor
2. Bothdebtsaredemandable

3.

Partner who collects is authorized to


manage and actually manages the
partnership

PARTNERWHORECEIVESSHAREOF
PARTNERSHIPCREDIT

Q:Whatistheobligationofapartnerwho
receivesshareofpartnershipcredit?

A:Tobringtothepartnershipcapitalwhathehas
received even though he may have given receipt
forhisshareonly.

Note:Requisites:
1. Apartnerhasreceivedinwholeorinpart,
hisshareofthepartnershipcredit
2. Other partners have not collected their
shares
3. Partnershipdebtorhasbecomeinsolvent

Q:Mayapersonwhohasnotdirectlytransacted
in behalf of an unincorporated association be
held liable for a contract entered into by such
association?

A:Yes.Theliabilityforacontractenteredintoon
behalf of an unincorporated association or
ostensible corporation may lie in a person who
may not have directly transacted on its behalf,
butreapedbenefitsfromthatcontract.(LimTong
Limv.PhilippineFishingGearIndustriesInc.,G.R.
No.136448,Nov.3,1999)

PROHIBITIONINENGAGINGINBUSINESS

Q: What are the rules regarding the prohibition


toengageinanotherbusiness?

A:
INDUSTRIALPARTNER
CAPITALISTPARTNER
Prohibition
Cannotengagein
Cannotengagein
business(withsame
businessforhimself
kindofbusinesswith
unlessthepartnership
thepartnership)forhis
expresslypermitshimto
ownaccount,unless
doso
thereisastipulationto

thecontrary
Remedy
Capitalistpartnersmay:
Capitalist partner, who
1. Exclude him from
violatedshall:
thefirm
1. Bring
to
the
2. Avail themselves of
common fund any
the benefits which
profits accruing to
he
may
have
him from said
obtained
transaction;and
3. Damages, in either
2. Bears all losses
case (Art. 1789,
(Art.1808,NCC)
NCC)

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345

UST GOLDEN NOTES 2011

Q:JoeandRudyformedapartnershiptooperate
a car repair shop in Quezon City. Joe provided
thecapitalwhileRudycontributedhislaborand
industry. Onone side of their shop, Joe opened
and operated a coffee shop, while on the other
side, Rudy put up a car accessories store. May
theyengageinsuchseparatebusinesses?Why?

A: Joe, the capitalist partner, may engage in the


restaurant business because it is not the same
kindofbusinessthepartnershipisengagedin.On
the other hand, Rudy may not engage in any
other business unless their partnership expressly
permits him to do so because as an industrial
partner he has to devote his full time to the
business of the partnership (Art. 1789, NCC).
(2001BarQuestion)

DAMAGESTOPARTNERSHIP

Q:Whatistherulewithregardtotheobligation
of a partner as to damages suffered by the
partnershipthroughhisfault?

A:
GR: Every partner is responsible to the
partnership for damages suffered by it
throughhisownfault.Thesedamagescannot
be offset by the profits or benefits which he
may have earned for the partnership by his
industry.

XPN:Ifunusualprofitsarerealizedthrough
extraordinaryeffortsoftheguiltypartner,the
courtsmayequitablymitigateorlessenhis
liabilityfordamages.(Art.1794,NCC)

DUTYTORENDERINFORMATION

Q:Whatisthedutyofthepartnerswithrespect
toinformationaffectingthepartnership?

A: They shall render on demand true and full


informationofallthingsaffectingthepartnership
to:
1. thepartner;or
2. legalrepresentativeofanydeceasedor
legally disabled partner. (Art. 1806,
NCC)

ACCOUNTABLEASFIDUCIARY

Q: How are partners accountable to each other


asfiduciary?

A:Everypartnermustaccounttothepartnership
for any benefit, and hold as trustee for it any
profitsderivedbyhimwithouttheconsentofthe

346

other partners from any transaction connected


withtheformation,conduct,orliquidationofthe
partnership or from any use by him of its
property.(Art.1807,NCC)

RIGHTSOFGENERALPARTNERS

Q:Whatarethepropertyrightsofapartner?
A:SIM
1. RightinSpecificpartnershipproperty
2. Interestinthepartnership(shareinthe
profitsandsurplus)
3. RighttoparticipateintheManagement

Q: What is the nature of a partner's right in


specificpartnershipproperty?

A:
1. Equal right to possession for
partnershippurposes
2. Right is not assignable, except in
connectionwithassignmentofrightsof
allpartnersinthesameproperty
3. Right is limited to his share of what
remains after partnership debts have
beenpaid
4. Right is not subject to attachment or
executionexceptonaclaimagainstthe
partnership
5. Rightisnotsubjecttolegalsupport

Q: What are the effects of assignment of


partnerswholeinterestinthepartnership?

A:
1. Rightswithheldfromtheassignee:
Such assignment does not grant the
assigneetherightto:
a. Tointerfereinthemanagement
b. To require any information or
account
c. Toinspectpartnershipbooks

2. Rightsofassigneeonpartnersinterest:
a. To receive in accordance with his
contracttheprofitsaccruingtothe
assigningpartner
b. To avail himself of the usual
remedies provided by law in the
eventoffraudinthemanagement
c. Toreceivetheassignorsinterestin
caseofdissolution
d. To require an account of
partnershipaffairs,butonlyincase
the partnership is dissolved, and
suchaccountshallcovertheperiod
from the date only of the last

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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PARTNERSHIP
IV.OBLIGATIONSOFPARTNERSHIP/PARTNERS
TOTHIRDPERSONS

account agreed to by all the


partners

Q:Whataretheeffectsofconveyanceofa
partnerofhisinterestinthepartnership?

A:
1. Conveyance of his whole interest
partnership may either remain or be
dissolved
2. Assigneedoesnotnecessarilybecomea
partner;hecannot:
a. interfere in the management or
administration;or
b. demand information, accounting
and inspection of the partnership
books.

Note:Buttheassigneehasthefollowingrights:
1. receive in accordance with his contract
the profits which the assigning partner
wouldotherwisebeentitled
2. avail himself of the usual remedies
provided by law in event of fraud in
management
3. receive assignors interest in case of
dissolution
4. requireandaccountofpartnershipaffairs
but only in case the partnership is
dissolved, and such account shall cover
the period from the date only of the last
accountagreedtobyalltheparties

CRIMINALLIABILITYFORMISAPPROPRIATION:
ESTAFA

Q: Rosa received from Jois money, with the


express obligation to act as Jois agent in
purchasing local cigarettes, to resell them to
several stores, and to give Jois the commission
correspondingtotheprofitsreceived.However,
Rosa misappropriated and converted the said
amount due to Jois to her personal use and
benefit. Jois filed a case of estafa against Rosa.
Can Rosa deny liability on the ground that a
partnershipwasformedbetweenherandRosa?

A: No. Even assuming that a contract of


partnership was indeed entered into by and
betweentheparties,whenapartnerreceivesany
moneyorpropertyforaspecificpurpose(suchas
that obtaining in the instant case) and he later
misappropriates the same, is guilty of estafa.
(Liwanagv.CA,G.R.No.114398,Oct.24,1997)

Q: What are the obligations of partners with


regardto3rdpersons?

A:
1. Everypartnershipshalloperateundera
firm name. Persons who include their
names in the partnership name even if
theyarenotmembersshallbeliableas
apartner
2. All partners shall be liable for
contractual obligations of the
partnershipwiththeirproperty,afterall
partnership
assets
have
been
exhausted:
a. Prorata
b. Subsidiary
3. Admission or representation made by
any partner concerning partnership
affairswithinthescopeofhisauthority
isevidenceagainstthepartnership
4. Noticetopartnerofanymatterrelating
topartnershipaffairsoperatesasnotice
topartnershipexceptincaseoffraud:
a. Knowledgeofpartneractinginthe
particular matter acquired while a
partner
b. Knowledgeofthepartneractingin
the particular matter then present
tohismind
c. Knowledge of any other partner
who reasonably could and should
have communicated it to the
actingpartner
5. Partners and the partnership are
rd
solidarily liable to 3 persons for the
partner'stortorbreachoftrust
6. Liability of incoming partner is limited
to:
a. His share in the partnership
propertyforexistingobligations
b. His separate property for
subsequentobligations
7. Creditorsofpartnershiparepreferredin
partnership property & may attach
partner'sshareinpartnershipassets

Note: On solidary liability. Art. 1816 should be


construed together with Art. 1824 (in connection
withArts.1822and1823).Whiletheliabilityofthe
partnersismerelyjointintransactionsenteredinto
by the partnership, a third person who transacted
with said partnership may hold the partners
solidarilyliableforthewholeobligationifthecaseof
thethirdpersonfallsunderArticles1822and1823.
(Munasquev.CA,G.R.No.L39780,Nov.11,1985)

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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347

UST GOLDEN NOTES 2011

V.DISSOLUTION

Q: Distinguish dissolution, winding up and


termination.

Dissolution
Achangeinthe
relationofthe
partners
causedbyany
partnerceasing
tobe
associatedin
carryingonthe
business.

Windingup

Termination

Settlingthe
partnership
businessor
affairsafter
dissolution

Pointintime
whenall
partnership
affairsare
woundupor
completed;the
endofthe
partnershiplife

Q:Whatarethecausesofdissolution?

A:
1. Withoutviolatingtheagreement:
a. Terminationofthedefinitetermor
specificundertaking
b. Expresswillofanypartneringood
faith, when there is no definite
termandnospecifiedundertaking
c. Express will of all partners (except
those who have assigned their
interests or suffered them to be
charged for their separate debts)
either before or after the
termination of any specified term
orparticularundertaking
d. Expulsion of any partner in good
faithofamember
2. Violatingtheagreement
3. Unlawfulnessofthebusiness
4. Loss
a. Specific thing promised as
contribution is lost or perished
beforedelivery
b. Lossofaspecificthingcontributed
beforeorafterdelivery,ifonlythe
useofsuchiscontributed

Note: The partnership shall not be


dissolvedbythelossofthethingwhenit
occurs after the partnership has acquired
theownershipthereof.

5.
6.
7.
8.

348

Deathofanyofthepartners
Insolvency of any partner or of the
partnership
Civilinterdictionofanypartner
BydecreeofcourtunderArt.1831,NCC
a. apartnerhasbeendeclaredinsane
orofunsoundmind
b. a partner becomes in any other
way incapable of performing his
partofthepartnershipcontract

c.

d.

e.
f.

a partner has been guilty of such


conduct as tends to affect
prejudiciallythecarryingonofthe
business
a partner willfully or persistently
commits a breach of the
partnershipagreement
thebusinessofthepartnershipcan
onlybecarriedonataloss
other circumstances render a
dissolutionequitable

Q:Whataretheeffectsofdissolution?

A:
1. Partnershipisnotterminated
2. Partnership continues for a limited
purpose
3. Transaction of new business is
prohibited (De Leon, Comments and
Cases on Partnership, Agency, and
Trust,p.229,2005ed)

Note: The dissolution of a partnership must not be


understood in the absolute and strict sense so that
at the termination of the object for which it was
createdthepartnershipisextinguished,pendingthe
windingupofsomeincidentsandobligationsofthe
partnership,butinsuchcase,thepartnershipwillbe
reputedasexistinguntilthejuridicalrelationsarising
outofthecontractaredissolved.(TestateofMotta
v.Serra,G.R.No.L22825,Feb.14,1925)

Dissolution does not automatically result in the


termination of the legal personality of the
partnership,northerelationsofthepartnersamong
themselves who remain as copartners until the
partnershipis terminated. (De Leon, Comments and
CasesonPartnership,Agency,andTrust,p.29,2005
ed)

Q: What is the effect of dissolution on the


authorityofapartner?

A:
GR: The partnership ceases to be a going
concern

XPN:Thepartnerspowerofrepresentationis
confinedonlytoactsincidenttowindingupor
completing transactions begun but not then
finished.(Art.1832,NCC)

Note: Subject to the qualifications set forth in


Articles 1833 and 1834 in relation to Article
1832,NCC:
1. In so far as the partners themselves are
concerned The authority of any partner
tobindthepartnershipbyanewcontract
is immediately terminated when the

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP

2.

dissolution is not by the Act, Insolvency,


orDeathofapartner(AID).
When the dissolution is by the act,
insolvency, or death, the termination of
authority depends upon whether or not
the partner had knowledge or notice of
dissolution(Art.1833,NCC).

Q:Thearticlesofcopartnershipprovidethatin
case of death of one partner, the partnership
shallnotbedissolvedbutshallbecontinuedby
thedeceasedpartnersheirs.WhenH,apartner,
died,hiswife,W,tookoverthemanagementof
some of the real properties with permission of
the surviving partner, X, but her name was not
included in the partnership name. She
eventuallysoldtheserealpropertiesafterafew
years. X now claims that W did not have the
authoritytomanageandsellthosepropertiesas
shewasnotapartner.Isthesalevalid?

A:Yes.Thewidowwasnotamereagent,because
she had become a partner upon her husband's
death,asexpresslyprovidedbythearticlesofco
partnership, and by authorizing the widow to
managepartnershippropertyXrecognizedheras
a general partner with authority to administer
andalienatepartnershipproperty.Itisimmaterial
thatW'snamewasnotincludedinthefirmname,
sincenoconversionofstatusisinvolved,andthe
articlesofcopartnershipexpresslycontemplated
the admission of the partner's heirs into the
partnership.(Goquiolayv.Sycip,G.R.No.L11840,
Dec.16,1963)

Q: What is the liability of a partner where the


dissolution is caused by the act, death or
insolvencyofapartner?

A:
GR: Each partner is liable to his copartners
for his share, of any liability created by any
partner for the partnership, as if the
partnershiphadnotbeendissolved.

XPNs:Partnersshallnotbeliablewhen:
1. the dissolution, being by act of any
partner, the partner acting for the
partnership had knowledge of the
dissolution;or
2. the dissolution, being by the death or
insolvency of a partner, the partner
acting for the partnership had
knowledge or notice of the death or
insolvency(Art.1833,NCC)

Q: After the dissolution of a partnership, can a


partnerstillbindthepartnership?

A:
GR: Yes. A partner continues to bind
partnership even after dissolution in the
followingcases:
1. Transactions to wind up partnership
affairs/complete
transactions
unfinishedatdissolution;
2. Transactions which would bind
partnership if not dissolved dissolution
hadnottakenplace,providedtheother
party/obligee:
a.
i.
ii.

b.
i.
ii.
iii.

Had extended credit to partnership


priortodissolution;and
Had no knowledge/notice of
dissolution;or

Didnotextendcredittopartnership;
Had known partnership prior to
dissolution;and
Had no knowledge/notice of
dissolution/fact of dissolution not
advertisedinanewspaperofgeneral
circulation in the place where
partnershipisregularlycarriedon.

XPNs: Partner cannot bind the partnership


anymoreafterdissolutionwheredissolutionis
duetounlawfulnesstocarryonbusiness

XPNtoXPN:Windingupofpartnershipaffairs
1. Partnerhasbecomeinsolvent
2. Actisnotappropriateforwindingupor
forcompletingunfinishedtransactions
3. Completely new transactions which
would bind the partnership if
dissolution had not taken place with
thirdpersonsinbadfaith.
4. Partner is unauthorized to wind up
partnership
affairs,
except
by
transactionwithonewho:
a.
i.
ii.

b.
i.
ii.
iii.

Had extended credit to partnership


priortodissolution;
Had no knowledge or notice of
dissolution;or

Did not extend credit to partnership


priortodissolution;
Had known partnership prior to
dissolution;and
Had no knowledge/notice of
dissolution/fact of dissolution not
advertisedinanewspaperofgeneral
circulation in the place where
partnershipisregularlycarriedon.

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349

UST GOLDEN NOTES 2011

Q: Does the dissolution of a partnership


dischargeexistingliabilityofapartner?

A:
GR:No.

XPN:Saidliabilityisdischargedwhenthereis
anagreementbetween:
1. Partnerhimself;
2. Person/scontinuingthebusiness;and
3. Partnershipcreditors

Q: What is the order of priority in the


distributionofassetsduringthedissolutionofa
limitedpartnership?

A: In setting accounts after dissolution, the


liabilities of the partnership shall be entitled to
paymentinthefollowingorder:
1. Those to creditors, in the order of
priority as provided by law, except
thosetolimitedpartnersonaccountof
their contributions, and to general
partners
2. Those to limited partners in respect to
their share of the profits and other
compensation by way of income on
theircontributions
3. Those to limited partners in respect to
thecapitaloftheircontributions
4. Those to general partners other than
forcapitalandprofits
5. Those to general partners in respect to
profits
6. Those to general partners in respect to
capital(Art.1863,NCC)

Note: Subject to any statement in the certificate or


to subsequent agreement, limited partners share in
the partnership assets in respect to their claims for
capital, and in respect to their claims for profits or
for compensation by way of income on their
contribution respectively, in proportion to the
respectiveamountsofsuchclaims.

WINDINGUP

Q: What takes place during the winding up of


thepartnership?

A: It is during this time after dissolution that


partnership business or affairs are being settled.
(De Leon, Comments and Cases on Partnership,
Agency,andTrust,p.229,2005ed)

Note:Examplesofwindingup:
1. Payingpreviousobligations
2. Collectingassetspreviouslydemandable

350

Engaging in new business necessary for winding up


such as contracting with a demolition company for
the demolition of the garage used in a used car
partnership (Paras, Civil Code of the Philippines

Annotated,Volume5,p.485,19696thed)

Q:Whoarethepersonsauthorizedtowindup?

A:
1. Partnersdesignatedbytheagreement
2. Intheabsenceofsuch,allpartnerswho
have not wrongfully dissolved the
partnership
3. Legal representative of last surviving
partnerwhoisnotinsolvent

Q:Whatarepartnershipassets?

A:
1. Partnershipproperty
2. Contributionsofthepartnersnecessary
for the payment of all liabilities [Art.
1839(2),NCC]

Q:Whatistheorderofpaymentinwindingup?

A:
1. Those owing to creditors other than
partners
2. Thoseowingtopartnersotherthanfor
capitalorprofits
3. Those owing to partners in respect of
capital
4. Those owing to partners in respect to
profits[Art.1839(2),NCC]

Q:Whatisthedoctrineofmarshallingofassets?

A:
1. Partnership creditors have preference
inpartnershipassets
2. Separate or individual creditors have
preference in separate or individual
properties
3. Anything left from either goes to the
other.

Q: What are the rights of a partner where


dissolution is not in contravention of the
agreement?

A: Unless otherwise agreed, the rights of each


partnerareasfollows:
1. To have the partnership property
applied to discharge the liabilities of
partnership;and
2. To have the surplus, if any, applied, to
pay in cash the net amount owing to
therespectivepartners.

CIVILLAWTEAM:
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PARTNERSHIP
Q: What are the rights of a partner where
dissolution is in contravention of the
agreement?

A: The rights of a partner vary depending upon


whetherheistheinnocentorguiltypartner.

1. Rights of partner who has not caused


thedissolutionwrongfully:
a. To have partnership property
applied for the payment of its
liabilitiesandtoreceiveincashhis
shareofthesurplus
b. Tobeindemnifiedforthedamages
caused by the partner guilty of
wrongfuldissolution
c. To continue the business in the
samenameduringtheagreedterm
of the partnership, by themselves
orjointlywithothers
d. To possess partnership property
shouldtheydecidetocontinuethe
business

2. Rights of partner who has wrongfully


causedthedissolution:
a. If the business is not continued by
the other partners, to have the
partnership property applied to
discharge its liabilities and to
receive in cash his share of the
surpluslessdamagescausedbyhis
wrongfuldissolution
b. Ifthebusinessiscontinued:
i. To have the value of his
interest in the partnership at
the time of the dissolution,
less any damage caused by
the dissolution to his co
partners,ascertainedandpaid
in cash, or secured by bond
approvedbythecourt;and
ii. To be released from all
existing and future liabilities
ofthepartnership

Q:Whataretherightsofinjuredpartnerwhere
partnershipcontractisrescinded?

A:
1. Right of a lien on, or retention of, the
surplus of partnership property after
satisfying partnership liabilities for any
sum of money paid or contributed by
him;
2. Right of subrogation in place of
partnership creditors after payment of
partnershipliabilities;and

3.

Right of indemnification by the guilty


partner against all debts and liabilities
ofthepartnership.

Q: How are the accounts settled between


partners?

A:
1. Assetsofthepartnershipinclude:
a. Partnership property (including
goodwill)
b. Contributionsofthepartners
2. Orderofapplicationoftheassets:
a. First, those owing to partnership
creditors
b. Second, those owing to partners
other than for capital and profits
suchasloansgivenbythepartners
oradvancesforbusinessexpenses
c. Third,thoseowingforthereturnof
the capital contributed by the
partners
d. Fourth, the share of the profits, if
any,duetoeachpartner

Q: A partnership was formed with Magdusa as


the manager. During the existence of the
partnership,twopartnersexpressedtheirdesire
towithdrawfromthefirm.Magdusadetermined
the value of the partners share which were
embodied in the document drawn in the
handwriting of Magdusa but was not signed by
all of the partners. Later, the withdrawing
partners demanded for payment but were
refused. Considering that not all partners
intervenedinthedistributionofallorpartofthe
partnershipassets,shouldtheactionprosper?

A: No. A partners share cannot be returned


without first dissolving and liquidating the
partnership, for the return is dependent on the
discharge of creditors, whose claims enjoy
preference over those of the partner, and it is
selfevident that all members of the partnership
areinterestedinitsassetsandbusiness,andare
entitled to be heard in the matter of the firms
liquidation and distribution of its property. The
liquidation prepared by Magdusa not signed by
the other partners is not binding on them.
(Magdusa v. Albaran, G.R. No. L17526, June 30,
1962)

Q:Whatispartnerslien?

A: The right of every partner to have the


partnership property applied, to discharge
partnership liabilities and surplus assets, if any,
distributed in cash to the respective partners,

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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after deducting what may be due to the


partnershipfromthemaspartners.

Q:Canapartnerdemandforhisshareduringthe
existenceofapartnership?

A: No. A share in a partnership can be returned


only after the completion of the latter's
dissolution, liquidation and winding up of the
business.

Since the capital was contributed to the


partnership,nottopartners,itisthepartnership
that must refund the equity of the retiring
partners.Sinceitisthepartnership,asaseparate
anddistinctentitythatmustrefundthesharesof
the partners, the amount to be refunded is
necessarilylimitedtoitstotalresources.Inother
words, it can only pay out what it has in its
coffers,whichconsistsofallitsassets.(Villarealv.
Ramirez,G.R.No.144214,July14,2003)

Q:Whataretheeffectswhenthebusinessofa
dissolvedpartnershipiscontinued?

A:
1. Creditors of old partnership are also
creditors of the new partnership who
continues the business of the old one
without liquidation of the partnership
affairs.
2. Creditors have an equitable lien on the
consideration
paid
to
the
retiring/deceased partner by the
purchaser when retiring/deceased
partner sold his interest without final
settlementwithcreditors.
3. Rights of retiring/estate of deceased
partner:
a. To have the value of his interest
ascertained as of the date of
dissolution;and
b. Toreceiveasordinarycreditorthe
value of his share in the dissolved
partnershipwithinterestorprofits
attributable to use of his right, at
hisoption.

Note: The right to demand on accounting of the


value of his interest accrues to any partner or his
legalrepresentativeafterdissolutionintheabsence
ofanagreementtothecontrary.

Prescriptionbeginstorunonlyuponthedissolution
of the partnership, when the final accounting is
done.

352

Q:Whoarethepersonsrequiredtorenderan
account?

A:
1. Windinguppartner;
2. Survivingpartner;and
3. Person or partnership continuing the
business

Q: Emnace and Tabanao decided to dissolve


their partnership in 1986. Emnace failed to
submit the statement of assets andliabilitiesof
thepartnership,andtorenderanaccountingof
the partnership's finances. Tabanaos heirs filed
against Emnace an action for accounting, etc.
Emnace counters, contending that prescription
hassetin.Decide.

A: Prescription has not yet set in. Prescription of


the said right starts to run only upon the
dissolution of the partnership when the final
accounting is done. Contrary to Emnaces
protestations,prescriptionhadnotevenbegunto
runintheabsenceofafinalaccounting.Theright
to demand an accounting accrues at the date of
dissolution in the absence of any agreement to
thecontrary.Whenafinalaccountingismade,it
is only then that prescription begins to run.
(Emnacev.CA,G.R.No.126334,Nov.23,2001)

Q: Pauline, Patricia and Priscilla formed a


businesspartnershipforthepurposeofengaging
in neon advertising for a term of five (5) years.
Pauline subsequently assigned to Philip her
interest in the partnership. When Patricia and
Priscillalearnedoftheassignment,theydecided
todissolvethepartnershipbeforetheexpiration
ofitstermastheyhadanunproductivebusiness
relationshipwithPhilipinthepast.Ontheother
hand, unaware of the move of Patricia and
Priscillabutsensingtheirnegativereactiontohis
acquisition of Paulines interest, Philip
simultaneously petitioned for the dissolution of
thepartnership.
Is the dissolution done by Patricia and Priscilla
without the consent of Pauline or Philip valid?
Explain.

A: Under Art 1830(1)(c), NCC, the dissolution by


Patricia and Priscilla is valid and did not violate
the contract of partnership even though Pauline
andPhilipdidnotconsentthereto.Theconsentof
Paulineisnotnecessarybecauseshehadalready
assigned her interest to Philip. The consent of
Philip is also not necessary because the
assignment to him of Paulines interest did not
makehimapartner,underArt.1813,NCC.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
Does Philip have any right to petition for the
dissolution of the partnership before the
expirationofitsspecifiedterm?Explain.

A: No, Philip has no right to petition for


dissolution because he does not have the
standingofapartner.(Art.1813,NCC)(1995Bar
Question)

VI.LIMITEDPARTNERSHIP

A.DEFINITION

Q:Whatislimitedpartnership?

A:Oneformedbytwoormorepersonshavingas
members one or more general partners and one
or more limited partners, the latter not being
personallyliableforpartnershipdebts(Art.1843)

Q:Whatarethecharacteristicsoflimited
partnership?

A:
1. It is formed by compliance with the
statutoryrequirements
2. One or more general partners control
thebusinessandarepersonallyliableto
creditors
3. One or more limited partners
contribute to the capital and share in
theprofitsbutdonotparticipateinthe
management of the business and are
not personally liable for partnership
obligations beyond their capital
contributions
4. The limited partners may ask for the
return of their capital contributions
underconditionsprescribedbylaw
5. Partnership debts are paid out of
common fund and the individual
propertiesofgeneralpartners

B.HOWLIMITEDPARTNERSHIPIS
FORMED/AMENDED

Q: What are the essential requirements for the


formationoflimitedpartnership?

A:
1. Certificate of articles of limited
partnership which states the matters
enumeratedinArt.1844,NCC,mustbe
signedandsworn;and
2. Certificate must be filed for record in
theofficeoftheSEC.

Note: Strict compliance with legal requirements is


notnecessary.Itissufficientthatthereissubstantial

compliance in good faith (Jo Chun v. Pacific


CommercialCo.,G.R.No.19892,Sept.6,1923).

Q:Doesalimitedpartnershiphaveapersonality
separateanddistinctfromthatofthepartners?
Whataretheconsequencesofsuch?

A: Yes. The personality of a limited partnership


beingdifferentfromthatofitsmembers,itmust,
on general principle, answer for, and suffer, the
consequenceofitsactsassuchanentitycapable
of being the subject of rights and obligations. If
the limited partnership failed to pay its
obligations, this partnership must suffer the
consequences of such a failure, and must be
adjudged insolvent. (Campos Rueda & Co. v.
Pacific Commercial Co., et. al, G.R. No. L 18703,
Aug.28,1922)

Q: When is the certificate or articles of limited


partnershipcancelled?

A:
1. Whenthepartnershipisdissolved
2. Whenallthelimitedpartnersceasedto
besuch

Q: When may a certificate or articles of limited


partnershipbeamended?

A:
1. Itmustfallunderthefollowingchanges
andconditions:
a. There is a change in the name of
the partnership or in the amount
orcharacterofthecontributionof
anylimitedpartner
b. Apersonissubstitutedasalimited
partner
c. An additional limited partner is
admitted
d. A person is admitted as a general
partner
e. A general partner retires, dies,
becomes insolvent or insane, or is
sentenced to civil interdiction and
the business is continued under
Article1860
f. There is a change in the character
ofthebusinessofthepartnership
g. There is a false or erroneous
statementinthecertificate
h. There is a change in the time as
stated in the certificate for the
dissolution of the partnership or
forthereturnofacontribution
i.
A time is fixed for the dissolution
ofthepartnership,orthereturnof

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j.

2.

3.

a contribution, no time having


beenspecifiedinthecertificate
The members desire to make a
change in any other statement in
thecertificateinorderthatitshall
accurately
represent
the
agreement among them (Art.
1864,NCC)

Must be signed and sworn to by all of


the members including the new
members if some added; in case of
substitution, the assigning limited
partnermustalsosign

MustberecordedintheSEC

LIMITEDPARTNER

Q:Whataretheliabilitiesofalimitedpartner?

A:
ASCREDITOR
Deficiencyin
contribution
Unpaid
contribution

ASTRUSTEE
Specificpropertystatedas
contributedbutnotyet
contributed/wrongfullyreturned
Money/otherproperty
wrongfullypaid/conveyedtohim
onaccountofhiscontribution

Q: What transactions are allowed or prohibited


inalimitedpartnership?

A:
1. Allowed
a. Grantingloanstopartnership
b. Transacting
business
with
partnership
c. Receiving pro rata share of
partnership assets with general
creditorsifheisnotalsoageneral
partner

2.

Prohibited
a. Receiving/holding
partnership
propertyascollateralsecurity
b. Receiving
any
payment,
conveyance,releasefromliabilityif
rd
itwillprejudicerightof3 persons

Note:Violationoftheprohibitionwillgiverisetothe
presumption that it has been made to defraud
partnershipcreditors.

The prohibition is not absolute because there is no


prohibitionifthepartnershipassetsaresufficientto
discharge partnership liabilities to persons not
claimingasgeneralorlimitedpartners.

354

Q:Whendoesageneralpartnerneedconsentor
ratificationofallthelimitedpartners?

A:Whenhe:
1. does any act in contravention of the
certificate;
2. does any act which would make it
impossible to carry on the ordinary
businessofthepartnership;
3. confesses
judgment
against
partnership;
4. possesses partnership property /
assigns rights in specific partnership
property other than for partnership
purposes;
5. admitspersonasgeneralpartner;
6. admits person as limited partner
unlessauthorizedincertificate;or
7. continues business with partnership
property on death, retirement, civil
interdiction, insanity or insolvency of
generalpartnerunlessauthorizedinthe
certificate.

PARTNERSHIPTORT
Q:Whenisthereapartnershiptort?

A:Where:
1. by any wrongful act or omission of any
partner,actingintheordinarycourseof
business of the partnership or with
authority of his copartners, loss or
injuryiscausedtoanyperson,notbeing
apartnerinthepartnership;
2. one partner, acting within the scope of
his apparent authority, receives money
or property from a third person, and
misappliesit;or
3. the partnership, in the course of its
business, receives money or property,
anditismisappliedbyanypartnerwhile
itisinthecustodyofthepartnership.

Note: Partners are solidarily liable with the


partnershipforanypenaltyordamagearisingfroma
partnershiptort.

C.RIGHTSANDOBLIGATIONSOFALIMITED
PARTNER

Q: What are the specific rights of a limited


partner?

A:To:
1. havepartnershipbookskeptatprincipal
placeofbusiness;
2. inspect/copy books at reasonable
hours;

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
3.

4.

5.
6.
7.

have on demand true and full


information of all things affecting
partnership;
have formal account of partnership
affairs whenever circumstances render
itjustandreasonable;
ask for dissolution and winding up by
decreeofcourt;
receive share of profits/other
compensationbywayofincome;and
receive return of contributions,
provided the partnership assets are in
excessofallitsliabilities.

Q:Whoisasubstitutedlimitedpartner?

A:Apersonadmittedtoalltherightsofalimited
partner who has died or assigned his interest in
thepartnership

Q: What are the rights and liabilities of a


substitutedlimitedpartner?

A:
GR: He has all the rights and powers and is
subjecttoalltherestrictionsandliabilitiesof
hisassignor.

XPN: Those liabilities which he was ignorant


of at the time that he became a limited
partner and which could not be ascertained
fromthecertificate

Q:Whataretherequirementsfortheadmission
ofasubstitutedlimitedpartner?

A:
1. All the members must consent to the
assigneebecomingasubstitutedlimited
partner or the limited partner, being
empoweredbythecertificatemustgive
the assignee the right to become a
limitedpartner;
2. The certificate must be amended in
accordancewithArt.1865,NCC;and
3. The certificate as amended must be
registeredintheSEC.

Q: What is the basis of preference given to


limitedpartnersoverotherlimitedpartners?

A: Priority or preference may be given to some


limitedpartnersoverotherlimitedpartnersasto
the:
1. returnoftheircontributions;
2. their compensation by way of income;
or
3. anyothermatter.

Note: In the absence of such statement in the


certificate,evenifthereisanagreement,alllimited
partners shall stand on equal footing in respect of
thesematters.

Q: What are the requisites for return of


contributionofalimitedpartner?

A:
1. All liabilities of the partnership have
been paid or if they have not yet been
paid, the assets of the partnership are
sufficienttopaysuchliabilities;
2. The consent of all the members
(generalandlimitedpartners)hasbeen
obtained except when the return may
berightfullydemanded;and
3. The certificate of limited partnership is
cancelledoramended

Q: When is the return of contribution of a


limitedpartneramatterofright?

A: When all liabilities of the partnership, except


liabilities to general partners and to limited
partners on account of their contributions, have
been paid or there remains property of the
partnership sufficient to pay them and the
certificate is cancelled or so amended as to set
forththewithdrawalorreduction:
1. onthedissolutionofthepartnership;
2. uponthearrivalofthedatespecifiedin
thecertificateforthereturn;or
3. aftertheexpirationof6monthnoticein
writing given by him to the other
partners if no time is fixed in the
certificate for the return of the
contribution or for the dissolution of
thepartnership.

Note: Even if a limited partner has contributed


property, he has only the right to demand and
receivecashforhiscontribution.Theexceptionsare:
1. When there is stipulation to the contrary
inthecertificate;or
2. Whenallthepartners(generalandlimited
partners)consenttothereturnotherthan
intheformofcash

Q:Whataretheliabilitiesofalimitedpartner?

1. Tothepartnership

A:Sincelimitedpartnersarenotprincipalsinthe
transaction of a partnership, their liability as a
rule,istothepartnership,nottothecreditorsof
the partnership. The general partners cannot,

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however waive any liability of the limited


partnerstotheprejudiceofsuchcreditors.

2. To the partnership creditors and other


partners
2. A limited partner is liable for
partnership obligations when he
contributed services instead of only
moneyorpropertytothepartnership
3. Whenheallowshissurnametoappear
inthefirmname
4. Whenhefailstohaveafalsestatement
in the certificate corrected, knowing it
tobefalse
5. Whenhetakespartinthecontrolofthe
business
6. When he receives partnership property
as collateral security, payment,
conveyance, or release in fraud of
partnershipcreditors
7. When there is failure to substantially
comply with the legal requirements
governing the formation of limited
partnerships

3. Toseparatecreditors

A: As in a general partnership, the creditor of a


limited partner may, in addition to other
remedies allowed under existing laws, apply to
the proper court for a charging order subjecting

the interest in the partnership of the debtor


partner for the payment of his obligation. (De
Leon, Comments and cases on Partnership,
AgencyandTrust,p.13,2005ed)

Q: What are the requisites for waiver or


compromiseofliabilities?

A:Thewaiverorcompromise:
1. ismadewiththeconsentofallpartners;
and
2. does not prejudice partnership
creditorswhoextendedcreditorwhose
claims arose before the cancellation or
amendmentofthecertificate.

Q: When may a limited partner have the


partnershipdissolved?

A:
1. When his demand for the return of his
contributionisdeniedalthoughhehasa
righttosuchreturn;or
2. When his contribution is not paid
although he is entitled to its return
because the other liabilities of the
partnership have not been paid or the
partnership property is insufficient for
theirpayment.

SUMMARYOFRIGHTSANDOBLIGATIONSOFPARTNERS

GENERALPARTNER

LIMITEDPARTNER
Rights
1.

1.
2.
3.
4.

Rightinspecificpartnershipproperty
Interestinthepartnership(shareintheprofitsandsurplus)
Righttoparticipateinthemanagement
Righttoassociateanotherpersonwithhiminhissharewithout
theconsentofotherpartners(subpartnership)
5. Right to inspect and copy partnership books at any reasonable
hour.
6. Right to a formal account as to partnership affairs (even during
existenceofpartnership)
a. if he is wrongfully excluded from partnership business or
possessionofitspropertybyhiscopartners.
b. ifrightexistsunderthetermsofanyagreement.
c. asprovidedinArt.1807,NCC
d. wheneverthecircumstancesrenderitjustandreasonable.

1.
2.
3.
4.

356

Obligations
Obligationsof partnersamongthemselves

Contributionofproperty
Contributionofmoneyandmoneyconvertedtopersonaluse
Prohibitioninengaginginbusinessforhimself
Contributeadditionalcapital

2.
3.

4.

5.
6.
7.

To have partnership books kept at


principalplaceofbusiness
To inspect/copy books at reasonable
hours
To have on demand true and full
information of all things affecting
partnership
Tohaveformalaccountofpartnership
affairs whenever circumstances
renderitjustandreasonable
Toaskfordissolutionandwindingup
bydecreeofcourt
To receive share of profits/other
compensationbywayofincome
To receive return of contributions,
providedthepartnershipassetsarein
excessofallitsliabilities

Tothepartnership

Sincelimitedpartnersarenotprincipalsin
thetransactionofapartnership,their
liabilityasarule,istothepartnership,not
tothecreditorsofthepartnership.The

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

PARTNERSHIP
5.
6.
7.
8.
9.

Managingpartnerwhocollectsdebt
Partnerwhoreceivesshareofpartnershipcredit
Damagestopartnership
Renderinformation
Accountableasfiduciary
Obligationsofpartnersto3rd persons

generalpartnerscannot,howeverwaive
anyliabilityofthelimitedpartnerstothe
prejudiceofsuchcreditors.

1.

Everypartnership shall operateunder a firm name. Persons who


includetheirnamesinthepartnershipnameeveniftheyarenot
membersshallbeliableasapartner
2. All partners shall be liable for contractual obligations of the
partnership with their property, after all partnership assets have
beenexhausted:
a. Prorata
b. Subsidiary
3. Admission or representation made by any partner concerning
partnership affairs within the scope of his authority is evidence
againstthepartnership
4. Notice to partner of any matter relating to partnership affairs
operatesasnoticetopartnershipexceptincaseoffraud:
a. Knowledgeofpartneractingintheparticularmatteracquired
whileapartner
b. Knowledgeofthepartneractingintheparticularmatterthen
presenttohismind
c. Knowledge of any other partner who reasonably could and
shouldhavecommunicatedittotheactingpartner
5. Partnersandthepartnershiparesolidarilyliableto3rdpersonsfor
thepartner'stortorbreachoftrust
6. Liabilityofincomingpartnerislimitedto:
a. Hisshareinthepartnershippropertyforexistingobligations
b. Hisseparatepropertyforsubsequentobligations
7.Creditorsofpartnershiparepreferredinpartnershipproperty&may
attachpartner'sshareinpartnershipassets

5.

6.

Tothepartnershipcreditorsandother
partners

1. A limited partner is liable for


partnership obligations when he
contributed services instead of only
moneyorpropertytothepartnership
2. When he allows his surname to
appearinthefirmname
3. When he fails to have a false
statementinthecertificatecorrected,
knowingittobefalse
4. When he takes part in the control of
thebusiness
5. When he receives partnership
property as collateral security,
payment, conveyance, or release in
fraudofpartnershipcreditors
6. When there is failure to substantially
comply with the legal requirements
governing the formation of limited
partnerships

Toseparatecreditors

Otherobligations
Asinageneralpartnership,thecreditorof

alimitedpartnermay,inadditiontoother
Duty to render on demand true and full information affecting
remediesallowedunderexistinglaws,
partnership to any partner or legal representative of any
applytothepropercourtforacharging
deceasedpartnerorofanypartnerunderlegaldisability.
ordersubjectingtheinterestinthe
Dutytoaccounttothepartnershipasfiduciary.
partnershipofthedebtorpartnerforthe
paymentofhisobligation.

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AGENCY

Q:Whatiscontractofagency?

A:Bycontractofagencyapersonbindshimselfto
render some service or to do something in
representation or on behalf of another, with the
consentorauthorityofthelatter.(Art.1868NCC)

Q: What are the characteristics of a contract of


agency?

A:BUNCPP
1. Bilateral If it is for compensation
becauseitgivesrisetoreciprocalrights
andobligations
2. Unilateral If gratuitous, because it
creates obligations for only one of the
parties
3. Nominate
4. Consensual It is perfected by mere
consent
5. Principal
6. Preparatory It is entered into as a
meanstoanend

Q:Whataretheclassificationsofagency?

A:
1. Astomannerofcreation
a. Express agent has been actually
authorized by the principal, either
orallyorinwriting
b. Implied agency is implied from
the acts of the principal, from his
silence or lack of action or his
failure to repudiate the agency,
knowing that another person is
acting on his behalf without
authority

2. Astocharacter
a. Gratuitous agent receives no
compensationforhisservices
b. Onerous agent receives
compensationforhisservices

3. Astoextentofbusinessoftheprincipal
a. Generalagencycomprisesallthe
businessoftheprincipal
b. Special agency comprises one or
morespecifictransactions

4. Astoauthorityconferred
a. Couchedingeneraltermsagency
is created in general terms and is
deemed to comprise only acts in

358

b.

the name and representation of


theprincipal
Simple or commission agent acts
in his own name but for the
accountoftheprincipal

Q: What are the essential elements of an


agency?

A:CORS
1. Consent (express or implied) of the
partiestoestablishtherelationship;
2. TheObjectistheexecutionofajuridical
actinrelationtothirdpersons;
3. TheagentactsasaRepresentativeand
notforhimself;and
4. The agent acts within the Scope of his
authority.

Q: Are there any formal requirements in the


appointmentofanagent?

A:
GR: There are no formal requirements
governingtheappointmentofanagent.

XPN:Whenthelawrequiresaspecificform.

i.e.whensaleoflandoranyinteresttherein
isthroughanagent,theauthorityofthelatter
must be in writing; otherwise, the sale shall
bevoid(Art.1874,NCC)

Q:Whoarethepartiestoacontractofagency?
Distinguish.

A:
1. Principal One whom the agent
represents and from whom he derives
authority; he is the one primarily
concernedinthecontract.
2. Agent One who represents the
principalinatransactionorbusiness.

Note:Fromthetimetheagentactsortransactsthe
business for which he has been employed in
representationofanother,athirdpartyisaddedto
the agency relationship the party with whom the
business is transacted. (De Leon, Comments and
Cases on Partnership, Agency, and Trust, p. 352,
2005ed)

Q: What is the nature of the relationship


betweenprincipalandagent?

A: It is fiduciary in nature that is based on trust


andconfidence.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

AGENCY
Q:Whatarethequalificationsofaprincipal?

A:
1. Naturalorjuridicalperson
2. Hemusthavecapacitytoact

Note:Ifapersoniscapacitatedtoactforhimselfor
hisownright,hecanactthroughanagent.

Insofarasthirdpersonsareconcerned,itisenough
that the principal is capacitated. But insofar as his
obligationstohisprincipalareconcerned,theagent
mustbeabletobindhimself.

Q:Whatisthetermjointprincipals?

A: Two or more persons appoint an agent for a


common transaction or undertaking. (Art. 1915,
NCC)

Q:Whataretherequisitesforsolidaryliabilityof
jointprincipals?

A:
1. Therearetwoormoreprincipals;
2. They have all concurred in the
appointmentofthesameagent;and
3. Agent is appointed for a common
transactionorundertaking.(DeLeon,p.
604,2005ed)

Q:Whatarethekindsofagents?

A:
1. Universal agent one employed to do
all acts which the principal may
personally do, and which he can
lawfully delegate to another the power
ofdoing
2. General agent one employed to
transactallbusinessoftheprincipal,or
allthebusinessofaparticularkindorin
aparticularplace,doallactsconnected
with a particular trade, business or
employment
3. Special or particular agent one
authorized to do act in one or more
specific transactions or to do one or
more specific acts or to act upon a
particularoccasion

Q:Canagencybecreatedbynecessity?

A:No.Whatiscreatedisadditionalauthorityin
anagentappointedandauthorizedbeforethe
emergencyarose.

Q:Whataretherequisitesfortheexistenceof
agencybynecessity?

A:
1. Realexistenceofemergency
2. Inability of the agent to communicate
withtheprincipal
3. Exercise of additional authority is for
theprincipalsprotection
4. Adoption of fairly reasonable means,
premisesdulyconsidered

Q:Whatistheruleregardingdoubleagency?

A:
GR:Itisdisapprovedbylawforbeingagainst
publicpolicyandsoundmorality.

XPN:Wheretheagentactedwithfull
knowledgeandconsentoftheprincipals.

Q: A granted B the exclusive right to sell his


brandofMaongpantsinIsabela,thepriceforhis
merchandise payable within 60 days from
delivery, and promising B a commission of 20%
on all sales. After the delivery of the
merchandisetoBbutbeforehecouldsellanyof
them,BsstoreinIsabelawascompletelyburned
withouthis fault, together with all of A'spants.
MustBpayAforthelostpants?Why?

A:ThecontractbetweenAandBisasalenotan
agency to sell because the price is payable by B
upon60daysfromdeliveryevenifBisunableto
resell it. If B were an agent, he is not bound to
pay the price if he is unable to resell it. As a
buyer,ownershippassedtoBupondeliveryand,
under Art. 1504, NCC, the thing perishes for the
owner. Hence, B must still pay the price. (1999
BarQuestion)

Q: Is mere representation of an alleged agent


sufficient to prove the existence of a principal
agentrelationship?

A: No. The declarations of the agent alone are


generally insufficient to establish the fact or
extent of agency. It is a settled rule that the
persons dealing with the assumed agent are
bound at their peril, if they would hold the
principals liable, to ascertain not only the fact of
agency but also the nature and extent of
authority, and in case either is controverted, the
burden of proof is upon them to establish it.
(SpousesYuv.PanAmericanWorldAirways,Inc.,
G.R.No.123560,Mar.27,2000)

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Q: A foreign manufacturer of computers and a


Philippine distributor entered into a contract
whereby the distributor agreed to order 1,000
units of the manufacturer's computers every
month and to resell them in the Philippines at
the manufacturer's suggested prices plus 10%.
All unsold units at the end of the year shall be
bought back by the manufacturer at the same
pricetheywereordered.Themanufacturershall
holdthedistributorfreeandharmlessfromany
claim for defects in the units. Is the agreement
oneforsaleoragency?

A: The contract is one of agency not sale. The


notionofsaleisnegatedbythefollowingindicia:
(1)thepriceisfixedbythemanufacturerwiththe
10%markupconstitutingthecommission;(2)the
manufacturer reacquires the unsold units at
exactly the same price; and (3) warranty for the
units was borne by the manufacturer. The
foregoing indicia negate sale because they
indicatethatownershipovertheunitswasnever
intendedtotransfertothedistributor.(2000Bar
Question)

II.POWERS

Q:Whatarethekindsofagencyastoextentof
powersconferred?

A:Anagencymaybecouchedingeneraltermsor
couchedinspecificterms.

Q:Whatisanagencycouchedingeneralterms?

A: One which is created in general terms and is


deemed to comprise only acts of administration
(Art.1877,NCC).

Q:Whenisanexpresspowernecessary?

A: It is necessary to perform any act of strict


ownership.

Q:Whatismeantbyactsofadministration?

A: Those which do not imply the authority to


alienate for the exercise of which an express
powerisnecessary.

Q:Whenispaymentanactofadministration?

A:Whenpaymentismadeintheordinarycourse
ofmanagement.

Q: When are making gifts an act of


administration?

360

A: The making of customary gifts for charity, or


those made to employees in the business
managed by the agent are considered acts of
administration.

Q: P granted to A a special power to mortgage


theformersrealestate.Byvirtueofsaidpower,
A secured a loan from C secured by a mortgage
onsaidrealestate.IsPpersonallyliableforsaid
loan?

A: No. A special power to mortgage property is


limited to such authority to mortgage and does
not bind the grantor personally to other
obligations contracted by the grantee in the
absence of any ratification or other similar act
thatwouldestopthegrantorfromquestioningor
disowning such other obligations contracted by
thegrantee.

A.TOBINDPRINCIPAL

Q: When is the act of an agent binding to the


principal?

A:
1. When the agent acts as such without
expressly binding himself or does not
exceed the limits of his authority. (Art.
1897)
2. If principal ratifies the act of the agent
which exceeded his authority. (Art.
1898)
3. Circumstances where the principal
himself was, or ought to have been
aware.(Art.1899)
4. If such act is within the terms of the
powerofattorney,aswritten.(Art.1900
&1902)
5. Principalhasratified,orhassignifiedhis
willingnesstoratifytheagentsact.(Art
1901)

Q: Does knowledge of a fact by an agent bind


theprincipal?

A:
GR: Knowledge of agent is knowledge of
principal.

XPNs:
1. Agents interests are adverse to those
oftheprincipal;
2. Agents duty is not to disclose the
information (confidential information);
or
3. Where the person claiming the benefit
of the rule colludes with the agent to

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

AGENCY
defraud the principal. (De Leon,
Comments and Cases on Partnership,
Agency,andTrust,p.367,2005ed)

Q:Whataretheeffectsoftheactsofanagent?

A:
1. Withauthority
a. Inprincipalsnamevalid
b. In his own name not binding on
the principal; agent and stranger
are the only parties, except
regarding things belonging to the
principal or when the principal
ratifies the contract or derives
benefittherefrom

2. Withoutauthority
a. Inprincipalsnameunauthorized
and unenforceable but may be
ratified, in which case, may be
validated retroactively from the
beginning
b. In his own name valid on the
agent,butnotontheprincipal

Q: What are the distinctions between authority


andtheprincipalsinstructions?

A:
AUTHORITY
Sumtotalofthepowers
committedtotheagent
bytheprincipal
Relatestothe
subject/businesswith
whichtheagentis
empoweredtodealor
act
Limitationsofauthority
areoperativeasagainst
thosewhohave/charged
withknowledgeofthem
Contemplatedtobe
madeknowntothird
personsdealingwiththe
agent

INSTRUCTIONS
Contemplatesonlya
privateruleofguidance
totheagent;
independentand
distinctincharacter

Referstothemanneror
modeofagentsaction
Withoutsignificanceas
againstthosewith
neitherknowledgenor
noticeofthem
Notexpectedtobe
madeknowntothose
withwhomtheagent
deals

Q:Whenistheprincipalboundbytheactualor
apparentauthorityoftheagent?

A:Theprincipalisboundbytheactsoftheagent
on his behalf, whether or not the third person
dealingwiththeagentbelievesthattheagenthas
actual authority, so long as the agent has actual
authority,expressorimplied.

Q:Whatisdoctrineofapparentauthority?

A: The principal is liable only as to third persons


who have been led reasonably to believe by the
conductoftheprincipalthatsuchactualauthority
exists,althoughnonehasbeengiven.

Q: What are the distinctions between apparent


authorityandauthoritybyestoppel?

A:
ApparentAuthority
Thatwhichisthough
notactuallygranted,
theprincipal
knowinglypermitsthe
agenttoexerciseor
holdshimoutas
possessing
Foundedinconscious
permissionofacts
beyondthepowers
granted

AuthoritybyEstoppel
Ariseswhentheprincipal,
byhisculpablenegligence,
permitshisagentto
exercisepowersnot
grantedtohim,even
thoughtheprincipalmay
havenonoticeor
knowledgeoftheagents
conduct
Foundedontheprincipals
negligenceinfailing
properlytosupervisethe
affairsoftheagent

Q: Can an agent maintain an action against


personswithwhomtheycontractedonbehalfof
hisprincipal?

A:No.Agentsarenotapartywithrespecttothat
contractbetweenhisprincipalandthirdpersons.
As agents, they only render some service or do
somethinginrepresentationoronbehalfoftheir
principals.Therenderingofsuchservicedidnot
make them parties to the contracts of sale
executedinbehalfofthelatter.

The fact that an agent who makes a contract for


his principal will gain or suffer loss by the
performance or nonperformance of the contract
by the principal or by the other party thereto
doesnotentitlehimtomaintainanactiononhis
ownbehalfagainsttheotherpartyforitsbreach.
An agent entitled to receive a commission from
his principal upon the performance of a contract
which he has made on his principal's account
does not, from this fact alone, have any claim
againsttheotherpartyforbreachofthecontract,
either in an action on the contract or otherwise.
Anagentwhoisnotapromiseecannotmaintain
an action at law against a purchaser merely
because he is entitled to have his compensation
oradvancespaidoutofthepurchasepricebefore
payment to the principal. (Uy v. CA, G.R. No.
120465,Sept.9,1999)

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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SUMMARYOFRULES;ACTSOFANAGENT

1.
2.

Inbehalfoftheprincipal,withinthescopeofauthority
Bindsprincipal;
Agentnotpersonallyliable
Withoutorbeyondscopeofauthority
Contractisunenforceableasagainsttheprincipalbutbindstheagenttothethirdperson

Bindingontheprincipalwhen:
1. Ratifiedor
2. Theprincipalallowedtheagenttoactasthoughhehadfullpowers

Withinthescopeofauthoritybutintheagentsname
1. Notbindingontheprincipal;
2. Principalhasnocauseofactionagainstthe3rdpartiesandviceversa

Note:Whenthetransactioninvolvesthingsbelongingtotheprincipal:
Remedyoftheprincipaldamagesforagentsfailuretocomplywiththeagency

Withinthescopeofthewrittenpowerofattorneybutagenthasactuallyexceededhisauthorityaccording
toanunderstandingbetweenhimandtheprincipal
1. Insofaras3rdpersonsareconcerned(notrequiredtoinquirefurtherthanthetermsofthewritten
power,agentactedwithinscopeofhisauthority;
2. Principalestopped

Withimpropermotives
Motiveisimmaterial;aslongaswithinthescopeofauthority,valid

Withmisrepresentationsbytheagent
1. Authorizedprincipalstillliable
2. Beyondthescopeoftheagentsauthority
GR:Principalnotliable

XPN:Principaltakesadvantageofacontractorreceivesbenefitsmadeunderfalserepresentationofhis
agent

Mismanagementofthebusinessbytheagent
1. Principalstillresponsiblefortheactscontractedbytheagentwithrespectto3rd persons;
2. Principal,however,mayseekrecoursefromtheagent

Tortcommittedbytheagent
Principalcivillyliablesolongasthetortiscommittedbytheagentwhileperforminghisdutiesinfurtherance
oftheprincipalsbusiness

Agentingoodfaithbutprejudices3rd parties
Principalisliablefordamages

B.EXCEPTION

Q:Whenistheactofanagentnotbindingtothe
principal?

A:Ifanagentactsinhisownname.Insuchcase,
theagentistheonedirectlyboundinfavorofthe
person with whom he has contracted, as if the
transactionwerehisown.(Art.1883,NCC)

362

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

AGENCY
III.EXPRESSVS.IMPLIEDAGENCY

Q:Distinguishexpressandimpliedagency.

A:

EXPRESSAGENCY
IMPLIEDAGENCY
Astodefinition
Onewheretheagent
hasbeenactually
Onewhichisimpliedfrom
authorizedbythe
theactsoftheprincipal,
principal,eitherorally
orinwriting
Astoauthority
Whenitisincidentaltothe
transactionorreasonably
necessarytoaccomplishthe
purposeoftheagency,and
Whenitisdirectly
therefore,theprincipalis
conferredbywords
deemedtohaveactually
intendedtheagentto
possess

Q:Distinguishagencyfromguardianship.

A:
AGENCY
Agentrepresentsa
capacitatedperson
Agentderives
authorityfromthe
principal
Agentisappointedby
theprincipalandcan
beremovedbythe
latter
Agentissubjectto
directionsofthe
principal

Agentcanmakethe
principalpersonally
liable

Q:
Distinguish
administration.

A:
AGENCY
Agentisappointed
bytheprincipal
Representsthe
principal
Agentdoesnotfile
abond
Agentiscontrolled
bytheprincipal
thrutheagreement

GUARDIANSHIP
Guardianrepresentsan
incapacitatedperson
Guardianderivesauthority
fromthecourt
Guardianisappointedby
thecourt,andstandsin
locoparentis
Guardianisnot subjectto
thedirectionsoftheward,
butmustactforthewards
benefit
Guardianhasnopowerto
imposepersonalliability
ontheward

agency

from

judicial

JUDICIALADMINISTRATION
JudicialAdministratoris
appointedbythecourt
Representsnotonlythe
courtbutalsotheheirsand
creditorsoftheestate
JudicialAdministratorfilesa
bond
Hisactsaresubjectto
specificordersfromthe
court

Q:Distinguishagencyfromleaseofservices.

A:
AGENCY
LEASEOFSERVICES
Agentrepresentsthe
Workerorlessorof
principal
servicesdoesnot

representhisemployer
Relationshipcanbe
Generally,relationship
terminatedatthewill
canbeterminatedonly
ofeitherprincipalor
atthewillofboth
agent
Agentexercises
Employeehasministerial
discretionarypowers
functions

Q:Distinguishagencyfromtrust.

A:
AGENCY
TRUST
Agentusuallyholds
Trusteemayholdlegal
notitleatall
titletotheproperty
Agentusuallyactsin
Trusteemayactinhis
thenameofthe
ownname
principal
Trustusuallyendsbythe
Agencyusuallymay
accomplishmentofthe
beterminatedor
purposesforwhichitwas
revokedanytime
formed
Agencymaynotbe
Trustinvolvescontrol
connectedatallwith
overproperty
property
Trusteedoesnot
Agenthasauthority
necessarilyoreven
tomakecontracts
possesssuchauthorityto
whichwillbebinding
bindthetrustororthe
onhisprincipal
cestuiquetrust
Agencyisreallya
Trustmaybetheresultof
contractualrelation
acontract,itmayalsobe

createdbylaw

IV.AGENCYBYESTOPPEL

Q:Whenisthereanagencybyestoppel?

A: When one leads another to believe that a


certain person is his agent, when as a matter of
fact such is not true, and the latter acts on such
misrepresentation, the former cannot disclaim
liability,forhehascreatedanagencybyestoppel.
(Paras, Civil Code of the Philippines Annotated,
th
Vol.V,p.558,6 ed)

Q:Whataretherulesregardingestoppelin
agency?

A:
1. Estoppel of agent One professing to
act as agent for another may be

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estopped to deny his agency both as


against his asserted principal and the
third persons interested in the
transactioninwhichheengaged.

2.

Estoppelofprincipal
a. AstoagentOnewhoknowsthat
another is acting as his agent and
fails to repudiate his acts, or
accepts the benefits, will be
estopped to deny the agency as
againsttheother.
b. As to subagent To estop the
principal from denying his liability
to a third person, he must have
known or be charged with
knowledge of the fact of the
transaction and the terms of the
agreementbetweentheagentand
subagent.
c. As to third persons One who
knowsthatanotherisactingashis
agent or permitted another to
appearashisagent,totheinjuryof
third persons who have dealt with
theapparentagentassuchingood
faith and in the exercise of
reasonable prudence, is estopped
todenytheagency.

3.

4.

Estoppel of third persons A third


person, having dealt with one as agent
maybeestoppedtodenytheagencyas
against the principal, agent, or third
personsininterest.
Estoppel of the government The
government is neither estopped by the
mistake or error on the part of its
agents.

Q:Distinguishimpliedagencyfromagencyby
estoppel.

A:
IMPLIEDAGENCY
AGENCYBYESTOPPEL
Astoliabilitybetweenprincipalandagent
Ifcausedbytheagent,he
Agentisatrueagent,
isnotconsideredatrue
withrightsandduties
agent,hence,hehasno
ofanagent
rightsassuch
Astoliabilitytothirdpersons
1. If caused by the
principal, he is liable,
1. The principal is
but only if the 3rd
alwaysliable
person acted on the
2. Theagentisnever
misrepresentation;
personallyliable
2. If caused by the agent
alone,onlytheagentis

364

liable

V.GENERALvs.SPECIALAGENCY

Q:Distinguishageneralagentfromaspecial
agent?

A:
GeneralAgent
SpecialAgent
ScopeofAuthority
Specificactsin
pursuanceofparticular
Allactsconnectedwith
instructionsorwith
thebusinessor
restrictionsnecessarily
employmentinwhichhe
impliedfromtheactto
isengaged
bedone
NatureofServiceAuthorized
Involvescontinuityof
Nocontinuityofservice
service
ExtenttowhichtheAgentmayBindthePrincipal
Maybindhisprincipalby
Cannotbindhisprincipal
anactwithinthescope
inamannerbeyondor
ofhisauthorityalthough
outsidethespecificacts
itmaybecontrarytothe
whichheisauthorizedto
lattersspecial
perform
instructions
TerminationofAuthority
Dutyimposeduponthe
Apparentauthoritydoes
thirdpartytoinquire
notterminatebymere
makesterminationofthe
revocationofhis
relationshipeffective
authoritywithoutnotice
uponrevocation
tothethirdparty
ConstructionofPrincipalsInstruction
Strictlyconstruedasthey
Merelyadvisoryin
limittheagents
nature
authority

Q:Whoisafactor/commissionagent?

A: It is one engaged in the purchase and sale of


personal property for a principal, which, for this
purpose,hastobeplacedinhispossessionandat
hisdisposal.

Q:Whoisabroker?

A: He is a middleman or intermediary who in


behalf of others and for a commission or fee
negotiates contracts/transactions relating to real
orpersonalproperty.

Q:Whatisfactorage?

A: It is the compensation of a factor or


commissionagent.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

AGENCY
Q:Whatisordinarycommission?

A: It is the compensation for the sale of goods


which are placed in the agents possession or at
hisdisposal

Q:Whatisguarantycommission?

A:Itisthefeewhichisgiveninreturnfortherisk
that the agent has to bear in the collection of
credits.

VI.AGENCYCOUCHEDINGENERALTERMS

Q:Whatisanagencycouchedingeneralterms?

A:Onewhichiscreatedingeneraltermsandis
deemedtocompriseonlyactsofadministration
(Art.1877,NCC).

VII.AGENCYREQUIRINGSPECIALPOWEROF
ATTORNEY

Q:Whatisspecialpowerofattorney(SPA)?

A: It is an instrument in writing by which one


person,asprincipal,appointsanotherashisagent
and confers upon him the authority to perform
certainspecifiedactsorkindsofactsonbehalfof
the principal; primary purpose is to evidence
agents authority to third parties within whom
theagentdeals.

Q: Should SPA be in writing and notarized in


ordertobevalid?

A:No.SPAisnotrequiredtobeinwritingand
neednotbenotarizedinordertobevalid.(De
Leon,CommentsandCasesonPartnership,
Agency,andTrust,p.443,2005ed)

Q:Istheinterventionofanotarypublicrequired
forthevalidityofanSPA?

A:
GR: A power of attorney is valid although no
notary public intervened in its execution.
(Barrettov.Tuason,G.R.Nos.L36811,36827,
36840, 36872, Mar. 31, 1934) (De Leon, p.
443,2005ed)

XPN: When SPA is executed in a foreign


country, it must be certified and
authenticatedaccordingtotheRulesofCourt,
particularlySec.25,Rule132.

Note: When the special power of attorney is


executed and acknowledged before a notary public
or other competent official in a foreign country, it

cannotbeadmittedinevidenceunlessitiscertified
as such in accordance with the foregoing provision
of the rules by a secretary of embassy or legation,
consulgeneral,consul,viceconsul,orconsularagent
or by any officer in the foreign service of the
Philippinesstationedintheforeigncountryinwhich
the record is kept of said public document and
authenticated by the seal of his office. (Medina v.
Natividad,G.R.No.177505,Nov.27,2008)

The failure to have the special power of attorney


(executedinaforeigncountry)authenticatedisnot
merelyatechnicalityitisaquestionofjurisdiction.
Jurisdiction over the person of the real partyin
interestwasneveracquiredbythecourts.(Ibid.)

Q:Whenisaspecialpowernecessary?

A:CALLMOSPRINGCOW

1. to Create or convey real rights over


immovableproperty;
2. ConveyorAcquireimmovable
3. to Loan or borrow money, unless the
latter act be urgent and indispensable
forthepreservationofthethingswhich
areunderadministration;
4. to Lease any real property to another
personformorethanoneyear;
5. to Make such Payments as are not
usually considered as acts of
administration;
6. to Obligate principal as guarantor or
surety
7. to bind the principal to render some
Servicewithoutcompensation;
8. to bind the principal in a contract of
Partnership;
9. to Ratify obligations contracted before
theagency
10. toAcceptorrepudiateanInheritance
11. EffectNovation
12. to make Gifts, except customary ones
forcharityorthosemadetoemployees
inthebusinessmanagedbytheagent
13. Compromise,
Arbitration
and
ConfessionofJudgment
14. anyOtheractofstrictdominion
15. Waiveanobligationgratuitously

Q:Whatarethelimitationstoaspecialpowerof
attorney?

A:
1. A special power to sell excludes the
powertomortgage
2. A special power to mortgage does not
include the power to sell (Art. 1879,
NCC)

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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UST GOLDEN NOTES 2011

3.

A special power to compromise does


not authorize submission to arbitration
(Art.1880,NCC)

VIII.AGENCYBYOPERATIONOFLAW

Q: When is an agency created by operation of


law?

A: When the agent withdraws from the agency


for a valid reason, he must continue to act until
theprincipalhashadareasonableopportunityto
takethenecessarystepsliketheappointmentof
a new agent to remedy the situation caused by
thewithdrawal.(Art.1929,NCC)

IX.RIGHTSANDOBLIGATIONSOFPRINCIPAL

Q: What are the obligations of the principal to


theagent?

A:To:
1. comply with all obligations which the
agent may have contracted within the
scopeofhisauthority(Art.1910,NCC);
2. advancetotheagent,shouldthelatter
so request, the sums necessary for the
execution of the agency (Art. 1912,
NCC);
3. reimburse the agent for all advance
madebyhim,providedtheagentisfree
fromfault(Ibid.);
4. indemnify the agent for all damages
whichtheexecutionoftheagencymay
have caused the latter without fault or
negligenceonhispart(Art.1913,NCC);
and
5. paytheagentthecompensationagreed
upon, or if no compensation was
specified, the reasonable value of the
agents services. (De Leon, Comments
and Cases on Partnership, Agency, and
Trust,pp.545555,2005ed)

Q: Is the principal liable for the expenses


incurredbytheagent?

A:
GR:Yes.

XPNs:
1. If the agent acted in contravention of
the principal's instructions, unless
principal derives benefits from the
contract;
2. When the expenses were due to the
faultoftheagent;

366

3.

4.

When the agent incurred them with


knowledge that an unfavorable result
would ensue, if the principal was not
awarethereof;or
When it was stipulated that the
expenseswouldbebornebytheagent,
orthatthelatterwouldbeallowedonly
acertainsum.

Q:Whatistheliabilityoftheprincipalregarding
contractsenteredintobytheagent?

A:
GR: The principal must comply with all the
obligations which the agent may have
contractedwithinthescopeofhisauthority.

XPN:Wheretheagentexceededhisauthority.

XPNtotheXPN:Whentheprincipalratifiesit.

Note: Even if the agent has exceeded his authority,


theprincipalissolidarilyliablewiththeagentifthe
formerallowedthelattertoactasthoughhehadfull
powers(Art.1911,NCC)

Q: CX executed a special power of attorney


authorizing DY to secure a loan from any bank
and to mortgage his property covered by the
owners certificate of title. In securing a loan
from M Bank, DY did not specify that he was
actingforCXinthetransactionwiththebank.Is
CXliableforthebankloan?

A: While as a general rule the principal is not


liableforthecontractenteredintobyhisagentin
case the agent acted in his own name without
disclosinghisprincipal,suchruledoesnotapplyif
the contract involves a thing belonging to the
principal.Insuchcase,theprincipalisliableunder
Art. 1883, NCC. The contract is deemed made in
his behalf. (SyJuco v. SyJuco, G.R. No. L13471,
Jan.12,1920)(2004BarQuestion)

Q: What is the liability of the principal for tort


committedbytheagent?

A:
GR: Where the fault or crime committed by
the agent is not in the performance of an
obligation of the principal, the latter is not
boundbytheillicitactsoftheagent,evenifit
isdoneinconnectionwiththeagency.

XPNs:
1. Where the tort was committed by the
agent because of defective instructions
from the principal or due to lack of

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AGENCY

2.

necessaryvigilanceorsupervisiononhis
part;or
When the tort consists in the
performance of an act which is within
the powers of an agent but becomes
criminal only because of themanner in
which the agent has performed it; the
principal is civilly liable to 3rd persons
whoactedingoodfaith.

Q:Whenistheprincipalnotboundbytheactof
theagent?

A:
1. GR:Whentheactiswithoutorbeyond
the scope of his authority in the
principalsname.

XPNs:
a. Where the acts of the principal
have contributed to deceive a 3rd
personingoodfaith
b. Where the limitation upon the
power created by the principal
couldnothavebeenknownbythe
rd
3 person
c. Where the principal has placed in
thehandsoftheagentinstruments
signedbyhiminblank
d. Where the principal has ratified
theactsoftheagent

2. Whentheactiswithinthescopeofthe
agents authority but in his own name,
except when the transaction involves
thingsbelongingtotheprincipal.

5.

6.

7.

8.

9.

10.

11.

12.

13.

Note:Thelimitsoftheagentsauthorityshallnotbe
consideredexceededshouldithavebeenperformed
in a manner more advantageous to the principal
thanthatspecifiedbyhim.

14.

15.

RESPONSIBILITIESANDOBLIGATIONSOFAN
AGENT

Q:Whatarethespecificobligationsofanagent
totheprincipal?

A:CAFOFANALADRIPBIR
1. Carry out the agency which he has
accepted
2. Answer for damages which through his
nonperformance the principal may
suffer
3. Finish the business already begun on
the death of the principal should delay
entailanydanger
4. Observe the diligence of a good father
of a family in the custody and

16.

17.

preservationofthegoodsforwardedto
himbytheownerincasehedeclinesan
agency,untilanagentisappointed(Art.
1885,NCC)
advance the necessary Funds should
there be a stipulation to do so (Art.
1886,NCC)
Act in accordance with the instructions
of the principal, and in default thereof,
to do all that a good father of a family
woulddo(Art.1887,NCC)
Not to carry out the agency of its
execution would manifestly result in
loss or damage to the principal (Art.
1888,NCC)
Answer for damages if there being a
conflictbetweenhisinterestsandthose
of the principal, he should prefer his
own(Art.1889,NCC)
not to Loan to himself if he has been
authorized to lend money at interest
(Art.1890,NCC)
render an Account of his transactions
andtodelivertotheprincipalwhatever
he may have received by virtue of the
agency(Art.1891,NCC)
Distinguish goods by countermarks and
designate the merchandise respectively
belonging toeach principal, in the case
of a commission agent who handles
goodsofthesamekindandmark,which
belong to different owners (Art. 1904,
NCC)
be Responsible in certain cases for the
actsofthesubstituteappointedbyhim
(Art.1890,NCC)
Payinterestonfundshehasappliedto
hisownuse(Art.1896,NCC)
Inform the principal, where an
authorized sale of credit has been
made,ofsuchsale(Art.1906,NCC)
Bear the risk of collection and pay the
principaltheproceedsofthesaleonthe
same terms agreed upon with the
purchaser, should he receive also on
sale, a guarantee commission (Art.
1907,NCC)
Indemnifytheprincipalfordamagesfor
his failure to collect the credits of his
principal at the time that they become
due(Art.1908,NCC)
be Responsible for fraud or negligence
(Art. 1909, NCC; De Leon, Comments
and Cases on Partnership, Agency, and
Trust,pp.478479,2005ed)

Note: Every stipulation exempting the agent from


the obligation to render an account shall be void
(par.2,Art.1891,NCC)

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Q: In case of breach of loyalty, is the agent still


entitledtocommission?

A:No,Theforfeitureofthecommissionwilltake
place regardless of whether the principal suffers
any injury by reason of such breach of loyalty. It
does not even matter if the agency is for a
gratuitous one, or that the principal obtained
betterresults,orthatusageandcustomsallowa
receiptofsuchabonus.

Note:Anagenthasanabsolutedutytomakeafull
disclosure or accounting to his principal of all
transactionsandmaterialfactsthatmayhavesome
relevance with the agency. (Domingo v. Domingo,
G.R.No.L30573,Oct.29,1971)

Q: When is the obligation to account not


applicable?

A:
1. Iftheagentactedonlyasamiddleman
with the task of merely bringing
togetherthevendorandvendees;
2. If the agent informed the principal of
the gift/bonus/profit he received from
the purchaser and his principal did not
objectthereto;or
3. Where a right of lien exists in favor of
theagent.

Q: What is the responsibility of two or more


agentsappointedsimultaneously?

A:
GR:Jointlyliable.

XPN:Solidarityhasbeenexpresslystipulated.
Each of the agents becomes solidarily liable
for:
1. thenonfulfillmentoftheagency;or
2. faultornegligenceofhisfellowagent.

XPN to the XPN: When one of the other


agentsactsbeyondthescopeofhisauthority
innocentagentisnotliable.

Note: An innocent agent has a right later on to


recoverfromtheguiltyornegligentagent.

Q:Whatistherulewithregardtotheexecution
oftheagency?

A:
GR: The agent is bound by his acceptance to
carryouttheagency,andisliablefordamages
which, through his nonperformance, the
principalmaysuffer.

368

XPN:Ifitsexecutioncouldmanifestlyresultin
lossordamagetotheprincipal

Q: What are the instances when the agent may


incurpersonalliability?

A:
1. Agentexpresslyboundhimself;
2. Agentexceedshisauthority;
3. Acts of the agent prevent the
performance on the part of the
principal;
4. When a person acts as agent without
authorityorwithoutaprincipal;or
5. A person who acts as an agent of an
incapacitated principal unless the third
person was aware of the incapacity at
thetimeofthemakingofthecontract.

Q:Whatisthescopeoftheagentsauthorityas
tothirdpersons?

A: It includes not only the actual authorization


conferredupontheagentbyhisprincipalbutalso
that which is apparent or impliedly delegated to
him.

Q: Is the third person required to inquire into


theauthorityoftheagent?

A:
1. WhereauthorityisnotinwritingEvery
person dealing with an assumed agent
must discover upon his peril, if he
wouldholdtheprincipalliable,notonly
the fact of the agency but the nature
and extent of the authority of the
agent.
2. Where authority is in writing 3rd
personisnotrequiredtoinquirefurther
thanthetermsofthewrittenpowerof
attorney.

Note:Athirdpersonwithwhomtheagentwishesto
contract on behalf of the principal may require the
presentation of the power of attorney or the
instructionsasregardstheagency.

Q: What is the rule with regard to the


advancementoffundsbytheagent?

A:
GR: There must be a stipulation in the
contract that the agent shall advance the
necessaryfunds

XPN:Whentheprincipalisinsolvent.

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
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AGENCY
RIGHTSOFAGENTS

Q:Whataretheinstanceswhentheagentmay
retaininpledgetheobjectoftheagency?

A:
1. If principal fails to reimburse the agent
the necessary sums, including interest,
which the latter advanced for the
execution of the agency (Art. 1912,
NCC);or
2. If principal fails to indemnify the agent
for all damages which the execution of
theagencymayhavecausedthelatter,
without fault or negligence onhis part.
(Art.1913,NCC)

Q: What is the rule where two persons deal


separatelywiththeagentandtheprincipal?

A:Ifthetwocontractsareincompatiblewitheach
other, the one of prior date shall be preferred.
Thisissubjecthowevertotheruleondoublesale
underArt.1544,NCC.

Note:Rulesofpreferenceindoublesale
1. Personal property possessor in good
faith
2. Realproperty
a. Registrantingoodfaith
b. Possessoringoodfaith
c. Person with the oldest title in good
faith(Art.1544,NCC)

If agent acted in good faith, the principal shall be


liable for damages to the third person whose
contractmustberejected.Ifagentisinbadfaith,he
aloneshallbeliable.(Art.1917,NCC)

PROHIBITEDACTSOFANAGENT

Q:Whataretheprohibitedactsofanagent?

A:
1. Personalacts
2. Criminalorillegalacts

Note:e.g.:
1. Righttovote
2. Makingofawill
3. Underoathstatements
4. Attendingboardmeetingsofcorporations.
(DeLeon,p.358,2005ed)

commission of a crime, he cannot escape


punishment on the ground that he simply acted
asanagentofanotherparty.(Ongv.CA,G.R.No.
119858,Apr.29,2003)

X.IRREVOCABLEAGENCY

Q:Whenisagencyirrevocable?

A:
1. Ifabilateralcontractdependsuponit
2. if it is the means of fulfilling an
obligationalreadycontracted
3. ifpartnerisappointedmanagerandhis
removal from the management is
unjustifiable.(Art1927)
4. if it has been constituted in the
common interest of the principal and
theagent(Art.1930)
5. Stipulationpouratrui

Q: How may the agent withdraw from the


agency?

A: The agent may withdraw from the agency by


giving due notice to the principal. If the latter
should suffer any damage by reason of the
withdrawal, the agent must indemnify him
therefor, unless the agent should base his
withdrawal upon the impossibility of continuing
the performance of the agency without grave
detrimenttohimself.(1736a)

NOTE: The agent, even if he should withdraw from


the agency for a valid reason, must continue to act
untiltheprincipalhashadreasonableopportunityto
takethenecessarystepstomeetthesituation.

XI.MODESOFEXTINGUISHMENT

Q: What is presumption of continuance of


agency?

A: It means that when once shown to have


existed, an agency relation will be presumed to
havecontinued,intheabsenceofanythingwhich
showsitstermination.

Q: Can a person acting as an agent escape


criminal liability by virtue of the contract of
agency?

A: No. The law on agency has no application in


criminalcases.Whenapersonparticipatesinthe
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Q: What are the essential elements for


continuanceofagency?

A:Bothprincipalandagentmustbe:
1. Present
2. Capacitated
3. Solvent (De Leon, Comments and Cases
on Partnership, Agency, and Trust, p.
610,2005ed)

Q:Cantheheirscontinuetheagency?

A:
GR:No.

Ratio: The agency calls for personal services


onthepartoftheagentsinceitisfoundedon
afiduciaryrelationship;rightsandobligations
intransmissible.

XPNs:
1. Agency by operation of law, or a
presumedortacitagency
2. Agency is coupled with an interest in
the subject matter of the agency (e.g.
powerofsaleinamortgage)

Q: What are the modes of extinguishing an


agency?

A:EDWARD
1. Expirationoftheperiod
2. Death, civil interdiction, insanity or
insolvencyofprincipaloroftheagent
3. Withdrawalbytheagent
4. Accomplishment of the object or the
purposeoftheagency
5. Revocation
6. Dissolution of the firm or corporation
which entrusted or accepted the
agency.

Note: The list is not exclusive; May also be


extinguished by the modes of extinguishment of
obligationsingeneralwhenevertheyareapplicable,
likelossofthethingandnovation.

REVOCATION

Q:Isacontractofagencyrevocable?

A:
GR: Yes. Agency is revocable at will by the
principal.

XPNs:Itcannotberevokedif:
1. abilateralcontractdependsuponit
2. itisthemeansoffulfillinganobligation
alreadycontracted

370

3.

4.

a partner is appointed manager of a


partnership and his termination is
unjustifiable
itiscreatednotonlyfortheinterestof
theprincipalbutalsofortheinterestof
thirdpersons

XPN to the XPN: When the agent acts to


defraudtheprincipal.

Q:Whatarethekindsofrevocation?

A: Revocation may either be express or implied.


(De Leon, Comments and Cases on Partnership,
Agency,andTrust,p.625,2005ed)

Q:Howisagencyimpliedlyrevoked?

A:Principal:
1. appoints a new agent for the same
business or transaction (Art. 1923,
NCC);
2. directly manages the business
entrustedtotheagent(Art.1924,NCC);
or
3. after granting general power of
attorney, grants a special one to
another agent which results in the
revocationoftheformerasregardsthe
special matter involved in the latter.
(Art.1926,NCC)

Q: How is agency revoked when the agent has


beenappointedbytwoormoreprincipals?

A:Anyoneoftheprincipalsisgrantedtherightto
revoke the power of attorney without the
consentoftheothers.

Q:Isnoticeofrevocationnecessary?

A:
1. As to the agent Express notice is not
necessary; sufficient notice if the party
to be notified actually knows, or has
reason to know, a fact indicating that
his
authority
has
been
terminated/suspended;
revocation
without notice to the agent will not
renderinvalidanactdoneinpursuance
oftheauthority
rd
2. As to 3 persons Express notice is
necessary
a.
As to former customers Actual
notice must be given to them
because they always assume the
continuance of the agency
relationship

CIVILLAWTEAM:
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AGENCY
b.

As to other persons Notice by


publicationisenough

Note: There is implied revocation of the previous


agencywhentheprincipalappointsanewagentfor
the same business or transaction, provided there is
incompatibility.Buttherevocationdoesnotbecome
effective as between the principal and the agent
untilitisinsomewaycommunicatedtothelatter.

Q:Whatistheeffectofthedirectmanagement
bytheprincipal?

A:
GR:Theagencyisrevokedfortherewouldno
longer be any basis for the representation
previously conferred. But the principal must
act in good faith and not merely to avoid his
obligationtotheagent.

XPN: The only desire of the principal is for


him and the agent to manage the business
together.

Q:RichardsoldalargeparceloflandinCebuto
Leo for P100 million payable in annual
installmentsoveraperiodoftenyears,buttitle
willremainwithRicharduntilthepurchaseprice
is fully paid. To enable Leo to pay the price,
Richard gave him a powerofattorney
authorizing him to subdivide the land, sell the
individual lots, and deliver the proceeds to
Richard,tobeappliedtothepurchaseprice.Five
years later, Richard revoked the power of
attorney and took over the sale of the
subdivision lots himself. Is the revocation valid
ornot?Why?

A: The revocation is not valid. The power of


attorneygiventothebuyerisirrevocablebecause
it is coupled with an interest the agency is the
means of fulfilling the obligation of the buyer to
paythepriceoftheland(Art.1927,NCC).Inother
words, a bilateral contract (contract to buy and
sell the land) is dependent on the agency. (2001
BarQuestion)

Q: Eduardo executed a SPA authorizing Zenaida


to participate in the prequalification and
biddingofaNIAprojectandtorepresenthimin
all transactions related thereto. It was granted
to them. Zenaida leased Manuels heavy
equipment to be used for the NIA project.
Manuel interposed no objection to Zenaidas
actuations. Eduardo later revoked the SPA
allegingthatZenaidaactedbeyondherauthority
in contracting with Manuel under the SPA.
Decide.

A: No.Eduardo and Zenaida entered into a


partnership with regard to the NIA project. Also,
Eduardo was present when Zenaida contracted
withManuel.UnderArt.1818,NCC,everypartner
isanagentofthepartnershipforthepurposeof
itsbusinessandeachonemayseparatelyexecute
allactsofadministration,unless,underArt.1801,
NCC,aspecificationoftheirrespectivedutieshas
beenagreedupon,orelseitisstipulatedthatany
oneofthemshallnotactwithouttheconsentof
all the others. (Mendoza v. Paule, G.R. No.
175885,Feb.13,2009)

DEATH

Q: What is the effect of death of a party to the


contractofagency?

A:
GR:Theagencyisterminatedbythedeathof
the principal even if the agency is for a
definiteperiod.

XPNs:
1. If it has been constituted in common
interest of the principal and the agent
or in the interest of the third person
who accepted the stipulation in his
favor;or
2. Anythingdonebytheagentwithoutthe
knowledgeofthedeathoftheprincipal
or on any other cause which
extinguishes the agency is valid and
shall be effective on third persons who
may have contracted with him in good
faith.

Q:Isthesaleofthelandbytheagentafterthe
deathoftheprincipalvalid?

A:Article1931,NCCprovidesthatanactdoneby
theagentafterthedeathoftheprincipalisvalid
andeffectiveifthesetworequisitesconcur:
1. that the agent acted without the
knowledgeofthedeathoftheprincipal;
and
2. that the third person who contracted
with the agent himself acted in good
faith.

Goodfaithheremeansthatthethirdpersonwas
not aware of the death of the principal at the
timethathecontractedwithsaidagent.(Rallosv.
FelixGoChan,G.R.No.L24332,Jan.31,1978)

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UST GOLDEN NOTES 2011

CHANGEOFCIRCUMSTANCESSURROUNDING
TRANSACTION

Q:Whatistheeffectofachangeofcircumstance
surroundingthetransaction?

A:
GR:Theauthorityoftheagentisterminated.

XPNs:
1. If the original circumstances are
restored within a reasonable period of
time, the agent's authority may be
revived;
2. Wheretheagenthasreasonabledoubts
as to whether the principal would
desire him to act, his authority will not
beterminatedifheactsreasonably;or
3. Where the principal and agent are in
close daily contact, the agent's
authoritytoactwillnotterminateupon
a change of circumstances if the agent
knows the principal is aware of the
change and does not give him new
instructions. (De Leon, pp. 616617,
2005ed)

WITHDRAWALBYTHEAGENT

Q:Cantheagentwithdrawfromtheagency?

A: Yes. The agent may renounce or withdraw


fromtheagencyatanytime,withouttheconsent
of the principal, even in violation of the latters
contractualrights;subjecttoliabilityforbreachof
contractorfortort.

Q: What are the kinds of withdrawal by the


agent?

A:
3. Without just cause The law imposes
upon the agent the duty to give due
noticetotheprincipalandtoindemnify
the principal should the latter suffer
damagebyreasonofsuchwithdrawal.
4. With just cause The agent cannot be
heldliable.

372

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
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COMPROMISE
COMPROMISE

I.DEFINITION

Q:Whatisacompromise?

A: A compromise is a contract whereby the


parties, by making reciprocal concessions, avoid
litigation or put an end to one already
commenced.(Art.2028,NCC)

Q: What are the characteristics of a


compromise?

A:
1. Consensual
2. Reciprocal
3. Nominate
4. Onerous
5. Accessory (in the sense that a prior
conflictispresupposed)
6. Once accepted, it is Binding on the
parties, provided there is no vitiated
consent(McCarthyv.BarberSteamship
Lines,45Phil.488).
7. It is the Settlement of a controversy
principally, and is but merely
incidentally, the settlement of a claim.
(Ibid)

Q:Whatarethekindsofcompromise?

A:
1. Judicialtoendapendinglitigation
2. Extrajudicial to prevent a litigation
fromarising

Q:Whatisthebasicdutyofacourtwhenevera
suitisfiled?

A: The court shall endeavor to persuade the


litigants in a civil case to agree upon some fair
compromise.(Art.2029,NCC)

Q: What circumstances may a proceeding in a


civilactionbesuspended?

A:
1. If willingness to discuss a possible
compromise is expressed by one or
bothparties;or
2. if it appears that one of the parties,
before the commencement of the
actionorproceeding,offeredtodiscuss
a possible compromise but the other
partyrefusedtheoffer.

Q:XisindebtedtoYintheamountofP50,000
with the stipulation that the same shall earn
interest at 40% per annum. When X failed to
pay,Ysuedhim.Inanefforttosettlethecase,X
offered to pay the principal but begged for the
reduction of the interest. Y refused,hence, trial
wasconducted.Canthejudgereducetherateof
interest?

A:Yes.Thecourtsmaymitigatethedamagetobe
paidbythelosingpartywhohasshownasincere
desireforacompromise.(Art.2031,NCC)

Q: Can there be a compromise on the criminal


aspectofacrime?

A: None. There may be a compromise upon the


civil liability arising from an offense; but such
compromiseshallnotextinguishthepublicaction
fortheimpositionofthelegalpenalty.(Art.2034,
NCC)

II.VOIDCOMPROMISE

Q:Whenisacompromisevoid?

A:
1. Civilstatus
2. Validity of a marrieage or a legal
separation
3. Anygroundforlegalseparation
4. Futuresupport
5. Jurisdictionofcourts
6. Futurelegitime

III.EFFECT

Q: What is theeffect if two parties enterintoa


compromise?

A:Ithastheeffectofresjudicata.Acompromise
has upon the parties the effect and authority of
resjudicata.(Art.2037,NCC)

Q:Whatrequirementisnecessaryinorderthata
compromisebeexecuted?

A:Inorderthatacompromisemaybeexecuted,
there must be approval of the court. (Art 2037,
NCC)

Q: A and B entered into a compromise


agreement.Aweekthereafter,Bfiledanaction
in court seeking to annul the compromise
agreementcontendingthatitisonesided.Isthe
actionproper?

ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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ICE
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HAIRFOR
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INANCE
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VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

373

UST GOLDEN NOTES 2011

A: No, because where the compromise is


instituted and carried through in good faith, the
factthattherewasamistakeastothelaworas
to the facts, except in certain cases where the
mistake was mutual and correctible as such in
equity, cannot afford a basis for setting aside a
compromise. Compromises are favored without
regard to the nature of the controversial
compromise, and they cannot be set aside
becausetheeventshowsallthegainshavebeen
on one side. (Asong v. Intermediate Appellate
Court,May12,1989)

Q: X and Y entered into a compromise


agreement whereby X respected the ownership
of Y over a part of a creek (now a fishpond). Is
theagreementvalid?

A: No, because that is contrary to public policy


andthelaw.Thecreekisapropertybelongingto
theState;hence,itispartofpublicdomainwhich
is not susceptible to private appropriation and
acquisition. (Maneclang v Intermediate Appellate
Court,161SCRA469)

Q: X and Y entered into a compromise


agreement, terminating a suit between them. X
failed to comply with the terms and conditions
of the same. What are the remedies of the
aggrievedparty?

A:Ifoneofthepartiesfailsorrefusestoabideby
the compromise, the other party may either
enforcethecompromise,orregarditasrescinded
and insist upon his original demand. (Art 2041,
NCC).

therefore, that a compromise agreement, not


tainted with infirmity, irregularity, fraud or
illegalityisthebetweenthepartieswhoareduty
boundtoabidebyitandobservestrictlyitsterms
and conditions. (Esguerra v. CA, GR 119310,
February3,1997)

Q: What is the effect of a contract or a


compromiseevenifitisdisadvantageoustoone
oftheparties?

A: It is still a valid one. It is a long established


doctrine that the law does not relieve a party
from the effects of an unwise, foolish, or
disastrous contract, entered into with all the
required formalities and with full awareness of
whatheisdoing.Courtshavenopowertorelieve
parties from obligations voluntarily assumed,
simply because their contracts turned out to be
disastrousdealsorunwiseinvestments.(Tandav.
Aldaya, 89 Phil. 497; Villacorte v. Mariano, 89
Phil.341)

It is a truism that a compromise agreement


enteredintobypartylitigants,whennotcontrary
tolaw,publicorder,publicpolicy,morals,orgood
customs is a valid contract which is the law
between the parties themselves. It follows,

374

CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM

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