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2018 Civil Law Last Minute Tips (Jurisprudence)

GENERAL PRINCIPLES

(1) Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, or in a newspaper of
general circulation in the Philippines, unless it is otherwise provided. Does the phrase “unless it is otherwise provided” mean the
publication requirement can be dispensed with? No. The phrase "unless otherwise provided" refers to a different effectivity date other
than after fifteen days following the completion of the law’s publication, but does not imply that the requirement of publication may be
dispensed with. Otherwise, such omission would offend due process as it would deny the public knowledge of the laws that are supposed to
govern it. (Nagkakaisang Maralita vs. Military Shrine Services, June 5, 2013)

(2) Procedural due process demands that administrative rules and regulations be published in order to be effective. Is there an exception
to this rule? Yes. By way of exception, interpretative regulations need not comply with the publication requirement. Interpretative regulations
add nothing to the law and do not affect substantial rights of any person; hence, in this case, they need to be subjected to the procedural due
process of publication. (Nueva Ecija I Electric Cooperative vs. ERC, February 3, 2016)

(3) In computation of time, which shall prevail, the New Civil Code or the Administrative Code? The Administrative Code, being the more
recent law, prevails. Thus, a “year” shall be understood to be twelve calendar months; “month” of thirty days, unless it refers to a specific
calendar month in which case it shall be computed according to the number of days the specific month contains; “day” to a day of twenty-
four hours and, “night” from sunrise to sunset. Accordingly, one calendar month from January 31, 2008 will be from February 1, 2008 to
February 29, 2008; one calendar year from January 15, 2016 will be from January 16, 2016 to January 15, 2017. (CIR vs. Primetown Property,
August 28, 2007)

(4) In 1958, A and B married solemnized under civil and Islamic rites. In 1977, the Muslim Code took effect. In 1993, A married C,
solemnized under the same rites. C claims that the Muslim Code invalidated the prior marriage of A and B. Is C correct? No. A new
law ought to affect the future, not what is past. Hence, in the case of subsequent marriage laws, no vested rights shall be impaired that pertain
to the protection of the legitimate union of a married couple. (Juliano-Llave vs. Republic, March 30, 2011)

(5) Does a pro hac vice ruling violate statutory law and the Constitution? Yes. Pro hac vice means a specific decision does not constitute a
precedent because the decision is for the specific case only, not to be followed in other cases. A pro hac vice decision violates Article 8 of
the NCC - which states that "judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the
Philippines." The decision of the Supreme Court cannot be pro hac vice because by mandate of the law every decision of the Court forms
part of the legal system of the Philippines. If another case comes up with the same facts as the present case, that case must be decided in the
same way as this case to comply with the constitutional mandate of equal protection of the law. Thus, a pro hac vice decision also violates
the equal protection clause of the Constitution. (Knights of Rizal vs. DMCI, April 18, 2017)

(6) Shirley, an employee of an airline, bought a pair of pants from a store. She paid and was given a receipt. On her way to a drugstore,
she was stopped on the pretext that she has not paid. Despite the confrontation, the storeowner wrote to her employer about the
incident. Can the storeowner be held liable for abuse of right? Yes. In sending the demand letter to Shirley’s employer, the storeowner
intended not only to ask for assistance in collecting the disputed amount but to tarnish respondent’s reputation in the eyes of her employer,
violating Articles 19, 20, and 21.

What are the elements of abuse of rights? The elements of abuse of rights are: (a) there is a legal right or duty; (2) which is exercised in
bad faith; (3) for the sole intent of prejudicing or injuring another. (California Clothing vs. Quinones, October 23, 2013)

(7) When is there unjust enrichment? There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a
person retains money or property of another against the fundamental principles of justice, equity and good conscience. The principle of unjust
enrichment has two conditions. First, a person must have been benefited without a real or valid basis or justification. Second, the benefit was
derived at another person’s expense or damage. (Loria vs. Muñoz, October 15, 2014)

(8) Article 26(1), NCC, provides that there is cause of action for “prying into the privacy of another’s residence.” Does this contemplate
business offices? Yes. The right to privacy under Article 26(1) covers business offices where the public are excluded therefrom and only
certain individuals are allowed to enter. The reasonableness of a person’s expectation of privacy depends on a two-part test: (1) whether, by

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his conduct, the individual has exhibited an expectation of privacy; and (2) this expectation is one that society recognizes as reasonable. The
right extends to places where he has the right to exclude the public or deny them access. The phrase “prying into privacy of another’s
residence,” therefore, covers places, locations, or even situations which an individual considers as private. (Spouses Hing vs. Choachuy, June
26, 2013)

CONFLICT OF LAWS

(9) Explain the doctrine of processual presumption (presumed identity approach). The party who wants to have a foreign law applied to a
dispute or case has the burden of proving the foreign law. Failing to do so, the doctrine of processual presumption applies – that is, if the
foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our local or domestic or
internal law. (Del Socorro vs Van Wilsem, December 10, 2014)

(10) In the judicial resolution of conflicts problems, what are the three consecutive phases involved? These are jurisdiction, choice of law,
and recognition and enforcement of judgments. (Hasegawa vs. Kitamura, November 23, 2007)

(11) What is the doctrine of renvoi? The doctrine of renvoi is one under which court in resorting to foreign law adopts rules of foreign country
as to conflict of law, which rule may in turn refer to back to law of the forum. (Agpalo, Conflict of Laws)

(12) Differentiate choice of law from forum non conveniens. Choice of law and forum non conveniens are entirely different matters. The former
is an offshoot of the fundamental principle of autonomy of contracts while the latter is designed to frustrate illicit means for securing
advantages and vexing litigants that would otherwise be possible if the venue of litigation were left entirely to the whim of either party.
Contractual choice of law provisions factor into transnational litigation and dispute resolution in one of or in a combination of four ways: (a)
procedures for settling disputes; (b) forum; (c) governing law; and (d) basis for interpretation. Forum non conveniens relates to, but is not
subsumed by, second of these.

When can the Philippine court properly assume jurisdiction over a case if it chooses to do so? A Philippine court may properly assume
jurisdiction over a case if it chooses to do so to the extent: (a) that the Philippine Court is one to which the parties may conveniently resort
to; (b) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (c) that the Philippine Court
has or is likely to have power to enforce its decision. (Saudi Arabian Airlines vs. Rebesencio, January 14, 2015)

FAMILY RELATIONS

(13) Is a marriage between two persons, contracted for the sole purpose of acquiring American citizenship in consideration of $2,000,
void ab initio on the ground of lack of consent? No. Consent is not lacking. In fact, there was real consent because it was not vitiated nor
rendered defective by any vice of consent. Their consent was also conscious and intelligent as they understood the beneficial and inconvenient
consequences of their marriage. While the avowed purpose of marriage is for the couple to establish conjugal and family life, there is no law
that declares a marriage void if it is entered into for purposes other than what the Constitution or law declares, such as the acquisition of
foreign citizenship. (Republic vs. Albios, October 16, 2013)

(14) The marriage contract states that no marriage license was exhibited to the solemnizing officer at the time of marriage and that it
does not fall under the circumstance where marriage license can be dispensed with. What will be its effect? The marriage is void ab
initio for lack of valid marriage license. To be considered void on the ground of absence of a marriage license, the law requires that the
absence of such marriage license must be apparent on the marriage contract, or at the very least, supported by a certification from the local
civil registrar that no such marriage license was issued to the parties. (Diaz-Salgado vs. Anson, July 27, 2016)

(15) Persons cohabiting for at least 5 years without legal impediment do not have to get a marriage license. Does the absence of the legal
impediment have to exist throughout the 5-year period, or only at the time of the marriage ceremony? The absence of the legal
impediment has to exist throughout the 5-year period. Otherwise, if that continuous 5-year cohabitation is computed without any distinction
as to whether the parties were capacitated to marry each other during the entire 5 years, then the law would be sanctioning immorality and
encouraging parties to have common law relationships and placing them on the same footing with those who lived faithfully with their spouse.
(Office of Administrator vs. Necessario, April 2, 2013)

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(16) At the time of their marriage, Cipriano and Myros are Filipino citizens. Myros went to US and subsequently became a naturalized
US citizen. Myros then divorced Cipriano. Is the divorce valid? Yes. The reckoning point is not the citizenship of the parties at the time
of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter
to remarry. When Myros divorced Cipriano, she is already a US citizen.

Can Cipriano still remarry? Yes. Paragraph 2 of Article 26 of the Family Code allows a Filipino citizen, who has been divorced by a spouse
who had acquired foreign citizenship and remarried, also to remarry. (Republic vs. Orbecido III, October 5, 2005)

Can an alien spouse who obtained divorce invoke Paragraph 2 of Article 26 of the Family Code to remarry? No, only the Filipino
spouse can invoke Paragraph 2 of Article 26, since the alien spouse’s status and legal capacity are generally governed by his national law.

Must the Filipino spouse who seeks to remarry still resort to a judicial action for declaration of authority to remarry? Yes.(Corpuz
vs. Sto. Tomas, August 11, 2010)

(17) Can the settlement of marital properties between two Filipinos as an incident of divorce obtained abroad be given recognition here
in the Philippines? No. Divorce between Filipinos is void and ineffectual under the nationality rule adopted by Philippine law. Hence, any
settlement of property between the parties of the first marriage involving Filipinos submitted as an incident of a divorce obtained in a foreign
country lacks competent judicial approval. (Lavadia vs. Heirs of Luna, July 23, 2014)

(18) Who can seek nullity of subsequent bigamous marriage? The husband or wife of the prior subsisting marriage (the valid marriage) is the
one who has the personality to file a petition for declaration of absolute nullity of void marriage. (Fujiki vs. Marinay, June 26, 2013)

Is a subsequent judicial declaration of nullity of first marriage a defense in bigamy case? No. At the time the second marriage is
contracted, the first marriage was still subsisting as it had not yet been legally dissolved. The crime of bigamy was already consummated
because at the time of the celebration of the second marriage, the accused’s first marriage which had not yet been declared null and void by
a court of competent jurisdiction was deemed valid and subsisting. (Montañes vs. Cipriano, October 22, 2012)

(19) Explain psychological incapacity as ground to declare nullity of marriage. Psychological incapacity refers to no less than a mental, not
physical, incapacity that causes a party to be truly incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which include their mutual obligations to live together, observe love, respect and fidelity and render
help and support. This psychological condition must exist at the time the marriage is celebrated. The psychological condition must be
characterized by (a) gravity, (b) juridical antecedence, and (c) incurability.

Will the lack of personal examination of the respondent by a psychologist necessarily fatal in a petition under Article 36? No. If the
totality of evidence presented is enough to sustain a finding of psychological incapacity, then actual medical examination of the person
concerned need not be resorted to.

How should courts evaluate the testimonies of psychologist who was unable to examine the respondent? The report, testimony and
conclusions deserve the application of a more rigid and stringent set of standards. The psychologist must establish the particular facts, not
generalities, that at the time the parties were married, respondent was already suffering from a psychological defect, its incurability and
gravity – the why and to what extent – that deprived him of the ability to assume the essential duties and responsibilities of marriage. To
make conclusions on the respondent’s psychological condition based on the information fed by only one side is not different from admitting
hearsay evidence as proof of the truthfulness of the content of such evidence. (Viñas vs, Parel-Viñas, January 21, 2015)

How should courts interpret Article 36, FC, the provision on psychological incapacity? Courts should interpret the provision on a case-
to-case basis, guided by experience, the findings of experts and researchers in psychological disciplines, and the decisions of church tribunals
that had persuasive effect by virtue of the provision itself having been taken from the Canon Law. (Kalaw vs. Fernandez, January 14, 2015)

(20) When is the “well-founded belief” requisite under Article 41, FC, on the declaration of an spouse as absentee complied with? It is
complied with only upon a showing that sincere honest-to-goodness efforts had indeed been made to ascertain whether the absent spouse is
still alive or is already dead. The present spouse must prove that his/her belief was the result of diligent and reasonable efforts and inquiries
to locate the absent spouse and that based on these efforts and inquiries, he/she believes that under the circumstances, the absent spouse is
already dead. It requires exertion of active effort. (Republic vs. Sareñogon, February 10, 2016)

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Does the reappearance of a spouse declared presumptively dead automatically terminate a subsequent marriage contracted by the
other spouse? No. Article 42, FC requires the following: (a) non-existence of a judgment annulling the previous marriage or declaring it
void ab initio; (b) recording in the civil registry of the residence of the parties to the subsequent marriage of the sworn statement of fact and
circumstances of reappearance; (c) due notice to the spouses of the subsequent marriage of the fact of reappearance; and (d) the fact of
reappearance must either be undisputed or judicially determined.

What is the status of the reappearing spouse if the affidavit of reappearance has not been filed? By fiction of law, he or she must still
be regarded as legally an absentee until the subsequent marriage is terminated as provided by law. (Santos vs Santos, October 8, 2014)

(21) What is the status of a sale of conjugal property without the consent of spouse? The sale is not merely voidable but void; hence it cannot
be ratified. Nevertheless, in the absence of the other spouse’s consent, the transaction should be construed as a continuing offer on the part
of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or upon
authorization by the court before the offer is withdrawn by either or both offerors. (Aggabao vs. Parulan, September 1, 2010)

(22) Is the rule that family home is exempt from forced sale absolute? No. Article 155(3), FC, allows forced sale of family home for debts
secured by mortgages on the premises before or after such constitution. (Fortaleza vs. Lapitan, August 15, 2012) (Article 155 also allows
forced sale for non-payment of taxes, debts incurred prior to the constitution of the family home, and for debts due to laborers, mechanics,
architects, and such persons who rendered service or furnished material for the construction of the building)

Where the foregoing scenarios are absent, the exemption of family home from forced sale is limited to P300,000 in urban areas and
P200,000 in rural areas. What if there is an increase in the value of the family home that it reached beyond the limit provided by law,
can the creditors now go after the family home? Yes, provided they establish these facts: (a) there was an increase in its actual value; (b)
the increase resulted from voluntary improvements on the property introduced by the persons constituting the family home, its owners or any
of its beneficiaries; and (c) the increased actual value exceeded the maximum allowed by law. (Eulogio vs. Bell, July 8, 2015)

Under Article 153, FC, a family home is exempt from execution. Is the exemption automatic? No. The right to exemption is a personal
privilege granted to the judgment debtor (possibly the owner or beneficiaries) and as such, it must be claimed not by the sheriff, but by the
debtor himself before the sale of the property at public auction. This claim for exemption must be set up and proved to the sheriff. (De Mesa
vs Acero, January 16, 2012)

(23) Explain the rules on partition of family home. The family home shall continue to exist despite the death of one or both spouses or of the
unmarried head of the family. Thereafter, the length of its continued existence is dependent upon whether there is still a minor-beneficiary
residing therein. For as long as there is one beneficiary even if the head of the family or both spouses are already dead, the family home will
continue to exist. If there is no minor-beneficiary, it will subsist until 10 years and within this period, the heirs cannot partition the same
except when there are compelling reasons which will justify the partition. (Patricio vs. Dario, November 20, 2006)

(24) When Ernst, a foreigner, and Norma, a Filipina citizen, divorced abroad, Ernst refused to support their child stating that under the
laws of Netherlands, he is not obliged to support a child. Can the provisions of the Family Code be invoked to compel Ernst to support
their child? No. Since Ernst is a foreign citizen, he is subject not to Philippine laws (Family Code), but to the laws of his country as to
whether he is obliged to give support to his child, as well as the consequences of his failure to do so.

Does the mere claiming that he is governed by his national law automatically exempt Ernst from his obligation to support? No. The
national law must be pleaded and proven in court; otherwise, the doctrine of processual presumption applies. Thus, if the law of the country
of which Ernst is a citizen has not been properly pleaded and proved, it is presumed to be the same with Philippine law, which enforces the
obligation of parents to support their children. (Del Socorro vs Van Wilsem, December 10, 2014)

(25) How can the filiation of illegitimate children be established? The filiation of illegitimate children, like legitimate children, is established
by (a) the record of birth appearing in the civil register or a final judgment; or (b) an admission of legitimate filiation in a public document
or a private handwritten instrument and signed by the parent concerned. In the absence thereof, filiation shall be proved by (a) the open and
continuous possession of the status of a legitimate child; or (b) any other means allowed by the Rules of Court and special laws. (Aguilar vs.
Siasat, January 28, 2015)

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What are the rules respecting the requirement of affixing the signature of the acknowledging parent in ay private handwritten
instrument wherein an admission of filiation of a legitimate or illegitimate child is made? The following are the rules: (a) where the
private handwritten instrument is the lone piece of evidence submitted to prove filiation, there should be strict compliance with the
requirement that the same must be signed by the acknowledging parent; and (b) where the private handwritten instrument is accompanied by
other relevant and competent evidence, it suffices that the claim of filiation therein be shown to have been made and handwritten by the
acknowledging parent as it is merely corroborative of such other evidence. (Dela Cruz vs. Garcia, July 31, 2009)

Can a baptismal certificate be a good proof of paternity? No. The lack of participation of the supposed father in the preparation of a
baptismal certificate renders this document incompetent to prove paternity. While a baptismal certificate may be considered a public
document, it can only serve as evidence of the administration of the sacrament on the date specified but not the veracity of the entries with
respect to the child’s paternity. (Perla vs. Perla, November 12, 2012)

(26) Does the father have the right to compel the use of his surname by his illegitimate child upon his recognition of filiation? No. Article
176, FC, provides that illegitimate children may use the surname of their father if their filiation has been expressly recognized by their father.
The use of the word “may” in the provision readily shows that an acknowledged illegitimate child is under no compulsion to use the surname
of his illegitimate father. The word “may” is permissive and operates to confer discretion upon the illegitimate children.

Does the father have the right of parental custody of his illegitimate child upon his recognition of filiation? No. Article 176, FC, is
clear: illegitimate children shall be under the parental authority of their mother. (Grande vs Antonio, February 18, 2014)

(27) May an illegitimate child, upon adoption by her natural father, use the surname of her natural mother as her middle name? Yes. The
law is silent as to what middle name an adoptee may use. Nevertheless, being a legitimate child by virtue of her adoption, it follows that
Stephanie is entitled to all the rights provided by law to a legitimate child without discrimination of any kind, including the right to bear the
surname of her father and her mother. (In the Matter of the Adoption of Stephanie Nathy Astorga Garcia, March 31, 2005)

(28) A, an American, and B, a Filipino, were married in Manila, had a daughter, and subsequently were divorced in the US. In 2002,
when the daughter was 6 years old, they executed in Manila an Agreement for the joint custody of X. Is the agreement valid and
enforceable in the Philippines? No. The relevant Philippine law on child custody for spouses separated in fact or in law is: no child under
seven years of age shall be separated from the mother. This statutory awarding of sole parental custody to the mother is mandatory, grounded
on sound policy consideration, subject only to a narrow exception not present here. (Dacasin vs. Dacasin, February 5, 2010)

(29) Spouses Monina and Primo were childless. They raised two abandoned children, Michelle and Michael, as their own. When Primo
died, Monina remarried Angel, an American citizen. Wanting to legally adopt Michelle and Michael, Monina, without joining her
American husband, filed petitions to adopt the children. Can a person, who has remarried, singly adopt? No. Under R.A. 8552,
husband and wife shall jointly adopt, except in the following cases: (i) if one spouse seeks to adopt the legitimate son/daughter of the other;
or (ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided, however, That the other spouse has signified his/her
consent thereto; or (iii) if the spouses are legally separated from each other. The use of the word "shall" in the provision means that joint
adoption by the husband and the wife is mandatory. (In Re: Petition for Adoption of Michelle P. Lim, May 21, 2009)

(30) Mike and Bernardina are the biological parents of John. When John was two years old, he was adopted by Cornelio. Two years later,
Cornelio died. If adoption is a personal relationship and that there are no collateral relatives by virtue of adoption, who was then left
to care for the minor John upon the death of Cornelio? His biological parents. Parental authority should be deemed to have reverted in
favor of the biological parents. While the case of John is not one of the grounds for rescission of adoption, the provision on the effects of
rescission of adoption, e.g. restoration of parental authority for minor, may apply by analogy. After all, the law on adoption goes for the best
interest of the child, and the best interest of the child is that someone will remain charged for his welfare and upbringing should his or her
adopter fail or is rendered incapacitated to perform his duties as a parent at a time the adoptee is still in his formative years. (Bartolome vs.
SSS, November 12, 2014)

(31) In case of death of the common-law husband, is the right to make funeral arrangements given to common-law wife? No. Under Article
305 of the New Civil Code, the duty and the right to make arrangements for the funeral of a relative shall be in accordance with the order
established for support. The law simply confines the right and duty to make funeral arrangements to the members of the family to the exclusion
of one’s common law partner. (Valino vs. Adriano, April 22, 2014)

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PROPERTY

To whom does the accretion of the alluvial deposits along the banks of a creek belong? The alluvial deposits along the banks of a creek
do not form part of the public domain as the alluvial property automatically belongs to the owner of the estate to which it may have been
added (riparian owner). The deposit must not be artificial and man-made or a result of human intervention. (Daclison vs. Baytion, April 6,
2016) Thus, drying up of the river cannot be considered as an accretion. The dried-up river bed belongs to the State as property of public
dominion, not to the riparian owner, unless a law vests the ownership in some other person. (Republic vs. Santos, November 12, 2012)

Is it automatically protected from acquisitive prescription by third persons? No. The riparian owner must register the alluvial deposits
under the Torrens system; otherwise, the alluvial property may be subject to acquisition through prescription by third persons. (Parañaque
vs. Ebio, June 23, 2010)

(32) When can a person building, planting, or sowing on land owned by another be considered in good faith? Good faith consists in the
belief of the builder that the land he is building on is his and in his ignorance of a defect or flaw in his title.

What are the rights of the parties in this case? The owner of the land on which anything has been built, sown or planted in good faith,
shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity, or to oblige the one who built
or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after proper indemnity. (Angeles vs. Pascual, September 21, 2011)

(33) Explain the concept of a builder in good faith under Article 448. The term "builder in good faith" as used in reference to Article 448 of
the Civil Code, refers to one who, not being the owner of the land, builds on that land believing himself to be its owner and unaware of the
land, builds on that land, believing himself to be its owner and unaware of the defect in h is title or mode of acquisition. (Aquino vs. Aguilar,
June 29, 2015)

Is a lessee a builder in good faith? No. A lessee is neither a builder in good faith nor in bad faith. As such lessees, they recognize the
ownership of another person. Their rights are determined based on their contract of lease, and in the absence thereof, by provisions on lease
under the New Civil Code. (Sulo sa Nayon vs. Nayong Pilipino, January 20, 2009)

(34) Bernard received casino chips as payment by a Chinese customer for services he rendered to the latter in his car shop. Bernard gave
the chips to his brothers, Deoven and Ludwin to be used in the casino. Finding the possession of Deoven and Ludwin of the chips
suspicious, they were accosted by casino personnel and their chips confiscated. The casino claimed that the chips were stolen. Bernard
demanded the return of the chips as the rightful owner thereof. Is Bernard correct? Yes. Bernard is presumed to be the lawful possessor
of the chips. Article 559, NCC, provides that the possession of movable property acquired in good faith is equivalent to title. There is no law
which prohibits the use of chips outside casino, and although unusual, payment by a Chinese client of casino chips is not unlawful. The casino
should present evidence in order to rebut Bernard’s legal presumption of ownership of chips. (Subic Bay Legends vs. Fernandez, September
29, 2014)

(35) When can a co-owner acquire by prescription the share of his co-owners? He must repudiate the ownership. In order that the title may
prescribe in favor of a co-owner, the following requisites must concur: (1) the co-owner has performed unequivocal acts of repudiation
amounting to an ouster of the other co-owners; (2) such positive acts of repudiation have been made known to the other co-owners; and (3)
the evidence thereof is clear and convincing.

Can one who is merely related by affinity to the decedent inherit from the decedent’s property and effect a repudiation of co-
ownership of the estate that was formed among the decedent’s heirs? No. One who is merely related by affinity to the decedent does not
inherit from the latter and cannot become a co-owner of the decedent’s property. Consequently, he cannot effect a repudiation of the co-
ownership of the estate that was formed among the decedent’s heirs. (Ining vs. Vega, August 12, 2013)

(36) Can a boundary dispute, e.g. two titles overlapping each other – be resolved in an ejectment proceeding? No. It can only be resolved
in the context of an accion reivindicatoria as it involves issue other than possession – encroachment, that is, whether the property claimed by
the defendant formed part of the plaintiff’s property. (Heirs of Aoas vs. As-il, October 19, 2016)

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(37) What is an easement? Easement or servitude, is a real right constituted on another's property, corporeal and immovable, by virtue of which
the owner of the same has to abstain from doing or to allow somebody else to do something on his property for the benefit of another thing
or person. It exists only when the servient and dominant estates belong to two different owners. Therefore, an acknowledgment of the
easement is an admission that the property belongs to another. (Mercader vs. Bardilas, June 27, 2016)

(38) Will the writing of the phrase with existing Right of Way in the TCT result in the acquisition of the easement by virtue of a title? No.
The phrase with existing Right of Way in the TCT is not one of the modes of acquisition of the easement by virtue of a title. Acquisition by
virtue of title refers to "the juridical act which gives birth to the easement, such as law, donation, contract, and will of the testator. (Mercader
vs. Bardilas, June 27, 2016)

(39) What are the requisites for legal easement of right of way? The requisites are: (1) the dominant estate is surrounded by other immovables
and has not adequate outlet to a public highway; (2) proper indemnity has been paid; (3) isolation was not due to acts of the proprietor of the
dominant estate; and (4) right of way claimed is at the point least prejudicial to the servient estate.

Article 650, NCC provides that easement of right of way shall be established at the point least prejudicial to the servient estate, and
insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be shortest. In case of
conflict between the criterion of least prejudicial and the criterion of the shortest way, which shall be prioritized? If these two
circumstances do not concur in a single tenement, the way which will cause the least damage should be used, even if it will not be the shortest.
The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance. (Quintanilla vs. Abangan, February
12, 2008)

Is the payment of indemnity amount to buying of property without the issuance of titles and not having the right to exercise dominion
over it? No. Payment of the value of the land for permanent use of the easement does not mean alienation of the land occupied. In fact, when
the owner of the dominant estate has joined it to another abutting on a public highway, and the servient estate demands that the easement be
extinguished, the value of the property received by the servient estate by way of indemnity shall be returned in full to the dominant estate.
(De Guzman vs. Filinvest, January 14, 2015)

(40) What is a nuisance? A nuisance is defined as any act, omission, establishment, business, condition of property, or anything else which: (1)
injures or endangers the healthor safety of others; or (2) annoys or offends the senses; or (3) shocks, defies or disregards decency or morality;
or (4) obstructs or interferes with the free passage of any public highway or street, or any body of water; or (5) hinders or impairs the use of
property.

Explain nuisance per se and nuisance per accidens. A nuisance may either be: (a) a nuisance per se – or one which affects the immediate
safety of persons and property and may be summarily abated under the undefined law of necessity – or (b) a nuisance per accidens – or that
which depends upon certain conditions and circumstances, and its existence being a question of fact, it cannot be abated without due hearing
thereon ina tribunal authorized to decide whether such a thing does in law constitute a nuisance. (Rana vs. Wong, June 30, 2014)

(41) For failure to pay several amortizations resulting in an impending cancellation of conditional sale, Esperanza sought assistance from
her brother, Gavino, who paid Esperanza’s total obligation amounting to P785,680.37. Later on, Gavino sought to collect the amount
paid by him, to which Esperanza claimed that it was purely a donation. Is Esperanza correct? No. The amount paid by Gavino is not
a donation. Article 748, NCC, provides that if the value of the personal property donated exceeds P5000, the donation and acceptance shall
be made in writing; otherwise, the donation shall be void. There being no documents showing the donation and acceptance, the amount
advanced by Gavino cannot be considered as a donation. That Gavino paid for Esperanza’s obligation because he wanted to help her at that
moment did not contradict an understanding for the return of the claimed amount. If Esperanza does not return the amount paid by Gavino,
unjust enrichment results. (Carinan vs. Cueto, October 8, 2014)

(42) What is the key feature of a donation mortis causa? Revocability. "Irrevocability" is a quality absolutely incompatible with the idea of
conveyances mortis causa, where "revocability" is precisely the essence of the act. A donation mortis causa has the following characteristics:
(a) it conveys no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor
should retain the ownership (full or naked) and control of the property while alive; (b) that before his death, the transfer should be revocable
by the transferor at will; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties
conveyed; and (c) that the transfer should be void if the transferor should survive the transferee. (Del Rosario vs. Ferrer, Septembe 20, 2010)

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(43) Donations of immovable property must be made in a public document. Must remuneratory donations of immovable property be also
in a public instrument? No. Instead of law on donations, the rules on contract should govern the subject contract because the donation is
onerous as the burden is imposed upon the donee of a thing with an undetermined value. The contract need not be in a public instrument, as
the requirement that transmission of real rights over immovable must appear in a public document, is only for convenience and does not
affect validity or enforceability. (Reyes vs. Asuncion, November 11, 2015)

LAND TITLES AND DEEDS

(44) Can an inalienable public land be proper object of possession? No, since it cannot be appropriated, it follows that it cannot be the proper
object of possession. Consequently, injunction cannot be issued in order to protect one’s alleged right to possession over the same. (Republic
vs. Cortez, September 7, 2015)

Can certificates of title covering inalienable and non-disposable public land be cancelled even if the same are already in the hands of
an alleged innocent purchaser for value? Yes. A spring cannot rise higher than its source. Having acquired no title to the property in
question, there is no other recourse but for the alleged innocent purchaser for value to surrender to the rightful ownership of the State.
(Republic vs. AFPRSBS, January 16, 2013)

(45) Explain the doctrine of indefeasibility of title. A certificate of title serves as evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein. This reliance on the certificate of title rests on the doctrine of indefeasibility of
the land title. (Abobon vs. Abobon, August 15, 2012) Thus, as between tax declarations/receipts and title, the title prevails. (Alcantara vs.
Belen, April 25, 2017)

(46) What is the mirror doctrine? The mirror doctrine which echoes the doctrinal rule that every person dealing with registered land may safely
rely on the correctness of the certificate of title issued therefor and is in no way obliged to go beyond the certificate to determine the condition
of the property.

Explain the exceptions to this doctrine. A person dealing with registered land has a right to rely on the Torrens certificate of title and to
dispense with the need of inquiring further except when the party has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient
facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. (Locsin vs. Hizon, September 17,
2014) Also, in case of banks, the ascertainment of the status or condition of a property offered to it as security for a loan must be a standard
and indispensable part of its operations. (PNB vs. Jumamoy, August 3, 2011)

(47) When can a forged or fraudulent tile become the root of a valid title? A forged or fraudulent document may become the root of a valid
title, if the property has already been transferred from the name of the owner to that of the forger, and then to that of an innocent purchaser
for value. This doctrine emphasizes that a person who deals with registered property in good faith will acquire good title from a forger and
be absolutely protected by a Torrens title. (Tolention vs. Latagan, June 22, 2015)

(48) When is there an attack on the title? An action or proceeding is deemed an attack on a title when its objective is to nullify the title, thereby
challenging the judgment pursuant to which the title was decreed.

Explain direct and collateral attack on the title. The attack is direct when the objective is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is
nevertheless made as an incident thereof. (Oño vs. Lim, March 9, 2010) A certificate of title shall not be subject to collateral attack. It cannot
be altered, modified, or cancelled except in a direct proceeding in accordance with law. (Firaza vs. Ugay, April 3, 2013)

Explain whether there is prohibited collateral attack on title:


(a) Counterclaim for annulment of title and reconveyance based on fraud. No, direct attack. (Firaza vs. Ugay, April 3, 2013)
(b) Assailing validity of title in a recovery of possession. Yes, collateral attack. (Firaza vs. Ugay, April 3, 2013)
(c) Collateral attack on a spurious title. No, spurious titles do not enjoy indefeasibility. (Oliveros vs. San Miguel, February 1, 2012)
(d) Quieting of title. No, there is no attack, only removal of cloud in the property. Quieting of title is a common law remedy for the removal
of any cloud, doubt, or uncertainty affecting title to real property. Whenever there is a cloud on title to real property or any interest in
real property by reason of any instrument, record, claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth

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and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title.. (Oño vs. Lim, March 9, 2010)

(49) What is the effect if there are two titles covering the same parcel of land? The principle that the earlier title prevails over a subsequent
one applies when there are two apparently valid titles over a single property. The existence of the earlier valid title renders the subsequent
title void because a single property cannot be registered twice.

When can a holder of a purported prior title be defeated by a holder of a subsequent title? When the prior title is spurious, or the one
alleging that he is a holder of a title has not shown that the same land had already been registered and that an earlier certificate for the same
is in existence. (Oliveros vs. San Miguel, February 1, 2012)

(50) What are the doctrines in acquisition of public land through prescription? The doctrines may be summed as follows:
(a) Under Section 14(1) of P.D. 1529, public lands can be acquired through adverse possession, which must begin on or before June 12,
1945. The said public lands must be declared to be alienable and disposable. Adverse possession prior to the declaration of the land
being alienable and disposable can be counted in favor of the claimant. That is, the property sought to be registered must be declared
already alienable and disposable at the time the application for registration of the title is filed.
(b) Under Section 14(2) of P.D. 1529, public lands can be acquired by acquisitive prescription, the adverse possession of which must be for
10 years (ordinary) or 30 years (extraordinary). The said public lands must be formally and expressly declared as patrimonial property
of the State; that is, it is no longer intended for public use or for public service. Adverse possession prior to the declaration of the land
being alienable and disposable cannot be counted in favor of the claimant. That is, all throughout the 10 year- or 30 year-period, the
land must already be declared patrimonial property.

Lands classified as forest or timber, mineral, or national parks are not susceptible of alienation or disposition unless they are
reclassified as agricultural. Who can make the reclassification and who can declare the lands as no longer intended for public service
or for the development of the national wealth? A positive act of the Government is necessary to enable such reclassification, and the
exclusive prerogative to classify public lands under existing laws is vested in the Executive Department, not in the courts. If, however, public
land will be classified as neither agricultural, forest or timber, mineral or national park, or when public land is no longer intended for public
service or for the development of the national wealth, thereby effectively removing the land from the ambit of public dominion, a declaration
of such conversion must be made in the form of a law duly enacted by Congress or by a Presidential proclamation in cases where the President
is duly authorized by law to that effect. (Heirs of Malabanan vs. Republic, September 3, 2013)

How does the applicant for land registration prove that a land has been declared alienable and disposable? The applicant must present
a certificate of land classification status issued by the Community Environment and Natural Resources Office (CENRO), or the Provincial
Environment and Natural Resources Office (PENRO) of the DENR. He must also prove that the DENR Secretary had approved the land
classification and released the land as alienable and disposable, and that it is within the approved area per verification through survey by the
CENRO or PENRO. Further, the applicant must present a copy of the original classification approved by the DENR Secretary and certified
as true copy by the legal custodian of the official records. (Republic vs. dela Paz, 15 November 2010)

SUCCESSION

(51) Can the heirs file a complaint for sum of money against the debtor of decedent for a loan granted before the latter’s demise? Yes.
Article 777 of the Civil Code states that the rights to the succession are transmitted from the moment of the death of the decedent. While the
decedent’s estate has a different juridical personality than that of the heirs, the heirs certainly have an interest in the preservation of the estate
and the recovery of its properties, for at the moment of decedent’s death, the heirs start to own the property, subject to the decedent's liabilities.
(Pasco vs. Heirs of De Guzman)

(52) Is a waiver of hereditary rights in favor of another executed by a future heir while the parents are still living valid? No. Such waiver
violates Article 1347, which prohibits any contract entered into upon a future inheritance.

Is an adverse claim annotated on the title of a property on the basis of such void waiver valid and effective as to bind subsequent
owners and hold them liable to the claimant? No. As no right or interest on the subject property flows from invalid waiver of hereditary
rights, the adverse claim is not entitled to the registration. Therefore, the adverse claim is without any basis and must consequently be
adjudged invalid and ineffective and perforce be cancelled. (Ferrer vs. Diaz, April 23, 2010)

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(53) Is being forgetful necessarily make a person mentally unsound so as to render him unfit to execute a will? No. Forgetfulness is not
equivalent to being of unsound mind. To be of sound mind, it is not necessary that the testator be in full possession of all his reasoning
faculties, or that his mind be wholly unbroken, unimpaired, or unshattered by disease, injury or other cause. It shall be sufficient if the testator
was able at the time of making the will to know the nature of the estate to be disposed of, the proper objects of his bounty, and the character
of the testamentary act. (Baltazar vs. Laxa, April 11, 2012)

(54) When is there preterition? Preterition consists in the omission of a compulsory heir from the will, either because he is not named or,
although he is named as a father, son, etc., he is neither instituted as an heir nor assigned any part of the estate without expressly being
disinherited – tacitly depriving the heir of his legitime. Preterition requires that the omission is total, meaning the heir did not also receive
any legacies, devises, or advances on his legitime. Under the New Civil Code, the preterition of a compulsory heir in the direct line shall
annul the institution of heirs, but the devises and legacies shall remain valid insofar as the legitimes are not impaired. Consequently, if a will
does not institute any devisees or legatees, the preterition of a compulsory heir in the direct line will result in total intestacy. (Morales vs.
Olondriz, February 3, 2016)

(55) What are the three (3) lines of transmission in reserva troncal? There are three (3) lines of transmission in reserva troncal. The first
transmission is by gratuitous title, whether by inheritance or donation, from an ascendant/brother/sister to a descendant called the prepositus.
The second transmission is by operation of law from the prepositus to the other ascendant or reservor, also called the reservista. The third
and last transmission is from the reservista to the reservees or reservatarios who must be relatives within the third degree from which the
property came. (Mendoza vs. Delos Santos, March 20, 2013)

(56) Can an illegitimate child inherit intestate from the legitimate children and relatives of his parents? No. An illegitimate child has no
right to inherit ab intestato from the legitimate children and relatives of his father or mother; in the same manner, such children or relatives
shall not inherit from the illegitimate child. The right of representation is not available to illegitimate descendants of legitimate children in
the inheritance of a legitimate grandparent. (Heirs of Arado vs. Alcoran, July 8, 2015)

OBLIGATIONS AND CONTRACTS

(57) Explain prescription as a mode of acquiring ownership. Prescription is a mode of acquiring ownership and other real rights over
immovable property. It is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession
should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Possession is open when it is patent, visible, apparent,
notorious and not clandestine. It is continuous when uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse
possessor can show exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so
conspicuous that it is generally known and talked of by the people in the neighborhood. (Imuan vs. Cereno, September 11, 2009)

(58) Article 1142 provides that a mortgage action prescribes in ten years. Does this prescriptive period apply to actions to annul
foreclosure of mortgage? No. While the prescriptive period is also ten years, the basis is Article 1144, the action being upon a written
contract. (Rural Bank of Malasiqui vs. Ceralde, November 25, 2015)

(59) Is there a distinction between damages and injury? Yes. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm
which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often
called damnum absque injuria. (Orchard Golf and Country Club vs. Yu, January 11, 2016)

Is there a distinction between damages and damage? Yes. “Damages” refers to the sum of money which the law awards as pecuniary
compensation for an injury done or a wrong sustained as a consequence of either a breach of a contractual obligation or a tortuous or illegal
act; while, “damage” pertains to the actionable loss or harm which results from the unlawful act, omission or negligence of another. Damages
are amounts recoverable or that which can be awarded for the damage done or sustained. (People vs. Dianos, October 7, 1998)

(60) Can the rescission under Article 1911 be extrajudicial? Yes. There is nothing in this law which prohibits the parties from entering into an
agreement that a violation of the terms of the contract would cause its cancellation even without court intervention. In contracts providing
for automatic revocation, judicial intervention is only necessary to determine whether or not the rescission was proper. (Asmeron vs. DBP,
November 23, 2011)

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(61) When is demand not necessary to constitute the debtor in default? There are four instances when demand is not necessary to constitute
the debtor in default: (1) when there is an express stipulation to that effect; (2) where the law so provides; (3) when the period is the controlling
motive or the principal inducement for the creation of the obligation; and (4) where demand would be useless. In the first two, it is not
sufficient that the law or obligation fixes a date for performance; it must further state expressly that after the period lapses, default will
commence. (Rivera vs. Salvador, January 14, 2015)

(62) X obligated itself to award the contract in favor of Y on the condition of Z’s non-exercise of its “Right to Top.” Z’s “Right to Top”
was subsequently declared void by the courts. Has the obligation to award the contract to Y become due and demandable? Yes.
Article 1185 provides that if an obligation is conditioned on the non-occurrence of a particular event at a determinate time, that obligation
arises (a) at the lapse of the indicated time, or (b) if it has become evident that the event cannot occur. In view of the nullity of Z’s “Right to
Top”, it has become evident that the same will not occur. The condition is deemed complied with by operation of law. (Osmeña vs. PSALM,
October 5, 2016)

(63) A contract provides: “CONTRACT DURATION. The project is estimated to be completed in six (6) years.” Is this an obligation with
a period? No. The termination of the contract was a mere estimate and cannot be considered a period or a "day certain" or that which must
necessarily come, although it may not be known when. (Salonte vs. COA, August 19, 2014)

(64) Lim delivered scrap papers worth P7M to Arco who has the option to either (a) pay the price or (b) deliver the finished products of
equivalent value. Is there an alternative obligation on the part of Arco? Yes. Thus, when it tendered a check to Lim representing partial
payment for the scrap papers, it exercised the option to pay the price. (Arco Pulp vs. Lim, June 25, 2014)

(65) In a contract of sale, Anakin and Luke were denominated as the “SELLER” while Leia is the “BUYER”. What is nature of obligation
of Anakin and Luke? The obligation is solidary. The contract to sell did not state "SELLERS" but "SELLER." This could only mean that
Anakin and Luke were considered as one seller in the contract. (AFP Retirement vs. San Victores, August 17, 2016)

(66) Santos Car Check (Santos) leased a showroom to Comglasco Corporation (Comglasco) for a period of five years. Barely a year,
Comglasco sought to pre-terminate the contract, citing business reverses brought by the 1997 Asian Financial Crisis. Comglasco
relies on Art. 1267, NCC, which provides that when the service has become so difficult as to be manifestly beyond the contemplation
of the parties, the obligor may also be released therefrom, in whole or in part. Is Comglasco correct? No. The obligation of Comglasco
to pay rentals is “to give.” Article 1267 applies only to prestations “to do.” Said article speaks of a prestation involving service which has
been rendered so difficult by unforeseen subsequent events as to be manifestly beyond the contemplation of the parties.

Can the principle of rebus sic stantibus excuse Comglasco from its obligation? No. The principle of rebus sic stantibus holds that parties
stipulate in light of certain prevailing conditions, and once these conditions cease to exist, the contract also ceases to exist. The parties to the
contract must be presumed to have assumed the risks of unfavorable developments. It is therefore only in absolutely exceptional changes of
circumstances that equity demands assistance. Comglasco has not shown that the poor financial condition of the country rendered the
performance of the lease contract impractical and inimical to the corporate survival of the petitioner. (Comglasco vs. Santos, March 25, 2015)

(67) Explain tender of payment and consignation. Consignation is the act of depositing the thing due with the court or judicial authorities
whenever the creditor cannot accept or refuses to accept payment, and it generally requires a prior tender of payment. Tender of payment is
the manifestation by the debtor to the creditor of his desire to comply with his obligation, with the offer of immediate performance. Tender
of payment may be extrajudicial, while consignation is necessarily judicial, and the priority of the first is the attempt to make a private
settlement before proceeding to the solemnities of consignation. Tender and consignation, where validly made, produces the effect of payment
and extinguishes the obligation. (Del Carmen vs. Sabordo, August 11, 2014)

What are the instances when tender of payment maybe dispensed with? Under Article 1256 of the Civil Code, consignation alone is
sufficient even without a prior tender of payment a) when the creditor is absent or unknown or does not appear at the place of payment; b)
when he is incapacitated to receive the payment at the time it is due; c) when, without just cause, he refuses to give a receipt; d) when two or
more persons claim the same right to collect; and e) when the title of the obligation has been lost.

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What are the requisites of a valid consignation? These are: (a) there was a debt due; (b) valid prior tender of payment, unless dispensed
with; (c) previous notice of consignation given to persons interested in the performance of the obligation; (d) amount or thing due was placed
at the disposal of court; and (e) after consignation, persons interested were notified thereof.

Is there a valid consignation if the subject monthly rentals were deposited in a non-drawing savings account? No, as it was not placed
at the disposal of the court. (PNB vs. Chan, March 13, 2017)

(68) Will dacion en pago totally extinguish the obligation? It depends on the parties’ intention. The dation in payment extinguishes the
obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or as may be proved, unless the parties by
agreement, express or implied, or by their silence, consider the thing as equivalent to the obligation, in which case the obligation is totally
extinguished. (Luzon Development Bank vs. Delta Development, January 12, 2011)

(69) Can unpaid rentals be legally compensated against expenses by the lessee for repairs and structural defects, which have yet to be
liquidated? No. In legal compensation, it is required that (a) each one of the obligors be bound principally and that he be at the same time a
principal creditor of the other; (b) both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and
also of the same quality if the latter has been stated; (c) the two debts are due; (d) the debts are liquidated and demandable; (e) over neither
of them be any retention or controversy, commenced by third parties and communicated in due time to the debtor. Here, the expenses for
repairs and structural defects are not yet liquidated. (Lao vs. Special Plans, June 29, 2010)

(70) Differentiate extinctive novation from modificatory novation. An extinctive novation has the twin effects of, first, extinguishing an
existing obligation and, second, creating a new one in its stead. This kind of novation presupposes a confluence of four essential requisites:
(1) a previous valid obligation; (2) an agreement of all parties concerned to a new contract; (3) the extinguishment of the old obligation; and
(4) the birth of a valid new obligation. Novation is merely modificatory where the change brought about by any subsequent agreement is
merely incidental to the main obligation (e.g., a change in interest rates or an extension of time to pay); in this instance, the new agreement
will not have the effect of extinguishing the first but would merely supplement it or supplant some but not all of its provisions. (Azarcon vs.
People, June 29, 2010)

Is mere assumption of obligation by another person tantamount to novation? No. In order that an obligation may be extinguished by
novation, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations are on every point incompatible
with each other. (Land Bank vs Ong, November 24, 2010) Thus, where there is no agreement to release the original debtor from liability, he
is still liable, notwithstanding the execution of a compromise agreement. (Ever Electrical vs. PBCOM, August 3, 2016)

(71) Explain the principle of relativity of contracts. The principle of relativity of contracts is that contracts can only bind the parties who entered
into it, and cannot favor or prejudice a third person, even if he is aware of such contract and has acted with knowledge thereof. Where there
is no privity of contract, there is likewise no obligation or liability to speak about. (PNB vs. Tan Dee, February 19, 2014)

(72) The credit agreement executed between a bank and its borrowers stipulated that the loan would be subjected to interest at a rate
"determined by the bank to be its prime rate plus applicable spread, prevailing at the current month." Is this stipulation valid? No.
The stipulation is violative of the principle of mutuality of contracts under Article 1308 of the Civil Code, which provides that “the contract
must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.” A perusal of the provision shows that
it does not require the conformity of the maker before a new interest rate could be enforced. Any stipulation regarding the validity or
compliance of the contract left solely to the will of one of the parties is invalid. (PNB vs. Manalo, February 24, 2014)

(73) What is the status of a sale of jointly owned real property by a co-owner without the express authority of the others? The sale of
jointly owned real property by a co-owner without the express authority of the others is unenforceable against the latter, but valid and
enforceable against the seller. (MCIAA vs. Heirs of Ijordan, January 11, 2016)

What is the status of deed of extra-judicial partition when the person who signed the same failed to obtain authority from his co-
heirs? Unenforceable, not voidable, as it is an unauthorized contract. (Heirs of Ureta vs. Heirs of Ureta, September 14, 2011)

(74) What is the effect if an extrajudicial settlement is not notarized? It is still valid, but is a private one. It cannot prejudice third persons.

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Are heirs who are parties to the extrajudicial settlement, which was not notarized, bound by the same? Yes. The principle of relativity
covers the heirs. The heirs of contracting parties are precluded from denying the binding effect of the agreement entered into by their
predecessors-in-interest. (Pontigon vs. Heirs of Sanchez, December 5, 2016)

(75) Under Article 1314 of the New Civil Code, however, any third person who induces another to violate .his contract shall be liable for
damages to the other contracting party. What are the elements of this tortious interference? The elements are: (1) existence of a valid
contract; (2) knowledge on the part of the third person of the existence of the contract and (3) interference on the part of the third person
without legal justification or excuse. (Ferro Chemicals vs. Garcia, October 5, 2016)

(76) What are the two kinds of simulated contracts? They are (a) absolute, and (b) relative. Simulation is absolute when there is color of
contract, but without any substance, the parties not intending to be bound thereby. It is relative when the parties come to an agreement that
they hide or conceal in the guise of another contract. (Buenaventura vs. Metrobank, August 3, 2016)

(77) What is accion pauliana? Accion pauliana is a legal action of last resort filed by a creditor to rescind a contract executed by his debtor to
defraud him. The requisites are: (a) the plaintiff asking for rescission has a credit prior to the alienation, although demandable later; (b) the
debtor has made a subsequent contract conveying a patrimonial benefit to a third person; (c) the creditor has no other legal remedy to satisfy
his claim, but would benefit by rescission of the conveyance to third person; (d) the act being impugned is fraudulent; and (e) the third person
who received the property conveyed, if by onerous title, has been an accomplice in the fraud. (Anchor Savings vs. Furigay, March 13, 2013)

(78) A void contract is equivalent to nothing and is absolutely wanting in civil effects. When is an action to declare its inexistence
necessary? When any of the terms of a void contract is performed, an action to declare its inexistence is necessary to allow restitution of
what has been given under it. If a void contract has already been performed, the restoration of what has been given is in order. This principle
springs from Article 22 (accion in rem verso), which states that: every person who through an act of performance of another, or any other
means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same. (Tan
vs. Hosana, February 3, 2016)

(79) What is the effect if both parties are in pari delicto? When both parties are in pari delicto or in equal fault, none of them may expect
positive relief from the courts in the interpretation of their agreement; instead, they shall be left as they were at the time the case was filed.
(Nicolas vs. Mariano, August 1, 2016)

(80) What are the three kinds of estoppels? The three kinds of estoppels are: (a) estoppel in pais; (b) estoppel by deed; and (c) estoppel by
laches. Under the first kind, a person is considered in estoppel if by his conduct, representations, admissions or silence when he ought to
speak out, whether intentionally or through culpable negligence, "causes another to believe certain facts to exist and such other rightfully
relies and acts on such belief, as a consequence of which he would be prejudiced if the former is permitted to deny the existence of such
facts." Under estoppel by deed, a party to a deed and his privies are precluded from denying any material fact stated in the deed as against
the other party and his privies. Under estoppel by laches, an equitable estoppel, a person who has failed or neglected to assert a right for an
unreasonable and unexplained length of time is presumed to have abandoned such right and cannot later on seek to enforce the same, to the
prejudice of the other party, who has no notice or knowledge that the former would assert such rights and whose condition has so changed
that the latter cannot, without injury or prejudice, be restored to his former state. (Go vs. BSP, July 8, 2015)

SPECIAL CONTRACTS

(81) Is a contract of sale which purports to sell a specific or definite portion of unpartitioned land valid? No. It is void. Prior to partition, a
sale of a definite portion of common property requires the consent of all co-owners because it operates to partition the land with respect to
the co-owner selling his or her share. Without the consent of his co-owners, a co-owner could not sell a definite portion of the co-owned
property. (Cabrera vs. Ysaac, November 19, 2014)

(82) Must the principle nemo dat quod non habet a requirement during the perfection of the contract of sale? No, it is required at the
consummation stage, or at the time of delivery. The fact that the seller is not the owner of the subject matter of the sale at the time of perfection
does not make the sale void. (Cahayag vs. Commercial Credit Corporation, January 13, 2016)

(83) Distinguish a contract of sale from a contract to sell. In a contract of sale, the title to the property passes to the vendee upon the delivery
of the thing sold; in a contract to sell, ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment

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of the purchase price. Otherwise stated, in a contract of sale, the vendor loses ownership over the property and cannot recover it until and
unless the contract is resolved or rescinded; whereas, in a contract to sell, title is retained by the vendor until full payment of the price. In the
latter contract, payment of the price is a positive suspensive condition, failure of which is not a breach but an event that prevents the obligation
of the vendor to convey title from becoming effective. (Reyes vs. Tuparan, June 1, 2011)

Is an agreement which stipulates that the seller shall execute a deed of sale only upon or after payment of the purchase price a
contract of sale? No. It is a contract of sell. The stipulation shows that the vendors reserved title to the subject property until full payment
of the purchase price. (Diego vs. Diego, February 20, 2013)

Micro Pacific sent a letter-proposal to Ace Foods for the delivery, sale and installation of the former’s computer products, which the
latter accepted for P600,000.00. After the latter issued a purchase order, the former delivered the products and an invoice, which, in
small fine print, states: title to sold property is reserved in MICRO PACIFIC until full compliance of the terms and conditions of
above and payment of the price. Is the contract entered into between Micro Pacific and Ace Foods a contract to sell? No. It is a contract
of sale. The title reservation stipulation in the invoice did not change the complexion of the transaction from a contract of sale into a contract
to sell as there is no showing that the said stipulation novated the contract of sale between the parties. (Ace Foods vs. Micro Pacific, December
11, 2013)

(84) What is the right of first refusal? The right of first refusal is not deemed a perfected contract of sale. In a right of first refusal, while the
object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's eventual intention to enter
into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto,
it can at best be so described as merely belonging to a class of preparatory juridical relations governed not by contracts but by, among other
laws of general application, the pertinent scattered provisions of the Civil Code on human conduct.

Is it the same as option contract? No. An option contract is entirely different and distinct from a right of first refusal in that in the former,
the option granted to the offeree is for a fixed period and at a determined price. Lacking these two essential requisites, what is involved is
only a right of first refusal. (Tuazon vs. Suarez, December 8, 2010)

(85) Can a party rely on Article 1354 – although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless
the debtor proves the contrary – to prove that an option contract has a consideration? No. When the written agreement itself does not
state the consideration for the option contract, the offeree or promisee bears the burden of proving the existence of a separate consideration
for the option. The offeree cannot rely on Article 1354 of the Civil Code, which presumes the existence of consideration, since Article 1479
of the Civil Code is a specific provision on option contracts that explicitly requires the existence of a consideration distinct from the purchase
price.

Does the absence of consideration supporting the option contract render it invalid? No. An option unsupported by a separate
consideration stands as an unaccepted offer to buy (or to sell) which, when properly accepted, ripens into a contract to sell.

Can the offer in the option contract be withdrawn anytime? When an offer is supported by a separate consideration, a valid
option contract exists, i.e., there is a contracted offer which the offerer cannot withdraw from without incurring liability in damages. When
the offer is not supported by a separate consideration, the offer stands but, in the absence of a binding contract, the offeror may withdraw it
any time. (PNOC v. Keppel Philippines Holdings, Inc., July 25 2016)

(86) Is option money same as earnest money? No. Earnest money and option money are not the same but distinguished thus: (a) earnest money
is part of the purchase price, while option money is the money given as a distinct consideration for an option contract; (b) earnest money is
given only where there is already a sale, while option money applies to a sale not yet perfected; and, (c) when earnest money is given, the
buyer is bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy, but may even forfeit it
depending on the terms of the option. (Rizalino vs. Paraiso Development, February 5, 2007)

Securitron, Inc., through Eleazar, its General Manager, negotiated with First Optima, Inc., through Young, for the sale of the latter’s
parcel of land. While ongoing negotiations, Securitron sent a letter to First Optima, accompanied with a check for P100,000.00,
indicating that it was a deposit. The same was coursed through the receptionist of First Optima, who issued a provisional receipt
which acknowledged the payment as earnest money. The check was eventually deposited with and credited to First Optima’s bank
account. When Securitron demanded that First Optima proceed with the sale, the latter refused to do so, claiming that there was no

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perfected contract yet and that it is now inclined not to accept the offer. Is First Optima correct? Yes. The letter and check to Securitron
– without awaiting the approval of board of directors and Young’s decision, or without making a new offer – constitutes a mere reiteration
of its original offer which was already rejected previously. Since there is no perfected sale between the parties, Securitron had no obligation
to make payment through the check; nor did it possess the right to deliver earnest money to First Optima in order to bind the latter to a sale.
In a potential sale transaction, the prior payment of earnest money even before the property owner can agree to sell his property is irregular,
and cannot be used to bind the owner to the obligations of a seller under an otherwise perfected contract of sale. (First Optima vs. Securitrom,
January 28, 2015)

(87) Explain the rules on double sale of immovable property under Article 1544. Ownership of an immovable property which is the subject
of a double sale shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default
thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided
there is good faith. The requirement of the law then is two-fold: acquisition in good faith and registration in good faith. If it would be shown
that a buyer was in bad faith, the alleged registration they have made amounted to no registration at all. (Rosaroso vs. Soria, June 19, 2013)

Will Article 1544 apply where one of the contracts involved is a contract of sale, and the other, a contract to sell, where there was no
full payment of the price? No. Since failure to pay the price in full in a contract to sell renders the same ineffective and without force and
effect, then there is no sale to speak of. Thus, there is only one sale. Hence, the rule on double sale will not apply. (Domingo vs. Manzano,
November 16, 2016)

Will Article 1544 apply to sales involving unregistered land? No. What applies is Act No. 3344, which provides for the system of recording
of transactions over unregistered real estate. Act No. 3344 expressly declares that any registration made shall be without prejudice to a third
party with a better right. The mere registration of a sale in one’s favor does not give him any right over the land if the vendor was no longer
the owner of the land, having previously sold the same to another even if the earlier sale was unrecorded. Neither could it validate the purchase
thereof by petitioners, which is null and void. Registration does not vest title; it is merely the evidence of such title. (Sabitsana vs. Muertegui,
August 5, 2013)

(88) What is the status of the sale of Philippine land to an alien but is titled in the name of the Filipino spouse? The sale contravenes the
Constitution and is thus void. This is true even if the alien provided the funds used to purchase the land. By entering into an illegal contract,
no implied trust was created and no reimbursement can be allowed. (Manigque-Stone vs. Cattleya Land, Inc., September 5, 2016)

(89) What is an equitable mortgage? There is an equitable mortgage where a contract entered into by the parties is denominated as sale yet their
intention is to secure an existing debt by way of a mortgage. The contract shall be presumed to be an equitable mortgage, in any of the
following cases: (1) when the price of a sale with right to repurchase is unusually inadequate; (2) when the vendor remains in possession as
lessee or otherwise; (3) when upon or after the expiration of the right to repurchase another instrument extending the period of redemption
or granting a new period is executed; (4) when the purchaser retains for himself a part of the purchase price; (5) when the vendor binds
himself to pay the taxes on the thing sold; (6) in any other case where it may be fairly inferred that the real intention of the parties is that the
transaction shall secure the payment of a debt or the performance of any other obligation. (Torda vs. Jaque, November 12, 2014)

(90) Ieuan purchased a Wigo through the loan granted by BDO. In connection therewith, he executed a Promissory Note with Chattel
Mortgage in favor of BDO, providing the terms of the twenty stated installments and BDO’s right to foreclose the mortgage upon
default. After the fifth installment, Ieuan failed to pay. BDO sought and was granted a writ of replevin and subsequently filed an
action for late payments. Ieuan raises the defense that under Recto Law, BDO’s recovery of the vehicle precluded the action for late
payments. Is Ieuan correct? No. Article 1484 or the Recto Law applies only when there is vendor-vendee relationship. Here, a loan contract
with accessory chattel mortgage contract – and not a contract of sale of personal property in installments – was entered into by the parties
with Ieuan as debtor-mortgagor and BDO as creditor-mortgagee. (Equitable Savigns vs. Palces, March 9, 2016)

(91) What are the mandatory twin requirements for a valid and effective cancellation under R.A. No. 6552? A valid and effective
cancellation under R.A. 6552 must comply with the mandatory twin requirements of a notarized notice of cancellation and a refund of the
cash surrender value. (Gatchalian Realty vs. Angeles, November 27, 2013)

Does the protection of R.A. No. 6552 cover a loan, e.g. housing loan, extended by an employer to enable its employee to finance the
purchase of house and lot? No. R.A. No. 6552 aimed to protect buyers of real estate on installment payments, not borrowers or mortgagors

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who obtained a housing loan to pay the costs of their purchase of real estate and used the real estate as security for their loan. (Sebastian vs.
BPI Family Bank, October 22, 2014)

(92) Distinguish between assignment of credit and subrogation. In an assignment of credit, the consent of the debtor is not necessary in order
that the assignment may fully produce legal effects. What the law requires in an assignment of credit is not the consent of the debtor but
merely notice to him as the assignment takes effect only from the time he has knowledge thereof. A creditor may, therefore, validly assign
his credit and its accessories without the debtor’s consent. Meanwhile, subrogation requires an agreement among the three parties concerned
— the original creditor, the debtor, and the new creditor. It is a new contractual relation based on the mutual agreement among all the
necessary parties (Liam vs. UCPB, June 15, 2016)

(93) Spouses Mamaril are jeepney operators. They would park their jeepneys every night at the Boy Scouts of the Philippines (BSP)
compound for a fee of P300 per jeepney per month. One morning, however, one of the vehicles was missing and was never recovered.
The security guards of AIB Security Agency with whom BSP had contracted for its security and protection reported that a male
person who looked familiar to them took the subject vehicle out of the compound. What is the contract between Spouses Mamaril
and BSP? The contract between Spouses Mamaril and BSP is a contract of lease. The act of parking a vehicle in a garage, upon payment of
a fixed amount, is a lease. Where a customer simply pays a fee, parks his car in any available space in the lot, locks the car and takes the key
with him, the possession and control of the car, necessary elements in bailment, do not pass to the parking lot operator, hence, the contractual
relationship between the parties is one of lease.

Is BSP liable for the lost jeepney? No. The contract being a lease, Article 1664, NCC, (provision on lease) applies: the lessor is not obliged
to answer for a mere act of trespass which a third person may cause on the use of the thing leased; but the lessee shall have a direct action
against the intruder. Here, BSP was not remiss in its obligation to provide Spouses Mamaril a suitable parking space for their jeepneys as it
even hired security guards to secure the premises; hence, it should not be held liable for the loss suffered by Spouses Mamaril. (Spouses
Mamaril vs. BSP; January 14, 2013)

(94) Article 1678 allows a lessee who built in good faith useful improvements to be entitled to ½ of the value of improvements at the time
of termination of the lease. Is the same right granted to a person who was allowed to occupy the land by mere tolerance? No. It does
not apply to those who possess property by mere tolerance of the owners, without a contractual right. (Aquino vs. Aguilar, June 29, 2015)

(95) What are the requisites for an implied new lease or tacita reconduccion? An implied new lease or tacita reconduccion will set in when
the following requisites are found to exist: a) the term of the original contract of lease has expired; b) the lessor has not given the lessee a
notice to vacate; and c) the lessee continued enjoying the thing leased for fifteen days with the acquiescence of the lessor. (Samelo vs.
Manotok Services, June 27, 2012)

(96) Is a special power of attorney (SPA) required to execute a deed of extra-judicial partition? No. Article 1878, NCC, requires SPA in
cases of acts of strict dominion. Partition among heirs is not legally deemed a conveyance of real property resulting in change of ownership.
The deed of extra-judicial partition cannot, therefore, be considered as an act of strict dominion. Hence, SPA is not necessary. (Heirs of Ureta
vs. Heirs of Ureta, September 14, 2011)

In cases where SPA is required, like borrowing money in behalf of the principal, must the SPA be in writing? No. As a general rule, a
contract of agency may be oral. It must be written, however, when the law requires a specific form, for example, in a sale of a piece of land
or any interest therein through an agent. Article 1878 does not state that the authority be in writing. The requirement under the said Article
refers to the nature of the authorization and not to its form. (Patrimonio vs. Guitierrez, June 4, 2014)

(97) When may an agent sue or be sued in his own name? An agent may sue or be sued solely in its own name and without joining the principal
when the following elements concur: (1) the agent acted in his own name during the transaction; (2) the agent acted for the benefit of an
undisclosed principal; and (3) the transaction did not involve the property of the principal.

Is the filing of a suit for a collection of sum of money, an act of administration or an act of strict dominion? Act of strict dominion.
While the power to collect and receive payments on behalf of the principal is an ordinary act of administration covered by the general powers
of an agent, the filing of suit is not. An agent's authority to file suit cannot be inferred from his authority to collect or receive payments; the
grant of special powers cannot be presumed from the grant of general powers. (V-Gent vs. Morning Star, July 22, 2015)

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(98) What is the “trust pursuit rule”? Where certain property entrusted to an agent and impressed by law with a trust in favor of the principal
is wrongfully diverted, such trust follows the property in the hands of a third person and the principal is ordinarily entitled to pursue and
recover it so long as the property can be traced and identified, and no superior equities have intervened. (Estate of Cabacungan vs. Laigo,
August 15, 2011)

What is the “purchase money resulting trust”? This is the first sentence of Article 1448: There is an implied trust when property is sold
and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property.
(Trinidad vs. Imson, September 16, 2015)

(99) Does an action for reconveyance based on an implied or constructive trust prescribe? It depends. As a general rule, an action for
reconveyance based on an implied or a constructive trust prescribes 10 years from the alleged fraudulent registration or date of issuance of
the certificate of title over the property. If the plaintiff or the person enforcing the trust is in possession of the property, however, the action
for reconveyance effectively becomes an action to quiet the property title, which does not prescribe. (Gabutan v. Nacalaban, June 29 2016)

(100) Briefly explain monetary interest and compensatory interest. Monetary interest is a compensation fixed by the parties for the
use or forbearance of money. Compensatory interest is one imposed by law or by courts as penalty or indemnity for damages. (PNB vs. Heirs
of Alonday, October 12, 2016)

Explain the rules on award of interest in the concept of actual and compensatory damages. The following are the rules:
A. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due
should be that which may have been stipulated in writing.
(a) In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial
demand, starting July 1, 2013 pursuant to BSP Circular No. 799.
(b) BSP Circular No. 799 does not apply when there is a law that states otherwise or impose a different interest.
(c) The interest due shall itself earn legal interest from the time it is judicially demanded.
B. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be
imposed at the discretion of the court at the rate of 6% per annum.
(a) No interest shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable
certainty.
(b) Where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially
or extrajudicially.
(c) When such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from
the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
C. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls
under A or B, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.
D. Judgments that became final and executory before July 1, 2013 shall continue to apply the previous legal rate of 12%. (Nacar vs Gallery
Frames, August 13, 2013; Sameer Overseas vs Cabiles, August 5, 2014)

Will the lack of a written stipulation to pay interest on the loaned amount disallows a creditor from charging monetary interest? Yes.
Under Article 1956, no interest shall be due unless it has been expressly stipulated in writing. (Dela Paz vs. L&J Development, September
8, 2014)

Where interest has been paid when it was not due, or it was excessive, what should be done? The one who received the same must return
it pursuant to the principle of solutio indebiti under Article 2154: If something is received when there is no right to demand it, and it was
unduly delivered through mistake, the obligation to return it arises. (Abella vs. Abella, July 8, 2015)

(101) Differentiate a contract of guaranty from a contract of suretyship. A surety is an insurer of the debt, whereas a guarantor is an
insurer of the solvency of the debtor. A suretyship is an undertaking that the debt shall be paid; a guaranty, an undertaking that the debtor
shall pay. A surety promises to pay the principal’s debt if the principal will not pay, while a guarantor agrees that the creditor, after proceeding
against the principal, may proceed against the guarantor if the principal is unable to pay. A surety binds himself to perform if the principal

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does not, without regard to his ability to do so. A guarantor, on the other hand, does not contract that the principal will pay, but simply that
he is able to do so. (Trade and Investment Development vs. Asia Paces, February 12, 2014)

Can a surety demand the enforcement of the arbitration clause contained in the principal contract? No. The surety is not a party to
that contract. An arbitration agreement being contractual in nature, it is binding only on the parties thereto, as well as their assigns and heirs.
(Gilat Satelitte vs. UCPB, April 7, 2014)

(102) Explain the concept of compromise. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced. Accordingly, a compromise is either judicial, if the objective is to put an end to a pending
litigation, or extrajudicial, if the objective is to avoid a litigation. As a contract, a compromise is perfected by mutual consent. However, a
judicial compromise, while immediately binding between the parties upon its execution, is not executory until it is approved by the court and
reduced to a judgment. (Land Bank vs. Heirs of Soriano, January 30, 2013)

(103) When will a pledge bind third persons? To have a binding effect on third parties, a contract of pledge must appear in a public
instrument. (Union Bank vs. Juniat, August 1, 2011)

(104) What is a dragnet clause or blanket mortgage clause? Generally, a mortgage liability is limited only to the amount mentioned
in the contract. A dragnet clause, however, allows mortgages to secure future advancements, and the amounts named as consideration in said
mortgage contract do not limit the amount for which the mortgage may stand as security if from the four corners of the instrument, the intent
to secure future and other indebtedness can be gathered. (Producer’s Bank vs. Excelsa, May 8, 2009) Such future loans must be sufficiently
described in the mortgage contract.

Can a dragnet clause secure past obligations? Yes. If the requirement could be imposed on a future loan that was uncertain to materialize,
there is greater reason that it should be applicable to a past loan, which is already subsisting and known to the parties. (PNB vs. Heirs of
Alonday, October 12, 2016)

(105) Explain the rules on right of redemption of foreclosed properties. (a) In case of judicial foreclosure, there is no right of
redemption, except where the mortgagee is a bank, in which case the mortgagee shall have the right to redeem the property within one year
after the sale. (b) In case of extrajudicial foreclosure, redemption may be made within one year from the date of registration of sale with the
Register of Deeds. By way of exception, where the mortgagee is a bank and the mortgagor is juridical person, redemption may be made
within three months from date of foreclosure sale or date of registration of certificate of sale with the Register of Deeds, whichever is earlier.
(Goldenway Merchandising vs. Equitable PCI, March 13, 2013)

(106) A single real estate mortgage was constituted over ten (10) separate lots. When the mortgagor defaulted on his loan, the
mortgagee foreclosed on the mortgaged and after sale by public auction, the mortgagee, as highest bidder, acquired the ten (10) lots
for 10 million pesos. The mortgagor attempted to exercise his right of redemption over 3 out of the 10 lots by tendering 3 million
pesos, but the mortgagor refused, citing the principle of the indivisibility of a real estate mortgage. Assuming the right of redemption
still applies, is the mortgagor justified in his refusal to allow partial redemption by relying on the indivisibility of the real estate
mortgage? No. The doctrine of indivisibility of mortgage does not apply once the mortgage is extinguished by a complete foreclosure thereof.
What the law proscribes is the foreclosure of only a portion of the property or a number of the several properties mortgaged corresponding
to the unpaid portion of the debt where before foreclosure proceedings partial payment was made by the debtor on his total outstanding loan
or obligation. Nothing in the law prohibits the piecemeal redemption of properties sold at one foreclosure proceeding. (Yap vs. Dy, July 27,
2011)

(107) What are the elements of pactum commissorium? The elements for pactum commissorium to exist are: (a) that there should be
a pledge or mortgage wherein property is pledged or mortgaged by way of security for the payment of the principal obligation; and (b) that
there should be a stipulation for an automatic appropriation by the creditor of the thing pledged or mortgaged in the event of non-payment of
the principal obligation within the stipulated period.

What are the elements of dacion en pago? For a valid dacion en pago to transpire, however, the attendance of the following elements must
be established, namely: (a) the existence of a money obligation; (b) the alienation to the creditor of a property by the debtor with the consent
of the former; and (c) the satisfaction of the money obligation of the debtor. To have a valid dacion en pago, therefore, the alienation of the
property must fully extinguish the debt.

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Pen obtained loans from Julian, secured by a real estate mortgage over a property. Pen was required to sign a deed of sale of the said
property, which deed did not contain any consideration and was undated, unfilled and not notarized. Upon failure to pay when such
debt became due, Pen requested to be shown the land title which was earlier conveyed to Julian, but the latter refused. Subsequently,
Pen learned that the title to mortgaged property had already been registered in the name of Julian. Is this a case of dacion en pago
or a pactum commissorium? This is a case of pactum commissorium. The first element was present considering that the property of the
Pen was mortgaged in favor of Julian as security for the former's indebtedness. As to the second, the authorization for Julian to appropriate
the property subject of the mortgage upon Pen's default was implied from Pen's having signed the blank deed of sale simultaneously with her
signing of the real estate mortgage. The haste with which the transfer of property was made upon the default on the obligation, and the
eventual transfer of the property in a manner not in the form of a valid dacion en pago ultimately confirmed the nature of the transaction as
a pactum commissorium. (Pen vs. Julian, January 11, 2016)

(108) Explain antichresis. Antichresis involves an express agreement between parties whereby : (a) the creditor will have possession of
the debtor's real property given as security; (b) such creditor will apply the fruits of the said property to the interest owed by the debtor, if
any, then to the principal amount; (c) the creditor retains enjoyment of such property until the debtor has totally paid what he owes; and
(d) should the obligation be duly paid, then the contract is automatically extinguished proceeding from the accessory character of the
agreement.

X obtained a borrowed P600,000 from A, B, and C, evidenced by a Kasulatan providing that the latter shall have the right to the
fruits of the subject land owned by A for six years, or until the loan is fully paid. Before full payment of the loan, X died. A, B, and
C then took possession of the land pursuant to the Kasulatan. X’s heirs sought to recover the subject land. Can they validly do so?
No. This is an example of antichresis. While the Kasulatan did not expressly provide for the transfer of possession of the subject land, the
contemporaneous acts of the parties show that such possession was intended to be transferred. As antichretic creditors, A, B, and C are
entitled to retain enjoyment of the subject land until the debt has been totally paid. (Reyes vs. Heirs of Malance, August 24, 2016)

TORTS AND DAMAGES

(109) Is the hotel owner liable for civil damages to the surviving heirs of its hotel guest whom strangers murder inside his hotel
room? Yes. When one registers as a guest of a hotel, he makes the establishment the guardian of his life and his personal belongings during
his stay. The murder could have been avoided had the security guards of the hotel dutifully observed this standard procedure. Catering to
the public, hotelkeepers are bound to provide not only lodging for their guests but also security to the persons and belongings of their guests.
(Makati Shangri-la vs. Harper, August 29, 2012)

(110) What are the elements to recover damages for malicious prosecution? These are: (1) the prosecution did occur, and the
defendant was himself the prosecutor or that he instigated its commencement; (2) the criminal action finally ended with an acquittal; (3) in
bringing the action, the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice — an improper or a
sinister motive.

Is an employee who was wrongly accused of criminal acts, illegally arrested and detained, presented to the media at a humiliating
press conference against his will, and prosecuted in an unfounded criminal suit entitled to damages for malicious prosecution? Yes.
(Marsman vs. Ligo, August 19, 2015)

(111) What is proximate cause? Proximate cause is that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces, the injury, and without which the result would not have occurred. (Shangri-la vs. Harper, August 29, 2012)

Spouses Guanio and Shangri-la entered into a contract where the marriage reception of the former will be held in one of its hotels.
During the reception, Shangri-la failed to deliver the quality services it promised to the spouses, prompting the spouses to file an
action for damages. Shangri-la claimed that the proximate cause of the injury of the spouses is the unexpected increase in their guests.
Can Shangri-la invoke the doctrine of proximate cause to exculpate itself from liability? No. The doctrine of proximate cause is
applicable only in actions for quasi-delicts, not in actions involving breach of contract. The doctrine is a device for imputing liability to a
person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a
pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is
merely to regulate the relation thus created. (Guanio vs. Makati Shangri-la, February 7, 2011)

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(112) Explain the doctrine of res ipsa loquitur. Res ipsa loquitur is a rule of evidence whereby negligence of the alleged wrongdoer
may be inferred from the mere fact that the accident happened provided the character of the accident and circumstances attending it lead
reasonably to belief that in the absence of negligence it would not have occurred and that thing which caused injury is shown to have been
under the management and control of the alleged wrongdoer. The requisites for the application of the doctrine of res ipsa loquitur are: (1)
the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the
injury was under the exclusive control of the person in charge; and (3) the injury suffered must not have been due to any voluntary action or
contribution of the person injured. (Jarcia vs. People, February 15, 2012)

In medical malpractice cases, is expert testimony generally required? Yes. It is generally required to define the standard of behavior by
which the court may determine whether the physician has properly performed the requisite duty toward the patient. This is so considering
that the requisite degree of skill and care in the treatment of a patient is usually a matter of expert opinion. By way of exception, when the
doctrine of res ipsa loquitur is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself
provides the proof of negligence. (Rosit vs. Davao Doctor’s Hospital, December 7, 2015)

(113) In quasi-delict actions involving a motor vehicle, where the defendant is the both the registered owner of the vehicle
(registered owner rule) and the employer of the driver of the motor vehicle (vicarious liability under Article 2180), how should the
liability of the defendant be determined? In cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first
establish that the employer is the registered owner of the vehicle in question. Once the plaintiff successfully proves ownership, there arises
a disputable presumption that the requirements of Article 2180 have been proven – that first, there exists an employment relationship between
the driver and the owner; second, that the driver acted within the scope of his or her assigned tasks. The burden of proof then shifts to the
defendant to show that no liability under Article 2180 has arisen. (Caravan Travel vs. Abejar, G.R. No. 170631, February 10, 2016)

(114) When is a person entitled to actual damages? For one to be entitled to actual damages, it is necessary to prove the actual amount
of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable by the injured party. Actual
damages are such compensation or damages that will put the injured party in the position in which he had been before he was injured.
Credence can only be given to claims which are duly supported by receipts. (People vs. Villar, April 13, 2015)

(115) Can a third party who did not commit a violation or invasion of the plaintiff or aggrieved party’s right be held liable for
nominal damages? No. Nominal damages may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the
purpose of vindicating or recognizing that right, not for indemnifying any loss suffered. (One Network vs. Baric, March 5, 2014)

(116) Generally, damages for loss of earning capacity must be proven by documentary evidence. In what instances may damages
for loss of earning capacity be granted despite lack of documentary evidence? Despite lack of documentary evidence, damages for loss
of earning capacity may be awarded in cases (1) the deceased is self-employed and earning less than the minimum wage under current labor
laws, in which case, judicial notice may be taken of the fact that in the deceased's line of work no documentary evidence is available; (2) the
deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws (Philippine Hawk vs Lee,
February 6, 2010); or (3) deceased is a student with good academic record that had he not died, it can reasonably be assumed that he could
have finished his studies and would be gainfully employed. (Perena vs. Zarate; August 29, 2012)

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