TABLE OF CONTENTS
FORMAL REQUISITES .............................. 13
PERSONS & FAMILY RELATIONS. 1
I. EFFECT AND APPLICATION OF LAWS .....2
A. WHEN LAWS TAKE EFFECT ........................2
B. IGNORANCE OF THE LAW ..........................2
C. RETROACTIVITY OF LAWS ..........................2
D. MANDATORY OR PROHIBITORY LAWS ....2
E. WAIVER OF RIGHTS .................................... 3
F. REPEAL OF LAWS ........................................ 3
G. JUDICIAL DECISIONS .................................. 3
L. BINDING EFFECT ........................................ 4
II. PERSONS AND PERSONALITY ................5
A. CONCEPT OF PERSON AND PERSONALITY
..........................................................................5
B. COMMENCEMENT AND TERMINATION OF
PERSONALITY ..................................................5
C. DEATH ..........................................................6
D. JURIDICAL PERSONS.................................. 7
E. RESTRICTIONS ON CIVIL CAPACITY .......... 7
E. 1. PRESUMPTION OF CAPACITY ........... 7
E. 2. RESTRICTIONS ON CAPACITY TO
ACT .............................................................. 7
I. MINORITY ............................................... 8
II. INSANITY ............................................... 8
III. DEAF-MUTISM ..................................... 9
IV. PRODIGALITY ....................................... 9
INCOMPETENT INCLUDES PRODIGALS
(RULES OF COURT RULE 92, SEC 2) ....... 9
V. CIVIL INTERDICTION ............................. 9
VI. FAMILY RELATIONS............................. 9
VII. ALIENAGE ........................................... 10
VIII. ABSENCE ........................................... 10
F. DOMICILE AND RESIDENCE OF PERSON . 11
III. FAMILY CODE.......................................... 11
A. EFFECT AND RETROACTIVITY................... 11
B. REPEAL AND AMENDMENT ...................... 11
IV. MARRIAGE AND PERSONAL
RELATIONSHIP BETWEEN SPOUSES ....... 12
A. CONCEPT OF MARRIAGE ......................... 12
B. AGREEMENTS PRIOR TO MARRIAGE ...... 12
C. REQUISITES ............................................... 12
KINDS OF REQUISITES AND EFFECTS OF
NON-COMPLIANCE.................................. 12
EFFECT OF ABSENCE OF REQUISITES ... 13
ESSENTIAL REQUISITES .......................... 13
1. GENDER ................................................ 13
2. AGE ....................................................... 13
3. CONSENT FREELY GIVEN .................... 13
i
1. CEREMONY ........................................... 13
2. AUTHORITY OF THE SOLEMNIZING
OFFICER .................................................... 14
3. LICENSE REQUIRED ............................. 15
4. MARRIAGE CERTIFICATE .................... 16
D. LAW GOVERNING VALIDITY OF
MARRIAGES ABROAD ................................... 16
E. COMMON-LAW MARRIAGES .................... 17
F. VOID AND VOIDABLE MARRIAGES .......... 18
F. 1. VOID MARRIAGES ............................. 19
ARTICLE 40 (NO JUDICIAL DECLARATION
OF NULLITY).............................................. 19
BOTH SPOUSES ENTERING A
SUBSEQUENT MARRIAGE AFTER
PRESUMPTIVE DEATH, WHO ACTED IN
BAD FAITH ............................................... 20
ARTICLE 53 (NON-RECORDING): ........... 23
F. 2. VOIDABLE OR ANNULLABLE
MARRIAGE ............................................... 26
G. THE LAW ON SEPARATION OF THE
SPOUSES ........................................................ 31
V. RIGHTS AND OBLIGATIONS OF
SPOUSES.....................................................38
A. LIVE TOGETHER ....................................... 38
B. FAMILY DOMICILE .................................... 38
C. SUPPORT .................................................. 38
D. MANAGEMENT OF FAMILY LIFE ............. 38
E. EFFECT OF NEGLECT OF DUTY ............... 38
F. EXERCISE OF PROFESSION ..................... 38
VI. PROPERTY RELATIONS OF SPOUSES. 39
A. MARRIAGE SETTLEMENTS ...................... 39
B. DONATIONS BY REASON OF MARRIAGE39
VII. FAMILY RELATIONS ............................. 57
THE FAMILY AS AN INSTITUTION .................57
EFFECTS OF FAMILY RELATIONSHIP ON
LEGAL DISPUTES ...........................................57
THE FAMILY HOME ........................................57
A. WHAT CONSTITUTES THE FAMILY
HOME? ......................................................57
B. WHO MAY CONSTITUTE THE FAMILY
HOME? ..................................................... 58
C. WHEN IS IT DEEMED CONSTITUTED?58
D. BENEFICIARIES ................................... 58
E. WHEN TERMINATED ........................... 59
F. WHEN IT MAY BE SOLD ...................... 59
G. RIGHTS OF CREDITORS ..................... 59
VIII. PATERNITY AND FILIATION .............. 60
A. LEGITIMATE CHILDREN ........................... 60
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B. PROOF OF FILIATION ............................... 62
C. ILLEGITIMATE CHILDREN .........................63
D. LEGITIMATED CHILDREN ........................ 65
IX. ADOPTION ............................................ 66
A. WHO CAN ADOPT .................................... 66
B. WHO CAN BE ADOPTED ........................... 67
C. PRE-ADOPTION PROCEDURES .............. 68
D. ADOPTION PROCEDURES ...................... 69
E. WHO MAY NOT ADOPT/ BE ADOPTED ... 69
F. RIGHTS OF AN ADOPTED CHILD ............. 70
G. RESCISSION OF ADOPTION .................... 70
H. RECTIFICATION OF SIMULATED BIRTH . 71
I. RA 8043 – THE LAW ON INTER-COUNTRY
ADOPTION ..................................................... 71
I. 1. WHO CAN ADOPT .............................. 72
I. 2. WHO CAN BE ADOPTED ................... 72
X. SUPPORT ................................................ 73
A. WHAT IT COMPRISES................................ 73
B. WHO ARE OBLIGED................................... 73
C. SUPPORT DURING MARRIAGE LITIGATION
........................................................................ 75
D. AMOUNT .................................................... 75
E. WHEN DEMANDABLE ............................... 75
F. OPTIONS .................................................... 75
G. ATTACHMENT ........................................... 75
XI. PARENTAL AUTHORITY AND CUSTODY
OF CHILDREN ............................................. 75
PARENTAL AUTHORITY INCLUDES [ART.
209]: .......................................................... 75
CASES WHEN PARENTAL AUTHORITY
AND RESPONSIBILITY MAY
TRANSFERRED OR RENOUNCED .......... 76
RULES AS TO THE EXERCISE OF
PARENTAL AUTHORITY .......................... 76
CHARACTERISTICS OF PARENTAL
AUTHORITY .............................................. 76
PARENTAL PREFERENCE RULE ............. 76
WHO EXERCISES AUTHORITY IN CASES
OF DEATH, ABSENCE, UNSUITABILITY,
REMARRIAGE, OR SEPARATION OF
PARENTS .................................................. 76
TENDER YEARS PRESUMPTION: ............ 77
PERSONS EXERCISING SUBSTITUTE
PARENTAL AUTHORITY IN DEFAULT OF
PARENTS OR JUDICIALLY APPOINTED
GUARDIAN ............................................... 77
SUBSTITUTE PARENTAL AUTHORITY
OVER DISADVANTAGED CHILDREN ...... 77
WHO ARE DISADVANTAGED CHILDREN:
................................................................... 77
PERSONS EXERCISING SPECIAL
PARENTAL AUTHORITY........................... 77
XII. EMANCIPATION.................................... 77
XII. SUMMARY JUDICIAL PROCEEDINGS
UNDER FC ................................................... 78
A. PROCEDURAL RULES PROVIDED FOR IN
THIS TITLE SHALL APPLY TO [ART. 238]: ... 78
B. SEPARATION IN FACT .............................. 78
C. INCIDENTS INVOLVING PARENTAL
AUTHORITY ................................................... 79
XIII. CARE AND EDUCATION OF CHILDREN
.................................................................... 80
XIV. SURNAMES ......................................... 81
A. SURNAMES OF CHILDREN ....................... 81
B. WIFE AFTER AND DURING MARRIAGE ... 81
C. CONFUSION AND CHANGE OF NAMES ... 81
XV. RULES GOVERNING PERSONS WHO
ARE ABSENT ...............................................82
A. PROVISIONAL MEASURES IN CASE OF
ABSENCE [ARTS. 381-383] ........................... 82
B. DECLARATION OF ABSENCE, [ARTS. 384-
389] ................................................................ 84
C. ADMINISTRATION OF THE PROPERTY OF
THE ABSENTEE, [ARTS. 387-389] ............... 84
D. PRESUMPTION OF DEATH, [ARTS. 390-
392] ................................................................ 85
XVI. FUNERALS .......................................... 85
BE
XVII. ENTRIES IN THE CIVIL REGISTER ..... 86
A. ARTS. 407-413 .................................... 86
B. RA 9048 AS AMENDED BY RA 10172 ...... 87
C. RULE 108, RULES OF COURT .................. 89
PROPERTY ................................ 91
I. CHARACTERISTICS..................................92
II. CLASSIFICATION ....................................92
A. HIDDEN TREASURE ................................. 92
B. BASED ON MOBILITY [IMMOVABLE OR
MOVABLE] ..................................................... 92
B. 1. REAL OR IMMOVABLE PROPERTY . 92
B.2. PERSONAL OR MOVABLE ............... 94
TESTS TO DETERMINE MOVABLE
CHARACTER ............................................ 95
B. 3. IMPORTANCE AND SIGNIFICANCE
OF CLASSIFICATION UNDER THE NCC . 95
C. BASED ON OWNERSHIP/RIGHTS-HOLDER
....................................................................... 96
C.1. PUBLIC DOMINION ........................... 96
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CHARACTERISTICS ................................. 96
CLASSIFICATIONS................................... 96
C.2. PRIVATE OWNERSHIP ......................97
KINDS ........................................................97
DETERMINATION (TWO DIFFERENT
VIEWS) ..................................................... 98
CONVERSION .......................................... 98
D. BASED ON CONSUMABILITY .................. 98
[NCC 418] ....................................................... 98
D.1. CONSUMABLE .................................. 98
D.2. NON-CONSUMABLE ....................... 98
E. BASED ON SUSCEPTIBILITY TO
SUBSTITUTION ............................................. 98
E.1. FUNGIBLES ....................................... 98
E.2. NON-FUNGIBLES ............................. 99
F. BASED ON THE CONSTITUTION [ARTICLE
XII, SEC 3]....................................................... 99
G. OTHER CLASSIFICATIONS....................... 99
G.1. BY THEIR PHYSICAL EXISTENCE..... 99
G.2. BY THEIR AUTONOMY OR
DEPENDENCE ......................................... 99
G.3. BY SUSCEPTIBILITY TO
DETERIORATION..................................... 99
G.4. BY REASON OF THEIR
SUSCEPTIBILITY TO DIVISION................ 99
G.5. BY REASON OF DESIGNATION ...... 99
G.6. EXISTENCE IN POINT OF TIME ....... 99
III. OWNERSHIP.......................................... 99
A. DEFINITION AND CONCEPT .................... 99
B. TYPES OF OWNERSHIP ..........................100
C. RIGHT IN GENERAL .................................100
C.1. RIGHTS INCLUDED IN OWNERSHIP
[NCC 428] ................................................100
C.2. BUNDLE OF RIGHTS .......................100
C.3. PROTECTING PROPERTY ...............100
C.3.1 BASIC DISTINCTIONS ....................100
REAL RIGHTS V. PERSONAL RIGHTS ...100
REAL ACTION V. PERSONAL ACTION
(ROC, RULE 4 SEC 1-2) ...........................100
ACTION IN REM V. ACTION IN PERSONAM
V. ACTION QUASI IN REM .......................101
C.3.2. REMEDIES .....................................101
DOCTRINE OF SELF-HELP [NCC 429-430]
..................................................................101
ACTIONS TO RECOVER OWNERSHIP AND
POSSESSION OF PROPERTY .................101
D. LIMITATIONS ON OWNERSHIP .............. 102
D.1. GENERAL LIMITATIONS: ................ 102
TAXATION, EMINENT DOMAIN, POLICE
POWER ................................................... 102
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POLICE POWER ...................................... 102
PROPERTY TAKEN WITH NO
COMPENSATION FOR GENERAL
WELFARE. ............................................... 102
TAXATION ............................................... 102
EMINENT DOMAIN ................................. 102
D.2. SPECIFIC LIMITATIONS: ................. 102
IMPOSED BY LAW, SIC UTERE TUO,
NUISANCE, STATE OF NECESSITY,
EASEMENTS, AND THOSE VOLUNTARILY
IMPOSED BY THE OWNER: SERVITUDES,
MORTGAGES IMPOSED BY CONTRACT.
................................................................. 102
SUMMARY OF ACTIONS ........................ 103
IV. ACCESSION.......................................... 104
A. CLASSIFICATION OF ACCESSION ..........104
A.1. WITH RESPECT TO IMMOVABLES ..104
ACCESSION DISCRETA ..........................104
PRINCIPLES APPLICABLE TO ACCESSION
DISCRETA ...............................................105
PRINCIPLES APPLICABLE TO ACCESSION
CONTINUA ..............................................105
A.2. WITH RESPECT TO MOVABLE
PROPERTY .............................................. 110
TYPES ...................................................... 110
CONJUNCTION / ADJUNCTION............. 110
MIXTURE .................................................. 111
SPECIFICATION ....................................... 111
V. QUIETING OF TITLE ............................... 112
OR INTEREST IN AND REMOVAL OR
PREVENTION OF CLOUD OVER TITLE TO OR
INTEREST IN REAL PROPERTY.................... 112
A. IN GENERAL.............................................. 112
B. PURPOSE .................................................. 112
C. NATURE: QUASI IN REM .......................... 112
D. JUSTIFICATIONS TO BRING AN ACTION TO
QUIET TITLE .................................................. 112
E. THE ACTION TO QUIET TITLE DOES NOT
APPLY: ........................................................... 112
F. REQUIREMENTS ....................................... 112
F.1. REQUISITES OF AN ACTION TO QUIET
TITLE ........................................................ 112
F.2. REQUISITES OF AN ACTION TO
PREVENT A CLOUD: ................................ 113
G. QUIETING OF TITLE V. REMOVAL OF
CLOUD ........................................................... 113
H. PRESCRIPTION / NON-PRESCRIPTION OF
ACTION .......................................................... 113
PRESCRIPTION OF ACTION.................... 113
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VI. CO-OWNERSHIP ................................... 114 VII. POSSESSION ....................................... 119

A. REQUISITES .............................................. 114 A. CONCEPT OF POSSESSION .....................119
B. WHAT GOVERNS CO-OWNERSHIP ......... 114 B. ESSENTIAL REQUISITES OF POSSESSION
C. CHARACTERISTICS OF CO-OWNERSHIP114 .......................................................................119
D. SOURCES OF CO-OWNERSHIP ............... 115 C. DEGREES OF POSSESSION .................... 120
D.1. LAW ................................................... 115 D. CASES OF POSSESSION ......................... 120
D.2. CONTRACT....................................... 115 D.1. POSSESSION FOR ONESELF, OR
D.3. INTESTATE SUCCESSION ............... 115 POSSESSION EXERCISED IN ONE’S OWN
D.4. TESTAMENTARY DISPOSITION OR NAME AND POSSESSION IN THE NAME
DONATION INTER VIVOS........................ 116 OF ANOTHER [NCC 524] ........................ 120
D.5. BY FORTUITOUS EVENT OR BY D.2. POSSESSION IN THE CONCEPT OF
CHANCE ................................................... 116 AN OWNER, AND POSSESSION IN THE
D.6. BY OCCUPANCY .............................. 116 CONCEPT OF A HOLDER WITH THE
D.7. BY ASSOCIATIONS AND SOCIETIES OWNERSHIP BELONGING TO ANOTHER
WITH SECRET ARTICLES ........................ 116 [NCC 525]................................................ 120
E. RIGHTS OF CO-OWNERS ......................... 116 D.3. POSSESSION IN GOOD FAITH AND
E.1. RIGHT TO SHARE IN THE BENEFITS POSSESSION IN BAD FAITH [NCC 526] . 121
AS WELL AS THE CHARGES [NCC 485] . 116 E. ACQUISITION OF POSSESSION .............. 122
E.2. RIGHT TO USE THE THING OWNED IN E.1. WAYS OF ACQUIRING POSSESSION
COMMON [NCC 486] .............................. 116 [NCC 531] ................................................. 122
RIGHT TO BRING AN ORDER IN E.2. BY WHOM MAY POSSESSION BE
EJECTMENT [NCC 487] ........................... 116 ACQUIRED [NCC 532]............................. 122
RIGHT TO COMPEL OTHER CO-OWNERS F. WHAT DO NOT AFFECT POSSESSION [NCC
TO CONTRIBUTE TO THE EXPENSES OF 537] ............................................................... 123
PRESERVATION AND TO THE TAXES [NCC F.1. ACTS MERELY TOLERATED ............ 123
488] .......................................................... 116 F.2. ACTS EXECUTED CLANDESTINELY
RIGHT TO REPAIR [NCC 489] ................. 116 AND WITHOUT THE KNOWLEDGE OF THE
RIGHT TO OPPOSE ALTERATIONS ........ 117 POSSESSOR [NCC 1108] .............................. 124
[NCC 491].................................................. 117 F.3. ACTS OF VIOLENCE AS LONG AS
RIGHT TO FULL OWNERSHIP OF HIS THE POSSESSOR OBJECTS THERETO (I.E.
PART AND OF THE FRUITS AND FILES A CASE) .............................................. 124
BENEFITS PERTAINING THERETO......... 117 [NCC 536]...................................................... 124
[NCC 493] ................................................. 117 RULES TO SOLVE CONFLICTS OF
RIGHT TO PARTITION [NCC 494] ........... 117 POSSESSION [NCC 538] .............................. 124
RIGHT TO REDEMPTION [NCC 1619] ...... 117 G. EFFECTS OF POSSESSION ..................... 124
F. RULES........................................................ 117 G.1. RIGHTS OF A POSSESSOR IN GOOD
F.1. ON RENUNCIATION OF SHARE FAITH ...................................................... 124
(DIFFERENT FROM RENUNCIATION OF G.2. OBLIGATIONS OF A POSSESSOR IN
CO-OWNERSHIP) .................................... 117 GOOD FAITH ........................................... 124
F.2. REPAIRS FOR PRESERVATION ....... 117 G.3. RIGHTS OF A POSSESSOR IN BAD
F.3. EMBELLISHMENTS OR FAITH ...................................................... 124
IMPROVEMENTS ..................................... 117 G.4. OBLIGATIONS OF A POSSESSOR IN
G. TERMINATION OR .................................... 118 GOOD FAITH ........................................... 125
EXTINGUISHMENT ....................................... 118 G.5. RIGHT TO BE PROTECTED IN HIS
G.1. TOTAL DESTRUCTION OF THING OR POSSESSION [NCC 539] ........................ 125
LOSS OF THE PROPERTY CO-OWNED .. 118 ACTIONS TO RECOVER POSSESSION .. 125
G.2. MERGER OF ALL INTERESTS IN ONE RULES ..................................................... 125
PERSON ................................................... 118 G.6. ENTITLEMENT TO FRUITS –
G.3. ACQUISITIVE PRESCRIPTION ......... 118 POSSESSOR IN GOOD/BAD FAITH [NCC
G.4. PARTITION OR DIVISION ................ 118 544, 549] ................................................ 126

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RIGHT OF THE POSSESSOR IN GOOD AS TO THE FRUITS ................................. 134

FAITH ...................................................... 126 AS TO THE OBJECT ................................ 134
D. REIMBURSEMENT FOR EXPENSES – C.5. BY THE TERMS OF THE USUFRUCT
POSSESSOR IN GOOD/BAD FAITH ............ 127 ................................................................. 134
[NCC 546-552].............................................. 127 D. RIGHTS AND OBLIGATIONS OF
D.1. NECESSARY EXPENSES ................. 127 USUFRUCTUARY ......................................... 134
D.2. USEFUL EXPENSES ........................ 127 D.1. RIGHTS AS TO THE THING AND ITS
D.3. EXPENSES FOR LUXURY ............... 127 FRUITS .................................................... 134
E. LOSS OR UNLAWFUL DEPRIVATION OF A RIGHT TO ENJOY THE PROPERTY ........ 134
MOVABLE PROPERTY ................................. 129 HIDDEN TREASURE ............................... 135
E.1. POSSESSION OF MOVABLE RIGHT TO FRUITS PENDING AT THE
ACQUIRED IN GOOD FAITH (IN CONCEPT BEGINNING OF USUFRUCT ................... 135
OF OWNER) IS EQUIVALENT TO TITLE RIGHT TO CIVIL FRUITS ......................... 135
[NCC 559] ................................................ 129 RIGHT TO ENJOY ANY INCREASE
E.2. PERIOD TO RECOVER [NCC 1140, 1132, THROUGH ACCESSIONS AND
1133] ......................................................... 129 SERVITUDES, INCLUDING PRODUCTS OF
E.3. FINDER OF LOST MOVABLE [NCC 719- HUNTING AND FISHING. ....................... 135
720] ......................................................... 129 RIGHT TO LEASE THE THING ................ 135
E.4. DISTINGUISHED FROM VOIDABLE RULES AS TO LEASE .............................. 136
TITLE [NCC 1506] .................................... 129 RIGHT TO IMPROVE THE THING, BUT
F. EFFECTS OF POSSESSION IN THE IMPROVEMENT INURES TO THE BENEFIT
CONCEPT OF AN OWNER ........................... 130 OF THE NAKED OWNER ........................ 137
PRESUMPTION IN FAVOR OF THE D.2. RIGHTS AS TO THE LEGAL RIGHT OF
POSSESSOR—FOR ACQUISITIVE USUFRUCT ITSELF ................................. 137
PRESCRIPTION ............................................ 130 RIGHT TO MORTGAGE RIGHT OF
G. LOSS/TERMINATION OF POSSESSION USUFRUCT ............................................. 137
[NCC 555] ...................................................... 131 RIGHT TO ALIENATE THE USUFRUCT
G.1. ABANDONMENT .............................. 131 EXCEPT IN PURELY PERSONAL
G.2. ASSIGNMENT, EITHER GRATUITOUS USUFRUCTS OR WHEN TITLE
OR ONEROUS.......................................... 131 CONSTITUTING IT PROHIBITS THE SAME
G.3. POSSESSION BY ANOTHER; IF ................................................................. 137
POSSESION HAS LASTED LONGER THAN D.3. OBLIGATIONS AT THE BEGINNING
ONE YEAR; REAL RIGHT OF POSSESSION OF THE USUFRUCT OR BEFORE
NOT LOST AFTER 10 YEARS – SUBJECT EXERCISING THE USUFRUCT................ 137
TO NCC 537.............................................. 131 TO MAKE AN INVENTORY ..................... 137
H. RULES FOR LOSS OF MOVABLES ......... 132 TO GIVE A BOND FOR THE FAITHFUL
I. KINDS OF ANIMALS .................................. 132 PERFORMANCE OF DUTIES AS
VIII. USUFRUCT ......................................... 132 USUFRUCTUARY.................................... 138
A. OBJECTS OF USUFRUCT ........................ 132 D.4. DURING THE USUFRUCT ............... 138
B. CHARACTERISTICS ................................. 132 TO TAKE CARE OF THE THING LIKE A
B.1. NATURAL CHARACTERISTICS ....... 132 GOOD FATHER OF A FAMILY ................ 139
C. CLASSIFICATION ..................................... 133 TO UNDERTAKE ORDINARY REPAIRS . 139
C.1. BY ORIGIN ........................................ 133 TO NOTIFY OWNER OF NEED TO
C.2. BY PERSON ENJOYING THE RIGHT OF UNDERTAKE EXTRAORDINARY REPAIRS
USUFRUCT ............................................. 133 ................................................................. 139
C.3. BY OBJECT OF USUFRUCT ............. 133 TO PAY FOR ANNUAL CHARGES AND
RIGHTS.................................................... 133 TAXES ON THE FRUITS ..........................140
THINGS ................................................... 133 TO NOTIFY OWNER OF ANY ACT
C.4. BY THE EXTENT OF THE USUFRUCT DETRIMENTAL TO OWNERSHIP ...........140
................................................................. 134 (NCC 601) .................................................140

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TO SHOULDER THE COSTS OF
LITIGATION REGARDING THE USUFRUCT
(NCC 602) ................................................ 140
TO ANSWER FOR FAULT
NEGLIGENCE OF THE ALIENEE, LESSEE
OR AGENT OF THE USUFRUCTUARY (NCC
590) ......................................................... 140
D.5. AT THE TIME OF THE TERMINATION
OF THE USUFRUCT ................................ 140
E. SPECIAL CASES OF USUFRUCT ............. 140
E.1. USUFRUCT OVER A PENSION OR A
PERIODICAL INCOME [NCC 570]........... 140
E.2. USUFRUCT OF PROPERTY OWNED IN
COMMON [NCC 582] .............................. 140
E.4. USUFRUCT CONSTITUTED ON A
FLOCK OR HERD OF LIVESTOCK .......... 140
[NCC 591] ................................................. 140
E.5. USUFRUCT OVER FRUIT BEARING
TREES AND SPROUT AND WOODLANDS
[NCC 575-576].......................................... 141
E.6. USUFRUCT ON A RIGHT OF ACTION
[NCC 578] ................................................. 141
E.7. USUFRUCT ON MORTGAGED
PROPERTY [NCC 600]............................. 141
E.8. USUFRUCT OVER AN ENTIRE
PATRIMONY [NCC 598] .......................... 141
E.9. USUFRUCT OVER DETERIORABLE
PROPERTY ............................................... 141
E.10. USUFRUCT OVER CONSUMABLE
PROPERTY [NCC 574] ............................ 142
F. RIGHTS OF THE OWNER ......................... 142
G. EXTINGUISHMENT / TERMINATION [NCC
603] ............................................................... 142
G.1. DEATH OF USUFRUCTUARY .......... 142
G.2. EXPIRATION OF PERIOD OR
FULFILLMENT OF RESOLUTORY
CONDITION IMPOSED ON USUFRUCT BY
PERSON CONSTITUTING USUFRUCT .. 142
G.3. MERGER OF RIGHTS OF USUFRUCT
AND NAKED OWNERSHIP IN ONE
PERSON .................................................. 143
G.4. RENUNCIATION OF USUFRUCT.... 143
G.5. EXTINCTION OR LOSS OF PROPERTY
[NCC 608] ............................................... 143
G.6. TERMINATION OF THE RIGHT OF
PERSON CONSTITUTING THE USUFRUCT
................................................................. 144
G.7. PRESCRIPTION ............................... 144
H. CONDITIONS NOT AFFECTING USUFRUCT
...................................................................... 144
H.1. EXPRORPIATION OF THING IN
USUFRUCT [NCC 609] ........................... 144
H.2. BAD USE OF THING IN USUFRUCT
OR [NCC 610]................................................. 144
IX. EASEMENT........................................... 144
A. CHARACTERISTICS ................................. 144
A.1. ESSENTIAL FEATURES: .................. 144
B. CLASSIFICATION ..................................... 146
B.1. AS TO RECIPIENT OF BENEFITS ..... 146
B.2. AS TO CAUSE OR ORIGIN .............. 146
B.3. AS TO ITS EXERCISE [NCC 615] ...... 146
B.4. AS INDICATION OF ITS EXISTENCE
................................................................. 146
B.5. BY THE OBJECT OR OBLIGATION
IMPOSED [NCC 616] ............................... 146
C. GENERAL RULES ..................................... 146
D. RELEVANCE OF CLASSIFICATIONS ....... 147
D.1. DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY PRESCRIPTION 147
D.2. DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY TITLE ................ 147
D.3. DETERMINES HOW TO COMPUTE
THE PRESCRIPTIVE PERIOD [NCC 621] 147
D.4. DETERMINES HOW EASEMENT IS
LOST BY PRESCRIPTION [NCC 631 (2)] . 147
E. CREATION ................................................ 147
E.1. BY TITLE ........................................... 147
E.2. BY LAW (LEGAL EASEMENTS) ....... 148
E.3. BY WILL OF THE OWNERS
(VOLUNTARY EASEMENTS) .................. 148
E.4. BY PRESCRIPTION .......................... 148
G. LEGAL EASEMENTS ................................ 148
G.1. LAW GOVERNING LEGAL
EASEMENTS ........................................... 148
F. VOLUNTARY EASEMENTS ...................... 148
H. RIGHTS AND OBLIGATIONS OF OWNERS
OF DOMINANT AND SERVIENT ESTATES.. 148
H.1. RIGHTS OF DOMINANT ESTATE
OWNER ................................................... 148
H.2. OBLIGATIONS OF DOMINANT
ESTATE OWNER ..................................... 149
H.3. RIGHTS OF THE SERVIENT ESTATE
OWNER ................................................... 149
H.4. OBLIGATIONS OF SERVIENT ESTATE
OWNER ...................................................150
I. KINDS OF LEGAL EASEMENTS ................150
I.1. NATURAL DRAINAGE .......................150
I.2. RIPARIAN BANKS.............................150
I.3. DRAINAGE OF BUILDINGS ..............150
I.4. DAM ..................................................150
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I.5. DRAWING WATER............................. 151
I.6. AQUEDUCT ........................................ 151
I.7. SLUICE GATE ..................................... 151
I.8. RIGHT OF WAY .................................. 151
I.9. PARTY WALL .................................... 153
I.10. EASEMENT OF LIGHT AND VIEW .. 155
I.11. INTERMEDIATE DISTANCES ........... 156
[NCC 677] ................................................ 156
BRANCHES, ROOTS AND FRUITS ........ 157
I.12. LATERAL AND SUBJACENT SUPPORT
................................................................. 157
J. MODES OF ACQUIRING EASEMENT ....... 157
J.1. BY TITLE ............................................ 157
J.2. BY PRESCRIPTION ........................... 157
K. EXTINGUISHMENT OF EASEMENTS ...... 158
K.1. MERGER ........................................... 158
K.2. BY A NON-USER FOR 10 YEARS .... 158
K.3. BY IMPOSSIBILITY OF USE ............. 158
K.4. EXPIRATION OF THE TERM OR
FULFILLMENT OF RESOLUTORY
CONDITION............................................. 158
K.5. RENUNCIATION OF THE OWNER OF
THE DOMINANT ESTATE ....................... 158
K.6. OTHER CAUSES NOT MENTION IN
NCC 631 ................................................... 159
X. NUISANCE ............................................. 159
A. NUISANCE V. TRESPASS ........................ 159
B. NUISANCE V. NEGLIGENCE .................... 160
C. CLASSES .................................................. 160
C.1. ACCORDING TO NATURE ............... 160
C.2. ACCORDING TO SCOPE OF
INJURIOUS EFFECTS ............................. 160
D. DOCTRINE OF ATTRACTIVE NUISANCE . 161
E. LIABILITY IN CASE OF NUISANCE ........... 161
E.1 WHO ARE LIABLE .............................. 161
E.2. LIABILITY OF CREATOR OF
NUISANCE ............................................... 161
E.3. LIABILITY OF TRANSFEREES .......... 161
E.4. NATURE OF LIABILITY ..................... 161
E.5. RIGHT TO RECOVER DAMAGES .... 162
NO PRESCRIPTION ................................ 162
F. REGULATION OF NUISANCES ................ 162
F.1. PUBLIC NUISANCE .......................... 162
F.2. PRIVATE NUISANCE ....................... 163
XI. MODES OF ACQUIRING OWNERSHIP 163
A. OCCUPATION .......................................... 164
A.1. REQUISITES ..................................... 164
A.2. KINDS .............................................. 164
A.3. SPECIAL RULES .............................. 164
OCCUPATION OF A SWARM OF BEES .. 164
vii
OCCUPATION OF DOMESTICATED
ANIMALS ................................................. 164
PIGEONS AND FISH ............................... 164
HIDDEN TREASURE ............................... 164
LOST MOVABLES; PROCEDURE AFTER
FINDING LOST MOVABLES.................... 164
B. DONATION ............................................... 165
B.1. OTHER INSTANCES CONSIDERED AS
DONATION.............................................. 165
B.2. NATURE ........................................... 165
B.3. REQUISITES..................................... 165
B.4. WHAT MAY BE DONATED .............. 165
B.5. WHAT MAY NOT BE DONATED...... 165
FUTURE PROPERTY ............................... 165
C. KINDS OF DONATIONS ........................... 166
C.1. AS TO ITS TAKING EFFECT ............. 166
C.2. AS TO CAUSE OR CONSIDERATION
................................................................. 168
C.3. AS TO EFFECTIVITY OR
EXTINGUISHMENT ................................. 168
D. FORMALITIES REQUIRED ....................... 168
D.1. HOW MADE AND ACCEPTED ......... 168
D.2. PERFECTION ................................... 168
D.3. QUALIFICATIONS OF DONORS AND
DONEES .................................................. 168
E. EFFECTS OF DONATION / LIMITATIONS170
E.1. IN GENERAL ..................................... 170
E.2. SPECIAL PROVISIONS .................... 170
F. VOID DONATIONS [NCC 739-740, 1027] 172
F.1. THOSE MADE BETWEEN PERSONS
WHO WERE GUILTY OF ADULTERY OR
CONCUBINAGE AT THE TIME OF THE
DONATION.............................................. 172
F.2. THOSE MADE BETWEEN PERSONS
FOUND GUILTY OF THE SAME CRIMINAL
OFFENSE, IN CONSIDERATION THEREOF
................................................................. 172
F.3. THOSE MADE TO A PUBLIC OFFICER
OR HIS WIFE, DESCENDANTS AND
ASCENDANTS, BY REASON OF HIS
OFFICE .................................................... 172
F.4. THOSE MADE TO PERSONS
INCAPACITATED TO SUCCEED BY WILL.
[NCC. 1027] .............................................. 172
G. REVOCATION V. REDUCTION................. 172
G.1. GROUNDS FOR REDUCTION.......... 172
C. TRADITION ............................................... 177
PRESCRIPTION .......................................... 177
OBLIGATIONS .......................... 181
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I. DEFINITION ............................................ 182
II. NATURE AND EFFECT OF OBLIGATIONS
................................................................... 185
A.OBLIGATION TO GIVE .............................. 185
B. OBLIGATION TO DO OR NOT TO DO ..... 185
C. BREACH ................................................... 186
C.1. COMPLETE FAILURE TO PERFORM
................................................................. 186
C.2. DEFAULT, DELAY, OR MORA ........ 186
C.3. FRAUD (DOLO) IN THE
PERFORMANCE OF THE OBLIGATION . 188
C.4. NEGLIGENCE (CULPA) IN THE
PERFORMANCE OF THE OBLIGATION . 189
C.5. CONTRAVENTION OF THE TENOR OF
THE OBLIGATION .................................... 191
D. LEGAL EXCUSE FOR BREACH:
FORTUITOUS EVENT OR ACTS OF THE
CREDITOR ..................................................... 191
E. REMEDIES AVAILABLE IN CASE OF
BREACH........................................................ 192
E.1. SPECIFIC PERFORMANCE .............. 192
E.2. SUBSTITUTED PERFORMANCE ..... 192
E.3. RESCISSION (RESOLUTION IN
RECIPROCAL OBLIGATIONS) ................ 192
E.4. DAMAGES, IN ANY EVENT ............. 193
E.5. SUBSIDIARY REMEDIES
CREDITORS ............................................ 193
III. KINDS OF CIVIL OBLIGATIONS ........... 195
A. PURE OBLIGATIONS ............................... 195
B. CONDITIONAL OBLIGATIONS ................ 195
C. OBLIGATIONS WITH A PERIOD OR TERM
...................................................................... 198
D. ALTERNATIVE OR FACULTATIVE
OBLIGATIONS ............................................. 200
E. DIVISIBLE AND INDIVISIBLE OBLIGATIONS
..................................................................... 202
F. OBLIGATIONS WITH A PENAL CLAUSE 203
IV. JOINT AND SOLIDARY OBLIGATIONS
.................................................................. 204
A. JOINT OBLIGATIONS .............................. 204
B. SOLIDARY OBLIGATIONS ...................... 206
V. EXTINGUISHMENT OF OBLIGATIONS 209
A. PAYMENT OR PERFORMANCE .............. 210
A.1 APPLICATION OF PAYMENTS ......... 212
A.2. DATION IN PAYMENT ..................... 212
A.3. PAYMENT BY CESSION .................. 213
A.3. TENDER OF PAYMENT AND
CONSIGNATION ..................................... 213
B. LOSS OF THE THING DUE OR
IMPOSSIBILITY OR DIFFICULTY OF
PERFORMANCE ........................................... 215
C. CONDONATION ....................................... 216
D. CONFUSION OR MERGER OF RIGHTS .. 217
E. COMPENSATION ..................................... 217
F. NOVATION............................................... 220
CONTRACTS ............................ 223
I. GENERAL PROVISIONS........................ 224
A. PRINCIPAL CHARACTERISTICS OF
CONTRACTS (MARCO) ............................... 224
A. 1. MUTUALITY .................................... 224
A.3. RELATIVITY..................................... 226
A.4. CONSENSUAL ................................ 227
A.5. OBLIGATORY FORCE ..................... 227
B. ELEMENTS OF CONTRACTS .................. 227
C. CLASSIFICATION OF CONTRACTS ........ 228
D. STAGES OF A CONTRACT ...................... 229
II. ESSENTIAL REQUISITES ..................... 229
A. CONSENT ................................................ 229
E. OBJECT OF CONTRACTS ........................ 236
F. CAUSE OF CONTRACTS ......................... 236
III. FORM OF CONTRACTS .......................238
A. KINDS OF FORMALITIES REQUIRED BY
LAW ............................................................. 238
OF
A.1. FOR THE VALIDITY OF CONTRACTS
(AD ESENTIA / AD SOLIMNITATEM/
SOLEMN CONTRACTS) ......................... 238
A.2. FOR THE PURPOSE OF PROVING THE
EXISTENCE OF THE CONTRACT........... 239
(AD PROBATIONEM/ STATUTE OF
FRAUDS) ................................................ 239
A.3. FOR THE EFFECTIVITY OF THE
CONTRACT AGAINST THIRD PERSONS
................................................................ 240
IV. REFORMATION OF INSTRUMENTS .. 240
A. CASES WHERE REFORMATION IS PROPER
...................................................................... 241
A.1. MISTAKE.......................................... 242
A.2. FRAUD ............................................ 242
A.3. INEQUITABLE CONDUCT [ART. 1362]
................................................................ 242
A.4. ACCIDENT [ART. 1364] ................... 242
A.5. SEVERE PACTO DE RETRO /
RELATIVE SIMULATION ........................ 242
B. WHO MAY ASK FOR REFORMATION [ART.
1368] ............................................................. 242
C. CASES WHERE REFORMATION IS NOT
PROPER ....................................................... 242
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 TABLE OF CONTENTS
V. INTERPRETATION OF CONTRACTS ... 243
A. RULES ON DOUBTS [ART. 1378] ............ 244
VI. DEFECTIVE CONTRACTS ................... 245
A. RESCISSIBLE CONTRACTS ................... 245
B. VOIDABLE CONTRACTS ........................ 249
C. UNENFORCEABLE CONTRACT .............. 251
D. VOID OR INEXISTENT CONTRACTS ...... 253
VII. NATURAL OBLIGATIONS .................. 255
NATURAL OBLIGATIONS ...................... 255
VIII. ESTOPPEL ..........................................257
DEFINITION ............................................257
KINDS OF ESTOPPEL .............................257
LACHES OR “STATE DEMANDS” ......... 258
IX. TRUSTS ............................................... 258
A. GOVERNING RULES ............................... 259
B. PARTIES [ART. 1440] .............................. 259
C. KINDS OF TRUST .................................... 259
C.1. EXPRESS TRUST............................. 259
C.2. IMPLIED TRUST ............................. 260
SALES ..................................... 262
I. DEFINITION AND ESSENTIAL REQUISITES
.................................................................. 263
A.DEFINITION OF SALES ............................ 263
B. ESSENTIAL REQUISITES OF A CONTRACT
OF SALE....................................................... 263
B.1. ESSENTIAL ELEMENTS OF A VALID
CONTRACT OF SALE ............................. 263
B.2. NON-ESSENTIAL ELEMENTS OF A
CONTRACT OF SALE ............................. 263
C. STAGES OF CONTRACT OF SALE .......... 263
PHASES OF A SALE CONTRACT .......... 263
D. OBLIGATIONS CREATED ....................... 264
NATURE OF OBLIGATIONS CREATED PER
DEFINITION IN ART.1458 ...................... 264
E. CHARACTERISTICS OF A CONTRACT OF
SALE ............................................................ 264
E.1. SALE IS TITLE AND NOT MODE ..... 264
F. SALE DISTINGUISHED FROM OTHER
CONTRACTS................................................ 264
DONATION ............................................ 264
F.1. BARTER ........................................... 265
F.2. CONTRACT FOR A PIECE OF WORK
................................................................ 265
F.3. DACION EN PAGO .......................... 265
F.4. CONTRACT OF SALE/CONTRACT TO
SELL ....................................................... 266
G. KINDS OF CONTRACT OF SALE ............ 266
II. PARTIES TO A CONTRACT OF SALE .. 266
A. KINDS OF INCAPACITY .......................... 266
ix
A.1. ABSOLUTE INCAPACITY ................ 266
A.2. RELATIVE INCAPACITY: MARRIED
PERSONS ............................................... 267
A.3. SPECIAL DISQUALIFICATIONS ..... 267
B. EFFECTS OF INCAPACITY ...................... 269
B.1. ABSOLUTE INCAPACITY ................ 269
B.2. RELATIVE INCAPACITY .................. 269
B.3. SPECIFIC INCAPACITY/ SPECIAL
DISQUALIFICATIONS ............................ 269
III. SUBJECT MATTER .............................. 269
A. REQUISITES OF A VALID SUBJECT
MATTER ....................................................... 269
A.1. MUST BE LICIT ................................ 269
A.2. EXISTING, FUTURE, CONTINGENT270
DETERMINATE OR DETERMINABLE .... 271
IV. OBLIGATIONS OF THE SELLER .......... 272
A. OBLIGATIONS OF THE VENDOR IN
GENERAL..................................................... 272
B. WHEN SELLER IS NOT THE OWNER ..... 272
C. SALE BY PERSON HAVING A VOIDABLE
TITLE ............................................................ 272
V. PRICE..................................................... 272
A. MEANING OF PRICE ............................... 272
B. REQUISITES FOR A VALID PRICE ...........273
C. HOW PRICE IS DETERMINED/ CERTAIN273
D. INADEQUACY OF PRICE ....................273
E. WHEN NO PRICE AGREED ............... 274
F. FALSE PRICE VS SIMULATED PRICE 274
G. EARNEST MONEY VS. OPTION MONEY
................................................................ 274
VI. FORMATION OF CONTRACT OF SALE
................................................................... 275
A. PREPARATORY....................................... 275
B. PERFECTION ........................................... 278
C. CONSUMMATION ................................... 278
FORMALITIES OF THE CONTRACT ...... 278
VII. TRANSFER OF OWNERSHIP ............ 280
OBLIGATIONS OF THE VENDOR: ......... 280
A. MANNER OF TRANSFER........................ 280
A.1. GENERAL CONCEPTS .................... 280
B. CONCEPT OF DELIVERY......................... 280
B.1. REQUISITES .................................... 280
B.2. WHAT TO DELIVER ........................ 280
B.3. WHERE TO DELIVER ...................... 280
B.4. WHEN TO DELIVER ......................... 281
C. WHEN DELIVERY DOES NOT
TRANSFER TITLE ................................... 281
D. KINDS OF DELIVERY .............................. 282
D.1.ACTUAL DELIVERY .......................... 282
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D.2. CONSTRUCTIVE DELIVERY ........... 283
E. DOUBLE SALES ...................................... 284
E.1. RULES GOVERNING SALE OF
MOVABLES, IMMOVABLES AND
UNREGISTERED LANDS ....................... 284
F. PROPERTY REGISTRATION DECREE .... 285
VIII. RISK OF LOSS ................................... 286
A. GENERAL RULE ...................................... 286
B. PRIOR TO PERFECTION OF CONTRACT286
C. AT TIME OF PERFECTION ...................... 286
D. AFTER PERFECTION BUT BEFORE
DELIVERY .................................................... 286
D.1.LOSS ................................................ 286
D.2. DETERIORATION ........................... 286
E. AFTER DELIVERY .................................... 287
IX. DOCUMENTS OF TITLE .......................287
A. DEFINITION............................................. 287
B. PURPOSE OF DOCUMENTS OF TITLE .. 287
C. NEGOTIABLE DOCUMENTS OF TITLE ... 287
C.1. WHO MAY NEGOTIATE IT? ............. 287
D. NON-NEGOTIABLE DOCUMENTS OF TITLE
..................................................................... 288
E. WARRANTIES OF SELLER
DOCUMENTS OF TITLE .............................. 288
F. RULES ON LEVY/GARNISHMENT OF
GOODS ........................................................ 288
X. REMEDIES OF AN UNPAID SELLER ... 289
A. DEFINITION OF UNPAID SELLER .......... 289
B. REMEDIES OF UNPAID SELLER ............ 289
JUDICIAL REMEDIES OF AN UNPAID
SELLER .................................................. 289
C. ALTERNATIVE REMEDIES OF THE UNPAID
SELLER UNDER RECTO LAW ..................... 290
XI. PERFORMANCE OF CONTRACT......... 291
A. DELIVERY OF THING SOLD..................... 291
B. PAYMENT OF PRICE ............................... 293
XII. WARRANTIES .................................... 294
A. EXPRESS WARRANTIES ........................ 294
B. IMPLIED WARRANTIES .......................... 295
B.1. IMPLIED WARRANTY OF TITLE ..... 295
B.2. IMPLIED WARRANTY AGAINST
ENCUMBRANCE/NON-APPARENT
SERVITUDES.......................................... 296
B.3. IMPLIED WARRANTY AGAINST
HIDDEN DEFECTS ................................. 296
B.4. IMPLIED WARRANTY AS TO
MERCHANTABLE QUALITY AND FITNESS
OF GOODS ............................................. 296
B.5. IMPLIED WARRANTY AGAINST
REDHIBITORY DEFECT IN THE SALE OF
ANIMALS ................................................ 297
C. EFFECTS OF WARRANTIES ................... 297
D. EFFECTS OF WAIVERS ........................... 297
E. BUYER’S OPTIONS IN CASE OF BREACH
OF WARRANTY ........................................... 297
F. WARRANTY IN SALE OF CONSUMER
GOODS ........................................................ 299
XIII. BREACH OF CONTRACT .................. 300
A. GENERAL REMEDIES [ART 1191] ............ 300
B. REMEDIES OF THE SELLER ................... 300
B.1. SALE OF MOVABLES ...................... 300
C. RECTO LAW: SALE OF MOVABLES ON
INSTALLMENT – ARTS. 1484-1486............. 302
C.1. WHEN APPLICABLE ........................ 302
C.2. ALTERNATIVE AND EXCLUSIVE
REMEDIES.............................................. 303
D. SALE OF IMMOVABLES .......................... 303
D.1. RESCISSION FOR ANTICIPATORY
BREACH ................................................. 303
D.2. SPECIFIC PERFORMANCE +
OF DAMAGES OR RESCISSION + DAMAGES
................................................................ 303
E. PD 957, SECTIONS 23 AND 24 ............... 304
F. MACEDA LAW (RA 6552): SALE OF
IMMOVABLES ON INSTALLMENT.............. 304
G. REMEDIES OF THE BUYER .................... 305
G.1. SALE OF MOVABLES ...................... 305
G.2. SALE OF IMMOVABLES ................. 305
XIV. EXTINGUISHMENT OF SALE ........... 306
A. CAUSES ................................................... 306
B. CONVENTIONAL REDEMPTION ............ 306
B.1. DEFINITION ..................................... 306
B.2. PERIOD ........................................... 306
B.3. BY WHOM EXERCISED................... 307
B.4. FROM WHOM TO REDEEM ........... 307
B.5. HOW EXERCISED ........................... 307
B.6. EFFECT OF REDEMPTION ............. 307
B.7. EFFECT OF NON-REDEMPTION.... 307
B.7. RIGHT TO REDEEM VS. OPTION TO
PURCHASE ............................................ 308
C. EQUITABLE MORTGAGE ........................ 308
C.1. PRESUMPTION THAT A CONTRACT IS
AN EQUITABLE MORTGAGE (5P-R) ..... 308
C.2. REQUISITES FOR PRESUMPTION OF
AN EQUITABLE MORTGAGE................. 309
C.3. RATIONALE BEHIND PROVISION ON
EQUITABLE MORTGAGE ....................... 309
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C.4. REMEDIES OF APPARENT VENDOR XVI. THE CONDOMINIUM ACT (RA 4726) 318
................................................................ 309 A. DEFINITION OF A CONDOMINIUM ......... 318
C.5. PERIOD OF REDEMPTION ............ 309 A.1. OTHER DEFINITIONS ...................... 318
C.6. EXERCISE OF THE RIGHT TO REDEEM B. TRANSFERS OR CONVEYANCES OF A
................................................................. 310 UNIT OR AN APARTMENT, OFFICE OR
C.7. HOW REDEMPTION IS EXERCISED 310 STORE, OR OTHER SPACE THEREIN
D. LEGAL REDEMPTION .............................. 310 [SECTION 5, RA 4726] ............................. 319
D.1. DEFINITION ..................................... 310 C. RIGHTS OF A CONDOMINIUM UNIT
D.2. MANNER ......................................... 310 OWNER (ASIDE FROM RIGHTS ARISING
D.3. PERIOD TO REDEEM ...................... 310 FROM OWNERSHIP) [SECTION 6] ......... 319
D.4. INSTANCES OF LEGAL REDEMPTION D. PARTITION BY SALE [SECTION 8]..... 319
.................................................................. 311 E. DECLARATION OF RESTRICTIONS BY
XV. THE LAW ON SALE OF SUBDIVISION OWNER OF PROJECT - PRECONDITION
AND CONDOMINIUM (PD 957) ................ 314 TO CONVEYANCE [SECTION 9]............. 320
A. DEFINITIONS ........................................... 314 F. ASSESSMENT IN ACCORDANCE WITH
A.1. DEFINITION OF "SALE" OR "SELL" 314 DECLARATION OF RESTRICTIONS
A.2. DEFINITION OF "BUY" OR [SECTION 20] ......................................... 320
"PURCHASE" .......................................... 314 G. HOW LIEN ENFORCED AFTER NON-
B. REQUIREMENTS FOR OWNERS AND PAYMENT OF ASSESSED FEES [SECTION
DEVELOPERS ............................................... 314 20] .......................................................... 320
B.1. REGISTRATION OF PROJECTS H. CONTENTS OF A DECLARATION OF
[SECTION 4, PD 957] .............................. 314 RESTRICTIONS [SECTION 9] ................. 320
B.2. REGISTRATION OF OWNER [SECTION I. INVOLUNTARY DISSOLUTION OF THE
4, PD 957] ............................................... 314 CONDOMINIUM CORPORATION [SECTION
B.3. LICENSE TO SELL [SECTION 5, PD 12] ........................................................... 320
957] ......................................................... 315 J.POWER OF ATTORNEY HELD BY
C. REQUIREMENT FOR DEALERS, CORPORATION IN CASE OF VOLUNTARY
BROKERS, AND SALESMEN (DBS) ....... 316 DISSOLUTION OF CONDOMINIUM
C.1. REGISTRATION ................................ 316 CORPORATION [SECTION 15] ............... 320
D. CHARACTERISTICS OF SALE OF A K. SALE, EXCHANGE, LEASE, OR
CONDOMINIUM OR SUBDIVISION UNIT AND DISPOSITION BY CORPORATION OF THE
SIMILAR CONTRACTS ................................. 316 COMMON AREAS [SECTION 16] ............ 321
D.1. REGISTRATION OF SALE, ETC L. STOCKHOLDER/MEMBER DEMANDING
[SECTION 17, PD 957] ............................. 316 PAYMENT FOR SHARES OR INTEREST
D.2. MORTGAGES ON UNIT OR LOT BY AKA APPRAISAL RIGHT [SECTION 17] ... 321
OWNER OR DEVELOPER [SECTION 18, PD M. REQUIREMENT FOR REGISTRATION
957] ......................................................... 317 OF CONVEYANCE WITH THE REGISTER
D.3. ADVERTISEMENTS BY THE OWNER OF DEEDS [SECTION 18]......................... 321
OR DEVELOPER [SECTION 19, PD 957] 317 N. REALTY TAX ON CONDOMINIUMS
D.4. NON-FORFEITURE OF PAYMENTS [SECTION 25] .......................................... 321
(SECTION 23, PD 957) ............................ 317 SUCCESSION ........................... 322
D.5. FAILURE TO PAY INSTALLMENTS I. GENERAL PROVISIONS......................... 323
[SECTION 24, PD 957] ............................ 317
A. DEFINITION ............................................. 323
D.6. ISSUANCE OF TITLE [SECTION 25, PD
B. OBJECT OF SUCCESSION AND
957] ......................................................... 317
TRANSMISSION .......................................... 323
D.7. REALTY TAX [SECTION 26, PD 957]
C. SUBJECTS OF SUCCESSION .................. 324
................................................................. 318
II. TESTAMENTARY SUCCESSION ......324
D.7. NO OTHER CHARGES [SECTION 27,
A. WILLS ...................................................... 324
PD 957] ................................................... 318
A.1. IN GENERAL .................................... 324

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 TABLE OF CONTENTS
I. KINDS OF WILLS................................. 324
II. CHARACTERISTICS OF WILLS .......... 324
III. RULES OF CONSTRUCTION AND
INTERPRETATION ................................. 325
IV. GOVERNING LAWS, IN GENERAL ... 326
A.2. TESTAMENTARY CAPACITY AND
INTENT ................................................... 326
A.3. FORM .............................................. 326
A.4. CODICILS ......................................... 331
A.5. INCORPORATION BY REFERENCE 331
A.6. REVOCATION .................................. 331
A.7. REPUBLICATION AND REVIVAL ....332
A.8. ALLOWANCE AND DISALLOWANCE
OF WILLS ................................................332
I. PROBATE REQUIREMENT ..................332
II. GROUNDS FOR DENYING PROBATE 333
B. INSTITUTION OF HEIR ............................ 333
C. SUBSTITUTION OF HEIRS ...................... 336
D. TESTAMENTARY DISPOSITIONS WITH A
CONDITION, A TERM, AND A MODE .......... 337
E. LEGITIME ................................................. 339
F. DISINHERITANCE ................................... 343
F.1. DISINHERITANCE OF CHILDREN AND
DESCENDANTS ..................................... 343
F.2. DISINHERITANCE OF PARENTS AND
ASCENDANTS ....................................... 344
F.3. DISINHERITANCE OF A SPOUSE .. 344
G. LEGACIES AND DEVISES ....................... 346
III. LEGAL OR INTESTATE SUCCESSION 349
A. GENERAL PROVISIONS ......................... 349
A.1. RELATIONSHIP ............................... 350
A.2. RIGHT OF REPRESENTATION ....... 351
B. ORDER OF INTESTATE SUCCESSION ... 353
IV. PROVISIONS COMMON TO TESTATE
AND INTESTATE SUCCESSION............... 355
A. RIGHT OF ACCRETION ........................... 355
B. CAPACITY TO SUCCEED BY WILL OR
INTESTACY .................................................. 356
C. ACCEPTANCE AND REPUDIATION OF THE
INHERITANCE ............................................. 358
D. COLLATION ............................................ 359
E. PARTITION AND DISTRIBUTION OF
ESTATE ........................................................ 360
E.1. IN GENERAL .................................... 360
E.2. EFFECTS OF PARTITION ................ 361
E.3. RESCISSION AND NULLIFICATION OF
PARTITION ............................................. 362
AGENCY .................................. 364
I. DEFINITION OF AGENCY ...................... 365
xii
A. AS A TYPE OF CONTRACT ..................... 365
A.1. ELEMENTS (STATUTORY): ............. 365
A.2. ELEMENTS (JURISPRUDENTIAL) . 365
A.3. BEING A CONTRACT, IT HAS COC 365
B. AS A LEGAL RELATIONSHIP .................. 365
C. EFFECTS OF AGENCY ............................. 365
C.1. INTEGRATION (MERGER) OF THE
PERSONALITY OF THE PRINCIPAL AND
THE AGENT ............................................ 365
C.2. EXTENSION (REPRODUCTION) OF
THE PERSONALITY OF THE PRINCIPAL
THROUGH THE AGENT ......................... 365
C.3. CONSEQUENCES ........................... 365
II. POWERS ................................................366
A. RIGHTS OF AGENTS ............................... 366
A.1. COMPENSATION ............................ 366
A.2. LEND MONEY TO / BORROW MONEY
FROM THE AGENCY .............................. 367
A.3. APPOINT A SUBSTITUTE ............... 367
A.4. RETAIN IN PLEDGE THE OBJECTS OF
AGENCY ................................................. 368
B. OBLIGATIONS OF AGENTS .................... 369
B.1. ACT WITHIN SCOPE OF AUTHORITY
................................................................ 369
B.2. ACT IN ACCORDANCE WITH
INSTRUCTIONS ..................................... 370
B.3. CARRY OUT THE AGENCY ............. 370
B.4. ADVANCE FUNDS ........................... 371
B.5. PREFER THE PRINCIPAL’S INTEREST
OVER HIS OWN ...................................... 371
B.6. RENDER ACCOUNT/DELIVER .......372
B.7. PAY INTEREST .................................372
B.8. LIABLE FOR FRAUD/NEGLIGENCE
.................................................................372
C. LIABILITY OF AGENTS ............................. 373
C.1. WHEN SOLIDARY ............................ 373
C.2. WHEN PERSONAL .......................... 373
III. EXPRESS VS IMPLIED AGENCY .......... 374
A. EXPRESS ................................................. 374
B. IMPLIED ................................................... 374
B.1. ACTS OF THE PRINCIPAL ............... 374
B.2. ACTS OF THE AGENT ..................... 374
IV. AGENCY BY ESTOPPEL ....................... 375
A. BASED ON STATUTE .............................. 375
A.1. TWO MODES ................................... 375
A.2. HOW RESCINDED .......................... 375
B. BASED ON JURISPRUDENCE ................ 375
B.1. REQUISITES .................................... 375
V. GENERAL VS. SPECIAL AGENCY ......... 376
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A. GENERAL AGENCY ..................................376
B. SPECIAL AGENCY ....................................376
VI. AGENCY COUCHED IN GENERAL TERMS
(ACGT)........................................................ 376
VII. AGENCY REQUIRING SPECIAL POWER
OF ATTORNEY........................................... 377
A. IN GENERAL ............................................ 377
B. EFFECT OF ABSENCE OF SPECIFIC
AUTHORITY .................................................. 377
B.1. IN GENERAL..................................... 377
B.2. SALE OF LAND OR ANY INTEREST
THEREIN ................................................. 377
B.3. EFFECT OF SPECIFIC
AUTHORIZATION ...................................378
VIII. AGENCY BY OPERATION OF LAW ....378
IX. RIGHTS AND OBLIGATIONS OF
PRINCIPAL.................................................378
A. OBLIGATIONS ..........................................378
A.1. COMPLY WITH THE OBLIGATIONS
CONTRACTED BY THE AGENT ..............378
A.2. ADVANCE OR REIMBURSE SUMS
NECESSARY............................................379
A.3. INDEMNIFY THE AGENT FOR INJURY
.................................................................379
A.4. COMPENSATE THE AGENT ........... 380
B. LIABILITY OF THE PRINCIPAL................ 380
B.1. IN GENERAL.................................... 380
B.2. BE SOLIDARILY LIABLE ................. 380
B.3. IF THE CONTRACT INVOLVES THINGS
BELONGING TO THE PRINCIPAL ......... 380
X. IRREVOCABLE AGENCY ....................... 381
XI. MODES OF EXTINGUISHMENT.......... 382
A. IN GENERAL ........................................... 382
B. REVOCATION .......................................... 382
B.1. IN GENERAL.................................... 382
B.2. WHEN REVOCATION IS NOT BINDING
ON THIRD PERSONS ............................ 383
B.3. APPOINTMENT OF NEW AGENT .. 383
B.4. DIRECT MANAGEMENT BY THE
PRINCIPAL ............................................. 383
B.5. SPECIAL AUTHORITY REVOKES THE
GENERAL AUTHORITY WHERE A SPECIAL
MATTER IS INVOLVED .......................... 383
B.6. WHEN AGENCY CANNOT BE
REVOKED ............................................... 383
C. WITHDRAWAL BY THE AGENT .............. 384
D. DEATH, CIVIL INTERDICTION, INSANITY
OR INSOLVENCY......................................... 384
D.1. IN GENERAL ................................... 384
xiii
D.2. EXCEPTIONS .................................. 384
D.3. DEATH OF AGENT ................... 384
E. DISSOLUTION / ACCOMPLISHMENT /
EXPIRATION ................................................ 384
PARTNERSHIP ........................ 389
I. CONTRACT OF PARTNERSHIP ............ 390
A. DEFINITION ............................................. 390
A.1. ELEMENTS (STATUTORY): ............. 390
A.2. ELEMENTS (JURISPRUDENCE)..... 390
B. ESSENTIAL FEATURES .......................... 390
B.1. LAWFUL PURPOSE......................... 390
B.2. COMMON BENEFIT ......................... 391
B.3. JURIDICAL PERSONALITY .............. 391
C. PARTIES ................................................... 391
D. OBJECT..................................................... 391
D.1. OBJECT OF UNIVERSAL
PARTNERSHIP ........................................ 391
D.2. OBJECT OF PARTICULAR
PARTNERSHIP ....................................... 392
D.3. EFFECT OF UNLAWFUL OBJECT .. 392
E. FORM ....................................................... 392
F. DURATION .............................................. 392
F.1. COMMENCEMENT .......................... 392
F.2. TERM ............................................... 392
F.3. EXTENSION..................................... 392
G.RULES TO DETERMINE EXISTENCE ...... 393
H. KINDS OF PARTNERSHIPS .................... 393
H.1. AS TO THE LEGALITY OF ITS
EXISTENCE: ........................................... 393
H.2. AS TO ITS OBJECT: ........................ 393
H.3. AS TO ITS DURATION: ................... 393
H.4. AS TO THE LIABILITY OF THE
PARTNERS: ............................................ 393
H.5. AS TO ITS PUBLICITY:.................... 393
H.6. AS TO ITS PURPOSE:..................... 393
I. KINDS OF PARTNERS .............................. 394
J. PARTNERSHIP, DISTINGUISHED FROM
OTHER CONTRACTS................................... 395
II. RIGHTS AND OBLIGATIONS OF THE
PARTNERSHIP .......................................... 397
A. RIGHT TO CONTRIBUTION .................... 397
A.1. CONTRIBUTION OF MONEY OR
PROPERTY ............................................. 397
I. AMOUNT OF CONTRIBUTION .......... 397
II. ADDITIONAL CAPITAL CONTRIBUTION
................................................................ 397
A.2. CONTRIBUTION OF INDUSTRY .... 398
B. RIGHT TO APPLY PAYMENT RECEIVED TO
PARTNERSHIP CREDIT .............................. 398
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B.1. REQUISITES: ................................... 398 IV. OBLIGATIONS OF PARTNERSHIP /

B.2. EXCEPTIONS: ................................. 398 PARTNERS TO THIRD PERSONS ........... 403
C. RIGHT TO RETURN OF CREDIT RECEIVED A. OBLIGATION TO OPERATE UNDER A FIRM
..................................................................... 398 NAME ........................................................... 403
D. RIGHT TO INDEMNITY FOR DAMAGES 398 B. LIABILITY OF PARTNERS FOR
D.1. SET-OFF OF LIABILITY ................... 398 PARTNERSHIP CONTRACTS ...................... 403
D.2. SUIT FOR DAMAGES ..................... 399 B.1. NATURE OF INDIVIDUAL LIABILITY
E. RESPONSIBILITY TO PARTNERS ........... 399 ................................................................ 403
III. RIGHTS AND OBLIGATIONS OF I. SUBSIDIARY........................................ 403
PARTNERS AMONG THEMSELVES ........ 399 II. PRO RATA .......................................... 404
A. RIGHT TO ASSOCIATE ANOTHER IN B.2. LIABILITY OF AN INDUSTRIAL
SHARE ......................................................... 399 PARTNER ............................................... 404
B. RIGHT TO INSPECT PARTNERSHIP BOOKS B.3. STIPULATION AGAINST INDIVIDUAL
..................................................................... 399 LIABILITY ................................................ 404
C. RIGHT TO A FORMAL ACCOUNT ........... 399 C. LIABILITY OF PARTNERS FOR
D. PROPERTY RIGHTS OF PARTNERS ...... 400 PARTNERSHIP CONTRACTS ...................... 404
D.1. IN GENERAL ................................... 400 C.1. ACTS APPARENTLY FOR THE
D.2. PROPERTY AND CAPITAL CARRYING ON OF USUAL BUSINESS .. 404
DISTINGUISHED .................................... 400 C.2. ACTS NOT APPARENTLY FOR
E. OWNERSHIP OF CERTAIN PROPERTIES CARRYING ON OF THE USUAL BUSINESS
..................................................................... 400 ................................................................ 404
F. RIGHTS IN SPECIFIC PROPERTY ........... 400 C.3. ACTS OF STRICT DOMINION ......... 404
G. INTEREST IN THE PARTNERSHIP ......... 400 C.4. ACTS IN CONTRAVENTION OF A
G.1. ASSIGNMENT OF INTEREST.......... 400 RESTRICTION ........................................ 405
G.2. CHARGING OF INTEREST BY D. CONVEYANCE OF PARTNERSHIP REAL
PERSONAL CREDITORS ........................ 401 PROPERTY .................................................. 405
H. RIGHT TO PARTICIPATE IN MANAGEMENT D.1. TITLE IN PARTNERSHIP NAME ..... 405
...................................................................... 401 D.2. TITLE IN THE NAME OF OTHER
H.1. POWERS OF A MANAGING PARTNER PERSONS ............................................... 405
................................................................. 401 E. LIABILITY OF THE PARTNERSHIP FOR
H.2. REVOCATION OF POWER OF ADMISSION BY A PARTNER ...................... 405
MANAGING PARTNER ........................... 401 F. LIABILITY OF THE PARTNERSHIP FOR
H.3. MANAGEMENT BY TWO OR WRONGFUL ACTS OF A PARTNER............ 405
MORE PARTNERS .................................. 401 G. LIABILITY OF THE PARTNERSHIP FOR
H.4. STIPULATION OF UNANIMITY ...... 402 MISAPPLICATION OF MONEY OR PROPERTY
H.5. MANAGEMENT WHEN MANNER ..................................................................... 405
NOT AGREED UPON ............................. 402 H. LIABILITY OF THE OTHER PARTNERS
H.6. MUTUAL AGENCY ................... 402 UNDER ARTICLES 1822 AND 1823 ............. 406
I. RIGHT TO PROFITS AND OBLIGATION FOR I. LIABILITY IN CASE OF PARTNERSHIP BY
LOSSES........................................................ 402 ESTOPPEL ................................................... 406
I.1. RULES FOR DISTRIBUTION OF I.1. PARTNER BY ESTOPPEL ................. 406
PROFITS AND LOSSES ......................... 402 I.2. LIABILITY OF A PARTNER BY
I.2. EXCLUSION OF PARTNER FROM ESTOPPEL .............................................. 406
SHARE.................................................... 402 I. PERSONAL REPRESENTATION ........ 406
J. OBLIGATION TO RENDER INFORMATION II. PUBLIC REPRESENTATION .............. 406
..................................................................... 403 I.3. EFFECT ON EXISTING PARTNERSHIP
K. OBLIGATION TO ACCOUNT AND ACT AS OR OTHER PERSONS NOT ACTUAL
TRUSTEE ..................................................... 403 PARTNERS............................................. 406
I.4. NATURE OF LIABILITY .................... 406
J. LIABILITY OF AN INCOMING PARTNER . 407

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 TABLE OF CONTENTS
K. NOTICE TO OR KNOWLEDGE OF THE
PARTNERSHIP ............................................ 407
V. DISSOLUTION ...................................... 407
A. CONCEPTS .............................................. 407
B. CAUSES OF DISSOLUTION .................... 407
B.1. WITHOUT VIOLATION OF THE
AGREEMENT ......................................... 407
B.2. IN CONTRAVENTION OF THE
AGREEMENT ......................................... 408
B.3. BY OPERATION OF LAW................ 408
B.4. BY DECREE OF COURT.................. 408
B.5. OTHER CAUSES ............................. 409
C. EFFECTS OF DISSOLUTION ................... 409
C.1. ON AUTHORITY OF THE PARTNERS
................................................................ 409
C.1.A. WITH RESPECT TO PARTNERS .. 409
C.1.B. WITH RESPECT TO THIRD PERSONS
................................................................ 409
C.2. ON LIABILITY FOR TRANSACTIONS
AFTER DISSOLUTION ........................... 409
C.3. ON LIABILITY FOR CONTRACTS
AFTER DISSOLUTION BY SPECIFIC
CAUSES................................................... 410
C.4. ON EXISTING LIABILITY OF
PARTNERS ............................................. 410
D. WINDING UP PARTNERS........................ 410
D.1. WHO MAY WIND UP ........................ 410
D.2. MANNER OF WINDING UP ............ 410
E. RIGHTS OF PARTNERS IN CASE OF
DISSOLUTION ............................................... 411
E.1. DISSOLUTION WITHOUT VIOLATION
OF THE AGREEMENT .............................. 411
E.2. DISSOLUTION IN CONTRAVENTION
OF THE AGREEMENT .............................. 411
I. PARTNER WHO DID NOT CAUSE THE
DISSOLUTION ......................................... 411
II. PARTNER WHO CAUSED THE
DISSOLUTION ......................................... 411
F. RIGHTS OF PARTNERS IN CASE OF
RESCISSION .................................................. 411
G. SETTLING OF ACCOUNTS BETWEEN
PARTNERS ................................................... 412
G.1. COMPOSITION OF PARTNERSHIP
ASSETS ................................................... 412
G.2. AMOUNT OF CONTRIBUTION FOR
LIABILITIES ............................................. 412
G.3. ENFORCEMENT OF CONTRIBUTION
................................................................. 412
G.4. ORDER OF APPLICATION OF ASSETS
................................................................. 412
xv
G.5. DOCTRINE OF MARSHALING OF
ASSETS ................................................... 412
G.6. DISTRIBUTION OF PROPERTY OF
INSOLVENT PARTNER ........................... 413
H. RIGHTS OF CREDITORS OF DISSOLVED
PARTNERSHIP ............................................. 413
H.1. AS CREDITORS OF THE NEW
PARTNERSHIP ........................................ 413
H.2. LIABILITY OF A NEW PARTNER ..... 413
H.3. PRIORITY OF CREDITORS OF
DISSOLVED PARTNERSHIP ................... 413
I. RIGHTS OF A RETIRED PARTNER OR A
REPRESENTATIVE OF DECEASED PARTNER
...................................................................... 413
J. RIGHT TO AN ACCOUNT .......................... 414
VI. LIMITED PARTNERSHIP...................... 414
A. DEFINITION .............................................. 414
B. CHARACTERISTICS ................................. 414
C. GENERAL AND LIMITED PARTNERS
DISTINGUISHED........................................... 414
D. GENERAL AND LIMITED PARTNERSHIP
DISTINGUISHED........................................... 415
E. FORMATION ............................................. 415
E.1. GENERAL REQUIREMENTS ............ 415
E.2. PURPOSE OF FILING ...................... 416
E.3. FIRM NAME ..................................... 416
E.4. FALSE STATEMENT IN THE
CERTIFICATE .......................................... 416
REQUISITES: ........................................... 416
E.5. GENERAL AND LIMITED PARTNER AT
THE SAME TIME...................................... 416
F. MANAGEMENT ........................................ 416
G. OBLIGATIONS OF A LIMITED PARTNER 417
G.1. OBLIGATIONS RELATED TO
CONTRIBUTION ...................................... 417
G.2. LIABILITY TO PARTNERSHIP
CREDITORS ............................................ 418
G.3. LIABILITY TO SEPARATE CREDITORS
................................................................. 418
H. RIGHTS OF A LIMITED PARTNER ........... 418
H.1. IN GENERAL .................................... 418
H.2. RIGHT TO TRANSACT BUSINESS
WITH THE PARTNERSHIP ...................... 418
H.3. RIGHT TO SHARE IN PROFITS ....... 419
H.4. RIGHT TO RETURN OF
CONTRIBUTION ...................................... 419
H.5. PREFERENCE OF LIMITED
PARTNERS.............................................. 419
H.6. RIGHT TO ASSIGN INTEREST ........ 419
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H.7. RIGHT TO ASK FOR DISSOLUTION
................................................................ 420
I. DISSOLUTION .......................................... 420
J. SETTLEMENT OF ACCOUNTS ................ 420
J.1. ORDER OF PAYMENT ..................... 420
J.2. SHARE IN THE PARTNERSHIP ASSETS
................................................................ 420
K. AMENDMENT OR CANCELLATION OF
CERTIFICATE ................................................ 421
K.1. CANCELLATION OF CERTIFICATE .. 421
K.2. AMENDMENT OF CERTIFICATE ..... 421
K.3. REQUIREMENTS FOR AMENDMENT
OR CANCELLATION ............................... 421
CREDIT TRANSACTIONS......... 422
I. LOAN ..................................................... 423
CONTRACTS OF LOAN ............................... 423
CONTRACT OF LOAN VS. CONTRACT TO
LOAN ........................................................... 423
SIMPLE LOAN VS. BARTER ........................ 423
COMMODATUM VS. MUTUUM .................. 423
A. COMMODATUM...................................... 423
A.1. KINDS OF COMMODATUM ............ 424
A.2. PARTIES ......................................... 424
A.3. OBLIGATIONS OF THE BAILEE ..... 424
A.4. OBLIGATIONS OF THE BAILOR .... 424
A.5. LIABILITY FOR DETERIORATION .. 424
A.6. RIGHT OF RETENTION .................. 424
B. MUTUUM ................................................ 425
B.1. OBLIGATIONS OF THE BORROWER
................................................................ 425
B.2. INTEREST AND SUSPENSION OF
USURY LAW ........................................... 425
B.3. KINDS OF INTEREST ...................... 425
B.4. WHEN IS COMPOUND INTEREST
ALLOWED? ............................................ 425
B.5. REQUISITES FOR INTEREST TO BE
CHARGEABLE ........................................ 425
B.6. ELEMENTS OF USURY .................. 426
II. DEPOSIT ............................................... 426
A. VOLUNTARY DEPOSIT ............................427
A.1. EXTINGUISHMENT ..........................427
A.2. OBLIGATIONS OF DEPOSITOR ......427
B. NECESSARY DEPOSIT .............................427
B.1. KINDS OF NECESSARY DEPOSIT ...427
B.2. DEPOSIT BY TRAVELERS IN HOTELS
AND INNS ...............................................427
B.3. EXTENT OF LIABILITY UNDER
ART.1998 ............................................... 428
B.4. WHEN HOTEL-KEEPER LIABLE .... 428
xvi
B.5. WHEN HOTEL-KEEPER NOT LIABLE
................................................................ 428
B.6. HOTEL-KEEPER’S RIGHT TO
RETENTION ........................................... 428
C. JUDICIAL DEPOSIT ................................. 428
C.1. NATURE AND PURPOSE ................ 428
C.2. DEPOSITARY OF SEQUESTERED
PROPERTY ............................................. 428
C.3. APPLICABLE LAW .......................... 429
III. GUARANTY AND SURETYSHIP.......... 429
A. NATURE AND EXTENT OF GUARANTY. 429
B. NATURE AND EXTENT OF SURETYSHIP
..................................................................... 432
C. EFFECT OF GUARANTY .......................... 433
C.1. EFFECTS OF GUARANTY BETWEEN
THE GUARANTOR AND THE CREDITOR
................................................................ 433
C.2. EFFECTS OF GUARANTY BETWEEN
THE DEBTOR AND THE GUARANTOR . 435
C.3. EFFECTS OF GUARANTY AS
BETWEEN CO-GUARANTORS .............. 436
D. EXTINGUISHMENT OF GUARANTY ....... 437
E. LEGAL AND JUDICIAL BONDS ............... 437
IV. PLEDGE ................................................ 437
A. CHARACTERISTICS ................................ 438
B. KINDS ...................................................... 438
LEGAL PLEDGE / PLEDGE BY OPERATION
OF LAW [ARTS. 2121-2122] .................... 438
C. ESSENTIAL REQUISITES ........................ 438
PROVISIONS APPLICABLE ONLY TO
PLEDGE .................................................. 439
D. REQUISITES FOR PERFECTION ............ 439
E. OBLIGATIONS OF PLEDGEE .................. 439
F. RIGHTS OF PLEDGOR............................. 439
G. FORECLOSURE ...................................... 440
G.1. REQUIREMENTS IN SALE OF THE
THING PLEDGED BY A CREDITOR, IF
CREDIT IS NOT PAID ON TIME ............. 440
G.2. EFFECTS OF THE SALE OF THE
THING PLEDGED ................................... 440
H. PLEDGE AS DISTINGUISHED FROM
CHATTEL MORTGAGE [ARTS. 2140, 1484] 440
I. PACTUM COMMISSORIUM....................... 440
ELEMENTS .............................................. 441
EFFECT ON PLEDGE .............................. 441
J. EQUITABLE MORTGAGE .......................... 441
ESSENTIAL REQUISITES ........................ 441
V. REAL MORTGAGE ................................ 441
A. OBJECTS OF REAL MORTGAGE ............. 441
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B. CHARACTERISTICS ................................. 441
C. KINDS ....................................................... 441
D. PRINCIPLE OF INDIVISIBILITY OF
PLEDGE/MORTGAGE ................................. 442
E. ESSENTIAL REQUISITES COMMON TO
PLEDGE AND MORTGAGE ......................... 442
F. FORECLOSURE OF MORTGAGE ............ 443
F.1. JUDICIAL FORECLOSURE .............. 443
F.2. EXTRAJUDICIAL FORECLOSURE .. 444
F.4. NATURE OF POWER
FORECLOSURE BY EXTRAJUDICIAL SALE
................................................................ 444
F.5. RIGHT OF MORTGAGEE TO RECOVER
DEFICIENCY ........................................... 445
F.6. EFFECT OF INADEQUACY OF PRICE
IN FORECLOSURE SALE ....................... 445
G. WAIVER OF SECURITY BY CREDITOR .. 445
H. REDEMPTION ......................................... 445
KINDS: .................................................... 445
VI. ANTICHRESIS...................................... 446
A. CHARACTERISTICS ................................ 446
B. SPECIAL REQUISITES............................. 446
C. AS DISTINGUISHED FROM OTHER
CONTRACTS................................................ 446
D. OBLIGATIONS OF ANTICHRETIC
CREDITOR ................................................... 446
E. REMEDIES OF CREDITOR IN CASE OF
NON-PAYMENT OF DEBT .......................... 447
VII. CHATTEL MORTGAGE ....................... 447
A. CHARACTERISTICS ................................ 447
B. OBLIGATIONS SECURED ....................... 447
C. PROPERTIES COVERED ......................... 447
D. VALIDITY OF CHATTEL MORTGAGE ..... 448
E. FORMAL REQUISITES ............................ 448
F. REGISTRATION OF CHATTEL MORTGAGE
..................................................................... 448
F.1. PERIOD ............................................ 448
F.2. VENUE ............................................ 448
F.3. EFFECT............................................ 448
G. FORECLOSURE ...................................... 449
DISPOSITION OF PROCEEDS ............... 449
VIII. QUASI-CONTRACTS ......................... 449
A.1. OBLIGATIONS OF A GESTOR ........ 450
A.2. OBLIGATIONS OF THE OWNER OF
THE PROPERTY OR BUSINESS ............ 450
A.3. EFFECT OF RATIFICATION ............. 451
A.4. EXTINGUISHMENT OF
MANAGEMENT ....................................... 451
B. SOLUTIO INDEBITI (UNDUE PAYMENT) . 451
WHEN DEBT NOT YET DUE ................... 451
RESPONSIBILITY OF TWO OR MORE
PAYEES ................................................... 451
WHEN MONEY OR THING DELIVERED IS
OWNED BY THIRD PERSON .................. 451
LIABILITY OF PAYEE ............................... 451
EXEMPTION FROM THE OBLIGATION TO
RESTORE THE PAYMENT UNDULY MADE
................................................................ 452
OF PRESUMPTION OF PAYMENT BY
MISTAKE, DEFENSE .............................. 452
C. OTHER QUASI-CONTRACTS .................. 452
IX. CONCURRENCE AND PREFERENCE OF
CREDITS ................................................... 453
A. WHEN RULES ON PREFERENCE ARE
APPLICABLE ................................................ 453
B. CLASSIFICATION OF CREDITS............... 453
B.1. SPECIAL PREFERRED CREDITS ON
SPECIFIC MOVABLE PROPERTY .......... 454
B.2. SPECIAL PREFERRED CREDITS ON
SPECIFIC IMMOVABLE PROPERTY AND
REAL RIGHTS......................................... 454
B.3. ORDINARY PREFERRED CREDITS 455
B.4. COMMON CREDITS ....................... 455
C. ORDER OF PREFERENCE OF CREDITS . 455
D. EXEMPT PROPERTY ............................... 456
LAND, TITLES, & DEEDS ......... 457
I. TORRENS SYSTEM ............................... 458
ELEMENTS OF A DEED: ........................ 458
TYPES OF ESTATE: ................................ 458
A. LAWS IMPLEMENTING LAND
REGISTRATION ........................................... 459
B. PURPOSES OF LAND REGISTRATION .. 459
C. ADMINISTRATION OF THE TORRENS
SYSTEM ....................................................... 460
CERTIFICATE OF TITLE .......................... 461
D. EFFECT OF REGISTRATION UNDER THE
TORRENS SYSTEM ...................................... 461
II. THE REGALIAN DOCTRINE ................. 463
A. EFFECTS .................................................. 464
B. CONCEPT OF NATIVE TITLE, TIME
IMMEMORIAL POSSESSION ...................... 464
III. CITIZENSHIP REQUIREMENT ............ 465
A. INDIVIDUALS .................................... 465
B. CORPORATIONS .............................. 466
IV. ORIGINAL REGISTRATION ................ 466
A. KINDS OF ORIGINAL REGISTRATION: .. 466
B. WHO MAY APPLY: .................................. 467
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C. PROCEDURE IN ORDINARY LAND D.4. AS TO THE DEFENSE OF AN

REGISTRATION ........................................... 468 EMPLOYER FOR THE NEGLIGENCE OF AN
D. EVIDENCE NECESSARY ..........................473 EMPLOYEE ............................................. 492
E. REMEDIES: ...............................................473 II. QUASI-DELICT ..................................... 492
F. PETITIONS AND MOTIONS AFTER A. NEGLIGENCE .......................................... 492
ORIGINAL REGISTRATION ......................... 474 A.1. DEFAULT STANDARD OF CARE:
V. JUDICIAL CONFIRMATION OF GOOD FATHER OF A FAMILY ............... 492
IMPERFECT OR INCOMPLETE TITLES.... 475 A.2. STANDARD OF CARE NEEDED IN
A. FILING OF THE APPLICATION: .............. 476 SPECIFIC CIRCUMSTANCES ................. 493
B. PROCEDURE IN JUDICIAL A.3. PRESUMPTIONS OF NEGLIGENCE
CONFIRMATION: ......................................... 477 ................................................................ 494
C. EVIDENCE NECESSARY TO I. IN MOTOR VEHICLE MISHAPS .......... 494
SUBSTANTIATE APPLICATION: .................. 477 II. POSSESSION OF DANGEROUS
VI. CADASTRAL REGISTRATION ............. 477 WEAPONS OR SUBSTANCES ............... 496
A. DISTINGUISHED FROM ORDINARY III. COMMON CARRIERS ....................... 496
REGISTRATION ............................................ 477 IV. RES IPSA LOQUITUR ........................ 496
VII. SUBSEQUENT REGISTRATION......... 479 A.4. PERSONS LIABLE .......................... 497
A. NECESSITY AND EFFECTS OF B. CAUSE ..................................................... 502
REGISTRATION ........................................... 479 C. DEFENSES............................................... 506
B. TWO TYPES OF DEALINGS .................... 480 C.1. DUE DILIGENCE TO PREVENT THE
C. VOLUNTARY DEALINGS ......................... 481 DAMAGE UNDER ARTICLE 2180 .......... 506
D. INVOLUNTARY DEALINGS .................... 483 C.2. ACTS OF PUBLIC OFFICERS .......... 506
REGISTRATION OF EXECUTION AND TAX C.3. AUTHORITY OF LAW...................... 506
DELINQUENCY SALES .......................... 483 C.4. DAMNUM ABSQUE INJURIA .......... 506
VIII. NON-REGISTRABLE PROPERTIES .. 486 C.5. PLAINTIFF’S NEGLIGENCE IS THE
PROXIMATE CAUSE .............................. 507
IX. DEALINGS WITH UNREGISTERED
C.6. CONTRIBUTORY NEGLIGENCE OF
LANDS ...................................................... 487 THE PLAINTIFF ...................................... 507
EFFECTS OF TRANSACTIONS COVERING
C.7. FORTUITOUS EVENT ..................... 507
UNREGISTERED LAND ......................... 487
C.8. PLAINTIFF’S ASSUMPTION OF RISK /
PRIMARY ENTRY BOOK AND
VOLENTI NON FIT INJURIA.................... 508
REGISTRATION BOOK .......................... 487
C.9. PRESCRIPTION .............................. 508
TORTS .................................... 489 C.10. WAIVER ......................................... 508
I. PRELIMINARY CONSIDERATIONS ...... 490 C.11. EMERGENCY RULE OR SUDDEN
A. DEFINITION OF TORT ............................ 490 PERIL DOCTRINE .................................. 509
A.1. ACCORDING TO MANNER OF III. INTENTIONAL TORTS......................... 509
COMMISSION ........................................ 490 A. HUMAN RELATIONS TORTS .................. 509
A.2. ACCORDING TO SCOPE ................ 490 A.1. ABUSE OF RIGHT ............................ 509
B. DEFINITION OF QUASI-DELICT ............. 490 A.2. ACTS CONTRARY TO LAW .............510
C. CULPA AQUILIANA DISTINGUISHED FROM A.3. ACTS CONTRARY TO MORALS ....... 511
CRIME ........................................................... 491 A.4. UNJUST ENRICHMENT ................... 512
D. CULPA AQUILIANA DISTINGUISHED FROM A.5. VIOLATION OF HUMAN DIGNITY ... 513
CULPA CONTRACTUAL; PRESENCE OF FAMILY RELATIONS ............................... 515
CONTRACTUAL RELATIONS ....................... 491 SOCIAL RELATIONS................................ 516
D.1. AS TO SOURCE ................................ 491 ECONOMIC RELATIONS ......................... 516
D.2. AS TO BURDEN OF PROOF ........... 491 A.6 DERELICTION OF DUTY .................. 517
D.3. AS TO APPLICABILITY OF THE A.7. UNFAIR COMPETITION ................... 517
DOCTRINE OF PROXIMATE CAUSE ...... 491 B. INDEPENDENT CIVIL ACTIONS .............. 517
B.1. VIOLATION OF CIVIL AND POLITICAL
RIGHTS .................................................... 517

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 TABLE OF CONTENTS
B.2. DEFAMATION, FRAUD, PHYSICAL
INJURIES ................................................. 519
B.3. NEGLECT OF DUTY ........................ 520
B.4. CATCH-ALL INDEPENDENT CIVIL
ACTION ................................................... 521
IV. LIABILITY ATTACHED TO SPECIFIC
PERSONS .................................................. 521
A. STRICT LIABILITY .................................... 521
A.1. POSSESSOR OR USER OF ANIMALS
................................................................. 521
A.2. PROVINCES, CITIES, AND
MUNICIPALITIES ................................... 522
A.3. PROPRIETOR OF BUILDING OR
STRUCTURE .......................................... 522
A.4. ENGINEER OR ARCHITECT OF
COLLAPSED BUILDING ......................... 523
A.5. OWNERS OF ENTERPRISES OR
OTHER EMPLOYERS ............................. 523
A.6. HEAD OF A FAMILY FOR THINGS
THROWN OR FALLING ......................... 524
A.7. PRODUCTS LIABILITY .................... 524
I. MANUFACTURERS / PROCESSORS OF
FOODSTUFFS ........................................ 524
II. CONSUMER ACT – RA 7394, SECS. 92-
107 (CH. 1) ............................................... 525
A.8. NUISANCE ...................................... 528
EASEMENT AGAINST NUISANCE ......... 528
DAMAGES ............................... 533
I. DEFINITION ........................................... 534
INJURY VS. DAMAGE VS. DAMAGES ......... 534
WHEN DAMAGES MAY BE RECOVERED ... 534
ELEMENTS FOR RECOVERY OF DAMAGES
..................................................................... 534
CLASSIFICATION ........................................ 534
ACCORDING TO PURPOSE ........................ 534
ACCORDING TO MANNER
DETERMINATION ....................................... 534
SPECIAL AND ORDINARY .......................... 534
GENERAL DAMAGES ............................. 534
SPECIAL DAMAGES ............................... 534
II. ACTUAL & COMPENSATORY DAMAGES
.................................................................. 535
REQUISITES ................................................ 535
WHEN IS A PERSON ENTITLED? .......... 535
ALLEGED AND PROVED WITH CERTAINTY
................................................................ 535
DEGREE OF CERTAINTY REQUIRED AS
TO: FACT, CAUSE AND AMOUNT OF
DAMAGES .............................................. 535
COMPONENTS ............................................ 536
LOSS COVERED; ......................................... 536
EXTENT OR SCOPE OF ACTUAL DAMAGES
..................................................................... 536
IN CONTRACTS AND QUASI-CONTRACTS 536
IN CRIMES AND QUASI-DELICTS .............. 537
EARNING CAPACITY, BUSINESS STANDING
..................................................................... 538
LOSS OR IMPAIRMENT OF EARNING
CAPACITY............................................... 538
INJURY TO BUSINESS STANDING OR
COMMERCIAL CREDIT .......................... 538
FORMULA FOR THE NET EARNING
CAPACITY............................................... 538
DEATH BY CRIME OR QUASI-DELICT .. 538
CIVIL / DEATH INDEMNITY ................... 539
AS TO THE LOSS OF EARNING CAPACITY
................................................................ 539
IN RAPE CASES...................................... 539
ATTORNEY’S FEES AND EXPENSES OF
LITIGATION ............................................ 539
INTEREST ................................................ 541
III. MORAL DAMAGES.............................. 543
WHEN AWARDED........................................ 543
REQUISITES FOR AWARDING MORAL
DAMAGES .............................................. 543
GENERAL PRINCIPLES OF RECOVERY:543
WHEN RECOVERABLE ............................... 545
IN CRIMINAL OFFENSE RESULTING IN
PHYSICAL INJURIES .............................. 545
IN QUASI-DELICTS CAUSING PHYSICAL
INJURIES ................................................ 545
IN SEDUCTION, ABDUCTION, RAPE AND
OTHER LASCIVIOUS ACTS .................... 546
IN ILLEGAL OR ARBITRARY DETENTION
OR ARREST ........................................... 546
OF
IN CASE OF MALICIOUS PROSECUTION
................................................................ 546
IN ACTS REFERRED TO IN ARTS. 21, 26,
27, 28, 29, 32, 34 &35, NCC .................. 546
VIOLATION OF HUMAN DIGNITY ......... 547
REFUSAL OR NEGLECT OF DUTY ........ 547
VIOLATION OF CIVIL AND POLITICAL
RIGHTS ................................................... 548
IN WILLFUL INJURY TO PROPERTY ..... 549
IN BREACH OF CONTRACT IN BAD FAITH
................................................................ 549
WHO MAY RECOVER MORAL DAMAGES.. 549
RELATIVES OF INJURED PERSONS ..... 550
JURIDICAL PERSONS ............................ 550
xix
 TABLE OF CONTENTS

FACTORS CONSIDERED IN DETERMINING COMPROMISE ............................................. 559

AMOUNT ................................................ 550 IX.MISCELLANEOUS RULES ................... 559
IV. NOMINAL DAMAGES ......................... 550 DAMAGES THAT CANNOT CO-EXIST ........ 559
REQUISITES AND CHARACTERISTICS ...... 550 NOMINAL WITH OTHER DAMAGES ..... 559
WHEN AWARDED ....................................... 550 ACTUAL AND LIQUIDATED .................. 559
NATURE AND DETERMINATION OF AMOUNT DAMAGES THAT MUST CO-EXIST ............. 559
...................................................................... 551 EXEMPLARY WITH MORAL, TEMPERATE,
V. TEMPERATE DAMAGES ....................... 551 LIQUIDATED OR COMPENSATORY ..... 559
REQUISITES ................................................ 552 DAMAGES THAT MUST STAND ALONE .... 559
FACTORS IN DETERMINING AMOUNT ..... 552 NOMINAL DAMAGES .................................. 559
WHERE THERE ARE RECEIPTS PROVIDED PRIVATE INTERNATIONAL LAW
AMOUNTING TO LESS THAN P25,000 552
WHERE NO RECEIPTS WERE PROVIDED
................................................560
................................................................ 553 I. INTRODUCTION ..................................... 561
VI.LIQUIDATED DAMAGES ...................... 553 A.SCOPE OF CONFLICTS OF LAWS: NATURE,
REQUISITES AND CHARACTERISTICS ...... 553 DEFINITION AND IMPORTANCE ................. 561
RULES GOVERNING BREACH OF CONTRACT A.2. DIVERSITY OF LAWS, CUSTOMS AND
..................................................................... 553 PRACTICES ............................................. 561
VII. EXEMPLARY OR CORRECTIVE A.2. DEFINITION ..................................... 561
A.3. OBJECT, FUNCTION AND SCOPE .. 561
DAMAGES................................................. 554
WHEN RECOVERABLE ............................... 554
II. JURISDICTION AND CHOICE OF LAW 562
A. JURISDICTION ........................................ 562
IN CRIMINAL OFFENSES; NCC ART. 2230
A.1. BASIS OF EXERCISE OF JUDICIAL
................................................................ 554
JURISDICTION ....................................... 562
IN CONTRACTS AND QUASI-CONTRACTS;
A.2. WAYS OF DEALING WITH A
NCC ART. 2232 ...................................... 555
CONFLICTS PROBLEM .......................... 563
REQUISITES ........................................... 555
B. CHOICE OF LAW ..................................... 563
REQUISITES TO RECOVER EXEMPLARY
B.1. APPROACHES TO CHOICE OF LAW
DAMAGES AND LIQUIDATED DAMAGES
................................................................ 563
AGREED UPON ...................................... 555
C. THE PROBLEM OF CHARACTERIZATION
DAMAGES IN CASE OF DEATH .................. 556
..................................................................... 564
RE. CRIMES AND QUASI-DELICTS ............ 556
C.1 CHARACTERIZATION AND THE
IN DEATH CAUSED BY BREACH OF
SINGLE-ASPECT METHOD ................... 564
CONDUCT BY A COMMON CRIME ....... 556
VIII. GRADUATION OF DAMAGES........... 557
C.2 DECEPAGE ...................................... 565
RULES.......................................................... 557
D. THE PROBLEM OF RENVOI ................... 565
IN CRIMES.............................................. 557
D.1. DEFINITION..................................... 565
IN QUASI-DELICTS ................................ 557
D.2. VARIOUS WAYS OF DEALING WITH
CONTRIBUTORY NEGLIGENCE ................. 557
THE PROBLEM OF RENVOI .................. 565
PLAINTIFF’S NEGLIGENCE ................... 557
E. NOTICE AND PROOF OF FOREIGN LAW
IN CONTRACTS, QUASI-CONTRACTS AND
..................................................................... 566
QUASI-DELICTS .................................... 557
E.1. EXTENT OF JUDICIAL NOTICE ....... 566
GROUNDS FOR MITIGATION OF DAMAGES
E.2. PROOF OF FOREIGN LAW ............. 566
..................................................................... 558
E.3. EXCEPTIONS TO THE APPLICATION
FOR CONTRACTS: ................................. 558
OF FOREIGN LAW ................................. 566
FOR QUASI-CONTRACTS: .................... 558
III. PERSONAL LAW ................................. 566
FOR QUASI-DELICTS: ........................... 558
A. NATIONALITY ......................................... 566
RULE WHEN CONTRACTING PARTIES ARE IN
A.1. IMPORTANCE OF A PERSONAL LAW
PARI DELICTO ............................................. 558
................................................................ 566
LIQUIDATED DAMAGES ............................. 559

xx
 TABLE OF CONTENTS
A.2. DETERMINATION OF NATIONALITY
................................................................ 567
B. DOMICILE ................................................ 567
B.1. DEFINITION ..................................... 567
B.2. GENERAL RULES ON DOMICILE .. 567
B.3. KINDS OF DOMICILE...................... 568
C. PRINCIPLES ON PERSONAL STATUS AND
CAPACITY .................................................... 568
C.1. DEFINITION ..................................... 568
C.2. LEGISLATIVE JURISDICTION
DISTINGUISHED FROM JUDICIAL
JURISDICTION ....................................... 568
C.3. BEGINNING AND END
PERSONALITY ....................................... 568
C.4. ABSENCE........................................ 568
C.5. NAME .............................................. 569
C.6. AGE OF MAJORITY ......................... 569
C.7. CAPACITY ....................................... 569
IV. CHOICE OF LAW PROBLEMS ............. 569
A. CHOICE-OF-LAW IN FAMILY RELATIONS
..................................................................... 569
A.1. MARRIAGE ...................................... 569
A.2. DIVORCE AND SEPARATION ......... 571
A.3. ANNULMENT AND DECLARATION OF
NULLITY .................................................. 571
A.4. PARENTAL RELATIONS ................. 571
A.5. ADOPTION ...................................... 571
B. CHOICE OF LAW IN PROPERTY .............. 571
B.1. THE CONTROLLING LAW ................ 571
B.2. CAPACITY TO TRANSFER OR
ACQUIRE PROPERTY .............................572
B.3. EXTRINSIC AND INTRINSIC VALIDITY
OF CONVEYANCES ................................572
B.4. EXCEPTION TO LEX SITUS RULE ...572
B.5. SITUS OF CERTAIN PROPERTIES ..572
C. CHOICE OF LAW IN CONTRACTS ...........572
C.1. EXTRINSIC VALIDITY OF CONTRACTS
.................................................................572
C.2. INTRINSIC VALIDITY OF CONTRACTS
.................................................................572
C.3. CAPACITY TO ENTER INTO
CONTRACTS ...........................................573
C.4. CHOICE OF LAW ISSUES IN
CONFLICTS CONTRACTS CASES ..........573
C.5. ADHESION CONTRACTS ................573
D. CHOICE OF LAW IN WILLS, SUCCESSION
AND ADMINISTRATION OF ESTATES ........573
D.1. EXTRINSIC VALIDITY OF WILLS .....573
D.2. INTRINSIC VALIDITY OF WILLS .....573
D.3. INTERPRETATION OF WILLS .........573
D.4. REVOCATION ................................. 573
D.5. PROBATE ....................................... 573
D.6. ADMINISTRATION OF ESTATES ... 573
E. CHOICE OF LAW IN TORTS AND CRIMES
..................................................................... 573
E.1. LEX LOCI DELICTI COMMISSI ......... 573
E.2. MODERN THEORIES ON FOREIGN
TORT LIABILITY ..................................... 574
E.3. FOREIGN TORT CLAIMS ................ 574
E.4. DISTINGUISHING BETWEEN TORTS
AND CRIMES.......................................... 574
E.5. LEX LOCI DELICTI ........................... 574
OF F. CHOICE OF LAW AFFECTING
CORPORATIONS AND OTHER JURIDICAL
ENTITIES ...................................................... 575
F.1. CORPORATIONS ............................. 575
F.2. PARTNERSHIPS ............................. 576
V. FOREIGN JUDGMENTS ........................ 577
A. RECOGNITION AND ENFORCEMENT OF
FOREIGN JUDGMENTS ................................ 577
A.1. DISTINCTION BETWEEN
RECOGNITION AND ENFORCEMENT ... 577
A.2. BASES OF RECOGNITION AND
ENFORCEMENT OF FOREIGN
JUDGMENTS ........................................... 577
A.3. POLICIES UNDERLYING
RECOGNITION AND ENFORCEMENT ... 577
A.4. REQUISITES FOR RECOGNITION OR
ENFORCEMENT ...................................... 577
A.5. PROCEDURE FOR ENFORCEMENT
................................................................ 578
xxi
UP LAW BOC PERSONS CIVIL LAW

CIVIL LAW
PERSONS & FAMILY
RELATIONS

1
UP LAW BOC PERSONS
I. Effect and Application
of Laws
A. WHEN LAWS TAKE EFFECT
Art. 2. Laws shall take effect after fifteen days
following the completion of their publication
either in the Official Gazette, or in a newspaper
of general circulation in the Philippines, unless
it is otherwise provided. (As amended by E.O.
200)
General Rules:
The clause "unless it is otherwise provided"
refers to the date of effectivity and not to the
requirement of publication itself, which cannot
in any event be omitted. [Tanada vs Tuvera
(1986)]
Publication is indispensable in every case, but
the legislature may in its discretion provide
that the usual fifteen-day period shall be
shortened or extended. [Tanada vs Tuvera
(1986)]
When, on the other hand, the administrative
rule goes beyond merely providing for the
means that can facilitate or render least
cumbersome the implementation of the law
but substantially increases the burden of those
governed, it behooves the agency to accord at
least to those directly affected a chance to be
heard, and thereafter to be duly informed,
before that new issuance is given the force and
effect of law. [Commissioner vs. Hypermix
(2012)]
Exception:
Interpretative regulations and those internal in
nature. [Tanada vs Tuvera (1986)]
B. IGNORANCE OF THE LAW
Art. 3. Ignorance of the law excuses no one
from compliance therewith. (2)
2
CIVIL LAW
Conclusive Presumption: That everyone knows
the law, even if they have no actual knowledge
of the law.
Mistake of Fact & Difficult Questions of Law:
These may excuse a party from the legal
consequences of his conduct; but not
ignorance of law:
 In specific instances provided by law,
mistake as to difficult legal questions has
been given the same effect as a mistake of
fact. (Tolentino)
 The laws referred to by this article are
those of the Philippines. There is no
conclusive presumption of knowledge of
foreign laws. (Tolentino)
C. RETROACTIVITY OF LAWS
Art. 4. Laws shall have no retroactive effect,
unless the contrary is provided. (3)
General Rule: All statutes are to be construed
as having only prospective operation.
Exceptions
(1) When the law itself expressly provides
Exceptions to Exception:
(a) Ex post facto law
(b) Impairment of contract
(2) In case of remedial statutes
(3) In case of curative statutes
(4) In case of laws interpreting others
(5) In case of laws creating new rights [Bona v.
Briones (1918)]
(6) Penal Laws favorable to the accused
D. MANDATORY OR PROHIBITORY
LAWS
Art. 5. Acts executed against the provisions of
mandatory or prohibitory laws shall be void,
except when the law itself authorizes their
validity. (4a)
Art. 17, par. 3 Prohibitive laws concerning
persons, their acts or property, and those
UP LAW BOC
which have for their object public order, public
policy and good customs shall not be rendered
ineffective by laws or judgments promulgated,
or by determinations or conventions agreed
upon in a foreign country. (11a)
E. WAIVER OF RIGHTS
Art. 6. Rights may be waived, unless the waiver
is contrary to law, public order, public policy,
morals, or good customs, or prejudicial to a
third person with a right recognized by law.
(4a)
Waiver – the relinquishment of a known right
with both knowledge of its existence and an
intention to relinquish it. [Portland v. Spillman]
Exceptions:
(1) If the waiver is contrary to law, public
order, public policy, morals or good
customs
(2) If the waiver prejudices a third person
(3) If the alleged rights do not yet exist
(4) If the right is a natural right
F. REPEAL OF LAWS
Art. 7. Laws are repealed only by subsequent
ones, and their violation or non-observance
shall not be excused by disuse, or custom or
practice to the contrary.
When the courts declared a law to be
inconsistent with the Constitution, the former
shall be void and the latter shall govern.
Administrative or executive acts, orders and
regulations shall be valid only when they are
not contrary to the laws or the Constitution.
(5a)
Two Kinds of Repeal (Tolentino)
(1) Express or Declared – contained in a
special provision of a subsequent law
(2) Implied or Tacit – takes place when the
provisions of the subsequent law are
PERSONS CIVIL LAW
incompatible or inconsistent with those of
an earlier law.
The fundament is that the legislature should
be presumed to have known the existing laws
on the subject and not have enacted conflicting
statutes. Hence, all doubts must be resolved
against any implied repeal, and all efforts
should be exerted in order to harmonize and
give effect to all laws on the subject. [Republic
vs. Marcopper Mining (2000)]
G. JUDICIAL DECISIONS
Art. 8. Judicial decisions applying or
interpreting the laws or the Constitution shall
form a part of the legal system of the
Philippines. (n)
Jurisprudence cannot be considered as an
independent source of law; it cannot create
law. (1 Camus 38 as cited in Tolentino)
The interpretation or construction placed by
the courts establishes the contemporaneous
legislative intent of the law. The latter as so
interpreted and construed would thus
constitute a part of that law as of the date the
statute is enacted. It is only when a prior ruling
of this Court finds itself later overruled, and a
different view is adopted, that the new doctrine
may have to be applied prospectively in favor
of parties who have relied on the old doctrine
and have acted in good faith in accordance
therewith. [Pesca v Pesca (2001)]
H. DUTY TO RENDER JUDGMENT
Art. 9. No judge or court shall decline to render
judgment by reason of the silence, obscurity or
insufficiency of the laws. (6)
Exception:
This article does not apply to criminal
prosecutions because where there is no law
punishing an act, the case must be dismissed.
(Tolentino)
3
UP LAW BOC
I. PRESUMPTION AND
APPLICABILITY OF CUSTOM
Art. 10. In case of doubt in the interpretation or
application of laws, it is presumed that the
lawmaking body intended right and justice to
prevail. (n)
Art. 11. Customs which are contrary to law,
public order or public policy shall not be
countenanced. (n)
Art. 12. A custom must be proved as a fact,
according to the rules of evidence. (n)
J. LEGAL PERIODS
Art. 13. When the laws speak of years, months,
days or nights, it shall be understood that
years are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four
hours; and nights from sunset to sunrise.
If months are designated by their name, they
shall be computed by the number of days
which they respectively have.
In computing a period, the first day shall be
excluded, and the last day included. (7a)
Revised Administrative Code Section 31. Legal
Periods. - "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 sunset to sunrise.
Policy on Last Day being a Legal
Holiday/Sunday
 If the period arises by statute or orders
by the government, the last day will
However, intestate and testamentary
successions, both with respect to the order of
succession and to the amount of successional
PERSONS CIVIL LAW
automatically be considered the next
working day
 If the period arises from a contractual
relationship, the act will still be due on
that Legal Holiday/Sunday
There obviously exists a manifest
incompatibility in the manner of computing
legal periods between the Civil Code and the
Revised Administrative Code of 1987. Since the
Administrative Code is the more recent law, it
governs the computation of legal period [CIR
vs Primetown (2007)]
K. APPLICABILITY OF PENAL LAWS
Art. 14. Penal laws and those of public security
and safety shall be obligatory upon all who live
or sojourn in the Philippine territory, subject to
the principles of public international law and to
treaty stipulations. (8a)
Exemptions under International Law (Theory of
Extraterritoriality):
(1) When the offense is committed by a foreign
sovereign while in Philippine territory
(2) When the offense is committed by
diplomatic representatives
(3) When the offense is committed in a public
or armed vessel of a foreign country.
L. BINDING EFFECT
Art. 15. Laws relating to family rights and
duties, or to the status, condition and legal
capacity of persons are binding upon citizens
of the Philippines, even though living abroad.
(9a)
Art. 16. Real property as well as personal
property is subject to the law of the country
where it is stipulated.
rights and to the intrinsic validity of
testamentary provisions, shall be regulated by
the national law of the person whose
4
UP LAW BOC PERSONS CIVIL LAW

succession is under consideration, whatever Juridical Capacity Capacity to Act

may be the nature of the property and Fitness of man to be the Power to do acts
regardless of the country wherein said property subject of legal relations with legal effect
may be found. (10a) Passive Active
Aptitude for the Holding Aptitude for the
Art. 17. The forms and solemnities of contracts, and Enjoyment of rights Exercise of rights
wills, and other public instruments shall be Inherent in natural Must be acquired
governed by the laws of the country in which persons
they are executed.
Lost upon death Lost through death
and other causes
When the acts referred to are executed before
Can exist without Must exist with
the diplomatic or consular officials of the
capacity to act juridical capacity
Republic of the Philippines in a foreign
Cannot be limited or May be restricted
country, the solemnities established by
restricted or limited
Philippine laws shall be observed in their
execution.
B. COMMENCEMENT AND
Prohibitive laws concerning persons, their acts
or property, and those which have, for their TERMINATION OF PERSONALITY
object, public order, public policy and good Art. 40. Birth determines personality; but the
conceived child shall be considered born for all
customs shall not be rendered ineffective by
purposes favorable to it, provided that it be
laws or judgments promulgated, or by born later with the conditions specified in the
determinations or conventions agreed upon in following article.
a foreign country. (11a)
Art. 41. For civil purposes, the fetus is
considered born if it is alive at the time it is
completely delivered from the mother’s womb.
II. Persons and However, if the fetus had an intra-uterine life of
less than seven months, it is not deemed born
Personality if it dies within twenty-four hours after its
complete delivery from the maternal womb.
A. CONCEPT OF PERSON AND
Birth = complete removal of the fetus from the
PERSONALITY
mother’s womb; before birth, a fetus is merely
Art. 37. Juridical capacity, which is the fitness to
part of the mother’s internal organs.
be the subject of legal relations, is inherent in
every natural person and is lost only through
death. Capacity to act, which is the power to do
acts with legal effect, is acquired and may be
lost.

Note: Juridical capacity can exist even without

capacity to act; the existence of the latter
implies that of the former.

5
 UP LAW BOC PERSONS CIVIL LAW

Proof that the fetus was alive upon separation Criminal liability ends with death BUT civil
is Complete respiration = test/sign of liability may be charged against the estate
independent life [People v. Tirol, (1981)].
Note: Article 43 provides a statutory
Intra-Uterine Life When Considered Born presumption when there is doubt on the order
7 months or more Alive upon delivery of death between persons who are called to
Less than 7 months Alive only after succeed each other (only).
completion of 24 hours
from delivery The statutory presumption of Article 43 was
not applied due to the presence of a credible
Personality of Conceived Child eyewitness as to who died first [Joaquin v.
(1) Limited = only for purposes FAVORABLE to Navarro, (1948)].
it.
Compare Art. 43 with Rule 131, Sec. 3 (jj),
(2) Conditional = it depends upon the child
presumption of Survivorship.
being born alive later.

Art. 43 Rule 131, Sec. 3 (jj)

Period of Conception = the first 120 days of the
300 days preceding the birth of the child. Only use the presumptions when there are no
facts to get inferences from
A conceived child can acquire rights while still Only use for Cannot be used for
in the mother’s womb. It can inherit by will or succession succession purposes
by intestacy. purposes
In any circumstance Only during death in
An aborted fetus had conditional personality calamities, wreck, battle
but never acquired legal rights/civil personality or conflagration
because it was not alive at the time of delivery
from the mother’s womb. No damages can be Presumption of Survivorship in the Rules of
claimed in behalf of the unborn child. [Geluz vs Court (Rule 131, sec. 3, (jj.)
CA (1961)]
Age Presumed Survivor
Both under 15 Older
C. DEATH
Both above 60 Younger
Art. 42. Civil personality is extinguished by
One under 15, the One under 15
death. The effect of death upon the rights and
other above 60
obligations of the deceased is determined by
Both over 15 and Male
law, by contract and by will.
under 60; different
sexes
Art. 43. If there is a doubt, as between two or
more persons who are called to succeed each Both over 15 and Older
other, as to which of them died first, whoever under 60; same sex
alleges the death of one prior to the other, shall One under 15 or over One between 15 and
prove the same; in the absence of proof, it is 60, the other 60
presumed that they died at the same time and between those ages
there shall be no transmission of rights from
one to the other.

6
UP LAW BOC PERSONS
D. JURIDICAL PERSONS
Article 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities
for public interest or purpose, created by law;
their personality begins as soon as they have
been constituted according to law;
(3) Corporations, partnerships and associations
for private interest or purpose to which the law
grants a juridical personality, separate and
distinct from that of each shareholder, partner
or member. (35a)
Article 45. Juridical persons mentioned in Nos.
1 and 2 of the preceding article are governed by
the laws creating or recognizing them.
Private corporations are regulated by laws of
general application on the subject.
Partnerships and associations for private
interest or purpose are governed by the
provisions of this Code concerning
partnerships.
(36 and 37a)
Article 46. Juridical persons may acquire and
possess property of all kinds, as well as incur
obligations and bring civil or criminal actions,
in conformity with the laws and regulations of
their organization. (38a)
Article 47. Upon the dissolution of corporations,
institutions and other entities for public
interest or purpose mentioned in No. 2 of
article 44, their property and other assets shall
be disposed of in pursuance of law or the
charter creating them. If nothing has been
specified on this point, the property and other
assets shall be applied to similar purposes for
the benefit of the region, province, city or
municipality which during the existence of the
institution derived the principal benefits from
the same. (39a)
7
CIVIL LAW
E. RESTRICTIONS ON CIVIL
CAPACITY
E. 1. PRESUMPTION OF CAPACITY
Article 37. Juridical capacity, which is the fitness
to be the subject of legal relations, is inherent
in every natural person and is lost only through
death. Capacity to act, which is the power to do
acts with legal effect, is acquired and may be
lost. (n)
E. 2. RESTRICTIONS ON CAPACITY TO
ACT
Art. 38. Minority, insanity or imbecility, the state
of being a deaf-mute, prodigality and civil
interdiction are mere restrictions on capacity to
act, and do not exempt the incapacitated
person from certain obligations, as when the
latter arise from his acts or from property
relations, such as easements.
Art. 39. The following circumstances, among
others, modify or limit capacity to act: age,
insanity, imbecility, the state of being a deaf-
mute, penalty, prodigality, family relations,
alienage, absence, insolvency and trusteeship.
The consequences of these circumstances are
governed in this Code, other codes, the Rules
of Court, and in special laws.
Capacity to act is not limited on account of
religious belief or political opinion.
A married woman, twenty-one years of age or
over, is qualified for all acts of civil life, except
in cases specified by law.
General rule: Incapacitated persons are not
exempt from certain obligations arising from
his acts or property relations.
UP LAW BOC PERSONS
I. MINORITY
RA 6809 (1989): An act lowering the age of
majority from twenty-one to eighteen years.
Effects on Contracts
(1) They cannot give consent to a contract (Art.
1327 (1))
(2) A contract where one of the parties is a
minor is voidable(Art. 1390(1))
(3) A contract is unenforceable when both of
the parties are minors (incapable of giving
consent) (Art. 1403(3))
(4) Minority cannot be asserted by the other
party in an action for annulment (Art. 1397)
(5) Not obliged to make restitution
exceptinsofar as he has been benefited
(Art. 1399)
(6) Minor has no right to demand the
thing/price voluntarily returned by him
(Art. 1426)
(7) Minor has no right to recover voluntarily
paid sum or delivered thing, if consumed in
good faith (Art. 1427)
(8) Must pay reasonable amount for
necessaries delivered to him (Art. 1489)
Estoppel works against minors who
misrepresent their ages in a contract and are
compelled to comply with its terms. (active
misrepresentation done by minors). [Mercado
vs Espiritu (1918)]
When a minor made no active
misrepresentation as to his minority and such
minority is known to the other party, the
contract is voidable (Art. 1403) as to the minor.
[Bambalan vs Miranda (1928)]
Minors are obliged to make restitution insofar
as they have been benefited (Art. 1399).
[Braganza vs Villa Abrille (1959]
8
CIVIL LAW
Effects on Marriage
(1) May not yet contract marriage (Art. 5, FC).
(2) Marriages, where one of the parties is
below 18, even with the consent of
parents/guardians, are VOID (Art. 35, FC).
Effect on Crimes
(1) General rule: EXEMPTED from criminal
liability
(2) Exception: Acted with discernment, and
the minor is between 15 and 18 years of
age.
II. INSANITY
Insanity includes many forms of mental
disease, either inherited or acquired. A person
may not be insane but only mentally deficient
(idiocy, imbecility, feeble-mindedness).
Effect on Contracts
(1) Incapacity to give consent to a contract
(Art. 1327(2))
(2) Contracts entered into during lucid
intervals are valid (Art. 1328)
(3) Restitution of benefits (Art. 1399)
(4) Voidable if one of the parties is insane (Art.
1390)
(5) Unenforceable if both of the parties are
insane (Art. 1403 (3))
Effect on Crimes
General rule: EXEMPTED from criminal liability
Exception: Acted during lucid interval
Effect on Marriage
(1) May be annulled if either party was of
unsound mind unless the such party after
coming to reason, freely cohabited with the
other (Art. 45(2), FC)
(2) Action for annulment of marriage must be
filed by the sane spouse who had no
knowledge of the other’s insanity, or by any
relative/guardian of the insane before the
death of either party; or by the insane
spouse during a lucid interval or after
regaining sanity (Art. 47(2), FC)
UP LAW BOC PERSONS
In the absence of proof that the defendant had
lost his reason or became demented a few
moments prior to or during the perpetration of
the crime, it is presumed that he was in a
normal condition of mind. It is improper to
conclude that he acted unconsciously, in order
to relieve him from responsibility on the
ground of exceptional mental condition, unless
his insanity and absence of will are proven.
[USA vs Vaguilar (1914)]
Capacity to act must be supposed to attach to
a person who has not previously been declared
incapable, and such capacity is presumed to
continue so long as the contrary be not proved,
that is, that at the moment of his acting he was
incapable, crazy, insane, or out his mind
[Standard Oil vs Arenas (1911)]
As no man would know what goes on in the
mind of another, the state or condition of a
person’s mind can only be measured and
judged by his behavior. Establishing the
insanity of an accused requires opinion
testimony which may be given by a witness
who is intimately acquainted with the person
claimed to be insane, or who has rational basis
to conclude that a person was insane based on
the witness’ own perception of the person, or
who is qualified as an expert, such as a
psychiatrist. [Crewlink vs Teringtering (2012)].
III. DEAF-MUTISM
(1) Cannot give consent to a contract if he/she
also does not know how to write (Art.
1327(2), CC)
(2) Can make a valid WILL, provided: he must
personally read the will. The contents of
the same have either been read personally
by him or otherwise communicated to him
by 2 persons (Art. 807, CC)
(3) Cannot be a witness to the execution of a
will (Art. 820, CC)
(4) Voidable if one of the parties is deaf-mute
and does not know how to write
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CIVIL LAW
(5) Unenforceable if both of the parties are
deaf-mutes and does not know how to
write
IV. PRODIGALITY
INCOMPETENT INCLUDES PRODIGALS
(RULES OF COURT RULE 92, SEC 2)
Note: It is not the circumstance of prodigality,
but the fact of being under guardianship that
restricts capacity to act.
V. CIVIL INTERDICTION
(1) It is an accessory penalty imposed upon
persons who are sentenced to a principal
penalty not lower than reclusion temporal
(Art. 41, RPC).
(2) Offender is deprived of rights of parental
authority, or guardianship, of marital
authority, of the right to manage his
property and of the right to dispose of such
by any act inter vivos (Art. 34, RPC)
(3) For the validity of marriage settlements,
the participation of the guardian shall be
indispensable (Art. 123)
VI. FAMILY RELATIONS
(1) Justifying circumstance if acted in defense
of person/rights of spouse, ascendants,
descendants, brothers/sisters, and other
relatives up to the 4th civil degree (Art.
11(2), RPC)
(2) Mitigating circumstance if acted in the
immediate vindication of a grave
offense/felony committed against his
spouse, ascendants or relatives of the
same civil degree (Art. 13(5), RPC)
(3) Incestuous and void marriages:
 Between ascendants and descendants
of any degree;
 Between brothers and sisters, whether
full or half-blood. (Art. 37, FC)
(4) Donations/grants of gratuitous advantage
between spouses during the marriage shall
UP LAW BOC PERSONS
be VOID, except moderate gifts during
family occasions (Art. 87, FC)
(5) Prescription does not run between spouses,
parent and child, guardian and ward (Art.
1109)
(6) Descendants cannot be compelled to testify
in a criminal case, against his parents and
grandparents
 UNLESS: crime was against the
descendant OR by one parent
against the other (Art. 215, FC)
(7) Spouses cannot sell property to each other,
except:
 Absolute separation is agreed
upon in the marriage settlements
 Judicial separation of property (Art.
1490)
(8) A suit between family members cannot
prosper without any showing that earnest
effort towards a compromise have been
made but have failed (Art. 151, FC)
 Exceptions: questions on civil
status of persons, validity of a
marriage or a legal separation,
any ground for legal separation,
future support, jurisdiction of
courts, future legitime (Art. 2035).
VII. ALIENAGE
Dual citizenship is different from dual
allegiance. The former arises when, as a result
of the concurrent application of the different
laws of two or more states, a person is
simultaneously considered a national by the
said states. Dual allegiance, on the other
hand, refers to the situation in which a person
simultaneously owes, by some positive act,
loyalty to two or more states. While dual
citizenship is involuntary, dual allegiance is the
result of an individual’s volition. For candidates
with dual citizenship, it should suffice if, upon
the filing of their certificates of candidacy, they
elect Philippine citizenship to terminate their
status as persons with dual citizenship
considering that their condition is the
10
CIVIL LAW
unavoidable consequence of conflicting laws of
different states. [Cordora vs COMELEC (2009)]
VIII. ABSENCE
Art. 390. After an absence of seven years, it
being unknown whether or not the absentee
still lives, he shall be presumed dead for all
purposes, except for those of succession.
The absentee shall not be presumed dead for
the purpose of opening his succession till after
an absence of ten years. If he disappeared after
the age of seventy-five years, an absence of
five years shall be sufficient in order that his
succession may be opened. (n)
Art. 391. The following shall be presumed dead
for all purposes, including the division of the
estate among the heirs:
1. A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who
has not been heard of for four years since the
loss of the vessel or aeroplane;
2. A person in the armed forces who has taken
part in war, and has been missing for four
years;
3. A person who has been in danger of death
under other circumstances and his existence
has not been known for four years.
Art. 41. A marriage contracted by any person
during subsistence of a previous marriage shall
be null and void, unless before the celebration
of the subsequent marriage, the prior spouse
had been absent for four consecutive years and
the spouse present has a well-founded belief
that the absent spouse was already dead. In
case of disappearance where there is danger of
death under the circumstances set forth in the
provisions of Article 391 of the Civil Code, an
absence of only two years shall be sufficient.
For the purpose of contracting the subsequent
marriage under the preceding paragraph the
UP LAW BOC
spouse present must institute a summary
proceeding as provided in this Code for the
declaration of presumptive death of the
absentee, without prejudice to the effect of
reappearance of the absent spouse.
Art. 42. The subsequent marriage referred to in
the preceding Article shall be automatically
terminated by the recording of the affidavit of
reappearance of the absent spouse, unless
there is a judgment annulling the previous
marriage or declaring it void ab initio.
A sworn statement of the fact and
circumstances of reappearance shall be
recorded in the civil registry of the residence of
the parties to the subsequent marriage at the
instance of any interested person, with due
notice to the spouses of the subsequent
marriage and without prejudice to the fact of
reappearance being judicially determined in
case such fact is disputed.
F. DOMICILE AND RESIDENCE OF
PERSON
For Natural Persons:
The place of their habitual residence (Art. 50)
For Juridical Persons:
The place where their legal representation is
established, or where they exercise their
primary functions, unless there is a law or other
provision that fixes the domicile (Art. 51)
Domicile vs. Residence
While domicile is permanent (there is intent to
remain), residence is temporary and may be
changed anytime (there is no necessary intent
to remain).
PERSONS CIVIL LAW
Requisites of Domicile (Callejo v. Vera)
1. Physical Presence in a fixed place
2. Intent to remain permanently (animus
manendi)
Kinds of Domicile
(1) Domicile of Origin
 Domicile of parents of a person at the
time he was born.
(2) Domicile of Choice
 Domicile chosen by a person, changing
his domicile of origin.
 A 3rd requisite is necessary – intention
not to return to one’s domicile as his
permanent place.
(3) Domicile by Operation of Law (i.e., Article
69, domicile of minor)
 A married woman does not lose her
domicile to her husband. (Romualdez-
Marcos vs. Comelec (1995))
III. Family Code
A. EFFECT AND RETROACTIVITY
Art. 255. This Code shall have retroactive effect
insofar as it does not prejudice or impair vested
or acquired rights in accordance with the Civil
Code or other laws.
The Family Code took effect on August 3, 1988.
B. REPEAL AND AMENDMENT
Art. 254. If any provision of this Code is held
invalid, all the other provisions not affected
thereby shall remain valid.
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IV. Marriage And
Personal Relationship
Between Spouses
A. CONCEPT OF MARRIAGE
Art. 1, FC. Marriage is a special contract of
permanent union between a man and a
woman entered into in accordance with law for
the establishment of conjugal and family life. It
is the foundation of the family and an
inviolable social institution whose nature,
consequences, and incidents are governed by
law and not subject to stipulation, except that
marriage settlements may fix the property
relations during the marriage within the limits
provided by this Code.
1987 Constitution Article XV, Section 2.
Marriage, as an inviolable social institution, is
the foundation of the family and shall be
protected by the State.
Marriage is an institution, in the maintenance
of which in its purity the public is deeply
interested. It is a relation for life and the
parties cannot terminate it at any shorter
period by virtue of any contract they may make
.The reciprocal rights arising from this relation,
so long as it continues, are such as the law
determines from time to time, and none other.
[Goitia vs Campos Rueda (1916)]
B. AGREEMENTS PRIOR TO
MARRIAGE
Extrajudicial dissolution of the conjugal
partnership without judicial approval is void.
[Espinosa vs Omana (2011)]
Mere breach of promise to marry is not an
actionable wrong. But to formally set a
wedding and go through all the above-
described preparation and publicity, only to
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CIVIL LAW
walk out of it when the matrimony is about to
be solemnized, is quite different. This is
palpably and unjustifiably contrary to good
customs for which defendant must be held
answerable in damages in accordance with
Article 21 aforesaid. [Wassmer vs Velez (1964)]
Article 21 may be applied in a breach of
promise to marry where the woman is a victim
of moral seduction. [Baksh vs CA (1993)]
C. REQUISITES
KINDS OF REQUISITES AND EFFECTS OF
NON-COMPLIANCE
(1) Essential Requisites (Art. 2)
(a) Legal Capacity of the contracting
parties, who must be a male and a
female
(b) Consent (of the parties) freely given in
the presence of a solemnizing officer.
(2) Formal Requisites (Art. 3)
(a) Authority of solemnizing officer
(b) A valid marriage license
Except:
(1) Marriages in articulo mortis or
when one or both parties are at
the point of death,
(2) Marriage in isolated places with
no available means of
transportation,
(3) Marriage among Muslims or other
ethnic cultural communities,
(4) Marriages of those who have lived
together as husband and wife
without any legal impediment for
at least 5 years
(c) Marriage Ceremony:
 Appearance of contracting parties
in the presence of a solemnizing
officer
 Personal declaration that they take
each other as husband and wife in
the presence of not less than 2
witnesses
UP LAW BOC
EFFECT OF ABSENCE OF REQUISITES
Absence Defect or Irregularity
Effect VOID VOIDABLE
ESSENTIAL REQUISITES
1. GENDER
Note: The best source for citing the
requirement of male/female is still statutory,
as provided explicitly in the Family Code.
Silverio v. Republic, (2007): Changing of sex in
one’s birth certificate on the basis of sex
reassignment was denied; otherwise, it would
result in confusion and would allow marriage
between persons of the same sex which is in
defiance of the law, as marriage is a union
between a man and a woman.
2. AGE
Legal Capacity (Art. 5)
Male or female 18 years old and above, not
under any of the impediments mentioned in
Art. 37 (incestuous marriages) & Art. 38
(marriages against public policy), may contract
marriage.
3. CONSENT FREELY GIVEN
Consent here refers to the consent of the
contracting parties; not of the parent/guardian
in those cases where such consent is required
(when either party is between 18 to 21 years of
age).
Absence:
People v. Santiago, (1927): A marriage entered
into by a person whose real intent is to avoid
prosecution for rape is void for total lack of
consent. The accused did not intend to be
married. He merely used such marriage to
escape criminal liability.
PERSONS CIVIL LAW
Defect:
Art. 45, FC. A marriage may be annulled for
any of the following causes existing at the time
of the marriage: xxx (3) that the consent of
either party was obtained by fraud, unless such
party afterwards, with full knowledge of the
facts constituting the fraud, freely cohabited
with the other as husband and wife.
Fraud here refers to matters which relate to the
marital relation:
 Non-disclosure of previous conviction by
final judgment of a crime involving moral
turpitude;
 Concealment of pregnancy by another
man;
 Concealment of a sexually transmitted
disease;
 Concealment of drug addiction,
alcoholism, lesbianism, or homosexuality
FORMAL REQUISITES
1. CEREMONY
Marriage Ceremony
No prescribed form or religious rite for the
solemnization of marriage is required. (Art. 6)
The couple's written agreement where they
declare themselves as husband and wife,
signed by them before a judge and two
capable witnesses, even though it was
independently made by them, still counts as a
valid ceremony. (Martinez v. Tan, (1909))
Minimum requirements prescribed by law:
(1) Appearance of contracting parties
personally before the solemnizing officer
(Art. 3)
(2) Personal declaration that they take each
other as husband and wife. (Art. 3)
(3) Presence of at least two witnesses of legal
age. (Art. 3)
(4) The declaration shall be contained in the
Marriage Certificate. (Art. 6)
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UP LAW BOC PERSONS CIVIL LAW

(5) Marriage certificate shall be signed by the (2) Priest, Rabbi, Imam or Minister of any
contracting parties and their witnesses and Church or Religious Sect. Must be:
attested by the solemnizing officer. (Art. 6) (a) Duly authorized by his church or
religious sect
Note: In a marriage in articulo mortis, when (b) Registered with the civil registrar
one or both parties are unable to sign the general
marriage certificate, it shall be sufficient for (c) Acting within the limits of the written
one of the witnesses to write the name of said authority granted to him by his church
party, which shall be attested by the or religious sect.
solemnizing officer. (Art. 6, par. 2) (d) At least one of the contracting parties
belongs to the solemnizing officer’s
Places where marriage SHALL be publicly church or religious sect. (Art. 7)
solemnized: (3) Ship Captain or Airplane Chief may
(1) Chambers of the judge or in open court solemnize a marriage in articulo mortis
(2) Church, chapel, or temple between passengers or crew members (Art.
(3) Office of the consul-general, consul, or 7, 31)
vice-consul (Art. 8) (4) A Military commander of a unit may
solemnize marriages in articulo mortis
Exceptions: between persons w/in the zone of military
 Marriages performed in articulo mortis or operation. (Art. 7, 32)
in remote places. (Art. 29) (5) Consul-general, consul or vice-consul may
 Where both parties request in writing solemnize marriages between Filipino
that marriage be solemnized at a place citizens abroad. (Art. 7, 10)
designated by them. (6) Municipal and City Mayors (LGC sec. 444-
455)
Non-compliance with this requirement does
not invalidate the marriage (premise: more Exceptions – Art. 35
witnesses = more people can notify officer of (1) Marriage is void when solemnized by any
impediments to marriage). person not legally authorized to perform
marriages unless either or both parties
2. AUTHORITY OF THE SOLEMNIZING believed in good faith that the solemnizing
OFFICER officer had legal authority to do so. (Art. 35
(2))
Who may solemnize marriage: (2) Absence & Irregularity of Authority of a
(1) Incumbent member of the Judiciary within solemnizing officer
his jurisdiction. (Art. 7)
Where a judge solemnizes a marriage outside
Absence Effect his jurisdiction, there is a resultant irregularity
1. Authority by VOID in the formal requisite laid down in Article 3,
church/sect which while it may not affect the validity of the
2. Registered w/ civil VOID marriage, may subject the officiating official to
registrar administrative liability. [Navarro v. Domagtoy
3. Acting w/in written IRREGULARITY (1996); Aranes v. Occiano (2002)]
authority
4. Either party belong IRREGULARITY
to that church/sect

14
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A marriage which preceded the issuance of the
marriage license is void and the subsequent
issuance of such license cannot render valid
the marriage. Except in cases provided by law,
it is the marriage license that gives the
solemnizing officer the authority to solemnize
a marriage. [Aranes v Occiano (2002)].
3. LICENSE REQUIRED
GENERAL RULE: License required
Article 9 - Issued by local registrar of city or
municipality where either contracting party
habitually resides
Article 11 - Each contracting party should file
separately.
PD 965, Sec.3, par.2 - No marriage license
shall be issued by the Local Civil Registrar
unless the applicants present a certificate,
issued at no cost to the applicants, by an Office
of Family Planning that they had received
instructions and information on family
planning and responsible parenthood.
Where Valid: License valid in any part of the
Philippines
Period of Validity: It will be valid for 120 days
from date of issue, automatically cancelled at
the expiration of such period.
I. Special Situations
a. Anyone between 18-21 years old who has not
yet been emancipated must present the
written consent that was given by his or her
parent or guardian. (Art. 14)
b. Anyone between 21-25 must ask for advice
from his or her parents or guardians. If the
advice wasn’t obtained, the marriage license
will only be released 3 months after the
publication of the application. (Art. 15)
15
CIVIL LAW
II. Foreign National
When either or both parties are foreign
nationals: Certificate of legal capacity to
contract marriage, issued by a diplomatic or
consular official, shall be submitted before a
marriage license can be obtained (Art. 21)
Stateless persons or refugees from other
countries: affidavit stating circumstances
showing capacity to contract marriage, instead
of certificate of legal capacity (Art. 21)
III. Exceptions
(1) Marriage in articulo mortis (Art. 27)
 The marriage may be solemnized
without the necessity of a marriage
license.
 It remains valid even if ailing party
survives.
(2) Between passengers or crew members in a
ship or airplane (Art. 31)
(3) Persons within a military zone (Art. 32)
(4) Marriage in Remote and inaccessible
places (Art. 28)
(5) Marriages by Muslims and Ethnic cultural
minorities provided they are solemnized in
accordance with their customs, rites or
practices. (Art. 33)
(6) Marriage by parties who have Cohabited
for at least 5 years without any legal
impediment to marry each other. (Art. 34,
Ninal vs. Badayog (2000))
Requisites for the 5-year cohabitation to be
valid for the exemption from acquiring a
marriage license
(1) The man and woman must have been
living together as husband and wife for at
least five years before the marriage;
(2) The parties must have no legal
impediment to marry each other;
(3) The fact of absence of legal impediment
between the parties must be present at the
time of marriage;
UP LAW BOC
(4) The parties must execute an affidavit
stating that they have lived together for at
least five years [and are without legal
impediment to marry each other]; and
(5) The solemnizing officer must execute a
sworn statement that he had ascertained
the qualifications of the parties and that he
had found no legal impediment to their
marriage.
(Borja-Manzano vs. Judge Sanchez (2001))
4. MARRIAGE CERTIFICATE
Absence and irregularity of marriage license and
contract
Republic v. CA and Castro (1994): There is a
presumption of regularity of official acts, and
the issuance of the Civil Registrar of a
Certificate of Due Search and Inability to Find
the application for a marriage license
certifies its inexistence, rendering the
marriage VOID.
Moreno v. Bernabe (1995): Before a marriage
can be solemnized, a valid marriage license
must be presented first, otherwise, it is VOID.
People v. Borromeo (1984): Non-existence of
a marriage contract does not invalidate the
marriage as long as all the requisites for its
validity are properly complied with.
Marriage Certificate
Where parties declare that they take each
other as husband and wife; contains the ff:
(1) Full name, sex, age of party
(2) Citizenship, religion, habitual residence
(3) Date and precise time of celebration of
marriage
(4) That marriage license was properly issued
(except in marriages of exceptional
character)
(5) That parental consent was secured, when
required
PERSONS CIVIL LAW
(6) That requirement as to parental advice was
complied with, when required
(7) That parties have entered into marriage
settlements, if any (Art. 22)
Note: Not an essential or formal requisite
without which the marriage will be void
(Madridejo v. de Leon (1930))
Best evidence that a marriage does exist.
[Tenebro v. CA (2004)]
D. LAW GOVERNING VALIDITY OF
MARRIAGES ABROAD
General rule in contracts
As to form: Governed by the laws of the country
in which they were executed (NCC Art. 17)
As to substantive requirements: Laws relating
to family rights and duties, or to the status,
condition and legal capacity of persons,
prohibitive laws regarding the person, his or
her property, those which have for their object
public order, public policy and good customs
bind all Filipinos regardless of location. (NCC
Art. 15, 17)
Marriages Celebrated Abroad
GENERAL RULE: Marriages solemnized abroad
in accordance with the laws in force in that
country shall be valid in the Philippines. (Art
26, par.1)
EXCEPTIONS:
(1) Marriage between persons below 18 years
old (Art. 35(1))
(2) Bigamous or polygamous marriage (Art.
35(4))
(3) Mistake in identity (Art. 35 (5))
(4) Marriages void under Article 53 (Art. 35 (6))
(5) Psychological incapacity (Art. 36)
(6) Incestuous marriages (Art. 37)
(7) Marriage void for reasons of public policy
(Art. 38)
16
UP LAW BOC
Essential requisites Formal requisites
Inherent in the parties, Requirements
carried everywhere independent of the
parties
Lex Nationalii – Laws Lex loci celebrationis-
relating to family rights if valid where
and duties, or to the celebrated, then
status, condition, and valid everywhere;
legal capacity of forms of contracting
persons are binding marriage are to be
upon Phil citizens even regulated by the law
though living abroad where it is
(Art. 15) celebrated. (Art. 26)
Foreign marriages void Foreign marriages
under Phil law due to may be void under
lack of an essential Phil law due to
requisite, even if valid absence of a formal
under foreign laws, will requisite under
not be recognized. foreign laws.
Proof of Foreign Marriage in order that it may
be upheld:
(1) Provisions of the foreign law
(2) Celebration of the marriage in
accordance with said provisions
Foreign Divorces
 Those obtained by Filipino citizens are
void under Philippine law.
 If the foreign spouse obtains a valid
divorce decree abroad capacitating
him/her to remarry, the Filipino spouse
shall have capacity to remarry under
Philippine law. (Art. 26, par.2)
Van Dorn v. Romillo (1985): A divorce
obtained by the foreign spouse in
accordance with the said spouse’s national
law is recognized in the Philippines and
releases Filipino spouse from their
marriage.
Quita v. Dandan (1998): The citizenship of
the spouses at the time of the divorce
determines their capacity to obtain a valid
PERSONS CIVIL LAW
divorce.
Llorente v. CA (2000): Citizenship at the
time the divorce is obtained determines its
validity. Since H was no longer a Filipino
citizen when he divorced W, the nationality
principle did not apply to him anymore and
the divorce is valid.
Garcia v. Recio (2001): A divorce decree
obtained by the foreign spouse is
recognized under Phil law if it is executed
in accordance with the foreigner’s national
law. The party must prove divorce as a fact
and that said divorce is obtained in
conformity with the law allowing it, before
the Philippine courts can take judicial
notice.
E. COMMON-LAW MARRIAGES
Art. 147. When a man and a woman who are
capacitated to marry each other, live
exclusively with each other as husband and
wife without the benefit of marriage or under a
void marriage, their wages and salaries shall
be owned by them in equal shares and the
property acquired by both of them through
their work or industry shall be governed by the
rules on co-ownership.
In the absence of proof to the contrary,
properties acquired while they lived together
shall be presumed to have been obtained by
their joint efforts, work or industry, and shall be
owned by them in equal shares. For purposes
of this Article, a party who did not participate
in the acquisition by the other party of any
property shall be deemed to have contributed
jointly in the acquisition thereof if the former's
efforts consisted in the care and maintenance
of the family and of the household.
Neither party can encumber or dispose by acts
inter vivos of his or her share in the property
17
UP LAW BOC
acquired during cohabitation and owned in
common, without the consent of the other,
until after the termination of their
cohabitation.
When only one of the parties to a void marriage
is in good faith, the share of the party in bad
faith in the co-ownership shall be forfeited in
favor of their common children. In case of
default of or waiver by any or all of the
common children or their descendants, each
vacant share shall belong to the respective
surviving descendants. In the absence of
descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall
take place upon termination of the
cohabitation. (144a)
Art. 148. In cases of cohabitation not falling
under the preceding Article, only the properties
acquired by both of the parties through their
actual joint contribution of money, property, or
industry shall be owned by them in common in
proportion to their respective contributions. In
the absence of proof to the contrary, their
contributions and corresponding shares are
presumed to be equal. The same rule and
presumption shall apply to joint deposits of
money and evidences of credit.
If one of the parties is validly married to
another, his or her share in the co-ownership
shall accrue to the absolute community or
conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is
not validly married to another, his or her shall
be forfeited in the manner provided in the last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise
apply even if both parties are in both faith.
(144a)
Though there is no technical marital
partnership between person living maritally
PERSONS CIVIL LAW
without being lawfully married, nevertheless
there is between them an informal civil
partnership which would entitle the parties to
an equal interest in property acquired by their
joint efforts [Lesaca vs Lesca (1952)]
Such form of co-ownership requires that the
man and woman living together must not in
any way be incapacitated to contract
marriage. [Eugenio vs Velez (1990)]
The falsity of the affidavit cannot be
considered as a mere irregularity in the formal
requisites of marriage. The law dispenses with
the marriage license requirement for a man
and a woman who have lived together and
exclusively with each other as husband and
wife for a continuous and unbroken period of
at least five years before the marriage. The aim
of this provision is to avoid exposing the parties
to humiliation, shame and embarrassment
concomitant with the scandalous cohabitation
of persons outside a valid marriage due to the
publication of every applicant’s name for a
marriage license. [De Castro vs De Castro
(2008)]
F. VOID AND VOIDABLE MARRIAGES
Presumption of Marriage
(1) Presumption in favor of a valid marriage
(Art 220, CC)
(2) The presumption that a man and a woman
deporting themselves as husband and wife
have entered into a lawful contract of
marriage is satisfactory if uncontradicted.
(Sec. 3 (aa), Rule 131, ROC)
(3) In marriages of exceptional character, the
existence of the marriage is presumed,
even in the TOTAL ABSENCE of a marriage
license. (Vda. De Jacob v CA (1999))
(4) If a marriage certificate is missing, and all
means HAVE NOT YET BEEN EXHAUSTED
to find it, then the marriage is presumed to
exist (Sevilla v. Cardenas (2006))
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Absence of a marriage certificate is not proof of
absence of marriage. To prove the fact of
marriage, the following would constitute
competent evidence: (1) the testimony of
witnesses to matrimony; (2) documentary
photos or videos of the wedding; (3) the
couple’s public cohabitation; and (4) birth and
baptismal certificates of children born during
the union. (Trinidad v CA (1998))
F. 1. VOID MARRIAGES
Type of Void Marriages
(1) Absence of any formal/essential requisites
(2) Bigamous and polygamous marriages
(3) Subsequent marriage, upon reappearance
of spouse
(4) Bad faith of both spouses
(5) Psychologically Incapacitated spouse
(6) Void subsequent marriages
(7) Incestuous Marriages
(8) Non-compliance with recording
requirement after declaration of nullity
Art. 39. The action or defense for the
declaration of absolute nullity shall not
prescribe. However, in case of marriage
celebrated before the effectivity of this Code
and falling under Article 36, such action or
defense shall prescribe in ten years after this
Code shall taken effect. (As amended by
Executive Order 227) (n)
a. Absence of Requisites
Art. 4(1): The absence of any essential or
formal requisites shall render the marriage
void ab initio, except as stated in Article 35 (a).
Art. 5: Any male or female of the age of
eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38,
may contract marriage.
Void from the Beginning (Art. 35)
PERSONS CIVIL LAW
(1) Marriage where any party is below eighteen
years of age even with the consent of
parents or guardians
(2) Marriage solemnized by any person not
legally authorized to perform marriages
unless such marriages were contracted
with either or both parties believing in
good faith that the solemnizing officer had
legal authority to do so.
Note: One’s belief in good faith that the
solemnizing officer has the required
authority is a mistake of fact, and not of
law.
(3) Marriage solemnized without a valid
marriage license, except in marriages
under exceptional circumstances
(4) Bigamous or polygamous marriages not
falling under Article 41 (Art. 41: subsequent
marriage by present spouse who obtained
a declaration of presumptive death for
absent spouse prior to the subsequent
marriage)
(5) There is a mistake as to the identity of the
other contracting party
(6) Subsequent marriages that are void under
Article 53 (Non-compliance with Art. 52)
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. [Alcantara vs
Alcantara (2007)]
An action for nullity of marriage is
imprescriptible. [Republic vs Dayot (2008)]
b. Bigamous and polygamous marriages
Article 40 (No Judicial Declaration Of Nullity)
A person entered into a subsequent marriage
without first getting a judicial declaration of
nullity of the first void marriage
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Article 41 (Presumptive Death)
Failure of the spouse present to obtain a
judicial declaration of presumptive death
before entering a subsequent marriage
Article 44 (Bad Faith of both spouses)
Both spouses entering a subsequent marriage
after presumptive death, who acted in bad
faith
It is now settled that the fact that the first
marriage is void from the beginning is not a
defense in a bigamy charge. As with a
voidable marriage, there must be a judicial
declaration of the nullity of a marriage before
contracting the second marriage. [Mercado vs
Tan (2000)]
The accused may still be charged with the
crime of bigamy, even if there is a subsequent
declaration of the nullity of the second
marriage, so long as the first marriage was still
subsisting when the second marriage was
celebrated. [Capili vs People (2013)]
The mere private act of signing a marriage
contract bears no semblance to a valid
marriage and thus, needs no judicial
declaration of nullity. Such act alone, without
more, cannot be deemed to constitute an
ostensibly valid marriage for which petitioner
might be held liable for bigamy unless he first
secures a judicial declaration of nullity before
he contracts a subsequent marriage. [Morigo
vs Morigo (2004)]
c. Subsequent Marriage when one spouse is
absent
Requirements for Subsequent Marriage to be
Valid When Prior Spouse is Absent (Art. 41):
(1) Subsequent marriage due to ordinary
absence where:
(a) Absent spouse had been absent for 4
consecutive years;
PERSONS CIVIL LAW
(b) The spouse present had a well-founded
belief that absent spouse is dead; and
(c) Judicial declaration of presumptive
death was secured (no prejudice to the
effect of the reappearance of the
absent spouse).
(2) Subsequent marriage due to extraordinary
absence where:
(a) Absent spouse had been missing for 2
consecutive years;
(b) There is danger of death under the
circumstances set forth in Art. 391 CC
attendant to the disappearance;
(c) The spouse present had a well-founded
belief that the missing person is dead;
and
(d) Judicial declaration of presumptive
death was secured (no prejudice to the
effect of the reappearance of the
absent spouse).
Extraordinary circumstances (Art. 391, CC):
(a) ON BOARD VESSEL lost at sea voyage,
airplane,
(b) ARMED FORCES in war, or
(c) DANGER OF DEATH under other
circumstances, existence not known
Notes:
 Institution of a summary proceeding is
not sufficient. There must also be a
summary judgment. (Balane)
 Only the spouse present can file or
institute a summary proceeding for the
declaration of presumptive death of
the absentee. (Bienvenido case)
 While an action for declaration of
death or absence under Rule 72,
Section 1(m), expressly falls under the
category of special proceedings, a
petition for declaration of presumptive
death under Article 41 of the Family
Code is a summary proceeding, as
provided for by Article 238 of the same
Code. [Republic vs Granada (2012)]
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 The belief of the present spouse must circumstances;

be the result of proper and honest to 4 years under
goodness inquiries and efforts to 2 years under extraordinary
ascertain the whereabouts of the extraordinary circumstances
absent spouse and whether the absent circumstances
spouse is still alive or is already
dead. This is drawn from As to In order to Declaration of
circumstances before and after the remarriage remarry, presumptive
disappearance and the nature and summary death is not
extent of inquiries made. [Republic vs proceeding is necessary
Granada (2012)] necessary

As to who can Can be The spouses

Effect of Reappearance of Absent Spouse
institute the instituted by themselves
GENERAL RULE: The subsequent marriage
action the spouse
remains valid.
present, any
EXCEPTION: It is automatically terminated by
interested
the recording of the affidavit of reappearance
party, and the
of the absent spouse at the instance of any
subsequent
interested person, with due notice to the
spouse
spouses of the subsequent marriage. (Art. 42)
As to effect on Subsequent Upon
Note: It is the recording of the affidavit of subsequent marriage is reappearance,
reappearance that automatically terminates marriage automatically judicial
the subsequent marriage. Hence, if absentee terminated by proceeding is
spouse reappears without recording affidavit of the recording necessary to
reappearance, then there is no legal effect. of an affidavit declare
Meanwhile, absentee spouse cannot remarry. of marriage null
(Tolentino) reappearance and void
of the absent
EXCEPTION TO THE EXCEPTION: If there is spouse
a judgment annulling the previous
marriage or declaring it void ab initio. (Art. As to ground Well founded Generally
42) belief that the believed to be
absent spouse dead
Good Faith: PERIOD of absence for is dead
PRESUMPTIVE DEATH is MANDATORY thus
cannot be shortened by good faith and if be
done so will be VOID.
Related Provisions
Difference between Absence in the Civil Code
and Family Code
Family Code Civil Code

As to period 4 years under Absent for at

normal least 7 years;

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Art. 390, Civil Code. After an absence of 7
years, it being unknown whether or not the
absentee still lives, he shall be presumed
dead for all purposes, except for those of
succession.
The absentee shall not be presumed dead for
the purpose of opening his succession till
after an absence of 10 years. If he
disappeared after the age of 75 years, an
absence of 5 years shall be sufficient in order
that his succession may be opened.
Art. 391, Civil Code. The following shall be
presumed dead for all purposes, including
the division of the estate among the heirs:
1. A person on board a vessel lost during a
sea voyage, or an aeroplane which is
missing, who has not been heard of for
four years since the loss of the vessel or
aeroplane;
2. A person in the armed forces who has
taken part in war, and has been missing
for four years;
3. A person who has been in danger of death
under other circumstances and his
existence has not been known for four
years.
Notes:
 Although 7 years is required for the
presumption of death of an absentee in the
CC, the FC makes an exception for the
purpose of remarriage by limiting such
requirement to 4 years.
d. Bad Faith of Both Spouses
Art. 44. If both spouses of the subsequent
marriage acted in bad faith, said marriage
shall be void ab initio and all donations by
reason of marriage and testamentary
dispositions made by one in favor of the other
are revoked by operation of law. (n)
PERSONS CIVIL LAW
e. Psychological incapacity
Contracted by any party who, at the time of the
celebration, was psychologically incapacitated
to comply with the essential marital
obligations of marriage, even if such incapacity
becomes manifest only after its solemnization
(Art. 36)
Republic v. Molina, (1997):
(1) The burden of proof to show the nullity of
the marriage belongs to the plaintiff. This is
to be investigated by the OSG for collusion.
(2) The root cause of the psychological
incapacity must be: (a) medically or clinically
identified, (b) alleged in the complaint, (c)
sufficiently proven by the experts, (d) clearly
explained in the decision.
(3) The incapacity must be proven to be existing
at “the time of the celebration” of the
marriage.
(4) Such incapacity must also be shown to be
medically or clinically permanent or
incurable.
(5) Such illness must be grave enough to bring
about the disability of the party to assume
the essential obligations of marriage.
(6) The essential marital obligations must be
those embraced by Articles 68 up to 71 of
the Family Code as regards the husband
and wife as well as Articles 220, 221, and
225 of the same Code in regard to parents
and their children.
(7) Interpretations given by the National
Appellate Matrimonial Tribunal of the
Catholic Church in the Philippines, while not
controlling/decisive, should be given great
respect by our courts.
(8) The trial court must order the prosecuting
attorney or fiscal and the Solicitor General to
appear as counsel for the state. No decision
shall be handed down unless the Solicitor
General issues a certification.
Santos v. Bedia-Santos, (1995): Laid down 3
characteristics for determining psychological
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incapacity: gravity, antecedent, and incurability.
Tsoi v. CA, (1997): Refusal of husband to have
sex was interpreted as psychological incapacity.
“A man who can but won’t is psychologically
incapacitated”
Marcos v. Marcos (2000): Psychological
incapacity maybe established by the totality of
the evidence presented. Personal medical
examination could be dispensed with.
Republic v. San Jose (2007): There is no
requirement that the respondent be medically
examined first.
Antonio v. Reyes, (2006): “Pathological liar”
considered as psychological incapacity, Molina
guidelines met.
Kalaw v. Fernandez (2015): In the task of
ascertaining the presence of psychological
incapacity as a ground for the nullity of
marriage, the courts, which are concededly not
endowed with expertise in the field of
psychology, must of necessity rely on the
opinions of experts in order to inform
themselves on the matter, and thus enable
themselves to arrive at an intelligent and
judicious judgment.
f. Incestuous marriages
Article 37 (Incestuous):
(1) Between ascendants and descendants of
any degree, legitimate or illegitimate
(2) Between brothers and sisters, whether full
or half blood, legitimate or illegitimate
g. Against Public Policy
Article 38 (Against Public Policy):
23
CIVIL LAW
(1) Between collateral blood relatives,
legitimate or illegitimate, up to the fourth
civil degree.
(2) Between step-parents and step-children.
 Note: Stepbrothers and stepsisters can
marry because marriages between
them are not among those enumerated
in Article 38.
(3) Between parents-in-law and children-in-
law.
(4) Between adopting parent and adopted
child.
(5) Between the surviving spouse of the
adopting parent and the adopted child.
(6) Between the surviving spouse of the
adopted child and the adopter.
(7) Between an adopted child and a legitimate
child of the adopter.
(8) Between adopted children of the same
adopter.
(9) Between parties where one, with the
intention to marry the other, killed that
other person's spouse, or his or her own
spouse.
Relationships outside of Art. 37 and 38 which
are not impediments to marriage: brother-in-
law with sister-in-law, stepbrother with
stepsister, guardian with ward, adopted with
illegitimate child of the adopter, adopted son
of the husband with adopted daughter of the
wife, parties who have been convicted of
adultery
h. Non-compliance with recording requirement
after declaration of nullity
Article 53 (Non-Recording):
Subsequent marriage of spouses, where the
requirements of recording under Art. 52 have
not have been complied with, shall be null and
void.
Art. 52. The judgment of annulment or of
absolute nullity of the marriage, the partition
UP LAW BOC
and distribution of the properties of the
spouses and the delivery of the children's
presumptive legitimes shall be recorded in the
appropriate civil registry and registries of
property; otherwise, the same shall not affect
third persons.
Previous marriage declared void ab initio or
annulled
Under the Civil Code (superseded by the Family
Code), there was no need for a judicial
declaration of nullity of a previous marriage for
a subsequent marriage to be valid (People v.
Mendoza (1954))
Atienza v. Brillantes, (1995): Even if the
judge’s first marriage contracted in 1965 was
void for not having a marriage license, the
requirement for a judicial declaration of
nullity in Art. 40 still applies for his
subsequent marriage contracted in 1991.
Apiag v. Cantero, (1997): Where both
marriages were contracted prior to the
effectivity of the FC, the requirement of Art.
40 does not apply to the second marriage
where a right is already vested and on which
the FC cannot have retroactive effect.
Domingo v. CA, (1993): The judicial
declaration of nullity can be invoked for
purposes other than remarriage. Article 40
was interpreted as being a requirement for
purposes of remarriage but not limited for
that purpose. Separation of property is also
a valid purpose for filing for a judicial
declaration of nullity.
The word “solely” in Art. 40 referred to
validating subsequent marriages but NOT to
limiting the purposes for which a judicial
declaration of nullity can be invoked.
PERSONS CIVIL LAW
Article 43 and 44 (Effects of Termination of
Bigamous Marriage under Art. 42)
Art. 43:
(1) Children of subsequent marriage –
conceived prior to its termination
considered legitimate; custody and
support decided by court in a proper
proceeding.
(2) Property Regime – dissolved and
liquidated (party in bad faith shall forfeit
his/her share in favor of the common
children or if there are none, children of the
guilty spouse by a previous marriage, and in
case there are none, to the innocent
spouse).
(3) Donation propter nuptias – remains valid,
(but if the donee contracted marriage in
bad faith, donations are revoked by
operation of law)
(4) Insurance benefits – innocent spouse may
revoke designation of guilty party as
beneficiary, even if such designation is
stipulated as irrevocable.
(5) Succession Rights – Party in bad faith shall
be disqualified to inherit from the innocent
spouse, whether testate or intestate.
Article 44 (Donations):
If both spouses of the subsequent marriage
acted in bad faith, all donations by reason of
marriage and testamentary dispositions made
by one party in favor of the other are revoked
by operation of law.
Who may file the petition for nullity of void
marriages?
GENERAL RULE: Only the husband or wife may
file the petition. (AM No. 02-11-10 SC, Sec. 2a)
Specifically, A.M. No. 02-11-10-SC extends only
to marriages covered by the Family Code,
which took effect on August 3, 1988, but, being
a procedural rule that is prospective in
application, is confined only to proceedings
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commenced after March 15, 2003. [Ablaza vs
Republic (2010)]
EXCEPTIONS:
(1) Nullity of marriage cases commenced
before the effectivity of A.M. No. 02-11-10-SC
(2) Marriages celebrated during the effectivity
of the Civil Code. [Carlos vs Sandoval (2008)]
However, the absence of a provision in the Civil
Code cannot be construed as a license for any
person to institute a nullity of marriage
case. Such person must appear to be the party
who stands to be benefited or injured by the
judgment in the suit, or the party entitled to
the avails of the suit. [Carlos vs Sandoval
(2008)]
Procedure in attacking a void marriage
GENERAL RULE: Void Marriages may be
attacked collaterally or directly.
EXCEPTION: A person in a void marriage must
first file for a declaration of nullity in order to
subsequently marry
Requisites for valid remarriage:
Art. 52. The judgment of annulment or of
absolute nullity of the marriage the partition
and distribution of the properties of the
spouses and the delivery of the children's
presumptive legitimes shall be recorded in the
appropriate civil registry and registries of
property; otherwise the same shall not affect
third persons. (n)
(1) The previous marriage should be judicially
declared void or annulled (final judgment)
(Terre v. Terre (1992), Atienza v. Brillantes
(1995));
(2) Must comply with the requirements of Art.
52.
Safeguard against collusion and No confession
of judgment
PERSONS CIVIL LAW
Art. 48 (2): In the cases referred to in the
preceding paragraph, no judgment shall be
based upon a stipulation of facts or confession
of judgment.
Stipulation of Facts: An admission by both
parties after agreeing to the existence of any of
the grounds or facts that would constitute a
void/voidable marriage
Confession of judgment: The admission by one
party admitting his/her fault to cause the
invalidity of the marriage.
Participation of the OSG
The obvious intent of the AM 02-11-10-SC was
to require the OSG to appear as counsel for the
State in the capacity of a defensor vinculi (i.e.,
defender of the marital bond) to oppose
petitions for, and to appeal judgments in favor
of declarations of nullity of marriage under
Article 36 of the Family Code, thereby ensuring
that only the meritorious cases for the
declaration of nullity of marriages based on
psychological incapacity-those sufficiently
evidenced by gravity, incurability and juridical
antecedence-would succeed. [Mendoza vs
Republic (2012)]
No Motion to Dismiss
AM 02-11-10-SC Sec.7 prohibits the filing of a
motion to dismiss in actions for annulment of
marriage. [Aurelio vs Aurelio (2011)]
Effect of pendency of action for declaration of
nullity:
(1) The court shall provide for the support of
the spouses,
(2) The custody and support of the common
children, giving paramount consideration
to their moral and material welfare, their
choice of parent with whom they wish to
remain.
(3) The court shall also provide for visitation
rights of other parent. (Art. 49)
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Effect of res judicata
Suffice it to state that parties are bound not
only as regards every matter offered and
received to sustain or defeat their claims or
demand but as to any other admissible matter
which might have been offered for that
purpose and of all other matters that could
have been adjudged in that case. [Mallion vs
Alcantara (2006)]
Effect of final judgment declaring nullity
The effects provided for by paragraphs (2), (3),
(4) and (5) of Article 43 and by Article 44 shall
also apply in the proper cases to marriages
which are declared void ab initio or annulled by
final judgment under Articles 40 and 45 (Art.
50(1)).
Final judgment in such cases shall provide for
the:
(1) Liquidation, partition, and distribution
of the properties of the spouses
(2) Custody and support of the common
children
(3) Delivery of their presumptive legitimes
 Unless such matters had been
adjudicated in previous judicial
proceedings (Art. 50(2))
 All creditors of the spouses/property
regime shall be notified of the proceedings
for liquidation (Art. 50(2 and 3))
In the partition, the conjugal dwelling and lot
shall be adjudicated to the spouse with whom
majority of the common children remain (Art.
102 and 129) (Art. 50(4)
Presumptive legitimes, computed as of the
date of the final judgment, shall be delivered in
cash, property or sound securities:
(1) Unless the parties, by mutual agreement
judicially approved, had already provided
for such (Art. 51(1))
PERSONS CIVIL LAW
(2) The children/guardian/trustee of property
may ask for the enforcement of the
judgment (Art. 51(2))
(3) The delivery of the presumptive legitimes
shall not prejudice the ultimate
successional rights, but the value of the
properties already received shall be
considered as advances on their legitime
(Art. 51(3))
GENERALLY, children born or conceived within
void marriages are illegitimate.
EXCEPTIONS:
 Children conceived or born before the
judgment under Article 36 has become
final and executory (Art. 54)
 Children conceived or born of
subsequent marriages under Article 53
(Art. 54)
F. 2. VOIDABLE OR ANNULLABLE
MARRIAGE
Art. 14: In case either or both of the contracting
parties, not having been emancipated by a
previous marriage, are between the ages of
eighteen and twenty-one, In addition to the
requirements of the preceding articles:
 Exhibit to the local civil registrar the
consent to their marriage of their father,
mother, surviving parent or guardian, or
persons having legal charge of them, in
the order mentioned
 Manifested in writing by the interested
party, who personally appears before the
proper local civil registrar, or
 In the form of an affidavit made in the
presence of two witnesses and attested
before any official authorized by law to
administer oaths
 The personal manifestation shall be
recorded in both applications for
marriage license, and the affidavit, if one
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is executed instead, shall be attached to
said applications.
Grounds for Annulment
Article 4 states that “xxx A defect in any of the
essential requisites shall render the marriage
voidable as provided in Article 45.”
Article 45. Marriage may be annulled on the
following grounds existing at time of marriage:
(1) One of the parties is 18 or above but below
21 years old, and there is no parental
consent.
(2) Either party was of unsound mind
(insanity).
(3) The consent of either party was obtained
through fraud (different from mistake in
identity)
(4) The consent of either party was obtained
through force, intimidation, or undue
influence.
(5) Either party is physically incapable of
consummating the marriage (impotence;
this is different from sterility, which is the
inability to produce offspring).
(6) Either party has a serious and incurable
sexually-transmissible disease, even if not
concealed.*
Action to Annul: Action in rem, concerns status
of parties; res is relation between parties or
marriage tie; jurisdiction depends on
nationality or domicile not the place of
celebration.
Grounds for Annulment explained:
a. Lack of parental consent
(a) 18 ≤ x < 21 without parental consent
(b) Ratified by party 18 or above but below
21 upon free cohabitation upon
reaching 21.
(c) TOLENTINO: parents whose consents
were wanting may ratify before 21; this
right can be waived; however, the Code
PERSONS CIVIL LAW
Commission believes that no such
ratification can be made by the parent.
Moe v. Dinkins, (1981): In defending the
requirement of parental consent, the Court
held that the State has power to make
adjustments in the constitutional rights of
minors based on the following grounds: 1)
the peculiar vulnerability of children, 2) to
protect minors from immature decision
making and prevent unstable marriages, 3)
on the presumption that parents act in the
best interests of their children in child
rearing.
b. Insanity
(a) Mental incapacity or insanity is a vice
of consent; insanity (1) of varying
degrees, (2) curable being an illness,
capable of ratification or convalidation,
(3) has lucid intervals, (4) ground only
for annulment in many countries
(b) Can be ratified by cohabitation after
insanity is cured or during a lucid
interval
(c) Mere mental weakness is not a ground
for annulment, but if found grave
enough, it may amount to
psychological incapacity.
(d) Intoxication, somnambulism where
one had no mental capacity to give
consent is equivalent to insanity
(e) Must EXIST AT THE TIME of the
celebration of the marriage. Insanity
that occurs after the celebration of
marriage does not constitute a cause
for nullity (Katipunan v. Tenorio (1937))
(f) Law presumes SANITY, burden of proof
on party alleging insanity
c. Fraud
(a) Only those enumerated in Art. 46:
 Non-disclosure of previous
CONVICTION by final judgment of a
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crime involving MORAL
TURPITUDE
 Concealment by wife at the time of
marriage, that she was pregnant by
another man
 Concealment of STD regardless of
nature existing at time of marriage
 Concealment of drug addiction,
habitual alcoholism, homosexuality,
lesbianism existing at time of
marriage
(b) NO other misrepresentation or deceit
of CHARACTER, HEALTH, RANK,
FORTUNE OR CHASTITY shall
constitute FRAUD.
(c) Conviction of Crime: requisites are
 Moral turpitude
 Conviction
(d) Concealment of Pregnancy
 Fraud against very essence of
marriage; importance of procreation
of children; an assault to the
integrity of the union by introducing
ALIEN BLOOD
 If husband knew of pregnancy, the
marriage cannot be annulled on the
ground of concealment
(e) May be ratified upon free cohabitation
after knowledge of fraud.
Art. 45 STD Art. 46 STD
Ground for annulment The STD is a type of
fraud which is a
ground for annulment
Does not have to be Must be concealed
concealed
Must be serious and Need not be serious
incurable nor incurable
The STD itself is the It is the concealment
ground for annulment that gives rise to the
annulment
Effect of Cure to Fraud in Art. 46:
Recovery or rehabilitation from STD, drug
addiction, and habitual alcoholism will NOT
PERSONS CIVIL LAW
BAR ACTION for annulment; The defect is not
the disease, but the FRAUD which VITIATED
CONSENT.
Buccat v. Mangonon de Buccat, (1941): W gave
birth 3 months after marriage, H filed for
annulment: concealment of non-virginity.
Denied. Court held that it was unbelievable
that husband could not have noticed when
wife had been at least 6 months pregnant
prior to marriage.
Aquino v. Delizo, (1960): The Supreme Court
granted annulment because the wife
concealed the fact that she was 4 months
pregnant during the time of the marriage.
Since Delizo was “naturally plump,” Aquino
could hardly be expected to know, by mere
looking, whether or not she was pregnant at
the time of the marriage.
Almelor v. RTC, (2008): It is the concealment
of homosexuality, and not homosexuality per
se, that vitiates the consent of the innocent
party. Such concealment presupposes bad
faith and intent to defraud the other party in
giving consent to the marriage.
d. Force, intimidation, undue influence
(a) FORCE must be one as to prevent party
from acting as a free agent; will
destroyed by fear/compulsion
(b) INTIMIDATION must be one as to
compel the party by a reasonable/well-
grounded fear of an imminent and
grave evil upon his person/properties
(c) DEGREE OF INTIMIDATION: age, sex,
condition of person borne in mind
(d) Threat or intimidation as not to act as
FREE AGENT; i.e. threatened by armed
demonstrations (Tiongco v. Matig-a)
(e) Committee added “undue influence”,
maybe compelled to enter out of
REVERENTIAL FEAR e.g., fear of
28
UP LAW BOC PERSONS
causing distress to parents,
grandparents, etc.
(f) May be ratified upon cohabitation after
force, intimidation, or undue influence
has ceased or disappeared.
e. Impotency
(a) Must exist at time of marriage, and be
continuous and incurable. If incapacity
can be remedied or is removable by
operation, NOT ANNULLABLE (Sarao v
Guevarra(1940))
(b) Physical condition: sexual intercourse
with a person of the opposite sex is
impossible, not mere sterility
(c) Only the potent spouse can file the
action for annulment and he/she must
not have been aware of the other’s
impotency at the time of marriage
(Sempio-Diy)
 If he/she was aware, it is
implied that he/she renounced
copulation by consenting to
the marriage. (Tolentino)
(d) When both spouses are impotent,
marriage cannot be annulled because
neither spouse is aggrieved. (Sempio-
Diy)
 An impotent plaintiff could not
have expected copulation with
the other spouse. (Tolentino)
(e) POTENCY PRESUMED; party who
alleges impotency has burden of proof
(Jimenez v Canizares (1960))
(f) REFUSAL of wife to be examined
DOES NOT PRESUME impotency
because Filipino women are inherently
shy & bashful; TC must order physical
examination because w/o proof of
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CIVIL LAW
impotency, she is presumed potent; to
order her to undergo physical exam
does not infringe her right against self-
incrimination (Jimenez v Canizares)
NOTE: If she continues to refuse the
physical exam, she can be held in
contempt & ordered confined in jail
until she does so
(g) Villanueva vs. CA (2006): Absence of
cohabitation is not a ground for
annulment.
(h) RELATIVE IMPOTENCY: may now be
invoked because there are cases where
one is impotent with respect to his/her
spouse but not with other men or
women.
(i) EXAMPLE: penile erection to other
women possible; unusually large penis
cannot fit with abnormally small
vagina
f. Sexually-transmissible disease serious and
incurable
(a) Should exist at the time of the
marriage
(b) Should be found serious
(c) Should appear to be incurable
(d) Reason: danger to the health of spouse
& offspring/s
(e) Same as incurable impotency
(f) Not subject to ratification  cannot be
ratified or convalidated by
cohabitation:
 Affliction of STD is unknown to
the other spouse (Balane)
 The other spouse must also be
free from a similar STD. (Balane)
UP LAW BOC PERSONS CIVIL LAW

Who may file, Prescription, Ratification

Ground Who can file Prescription Ratification

(Art. 45) (Art. 47) (Art. 47) (Art. 45)
Lack of Party 18 or above but Within 5 years after Free cohabitation after
parental below 21 attaining 21. attaining age of 21.
consent Parent or guardian who Before party below 21
did not give consent reaches 21.
Insanity Sane spouse with no Any time before the death Free cohabitation of insane
knowledge of the other’s of either party party after insane party
insanity comes to reason

Legal guardian of insane

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

30
UP LAW BOC PERSONS AND FAMILY RELATIONS
Marriages Not Subject to Ratification/
Convalidation by cohabitation
(1) One spouse is incurably impotent (Art. 47 –
prescription: 5 years)
(2) One spouse has an incurable STD (Art. 47 –
prescription: 5 years)
Presence of Prosecutor
Art. 48: To prevent collusion between the
parties, fabrication or suppression of evidence,
the prosecuting attorney or fiscal shall appear
on behalf of the State.
Corpuz v. Ochoterena, (2004): In a legal
separation or annulment case, the prosecuting
attorney must first rule out collusion as a
condition sine qua non for further proceedings.
A certification by the prosecutor that he was
present during the hearing and even cross-
examined the plaintiff does not suffice to
comply with the mandatory requirement.
Marriages dissolved by foreign judgment
Aliens may obtain divorces abroad, which may
be recognized in the Philippines, provided they
are valid according to their national law. The
marriage tie when thus severed as to one party,
ceases to bind either. [Van Dorn vs Romillo
(1985)]
A marriage between two Filipinos cannot be
dissolved even by a divorce obtained abroad,
because of Articles 15 and 17 of the Civil Code. In
mixed marriages involving a Filipino and a
foreigner, Article 26 of the Family Code allows
the former to contract a subsequent marriage in
case the divorce is “validly obtained abroad by
the alien spouse capacitating him or her to
remarry.” A divorce obtained abroad by a
couple, who are both aliens, may be recognized
in the Philippines, provided it is consistent with
their respective national laws. [Garcia vs Recio
(2001)]
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CIVIL LAW
Courts will only determine (1) whether the
foreign judgment is inconsistent with an
overriding public policy in the Philippines; and
(2) whether any alleging party is able to prove
an extrinsic ground to repel the foreign
judgment, i.e. want of jurisdiction, want of
notice to the party, collusion, fraud, or clear
mistake of law or fact. If there is neither
inconsistency with public policy nor adequate
proof to repel the judgment, Philippine courts
should, by default, recognize the foreign
judgment as part of the comity of nations.
[Fujiki vs Marinay (2013)]
G. THE LAW ON SEPARATION OF THE
SPOUSES
SEPARATION IN FACT
Art. 239. When a husband and wife are
separated in fact, or one has abandoned the
other and one of them seeks judicial
authorization for a transaction where the
consent of the other spouse is required by law
but such consent is withheld or cannot be
obtained, a verified petition may be filed in
court alleging the foregoing facts.
The petition shall attach the proposed deed, if
any, embodying the transaction, and, if none,
shall describe in detail the said transaction and
state the reason why the required consent
thereto cannot be secured. In any case, the final
deed duly executed by the parties shall be
submitted to and approved by the court. (n)
AGREEMENT TO SEPARATE
A notary public should not facilitate the
disintegration of a marriage and the family by
encouraging the separation of the spouses
and extrajudicially dissolving the conjugal
partnership. [Espinosa vs Omana (2011)]
UP LAW BOC PERSONS AND FAMILY RELATIONS
ABSOLUTE DIVORCE
Article 26, par. 2 Where a marriage between a
Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly
obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under
Philippine law. (As amended by Executive Order
227)
If both parties are Muslims, there is a
presumption that the Muslim Code or Muslim
law is complied with. If together with it or in
addition to it, the marriage is likewise
solemnized in accordance with the Civil Code of
the Philippines, in a so-called combined
Muslim-Civil marriage rites whichever comes
first is the validating rite and the second rite is
merely ceremonial one. But, in this case, as long
as both parties are Muslims, this Muslim Code
will apply. [Zamoranos vs People (2011)]
One of the effects of irrevocable talaq, as well as
other kinds of divorce, refers to severance of
matrimonial bond, entitling one to remarry.
[Zamoranos vs People (2011)]
Note: The grounds for legal separation are
exclusive. (Article 55)
These must be filed within 5 years after
occurrence of cause (Article 57)
(1) Repeated physical violence or grossly
abusive conduct directed against the
petitioner, a common child, or a child of the
petitioner;
(2) Physical violence or moral Pressure to
compel the petitioner to change religious or
political affiliation;
(3) Attempt of respondent to Corrupt or induce
the petitioner, a common child, or a child of
the petitioner, to engage in prostitution, or
connivance in such corruption or
inducement;
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CIVIL LAW
(4) Final judgment sentencing the respondent
to imprisonment of more than six years,
even if pardoned;
(5) Drug addiction or habitual alcoholism of the
respondent;
(6) Lesbianism or Homosexuality of the
respondent;
(7) Contracting by the respondent of a
subsequent Bigamous marriage, whether in
the Philippines or abroad;
(8) Sexual infidelity or perversion;
(9) Attempt by the respondent Against the life
of the petitioner; or
(10) Abandonment of petitioner by respondent
without justifiable cause for more than one
year.
People v. Zapata and Bondoc (1951):
Adultery is not a continuing crime; it is
consummated at every moment of carnal
knowledge. Thus, every sexual act is a
ground for legal separation.
Gandioco v. Peñaranda (1989): For sexual
infidelity as a ground for legal separation,
there is no need for a prior conviction for
concubinage, because legal separation
only requires a preponderance of evidence,
as opposed to proof beyond reasonable
doubt.
Lapuz Sy v. Eufemio (1972): The death of
one party in a legal separation case abates
the action. This is because the death of
either spouse automatically dissolves the
marriage. An action for legal separation is
also purely personal between the spouses.
Dela Cruz. v. Dela Cruz (1968):
Abandonment is not mere physical
estrangement but also financial and moral
desertion. There must be an absolute
cessation of marital relations, duties, and
rights with the intention of perpetual
separation.
UP LAW BOC PERSONS AND FAMILY RELATIONS
Almelor vs RTC (2008): It is the
concealment of homosexuality, and not
homosexuality per se, that vitiates the
consent of the innocent party. Such
concealment presupposes bad faith and
intent to defraud the other party in giving
consent to the marriage.
Acts of Violence according to RA 9262
(1) Causing physical harm to the woman or her (6)
child;
(2) Threatening to cause the woman or her
child physical harm; (7)
(3) Attempting to cause the woman or her child
physical harm;
(4) Placing the woman or her child in fear of
imminent physical harm;
(5) Attempting to compel or compelling the
woman or her child to engage in conduct (8)
which the woman or her child has the right
to desist from or desist from conduct which
the woman or her child has the right to
engage in, or attempting to restrict or
restricting the woman's or her child's
freedom of movement or conduct by force or
threat of force, physical or other harm or
threat of physical or other harm, or
intimidation directed against the woman or
child. This shall include, but not limited to,
the following acts committed with the
purpose or effect of controlling or restricting
the woman's or her child's movement or
conduct:
(a) Threatening to deprive or actually
depriving the woman or her child of
custody to her/his family;
(b) Depriving or threatening to deprive
the woman or her children of
financial support legally due her or
her family, or deliberately providing (9)
the woman's children insufficient
financial support;
33
CIVIL LAW
(c) Depriving or threatening to deprive
the woman or her child of a legal
right;
(d) Preventing the woman in engaging
in any legitimate profession,
occupation, business or activity or
controlling the victim's own money
or properties, or solely controlling
the conjugal or common money, or
properties;
Inflicting or threatening to inflict physical
harm on oneself for the purpose of
controlling her actions or decisions;
Causing or attempting to cause the woman
or her child to engage in any sexual activity
which does not constitute rape, by force or
threat of force, physical harm, or through
intimidation directed against the woman or
her child or her/his immediate family;
Engaging in purposeful, knowing, or
reckless conduct, personally or through
another, that alarms or causes substantial
emotional or psychological distress to the
woman or her child. This shall include, but
not be limited to, the following acts:
(a) Stalking or following the woman or
her child in public or private places;
(b) Peering in the window or lingering
outside the residence of the woman
or her child;
(c) Entering or remaining in the
dwelling or on the property of the
woman or her child against her/his
will;
(d) Destroying the property and
personal belongings or inflicting
harm to animals or pets of the
woman or her child; and
(e) Engaging in any form of harassment
or violence;
Causing mental or emotional anguish,
public ridicule or humiliation to the woman
or her child, including, but not limited to,
repeated verbal and emotional abuse, and
denial of financial support or custody of
UP LAW BOC PERSONS AND FAMILY RELATIONS
minor children of access to the woman's
child/children.
DEFENSES
Grounds for denying legal separation (Article
56):
(1) Condonation by aggrieved party
(2) Consent by aggrieved party to the
commission of the offense
(3) Connivance between parties in the
commission of the offense
(4) Mutual guilt or Recrimination between
spouses in the commission of any ground
for legal separation
(5) Collusion between parties to obtain decree
of legal separation
(6) Prescription of action for legal separation
(Art. 57: 5 years from occurrence of the
cause of action)
(7) Reconciliation of parties during pendency of
action (Art. 66 par.1)
(8) Death of either party during pendency of
action (Lapuz-Sy vs. Eufemio)
WHEN TO FILE/TRY ACTIONS
An action for legal separation shall be filed
within five years from the time of the occurrence
of the cause. (Art. 57)
COOLING-OFF PERIOD AND RECONCILIATION
EFFORTS
Action cannot be tried before six months have
elapsed from the filing of the petition (Art. 58).
Actions cannot be tried unless the court has
attempted to reconcile the spouses, and
determined that despite such efforts,
reconciliation is highly improbable (Art. 59)
Note: This is without prejudice to judicial
determination of custody of children, alimony,
and support pendente lite.
34
CIVIL LAW
Araneta vs. Concepcion, (1956): Courts can
still resolve other issues, pending the waiting
period or cooling off period. In resolving
other issues, courts should try not to touch,
as much as possible, on the main issue (i.e.
adultery if that is the ground used). However,
Court must still receive evidence if just to
settle incidental issues of support and
custody.
Note: This provision of the Family Code
dictating a mandatory 6-month cooling-off
period does not apply in cases where violence,
as used in RA 9262 (Anti-Violence Against
Women and their Children), is alleged. The case
should be heard as soon as possible by the
court.
CONFESSION OF JUDGMENT
No decree of legal separation shall be based
upon a stipulation of facts or a confession of
judgment (Art. 60, par. 1. FC).
Note: Art. 60 par. 1 applies only if the judgment
was based solely on the stipulation of facts or
solely on the confession of judgment. Thus, if
other grounds were used, Art. 60 par. 1 is not
applicable. (Balane)
Ocampo v Florenciano (1960): The prohibition
on confession of judgment does not mean
that the Court will not grant petition if one
party admits to being guilty of the charges of
adultery. The point of this provision is that
the Court should still admit evidence, not
decide just based on an admission of guilt.
Because what is prohibited is handing down
a decree of legal separation based solely on
a confession of judgment.
EFFECTS OF FILING PETITION
(1) The spouses are entitled to Live separately,
but the marital bond is not severed. (Art. 61
(1))
UP LAW BOC PERSONS AND FAMILY RELATIONS
(2) Administration of Community or Conjugal
Property – If there is no written agreement
between the parties, the court shall
designate one of them or a third person to
administer the ACP or CPG. (Art. 61, par. 2)
EFFECTS OF PENDENCY
The Court shall provide for: (Art. 62, cf. Art. 49.
FC)
 Support of spouses
Custody of children
The court shall give custody of children to
one of them, if there is no written
agreement between the spouses.
 Visitation rights of the other spouse
EFFECTS OF LEGAL SEPARATION
(1) The spouses can live separately (Art. 63) but
the marriage bonds are not severed.
(2) The ACP or CPG shall be dissolved and
liquidated, and the share of the guilty
spouse shall be forfeited in favor the
common children, previous children, or
innocent spouse, in that order (Art. 63. cf.
Art. 43, par. 2).
(3) Custody of the minor children shall be
awarded to the innocent spouse (Art. 63, cf.
Art 213)
(4) Guilty spouse shall be disqualified from
Inheriting from innocent spouse by intestate
succession. The provisions in favor of the
guilty party in the will of the innocent
spouse shall also be revoked by operation of
law. (Art. 63)
(5) Donations in favor of the guilty spouse may
be revoked (Art. 64) but this action
35
CIVIL LAW
prescribes after 5 years from the decree of
legal separation.
(6) Innocent spouse may also revoke
designation of guilty spouse as beneficiary
in an Insurance policy, even if such
stipulations are irrevocable. (Art. 64. FC, cf.
PD 612, sec. 11)
(7) Obligation for Mutual support ceases, but
the court may order the guilty spouse to
support the innocent spouse. (Art. 198)
(8) The wife shall continue to use the Surname
of the husband even after the decree for
legal separation. (Laperal v. Republic (1992))
RECONCILIATION
Should the spouses reconcile, they should file a
corresponding joint manifestation under oath of
such reconciliation, duly signed by them and
filed with the court in the same proceeding for
legal separation. (Art. 65)
Effects of Reconciliation
(1) Proceedings for legal separation shall be
terminated at whatever stage. (Art. 66)
(2) If there is a final decree of legal separation, it
shall be set aside. (Art. 66)
(3) The separation of property and forfeiture of
share of guilty spouse shall subsist, unless the
spouses agree to revive their former property
regime or to institute another property regime.
(Art. 66 cf. Art. 67)
(4) Joint custody of children is restored.
(5) The right to intestate succession by guilty
spouse from innocent spouse is restored.
(6) The right to testamentary succession depends
on the will of the innocent spouse.
UP LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Annex to Void and Voidable Marriages and Legal Separation

Grounds
Void Marriages
(1) One is a minor
(2) No authority to marry
(3) No valid marriage
license
(4) Bigamous and
polygamous
marriages
(5) Mistake of identity
(6) Void subsequent
marriage
(7) Psychological
incapacity
(8) Incestuous Marriages
(9) 9. Marriages against
public policy
Voidable Marriages Legal Separation
(10) Lack of parental (17) Repeated Physical Violence
consent (18) Pressure to compel to change
(11) Insanity religious/political affiliations
(12) Fraud (19) Corruption / Inducement to engage in
(13) Force, prostitution
Intimidation or (20) Final judgement with sentence of more
(14) Undue Influence than 6 yrs.
(15) Impotence (21) Drug Addiction / Habitual Alcoholism
(16) 6. Serious and (22) Homosexuality / Lesbianism
Incurable STD (23) Bigamous marriage
(24) Sexual Infidelity
(25) Attempts against the life of petitioner
(26) 10. Abandonment without just cause for
more than 1 year

Effects of Filing / Pending Decree

Void/Voidable Marriages Legal Separation
Support for the spouses
Custody and support for the children
Visitation rights to the other spouse

Effects of Affidavit of Reappearance, Judicial Declaration of Nullity, Annulment and Legal Separation
Void Marriages Terminated Marriage Voidable Legal Separation
(Art. 41) Marriages
Status of Marital ties
Severed Severed Severed Not Severed
Status of Marriage
Void ab initio Subsequent marriage Void Valid
is terminated (not
invalidated)
Status of Children born and conceived before termination
Illegitimate Legitimate Legitimate Legitimate
EXCEPT: Art. 36 and 35
conceived and born before
judgment (legitimate)
Custody of Children
Court Proceeding Court Proceeding Court Proceeding Innocent Spouse
Property Relations
1. Dissolution and Liquidation of properties
a. Guilty/Bad Faith spouse will forfeit his/her share from the Net Profits to the (in order):
i. Common children
ii. Children of the guilty spouse by previous marriage

36
UP LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

iii. The innocent spouse

2. Notification of creditors with the proceedings for liquidation
3. Conjugal dwelling to be adjudicated to the spouse who has custody of majority of common
children
4. Insurance policy may be revoked only by the innocent spouse (Legal Separation: Only within 5
years)
5. Spouse in bad faith/guilty shall be disqualified to inherit from innocent spouse (intestate
succession only in legal separation)
Donation Propter Nuptias
Valid, but if done contracted marriage in bad faith, revoked by operation of May be revoked
law within 5 years

37
UP LAW BOC PERSONS AND FAMILY RELATIONS
V. Rights and
Obligations Of Spouses
A. LIVE TOGETHER
GENERAL RULE: It is their obligation to do so
(cohabitation). It is also their obligation to
observe mutual love, respect and fidelity and
render mutual help and support. (Art. 68)
EXEMPTION: One spouse living abroad or
there are valid and compelling reasons
(Art. 69 (2)) – at the discretion of the
court.
EXEMPTION TO EXEMPTION:
Incompatibility with the solidarity of the
family (Art. 69 (2))
Ilusorio v. Bildner (2000): A person has a
purely personal right to consortium
(Constitutional right to liberty). Court
cannot order a man to go back to the
conjugal dwelling. (Shows that what is in
Family Code is not the former spousal unity
doctrine (Old England)).
Goitia v. Campos Rueda (1916): If the wife
abandons the family domicile (vs obligation
of cohabitation) with justifiable cause i.e.
being forced to perform lewd sexual acts,
the husband’s obligation to support her is
not terminated. The law will not permit the
husband to terminate the obligation to
support his wife by his own wrongful acts in
driving the wife to seek protection in her
parents’ home.
Arroyo v. Vasquez de Arroyo (1921): A court
cannot compel a married woman to go
back to her husband, but the court may
decree that support be terminated.
B. FAMILY DOMICILE
The husband and wife shall fix the family
domicile. (Art. 69)
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CIVIL LAW
In case of disagreement, the court shall decide.
(Art. 69 (1))
C. SUPPORT
From the conjugal property; If none, income or
the fruits of their separate properties; if none,
from their separate properties (liable in
proportion to their properties).
In the case of a separation de facto, if it is
proved that the husband and wife were still
living together at the time of his death, it would
be safe to presume that she was dependent on
the husband for support, unless it is shown that
she is capable of providing for herself. [SSS v.
Aguas (2006)]
D. MANAGEMENT OF FAMILY LIFE
This is the right and duty of both spouses.
E. EFFECT OF NEGLECT OF DUTY
In case the other spouse neglects his or her
duties or commits acts which tend to bring
danger, dishonor or injury to the family, the
aggrieved party may apply to the court for relief.
(Art. 72)
 Injury contemplated is physical, moral,
emotional or psychological, not
financial.
F. EXERCISE OF PROFESSION
Either spouse may exercise any legitimate
profession, without need for consent of the
other.
o The other spouse may only object on
valid, serious, and moral grounds.
o In case of disagreement, the Court shall
decide whether:
 The objection is proper, and
 Benefit has accrued to the family
before OR after the objection.
UP LAW BOC PERSONS AND FAMILY RELATIONS
If BEFORE the objection, enforce resulting
obligation against the separate property of the
spouse who has not obtained consent. (Art. 73)
VI. Property Relations of
Spouses
A. MARRIAGE SETTLEMENTS
Requisites for Validity
Art. 75. Future spouses may agree upon, in the
marriage settlement, which property regime
will govern their marriage (ACP, CPG,
complete separation of property, other
regimes). However, in the absence of a
marriage settlement, or when the regime
agreed upon is void, the system of absolute
community of property as established by this
Code shall govern.
Marriage settlements are considered accessory
to the marriage, therefore as per Art. 81,
stipulations in consideration of future marriage
and donations will be void if the marriage does
not take place.
Art. 103(3) & 130(3). Should the surviving spouse
contract a subsequent marriage without
compliance with the foregoing requirements
a mandatory regime of complete separation of
property shall govern the property relations of
the subsequent marriage.
Marriage Settlement Rules
When modifications can be made
General rule: Before marriage is celebrated [Art.
76]
Art. 63(2): Property regime is dissolved and
liquidated
Arts. 66 and 67: Reconciliation in case of legal
separation
Art. 128: When abandoned spouse petitions the
39
CIVIL LAW
court for judicial separation of property
Art. 135 : Sufficient cause for judicial separation
of property
Art. 136 : Voluntary dissolution of ACP or CPG by
the spouses
Requirements of marriage settlements and any
modification thereof [Art. 77]
Made in writing
Signed by the parties
Executed before the marriage celebration
Not to prejudice third persons unless registered
in the local civil registry where the marriage is
recorded and in registries of property
If executed by a person below 21 y.o., valid only
when persons required to give consent to the
marriage (father, mother, or guardian,
respectively) are made parties to the agreement
[Art. 78]
If executed by a person upon whom civil
interdiction has been pronounced or who is
subject to any other disability, valid only when
his guardian appointed by a competent court is
made party to the agreement [Art. 79]
B. DONATIONS BY REASON OF
MARRIAGE
Solis v. Barroso (1928): In donations propter
nuptias, the marriage is really a consideration,
but not in the sense of giving birth to the
obligation. There can be a valid donation even if
the marriage never took place, but the absence
of marriage is a ground for the revocation of the
donation.
Mateo v. Lagua (1969): Donations propter
nuptias are without onerous consideration,
marriage being merely the occasion or motive
for the donation, not its cause. Being
liberalities, they remain subject to reduction for
inofficiousness upon the donor’s death, if they
should infringe the legitime of a forced heir.
Requisites of donations propter nuptias
Made before the celebration of marriage
Made in consideration of marriage
In favor of one or both of the future spouses
UP LAW BOC PERSONS AND FAMILY RELATIONS
Donor must be one of the betrothed or any third
person
Donations excluded
Ordinary wedding gifts given after the
celebration of the marriage
Donations in favor of future spouses made
before marriage but not in consideration thereof
Donations made in favor of persons other than
the spouses even if founded on the intended
marriage
Who may donate
Spouses to each other
Parents of one or both spouses
Third persons to either or both spouses
Sources of rules governing donations propter
nuptias
Family code provisions [Arts. 82-87]
Ordinary donation provisions [Art. 83; Title III of
Book III, NCC]
Provisions on testamentary succession and the
formalities of wills for donations on future
property [Art. 84, par. 2]
Rules for donations before marriage
General rule: Future spouses who agree upon a
regime other than ACP cannot donate to each
other more than 1/5 of their present property
(excess shall be considered void). [Art. 84]
Donations of property subject to encumbrances
(1) Are considered valid.
(2) In case of foreclosure:
(a) if property value < obligation, donee
shall not be liable for the deficiency
(b) if property value > obligation, donee
shall be entitled to the excess (Art. 85)
Grounds for revocation of donation propter
nuptias [Art. 86]
1. If the marriage is not celebrated or judicially
declared void ab initio, except donations made
in marriage settlements.
2. When the marriage takes place without the
consent of the parents or guardians, as required
by law.
3. When the marriage is annulled, and the
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CIVIL LAW
donee acted in bad faith.
4. Upon legal separation, if the donee is the
guilty spouse.
5. If there is a resolutory condition, and it is not
complied with.
6. When donee has committed an act of
ingratitude: [Art. 765, CC]
a. An offense against person or property of
donor, or his wife or children under
parental authority.
b. An imputation to the donor of any
criminal offense, or any act involving
moral turpitude, even if proven, unless the
crime is committed against the donee, his
wife or children under his authority.
c. Refusing to support the donor, if he/she is
legally required to do so.
Effects of judicial declaration of nullity
Donations by reason of marriage shall remain
valid except that if the donee contracted
marriage in bad faith, such donations made to
said donee are revoked by operation of law.
[Art. 43 (3)]
Revocation by operation of law - Thus, even if
spouse in good faith condones the donee, the
donation propter nuptias is still forfeited.
Effects provided for by Art. 43(2), (3), (4), and (5)
and by Art. 44 shall also apply to marriages that
are declared void ab initio or annulled by final
judgment under Article 40 (Judicial declaration
of nullity) and 45 (Voidable marriages). [Art. 50]
Rules for donations during marriage
General rule: Spouses cannot donate to each
other, directly or indirectly; donations made by
spouses to each other during the marriage are
void. [Art. 87]
These donations refer to donations inter vivos
[Tolentino]
Exception: Moderate gifts on the occasion of
any family rejoicing.
Harding v. Commercial Union, (1918): The
prohibition on donations can only be assailed by
persons who bear such relation to the parties or
the property itself, that their rights are being
interfered with. Here, the insurance company of
the donated car cannot assail the validity of the
donation. In addition, the codal exception of
UP LAW BOC PERSONS AND FAMILY RELATIONS
“moderate gifts” depends on the income class
of the spouses and a car could be considered a
“moderate gift” that does not infringe the
prohibition of donation between spouses.
Nazareno v. Birog, (1947): A spouse cannot
donate to persons which the other spouse may
inherit from as it constitutes an indirect
donation.
Rules for donations between common-law
spouses
Matabuena v Cervantes, (1971): The donation
between common-law spouses falls within the
provision prohibiting donations between
spouses during marriage.
Sumbad v. CA, (1999): The donation made by a
man to a woman was held valid because no
proof was shown that they were still living in a
common-law relationship at the time of the
donation.
Distinguished from Ordinary Donations
Donations propter Ordinary donations
nuptias
Does not require Express acceptance
express acceptance necessary
May be made by Cannot be made by
minors (Art. 78) minors
May include future Cannot include future
property property
If present property is No limit to donation of
donated and property present property
is not absolute provided legitimes are
community, limited to not impaired
1/5 (Art. 84)
Grounds for revocation Grounds for revocation
- in Art. 86 - in donation laws
Absolute Community of Property and Conjugal
Partnership of Gains
Art. 80. In absence of a contrary stipulation in a
marriage settlement, property relations
between Filipino spouses are governed by
Philippine laws, regardless of the place of
marriage and their residence.
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CIVIL LAW
By the Nationality Rule [Art. 15], the rule that
Absolute Community Property (ACP) is the
default mode of property relations absent any
marriage settlement applies to all Filipinos,
regardless of the place of the marriage and
their residence.
Exceptions:
(1) Where both spouses are aliens
(2) As to the extrinsic validity of contracts
affecting property not situated in the
Philippines and executed in the country
where the property is located
(3) As to the extrinsic validity of contracts
entered into in the Philippines but affecting
property situated in a foreign country whose
laws require different formalities for its
extrinsic validity
Art. 81. Everything stipulated in marriage
settlements in consideration of a future
marriage are void if marriage does not take
place. However, stipulations that do not depend
upon the celebration of marriage (e.g.
recognition of paternity of illegitimate child)
remain valid.
Art. 89. Waiver of rights, interests, shares and
effects of the absolute community of property is
allowed, except in the following cases:
(1) When there is judicial separation of
property
(2) When the marriage is dissolved by
death of one of the spouses
(3) When the marriage is annulled
*The creditors of the spouse who made such
waiver may petition the court to rescind the
waiver to the extent of the amount sufficient to
cover the amount of their credits.
Art. 90. Co-ownership rules shall apply to ACP
in matters not provided by the Family Code.
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Comparison of ACP and CPG

ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY
When it At the precise moment of the Default property regime for marriages
commences celebration of the marriage [Art. 88] celebrated before the Family Code took
effect (August 3, 1988)
For marriages after the Family Code, if
agreed to by the parties through a
marriage settlement.
What it consists of All the property owned by the Proceeds, products, fruits, and income
spouses at the time of the of their separate properties
celebration of the marriage or Everything acquired by them within
acquired thereafter [Art. 91] marriage through their own efforts
Under the ACP, spouses cannot Everything acquired by them by chance
exclude specific properties from the
regime.
Winnings from gambling shall Specific properties (Art. 117)
accrue to the community property 1. Acquired by onerous title during the
[Art. 95] marriage at the expense of the common
fund;
2. Acquired through the labor, industry,
work, or profession of either or both
spouses
3. Fruits from common property and net
fruits of the exclusive property of each
spouse
4. Share of either spouse in hidden
treasure, whether as finder or owner of
property where treasure was found
5. Acquired through occupation such as
fishing or hunting
6. Livestock existing at dissolution of
partnership in excess of what is brought
by either spouse to the marriage
7. Acquired by chance, such as winnings
from gambling or betting
Moral damages arising from a contract
paid from the CPG [Zulueta v. Pan Am
(1973)]

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ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY
What it consists of Loans contracted during the marriage
are conjugal, and so is any property
acquired therefrom [Mendoza v. Reyes
(1983)]
Property purchased by installment, paid
partly with conjugal funds and partly
with exclusive funds, if full ownership
was vested during the marriage; the
CPG shall reimburse the owner-spouse
[Art. 118]
If a winning ticket is bought by conjugal
funds, the prize is conjugal (otherwise,
the prize is exclusive property of the
spouse who owns the ticket)
Improvement on exclusive property: if
original value < new value (where new
value = value of land + value of
improvements + net change in value),
then land becomes conjugal property,
subject to the reimbursement of the
value of the property of the owner-
spouse at the dissolution of the CPG
Property belonging to one spouse
converted into another kind totally
different in nature from its original form
during marriage becomes conjugal in
the absence of proof that the expenses
of the conversion were exclusively for
the account of the original owner-
spouse, subject to reimbursement of the
value of the original property from the
conjugal partnership
What remains Properties acquired before the Property brought into the marriage by
exclusive property marriage, for those with legitimate each spouse as his/her own
descendants with a former marriage
(to protect rights of children by a
former marriage)

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ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY
What remains Properties acquired during the Property acquired by either spouse
exclusive property marriage by a gratuitous title, i.e. during the marriage by gratuitous title
donation, inheritance by testate and
intestate succession, including the
fruits of such properties
Except: When expressly provided by
the donor or testator that the
property shall form part of the ACP

Properties for personal use Property acquired by right of

Except: Jewelry redemption, by barter, or by exchange
with property belonging to either
spouse
Plata v. Yatco: Plata purchased property
when she was single. When married,
she and her husband Bergosa co-
signed a mortgage on the property.
Upon foreclosure, Bergosa was sued for
illegal detainer. A writ of execution on
the property was carried out but Plata
refused to leave the premises. SC ruled
that Plata cannot be held in contempt.
Property is not conjugal. Her husband
signing as co-mortgagor does not
convert it to CPG. She could ignore
execution because the decision was for
her husband alone.
Property purchased with exclusive
money of either spouse

Property purchased by installment, paid

partly with conjugal funds and partly
with exclusive funds, if full ownership
was vested before the marriage [Art.
118]

Even if the installment is completed

after the marriage, the property is
exclusive if ownership was vested in one
spouse before the marriage [Lorenzo v.
Nicolas (1952)]

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ABSOLUTE COMMUNITY PROPERTY CONJUGAL PARTNERSHIP OF

GAINS
Presumption All properties acquired during the All property acquired during
marriage form part of the ACP, unless the marriage, whether made,
it be proven that they are excluded. contracted, or registered in the
[Art. 93] name of one spouse, are
presumed conjugal unless the
contrary is prove. [Art 116]

Charges and Arts. 94 Arts. 121-123

Obligations 1. Support of the following: 1. Support of the following:
a. Spouses; a. Spouses;
b. Common children; b. Common children;
c. Legitimate children of previous c. Legitimate children of
marriage; previous marriage;
d. Illegitimate children – follow the d. Illegitimate children – follow
provisions on Support; ACP liable in the provisions on Support;
case of absence or insufficiency of thePartnership assets liable in
exclusive property of the debtor- case responsibilities under Art.
spouse but the payment shall be 121 have been covered and
considered as advance to the share of there is absence or insufficiency
the debtor-spouse. of the exclusive property of the
debtor-spouse but the payment
2. Expenses to enable either spouse to shall be considered as advance
commence/ complete a to the share of the debtor-
professional/vocational course or spouse.
activity for self-improvement;
2. Expenses to enable either
3. Value donated or promised by both spouse to commence/complete
spouses in favor of common legitimate a professional/vocational
children for the exclusive purpose of course or activity for self-
commencing/completing a improvement;
professional/vocational course or
activity for self-improvement 3. Value donated or promised
by both spouses in favor of
common legitimate children for
the exclusive purpose of
commencing/completing a
professional/vocational course
or activity for self-improvement

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ABSOLUTE COMMUNITY PROPERTY
Charges and If community property is insufficient,
Obligations the spouses are solidarily liable for
the unpaid balance from their
separate properties except for:
1. Debts contracted by either spouse
before marriage which have not
redounded to the benefit of the
family;
2. Support of illegitimate children;
and
3. Liabilities incurred by either
spouse arising from crime or quasi-
delict.
Gambling losses of any kind (i.e.
legal or illegal) shall be borne by the
losing spouse’s separate property
[Art. 95]
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CIVIL LAW
CONJUGAL PARTNERSHIP OF GAINS
If conjugal partnership property is
insufficient, the spouses are solidarily
liable for the unpaid balance from
their separate properties except for:
1. Debts contracted by either spouse
before marriage which have not
redounded to the benefit of the
family;
2. Support of illegitimate children;
and
3. Liabilities incurred by either spouse
arising from crime or quasi-delict.
Gambling losses of any kind (i.e. legal
or illegal) shall be borne by the losing
spouse’s separate property [Art. 123]
DBP v. Adil (1988):
Loan contracts signed by both
spouses are conjugal, and they are
jointly liable for payment, even if only
one spouse signs a subsequent
promissory note.
Ayala Investment v. Ching (1998):
The Supreme Court ruled that the
indirect benefits that might accrue to
a husband in signing as a surety or
guarantee in an agreement not in
favor of the family but in favor of his
employer corporation are not benefits
that can be considered as giving a
direct advantage accruing to the
family. Hence, the creditors cannot go
against the conjugal partnership
property in satisfying the obligation
subject of the surety agreement. A
contrary view would put in peril the
conjugal partnership by allowing it to
be given gratuitously as in cases of
donation of conjugal partnership
property, which is prohibited.
UP LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY
Ownership, De Ansaldo v. Sheriff of Manila (1937):
administration, Spouses are not co-owners of CPG
enjoyment, and during the marriage and cannot
disposition alienate the supposed ½ interest of
each in the said properties. The interest
of the spouses in the CPG is only
inchoate or a mere expectancy and
does not ripen into title until it appears
after the dissolution and liquidation of
the partnership that there are net
assets.

Charges and Either spouse may, through a will, Art. 124, par. 2: Disposition or
Obligations dispose of his or her interest in the encumbrance of conjugal property
community property. [Art. 97] requires the following:
However, the will should refer only
to his or her share in the community
property.
Donation of one spouse without the Consent or approval by both spouses,
consent of the other is not allowed. or
[Art. 98]
Exceptions:
1. Moderate donations to
charity due to family
rejoicing or distress
2. Moderate gifts by each
spouse to the other due to
family rejoicing
Moderation depends on the family’s
socio-economic status.

ACP allows donations in excess of

one-fifth of present property of
future spouses because the
donation would form part of the
community property once the
marriage is celebrated. [Art. 84]
Jader-Manalo v. Camaisa (2002): Mere awareness of a transaction is NOT
consent.

ABSOLUTE COMMUNITY PROPERTY CONJUGAL PARTNERSHIP OF GAINS

47
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Charges and Homeowner’s Savings & Loan Bank v. Dallo (2005):

Obligations In the absence of (court) authority or written consent of the other spouse, any
disposition or encumbrance of the conjugal property shall be void.

Cheeseman v. IAC (1991):

If however, one of the spouses is an alien, the Filipino spouse may encumber or
dispose of the property w/o the consent of the former. The property is presumed
to be owned exclusively by the Filipino spouse.

Dissolution of Terminates upon [Art. 99]:
the regime 1. Death of either spouse – follow
rules in Art. 103
2. Legal separation – follow rules in
Arts. 63 and 64
3. Annulment or judicial declaration
of nullity – follow rules in Arts. 50
and 52
Judicial separation of property
during marriage – follow rules in
Arts. 134 to 138
Effect of de Rules on de facto separation [Art.
facto 100]
separation De facto separation does not affect
the ACP, except that:
1. Spouse who leaves the conjugal
home without just cause shall not
be entitled to support; however,
he/she is still required to support
the other spouse and the family
2. If consent is necessary for
transaction but is withheld or
otherwise unobtainable,
authorization may be obtained
from the court
3. Support for family will be taken
from the ACP
4. If ACP is insufficient, spouses
shall be solidarily liable
Terminates upon [Art. 126; cf. Art. 99]:
1. Death
2. Legal separation
3. Annulment or judicial declaration of
nullity
Judicial separation of property
Rules on de facto separation [Art. 127]
De facto separation does not affect the
CPG, except that:
1. Spouse who leaves the conjugal
home without just cause shall not be
entitled to support; however, he/she
is still required to support the other
spouse and the family
2. If consent is necessary for transaction
but is withheld or otherwise
unobtainable, authorization may be
obtained from the court
3. Support for family will be taken from
the partnership property.
4. If partnership property is insufficient,
spouses shall be solidarily liable

ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY

48
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Effect of de facto 5. If it is necessary to 5. If it is necessary to administer or

separation administer or encumber encumber separate property of
separate property of spouse spouse who left, spouse present
who left, spouse present may ask for judicial authority to do
may ask for judicial this
authority to do this 6. If partnership property is not
6. If ACP is not enough and enough and one spouse has no
one spouse has no separate separate property, spouse who has
property, spouse who has property is liable for support,
property is liable for according to provisions on support.
support, according to
provisions on support.
Charges and Abandonment [Art. 101] Abandonment [Art. 128]
Obligations Present/aggrieved spouse may Present/aggrieved spouse may petition
petition the court for: the court for:
1. Receivership 1. Receivership
2. Judicial separation of 2. Judicial separation of property
property 3. Authority to be the sole administrator
3. Authority to be the sole of the partnership property, subject
administrator of the to precautionary conditions that the
absolute community, court may impose
subject to precautionary
conditions that the court A spouse is deemed to have abandoned
may impose the other when he or she has left the
conjugal dwelling without any intention
A spouse is deemed to have of returning.
abandoned the other when he or
she has left the conjugal dwelling Spouse is prima facie considered to
without any intention of returning. have abandoned the other spouse and
the family if he or she has:
Spouse is prima facie considered to 1. Left for a period of 3 months
have abandoned the other spouse 2. Failed to inform the other spouse of
and the family if he or she has: his or her whereabouts for a period
1. Left for a period of 3 of 3 months
months
Failed to inform the other spouse of
his or her whereabouts for a period
of 3 months

ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY

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Rules on
Abandonment
Liquidation of Procedure [Art. 102]
assets and  Inventory of assets of ACP
liabilities and of spouses, with
market values
 Obligations are paid with
community property, and
separate obligations not
charged to ACP paid by
respective assets of
spouses
If obligations exceed the assets of
the ACP, nothing is divided.
Creditors can go after the separate
properties of the spouses, which are
solidarily liable for the deficiency
 Delivery of whatever
remains in their exclusive
property
 Balance, or net remainder is
divided equally between
the spouses, irrespective of
how much each brought
into the community
ABSOLUTE COMMUNITY
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CIVIL LAW
Partosa-Jo v. CA (1992):
Physical separation of the spouses,
coupled with the husband’s refusal to
give support to the wife, sufficed to
constitute abandonment as a ground
for an action for the judicial separation
of their conjugal property.
Procedure [Art. 129]
1. Prepare an inventory of all
properties
2. Amounts advanced by CPG in
payment of personal debts and
obligations shall be credited to
the CPG
3. Reimburse each spouse for the
use of his/her exclusive funds in
the acquisition of property or
for the value of his or her
exclusive property, the
ownership of which has been
vested by law in the conjugal
partnership
4. Debts and obligations of CPG
shall be paid out of the
conjugal assets, otherwise both
spouses are solidarily liable
with their exclusive property
5. Remains of the exclusive
properties shall be delivered to
respective owner-spouses
CONJUGAL PARTNERSHIP OF GAINS
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PROPERTY
Liquidation of  If personal obligations of a 6. Indemnify loss/deterioration of
assets and spouse exceed his/her movables belonging to either
liabilities separate property, creditor spouse, even due to fortuitous
can go after the share of event, used for the benefit of
the spouse on the net the family
remainder of the ACP, 7. Net remainder of CPG shall
without prejudice to the constitute the profits which
provisions of law on shall be divided equally
forfeitures and delivery of between husband and wife
presumptive legitimes except when:
 After covering all  A different proportion
community obligations and or division was agreed
obligations of spouses, upon in the marriage
balance of separate settlements
properties shall be delivered  There has been a
to respective spouses or voluntary waiver or
their heirs, and they will forfeiture of such share
also divide into two equal as provided in the FC
shares whatever is left of 8. Presumptive legitimes are
the community assets, delivered to common children
without prejudice to the 9. Conjugal dwelling goes to:
provisions of law on  Spouse with whom
forfeitures and delivery of majority of common
presumptive legitimes children choose to
remain (below 7 y.o. =
deemed to have chosen
the mother)
Whoever the court chooses in case
of lack of majority
Rules in case of termination of marriage by death of one of the spouses [Art.
104]:
(1)The community property shall be liquidated in the same proceeding for the
settlement of the estate of the deceased spouse.
(2)If no such judicial settlement proceeding is instituted, surviving spouse
shall liquidate the community property either judicially or extra-judicially
within one year from the death of the deceased spouse.
a. If no liquidation is made within the period, any disposition or
encumbrance involving community property of the terminated marriage
shall be void.

ABSOLUTE COMMUNITY CONJUGAL PARTNERSHIP OF GAINS

PROPERTY

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Liquidation of b. Non-compliance with liquidation procedures would mean that a

assets and subsequently contracted marriage will follow a regime of complete
liabilities separation of property.

Procedure for liquidation of properties of two marriages [Art. 104]:

(1) Determine the capital, fruits, and income of each community upon such
proof as may be considered according to the rules of evidence.
(2) In case of doubt as to which community the existing properties belong,
they shall be divided between two communities in proportion to the capital
and duration of each.

Separation of Property of the Spouses and Administration of Common Property by One Spouse During
the Marriage

Art. 134. In the absence of an express declaration in the marriage settlements

the separation of property between spouses during the marriage shall not take place except by
judicial order. Such judicial separation of property may either be voluntary or for sufficient
cause.

Judicial separation of property may either be (1) voluntary or (2) for sufficient cause.

(a) Sufficient Causes and Grounds for Return to Previous Regime

Sufficient Causes for Judicial Separation of Grounds for Return to Previous Regime

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Property (Art. 135) (Art. 141)

(1) Spouse of petitioner has been sentenced (1) Termination of the civil interdiction
to a penalty which carries with it the
penalty of civil interdiction
(2) Spouse of petitioner is judicially declared (2) Reappearance of absentee spouse
an absentee
(3) Loss of parental authority of the spouse of(5) Restoration of parental authority to the
petitioner has been decreed by the court spouse previously deprived of it
(4) Spouse of petitioner has abandoned the (4) When the spouse who left the conjugal
latter or failed to comply with his or her home without legal separation resumes
obligations to the family common life with the other
(5) The spouse granted the power of (3) When the court, being satisfied that the
administration in the marriage settlements spouse granted the power of administration
has abused that power in will not again abuse that power,
authorizes the resumption of said
administration
(6) At the time of the petition, the spouses (6) Reconciliation and resumption of common
have been separated in fact for at least 1 life of the spouses who had been separated
year and reconciliation is highly in fact for at least 1 year
improbable.
(7) When after voluntary dissolution of the ACP
or CPG has been judicially decreed upon the
joint petition of the spouses, they agree to
the revival of the former property regime.
No voluntary separation of property may
thereafter be granted.

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SEPARATION OF PROPERTY
Agreed upon in the marriage settlements by the spouses
Mandatory under Arts. 103 & 130 (subsequent marriages contracted by a
When it applies surviving spouse without judicial settlement of previous property regime)
Default property regime when there is reconciliation between spouses after
judicial separation of property
Present or future property or both
Each spouse’s earnings from his or her own profession, business, or industry
What it
Natural, industrial or civil fruits of spouse’s separate properties
consists of
May be total or partial
If partial, property not considered separate is presumed to pertain to the ACP
Family expenses: Both spouses are liable in proportion to their income; if
Liabilities insufficient, based on the current value of their separate properties
Creditors for family expenses: Spouses solidarily liable
Spouses may own, dispose, possess, and administer separate estates without the
consent of the other
Administration of exclusive properties may be transferred between spouses
Ownership, when:
administration, One spouse becomes the other spouse’s guardian
enjoyment, and 1. One spouse is judicially declared an absentee
disposition 2. One spouse is given the penalty of civil
interdiction
3. One spouse becomes a fugitive
Conveyance between the spouses is allowed under Art. 1490, NCC.

In Re: voluntary dissolution of CPG of Sps. Bernas (1965):

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

Maquilan v. Maquilan (2007):

A compromise agreement with judicial recognition is valid, pending petition for declaration of nullity
of marriage.

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Property Regime of Unions Without Marriage, Arts. 147-148

Art. 147 Art. 148

Man and woman living together as Man and woman living together as
husband and wife, with capacity to husband and wife, NOT capacitated
marry (Art.5, without any legal to marry
impediment) a. Under 18 years old
a. at least 18 years old b. Adulterous relationship
b. not Art. 37 (incestuous c. Bigamous/polygamous marriage
Applicability void marriage) d. Incestuous marriages under Art.
c. not Art. 38 (void 37
marriage by reason of e. Void marriages by reason of public
public policy) policy under Art. 38
d. not bigamous
Other void marriages due to absence
of formal requisite
Salaries and Owned in equal shares Separately owned by parties
wages
Properties Remains exclusive, provided there is Remains exclusive
acquired proof
through
exclusive funds
Properties Governed by rules on co-ownership Owned in common in proportion to
acquired by both respective contribution
through work
and industry
Owned in equal shares since it is
presumed to have been acquired
through joint efforts No presumption of joint acquisition.
When there is evidence of joint
Properties
acquisition but none as to the extent
acquired while If one party did not participate in
acquisition, presumed to have of actual contribution, there is a
living together
contributed through care and presumption of equal sharing.
maintenance of family and household

1. In favor of their common children If one party is validly married to

2. In case of default of or waiver by
any or all of the common children
or their descendants, each vacant
share shall belong to the respective
surviving descendants
In the absence of such descendants,
Forfeiture
such share belongs to the innocent
party
another his/her share in the co-
owned properties will accrue to the
ACP/CPG of his/her existing valid
marriage
If the party who acted in bad faith is
not validly married to another,
his/her share shall be forfeited in the
same manner as that provided in Art
147.

The same rules on forfeiture shall

apply if both parties are in bad faith.

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Yaptinchay v. Torres (1969):

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

Villanueva v. CA (2004):
Transfer of certificate and tax declarations are not sufficient proof of joint contribution.

Valdez v. QC-RTC (1996):

Marriages that have been declared void come under the rules of co-ownership under FC147/148
regardless of the reason.

56
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VII. Family Relations
THE FAMILY AS AN INSTITUTION
Art. 149. The family being the foundation of
the nation is a basic social institution which
public policy cherishes and protects.
Consequently,
family relations are governed by law and no
custom practice or agreement destructive of
the family shall be recognized or given effect.
General Rules
 The family is an institution that is
governed by law
 The internal aspect of the family is sacred
and inaccessible to law because law must
respect the freedom of action of man.
Art. 150. Family relations include those:
(1) Between husband and wife
(2) Between parents and children
(3) Among other ascendants and
descendants
(4) Among brothers and sisters, full or half
blood.
EFFECTS OF FAMILY RELATIONSHIP
ON LEGAL DISPUTES
Art. 151. No suit between members of the
same family shall prosper unless it should
appear form the verified complaint or petition
that earnest efforts toward a compromise
have been made but that the same have
failed. If it is shown that no such efforts were
in fact made
the case must be dismissed.
General Rules
 Suit between members of the same
family shall prosper only if it shall
appear in a verified complaint or
petition that:
o Earnest efforts towards a
compromise have been made;
o Such efforts have failed; and
PERSONS CIVIL LAW
o Such earnest efforts and the
fact of failure must be
alleged.
 The case will be dismissed if it is
shown that no such efforts were
made.
Exceptions
o The general rule shall not apply to
cases which may not be the subject of
compromise.
o The following cannot be subject of
compromise: (Art 2035)
(1) Civil status of persons,
(2) Validity of marriage or a legal separation,
(3) Any ground for legal separation,
(4) Future support (as it is presumed to be
needed for the survival of the one
receiving support),
(5) Jurisdiction of courts,
(6) Future legitime
THE FAMILY HOME
A. WHAT CONSTITUTES THE FAMILY
HOME?
General Rules
o The family home is the dwelling house
where family resides and the land on
which it is sustained (Art. 152)
o The family home must be part of the
properties of the absolute community
or the conjugal partnership, or of the
exclusive properties of either spouse
with the other’s consent. It may also
be constituted by an unmarried head
of a family in his or her own property.
(Art. 156)
o For the purposes of availing of the
benefits of a family home as provided
for in this Chapter, a person may
constitute, or be the beneficiary of,
only one home. (Art. 161)
57
UP LAW BOC PERSONS
B. WHO MAY CONSTITUTE THE FAMILY
HOME?
General Rules
o The family home may be constituted
jointly by the husband and wife or an
unmarried head of the family (Art.
152)
o A person may constitute and be the
beneficiary of only one family home
(Art. 161)
C. WHEN IS IT DEEMED CONSTITUTED?
General Rules
o The family home is deemed
constituted on a house and lot form
the time it is occupied as a family
residence.
o The family home is exempt from the
following from the time of its
constitution and so long as any of its
beneficiaries actually resides therein
(Art. 153):
(1) Execution
(2) Forced sale
(3) Attachment
Exceptions in the exemption of the family
home from execution (Art. 155)
(1) Nonpayment of taxes.
(2) Debts incurred prior to the constitution of
the family home.
(3) Debts secured by mortgages on the
premises before or after such constitution.
(4) Debts due to laborers, mechanics,
architects, builders, materialmen and
others who have rendered service or
furnished material for the construction of
the building.
58
CIVIL LAW
D. BENEFICIARIES
Art. 154. The beneficiaries of a family home
are:
1. The husband and wife, or an
unmarried person who is the head
of a family; and
2. Their parents, ascendants,
descendants brothers, and sisters
(legitimate/illegitimate), who are
living in the family home and who
depend on the head of the family
for support
General Rule
o Requisites to be a beneficiary:
o The relationship is within those
enumerated
o They live in the family home
o They are dependent for legal
support on the head of the family
o The law explicitly provides that
occupancy of the family home either
by the owner thereof or by “any of its
beneficiaries” must be actual. That
which is “actual” is something real, or
actually existing, as opposed to
something merely possible, or to
something which is presumptive or
constructive. Actual occupancy,
however, need not be by the owner of
the house specifically. Rather, the
property may be occupied by the
“beneficiaries” enumerated in Article
154 of the Family Code, which may
include the in-laws where the family
home is constituted jointly by the
husband and wife. But the law
definitely excludes maids and
overseers. They are not the
beneficiaries contemplated by the
Code. [Patricio vs. Dario (2006)]
o Requirements for the sale, alienation,
donation, assignment, or
encumbrance of the family home (Art.
158)
UP LAW BOC PERSONS
o The written consent of the
person constituting it,
o That of the spouse of the
person constituting it, and
o That of majority of the
beneficiaries of legal age
. the Family Code explicitly allows the
E. WHEN TERMINATED
Art. 159. The family home shall continue
despite the death of one or both of the
spouses or of the unmarried head of the
family for a period of ten years or for as long
as there is a minor beneficiary and the heirs
cannot partition the same unless the court
finds compelling reasons therefor. The rule
shall apply regardless of whoever owns the
property or constituted the family home.
General Rule
o Article 159 imposes the proscription
against the immediate partition of the
family home regardless of its
ownership. This signifies that even if
the family home has passed by
succession to the co-ownership of the
heirs, or has been willed to any one of
them, this fact alone cannot
transform the family home into an
ordinary property, much less dispel
the protection cast upon it by the law.
The rights of the individual co-owner
or owner of the family home cannot
subjugate the rights granted under
Article 159 to the beneficiaries of the
family home. [Arriola vs. Arriola
(January 28, 2008)]
F. WHEN IT MAY BE SOLD
Art. 158. The family home may be sold
alienated donated assigned or encumbered
by the owner or owners thereof with the
written consent of the person constituting the
same
the latter’s spouse and a majority of the
beneficiaries of legal age. In case of conflict
the court shall decide.
59
CIVIL LAW
General Rules
o As a rule, the family home is exempt
from execution, forced sale or
attachment. However, Article 155(3) of
forced sale of a family home “for debts
secured by mortgages on the premises
before or after such constitution.” In
this case, there is no doubt that
spouses Fortaleza voluntarily
executed on January 28, 1998 a deed
of Real Estate Mortgage over the
subject property…and assuming that
the property is exempt from forced
sale, spouses Fortaleza did not set up
and prove to the Sheriff such
exemption from forced sale before it
was sold at the public auction. The
spouses Fortaleza neither filed an
action nor made a formal offer to
redeem the subject property
accompanied by an actual and
simultaneous tender of payment. It is
also undisputed that they allowed the
one-year period to lapse from the
registration of the certificate of sale
without redeeming the mortgage. For
all intents and purposes, spouses
Fortaleza have waived or abandoned
their right of redemption. [Fortaleza
vs. Lapitan (2012)]
G. RIGHTS OF CREDITORS
Art. 157. The actual value of the family home
shall not exceed at the time of its constitution
the amount of three hundred thousand pesos
in urban areas and two hundred thousand
pesos in rural areas or such amounts as may
hereafter be fixed by law.
General Rules
o In any event, if the value of the
currency changes after the adoption
of this Code, the value most favorable
UP LAW BOC
for the constitution of a family home
shall be the basis of evaluation.
o Urban areas include chartered cities
and municipalities
o All others are deemed to be rural
areas
Procedure to avail of right under Art. 160
1. The creditor must file a motion in the
court proceeding where he obtained a
favorable decision for a writ of execution
against the family home.
2. There will be a hearing on the motion
where the creditor must prove that the
actual value of the family home exceeds
the maximum amount fixed by the FC
either at the time of its constitution or as a
result of improvements introduced
thereafter.
3. If the creditor proves that the actual value
exceeds the maximum amount the court
will order its sale in execution.
4. If the family home is sold for more than
the value allowed, the proceeds shall be
applied as follows:
a. First, the obligation enumerated in
Article 157 must be paid
b. Then the judgment in favor of the
creditor will be paid, plus all the costs
of execution
c. The excess, if any, shall be delivered
to the judgment debtor
General Rules
o The proof that the house is the family
home must be alleged against
creditors; Applied the rule in Art. 160,
FC. [Versola v. Mandolaria (2006)]
PERSONS CIVIL LAW
VIII. Paternity and
Filiation
Art. 163. The filiation of children may be by
nature or by adoption. Natural filiation may
be legitimate or illegitimate. (n)
Kinds of Filiation [Arts. 163, 164, 165]:
(1) Natural
 Legitimate
 Illegitimate
(2) Legal Fiction (Adoption)
A. LEGITIMATE CHILDREN
Art. 164. Children conceived or born during the
marriage of the parents are legitimate.
Children conceived as a result of artificial
insemination of the wife with the sperm of the
husband or that of a donor or both are
likewise legitimate children of the husband
and his wife, provided, that both of them
authorized or ratified such insemination in a
written instrument executed and signed by
them before the birth of the child. The
instrument shall be recorded in the civil
registry together with the birth certificate of
the child. (55a, 258a)
1. Natural/Biological
Liyao v. Liyao (2002): A child conceived or born
during a valid marriage is presumed to belong
to that marriage, regardless of the existence
of extramarital relationships.
2. Artificial Insemination
Requisites to be considered legitimate:
(a) Artificial insemination made on wife
(b) Sperm comes from any of the
following:
60
UP LAW BOC PERSONS CIVIL LAW

 Husband
 Third Person Donor Macadangdang v. CA (1980): Mere proximate
 Husband and third person separation between the spouses is not
donor sufficient physical separation to constitute as
(c) In case of donor sperm, husband and ground for impugning legitimacy.
wife must authorize/ratify
insemination in a written instrument Andal v. Macaraig (1951): Serious illness of the
 Executed & signed by husband which absolutely prevented him
husband and wife before the from having sexual intercourse with his wife,
birth of the child. like if the husband was already in comatose or
in a vegetative state, or sick with syphilis in
 Recorded in the civil registry
the tertiary stage so that copulation was not
together with the birth
possible. But tuberculosis, even in its most
certificate of the child.
crucial stage, does not preclude copulation
between the sick husband and his wife.
Dual consent is required whether the semen
used comes from the husband or a third
Jao v. CA (1987): Blood-type matching is an
person donor [Tolentino]
acceptable means of impugning legitimacy,
covered by Art. 166(2), under "biological or
De Castro v. Assidao-De Castro, (2008):
other scientific reasons." But this is only
Common children born before the annulment
conclusive of the fact of non-paternity.
are legitimate, and therefore entitled to
support from each of the spouses.
Benitez-Badua v. CA (1994): Only the man (and
his heirs in certain situations) can impugn the
Impugning Legitimacy
legitimacy of the child
Grounds for impugning legitimacy of a child
are [Art. 166]:
Legitimacy with regard to the mother:
(1) Physical impossibility for the husband to
(1) Child considered legitimate although [Art.
have sexual intercourse with his wife
167]:
within the first 120 days of the 300 days
(a) Mother may have declared against its
which immediately preceded the child's
legitimacy
birth due to:
(b) Mother may have been sentenced as
a. Physical incapacity of the husband to
an adulteress (also applies to wife
have sexual intercourse with his wife
who was raped)
b. Husband and wife were living
(2) If the marriage is terminated and the
separately as to make sexual
mother contracted another marriage
intercourse impossible
within 300 days after the termination of
c. Serious illness of the husband
the former marriage, the following rules
absolutely preventing sexual
shall govern in the absence of proof to the
intercourse
contrary [Art 168]:
(2) Other biological or scientific reasons,
(a) If born before 180 days after the
except Artificial Insemination
solemnization of the subsequent
(3) And in case of Artificial Insemination, the
marriage – child is considered
written consent of either parent was
conceived during the former marriage,
vitiated through fraud, violence, mistake,
provided it be born within 300 days
intimidation, or undue influence

61
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after termination of the former
marriage
(b) If born after 180 days following the
celebration of the subsequent
marriage – child is considered
conceived during such marriage, even
if it be born within 300 days after the
termination of the former marriage
Note: The legitimacy or illegitimacy of a child
born after 300 days following the termination
of the marriage – burden of proof upon
whoever alleges the status. [Art. 169]
If nobody asserts the legitimacy or
illegitimacy of the child described in Art. 169,
the child should be considered illegitimate
unless legitimacy is proved. Legitimacy
cannot be presumed here since the birth was
beyond the 300-day period of gestation.
While it goes against the policy of law to lean
in favor of legitimacy, this interpretation is
better than the anomalous situation created
by Art. 169, which is a child without a status.
[Tolentino]
Action for Impugning Legitimacy [Arts. 170
and 171]
May be brought within 1, 2, or 3 years from the
knowledge of the birth, or the knowledge of
registration of birth.
(1) Within 1 year  if husband or any heirs
reside in the same city or municipality
where the child was born or his birth was
recorded.
(2) Within 2 years  if the husband or all
heirs live in the Philippines but do not
reside in the same city or municipality
where the child's birth took place or was
recorded
(3) Within 3 years  if the husband or all
heirs live outside the Philippines when the
child's birth took place or was recorded in
the Philippines
PERSONS CIVIL LAW
If the birth of the child has been concealed or
was unknown to the husband, the above
periods shall be counted:
(1) From the discovery or knowledge of the
birth of the child, or
(2) From the discovery or knowledge of its
registration, whichever is earlier.
GENERAL RULE: Only the husband can
impugn the legitimacy of a child. If he does
not bring an action within the prescribed
periods, he cannot file such action anymore
thereafter, and this is also true with his heirs.
EXCEPTION: That the heirs of the husband
may file the action or continue the same
within the periods prescribed in Art. 170 [Art.
171]:
(a) If the husband died before the expiration
of the period fixed for bringing his action
(b) If he should die after the filing of the
complaint without having desisted
therefrom
(c) If the child was born after the death of the
husband.
Sayson v. CA (1992): Legitimacy can only be
attacked directly.
B. PROOF OF FILIATION
Art. 172. The filiation of legitimate children is
established by any of the following:
(1) The record of birth appearing in the civil
register or a final judgment; or
(2) An admission of legitimate filiation in a
public document or a private handwritten
instrument and signed by the parent
concerned.
In the absence of the foregoing evidence, the
legitimate filiation shall be proved by:
(1) The open and continuous possession of the
status of a legitimate child; or
62
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(2) Any other means allowed by the Rules of
Court and special laws. (265a, 266a, 267a)
Legitimate children may establish their
filiation by any of the following [Art. 172]:
(1) Primary Evidence
 Their record of birth appearing in the
civil registry.
 An admission of his filiation by his
parent in a public document or a
private handwritten instrument and
signed by said parent
(2) Secondary Evidence
 Proof of open and continuous
possession of status as legitimate
child
 Any other means stated by the rules
of court or special laws
Note: Only in the absence of primary evidence
can secondary evidence be admitted
Action for Claiming Filiation (Legitimate
Children) [Art. 173]:
(a) The child can bring the action during his
or her lifetime
(b) If the child dies during minority or in a
state of insanity, such action shall be
transmitted to his heirs, who shall have a
period of five years within which to
institute the action.
(c) The action commenced by the child shall
survive notwithstanding the death of
either or both of the parties
Rights of Legitimate Children [Art. 174]:
(a) To bear the Surnames of the father and
the mother, in conformity with the
provisions of the Civil Code on surnames
(b) To receive support from their parents,
their ascendants, and in proper cases,
their brothers and sisters, in conformity
with the provisions of the Code on
Support
PERSONS CIVIL LAW
(c) To be entitled to the legitimate and other
Successional rights granted to them by
the Civil Code
C. ILLEGITIMATE CHILDREN
Art. 165. Children conceived and born outside
a valid marriage are illegitimate, unless
otherwise provided in this Code. (n)
Who are illegitimate children
GENERAL RULE: Those conceived and born
outside of a valid marriage. [Art. 165]
EXCEPTIONS:
(1) Children of marriages void under Art. 36
(psychological incapacity); and
(2) Under Art. 53 (subsequent marriages
which did not comply with Art. 52).
(Sempio-Dy)
Art. 175. Illegitimate children may establish
their illegitimate filiation in the same way and
on the same evidence as legitimate children.
The action must be brought within the same
period specified in Article 173, except when
the action is based on the second paragraph
of Article 172, in which case the action may be
brought during the lifetime of the alleged
parent. (289a)
GENERAL RULE: Illegitimate children may
establish their illegitimate filiation in the
same way and on the same evidence (primary
or secondary) as legitimate children.
Action for Claiming Filiation [Art. 175]:
(a) For actions based on primary evidence,
the same periods stated in Art. 173 apply.
(b) For actions based on secondary evidence,
the action may only be brought during the
lifetime of the alleged parent.
63
UP LAW BOC PERSONS
Mendoza v. Melia (1966): Baptismal certificates
are given probative value only for births
before 1930. Birth certificates must be signed
by the parents and sworn for it to be admitted
as evidence.
Baluyut v. Baluyut (1990): Unsigned birth
certificates are not evidence of recognized
filiation.
Acebedo v. Arquero (2003): Baptismal
certificates are only conclusive of the
sacrament administered, and cannot be used
as proof of filiation.
Lim v. CA (1975): Marriage certificates cannot
be used as proof of filiation.
Jison v. CA (1998): Rule 130, Sec. 40 is limited
to objects commonly known as family
possessions reflective of a family's reputation
or tradition regarding pedigree like
inscriptions on tombstones, monuments, or
coffin plates.
Eceta v. Eceta (2004): Signature of the father
on the birth certificate is considered as an
acknowledgement of paternity and mere
presentation of a duly authenticated copy of
such certificate will successfully establish
filiation.
Heirs of Rodolfo Bañas v. Heirs of Bibiano Bañas
(1985): "Su padre [Your father]" ending in a
letter is only proof of paternal solicitude and
not of actual paternity. Signature on a report
card under the entry of "Parent/Guardian" is
likewise inconclusive of open admission.
De Jesus v. Syquia (1933): By "open and
continuous possession of the status of a
legitimate child" is meant the enjoyment by
the child of the position and privileges usually
attached to the status of a legitimate child,
like bearing the paternal surname, treatment
64
CIVIL LAW
by the parents and family of the child as
legitimate, constant attendance to the child's
support and education, and giving the child
the reputation of being a child of his parents.
Agustin v. CA (2005): DNA evidence can be
used as proof of paternity.
De Jesus v. Estate of Decedent Juan Gamboa
Dizon (2001): The due recognition of an
illegitimate child in a record of birth, a will, a
statement before a court of record, or in any
authentic writing, is in itself a consummated
act of acknowledgement of the child, and no
further court action is required.
Gono-Javier vs. Court of Appeals (1994): Mere
possession of status as an illegitimate child
does not make a recognized illegitimate child
but is only a ground for bringing an action to
compel judicial recognition by the assumed
parent.
Estate of Rogelio Ong v. Diaz (2007): DNA
evidence can still be used even after the death
of the parent.
Gotardo v. Buling (2012): There are four
significant procedural aspects of a traditional
paternity action that parties have to face:
a prima facie case, affirmative defenses,
presumption of legitimacy, and physical
resemblance between the putative father and
the child. A prima facie case exists if a woman
declares — supported by corroborative proof
— that she had sexual relations with the
putative father; at this point, the burden of
evidence shifts to the putative father. Further,
the two affirmative defenses available to the
putative father are: (1) incapability of sexual
relations with the mother due to either
physical absence or impotency, or (2) that the
mother had sexual relations with other men at
the time of conception.
UP LAW BOC PERSONS
Perla v. Baring and Perla (2012): To prove open
and continuous possession of the status of an
illegitimate child, there must be evidence of
the manifestation of the permanent intention
of the supposed father to consider the child as
his, by continuous and clear manifestations of
parental affection and care, which cannot be
attributed to pure charity.
Meanwhile, the lack of participation of the
supposed father in the preparation of a
baptismal certificate renders this document
incompetent to prove paternity. Baptismal
certificates are per se inadmissible in evidence
as proof of filiation and they cannot be
admitted indirectly as circumstantial evidence
to prove the same
Art. 176. Illegitimate children shall use the
surname and shall be under the parental
authority of their mother, and shall be entitled
to support in conformity with this Code. The
legitime of each illegitimate child shall
consist of one-half of the legitime of a
legitimate child. Except for this modification,
all other provisions in the Civil
Code governing successional rights shall
remain in force.(287a)
Rights of Illegitimate Children:
(a) Use the Surname and be under the
parental authority of the mother
(b) However, may use the surname of their
father if
 Their filiation has been expressly
recognized by the father through the
record of birth appearing in the civil
register; or
 There is an admission in a public
document or private handwritten
instrument made by the father.
 Provided, the father has the right to
institute an action before the regular
courts to prove non-filiation during his
lifetime [RA 9255]
65
CIVIL LAW
Grande v. Antonio (2014): The use of the word
“may” in Art. 176 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.
(c) Shall be entitled to Support in conformity
with the Family Code
(d) Legitime shall consist of one-half of the
legitime of a legitimate child.
D. LEGITIMATED CHILDREN
Art. 177. Only children conceived and born
outside of wedlock of parents who, at the time
of the conception of the former, were not
disqualified by any impediment to marry each
other may be legitimated. (269a)
GENERAL RULE: "Legitimated" children are
illegitimate children who because of the
subsequent marriage of their parents are, by
legal fiction, considered legitimate.
To be capable of legitimation:
(1) The child must have been conceived and
born outside of wedlock; and
(2) The parents, at the time of the child's
conception, were not disqualified by any
impediment to marry each other, or
disqualified only because either or both of
them were below 18 y.o. (Art. 177 as
amended by RA 9858)
Procedure and Effects:
(a) Legitimation shall take place by a
subsequent valid marriage between
the parents. The annulment of a
voidable marriage shall not affect the
legitimation. [Art. 178]
UP LAW BOC PERSONS CIVIL LAW

(b) Effects of legitimation shall retroact with

to the time of the child’s birth [Art. exceptions
180] allowing
(c) Legitimation of children who died only one of
before the celebration of the marriage them to
shall benefit their descendants [Art. apply [RA
181] 8552]
Effect on Same status Creates a
Grounds for impugning legitimation: parent- and rights with relationship
(1) The subsequent marriage of the child's child that of a only
parents is void. relationship legitimate between the
(2) The child allegedly legitimated is not child not only child and the
natural. in relation to adopting
(3) The child is not really the child of the the parents
alleged parents. (Sempio-Dy) legitimizing
parents but
Rights: also to other
The same as those of legitimate children [Art. relatives
179]
ADOPTION is a juridical act, which creates
Impugning legitimation [Art. 182] between two persons a relationship similar to
(1) May be made only by those who are that which results from legitimate paternity
prejudiced in their rights and filiation.
(2) Within five years from the time their cause
of action accrues It requires a proceeding in rem, and may only
be proven by a judicial decree issued by a
court of competent jurisdiction, not by open
IX. Adoption and continuous cohabitation.

RA 8552 – Domestic Adoption Law (February

LEGITIMATION ADOPTION
25, 1998)
The law
creates by
The law merely A. WHO CAN ADOPT
Legal effect fiction a
makes legal A. Filipino Citizens (Sec. 7a)
relation
what exists by (a) Of legal age
which did
nature (b) With full civil capacity and legal
not in fact
rights
exist
(c) Of good moral character and has
Persons Natural Strangers
not been convicted of any crime
affected Children (generally)
involving moral turpitude
Procedure Extrajudicial Always by
(d) Emotionally and psychologically
acts of parents judicial
capable of caring for children
decree
(e) At least sixteen (16) years older
Who should Both parents Both
than adoptee, except when
apply parents,
adopter is biological parent of the

66
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adoptee or is the spouse of the
adoptee’s parent
(f) In a position to support and care
for his/her children in keeping
with the means of the family
(g) Has undergone pre-adoption
services
B. Aliens (Sec. 7b)
- Same for Filipinos provided further
that:
(1) His/her country has diplomatic
relations with the Philippines
(2) Has been living in the Philippines
for 3 continuous years prior to the
filing of application and
maintains such residence until
the decree is entered (provided
that absences not exceeding 60
days per 1 year for professional,
business, or emergency reasons
are allowed)
(3) Has been certified by his/her
diplomatic or consular office or
any appropriate government
agency that he/she has the legal
capacity to adopt in his/her
country
(4) His/her government allows the
adoptee to enter his/her country
as his/her adoptee
(5) Has submitted all the necessary
clearances and such certifications
as may be required
**Items 3, 4 and 5 may be waived under
the following circumstances:
(a) Adopter is a former Filipino
Citizen who seeks to adopt a
relative within the 4th degree of
consanguinity or affinity
(b) Adopter seeks to adopt the
legitimate or illegitimate child of
his/her Filipino spouse
(c) Adopter is married to a Filipino
Citizen and seeks to adopt jointly
PERSONS CIVIL LAW
with his/her spouse a relative
within the 4th degree of
consanguinity or affinity of the
Filipino spouse
C. Guardians
With respect to their wards, after the
termination of the guardianship and
clearance of his/her accountabilities.
Husband and wife shall adopt jointly, EXCEPT:
(1) If one spouse seeks to adopt the
legitimate child of the other
(2) If one of the spouses seeks to adopt
his/her illegitimate child provided
that the other spouse has signified
his/her consent
(3) If spouses are legally separated from
each other
Note: If spouses jointly adopt, parental
authority shall be jointly exercised by them.
B. WHO CAN BE ADOPTED (Sec. 8)
(a) Minor who has been administratively
or judicially declared available for
adoption
(b) Legitimate child of one spouse by
another
(c) Illegitimate child by a qualified
adopter to improve the child’s status
to that of legitimacy
(d) A person of legal age if, prior to the
adoption, said person has been
consistently considered and treated
by the adopter(s) as his/her child
since minority
(e) A child whose previous adoption has
been rescinded
(f) A child whose biological or adoptive
parent(s) has died, provided that no
proceedings shall be initiated within 6
months from the time of death of said
parent(s)
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Exceptions to the Requirement of a
Certification that the Child is Available for
Adoption (Sec. 4):
 Adoption of an illegitimate child by
his/her biological parent;
 Adoption of a child by his/her
stepparent;
 Adoption by a relative within the 4th
civil degree by consanguinity or
affinity
Persons whose written consent is necessary for
adoption (Sec. 9)
(1) The prospective adoptee if 10 years or
older
(2) The prospective adoptee’s biological
parents, legal guardian or the
government instrumentality or
institution that has custody of the
child
(3) The prospective adopters’ legitimate
and adopted children who are 10
years or older
(4) The prospective adopters’ illegitimate
children, if any, who are 10 years or
older and living with them
(5) The spouse, if any, of the person
adopting or to be adopted.
Note: A decree of adoption shall be effective
as of the date the original petition was filed. It
also applies in case the petitioner dies before
the issuance of the decree of adoption to
protect the interest of the adoptee.
C. PRE-ADOPTION PROCEDURES
1. Voluntary Commitment of biological
mother wanting to put her child up for
adoption
PERSONS CIVIL LAW
Counseling on her options other than
adoption
Explaining to her the implications of losing
her parental authority over the child
Continuing services shall be provided after
relinquishment to cope with feelings of loss,
etc. and other services for his/her
reintegration to the community
Biological parent(s) who decide to keep the
child shall be provided with adequate
services and assistance to fulfill their
parental responsibilities
Biological parent(s) who decide to put the
child for adoption shall sign the Deed of
Voluntary Commitment (DVC), which shall
be rescissible within 3 months from signing
of the same
2. Involuntary Commitment of abandoned or
neglected child
Filing of a petition at Regional DSWD in the
form of an affidavit and with the required
supporting documents
Posting of the petition, then
recommendation by the Regional Director
of the DSWD (5 days each)
Issuance of certification by DSWD Secretary
declaring the child legally available for
adoption
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3. Required supporting documents for a

Placement
petition for the declaration of involuntary
commitment:
(a) Social Case Study Report by DSWD /
LGU / institution charged with child’s
custody Supervised Trial Custody
(b) Proof of efforts to locate the child’s
parents/known relatives
- Written certification that a
Home Study Report
local/national radio/TV case was
aired on 3 different occasions
- Publication in 1 newspaper of
general circulation Recommendation and Consent of DSWD
- Police report / barangay
certification of due diligence
- Returned registered mail to last File Petition for Adoption within 30 days
known address of parents from Receipt of Consent from DSWD
(c) Birth certificate, if available
(d) Recent photo and photo upon
abandonment of child
Adoption Decree
D. ADOPTION PROCEDURES
Inquiry of prospective adopters at DSWD Note:
DSWD must certify the child as legally
available for adoption as a prerequisite for
adoption proceedings. (RA 9253)
Attendance of DSWD Adoption Fora and After the decree of adoption, the court may
Seminars (include counseling) also issue a travel authority, if needed; DSWD
to provide post adoption services

Application for Adoption The case study report by the DSWD/LGU is

indispensable. Without it, the adoption decree
shall be void. (DSWD v. Judge Belen (1997))

Case Study Report E. WHO MAY NOT ADOPT/ BE

ADOPTED

Certificate of Availability for Adoption Art. 184 (as amended by RA 8552)

The following may not adopt:
(1) The guardian, with respect to the
ward, prior to the approval of the final
Matching accounts rendered upon the
termination of the guardianship

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(2) Any person convicted of a crime of
moral turpitude
F. RIGHTS OF AN ADOPTED CHILD
(a) Parental Authority
Except in cases where the biological
parent is the adopter’s spouse, all legal
ties between biological parent and
adoptee shall be severed, and the same
shall then be vested on the adopters.
[Sec. 16]
(b) Legitimacy
The adoptee shall be considered the
legitimate son/daughter of the adopters
for all intents and purposes, and as such
is entitled to all rights and obligations
provided by law to legitimate children
born to them without discrimination of
any kind. [Sec. 17]
(c) Succession
In legal and intestate succession, the
adopter and the adoptee shall have
reciprocal rights of succession without
distinction from legitimate filiation.
However, if the adoptee and his/her
biological parents had left a will, the law
on testamentary succession shall govern.
[Sec. 18]
Art. 190 as amended. Rules on legal or
intestate succession to the estate of the
adoptee:
(1) Legitimate and illegitimate children,
descendants and the surviving spouse of the
adoptee shall inherit in accordance with the
ordinary rules of legal/intestate succession
(2) When the surviving spouse OR illegitimate
children AND adopters concur, they shall
inherit on a 50-50 basis
PERSONS CIVIL LAW
(3) When the surviving spouse AND
illegitimate children AND adopters concur,
they shall inherit on a 1/3-/1/3-1/3 basis
(4) When only adopters survive, they shall
inherit 100% of the estate
(5) When only collateral blood relatives
survive, ordinary rules of legal or intestate
succession shall apply
(d) Name
An adopted child shall bear the surname of
the adopter (CC, Art. 365).
RA 8552 allows the change of first name
to be instituted in the same proceeding as
the adoption: “the decree of adoption shall
state the name by which the child is to be
known”.
(e) Nationality
Adoption does not confer citizenship: Sec.
3, Art. 4 of the Constitution: Philippine
citizenship may be lost/acquired [only] in
the manner provided by law.
The right to confer citizenship belongs to
the State (political) and cannot be granted
by a citizen through adoption. Adoption
creates a relationship between the adopter
and adoptee, not between the State and
the adoptee.
G. RESCISSION OF ADOPTION
Adoptee may file action for rescission, with the
assistance of DSWD if he/she is a minor or
over 18 but incapacitated, based on the ff
grounds (Sec. 19):
(1) Repeated physical and verbal
maltreatment by adopters despite having
undergone counseling
(2) Attempt on life of adoptee
(3) Sexual assault or violence
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(4) Abandonment or failure to comply with
parental obligations
Note: Adoption, being in the best interest of
the child, shall not be subject to rescission by
the adopter. However, the adopter may
disinherit the child based on causes
enumerated in CC, Art. 919:
(1) Conviction of an attempt on the life of the
adopter
(2) Having accused, without grounds, the
adopter of a crime punishable by
imprisonment for more than 6 years
(3) Conviction of adultery/concubinage with
the adopter’s spouse
(4) Having caused the adopter to make or
change a will by force, intimidation or
undue influence
(5) Refusal without just cause to support the
adopter
(6) Maltreatment of the adopter by
word/deed
(7) Living a dishonorable/disgraceful life
(8) Conviction of a crime which carries with it
the penalty of civil interdiction
Effects of Rescission [Sec. 20]:
(1) Parental authority of the adoptee's
biological parents, if known, OR the legal
custody of the DSWD shall be restored if
the adoptee is still a minor or
incapacitated
(2) Reciprocal rights and obligations of the
adopters and the adoptee shall be
extinguished
(3) Court shall order the Civil Registrar to
cancel the amended certificate of birth of
the adoptee and restore his/her original
birth certificate
(4) Succession rights shall revert to its status
prior to adoption, but only as of the date
of judgment of judicial rescission
(5) Vested rights prior to judicial rescission
shall be respected
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CIVIL LAW
Note: Rescission contemplates a situation
where the adoption decree remains valid until
its termination
H. RECTIFICATION OF SIMULATED
BIRTH
Simulation of birth is the tampering of LCR
records to make it appear that a certain child
was born to a person who is not his/her
biological parent, causing said child to lose
his/her true identity/status.
Sec. 21-b (RA 8552) Any person who shall
cause the fictitious registration of the birth of
a child under the name(s) of a person(s) who
is not his/her biological parent(s) shall be
guilty of simulation of birth, and shall be
punished by prision mayor in its medium
period and a fine not exceeding P50,000.00.
Sec. 22 (RA 8552) A person who has, prior to
the effectivity of RA 8552, simulated the birth
of a child shall not be punished for such act,
PROVIDED:
- The simulation was for the child’s best
interest
- Child has been treated consistently as
his own
- Petition filed within 5 years of RA 8552’s
effectivity (2003)
Three-in-one Procedure
- Correction of entries in birth certificate
- Deed of Voluntary Commitment or
Declaration of abandonment
- Adoption decree
I. RA 8043 – THE LAW ON INTER-
COUNTRY ADOPTION
(June 7, 1995)
INTER-COUNTRY ADOPTION refers to the
socio-legal process of adopting a Filipino
UP LAW BOC
child by a foreigner or a Filipino citizen
permanently residing abroad where the
petition is filed, the supervised trial custody is
undertaken, and the decree of adoption is
issued outside the Philippines
I. 1. WHO CAN ADOPT
Any foreign national or a Filipino citizen
permanently residing abroad who has the
qualifications and none of the
disqualifications under the Act may file an
application if he/she:
(a) Is at least 27 years of age and at least 16
years older than the child to be adopted,
at the time of application unless the
adopter is the parent by nature of the
child to be adopted or the spouse of such
parent
(b) If married, his/her spouse must jointly file
for the adoption
(c) Has the capacity to act and assume all
rights and responsibilities of parental
authority under his national laws, and has
undergone the appropriate counseling
from an accredited counselor in his/her
country
(d) Has not been convicted of a crime
involving moral turpitude
(e) Is eligible to adopt under his/her national
law
(f) Is in a position to provide the proper care
and support and to give the necessary
moral values and example to all his
children, including the child to be
adopted
(g) Agrees to uphold the basic rights of the
child as embodied under Philippine laws,
the U.N. Convention on the Rights of the
Child, and to abide by the rules and
regulations issued to implement the
provisions of this Act
(h) Comes from a country with whom the
Philippines has diplomatic relations and
whose government maintains a similarly
authorized and accredited agency and
PERSONS CIVIL LAW
that adoption is allowed under his/her
national laws
(i) Possesses all the qualifications and none
of the disqualifications provided in
applicable Philippine laws.
I. 2. WHO CAN BE ADOPTED
(a) Only a legally-free child may be the subject
of inter-country adoption.
(b) A legally-free child is one who has been
voluntarily or involuntarily committed to
the DSWD of the Philippines, in
accordance with the Child and Youth
Welfare Code.
(c) No child shall be matched to a foreign
adoptive family unless it is satisfactorily
shown that the child cannot be adopted
locally (last resort).
(d) In order that such child may be
considered for placement, the following
documents must be submitted to the
Board:
 Child study
 Birth Certificate / Foundling
Certificate
 Deed of Voluntary Commitment/
Decree of Abandonment/ Death
Certificate of parents
 Medical Evaluation / History
 Psychological Evaluation, as
necessary
 Recent photo of the child
Tamargo v. CA (1992): Where the petition for
adoption was granted after the child had
shot and killed a girl, the Supreme Court did
not consider the retroactive effect given to
the decree of adoption so as to impose a
liability upon adopting parents at a time
when adopting parents had no actual or
physically custody over the child.
Retroactive effect may perhaps be given to
the granting of the petition for adoption
where such is essential to permit the accrual
of some benefit or advantage in favor of the
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adopted child. In the instant case, however,
to hold that parental authority had been
retroactively lodged in the adopting parents
so as to burden them with liability for a
tortuous act that they could not have
foreseen and which they could not have
prevented would be unfair and
unconscionable.
Lazatin v. Campos (1979): Adoption is a
juridical act, proceeding in rem. Because it is
artificial, the statutory requirements in order
to prove it must be strictly carried out.
Petition must be announced in publications
and only those proclaimed by the court are
valid. Adoption is never presumed.
Santos v. Aranzanso (1966): Validity of facts
behind a final adoption decree cannot be
collaterally attacked without impinging on
that court’s jurisdiction.
DSWD v. Belen (1997): Participation of the
appropriate government instrumentality in
performing the necessary studies and
precautions is important and is
indispensable to assure the child’s welfare.
Landingin v. Republic (2006): Consent for
adoption must be written and notarized.
Sayson v. CA (1992): Adopted children do not
have a right to represent their adopters in
successional interests. Although an adopted
child is deemed to be a legitimate child and
have the same rights as the latter, these
rights do not include the right of
representation (because the adopted child
has no right to inherit from the
grandparent). The relationship created by
the adoption is between only the adopting
parents and the adopted child. It does not
extend to the blood relatives of either party.
73
CIVIL LAW
X. Support
A. WHAT IT COMPRISES
Consists of everything indispensable for
sustenance, dwelling, clothing, medical
attendance, education and transportation,
in keeping with the financial capacity of the
family. [Art. 194]
 Education includes a person’s schooling
or training for some profession, trade or
vocation, the right to which shall subsist
beyond the age of majority. [Art. 194]
 Transportation includes expenses in
going to and from school, or to and
from place of work. [Art. 194]
B. WHO ARE OBLIGED
 To support each other:
o Spouses;
o Legitimate ascendants and
descendants;
o Parents and their children (legitimate
and illegitimate) and the children of
the latter (legitimate and
illegitimate);
o Legitimate brothers and sisters,
whether of full or half-blood; [Art.
195]
o Illegitimate brothers and sisters,
whether of full or half-blood, except
when the need for support of one (of
age) is due to a cause imputable to
his/her fault or negligence. [Art. 196]
Note: Both legitimate and illegitimate
children are entitled to support.
 Properties answerable for support
From the separate property of the obligor. If
no separate property, the ACP/CPG (if
financially capable) shall advance the
support, to be deducted from the obligor’s
share upon liquidation of such regime. [Art.
197]
UP LAW BOC
 Order of support
o If there are multiple obligors
 Spouse
 Descendants, nearest in degree
 Ascendants, nearest in degree
 Brothers and Sisters [Art. 199]
The order of liability among ascendants and
descendants would be: (1) legitimate children
and descendants, (2) legitimate parents and
ascendants, (3) illegitimate children and their
descendants. [Tolentino]
When two or more are obliged to give
support, the payment shall be divided
between them in proportion to their resources;
Also, in case of urgent need and by special
circumstances, judge may order only one
obligor to furnish support without prejudice to
reimbursement from other obligors of the
share due from them (Art. 200).
o If there are multiple recipients and only
one obligor, and the latter has no
sufficient means to satisfy all claims:
 Observe order in Article 199 as to
whose claim shall be satisfied
first;
 But if the concurrent obligees are
the spouse and a child subject to
parental authority, the child shall
be preferred. [Art. 200]
The above preference given to a child under
parental authority over the spouse should
prevail only if the person obliged to support
pays it out of his separate property. So if the
support comes from ACP or CPG, the above
rule of preference for the child does not apply.
[Tolentino]
Pelayo v. Lauron (1909):
Even if the parents-in-law were the ones
PERSONS CIVIL LAW
who called for the physician’s services for
the childbirth of their daughter-in-law, it is
the woman’s husband who is bound to pay
the fees due to the physician.
Lacson v. San Jose-Lacson (1968):
Man is still liable for support in arrears
since the mother advanced it from a
stranger (the uncle of the daughters).
Lacson v. Lacson (2006):
Acknowledgment of and commitment to
comply with support obligation through a
note in his own handwriting is proof that a
demand was made.
Gotardo v. Buling (2012):
The amount of support is variable and, for
this reason, no final judgment on the
amount of support is made as the amount
shall be in proportion to the resources or
means of the giver and the necessities of
the recipient.
 Stranger gives support
When, without the knowledge of the person
obliged to give support, it is given by a
stranger, the stranger has the right to claim
the same from the person obliged, unless it
appears that he gave it without intention of
being reimbursed. [Art. 206]
 Person obliged refuses or fails to give
support
When the person obliged to give support
unjustly refuses or fails to give support when
urgently needed, any third person may furnish
support to the needy individual, with right of
reimbursement from the person obliged to
give support. This particularly applies when
the father or mother of a minor child unjustly
refuses to support or fails to give support to
the child when urgently needed. [Art. 207]
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 Contractual support or that given by will
o The excess in amount beyond that
required for legal support shall be
subject to levy on attachment or
execution. [Art. 208]
Reason: The amount of support
agreed upon in the contract or given
in the will can be more than what the
recipient needs (Sempio-Diy).
Furthermore, contractual support
shall be subject to adjustment
whenever modification is necessary
due to changes in circumstances
manifestly beyond the contemplation
of the parties. [Art. 208]
C. SUPPORT DURING MARRIAGE
LITIGATION
Pending legal separation or annulment, and
for declaration of nullity, support pendente lite
for spouses and children will come from the
ACP/CPG. After final judgment granting the
petition, mutual support obligation between
spouses ceases. (But in legal separation, court
may order guilty spouse to give support to
innocent spouse.) [Art. 198]
Note: De facto separation does not affect the
ACP and the CPG, except that the spouse who
leaves the conjugal home without just cause
shall not be entitled to support. [Art. 100]
D. AMOUNT
The amount of support is in proportion to the
means of the provider and the needs of the
receiver, and can be reduced or increased if
such circumstances change. [Arts. 201, 202]
E. WHEN DEMANDABLE
 The obligation to give support shall be
demandable from the time the person who
has a right to receive the same needs it for
maintenance, but it shall not be paid
PERSONS CIVIL LAW
except from the date of judicial or extra-
judicial demand. [Art. 203]
 Support pendente lite may be claimed in
accordance with the Rules of Court. [Art.
203]
 Payment shall be made within the first 5
days of each corresponding month. When
the recipient dies, his heirs shall not be
obliged to return what he has received in
advance. [Art. 203]
F. OPTIONS
 Payment of the amount; or
 Receiving and maintaining the recipient in
the home of the provider, unless there is a
legal or moral obstacle for doing so.
G. ATTACHMENT
The right to receive support as well as any
money or property obtained as such support
shall not be levied upon on attachment or
execution. (Art. 205)
This is to protect that which the law gives to
the recipient against want and misery.
[Tolentino]
XI. Parental Authority
and Custody of Children
Parental authority is the mass of rights and
obligations which parents have in relation to
the person and property of their children until
their emancipation, and even after this under
certain circumstances (Manresa).
PARENTAL AUTHORITY INCLUDES [ART.
209]:
(1) The caring for and rearing of children
for civic consciousness and efficiency;
(2) The development of the moral,
mental and physical character and
well-being of said children
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the child, are ordinarily entitled to custody as

Parental authority and responsibility may not against all persons. [Santos v CA (1995)]
be renounced or transferred except in the
cases authorized by law. [Art. 210] WHO EXERCISES AUTHORITY IN CASES
OF DEATH, ABSENCE, UNSUITABILITY,
CASES WHEN PARENTAL AUTHORITY REMARRIAGE, OR SEPARATION OF
AND RESPONSIBILITY MAY BE PARENTS:
TRANSFERRED OR RENOUNCED: (1) In case one parent is absent or already
• Adoption; dead, the present or surviving parent
• Guardianship; or [Art. 212]
• Commitment of the child in an entity or Remarriage of the surviving parent
institution engaged in child care or in a shall not affect his/her parental
children’s home authority over the children, unless the
court appoints another person to be
RULES AS TO THE EXERCISE OF the guardian of the children or their
PARENTAL AUTHORITY: property [Art. 212]
• Jointly exercised by the father and mother (2) In case of a void/annulled marriage,
over their common children, but in case of and there is no agreement between
disagreement, the father's decision shall spouses, the parent designated by the
prevail, unless there is a judicial order to the court [Art. 43 par. 1; Art. 49]
contrary [Art. 211] (3) Innocent spouse gets custody of
• Exercised by the mother if the child is minor children in legal separation
illegitimate [Art.176] [Art. 63 par. 3]
• Children under parental authority shall (4) The court shall take into account all
always observe respect and reverence relevant considerations, especially the
towards their parents and are obliged to choice of the child over seven years of
obey them [Art. 211] age, unless the parent chosen is unfit
[Art. 213 par. 1]
CHARACTERISTICS OF PARENTAL (5) Substitute parental authority [Art.
AUTHORITY: 214]
(1) Natural right and duty of parents [Art. (a) In case of death, absence or
209, FC] unsuitability of the parents,
(2) Cannot be renounced, transferred or substitute parental authority
waived, except in cases authorized by shall be exercised by the
law [Art 210, FC] surviving grandparent
(3) Jointly exercised by the father and the (b) When several grandparents
mother [Art. 211, FC] survive, the one designated by
(4) Purely personal and cannot be the court shall exercise
exercised through agents parental authority, taking into
(5) Temporary account all relevant
considerations, especially the
PARENTAL PREFERENCE RULE: choice of the child over seven
The natural parents, who are of good years of age, unless the
character and who can reasonably provide for grandparent chosen is unfit

76
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Descendant’s Privilege of Refusal to Testify
[Art. 215]: No descendant shall be compelled,
in a criminal case, to testify against his
parents and grandparents.
Exception: When such testimony is
indispensable in (1) a crime against the
descendant, or (2) a crime by one parent
against the other.
TENDER YEARS PRESUMPTION:
NO child under 7 years of age shall be
separated from the mother, unless the court
finds compelling reasons to order otherwise.
[Art. 213 par 2; Art. 363, NCC; Gamboa v. CA
(2007)]
Examples of compelling reasons are:
(1) When the mother is insane;
(2) With a communicable disease that might
endanger the life or health of the child;
(3) Is maltreating the child; or
(4) Has another child by another man who
lives with her. [Cervantes v. Fajardo (1989)]
Note: Alleged lesbianism [Gualberto v.
Gualberto (2005)], prostitution or infidelity to
husband does not necessarily make a mother
unfit as parent. It must be shown that such
lesbianism, prostitution or infidelity adversely
affect the child.
PERSONS EXERCISING SUBSTITUTE
PARENTAL AUTHORITY IN DEFAULT OF
PARENTS OR JUDICIALLY APPOINTED
GUARDIAN (IN THIS ORDER):
• The surviving grandparent [Art. 214, FC]
• Oldest brother or sister, over 21 years old,
unless unfit or unqualified.
• Child’s actual custodian, over 21 years old,
unless unfit or unqualified.
Note: The same order applies to the
appointment of judicial guardian over the
property of the child
PERSONS CIVIL LAW
SUBSTITUTE PARENTAL AUTHORITY
OVER DISADVANTAGED CHILDREN (Art.
217)
Entrusted in summary judicial proceedings to:
(1) Heads of children’s homes
(2) Orphanages
(3) Similar institutions duly accredited by the
proper government agency (such as the
DSWD)
WHO ARE DISADVANTAGED CHILDREN:
(1) Foundlings
(2) Abandoned
(3) Neglected
(4) Abused
(5) Others similarly situated
PERSONS EXERCISING SPECIAL
PARENTAL AUTHORITY [Art. 218 FC]
(1) School, its administrators and teachers; or
(2) The individual, entity or institution
engaged in child care
Note: Exercised over minor child while under
their supervision, instruction or custody.
XII. Emancipation
Art. 234. Emancipation takes place by the
attainment of majority. Unless otherwise
provided, majority commences at the age of
eighteen years.
Art. 236. Emancipation shall terminate
parental authority over the person and
property of the child who shall then be
qualified and responsible for all acts of civil
life, save the exceptions established by
existing laws in special cases.
Contracting marriage shall require parental
consent until the age of twenty-one.
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Persons between ages twenty-one and
twenty-five, shall be obliged to ask their
parents orguardian for advice upon the
intended marriage.
 No advice or unfavorable advice: marriage
license shall not be issued till after three
months following the completion of the
publication of the application therefor
 Sworn statement by the contracting
parties that advice has been sought,
together with written advice if any or
refusal to give advice: attached to the
application for the marriage license [Art.
15, FC]
Nothing in this Code shall be construed to
derogate from the duty or responsibility of
parents and guardians for children and wards
below twenty-one years of age mentioned in
the second and third paragraphs of Article
2180 of the Civil Code.
RA 6809:
By virtue of this law, emancipation can no
longer take place by virtue of the minor’s
marriage or by the concession of the parents
to a minor in a recorded public instrument.
XII. Summary Judicial
Proceedings Under FC
A. PROCEDURAL RULES PROVIDED
FOR IN THIS TITLE SHALL APPLY TO
[ART. 238]:
(1) Separation in fact between husband and
wife
(2) Abandonment by one of the other
(3) Incidents involving parental authority
B. SEPARATION IN FACT
PERSONS CIVIL LAW
A verified petition alleging the following facts
is required when [Art. 239]:
 A husband and wife are separated in fact;
or,
 One has abandoned the other
Situation: Where one of them seeks judicial
authorization for a transaction where the
consent of the other spouse is required by law
but such consent is withheld or cannot be
obtained
The petition shall:
(1) Attach the proposed deed, if any,
embodying the transaction, if none, shall
describe in detail the said transaction and
state the reason why the required consent
thereto cannot be secured.
(2) The final deed duly executed by the
parties shall be submitted to and
approved by the court.
Separate Claim for Damages: Claims for
damages by either spouse, except costs of the
proceedings, may be litigated only in a
separate action. [Art. 240]
Jurisdiction: Jurisdiction over the petition
shall, upon proof of notice to the other
spouse, be exercised by the proper court
authorized to hear family cases, if one exists,
or in the regional trial court or its equivalent
sitting in the place where either of the
spouses resides. [Art. 241]
Notification to other spouse:
(1) Upon the filing of the petition, the court
shall notify the other spouse, whose
consent to the transaction is required, of
said petition, ordering said spouse to
show cause why the petition should not
be granted, on or before the date set in
said notice for the initial conference.
(2) The notice shall be accompanied by a
copy of the petition and shall be served at
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the last known address of the spouse
concerned. [Art. 242]
Procedure:
(1) A preliminary conference shall be
conducted by the judge personally
without the parties being assisted by
counsel.
(2) After the initial conference, if the court
deems it useful, the parties may be
assisted by counsel at the succeeding
conferences and hearings. [Art. 243]
(3) If the petition is not resolved at the initial
conference, said petition shall be
decided in a summary hearing. Basis of
summary hearing (at the sound
discretion of the court):
• Affidavits
• Documentary evidence
• Oral testimonies at the court’s sound
discretion. If testimony is needed, the
court shall specify the witnesses to be
heard and the subject-matter of their
testimonies, directing the parties to
present said witnesses. [Art. 246(a)]
When appearance of spouses required:
1. In case of non-appearance of the spouse
whose consent is sought, the court shall
inquire into the reasons for his failure to
appear, and shall require such
appearance, if possible. [Art. 244]
2. If, despite all efforts, the attendance of the
non-consenting spouse is not secured, the
court may proceed ex parte and render
judgment as the facts and circumstances
may warrant. In any case, the judge shall
endeavor to protect the interests of the
non-appearing spouse. [Art. 245]
Nature of judgment: The judgment of the
court shall be immediately final and
executory. [Art 247]
PERSONS CIVIL LAW
Rules applicable for administering or
encumbering separate property of spouse: The
petition for judicial authority to administer or
encumber specific separate property of the
abandoning spouse and to use the fruits or
proceeds thereof for the support of the family
shall also be governed by these rules. [Art.
248]
C. INCIDENTS INVOLVING
PARENTAL AUTHORITY
Procedure
(1) Such petitions shall be verified and filed
in the proper court of the place where the
child resides. [Art. 250]
(2) Upon the filing of the petition, the court
shall notify the parents or, in their
absence or incapacity, the individuals,
entities or institutions exercising
parental authority over the child. [Art.
251]
Note:
• Petitions filed under Articles 223, 225 and
235 of this Code involving parental
authority shall be verified. [Art. 249]
• The rules in Chapter 2 hereof shall also
govern summary proceedings under this
Chapter insofar as they are applicable [Art.
253]
• The foregoing rules in Chapter 2
(Separation in Fact) and (Incidents
Involving Parental Authority) hereof shall
likewise govern summary proceedings filed
 Declaration of presumptive death [Art.
41]
 Delivery of presumptive legitime [Art.
51]
 Fixing of family domicile [Art. 69]
 Disagreements regarding one spouse’s
profession, occupation, business, or
activity [Art. 73]
 Disposition or encumbrance of common
property in ACP where one spouse is
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incapacitated or unable to participate in
the administration; administration of
absolute community in a disagreement
and the wife takes recourse within five
years [Art. 96]
 Disposition or encumbrance of common
property in CPG where one spouse is
incapacitated or unable to participate in
the administration; administration of
partnership property in a disagreement
and the wife takes recourse within five
years, [Art. 124]
When wife and husband are de facto
separated and the CPG is insufficient, the
spouse present shall, upon a petition, be
given judicial authority to administer or
encumber any specific property of the other
spouse and use the fruits and proceeds
thereof to satisfy the latter’s share. [Art. 127]
XIII. Care and
Education of Children
Every child:
(1) Is entitled to parental care;
(2) Shall receive at least elementary
education;
(3) Shall be given moral and civic training by
the parents or guardian;
(4) Has a right to live in an atmosphere
conducive to his physical, moral and
intellectual development. [Art. 356, NCC]
Duties of the child:
(1) Obey and honor his parents or guardian;
(2) Respect his grandparents, old relatives,
and persons holding substitute parental
authority;
(3) Exert his utmost for his education and
training;
(4) Cooperate with the family in all matters
that make for the good of the same. [Art.
357, NCC]
PERSONS CIVIL LAW
Every parent and every person holding
substitute parental authority shall see to it
that the rights of the child are respected and
his duties complied with, and shall
particularly, by precept and example, imbue
the child with highmindedness, love of
country, veneration for the national heroes,
fidelity to democracy as a way of life, and
attachment to the ideal of permanent world
peace. [Art. 358, NCC]
The government promotes the full growth of
the faculties of every child.
The government will establish, whenever
possible:
(1) Schools in every barrio, municipality and
city where optional religious instruction
shall be taught as part of the curriculum
at the option of the parent or guardian;
(2) Puericulture and similar centers;
 (3)
Councils for the Protection of Children;
and (4) Juvenile courts. [Art. 359, NCC]
The Council for the Protection of Children shall
look after the welfare of children in the
municipality.
Functions:
(1) Foster the education of every child in the
municipality
(2) Encourage the cultivation of the duties of
parents
(3) Protect and assist abandoned or
mistreated children, and orphans
(4) Take steps to prevent juvenile
delinquency
(5) Adopt measures for the health of children
(6) Promote the opening and maintenance of
playgrounds
(7) Coordinate the activities of organizations
devoted to the welfare of children, and
secure their cooperation. [Article 360,
NCC]
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Juvenile courts will be established, as far as
practicable, in every chartered city or large
municipality.[Art. 361, NCC]
Whenever a child is found delinquent by any
court, the father, mother, or guardian may in
a proper case be judicially admonished. [Art.
362, NCC]
XIV. Surnames
A. SURNAMES OF CHILDREN
(1) Legitimate and legitimated children shall
principally use the surname of the father.
[Art. 364]
(2) An adopted child shall bear the surname
of the adopter. [Art. 365]
(3) A natural child acknowledged by both
parents shall principally use the surname
of the father. If recognized by only one of
the parents, a natural child shall employ
the surname of the recognizing parent.
[Art 366]
(4) Natural children by legal fiction shall
principally employ the surname of the
father [Art. 367]
(5) Illegitimate children referred to in Article
287 shall bear the surname of the mother.
[Art 368]
(6) Children conceived before the decree
annulling a voidable marriage shall
principally use the surname of the father.
[Art. 369]
B. WIFE AFTER AND DURING
MARRIAGE
(1) A married woman may use [Art. 370]:
(a) Her maiden first name and surname
and add her husband's surname, or
PERSONS CIVIL LAW
(b) Her maiden first name and her
husband's surname or
(c) Her husband's full name, but
prefixing a word indicating that she
is his wife, such as "Mrs."
The wife cannot claim an exclusive right to
use the husband’s surname. She can’t be
prevented from using it; but neither can
she restrain others from using it.
[Tolentino]
(2) In case of annulment of marriage, and the
wife is the guilty party, she shall resume
her maiden name and surname. If she is
the innocent spouse, she may resume her
maiden name and surname. However, she
may choose to continue employing her
former husband's surname, unless [Art.
371]:
(a) The court decrees otherwise, or
(b) She or the former husband is married
again to another person.
(3) When legal separation has been granted,
the wife shall continue using her name and
surname employed before the legal
separation. [Art. 372]
(4) A widow may use the deceased
husband's surname as though he were still
living, in accordance with Article 370. [Art
373]
C. CONFUSION AND CHANGE OF
NAMES
In case of identity of names and surnames,
the younger person shall be obliged to use
such additional name or surname as will
avoid confusion. [Art. 374]
In case of identity of names and surnames
between ascendants and descendants, the
word "Junior" can be used only by a son.
Grandsons and other direct male descendants
shall either [Art. 375]:
(1) Add a middle name or the mother's
surname, or
(2) Add the Roman Numerals II, III, and so on.
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Art. 43. If there is a doubt as between two or

Usurpation of a name and surname may be more persons who are called to succeed each
the subject of an action for damages and other as to which of them died first whoever
other relief. [Art. 377] alleges the death of one prior to the other
shall prove the same; in the absence of proof
it is presumed that they died at the same time
The unauthorized or unlawful use of another and there shall be no transmission of rights
person's surname gives a right of action to the from one to the other.
latter [Art. 378]
Note: Article 43 provides a statutory
The employment of pen names or stage presumption when there is doubt on the order
names is permitted, provided it is done in of death between persons who are called to
good faith and there is no injury to third succeed each other (only).
persons. Pen names and stage names cannot
be usurped. [Art. 379] Joaquin v. Navarro (1948):
The statutory presumption of Article 43 was
Except as provided in the preceding article, no not applied due to the presence of a credible
person shall use different names and eyewitness as to who died first.
surnames. [Art 380]
Presumption in the Rules of Court (Rule 131,
Illegitmate Children shall use the surname sec. 3, (jj.) (Presumption of survivorship)
and shall be under the parental authority of
their mother. However, they may use the Age Presumed Survivor
surname of their father if their filiation has Both under 15 Older
been expressly recognized by their father Both above 60 Younger
through: One under 15, the One under 15
(a) record of birth in civil register other above 60
(b) admission in public document Both over 15 and Male
(c) admission in private handwritten under 60; different
document sexes
Both over 15 and Older
under 60; same sex
One under 15 or over One between 15 and
60, the other 60
between those ages

XV. Rules Governing Note: Applicable only to two or more persons

who perish in the same calamity, and it is not
Persons who are shown who died first, and there are no
particular circumstances from which it can be
Absent inferred.

A. PROVISIONAL MEASURES IN Article 41. A marriage contracted by any

person during subsistence of a previous
CASE OF ABSENCE [ARTS. 381-383] marriage shall be null and void, unless before
the celebration of the subsequent marriage,

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the prior spouse had been absent for four
consecutive years and the spouse present has
a well founded belief that the absent spouse
was already dead. In case of disappearance
where there is danger of death under the
circumstances set forth in the provisions of
Article 391 of the Civil Code, an absence of
only two years shall be sufficient.
General rule: Marriage contracted by any
person during the subsistence of a previous
marriage is void.
Exceptions: The following subsequent
marriage of the present spouse is valid:
(1) Subsequent marriage due to ordinary
absence where:
(a) The prior spouse had been absent for
4 consecutive years;
(b) The spouse present had a well-
founded belief that absent spouse is
dead; and
(c) Judicial declaration of presumptive
death was secured (no prejudice to
the effect of the reappearance of the
absent spouse).
(2) Subsequent marriage due to
extraordinary absence where:
(a) The prior spouse had been missing for
2 consecutive years;
(b) There is danger of death attendant to
the disappearance [Art. 391, Civil
Code];
(c) The spouse present had a well-
founded belief that the missing
person is dead; and
(d) Judicial declaration of presumptive
death was secured (no prejudice to
the effect of the reappearance of the
absent spouse).
Notes:
• Institution of a summary proceeding is not
sufficient. There must also be a summary
judgment. (Balane)
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• Only the deserted spouse can file or
institute a summary proceeding for the
declaration of presumptive death of the
absentee. (Bienvenido case)
• There must have been diligent efforts on
the part of the deserted spouse to locate
the absent spouse. These diligent efforts
correspond to the requirement of the law
for a well-founded belief.
Exception to the Exception:
Art. 381. When a person disappears from his
domicile, his whereabouts being unknown,
and without leaving an agent to administer
his property, the judge, at the instance of an
interested party, a relative, or a friend, may
appoint a person to represent him in all that
may be necessary.
This same rule shall be observed when under
similar circumstances the power conferred by
the absentee has expired.
Art. 382. The appointment referred to in the
preceding article having been made, the
judge shall take the necessary measures to
safeguard the rights and interests of the
absentee and shall specify the powers,
obligations and remuneration of his
representative, regulating them, according to
the circumstances, by the rules concerning
guardians.
Art. 383. In the appointment of a
representative, the spouse present shall be
preferred when there is no legal separation.
If the absentee left no spouse, or if the spouse
present is a minor, any competent person may
be appointed by the court.
Requisites: The judge may appoint a person to
represent absentee when:
(1) Person disappears from his domicile
(2) His whereabouts are unknown
(3) No agent to administer his property
(4) An interested party, a relative, or a
friend files the action
Who may be appointed as representative?
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(1) Spouse present shall be preferred
when there is no legal separation
(2) If no spouse or spouse is
incapacitated, any competent person
B. DECLARATION OF ABSENCE,
[ARTS. 384-389]
Art. 384. Two years having elapsed without
any news about the absentee or since the
receipt of the last news, and five years in case
the absentee has left a person in charge of the
administration of his property, his absence
may be declared.
Art. 385. The following may ask for the
declaration of absence:
1. The spouse present;
2. The heirs instituted in a will, who may
present an authentic copy of the same;
3. The relatives who may succeed by the law
of intestacy;
4. Those who may have over the property of
the absentee some right subordinated to
the condition of his death.
Art. 386. The judicial declaration of absence
shall not take effect until six months after its
publication in a newspaper of general
circulation.
When may absence be declared?
• Two years without any news about the
absentee
• Five years if the absentee left a person in
charge of administration of his property
• Declaration takes effect only after six
months after publication in a newspaper of
general circulation
Who may ask for a declaration of absence?
(1) Spouse present
(2) Heirs instituted in a will, who may
present an authentic copy of the
same;
PERSONS CIVIL LAW
(3) Relatives who may succeed by the law
of intestacy;
(4) Those who may have some right over
the property of the absentee,
subordinated to the condition of his
death.
C. ADMINISTRATION OF THE
PROPERTY OF THE ABSENTEE,
[ARTS. 387-389]
Art. 387. An administrator of the absentee's
property shall be appointed in accordance
with Article 383.
Art. 388. The wife who is appointed as an
administratrix of the husband's property
cannot alienate or encumber the husband's
property, or that of the conjugal partnership,
without judicial authority.
Art. 389. The administration shall cease in any
of the following cases:
1. When the absentee appears personally or
by means of an agent;
2. When the death of the absentee is proved
and his testate or intestate heirs appear;
3. When a third person appears, showing by a
proper document that he has acquired the
absentee's property by purchase or other
title.
In these cases the administrator shall cease in
the performance of his office, and the
property shall be at the disposal of those who
may have a right thereto.
Who may administer the property?
• Spouse present shall be preferred when
there is no legal separation
• If no spouse or spouse is incapacitated, any
competent person
When will the administration of property
cease?
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Administrator shall cease in performance of
his office, and property shall be disposed in
favor of those who have a right thereto when
(1) Absentee appears personally or by
means of an agent
(2) Testate or intestate heirs appear, upon
proof of death of absentee
(3) Third person appears, with a proper
document showing he has acquired
absentee’s property by purchase or
other title
D. PRESUMPTION OF DEATH,
[ARTS. 390-392]
Art. 390. After an absence of 7 years, it being
unknown whether or not the absentee still
lives, he shall be presumed dead for all
purposes, except for those of succession.
The absentee shall not be presumed dead for
the purpose of opening his succession till
after an absence of 10 years. If he disappeared
after the age of 75 years, an absence of 5
years shall be sufficient in order that his
succession may be opened.
Art. 391. The following shall be presumed
dead for all purposes, including the division of
the estate among the heirs:
1. A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who
has not been heard of for four years since the
loss of the vessel or aeroplane;
2. A person in the armed forces who has taken
part in war, and has been missing for four
years;
3. A person who has been in danger of death
under other circumstances and his existence
has not been known for four years.
General rule: A person shall be presumed
dead for all purposes after absence for a
period of 7 years.
Exception: Succession
• In succession, 10 years is required for
presumption of death.
PERSONS CIVIL LAW
• If absentee disappeared after age of 75, 5
years shall be sufficient.
Extraordinary Absence
Only 4 years is required for presumption to
arise if:
(1) A person on board a vessel lost during a
sea voyage, or an aeroplane which is
missing, who has not been heard of for
four years since the loss of the vessel or
aeroplane;
(2) A person in the armed forces who has
taken part in war, and has been missing
for four years;
(3) A person who has been in danger of
death under other circumstances and
his existence has not been known for
four years.
Note:
• Although 7 years is required for the
presumption of death of an absentee in the
Civil Code, Art. 41 of the Family Code
makes an exception for the purpose of
remarriage by limiting such requirement to
4 years.
• Art. 41 also limits the required 4 years in
Art. 391 for absence under exceptional
circumstances to only 2 years.
Art. 392. If the absentee appears or without
appearing his existence is proved he shall
recover his property in the condition in which it
may be found and the price of any property
that may have been alienated or the property
acquired therewith; but he cannot claim either
fruits or rents.
XVI. Funerals
The duty and the right to make arrangements
for the funeral of a relative shall be in
accordance with the order established for
support, under Article 294 [Art. 305]:
(1) Spouse
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(2) Descendants in the nearest degree. In
case of descendants of the same
degree, the oldest shall be preferred.
(3) The ascendants in the nearest degree.
In case of ascendants, the paternal shall
have a better right
(4) The brothers and sisters, the oldest
shall be preferred.
(5) Municipal authorities – if there are no
persons who are bound to support or if
such persons are without means
Nature of funeral: Every funeral shall be in
keeping with the social position of the
deceased. [Art. 306]
The funeral shall be:
(1) In accordance with the expressed
wishes of the deceased.
(2) In the absence of such expression, his
religious beliefs or affiliation shall
determine the funeral rites.
(3) In case of doubt, the form of the funeral
shall be decided upon by the person
obliged to make arrangements for the
same, after consulting the other
members of the family [Art. 307]
Note: No human remains shall be retained,
interred, disposed of or exhumed without the
consent of the persons mentioned in articles
294 and 305.
Damages: Any person who shows disrespect
to the dead, or wrongfully interferes with a
funeral shall be liable to the family of the
deceased for damages, material and moral
[Art. 309]
Funeral Expenses: The construction of a
tombstone or mausoleum shall be deemed a
part of the funeral expenses, and shall be
chargeable to the conjugal partnership
property, if the deceased is one of the spouses
[Art. 310].
PERSONS CIVIL LAW
Guidelines in making funeral arrangements
(1) The persons who are preferred in the
right to make funeral arrangements may
waive the right expressly or impliedly in
which case the right and duty
immediately descend to the person next
in the order.
(2) It must be in keeping with the social
position of the deceased.
(3) Law shall prevail over the will of the
persons who have the right to control the
burial of deceased – exhumation,
evidential purpose, disposition of corpse
by deceased, mutilation of corpses and
autopsies.
(4) Corpses which are to be buried at public
expenses may also be used for scientific
purposes under certain conditions.
(5) Expressed wishes of the deceased is
given priority provided that it is not
contrary to law and must not violate the
legal and reglementary provisions
concerning funerals and disposition of
the remains (time, manner, place or
ceremony)
(6) In the absence of expressed wishes, his
religious beliefs or affiliation shall
determine the funeral rights.
(7) In case of doubt, the persons in Art. 199
shall decide.
(8) Any person who disrespects the dead or
interferes with the funeral shall be liable
for material and moral damages.
XVII. Entries in the Civil
Register
A. ARTS. 407-413
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Art. 407. Acts, events and judicial decrees
concerning the civil status of persons shall be
recorded in the civil register.
Art. 408. The following shall be entered in the
civil register:
1. Births;
2. marriages;
3. deaths;
4. legal separations;
5. annulments of marriage;
6. judgments declaring marriages void from
the beginning;
7. legitimations;
8. adoptions;
9. acknowledgments of natural children;
10. naturalization;
11. loss, or
12. recovery of citizenship;
13. civil interdiction;
14. judicial determination of filiation;
15. voluntary emancipation of a minor; and
16. changes of name.
Art. 409. In cases of legal separation,
adoption, naturalization and other judicial
orders mentioned in the preceding article, it
shall be the duty of the clerk of the court
which issued the decree to ascertain whether
the same has been registered, and if this has
not been done, to send a copy of said decree
to the civil registry of the city or municipality
where the court is functioning.
Art. 410. The books making up the civil
register and all documents relating thereto
shall be considered public documents and
shall be prima facie evidence of the facts
therein contained.
Art. 411. Every civil registrar shall be civilly
responsible for any unauthorized alteration
made in any civil register, to any person
suffering damage thereby. However, the civil
registrar may exempt himself from such
liability if he proves that he has taken every
reasonable precaution to prevent the
unlawful alteration.
PERSONS CIVIL LAW
Art. 413. All other matters pertaining to the
registration of civil status shall be governed
by special laws.
B. RA 9048 AS AMENDED BY RA
10172
AN ACT AUTHORIZING THE CITY OR
MUNICIPAL CIVIL REGISTRAR OR THE
CONSUL GENERAL TO CORRECT A
CLERICAL OR TYPOGRAPHICAL ERROR IN
AN ENTRY AND/OR CHANGE OF FIRST
NAME OR NICKNAME IN THE CIVIL
REGISTER WITHOUT NEED OF A JUDICIAL
ORDER, AMENDING FOR THIS PURPOSE
ARTICLES 376 AND 412 OF THE CIVIL CODE
OF THE PHILIPPINES
General rule: No entry in a civil register shall
be changed or corrected without a judicial
order
Exception: Clerical or typographical errors;
Change of: first name or nickname, day and
month in the date of birth, or sex of a person
This exception applies where it is patently
clear that there was a clerical or
typographical error or mistake in the entry,
which can be corrected or changed by the
concerned city or municipal civil registrar or
consul general in accordance with the
provisions of this Act and its implementing
rules and regulations
Note:
• Clerical or typographical error refers to a
mistake committed in the performance of
clerical work in writing, copying,
transcribing or typing an entry in the civil
register that is harmless and innocuous
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(i.e. misspelled name, misspelled place of
birth, mistake in the entry of day and
month in the date of birth or the sex of the
person or the like, which is visible to the
eyes or obvious to the understanding, and
can be corrected or changed only by
reference to other existing record or
records)
• Before the amendment by RA 10172, no
correction must involve the change of sex,
nationality, age or status of the petitioner.
After the amendment, change of sex can
now be subjected to correction without
judicial order under the rules of this Act.
• Civil Register refers to the various registry
books and related certificates and
documents kept in the archives of the local
civil registry offices, Philippine Consulates
and of the Office of the Civil Registrar
General.
Sec. 3. Who May File the Petition and Where. –
Any person having direct and personal
interest in the correction of a clerical or
typographical error in an entry and/or change
of first name or nickname in the civil register
may file, in person, a verified petition with the
local civil registry office of the city or
municipality where the record being sought to
be corrected or changed is kept.
In case the petitioner has already migrated to
another place in the country and it would not
be practical for such party, in terms of
transportation expenses, time and effort to
appear in person before the local civil
registrar keeping the documents to be
corrected or changed, the petition may be
filed, in person, with the local civil registrar of
the place where the interested party is
presently residing or domiciled. The two (2)
local civil registrars concerned will then
communicate to facilitate the processing of
the petition.
PERSONS CIVIL LAW
Citizens of the Philippines who are presently
residing or domiciled in foreign countries may
file their petition, in person, with the nearest
Philippine Consulates.
The petitions filed with the city or municipal
civil registrar or the consul general shall be
processed in accordance with this Act and its
implementing rules and regulations.
All petitions for the clerical or typographical
errors and/or change of first names or
nicknames may be availed of only once.
Grounds
Who may file the petition and where?
(1) Any person having direct personal interest
in the correction of a clerical or
typographical error in an entry and/or
change of first name or nickname in the
civil register
(2) Verified petition with the local civil registry
office of the city or municipality
(a) where the record being sought to be
corrected or changed is kept
(b) where the interested party is presently
residing or domiciled, if it will be
impractical to submit in the place where
record is kept (i.e. when party has
migrated to another place in the country)
(c) nearest Philippine Consulates, if the
petitioner is presently residing or
domiciled in foreign countries
Note:
All petitions for the clerical or typographical
errors and/or change of first names or
nicknames may be availed of only once.
Sec. 4. Grounds for Change of First Name or
Nickname. – The petition for change of first
name or nickname may be allowed in any of
the following cases:
(1) The petitioner finds the first name or
nickname to be ridiculous, tainted with
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dishonor or extremely difficult to write or
pronounce.
(2) The new first name or nickname has been
habitually and continuously used by the
petitioner and he has been publicly known
by that first name or nickname in the
community: or
(3) The change will avoid confusion.
Sec. 5. Form and Contents of the Petition. –
The petition for correction of a clerical or
typographical error, or for change of first
name or nickname, as the case may be, shall
be in the form of an affidavit, subscribed and
sworn to before any person authorized by the
law to administer oaths. The affidavit shall set
forth facts necessary to establish the merits of
the petition and shall show affirmatively that
the petitioner is competent to testify to the
matters stated. The petitioner shall state the
particular erroneous entry or entries, which
are sought to be corrected and/or the change
sought to be made.
The petition shall be supported with the
following documents:
(1) A certified true machine copy of the
certificate or of the page of the registry
book containing the entry or entries sought
to be corrected or changed.
(2) At least two (2) public or private
documents showing the correct entry or
entries upon which the correction or
change shall be based; and
(3) Other documents which the petitioner or
the city or municipal civil registrar or the
consul general may consider relevant and
necessary for the approval of the petition.
No petition for correction of erroneous entry
concerning the date of birth or the sex of a
person shall be entertained except if the
petition is accompanied by earliest school
record or earliest school documents such as,
but not limited to, medical records, baptismal
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CIVIL LAW
certificate and other documents issued by
religious authorities; nor shall any entry
involving change of gender corrected except if
the petition is accompanied by a certification
issued by an accredited government physician
attesting to the fact that the petitioner has
not undergone sex change or sex transplant.
The petition for change of first name or
nickname, or for correction of erroneous entry
concerning the day and month in the date of
birth or the sex of a person, as the case may
be, shall be published at least once a week for
two (2) consecutive weeks in a newspaper of
general circulation.
Furthermore, the petitioner shall submit a
certification from the appropriate law
enforcement agencies that he has no pending
case or no criminal record.
The petition and its supporting papers shall
be filed in three (3) copies to be distributed as
follows: first copy to the concerned city or
municipal civil registrar, or the consul
general; second copy to the Office of the Civil
Registrar General; and third copy to the
petitioner
C. RULE 108, RULES OF COURT
CANCELLATION OR CORRECTION OF
ENTRIES IN THE CIVIL REGISTRY
Sec. 1. Who may file petition. - Any person
interested in any act, event, order or decree
concerning the civil status of persons which
has been recorded in the civil register, may
file a verified petition for the cancellation or
correction of any entry relating thereto, with
the Court of First Instance of the province
where the corresponding civil registry is
located.
Sec. 2. Entries subject to cancellation or
correction. - Upon good and valid grounds,
UP LAW BOC
the following entries in the civil register may
be cancelled or corrected: (a) births; (b)
marriages; (c) deaths; (d) legal separations;
(e) judgments of annulments of marriage; (f)
judgments declaring marriages void from the
beginning; (g) legitimations; (h) adoptions; (i)
acknowledgments of natural children; (j)
naturalization (k) election, loss or recovery of
citizenship (l) civil interdiction; (m) judicial
determination of filiation; (n) voluntary
emancipation of a minor; and (o) changes of
name.
Sec. 3. Parties. - When cancellation or
correction of an entry in the civil register is
sought, the civil registrar and all persons who
have or claim any interest which would be
affected thereby shall be made parties to the
proceeding.
Sec. 4. Notice and publication. - Upon the
filing of the petition, the court shall, by an
order, fix the time and place for the hearing of
the same, and cause reasonable notice
thereof to be given to the persons named in
the petition. The court shall also cause the
order to be published once a week for three
(3) consecutive weeks in a newspaper of
general circulation in the province.
Sec. 5. Opposition. - The civil registrar and any
person having or claiming any interest under
the entry whose cancellation or correction is
sought may, within fifteen (15) days from
notice of the petition, or from the last date of
publication of such notice, file his opposition
thereto.
Sec. 6. Expediting proceedings. - The court in
which the proceeding is brought may make
orders expediting the proceedings, and may
also grant preliminary injunction for the
preservation of the rights of the parties
pending such proceedings.
PERSONS CIVIL LAW
Sec. 7. Order. - After hearing, the court may
either dismiss the petition or issue an order
granting the cancellation or correction prayed
for. In either case, a certified copy of the
judgment shall be served upon the civil
registrar concerned who shall annotate the
same in his record.
Who may file petition? - Any person interested
in any act, event, order or decree concerning
the civil status of persons which has been
recorded in the civil register
Where filed? - Verified petition for
cancellation or correction of entry in the civil
registy may be filed with the Regional Trial
Court of the province where the
corresponding civil registry is located
Entries subject to Cancellation/Correction
• Births
• Marriages
• Deaths
• Legal separations
• Judgments of annulments of marriage
• Judgments declaring marriages void from
the beginning
• Legitimations
• Adoptions
• Acknowledgments of natural children
• Naturalization
• Election, loss or recovery of citizenship
• Civil interdiction
• Judicial determination of filiation
• Voluntary emancipation of a minor
• Changes of name
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CIVIL LAW
PROPERTY

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I. Property – All things which are, or may be,
the object of appropriation. [NCC 414]
I. Characteristics
(1) Utility – capacity to satisfy human wants
(2) Substantivity and Individuality – separate
and autonomous existence
(3) Susceptibility of being appropriated –
what cannot be appropriated because of
their distance, depth, or immensity cannot
be considered ‘things’ (i.e. stars, ocean)
II. Classification
A. HIDDEN TREASURE
Hidden treasure –any hidden and unknown
deposit of money jewels aor other precious
objects, the lawful ownership of which does
not appear. [NCC 439]
Owner of the land, building or other property
on which the hidden treasure was found, also
owns it, subject to:
(a) Right of a finder by chance who is not
a trespasser/intruder: ½ of treasure
(b) Right of a usufructuary who finds
treasure: ½ of treasure
(c) Right of State to acquire things of
interest to science or the arts [NCC
438]
B. BASED ON MOBILITY
[IMMOVABLE OR MOVABLE]
B. 1. REAL OR IMMOVABLE PROPERTY
NCC 415.
(1) Land, buildings, roads and constructions
of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while
they are attached to the land or form an
integral part of an immovable;
(3) Everything attached to an immovable in a
fixed manner, in such a way that it cannot
be separated therefrom without breaking
the material or deterioration of the object;
PROPERTY CIVIL LAW
(4) Statues, reliefs, paintings or other objects
for use or ornamentation, placed in
buildings or on lands by the owner of the
immovable in such a manner that it
reveals the intention to attach them
permanently to the tenements;
(5) Machinery, receptacles, instruments or
implements intended by the owner of the
tenement for an industry or works which
may be carried on in a building or on a
piece of land, and which tend directly to
meet the needs of the said industry or
works;
(6) Animal houses, pigeon-houses, beehives,
fish ponds or breeding places of similar
nature, in case their owner has placed
them or preserves them with the intention
to have them permanently attached to the
land, and forming a permanent part of it;
the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while
the matter thereof forms part of the bed,
and waters either running or stagnant;
(9) Docks and structures which, though
floating, are intended by their nature and
object to remain at a fixed place on a river,
lake, or coast;
(10) Contracts for public works, and
servitudes and other real rights over
immovable property.
CATEGORIES OF IMMOVABLES
(a) By nature
(b) By incorporation
(c) By destination
(d) By analogy
Immovables by Nature: cannot be moved from
place to place; their intrinsic qualities have no
utility except in a fixed place. (pars. 1 & 8)
(1) Par. 5
(a) Building - their adherence to the land
must be permanent and substantial.
(b) Buildings have been considered as
immovables, despite:
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(i) Treatment by the parties e.g. they
constitute a separate mortgage
on the building and the land
[Punzalan v. Lacsamana]
(ii) Separate Ownership i.e. a
building on rented land is still
considered an immovable.
[Tolentino]
separation will be substantial e.g.
wells, sewers, aqueducts and railways
(i) Whether attached by the owner
himself or some other person
(3) Par. 7
Actually used (it has been spread over the
land)

Immovables by Destination: are essentially

(2) Par. 8
(a) Mineral Deposits movables but by the purpose for which they
have been placed in an immovable, partake of
(i) Minerals still deposited in the soil;
the nature of an immovable [Par. 4, 5, 6 & 9]
(ii) When minerals have been
extracted, they become chattel.
(1) Par. 4
(b) Slag Dump: dirt and soil taken from a
(a) Placed by the owner or by the tenant
mine and piled upon the surface of
(as agent);
the ground. Minerals can be found
(i) With intention of attaching them
inside the dump.
permanently even if adherence
(c) Waters: those still attached to or
will not involve breakage or injury.
running thru the soil or the ground.
(b) Where the improvement or ornaments
placed by the lessee are not to pass to
Immovables by Incorporation: are essentially
movables but are attached to an immovable in the owner at the expiration of the
lease, they remain movables for
such a way as to be an integral part [Par. 2, 3,
chattel mortgage purposes. [Davao
& 7]
Sawmill v. Castillo (1935)]
(1) Par. 2
Par. 3 v. Par. 4
(a) Trees and plants: only immovables
when they are attached to the land or Par. 3 Par. 4
form an integral part of an immovable Cannot be separated Can be separated
(i) When they have been cut or from immovablefrom immovable
uprooted, they become movables. without breaking or without breaking or
(b) By special treatment of Act 1508 deterioration deterioration
(Chattel Mortgage Law), growing Must be placed by
crops may be subject of a Chattel Need not be placed by the owner, or by his
Mortgage. the owner agent, expressed or
(c) For the purpose of attachment: implied
growing crops are to be attached in Real property by
Real property by
the same manner as realty. (Rule 59, incorporation and
incorporation
Sec. 7) destination

(2) Par. 3 (2) Par. 5

(a) Res vinta in Roman Law Immovability depends upon their
(b) “Attachment in a fixed manner”: being destined for use in the industry or
breakage or injury in case of work in the tenement;

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The moment they are separated,
(from the immovable or from the
industry or work in which they are
utilized) they recover their condition
as movables.
If it is still needed for the industry but
separated from the tenement
temporarily, the property continues to
be immovable.
Requisites for Immovability in Par. 5:
Placed by the owner or the tenant (as
agent);
The machine, receptacle, instrument,
implement must also be ESSENTIAL to the
business in order to be considered realty.
[Mindanao Bus Co. v City Assessor (1962)]
Except: Estoppel
Parties may, by agreement, treat as
personal property that which by nature
would be real, as long as no third
parties would be prejudiced. That
characterization is effective between
the parties. [Makati Leasing v. Wearever
(1983)]
Effect of Attachment
Machinery becomes part of the
immovable.
The installation of machinery and
equipment in a mortgaged sugar central for
the purpose of carrying out the industrial
functions and increasing production,
constitutes a permanent improvement on said
sugar central and subjects said machinery
and equipment to the mortgage constituted
thereon. [Berkenkotter v. Cu Unjieng(1935)]
(3) Par. 6
(a) Requisites:
(i) Placed by the owner or the tenant
(as agent);
(ii) With the intention of permanent
attachment;
(iii) Forming a permanent part of the
immovable.
PROPERTY CIVIL LAW
(4) Par. 9
 A floating house tied to a shore and
used as a residence is considered real
property, considering that the waters on
which it floats are considered
immovables.
 But if the floating house makes it a
point to journey from place to place, it
assumes the category of a vessel, and is
considered a movable.
Immovables by Analogy: Contracts for public
works, servitudes, other real rights over
immovable property e.g. usufruct and lease of
real property for a period of 1 year and
registered [Par. 10]
Note: Enumeration in Art. 415 not absolute.
 Parties may by agreement treat as, but
effective only as to them. It is based, partly,
upon the principle of estoppel. [Evangelista
vs. Alto Surety(1958)]
 For purposes of taxation, improvements on
land are commonly taxed as realty, even
though for some purposes, they might be
considered as personalty.
It is a familiar phenomenon to see things
classified as real property for purposes of
taxation, which on general principle, might
be considered personal property. [Manila
Electric v. Central Bank (1962)]
B.2. PERSONAL OR MOVABLE
NCC 416 & 417.
(1) Those movables susceptible of
appropriation which are not included in
the preceding article;
(2) Real property which by any special
provision of law is considered as
personalty;
(3) Forces of nature which are brought under
control by science; and
(4) In general, all things which can be
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transported from place to place without
impairment of the real property to which
they are fixed.
(5) Obligations and actions which have for
their object movables or demandable
sums; and
(6) Shares of stock of agricultural,
commercial and industrial entities,
although they may have real estate.
TESTS TO DETERMINE MOVABLE
CHARACTER
(1) By exclusion
 Everything NOT included in Article 415
 Parties cannot by agreement treat as
immovable that which is legally
movable
(2) By description
(a) Ability to change location – whether it
can be carried from place to place;
(b) Without substantial injury to the
immovable to which it is attached.
The steel towers built by MERALCO are not
buildings or constructions since they are
removable and merely attached to a square
metal frame by means of bolts, which when
unscrewed could easily be dismantled and
moved from place to place, without breaking
the material or causing deterioration to the
object they are attached. [Board of
Assessment Appeals v. Meralco]
(3) By special provision of law
(a) Growing crops under the Chattel
Mortgage Law
(b) Machinery installed by a lessee not
acting as agent of the owner [Davao
Sawmill v. Castillo]
(c) Intellectual property – considered
personal property; it consists in the
pecuniary benefit which the owner can
get by the reproduction or
manufacture of his work.
PROPERTY CIVIL LAW
(4) By forces of nature
 e.g. electricity, gas, heat, oxygen
B. 3. IMPORTANCE AND SIGNIFICANCE
OF CLASSIFICATION UNDER THE NCC
(1) In criminal law
(a) Usurpation of property can take place
only with respect to real property.
[RPC 312]
(b) Robbery and theft can be committed
only against personal property. [RPC
293, 308]
(2) In the forms of contracts:
(a) Subject matter of specific contracts:
(i) Only real property can be the
subject of real mortgage [NCC
2124] and antichresis. [NCC 2132]
(ii) Only personal property can be the
subject of voluntary deposit [NCC
1966], pledge [NCC 2094] and
chattel mortgage. [Act 1508]
(b) Donations of real property are
required to be in a public instrument
[NCC 749] but a donation of a
movable may be made orally or in
writing. [NCC 748]
(3) For acquisitive prescription:
(a) Real property can be acquired by
prescription in 30 years (bad faith)
and 10 years (good faith). (NCC 1137,
1134)
(b) Movables can be acquired by
prescription in 8 years (bad faith) and
4 years (good faith). (NCC 1132)
(4) Actions for recovery of possession:
(a) Possession of real property -
recovered through accion
reivindicatoria, accion publiciana,
forcible entry and unlawful detainer.
(b) Possession of movable property -
recovered through replevin.
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(5) Venue of actions:
(a) Real actions - Actions concerning real
property are commenced in the court
that has jurisdiction over the area
where the real property is situated.
[Rules of Court Rule 4 Sec. 1]
(b) Personal actions - Commenced where
the plaintiff or any of the principal
plaintiffs, or where the defendant or
any of the principal defendants
resides, or if a non-resident
defendant, where he may be found, at
the election of the plaintiff. [Rule 4
Sec. 2]
(6) The governing law (Private International
Law):
(a) Immovables - governed by the law of
the country where they are located.
(b) Movables - governed by the personal
laws of the owner. (which in some
cases is the law of his nationality and
in other cases, the law of his domicile)
(7) In affecting third persons:
(a) In transactions involving real property
– must be recorded in the Registry of
Property to affect third persons.
(b) In transactions involving personal
property – registration is not required,
except for chattel mortgages. [Chattel
Mortgage Register, NCC 2140]
(c)
C. BASED ON OWNERSHIP/RIGHTS-
HOLDER
NCC 419. Property is part of either the public
dominion or private ownership.
Churches and other consecrated objects are
considered outside the commerce of man;
they are considered neither public nor private
property.
PROPERTY CIVIL LAW
C.1. PUBLIC DOMINION
Property of public dominion is outside the
commerce of man. They cannot be the subject
matter of private contracts, cannot be
acquired by prescription and they are not
subject to attachment and execution nor
burdened with a voluntary easement.
Public
As defined by NCC 420
Dominion
Public Used in Art XII, Section 2,
Domain 1987 Constitution
Public Lands Public Land Act
CHARACTERISTICS
 Not owned by the State but pertains to it as
territorial sovereign; to hold in trust for the
interest of the community.
 Purpose: For public use, and not for use by
the State as a juridical person.
 Cannot be the subject of appropriation
either by the State or by private persons.
CLASSIFICATIONS
Administered by the State [NCC 420
(1) Those intended for public use. (roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores,
roadsteads, and others of similar
character)
May be used by everybody, even by
strangers or aliens but nobody can
exercise over it the rights of a private
owner.
(2) Those intended for some public service:
may be used only by authorized persons
but exists for the benefit of all. e.g.
fortresses, unleased mines and civil
buildings.
(3) Those for the development of the national
wealth. Includes natural resources such as
minerals, coal, oil and forest.
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(4) Patrimonial property:
(a) Owned by the State over which it has
the same rights as private individuals
in relation to their own property.
(b) Subject to the administrative laws and
regulations on the procedure of
exercising such rights. E.g. friar lands,
escheated properties and commercial
buildings.
(c) Purpose:
(i) Enables the State to attain its
economic ends.
(ii) Serves as a means for the State’s
subsistence and preservation.
(iii) Enables the State to fulfill its
primary mission.
(d) Conversion of Property of Public
Dominion for Public Use to
Patrimonial Property:
(i) Property of public dominion, when
no longer intended for public use
or for public service, shall form
part of the patrimonial property of
the State [NCC 422, Civil Code]
(ii) An express Declaration by the
State (either by the Congress or by
the President, if the power was
provided by law) that the public
dominion property has been
converted into patrimonial
property, even though it was
classified as alienable or
disposable. [Heirs of Malabanan v.
Republic (2009)]
Administered by Municipal Corporations [NCC
424]
(1) Property for public use, in the provinces,
cities, and municipalities, consist of the
provincial roads, city streets, municipal
streets, the squares, fountains, public
waters, promenades, and public works for
public service paid for by said provinces,
cities, or municipalities.
(2) Patrimonial property of Municipal
Corporations:
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CIVIL LAW
 The province or municipality, as a
juridical entity, also possesses private
property to answer for its economic
necessities.
 Classification of Properties of provinces,
cities, and municipalities [Salas v.
Jarencio, (1972)]
(i) Properties acquired with their own
funds in their private or corporate
capacity over which the political
subdivision has ownership and
control.
(ii) Properties of public dominion
held in trust for the State’s
inhabitants are subject to the
control and supervision of the
State.
 A municipal corporation must prove that
they acquired the land with their own
corporate funds
 Presumption: that land comes from the
State upon the creation of the
municipality. All lands in the possession
of the municipality
 Exception: for those acquired with its
private funds, are deemed to be property
of public dominion, held in trust for the
State for the benefit of its inhabitants.
 Congress has paramount power to
dispose of lands of public dominion in a
municipality, the latter being a
subdivision only for purposes of local
administration. [Salas v. Jarencio, (1972)]
C.2. PRIVATE OWNERSHIP
Can be exercised by the state in its private
capacity or by private persons.
KINDS
(1) Patrimonial property - Property owned by
the State and its political subdivisions in
their private capacity; all property of the
State not included in NCC 420 (on public
dominion) [NCC 421-424]
UP LAW BOC
(2) Property belonging to private persons,
either individually or collectively [NCC
425]
 Property of private ownership, besides
the patrimonial property of the State,
provinces, cities, and municipalities,
consists of all property belonging to
private persons, either individually or
collectively.
 Refers to all property belonging to
private persons, natural or juridical,
either individually or collectively (co-
owned property)
DETERMINATION (TWO DIFFERENT
VIEWS)
(1) Determined by how the property was used
In Province of Zamboanga v. City of
Zamboanga (1968), property was
considered patrimonial for they were not
for public use.
(2) Determined by how the property was
acquired
According to Salas v. Jarencio (1972), the
absence of a title deed to any land,
showing that it was acquired with its
private or corporate funds, the
presumption is that such land came from
the State upon the creation of the
municipality.
CONVERSION
Alienable Public Land converted to Private
Property through Prescription
 Alienable public land held by a possessor –
personally/through predecessors-in-
interest, openly, continuously and
exclusively – for 30 years is CONVERTED to
private property by the mere lapse or
completion of the period. The application
for confirmation is mere formality, because
land had already been converted, giving rise
to a registrable title. [Director of Lands v.
IAC(1986)]
PROPERTY CIVIL LAW
Private Land converted to Property of Public
Dominion through abandonment and
reclamation
 Through the gradual encroachment or
erosion by the ebb and flow of the tide,
private property may become public IF the
owner appears to have ABANDONED the
land, and permitted it to be totally
destroyed so as to become part of the shore.
The land having disappeared on account of
the gradual erosion, and having remained
submerged until they were reclaimed by the
government, they are public land.
[Government v. Cabangis (1929)]
D. BASED ON CONSUMABILITY
[NCC 418]
Only applies to movable property, determined
by nature.
D.1. CONSUMABLE
(1) Movables which cannot be used in a
manner appropriate to their nature
without their being consumed. (e.g. food)
(2) Consumable goods cannot be the subject
matter of a commodatum unless the
purpose of the contract is not the
consumption of the object, as when it is
merely for exhibition.
D.2. NON-CONSUMABLE
All others not falling under ‘consumable’ e.g.
money in coin.
E. BASED ON SUSCEPTIBILITY TO
SUBSTITUTION
Only applies to movables, determined by the
intention of the parties.
E.1. FUNGIBLES
Things that, because of their nature or the will
of the parties, are capable of being
substituted by others of the same kind, not
having a distinct individuality.
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E.2. NON-FUNGIBLES
(1) Things that cannot be substituted for G.4. BY REASON OF THEIR
another; SUSCEPTIBILITY TO DIVISION
(2) If the parties agreed that the same thing (1) Divisible
be returned, it is not fungible. Those which can be divided physically or
juridically without injury to their nature
F. BASED ON THE CONSTITUTION e.g.: piece of land or an inheritance.
[ARTICLE XII, SEC 3] (2) Indivisible
(1) Public Agricultural Land; Those which cannot be divided without
destroying their nature or rendering
(2) Mineral Land;
impossible the fulfillment of the juridical
(3) Timber Land; relation of which they are object.
(4) National Parks.
G.5. BY REASON OF DESIGNATION
G. OTHER CLASSIFICATIONS (1) Generic
G.1. BY THEIR PHYSICAL EXISTENCE That which indicates its homogenous
(1) Corporeal nature, but not the individual such as a
All property the existence of which can be horse, house, dress, without indicating it.
determined by the senses. (res qui tangi (2) Specific
possunt) That which indicates the specie or its
(2) Incorporeal nature and the individual, such as “the
(a) Things having abstract existence, white horse of X”.
created by man and representing
value. G.6. EXISTENCE IN POINT OF TIME
(b) Includes rights over incorporeal (1) Present
things, credits, and real rights other Those which exist in actuality, either
than ownership over corporeal things. physical or legal, such as, the erected
building.
G.2. BY THEIR AUTONOMY OR (2) Future
DEPENDENCE Those which do not exist in actuality, but
(1) Principal whose existence can reasonably be
Those to which other things are expected with more or less probability,
considered dependent or subordinated, such as ungathered fruits.
such as the land on which a house is built.
(2) Accessory
Those which are dependent upon or III. Ownership
subordinated to the principal. They are
destined to complete, enhance or A. DEFINITION AND CONCEPT
ornament another property.  Independent right of exclusive enjoyment
and control of a thing.
G.3. BY SUSCEPTIBILITY TO  Has the purpose of deriving all advantages
DETERIORATION required by the reasonable needs of the
(1) Deteriorable owner/holder of right and promotion of
Those that deteriorate through use or by general welfare.
time.  A complete subjection to an owner’s will.
(2) Non-deteriorable.

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 May be exercised in everything not C.3. PROTECTING PROPERTY

prohibited by public law or the rights of C.3.1 BASIC DISTINCTIONS
another.
REAL RIGHTS V. PERSONAL RIGHTS
B. TYPES OF OWNERSHIP Real Rights
(1) Full Ownership Rights that confer upon its holder an
With complete rights over the property. autonomous power to derive directly from a
(2) Naked Ownership thing certain economic advantages
Absence of jus fruendi and jus utendi. independently of whoever the possessor of
(3) Sole Ownership the thing.
Ownership vested only in one person.
(4) Co-Ownership Personal Rights
Ownership vested in 2 or more persons. Rights of a person to demand from another as
a definite passive subject, the fulfillment of a
C. RIGHT IN GENERAL prestation to give, to do or not to do.
C.1. RIGHTS INCLUDED IN
Real Rights Personal Rights
OWNERSHIP [NCC 428] Definite active subject Definite active
(1) Right to enjoy and dispose of a thing, who has a right subject (creditor)
without other limitations than those against ALL persons and a definite
established by law. generally as an passive subject
(2) Right of action against the holder and indefinite passive (debtor).
possessor of the thing in order to recover subject.
it.
Object is generally a Subject matter is
corporeal thing. always an
C.2. BUNDLE OF RIGHTS
incorporeal thing.
(1) Jus Utendi: right to enjoy and receive what
Generally Personal right
the property produces.
extinguished by the survives the subject
(2) Jus Fruendi: right to receive the fruits.
loss or destruction of matter.
(3) Jus Accessiones: right to the accessories.
the thing over which it
(4) Jus Abutend: right to consume a thing by
is exercised.
use.
It is directed against It is binding or
(5) Jus Disponendi: right to alienate,
the whole world, enforceable only
encumber, transform or even destroy the
giving rise to real against a particular
thing owned.
actions against 3rd person giving rise to
(6) Jus Vindicandi: right to recover possession
persons. personal actions
of property based on a claim of
against such debtor.
ownership.
(7) Jus Possidendi: right to possess the
REAL ACTION V. PERSONAL ACTION
property. (Implied from all the other
(ROC, RULE 4 SEC 1-2)
rights)
Real action
Actions affecting title to or possession of real
property or any interest therein.

Personal action
All other actions.

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ACTION IN REM V. ACTION IN
PERSONAM V. ACTION QUASI IN REM
Action in rem
Action against a property, judgment binding
against the whole world.
Action in personam
Action against a specific person, judgment
binding against that particular person.
Action quasi in rem
Action against a specific property with respect
to a person.
C.3.2. REMEDIES
DOCTRINE OF SELF-HELP [NCC 429-
430]
 The owner may use such force as may be
reasonably necessary to repel or prevent
an actual or threatened unlawful physical
invasion or usurpation of his property.
 Every owner may enclose or fence his
land or tenements by any other means
without detriment to servitudes
constituted thereon.
ACTIONS TO RECOVER OWNERSHIP
AND POSSESSION OF PROPERTY
Immovable Property
Accion Reivindicatoria
Recovery of ownership of real property.
 Including but not limited to possession.
 Prescription of Action: 30 years.
Accion Publiciana
Recovery of a better right to possess (de jure).
 Judgment as to who has the better right of
possession.
 Also, actions for ejectment not filed within 1
year must be filed as accion publiciana.
 Prescription: 10 years.
Accion Interdictal
A summary action for recovery of physical
possession through either an action for
Forcible Entry or Unlawful Detainer.
PROPERTY CIVIL LAW
 Prior physical possession by the plaintiff is
not required.
 The action must be filed within 1 year
AFTER dispossession / unlawful possession
/ demand to vacate.
Distinction between forcible entry and
unlawful detainer
(1) Forcible Entry: Lawful possessor deprived
through FISTS:
 FISTS (Force, Intimidation, Strategy,
Threats, Stealth)
 Prescription: 1 year from dispossession
(force, intimidation, threats) or from
knowledge of dispossession (strategy,
stealth).
(2) Unlawful Detainer: Possessor refused to
vacate upon demand by owner.
 Legal possession (by permission/
tolerance) becomes unlawful upon
failure to vacate.
 Prescription of action: 1 year from last
notice to vacate.
Movable property
Replevin
 For manual delivery of property
 Prescription of Right: 4 years (good faith) or
8 years (bad faith)
Requisites for recovery of property [NCC 434]
(1) Property must be identified;
Through a relocation survey and a title
properly identifying boundaries and
location.
(2) Plaintiff must rely on the strength of his
title and not on weakness of defendant’s
title.
 Right must be founded on positive title
and not on lack or insufficiency of
defendant’s.
 Ei incumbit probatio qui dicit, non qui
negat: He who asserts, not he who
denied must prove.
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D. LIMITATIONS ON OWNERSHIP (a) Private property or its use as the object of

D.1. GENERAL LIMITATIONS: the expropriation;
TAXATION, EMINENT DOMAIN, POLICE (b) The property or its use is taken by the
State or by competent authority;
POWER
(c) The purpose of the taking is for public
POLICE POWER use;
(d) The taking must be attended with due
PROPERTY TAKEN WITH NO
process of law; and
COMPENSATION FOR GENERAL
(e) There is payment of just compensation.
WELFARE.
 When any property is condemned or seized Note:
by competent authority in the interest of  Expropriation may be exercised on both
health, safety or security, the owner thereof real and personal property. [Rule 67,
shall not be entitled to compensation, Rules of Court]
unless he can show that such condemnation
 Expropriation may be exercised not only
or seizure is unjustified. [Art. 436, Civil Code] on property but also its use such as the
use of telephone lines [Republic v PLDT
Requisites
(1969)]
To justify the exercise of police power, the
following must appear [US v Toribio(1910)]:
D.2. SPECIFIC LIMITATIONS:
(a) The interests of the public generally,
IMPOSED BY LAW, SIC UTERE TUO,
require such interference (as
distinguished from those of a particular NUISANCE, STATE OF NECESSITY,
class); and EASEMENTS, AND THOSE
(b) The means are reasonably necessary for VOLUNTARILY IMPOSED BY THE
the accomplishment of a purpose, and OWNER: SERVITUDES, MORTGAGES
not unduly oppressive. IMPOSED BY CONTRACT.
(1) Legal Servitudes
TAXATION Once requisites are satisfied, the servient
Forced contribution to the operation of owner may ask the Court to declare the
government. existence of an easement.
(a) Art. 644 & 678: Aqueduct
(b) Art. 679: Planting of trees
(c) Art. 670: Light and View
(d) Art. 649 & 652: Right of Way
EMINENT DOMAIN (e) Art. 637: Passage of water from upper
Property taken for public use/purpose, but to lower tenements
subject to due process and payment of just (f) Art. 676: Drainage of buildings
compensation. (g) Art. 684-687: Lateral and subjacent
support
Requisites
To justify the exercise of the right of eminent (2) Must not injure the rights of a third person
domain, the following requisites must all be (a) Sic Utere Tuo Ut Alienum Non Laedas
present: (b) The owner of a thing cannot make use
thereof in such manner as to injure
the rights of a third person. [NCC 431]

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A nuisance is any act, omission,

(3) Actions in a State of Necessity
The owner of a thing has no right to
prohibit the interference of another with
the same, if the interference is necessary
to avert an imminent danger and the
threatened damage, compared to the
damage arising to the owner from the
interference, is much greater. The owner
may demand from the person benefited,
indemnity for the damage to him. [NCC
432]
(4) Nuisance
establishment, business, condition of
property, or anything else which:
(a) Injures or endangers the health or
safety of others;
(b) Annoys or offends the senses;
(c) Shocks, defies or disregards decency
or morality;
(d) Obstructs or interferes with the free
passage of any public highway or
street, or any body of water; or
(e) Hinders or impairs the use of property.
[NCC 694]

SUMMARY OF ACTIONS

Action Venue Summon Prayer Basis Prescription

Forcible Entry / Real In Possession Prior physical 1 year
Unlawful Action personam possession
Detainer
Accion Real In Possession Real right of 10 years
Publiciana Action personam Possession [NCC 555(4)]
Real In Possession Ownership GF: 10 years
Action personam BF: 30 years
[NCC 1137]
Accion
Reividicatoria
Exceptiion: Torrens Title;
Exception to exception:
laches
Real In Title Ownership 10 years
Reconveyance
Action personam (NCC 1456)
Real Quasi-in Quieting of Ownership Imprescriptible
Quieting of Title
Action rem Title
Personal In Possession Ownership GF: 4 years
Replevin
Action personam BF: 8 years

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IV. Accession
Accession – the right by virtue of which the
owner of a thing becomes the owner of
everything that is produced thereby, or which
is incorporated or attached thereto, either
naturally or artificially. [NCC 440]
Accessories – things joined to or included
with the principal thing for the latter’s
embellishment, better use, or completion.
A. CLASSIFICATION OF ACCESSION
(1) Accession Discreta (fruits) – the right
pertaining to the owner of a thing over
everything produced thereby (by internal
forces).
(2) Accession Continua – the right pertaining
to the owner of a thing over everything
that is incorporated or attached thereto
either naturally or artificially; by external
forces (by external forces).
(a) Over Immovables
(i) Industrial
(ii) Natural
(1) Alluvion
(2) Avulsion
(3) Change of Course of River
(4) Formation of Islands
(b) Over Movables
(i) Conjunction and Adjunction
(ii) Commixtion and Confusion
(iii) Specification
A.1. WITH RESPECT TO IMMOVABLES
ACCESSION DISCRETA
Right of ownership to the fruits. [NCC 441]
General Rule: To the owner of the principal
belongs the natural, industrial and civil fruit.
Exceptions:
PROPERTY CIVIL LAW
(1)
(2)
Possession in good faith
Usufruct
(3) Lease
(4) Antichresis
In cases where there is a clear and convincing
evidence to prove that the principal and the
accessory are not owned by one and the same
person or entity, the presumption shall not be
applied and the actual ownership shall be
upheld. In a number of cases, we recognized the
separate ownership of the land from the building
and brushed aside the rule that accessory
follows the principal. [Villasi v. Garcia (2014)]
FRUITS
All periodical additions to a principal thing
produced by forces inherent to the thing itself.
KINDS OF FRUITS
(1) Natural – spontaneous products of soil and
the young and other products of animals
[NCC 442 (1)].
Under the rule partus sequitur ventrem, to the
owner of female animals would also belong
the young of such animals although this
right is lost when the owner mixes his cattle
with those of another.
(2) Industrial – produced by lands of any kind
through cultivation or labor [NCC 442 (2)].
Standing trees are not fruits since they are
considered immovables although they
produce fruits themselves. However, they
may be considered as industrial fruits when
they are cultivated or exploited to carry on an
industry.
(3) Civil – easily prorated for under NCC 544
they are deemed to accrue daily and belong
to the possessor in good faith in that
proportion.
Notes:
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(a) Natural and Industrial Fruits are real
property while still ungathered.
(b) Only those that are manifest or born
are considered as natural or
industrial fruits.
PRINCIPLES APPLICABLE TO
ACCESSION DISCRETA
(1) Time of Accrual depending on kind:
 Annuals: from the time seedlings
appear on the ground.
 Perennials: from the time fruits actually
appear on the plants.
 Young of animals: from the time they
are in the womb, although unborn –
beginning of maximum ordinary period
of gestation.
 Fowls: from the time of incubation.
(2) A receiver of fruits has the obligation to
pay the expenses incurred by a third
person in the production, gathering and
preservation. [NCC 443]
 Exception: Receiver does not have to
pay if fruits are recovered before
gathering from a possessor in bad faith,
receiver does NOT have to pay
indemnity.
 But if recovered after fruits have been
gathered, receiver must pay since the
fruits have been separated from
immovable, hence accession principles
will not apply.
PRINCIPLES APPLICABLE TO
ACCESSION CONTINUA
(1) Accession Continua Artificial or Industrial
Building, planting or sowing on land
owned by another (over immovables).
General Rule: Whatever is built, planted
or sown on the land of another +
improvements or repairs made thereon,
belong to the owner of the land subject
to the rules on BPS.
PROPERTY CIVIL LAW
Presumptions
(a) All works, sowing and planting are
presumed made by the owner.
(b) All works are presumed made at the owner’s
expense, unless the contrary is proved.
(c) The owner of the principal thing owns the
natural, industrial and civil fruits, except
when the following persons exist:
(i) Possessor in Good Faith
(ii) Usufructuary
(iii) Lessee
(iv) Antichretic creditor
Meaning of bad faith
(1) On the part of the landowner
Whenever the building, planting or sowing
was done with the knowledge and without
opposition on his part.
(2) On the part of owner of materials
Allows the use of his materials without
protest.
(3) On the part of the builder, planter and sower
Knows that he does not have title to the land,
nor the right to build thereon OR no
permission of the owner of the materials to
pay their value.
Note
 Bad faith leads to liability for damages and the
loss of the works or the improvement without
reimbursement.
 Bad faith of one party neutralizes the bad faith
of the other.
(4) Accession Continua Natural
Land deposits, etc.
(a) Alluvium
Soil is gradually deposited on banks adjoining
the river. There can be no acquisition of soil
deposited on the shores of the sea [De Buyser v.
Director of Lands (1983)]
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Requisites
(1) Deposit of soil or sediment is gradual
and imperceptible;
(2) As a result of the action of the currents of
the waters of the river and should have
no human intervention;
(3) Land where the accretion takes place is
adjacent to the banks of the rivers; and
(4) Deemed to Exist: When the deposit of the
sediment has reached a level higher than
the highest level of the water during the
year.
Effect
The riparian owner automatically owns the
Alluvion BUT it does not automatically
become registered property in his name.
[Grande v CA (1962)]
Rationale
 To offset the owner’s loss from possible
erosion due to the current of the river;
 To compensate for the subjection of the
land to encumbrances and legal
easements.
(b) Avulsion
A portion of land is segregated from one
estate by the forceful current of a river, creek
or torrent and transferred to another.
Requisites
(1) Segregation and transfer of land is
sudden and abrupt;
(2) Caused by the current of the water; and
(3) The portion of land transported must be
known and identifiable. OR
(4) Can also apply to sudden transfer by
other forces of nature such as land
transferred from a mountain slope
because of an earthquake.
Effect
The ownership of the detached property is
retained by the owner subject to removal
within 2 years from the detachment.
PROPERTY CIVIL LAW
(c) Change Of Course Of River
Requisites:
(1) Change in the natural course of the waters of
the river; and
(2) Such change causes the abandonment of the
river beds. “Natural Bed”: ground covered by
its waters during the highest floods. [Binalay
v Manalo (1991)]
(3) Such change is sudden or abrupt
Results
(1) Owners whose lands are occupied by the new
course automatically become owners of the
old bed, in proportion to the area they lost
(2) Owners of the lands adjoining the old bed
are given the right to acquire the same by
paying the value of the land.
*Not exceeding the value of the land invaded
by the new bed (the old property of the
owner)
(3) The new bed opened by the river on a private
estate shall become of public dominion.
(d) Formation of Islands
They belong to the State if:
(1) Formed on the seas within the jurisdiction of
the Philippines.
(2) Formed on lakes, or
(3) Formed on navigable or floatable rivers:
(a) Capable of affording a channel or
passage for ships and vessels;
(b) Must be sufficient not only to float
bancas and light boats, but also bigger
watercraft;
(c) Deep enough to allow unobstructed
movements of ships and vessels.
TEST: can be used as a highway of
commerce, trade and travel.
They belong to the owners of the nearest margins
or banks if:
(1) Formed through successive accumulation of
alluvial deposits
(2) On non-navigable and non-floatable rivers
(3) If island is in the middle: divided
longitudinally in half.
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Landowner [LO] in Good Faith Landowner [LO] in Bad Faith

Rights of Landowner [NCC 448] Absolute Duties of Landowner
Options: [NCC 447]:
(1) Buy (only after payment of indemnity for (1) Pay damages; and
Builder, necessary, useful and ornamental expenses [NCC (2) Allow removal; or
Planter, Sower 546 and 548]); (3) Buy or pay for value of
[BPS] (2) Sell to BP (unless the value of the land is improvement.
in Good Faith considerably more than that of the building or
trees); or
Remedy: Rent to BP if LO does not want to buy
(3) Rent to S.
Rights of Landowner [NCC 449-452] Same as though both
Options: landowner and BPS are in
(1) Appropriate the improvements without paying good faith
Builder, indemnity;
Planter, Sower (2) Demolish/Removal of the work of BPS at the
[BPS] expense of BPS;
in Bad Faith (3) Sell to BP; or
(4) Rent to the S

Absolute right to Damages from BPS.

Landowner [LO] in Good Faith Landowner [LO] in Bad Faith

Right of Landowner [NCC 447] Absolute Duties of Landowner [NCC 447]:
Owner of
To buy the improvements unless OM can (1) Pay damages; and
Material [OM]
remove without damage. (2) Allow removal in any event; or
in Good Faith
(3) Pay for value.
Absolute Rights of Landowner [NCC 447] Same as though both landowner and
Owner of
(1) To appropriate the materials without material man are in good faith
Material [OM]
payment.
in Bad Faith
(2) Right to damages from OM.

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Landowner BPS Owner of Material [OM]

Good faith Good faith Good faith
Options: (1) Right of retention until (1) Collect value of material
(1) Right to acquire improvements necessary and useful primarily from BPS and
and pay indemnity to BPS; expenses are paid; subsidiarily to landowner if
subsidiarily liable to OM; (2) To pay value of materials BPS is insolvent; and
(2) Sell the land to BP except if the to OM. (2) Limited right of removal (if
value of the land is the removal will not cause
considerably more; or any injury)
(3) Rent to sower.
Good faith Good faith Bad faith
Options: (1) Right of retention until (1) Lose the material without
(1) Right to acquire improvements necessary and useful right to indemnity.
and pay indemnity to BPS; expenses are paid. (2) Must pay for damages to
(2) Sell land to BP except if the (2) Keep BPS without BPS.
value of the land is indemnity to OM and
considerably more; or collect damages from him.
(3) Rent to sower.
Good faith Bad faith Bad faith
(1) Landowner has right to collect Recover necessary expenses (1) Recover value from BPS
damages from BPS in any case for preservation of land from (as if both are in good
and the option to either landowner unless landowner faith)
(a) Acquire improvements w/o sells land. (2) If BPS acquires
paying for indemnity; improvement, remove
(b) Demolition or restoration; materials if feasible w/o
or injury
(c) Sell to BP, or to rent to (3) No action against
sower landowner but may be
(2) Pay necessary expenses to liable to landowner for
BPS. consequential damages
Bad faith Bad faith Bad faith
Same as when all acted in good Same as when all acted in Same as when all acted in
faith under Article 453 good faith under Article 453 good faith under Article 453
Bad faith Good faith Good faith
(1) Acquire improvement after (1) May remove (1) Remove materials if
paying indemnity and damages improvements. possible w/o injury
to BPS unless the latter (2) Be indemnified for (2) Collect value of materials
decides to remove. damages in any event from BPS; subsidiarily from
(2) Subsidiarily liable to OM for (3) Pay OM the value of the landowner
value of materials. materials

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Landowner BPS Owner of Material [OM]

Good faith Bad faith Good faith
Options: (1) Right of retention until (1) Collect value of materials
(3) Right to acquire improvements necessary expenses are primarily from BPS and
and pay indemnity to BPS; paid. subsidiarily from
subsidiarily liable to OM; (2) Pay value of materials to landowner.
(4) Sell the land to BP except if the OM and pay him (2) Collect damages from
value of the land is damages. BPS.
considerably more; or (3) Absolute right to remove
Rent to sower. materials in any event.
Good faith Bad faith Good faith
(1) Landowner has right to collect (1) Right to necessary (1) Collect value of materials
damages from BPS in any case expenses. primarily from BPS and
and the option to either (2) Pay value of materials to subsidiarily from
(a) Acquire improvements w/o OM. landowner
paying for indemnity; (3) Pay damages to OM/LO. (2) Collect damages from BPS
(b) Demolition or restoration; (3) If BPS acquires
or improvements, absolute
(c) Sell to BP, or to rent to right of removal in any
sower event.
(2) Pay necessary expenses to
BPS.
Bad faith Good faith Bad faith
Acquire improvements and pay (1) Receive indemnity for (1) No right to indemnity.
indemnity and damages to BPS damages. (2) Loses right to material.
unless the latter decides to remove (2) Absolute right of removal
materials. of improvements in any
event.

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A.2. WITH RESPECT TO MOVABLE
PROPERTY
TYPES
(1) Conjunction or Adjunction
Process where 2 movables belonging to
different owners are attached to each other
to form a single object.
(2) Mixture
The union of material where the
components lose their identity.
(3) Specification
Transforming or giving of a new form to
another’s material through labor.
CONJUNCTION / ADJUNCTION
Requisites
(1) There are 2 movables belonging to 2
different owners;
(2) They are united in such a way that they
form a single object; and
(3) They are so inseparable that their
separation would impair their nature or
result in substantial injury to either
component.
Kinds
(1) Inclusion or engraftment – e.g. a diamond
is set on a gold ring
(2) Soldadura or soldering – e.g. when lead is
united or fused to an object made of lead
(a) Ferruminacion if both the accessory
and principal objects are of the same
metal; and
(b) Plumbatura, if they are of different
metals
(3) Escritura or writing – e.g. when a person
writes on paper belonging to another;
(4) Pintura or painting – e.g. when a person
paints on canvas belonging to another;
(5) Tejido or weaving – e.g. when threads
belonging to different owners are used in
making textile
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CIVIL LAW
Ownership of new object formed by adjunction
(1) If union was made in good faith
The owner of principal thing acquires the
accessory, with obligation to indemnify
the owner of the accessory for its value in
its uncontroverted state.
(2) If union was in bad faith, NCC 470 applies:
 Owner of accessory in bad faith loses
the thing incorporated and has the
obligation to indemnify the owner of the
principal thing for damages.
 If owner of principal is in bad faith,
owner of the accessory has a right to
choose between the owner of principal
paying him its value or that the thing
belonging to him be separated, even
though for this purpose it be necessary
to destroy the principal thing; and in
both cases, there shall be indemnity for
damages
Test to determine the principal thing
In the order of application, the principal is
that:
(1) To which the other has been united as an
ornament or for its use or perfection
(“Rule of importance and purpose”).
(2) Of greater value.
(3) Of greater volume.
(4) That of greater merits, taking into
consideration all the pertinent legal
provisions, as well as the comparative
merits, utility and volume of their
respective things. [Manresa]
When separation allowed
(1) When separation will not cause any injury;
or
(2) When the accessory is much more
precious:
(a) Owner of accessory may demand
separation even though the principal
thing may suffer.
UP LAW BOC PROPERTY
(b) Owner who caused the union shall
bear the expenses for separation even
if he acted in good faith.
(3) When the owner of the principal is in bad
faith.
MIXTURE
Kinds
(1) Commixtion: mixture of solid things
(2) Confusion: mixture of liquid things
Rules
(1) Mixture by will of the owners:
(a) Primarily governed by their
stipulations.
(b) In the absence of stipulation, each
owner acquires a right or interest in the
mixture in proportion to the value of
his material.
(2) Mixture caused by an owner in good faith or
by chance
(a) Share of each owner shall be
proportional to the value of the part
that belonged to him.
(b) If things mixed are exactly the same
kind, quality and quantity, divide the
mixture equally.
(c) If things mixed are of different kind or
quality, a co-ownership arises.
(d) If they can be separated without injury,
the owners may demand separation.
(e) Expenses are borne by the owners pro
rata.
(f) NOTE: Good faith does not necessarily
exclude negligence, which gives rise to
damages.
(3) Mixture caused by an owner in bad faith
(a) Actor forfeits the thing belonging to
him.
(b) Actor also becomes liable for
damages.
(4) Mixture made with knowledge and without
objection of the other owner
Rights to be determined as though both
acted in good faith.
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CIVIL LAW
SPECIFICATION
Definition
Takes place when the work of a person is
done on the material of another, such
material, in consequence of the work itself,
undergoes a transformation.
Rules
(1) Person in good faith
General rule
Worker becomes the owner but must
indemnify the owner (who was also in
good faith) for the value of the material.
Exception
If the material is more valuable than the
new thing, the owner of the material may
choose:
(a) To take the new thing but must pay
for the work or labor; or
(b) To demand indemnity for the
material.
If the owner was in bad faith, maker may
appropriate the new thing without paying
the owner OR require the owner to pay
him the value of the thing or his work,
with right to indemnity
(2) Person in bad faith
General rule
(a) Owner may either appropriate the
new thing to himself without paying
the maker OR
(b) Owner may demand value of material
plus damages
Exception
The first option is not available in case the
value of the work, for artistic or scrientific
reasons, is considerably more than that of
the material
(3) Person made use of material with consent
and without objection of owner
Rights shall be determined as though
both acted in good faith
UP LAW BOC
V. Quieting of Title
OR INTEREST IN AND REMOVAL OR
PREVENTION OF CLOUD OVER TITLE
TO OR INTEREST IN REAL PROPERTY
A. IN GENERAL
A remedy or form of proceeding originating in
equity jurisprudence. Equity comes to the aid
of the plaintiff who would suffer if the
instrument (which appear to be valid but is in
reality void, ineffective, voidable or
unenforceable) was to be enforced.
B. PURPOSE
(1) To declare:
(a) The invalidity of a claim on a title; or
(b) The invalidity of an interest in property.
(2) To free the plaintiff and all those claiming
under him from any hostile claim on the
property.
C. NATURE: QUASI IN REM
 A suit against a particular person or persons
in respect to the res and the judgment will
apply only to the property in dispute.
 The action to quiet title is characterized as
proceeding quasi in rem. Technically, it is
neither in rem nor in personam. In an action
quasi in rem, an individual is named as a
defendant. However, unlike suits in rem, a
quasi in rem judgment is conclusive only
between the parties. [Spouses Portic v.
Cristobal]
D. JUSTIFICATIONS TO BRING AN
ACTION TO QUIET TITLE
(1) To prevent future or further litigation on
the ownership of the property.
(2) To protect the true title and possession.
(3) To protect the real interest of both parties.
(4) To determine and make known the precise
state of the title for the guidance of all.
PROPERTY CIVIL LAW
E. THE ACTION TO QUIET TITLE
DOES NOT APPLY:
(1) To questions involving interpretation of
documents;
(2) To mere written or oral assertions of
claim, unless made in a legal proceeding
or asserting that an instrument or entry in
plaintiff’s favor is not what it purports to
be;
(3) To boundary disputes;
(4) To deeds by strangers to the title unless
purporting to convey the property of the
plaintiff;
(5) To instruments invalid on their face; or
(6) Where the validity of the instrument
involves a pure question of law.
F. REQUIREMENTS
F.1. REQUISITES OF AN ACTION TO
QUIET TITLE
(1) There is a CLOUD on title to real property
or any interest to real property;
(2) The plaintiff must have legal or equitable
title to, or interest in the real property;
and
(3) Plaintiff must return the benefits received
from the defendant.
“Cloud on title” means a semblance of title,
either legal or equitable, or a claim or a right
in real property, appearing in some legal form
but which is, in fact, invalid or which would be
inequitable to enforce.
A cloud exists if:
(1) There is a claim emerging by reason of:
(a) Any instrument e.g. a contract, or any
deed of conveyance, mortgage,
assignment, waiver, etc. covering the
property concerned;
(b) Any record, claim, encumbrance e.g.
an attachment, lien, inscription,
adverse claim, lis pendens, on a title;
or
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UP LAW BOC PROPERTY
(c) Any proceeding e.g. an extrajudicial
partition of property.
(2) The claim should appear valid or effective
and extraneous evidence is needed to prove
their validity or invalidity;
(a) Test: Would the owner of the property
in an action for ejectment brought by
the adverse party be required to offer
evidence to defeat a recovery?
(b) As a general rule, a cloud is not
created by mere verbal or parole
assertion of ownership or an interest in
property.
(3) Such instrument, etc. is, in truth and in fact,
invalid, ineffective, voidable, or
unenforceable, or has been extinguished or
terminated, or has been barred by
extinctive prescription; and
(4) Such instrument, etc. may be prejudicial to
the true owner or possessor.
F.2. REQUISITES OF AN ACTION TO
PREVENT A CLOUD:
(1) Plaintiff has a title to a real property or
interest therein;
(2) Defendant is bent on creating a cloud on
the title or interest therein. The danger
must not be merely speculative or
imaginary but imminent; and
(3) Unless the defendant is restrained or
stopped, the title or interest of the plaintiff
will be prejudiced or adversely affected.
The plaintiff must have legal or equitable title
to, or interest in the real property [NCC 477]
(1) Legal title: the party is the registered owner
of the property.
(2) Equitable title: the person has the
beneficial ownership of the property.
The plaintiff must return the benefits received
from the defendant [NCC 479]
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CIVIL LAW
G. QUIETING OF TITLE V. REMOVAL
OF CLOUD
Quieting of Title Removal of Cloud
There isn’t always There is always an
an adverse claim adverse claim by virtue
(eg. land of an instrument, record,
registration claim, encumbrance or
cases) proceeding.
H. PRESCRIPTION / NON-
PRESCRIPTION OF ACTION
PRESCRIPTION OF ACTION
(1) When the plaintiff is in possession of the
property, the action to quiet title does not
prescribe.
Rationale for Rule
“The owner of real property who is in
possession thereof may wait until his
possession is invaded or his title is
attacked before taking steps to vindicate
his right. A person claiming title to real
property, but not in possession thereof,
must act affirmatively and within the time
provided by the statute. Possession is a
continuing right as is the right to defend
such possession. So it has been
determined that an owner of real property
in possession has a continuing right to
invoke a court of equity to remove a cloud
that is a continuing menace to his title.
Such a menace is compared to a
continuing nuisance or trespass which is
treated as successive nuisances or
trespasses, not barred by statute until
continued without interruption for a
length of time sufficient to affect a change
of title as a matter of law." [Pingol v. CA]
(2) When the plaintiff is not in possession of
the property, the action to quiet title may
prescribe.
(a) 10 yrs. – ordinary prescription
(b) 30 yrs. – extraordinary prescription (in
bad faith)
UP LAW BOC
VI. Co-ownership
The form of ownership when the ownership of
an undivided thing or right belongs to different
persons. [NCC 484]
A. REQUISITES
(1) Plurality of owners;
(2) Object must be an undivided thing or right;
and
(3) Each co-owner’s right must be limited only
to his ideal or abstract share of the
physical whole.
B. WHAT GOVERNS CO-OWNERSHIP
(1) Contracts;
(2) Special laws; and
(3) The Civil Code
C. CHARACTERISTICS OF CO-
OWNERSHIP
(1) There are 2 or more co-owners.
(2) There is a single object which is not
materially or physically divided and over
which and his ideal share of the whole.
(3) There is no mutual representation by the
co-owners.
(4) It exists for the common enjoyment of the
co-owners.
(5) It has no distinct legal personality.
(6) It is governed first of all by the contract of
the parties; otherwise, by special legal
provisions, and in default of such
provisions, by the provisions of Title III on
Co-Ownership.
There are ideal shares defined but not
physically identified [NCC 485]
(1) The share of the co-owners, in the benefits
as well as in the charges, shall be
proportional to their respective interests.
(2) Any stipulation in a contract to the contrary
shall be void.
PROPERTY CIVIL LAW
(3) The portions belonging to the co-owners
in the co-ownership shall be presumed
equal, unless the contrary is proved.
Each co-owner has absolute control over his
ideal share
 Every co-owner has absolute ownership
of his undivided interest in the co-owned
property and is free to alienate, assign or
mortgage his interest except as to purely
personal rights. While a co-owner has
the right to freely sell and dispose of his
undivided interest, nevertheless, as a co-
owner, he cannot alienate the shares of
his other co-owners – nemo dat quod non
habet. [Acabal v. Acabal]
Mutual respect among co-owners with regard
to use, enjoyment, and preservation of the
things as a whole
(1) The property or thing held pro-indiviso is
impressed with a fiduciary character: each
co-owner becomes a trustee for the
benefit of his co-owners and he may not
do any act prejudicial to the interest of his
co-owners.
(2) Until a judicial division is made, the
respective part of each holder cannot be
determined. The effects of this would be:
(a) Each co-owner exercises, together
with the others, joint ownership over
the pro indiviso property, in addition
to his use and enjoyment of the same
(b) Each co-owner may enjoy the whole
property and use it.
(3) Redemption exercised by a co-owner
inures to the benefit of his other co-
owners [Mariano v CA (1993)]
Only limitation
A co-owner cannot use or enjoy the property
in a manner that shall injure the interest of his
other co-owners. [Pardell v. Bartolome]
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D. SOURCES OF CO-OWNERSHIP
D.1. LAW
(1) Cohabitation: co-ownership between
common law spouses
The Family Code, in the following
provisions, made the rules on co-
ownership apply:
 Art. 147: between a man and a woman
capacitated to marry each other
 Art. 148: between a man and a woman
not capacitated to marry each other
 Art. 90: if matter is not provided in the FC
Chapter on ACP, then rules on co-
ownership will apply
(2) Purchase creating implied trust
If two or more persons agree to purchase
property and by common consent, the
legal title is taken in the name of one of
them for the benefit of all, a trust is created
by force of law in favor of the others in
proportion to the interest of each.
[NCC 1452]
(3) Easement of Party Wall: co-ownership of
part-owners of a party wall (NCC 658)
(4) Condominium Law: co-ownership of the
common areas by holders of units
Sec. 6, RA 4726. The Condominium Act.
Unless otherwise expressly provided in the
enabling or master deed or the declaration of
restrictions, the incidents of a condominium
grant are as follows:
(c) Unless otherwise, provided, the common
areas are held in common by the holders
of units, in equal shares, one for each unit.
D.2. CONTRACT
By Agreement of Two or More Persons
Article 494, Civil Code. No co-owner shall be
obliged to remain in the co-ownership. Each co-
owner may demand at any time the partition of
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CIVIL LAW
the thing owned in common, insofar as his share
is concerned.
Nevertheless, an agreement to keep the thing
undivided for a certain period of time, not
exceeding ten years, shall be valid. This term may
be extended by a new agreement.
A donor or testator may prohibit partition for a
period which shall not exceed twenty years.
Neither shall there be any partition when it is
prohibited by law.
No prescription shall run in favor of a co-owner or
co-heir against his co-owners or co-heirs so long
as he expressly or impliedly recognizes the co-
ownership.
By the creation of a Universal Partnership of all
present property
NCC 1778. A partnership of all present
property is that in which the partners
contribute all the property which actually
belongs to them to a common fund, with the
intention of dividing the same among
themselves, as well as all the profits which
they may acquire therewith.
NCC 1779. In a universal partnership of all
present property, the property which
belonged to each of the partners at the time
of the constitution of the partnership,
becomes the common property of all the
partners, as well as all the profits which they
may acquire therewith.
A stipulation for the common enjoyment of
any other profits may also be made; but the
property which the partners may acquire
subsequently by inheritance, legacy, or
donation cannot be included in such
stipulation, except the fruits thereof
D.3. INTESTATE SUCCESSION
Co-ownership between the heirs before
partition of the estate
NCC 1078. Where there are two or more heirs,
the whole estate of the decedent is, before its
UP LAW BOC
partition, owned in common by such heirs,
subject to the payment of debts of the
deceased.
 For as long as the estate is left undivided the
heirs will be considered co-owners of the
inheritance.
 If one of the heirs dies, his heirs will in turn
be co-owners of the surviving original heirs.
D.4. TESTAMENTARY DISPOSITION OR
DONATION INTER VIVOS
(1) When a donation is made to several persons
jointly, it is understood to be in equal
shares, and there shall be no right of
accretion among them, unless the donor
has otherwise provided. [NCC 753]
(2) A donor or testator may prohibit partition
for a period which shall not exceed 20
years.
D.5. BY FORTUITOUS EVENT OR BY
CHANCE
(1) Co-ownership between owners of 2 things
that are mixed by chance or by will of the
owners:
[NCC 472] Each owner shall acquire a
right proportional to the part belonging to
him, bearing in mind the value of the
things mixed or confused.
(2) Hidden Treasure [NCC 438]
When the discovery is made on the property
of another, or of the State or any of its
subdivisions, and by chance, one-half shall
be allowed to the finder.
D.6. BY OCCUPANCY
Harvesting and Fishing: Co-ownership by two
or more persons who have seized a res nullius
thing
D.7. BY ASSOCIATIONS AND SOCIETIES
WITH SECRET ARTICLES
Articles are kept secret among the members
and any one of the members may contract in
PROPERTY CIVIL LAW
his own name with third persons are governed
by the provisions relating to co-ownership.
E. RIGHTS OF CO-OWNERS
E.1. RIGHT TO SHARE IN THE BENEFITS
AS WELL AS THE CHARGES [NCC 485]
 Proportional to their interests;
 Stipulation to the contrary is void;
 Portion belonging to the co-owners is
presumed equal.
E.2. RIGHT TO USE THE THING OWNED
IN COMMON [NCC 486]
Limitations
That he use the thing in accordance with the
purpose for which it is intended.
That he uses it in such a way as to not injure
the interest of the co-ownership or prevent
the other co-owners from using it.
RIGHT TO BRING AN ORDER IN
EJECTMENT [NCC 487]
RIGHT TO COMPEL OTHER CO-OWNERS
TO CONTRIBUTE TO THE EXPENSES OF
PRESERVATION AND TO THE TAXES
[NCC 488]
(1) Any one of the other co-owners may
exempt himself by renouncing so much of
his undivided interest as may be
equivalent to his share of the expenses
and taxes.
(2) No waiver if it is prejudicial to the co-
ownership
RIGHT TO REPAIR [NCC 489]
(1) Repairs for preservation may be made at
the will of one of the co-owners but he
must first notify his co-owners.
(2) Expenses to improve or embellish, decided
upon by a majority.
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UP LAW BOC PROPERTY CIVIL LAW

RIGHT TO OPPOSE ALTERATIONS (2) If 2 or more co-owners wish to exercise

[NCC 491] this right, redemption will be made in
(1) Consent of all the others is needed to make proportion to their share in the thing
alterations, even if the alteration benefits
all. Note: Rules on Co-Ownership does not apply
to CPG or ACP.
(2) If the withholding of the consent is clearly
(1) These are governed by the Family Code.
prejudicial to the common interest, the
(2) Even void marriages and cohabitation of
courts may afford relief
incapacitated persons are governed by FC
(3) Reason for the rule: alteration is an act of
50, 147, and 148.
ownership, not of mere administration.
F. RULES
RIGHT TO FULL OWNERSHIP OF HIS
F.1. ON RENUNCIATION OF SHARE
PART AND OF THE FRUITS AND
(DIFFERENT FROM RENUNCIATION OF
BENEFITS PERTAINING THERETO
CO-OWNERSHIP)
[NCC 493]
(1) Other co-owners may choose not to
(1) Therefore he may alienate, assign or
contribute to the expenses by renouncing
mortgage it, and even substitute another
so much of his undivided interest as may
person in its enjoyment except when
be equivalent to his share of the necessary
personal rights are involved.
expenses and taxes.
(2) The effect of the alienation or the
(2) Renunciation must be express; thus, failure
mortgage, with respect to the co-owners,
to pay is not a renunciation of the right.
shall be limited to the portion which may
(3) Requires the consent of other co-owners
be allotted to him in the division upon the
because it is a case of dacion en pago
termination of the co-ownership.
(cessation of rights) involving expenses
and taxes already paid. (J.B.L. Reyes)
RIGHT TO PARTITION [NCC 494]
(4) Cannot renounce his share if it will be
(1) Each may demand at any time the partition
prejudicial to another co-owner.
of the thing, insofar as his share is
concerned.
F.2. REPAIRS FOR PRESERVATION
(2) An agreement to keep the thing undivided
(1) First, notify other co-owners, as far as
for a certain period NOT exceeding 10
practicable.
years is valid.
(2) Co-owner may advance expenses for
(3) Term may be extended by a new
preservation even without prior consent;
agreement.
he is entitled to reimbursement.
(4) Donor or testator may prohibit partition,
period NOT to exceed 20 years.
F.3. EMBELLISHMENTS OR
(5) No partition may be made if prohibited by
IMPROVEMENTS
law.
(1) Notify co-owners of improvements and
(6) Right does not prescribe.
embellishments to be made.
RIGHT TO REDEMPTION [NCC 1619]
If no notification is made, the co-owner
(1) May exercise this in case the shares of
who advanced the expenses will only have
other co-owners are sold to a third person
the right to be reimbursed if he proves the

117
UP LAW BOC PROPERTY
necessity of such repairs and the
reasonableness of the expenses.
Exception: If proven that had there been a
notification, they could have hired another
who would charge less or that they know of
a store that sells the needed material at a
cheaper price
The reimbursement will be limited to the
amount that should have been spent had
he notified the others, and the difference
shall be borne by him alone.
(2) Decisions by the majority must be
followed.
G. TERMINATION OR
EXTINGUISHMENT
G.1. TOTAL DESTRUCTION OF THING OR
LOSS OF THE PROPERTY CO-OWNED
Is there still co-ownership if a building is
destroyed? Yes, over the land and the debris.
G.2. MERGER OF ALL INTERESTS IN ONE
PERSON
G.3. ACQUISITIVE PRESCRIPTION
By whom
(1) A third person. [NCC 1106]
(2) A co-owner against the other co-owners.
Requisites for acquisitive prescription against
co-owners [Adille v CA (1988)]:
(1) A co-owner repudiates the co-ownership;
(2) The act of repudiation is clearly made
known to other co-owners;
(3) The evidence thereon is clear and
conclusive; and
(4) The co-owner has been in possession thru
open, continuous, exclusive and notorious
possession of the property for the period
required by law.
Note: there is a presumption that possession of
a co-owner is NOT adverse
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CIVIL LAW
Registration under the Torrens system is
constructive notice of title but it not sufficient
notice of the act of repudiation. [Adille v CA]
G.4. PARTITION OR DIVISION
Procedure for Partition
 Governing rule: Rule 69 of the Rules of
Court.
 How: By agreement of parties or by judicial
decree.
 Form: Oral or Written (Statute of Frauds
does not operate here because it is not a
conveyance of property but a mere
segregation or designation of which parts
belong to whom)
 The Rules of Court do not preclude
agreements or settlements.
Action for Partition will determine:
(1) Whether or not the plaintiff is indeed a co-
owner of the property
(2) How the property will be divided between
the plaintiff and defendant.
Effects
(1) Confers exclusive ownership of the
property adjudicated to a co-heir.
(2) Co-heirs shall be reciprocally bound to
warrant the title to and the quality of each
property adjudicated.
(3) Reciprocal obligation of warranty shall be
proportionate to the respective hereditary
shares of co-heirs.
(4) An action to enforce warranty must be
brought within 10 years from the date the
right accrues.
(5) The co-heirs shall not be liable for the
subsequent insolvency of the debtor of
the estate.
Unless partition is effected, each heir cannot
claim sole ownership over a definite portion of
the land. Heirs become the undivided owner
of the whole estate. Until said partition, he
cannot alienate a specific part of the estate.
UP LAW BOC PROPERTY
Until then, they can only sell their successional
rights. [Carvaria v. CA]
Rights against individual co-owners in case of
partition [NCC 497]
(1) The creditors are allowed to take part in
the partition.
Reason for the rule: They own part of the
interest of the co-owners who made the
assignment or alienation.
Intervention of creditors and assignees
General Rule: Creditors may take part in the
division. They need to establish the existence
of the credit during co-ownership.
Exception: If the partition was already executed
Exception to the exception: If there was fraud,
or a previous formal opposition to the partition.
Rules on notice to creditors and assignees:
(1) The law does not expressly require
previous notice to the creditors and
assignees before a partition, but the right
of creditors and assignees to take part in
the division presupposes the duty to notify.
(2) If notice is not given, the partition will not
be binding on them.
(3) Once notice has been given, it is the duty of
creditors and assignees to intervene and
make known their stand.
(a) If they fail, they cannot question the
division made, except in cases of fraud.
(b) If they formulate a formal question,
they can contest such partition
Partition in case co-owners cannot agree on the
partition of an indivisible thing (NCC 498)
VII. Possession
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CIVIL LAW
The holding of a thing or the enjoyment of a
right. [NCC 523]
A. CONCEPT OF POSSESSION
 To possess, in a grammatical sense, means
to have, to physically and actually occupy a
thing, with or without right. [Sanchez
Roman]
 It is the holding of a thing or a right,
whether by material occupation or by the
fact that the thing or the right is subjected
to the action of our will. [Manresa]
 Possession includes the idea of occupation.
It cannot exist without it. (Exceptions: NCC
537)
 It is an independent right apart from
ownership. Ownership differs from
possession in that an owner may validly
convey the property itself while a possessor
may not.
Right of possession Right to possess
(jus possessionis) (jus possidendi)
Independent right Incident to ownership
B. ESSENTIAL REQUISITES OF
POSSESSION
(1) Corpus possessionis: Holding (actual or
constructive) of a thing or exercise of a
right, if right is involved.
(a) General Rule: Possession and
cultivation of a portion of a tract
under claim of ownership of all is a
constructive possession of all, if the
remainder is not in adverse
possession of another. [Ramos v.
Director of Lands (1918)]
(b) Doctrine of constructive possession
applies when the possession is under
title calling for the whole. It does not
apply where possession is without
title.
(2) Animus possidendi: Intention to possess
(a) There is no possession if the holder
does not want to exercise the rights of
a possessor.
UP LAW BOC
(b) Implied from the acts of the possessor.
(c) May be contradicted and rebutted by
evidence – to prove that the person
who is in possession does not in fact
exercise power or control and does not
intend to do so.
C. DEGREES OF POSSESSION
(1) Mere holding or possession without title
and in violation of the right of the owner
(a) possession of a thief or usurper of land
(b) Here, both the possessor and the
public know that the possession is
wrongful.
(2) Possession with juridical title but not that
of ownership
(a) e.g. possession of a tenant, depository
agent, bailee trustee, lessee,
antichretic creditor.
(b) This possession is peaceably acquired.
(c) This degree of possession will never
ripen into full ownership as long as
there is no repudiation of concept
under which property is held.
(3) Possession with just title or title sufficient
to transfer ownership, but not from the
true owner
(a) e.g. possession of a vendee from a
vendor who pretends to be the owner.
(b) This degree of possession ripens into
full ownership by lapse of time.
(4) Possession with a just title from the true
owner
(a) This is possession that springs from
ownership.
D. CASES OF POSSESSION
D.1. POSSESSION FOR ONESELF, OR
POSSESSION EXERCISED IN ONE’S OWN
PROPERTY CIVIL LAW
NAME AND POSSESSION IN THE NAME
OF ANOTHER [NCC 524]
(1) In one’s own name – the fact of possession
and the right to such possession is found
in the same person.
(2) In the name of another – the one in actual
possession is without any right of his own,
but is merely an instrument of another in
the exercise of the latter’s possession.
Kinds of possession in the name of another
(1) Necessary – arises by operation of law
e.g. representatives who exercise
possession in behalf of a conceived child,
juridical persons, persons not sui juris and
the conjugal partnership
(2) Voluntary – effected through the mutual
consent of the parties
(a) e.g. agents or administrators
appointed by the owner or possessor.
(b) Third person may also voluntary
exercise possession in the name of
another, but it does not become
effective unless ratified by the person
in whose name it is exercised.
D.2. POSSESSION IN THE CONCEPT OF
AN OWNER, AND POSSESSION IN THE
CONCEPT OF A HOLDER WITH THE
OWNERSHIP BELONGING TO ANOTHER
[NCC 525]
(1) Possession in Concept of Holder
(a) One who possesses as a mere holder,
not in the concept of owner,
acknowledges in another a superior
right which he believes to be
ownership, whether his belief be right
or wrong.
(b) e.g. tenant, usufructuary, borrower in
commodatum.
(2) Possession in Concept of Owner
(a) May be exercised by the owner
himself or one who claims to be so.
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UP LAW BOC PROPERTY
(b) When a person claims to be the owner
of a thing, whether he believes so or
not, acting as an owner, and
performing acts of ownership, and he is
or may be considered as the owner by
those who witness his exercise of
proprietary rights, then he is in the
possession of an owner. This is the kind
of possession that ripens into
ownership under Article 540, when
such possession is public, peaceful and
uninterrupted. [see Art. 1118].
Effects of Possession in Concept of an Owner
(1) Converted into ownership by the lapse of
time necessary for prescription.
(2) Possessor can bring all actions necessary
to protect his possession, availing himself
of any action which an owner can bring,
except accion reivindicatoria which is
substituted by accion publiciana.
(3) He can ask for the inscription of possession
in the registry of property.
(4) Upon recovering possession from one who
has unlawfully deprived him of it, he can
demand fruits and damages.
(5) He can do on the thing possessed
everything that the law authorizes an
owner to do; he can exercise the right of
pre-emption and is entitled to the
indemnity in case of appropriation.
D.3. POSSESSION IN GOOD FAITH AND
POSSESSION IN BAD FAITH [NCC 526]
(1) Possessor in good faith – one who is
unaware that there exists a flaw in the title
or mode og acquisition which invalidates
his acquisition.
(a) Good faith – consists in the possessor’s
belief that the person from whom he
received a thing was the owner of the
same and could convey his title.
(b) It implies freedom from knowledge and
circumstances which ought to put a
person on inquiry.
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CIVIL LAW
(c) The belief of a possessor that he is the
owner of the thing must be based
upon the title or mode of acquisition,
such as a sale, a donation, inheritance
or other means of transmitting
ownership; for without this, there can
be no real, well-grounded belief of
one’s ownership.
(d) Error in the application of the law, in
the legal solutions that arise from
such application, in the appreciation
of legal consequence of certain acts,
and in the interpretation of doubtful
provisions or doctrines, may properly
serve as basis for good faith.
(e) A misconception of the law, no matter
how honest cannot have the effect of
making one a possessor in good faith
when he does not hold a title valid in
form or a deed sufficient in terms to
transfer property.
(2) Possessor in bad faith – one who knows
his title is defective.
(a) Only personal knowledge of the flaw
in the title or mode of acquisition can
make him a possessor in bad faith for
bad faith is not transmissible from
one person to another.
(b) Mistake upon a doubtful or difficult
question of law as a basis of good
faith.
(c) Mistake or ignorance of the law, by
itself, cannot become the basis of
good faith. What makes the error or
ignorance a basis of good faith is the
presence of an apparent “doubt” or
“difficulty” in the law. In other words,
the law is complex, ambiguous, or
vague such that it is open to two or
more interpretations.
(d) When the ignorance of the law is
gross and inexcusable, as when a
person of average intelligence would
know the law, such ignorance cannot
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be the basis of good faith. Otherwise,
the intendment of Article 3 which
states that, “Ignorance of the law
excuses no one from compliance
therewith,” will be defeated.
What Things May be Possessed [NCC 530]
Only things and rights which are susceptible of
being appropriated may be the object of
possession.
What May Not Be Possessed by Private Persons
(1) Res Communes
(2) Property of Public Dominion
(3) Right under discontinuous and/or non-
apparent easement
E. ACQUISITION OF POSSESSION
E.1. WAYS OF ACQUIRING POSSESSION
[NCC 531]
(1) By material occupation
(a) “Material occupation” – used in its
ordinary meaning and not in its
technical meaning under NCC 712,
which defines occupation as a mode of
acquiring ownership.
(b) Possession acquired by material
occupation is only possession as a fact,
not the legal right of possession.
(c) Constructive delivery is considered as
an equivalent of material occupation in
two situations where such occupation
is essential to the acquisition of
possession:
(i) Tradicion brevi manu – takes place
when one who possess a thing by
title other than ownership,
continues to possess the same
under a new title, that of
ownership.
(ii) Tradicion constitutum
possessorium – takes place when
the owner alienates the thing, but
continues to possess the same
under a different title.
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CIVIL LAW
(2) By subjection to the action of one’s will
(a) This mode refers more to the right of
possession than to possession as a
fact. The “action of our will” must be
juridical, in the sense that it must be
according to law.
(b) It includes:
(i) Tradicion symbolica – by
delivering some object or symbol
placing the thing under the
control of the transferee.
(ii) Tradicion longa manu – by the
transferor pointing out to the
transferee the things that are
being transferred.
(3) By execution of proper acts under legal
formalities
(a) This mode refers to juridical acts or
the acquisition of possession by
sufficient title evidenced by the
performance of required formalities.
(b) Examples:
(i) Donations;
(ii) Succession;
(iii) Contracts (like a sale with right to
repurchase);
(iv) Judicial possession;
(v) Execution of judgments;
(vi) Execution and registration of
public instruments;
(vii) Inscription of possessory
information titles.
(c) The execution of the required
formalities is equivalent to delivery of
the property.
E.2. BY WHOM MAY POSSESSION BE
ACQUIRED [NCC 532]
(1) By the same person
(2) By his legal representative
(3) By his agent
(4) By any person without any power
whatsoever but subject to ratification,
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without prejudice to proper case of
negotiorum gestio [Arts. 2144, 2149, 2150]
(5) Qualifiedly, minors and incapacitated
persons
(1) By the same person
Elements of personal acquisition
(a) Must have the capacity to acquire
possession;
(b) Must have the intent to possess; and
(c) The possibility to acquire possession
must be present.
(2) By his legal representative
Requisites of acquisition through another
(a) That the representative or agent has
the intention to acquire the thing or
exercise the right for another, and not
for himself; and
(b) That the person for whom the thing
has been acquired or the right
exercised, has the intention of
possessing such thing or exercising
such right,
Note
(a) Bad faith is personal and
intransmissible. Only the person who
acted in bad faith must suffer its
effects; his heir should not be saddled
with the consequences.
(b) Good faith can only benefit the person
who has it; and the good faith of the
heir cannot erase the effects of bad
faith of his predecessor.
(3) By any person without any power
whatsoever but subject to ratification,
without prejudice to proper case of
negotiorum gestio [NCC 2144, 2149, 2150]
(a) Whoever voluntarily takes charge of
the agency or management of the
business or property of another,
without any power from the latter, is
obliged to continue until the
termination of the affair and its
incidents, or to require the person
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CIVIL LAW
concerned to substitute him, if the
owner is in a position to do so.
(b) This juridical relation does not arise in
either of these instances:
(i) When the property or business is
not neglected or abandoned;
(ii) If in fact the manager has been
tacitly authorized by the owner.
(4) Qualifiedly, minors and incapacitated
persons [NCC 535]
(a) Incapacitated – all those who do not
have the capacity to act (insane,
lunatic, deaf-mutes who cannot read
and write, spendthrifts and those
under civil interdiction).
(b) Object of possession – things only, not
rights.
(c) Method of acquisition – material
occupation; acquisition by means for
which the incapacitated person has
the capacity, such as acquisition by
succession, testate or intestate, or by
donations propter nuptias, pure and
simple donations.
F. WHAT DO NOT AFFECT
POSSESSION [NCC 537]
F.1. ACTS MERELY TOLERATED
(1) Those which because of neighborliness or
familiarity, the owner of property allows
another person to do on the property;
(2) Those services or benefits which one’s
property can give to another without
material injury or prejudice to the owner,
who permits them out of friendship or
courtesy;
(3) Acts of little disturbances, which a person,
in the interest of neighborliness or friendly
relations permits others to do on his
property, although continued for a long
time, no right will be acquired by
prescription.
UP LAW BOC
Note: Permissive use merely tolerated by the
possessor cannot affect possession and cannot
be the basis of acquisitive prescription.
Possession to constitute the foundation of
prescriptive right must be possession under
claim of title; it must be adverse. [Cuaycong v.
Benedicto]
F.2. ACTS EXECUTED
CLANDESTINELY AND WITHOUT THE
KNOWLEDGE OF THE POSSESSOR
[NCC 1108]
Possession has to be in the concept of an
owner, public, peaceful and uninterrupted.
F.3. ACTS OF VIOLENCE AS LONG
AS THE POSSESSOR OBJECTS
THERETO (I.E. FILES A CASE)
[NCC 536]
(1) Possession cannot be acquired through
force or intimidation.
Includes forcibly taking away the property
from another and also when one occupied
the property in the property in the absence
of another, and repels the latter upon his
return.
(2) Effect on Possession
Acts mentioned do not constitute true
possession. They do not interrupt the
period of prescription nor affect the rights
to the fruits.
RULES TO SOLVE CONFLICTS OF
POSSESSION [NCC 538]
General Rule: Possession cannot be recognized
in two different personalities, except in cases of
co-possession by co-possessors without
conflict of claims of interest.
In case of conflicting possession – preference is
given to:
(1) Present possessor or actual possessor;
PROPERTY CIVIL LAW
(2) If there are two or more possessors, the
one longer in possession;
(3) If the dates of possession are the same,
the one who presents a title; or
(4) If all conditions are equal, the thing shall
be placed in judicial deposit pending
determination of possession or ownership
through proper proceedings.
G. EFFECTS OF POSSESSION
G.1. RIGHTS OF A POSSESSOR IN GOOD
FAITH
(1) Right to be protected and respencted in
possession; (NCC 539)
(2) Right to bring action to restore
possession;
(3) Right to the fruits already received;
(NCC. 544)
(4) Right to a share in pending fruits and the
production, gathering, and preservation
of such; (NCC. 545)
(5) Right to necessary expenses; (NCC. 546)
(6) Right to retain the thing until reimbursed;
(NCC. 546)
(7) Right to remove useful improvements
removable without damage to the
principal thing or to refund its value;
(upon election by the owner) (NCC. 547)
(8) Right to recover removable ornaments.
(NCC. 548)
G.2. OBLIGATIONS OF A POSSESSOR IN
GOOD FAITH
(1) Pay in proportion to the charges,
expenses of cultivation and the net
proceeds upon cessation of good faith;
(NCC 545)
(2) Costs of litigation; (NCC 550)
(3) Liability to the deterioration/loss of a
thing possessed if acted through
fraudulent intent/negligence. (NCC 552)
G.3. RIGHTS OF A POSSESSOR IN BAD
FAITH
(1) Right to be respected in possession;
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(NCC 539)
(2) Right to necessary expenses and the
production, gathering, and preservation of
fruits; (NCC. 545 and 546)
(3) Does not have right to reimbursement of
expenses for luxury but may remove them
as long as the principal thing suffers no
injury, or may sell them to the owner.
G.4. OBLIGATIONS OF A POSSESSOR IN
GOOD FAITH
(1) Reimburse the value of the fruits received
and which the legitimate possessor could
receive; (NCC 549)
(2) Pay in proportion to the charges, expenses
of cultivation and the net proceeds upon
cessation of good faith; (NCC 545)
(3) Costs of litigation; (NCC 550)
(4) Liability to the deterioration/loss of a thing
possessed in every case, including
fortuitous events. (NCC 552)
G.5. RIGHT TO BE PROTECTED IN HIS
POSSESSION [NCC 539]
(1) Every possessor has a right to be respected
in his possession; if disturbed, possessor
has a right to be protected in or restored to
said possession.
(2) Every possessor includes all kinds of
possession, from that of an owner to that
of a mere holder, except that which
constitutes a crime.
(3) Reason for the rule: To prevent anyone from
taking the administration of justice into his
own hands. Even the owner cannot forcibly
eject the possessor, but must resort to the
courts.
ACTIONS TO RECOVER POSSESSION
(1) Forcible Entry and Unlawful Detainer
(Summary proceedings)
(a) Action by a person deprived of the
possession of any land or building by
force, intimidation, strategy, threat, or
stealth (FISTS) at any time within 1 year
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CIVIL LAW
after such unlawful deprivation (Rule
70)
(b) May ask for writ of preliminary
mandatory injunction within 10 days
from filing of complaint in forcible
entry (NCC 539).
(c) The same writ is available in unlawful
detainer actions upon appeal.
(NCC 1674)
(2) Accion Publiciana
(a) This action is based on the superior
right of possession; no issue of
ownership is settled.
(b) Action for the recovery of possession
of real property upon mere allegation
and proof of a better title.
(c) This must be instituted within 10/30
years (or else acquisitive prescription
will deny recovery).
(3) Accion Reivindicatoria
(a) This action is for the recovery of
possession based on a claim of
ownership.
(b) It is an action setting up title and the
right to possession.
(c) This action is not barred by a
judgment in an action for forcible
entry and unlawful detainer.
(4) Action for Replevin
This is a prayer to recover possession of
movable property
RULES
(1) Lawful possessor can employ self-help
(NCC 429)
(2) To consolidate title by prescription, the
possession must be under claim of
ownership, and it must be peaceful,
public and uninterrupted.
(3) It is only the conviction of ownership
externally manifested, which generates
ownership.
UP LAW BOC PROPERTY
(4) Acts of possessory character done by virtue
of a license or mere tolerance by the real
owner are not sufficient and will not confer
title by prescription or adverse possession.
(5) The following cannot acquire title by
prescription:
(a) Lessees, trustees, pledges, tenants on
shares or planters and all those who
hold in the name or representation of
another;
(b) Mere holders placed in possession of
the property by the owner, such as
agents, employees;
(c) Those holding in a fiduciary character,
like receivers, attorneys, depositaries
and antichretic creditors;
(d) Co-owner, with regard to common
property; Except: When he holds the
same adversely against all of them
with notice to them of the exclusive
claim of ownership.
(i) Possession of real property
presumes possession of the
movables therein (NCC 542);
(ii) Each co-owner is deemed to have
exclusive possession of the part
which may be allotted to him upon
the division, for the entire period
during which the co-possession
lasted.
(6) Interruption in the possession of the whole
or a part of a thing possessed in common
shall be to the prejudice of all the
possessors. (NCC 543)
G.6. ENTITLEMENT TO FRUITS –
POSSESSOR IN GOOD/BAD FAITH [NCC
544, 549]
(1) Possessor in good faith is entitled to the
fruits received before the possession is
legally interrupted.
(2) Natural and industrial fruits are considered
received from the time they are gathered or
severed.
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CIVIL LAW
(3) Civil fruits are deemed to accrue daily and
belong to the possessor in good faith in
that proportion.
Provision is based on the following reasons of
equity:
 The fruits received are generally used for
the consumption and livelihood of the
possessor, and his life and expenses may
have been regulated in view of such fruits.
 The owner has been negligent in not
discovering or contesting the possession of
the possessor; it would be unjust after the
possessor has been thus allowed to rely on
the efficacy of the title, to require him to
return the fruits he has received on the basis
of that title.
 Between the owner, who has abandoned his
property and left it unproductive, and the
possessor, who has contributed to the social
wealth, by the fruits he has produced, the
law leans toward the latter.
RIGHT OF THE POSSESSOR IN GOOD
FAITH
Only limited to the fruits of the thing. He must
restore the fruits received from the time such
good faith ceased. He has no rights to the
objects which do not constitute fruits.
Legal interruption of possession in good faith
Takes place when an action is filed against
him—from the time he learns of the
complaint, from the time he is summoned to
the trial.
Effect of cessation of good faith (NCC 545)
(a) If at the time the good faith ceases,
there should be any natural or
industrial fruits, the possessor shall
have a right to a part of the expenses
of cultivation, and to a part of the net
harvest, both in proportion to the time
of the possession.
UP LAW BOC PROPERTY CIVIL LAW

(b) The charges divided on the same basis surrounding an estate, an irrigation
by the two possessors. system, planting in an uncultivated land,
 “Charges” – Those which are a fishpond, an elevator in the building,
incurred, not on the thing itself but electric lighting system
because of it (e.g. taxes, (2) They are reimbursed only to the possessor
contributions in favor of the in GF as a compensation or reward for
government) him. A possessor in BF cannot recover
(c) The owner of the thing may give the such expenses.
possessor in good faith the right to (3) If the useful improvements can be
finish the cultivation and gathering of removed without damage to the principal
the growing fruits, as an indemnity for thing, the possessor in good faith may
his part of the expenses of cultivation remove them, unless the person who
and the net proceeds. recovers the possession refunds the
 The possessor in good faith who refuses expenses or pays the increase in value
to accept this concession shall lose the which the thing may have acquired by
right to be indemnified in any other reason thereof.
manner.
D.3. EXPENSES FOR LUXURY
When fruits are insufficient (1) They do not affect the existence or the
There should only be reimbursement of substance of the thing itself, but only the
expenses; but each possessor should suffer a comfort, convenience or enjoyment of the
proportionate reduction due to the possessor.
insufficiency of the harvest. (2) They are not the subject of
reimbursement, because the law does not
D. REIMBURSEMENT FOR EXPENSES compensate personal whims or caprices,
– POSSESSOR IN GOOD/BAD FAITH e.g. Opening of a garden, placing
[NCC 546-552] fountains and statues in it, adorning the
D.1. NECESSARY EXPENSES ceilings with paintings, and the walls with
(1) Imposed by the thing itself for its reliefs.
preservation and have no relation to the
desire or purpose of the possessor. Useful Expenses Expenses for Luxury
(2) They are the “cost of living” for the thing Those which Those which merely
and must be reimbursed to the one who increased the income embellished the
paid them, irrespective of GF or BF. derived from the thing thing
(a) Only the possessor in GF may retain
Result: Increase in the
the thing until he has been reimbursed
products, either
therefor.
absolutely, or because
(3) The expenses are not considered Result: Benefit or
of greater facilities for
improvements; they do not increase the advantage is only
producing them
value of the thing, but merely prevent for the convenience
them from becoming useless. of definite
Includes expenses
possessors
resulting in real
D.2. USEFUL EXPENSES
benefit or advantage
(1) Incurred to give greater utility or
to the thing
productivity to the thing, e.g. Wall

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Useful Expenses Expenses for Luxury Possessor in GF Possessor in BF

The utility is for the
Result: Benefit or
possessor or Charges
advantage is only for
particular persons
the convenience of Must share with the
alone and is
definite possessors legitimate possessor, in
therefore accidental. Same as with GF
proportion to the time
Notes (545)
(1) Costs of litigation over the property shall of the possession (545)
be borne by every possessor. [NCC 550]
(2) Improvements caused by nature or time Necessary Expenses
shall always inure to the benefit of the Right to reimbursement
person who has succeeded in recovering and retention in the Reimbursement
possession [NCC 551] meantime (546) only (546)
 Includes all the natural accessions
referred to by articles 457-465, and all
Useful Expenses
those that do not depend upon the will of
the possessor. (e.g. widening of the Right of retention until
streets, rising of fountains of fresh or reimbursed; Owner’s
mineral water, increase of foliage of option to reimburse him
trees) either for expenses or
for increase in value
Possessor in GF Possessor in BF which the thing may
No right to
have acquired (546)
Fruits Received reimbursement
and no right of
Entitled to the fruits Limited right of removal
removal (547)
while possession is in GF Must reimburse – should not damage
and before legal the legitimate principal and owner
interruption (544) possessor (549) does not exercise option
of paying the expenses
Pending Fruits or increase in value
(547)
Entitled to part of the
expenses of cultivation, Ornamental Expenses
and to a part of the net Limited right of removal Limited right of
harvest, in proportion to (548) removal (549)
the time of the
Deterioration or Loss
possession.
Must reimburse No liability unless due to
the legitimate fraud or negligence Liable in every
Indemnity may be, at the
possessor (549) after becoming in BF case (552)
owner’s option,
1. In money, OR (552)
2. By allowing full Costs of Litigation
cultivation and
Bears cost (550) Bears cost (550)
gathering of the fruits
(545)

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E. LOSS OR UNLAWFUL (4) Movable properties possessed through a

DEPRIVATION OF A MOVABLE crime can never be acquired through
prescription.
PROPERTY
E.1. POSSESSION OF MOVABLE E.3. FINDER OF LOST MOVABLE [NCC
ACQUIRED IN GOOD FAITH (IN CONCEPT 719-720]
OF OWNER) IS EQUIVALENT TO TITLE (1) Whoever finds a movable, which is not a
[NCC 559] treasure, must return it to its previous
(1) Possessor has actual title which is possessor.
defeasible only by true owner. (2) If the previous possessor is unknown, the
finder shall immediately deposit it with
Requisites of Title the mayor of the city or municipality
(a) Possession in GF;
where the finding has taken place.
(b) The owner has voluntarily parted with
(3) The finding shall be publicly announced
the possession of the thing; and
by the mayor for two consecutive weeks in
(c) The possession is in the concept of an
the way he deems best.
owner.
(4) If the movable cannot be kept without
deterioration, or without expenses which
(2) Nevertheless, one who has lost any
considerably diminish its value, it shall be
movable or has been unlawfully deprived
sold at public auction eight days after the
thereof may recover it from the person in
publication.
possession.
(5) Six months from the publication having
When the owner can recover elapsed without the owner having
(a) Has lost the thing; or appeared, the thing found, or its value,
(b) Has been unlawfully deprived thereof. shall be awarded to the finder. The finder
and the owner shall be obliged, as the
(3) If the current possessor has acquired it in case may be, to reimburse the expenses.
good faith at a public sale, owner must (6) If the owner should appear in time, he
reimburse the price paid in order to recover shall be obliged to pay, as a reward to the
the property. finder, one-tenth of the sum or of the price
of the thing found.
E.2. PERIOD TO RECOVER [NCC 1140,
1132, 1133] E.4. DISTINGUISHED FROM VOIDABLE
(1) Actions to recover movable properties TITLE [NCC 1506]
prescribe after 8 years from the time the (1) A seller of goods with a voidable title not
possession thereof is lost, unless the avoided at the time of the sale: The buyer
possessor has acquired the ownership by acquires a good title to the goods,
prescription for a lesser period. provided he buys them in good faith, for
(2) Ownership of movable properties value, and without notice of the seller's
prescribes through uninterrupted defect of title.
possession for 4 years in good faith. (2) A movable lost or which the owner has
(3) Ownership of personal property also been unlawfully deprived acquired by a
prescribes through uninterrupted possessor in good faith at a public sale:
possession for 8 years, without need of any The owner can always recover the
other condition.

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UP LAW BOC PROPERTY
movable provided he reimburses the price
paid.
F. EFFECTS OF POSSESSION IN THE
CONCEPT OF AN OWNER
Possession may lapse and ripen into full
ownership.
General Rule: Presumption of just title and
cannot be obliged to show or prove it. [NCC
541]
 Basis: Possession is presumed ownership,
unless the contrary is proved. This
presumption is prima facie and it prevails
until contrary is proved.
 Just title: that which is legally sufficient to
transfer the ownership or the real right to
which it relates.
 For the purposes of prescription, there is just
title when the adverse claimant came into
possession of the property through one of
the modes recognized by law for the
acquisition of ownership or other real rights,
but the grantor was not the owner or could
not transmit any right. [NCC 1129]
Exception For the purposes of prescription, just
title must be proved; it is never presumed.
[NCC 1131]
(1) Possessor may bring all actions necessary
to protect his possession except accion
reivindicatoria.
(2) May employ self-help under Art. 429.
(3) Possessor may ask for inscription of such
real right of possession in the registry of
property.
(4) Has right to the fruits and reimbursement
of expenses (assuming he is possessor in
good faith)
(5) Upon recovery of possession which he was
unlawfully deprived of, may demand fruits
and damages.
(6) Generally, he can do on the things
possessed everything that the law
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CIVIL LAW
authorizes the owner to do until he is
ousted by one who has a better right.
(7) This is whether possession is in good faith
or in bad faith [NCC. 528]
PRESUMPTION IN FAVOR OF THE
POSSESSOR—FOR ACQUISITIVE
PRESCRIPTION
(1) Of good faith until contrary is proved
(NCC 527)
(a) Presumption is only juris tantum
because possession is the outward
sign of ownership. Unless such proof
of bad faith is presented, the
possessor will be held to be in good
faith.
(b) So long as the possessor is not
actually aware of any defect
invalidating his title, he is deemed a
possessor in good faith.
(2) Of continuity of initial good faith in which
possession was commenced; possession
in good faith does not lose this character
except in case and from the moment
possessor became aware or is not
unaware of improper or wrongful
possession
(NCC 528)
(a) Good faith ceases from the date of the
summons to appear at the trial.
[Cordero v Cabral (1983)]
(b) Good faith ceases when there is:
(i) Extraneous evidence; or
(ii) A suit for recovery of the property
by the true owner.
(3) Of enjoyment of possession in the same
character in which possession was
required until contrary is proved [NCC
529]
(4) Of non-interruption of possession in favor
of present possessor who proves
UP LAW BOC PROPERTY
possession at a previous time until the
contrary is proved [NCC 554]
(a) Possession is interrupted for the
purposes of prescription, naturally or
civilly. [NCC 1120]
(b) Possession is naturally interrupted
when through any cause it should
cease for more than one year [NCC 1121]
(c) Old possession is not revived if a new
possession should be exercised by the
same adverse claimant [NCC 1121]
(d) If the natural interruption is for only
one year or less, the time elapsed shall
be counted in favor of the prescription
[NCC 1122]
(e) Civil interruption is produced by
judicial summons to the possessor.
[NCC 1123]
(f) Judicial summons shall be deemed not
to have been issued and shall not give
rise to interruption [NCC 1124]:
(i) If it should be void for lack of legal
solemnities;
(ii) If the plaintiff should desist from
the complaint or should allow the
proceedings to lapse;
(iii) If the possessor should be absolved
from the complaint
(g) In all these cases, the period of the
interruption shall be counted for the
prescription
(5) Non-interruption of possession of property
unjustly lost but legally recovered
[NCC. 561]
(6) Other presumptions with respect to
specific properties of property rights
(a) Of extension of possession of real
property to all movables contained
therein so long as in is not shown that
they should be excluded (NCC 542)
(b) Non-interruption of possession of
hereditary property (NCC 553)
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CIVIL LAW
(i) Possession of hereditary property
is deemed transmitted to the heir
without interruption and from the
moment of the death of the
decedent
(c) Of just title in favor of possessor in
concept of owner (NCC 541)
(d) Exclusive Possession of Common
Property (NCC. 543)
G. LOSS/TERMINATION OF
POSSESSION [NCC 555]
(1) By the abandonment of the thing;
(2) By an assignment made to another either
by onerous or gratuitous title;
(3) By the destruction or total loss of the
thing, or because it goes out of
commerce;
(4) By the possession of another, subject to
the provisions of Art. 537, if the new
possession has lasted longer than 1 year.
But the real right of possession is not lost
till after the lapse of 10 years.
G.1. ABANDONMENT
 Includes the giving up of possession, and
not necessarily of ownership by every
possessor.
 It is the opposite of occupation. It consists of
the voluntary renunciation of all the rights
which the person may have in a thing, with
intent to lose such a thing. To be effective, it
is necessary that it be made by a possessor
in the concept of an owner.
 It must be clearly appear that the spes
recuperandi is gone and the animus
revertendi is finally given up.
G.2. ASSIGNMENT, EITHER
GRATUITOUS OR ONEROUS
Complete transmission of ownership rights to
another person, gratuitously or onerously.
G.3. POSSESSION BY ANOTHER; IF
POSSESION HAS LASTED LONGER
UP LAW BOC
THAN ONE YEAR; REAL RIGHT OF
POSSESSION NOT LOST AFTER 10
YEARS – SUBJECT TO NCC 537
(1) Acts merely tolerated, and those executed
clandestinely and without the knowledge
of the possessor of a thing, or by violence,
do not affect possession.
(2) Possession that is lost here refers only to
possession as a fact (de facto), not the
legal right of possession (de jure). It is the
possession that the new possessor
acquires.
(3) Real right of possession is lost only after 10
years.
(4) After 1 year, the actions for forcible entry
and unlawful detainer can no longer be
brought. But accion publiciana may still be
instituted to recover possession de jure.
H. RULES FOR LOSS OF MOVABLES
(1) The possession of movables is not deemed
lost so long as they remain under the
control of the possessor, even though for
the time being he may not know their
whereabouts. (NCC 556)
(2) Control – judicial control or right, or that
the thing remains in one’s patrimony.
(3) Wild animals are possessed only while they
are under one's control. (NCC 560)
(a) Domesticated or tamed animals – if
they retain the habit of returning to the
premises of the possessor.
I. KINDS OF ANIMALS
(1) Wild— those which live naturally
independent of man.
(2) Domesticated— those which, being wild by
nature, have become accustomed to
recognize the authority of man. When they
observe this custom, they are placed in the
same category as domestic and when they
lose it, they are considered as wild.
(3) Domestic or Tame— those which are born
and reared ordinarily under the control and
PROPERTY CIVIL LAW
care of man; they are under the ownership
of man, and do not become res nullius
unless they are abandoned.
VIII. Usufruct
Usufruct gives a right to enjoy the property of
another with the obligation of preserving its
form and substance, unless the title
constituting it or the law otherwise provides.
[NCC 562]
A. OBJECTS OF USUFRUCT
(1) Independent Rights
A servitude which is dependent on the
tenement to which it attaches cannot be
the object of usufruct.
(2) Things
(a) Non-consumable things.
(b) Consumable things, but only as to
their value if appraised, or on an equal
quantity and quality if they were not
appraised.
(3) Unproductive things
e.g. sterile or absolutely unproductive land,
or things for mere pleasure, such as
promenades, statues or paintings, even if
they do not produce any utility.
B. CHARACTERISTICS
(1) It is a real right;
(2) Of temporary duration;
(3) The purpose is to derive all advantages
from the thing due to normal exploitation.
B.1. NATURAL CHARACTERISTICS
(1) Includes only the right to use (jus utendi)
and the right to the fruits (jus fruendi).
(2) Usufructuary must preserve the form or
substance of the thing.
(a) Preservation is a natural requisite, not
essential because the title constituting
it or the law may provide otherwise.
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(b) Reasons for preserving form and
substance
(i) To prevent extraordinary
exploitation;
(ii) To prevent abuse, which is
frequent;
(iii) To prevent impairment.
(c) Exception: In an abnormal usufruct,
alteration is allowed.
(3) Usufruct is extinguished by the death of
the usufructuary.
(a) Natural because a contrary intention
may prevail.
C. CLASSIFICATION
C.1. BY ORIGIN
(1) Voluntary: created by the will of private
persons
(a) By act inter vivos – such as contracts
and donations:
(i) By alienation of the usufruct;
(ii) By retention of the usufruct;
(iii) Where a usufruct is constituted
inter vivos and for valuable
consideration, the contract is
unenforceable unless in writing.
(b) By act mortis causa – such as
testament.
(2) Legal: as provided by law.
Usufruct of parents over the property of
unemancipated children. (now limited to
the collective daily needs of the family)
[(FC 26)]
(3) Mixed: created both by law and the acts of
persons.
(a) The rights and duties of the
usufructuary provided by law may be
modified or eliminated by the parties.
(b) The title constituting the usufruct may
validly authorize the usufructuary to
alienate the thing itself held in
usufruct.
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CIVIL LAW
(i) If the usufructuary is authorized to
alienate the thing in case of
necessity, it is the usufructuary
who determines the question of
necessity.
C.2. BY PERSON ENJOYING THE RIGHT
OF USUFRUCT
(1) Simple: only one usufructuary enjoys the
property.
(2) Multiple: several usufructuaries enjoy the
property.
(a) Simultaneous: at the same time.
(b) Successive: one after the other.
Limitations On Successive Usufruct
(1) If usufruct is by donation, ALL donees
must be alive. [NCC 756]
(2) Fiduciary or first heir and the second heir
must be alive at the time of the death of
the testator. [NCC 863]
(3) If by testamentary succession, there must
be only 2 successive usufructuaries, and
both must be alive or at least already
conceived at the time of the testator’s
death. [NCC 869]
C.3. BY OBJECT OF USUFRUCT
Usufruct may be constituted on the whole or a
part of the fruits of the thing or on a right,
provided it is not strictly personal or
intransmissible. [NCC 564]
RIGHTS
(1) Must not be strictly personal or
intransmissible.
(2) Usufruct over a real right is by itself a real
right.
(a) Right to receive present or future
support cannot be the object of the
usufruct.
THINGS
UP LAW BOC
(1) Normal: involves non-consummable things
where the form and substance are
preserved.
(2) Abnormal or irregular: when the usufruct
includes things which cannot be used
without being consumed.
(a) The usufructuary has right to make use
of them under the obligation of paying
their appraised value at the
termination of the usufruct, if they
were appraised when delivered.
(b) If they were not appraised, he has the
right to return the same quantity and
quality, or pay their current price at the
time the usufruct ceases. [NCC 574]
(c) In reality, the usufruct is not upon the
consumable things themselves, but
upon the sum representing their value
or upon a quantity of things of the
same kind and quality.
(d) The usufructuary, in effect, becomes
the owner of the things in usufruct,
while the grantor becomes a mere
creditor entitled to the return of the
value or of the things of the same
quantity and quality (as if converted
into a simple loan).
C.4. BY THE EXTENT OF THE USUFRUCT
AS TO THE FRUITS
(1) Total: all consumed by the usufruct.
(2) Partial: only on certain aspects of the
usufruct’s fruits.
AS TO THE OBJECT
(1) Singular: only on particular property of the
owner.
(2) Universal: pertains to the whole property;
A universal usufructuary must pay the
debts of the naked owner, if stipulated.
Article 758 and 759 on donations apply.
NCC 758: When the donation imposes upon
the donee the obligation to pay the debts of
PROPERTY CIVIL LAW
the donor, if the clause does not contain any
declaration to the contrary, the former is
understood to be liable to pay only the debts
which appear to have been previously
contracted. In no case shall the donee be
responsible for the debts exceeding the value
of the property donated, unless a contrary
intention clearly appears.
NCC 759: There being no stipulation
regarding the payment of debts, the donee
shall be responsible therefor only when the
donation has been made in fraud of creditors.
The donation is always presumed to be in
fraud of creditors, when at the time thereof
the donor did not reserve sufficient property
to pay his debts prior to the donation.
C.5. BY THE TERMS OF THE USUFRUCT
(1) Pure: no terms or conditions.
(2) Conditional: either suspensive or
resolutory.
(3) With a term or period
(a) Ex die: from a certain day.
(b) In diem: up to a certain day.
(c) Ex die in diem: from a certain day up
to a certain day.
D. RIGHTS AND OBLIGATIONS OF
USUFRUCTUARY
D.1. RIGHTS AS TO THE THING AND ITS
FRUITS
RIGHT TO ENJOY THE PROPERTY
Right to enjoy the property to the same extent
as the owner, but only with respect to its use
and the receipt of its fruits.
(1) Usufructuary cannot extract products
which do not constitute fruits because he
is bound to preserve the form and
substance of the thing.
(2) Usufructuary rights may be transferred,
assigned or otherwise disposed of by the
usufructuary.
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(3) Not exempt from execution and can be possessor and the
sold at public auction. usufructuary

HIDDEN TREASURE Fruits already matured at the time of the

As to hidden treasure, usufructuary is termination of the usufruct, which ordinarily
considered a stranger without a right to a would have already been gathered by the
share, unless he is also the finder of the usufructuary, may remain ungathered for no
treasure fault imputable to him, but because of malice
(1) With respect to hidden treasure which may or an act imputable to the naked owner or a
be found on the land or tenement, he shall 3rd person, or even due to force majeure or
be considered a stranger. fortuitous event.
(2) Hidden treasure belongs to the owner of
the land, building, or other property on RIGHT TO CIVIL FRUITS
which it is found. (1) Civil fruits – deemed to accrue daily, and
(3) Nevertheless, when the discovery is made belong to the usufructuary in proportion
on the property of another, or of the State to the time the usufruct may last.
or any of its subdivisions, and by chance, (2) Whenever a usufruct is constituted on the
one-half thereof shall be allowed to the right to receive a rent or periodical
finder. pension, whether in money or in fruits, or
in the interest on bonds or securities
RIGHT TO FRUITS PENDING AT THE payable to bearer, each payment due
BEGINNING OF USUFRUCT shall be considered as the proceeds or
Fruits pending at the fruits of such right.
Fruits pending at the (3) Whenever it consists in the enjoyment of
termination of the
beginning of the usufruct benefits accruing from a participation in
usufruct
any industrial or commercial enterprise,
Belong to the Belong to the naked
the date of the distribution of which is not
usufructuary owner
fixed, such benefits shall have the same
Without need to The owner shall character.
reimburse the expenses reimburse to the (a) In either case, they shall be
to the owners usufructuary distributed as civil fruits.
ordinary cultivation
expenses from the *Note: If the usufruct is constituted only on
proceeds of the the land and not the building built thereon
fruits (not to exceed then the right to the fruits by the usufructuary
the value of the would not extend to the building. The
building is considered as a separate and
fruits)
distinct prinicipal which produces its own
Without prejudice to the Rights of innocent fruits. [Gabuya v Cui (1971)]
right of 3rd persons e.g. if 3rd parties should
the fruits had been not be prejudiced. RIGHT TO ENJOY ANY INCREASE
planted by a possessor in THROUGH ACCESSIONS AND
good faith, the pending SERVITUDES, INCLUDING PRODUCTS
crop expenses and OF HUNTING AND FISHING.
charges shall be
prorated between said RIGHT TO LEASE THE THING

135
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General rule: The usufructuary may lease the
thing to another but this shall terminate upon
the expiration of the usufruct, saving leases of
rural lands, which shall be considered as
subsisting during the agricultural year.
Exceptions
(1) Legal usufructs cannot be leased.
(2) Caucion juratoria (lease would show that
the usufructuary does not need the
property badly)
Effect of the transfer of right:
(1) The transfer or lease of the usufruct does
NOT terminate the relation of the
usufructuary with the owner.
(2) Death of the transferee does not terminate
the usufruct but it terminates upon the
death of the usufructuary who made the
transfer.
RULES AS TO LEASE
(3) The property in usufruct may be leased
even without the consent of the owner.
(4) The lease should be for the same period as
the usufruct.
(a) EXCEPT: leases of rural lands
continues for the remainder of the
agricultural year.
(b) A lease executed by the usufructuary
before the termination of the usufruct
and subsisting after the termination of
the usufruct must be respected, but
the rents for the remaining period will
belong to the owner.
(c) If the usufructuary has leased the lands
or tenements given in usufruct, and the
usufruct should expire before the
termination of the lease, he or his heirs
and successors shall receive only the
proportionate share of the rent that
must be paid by the lessee.
[NCC, 568]
(5) It is the usufructuary and not the naked
owner who has the right to choose the
tenant.
PROPERTY CIVIL LAW
(a) As corollary to the right of the
usufructuary to all the rent, to choose
the tenant, and to fix the amount of
the rent, she necessarily has the right
to choose herself as the tenant
thereof; and, as long as the
obligations she had assumed towards
the owner are fulfilled. [Fabie v.
Gutierrez David (1945)]
(6) A lease executed by the owner before the
creation of the usufruct is not
extinguished by such usufruct.
Limitations on the Right to Lease the Property
(1) Usufructuary cannot alienate a thing in
usufruct:
(a) Cannot alienate or dispose of the
objects included in the usufruct;
(b) Cannot renounce a servitude;
(c) Cannot mortgage or pledge a thing.
(d) EXCEPT:
(i) When the right of usufruct is
converted into the right of
ownership;
(ii) When the things are consumable;
(NCC 574);
(iii) When the things by their nature
are intended for sale, such as the
merchandise in a commercial
establishment; and
(iv) When the things, whatever their
nature, are delivered under
appraisal as equivalent to their
sale.
(2) Future crops may be sold but such sale
would be void if not ratified by the owner.
(a) The buyer’s remedy is to recover from
the usufructuary.
(3) Only voluntary usufruct can be alienated.
(4) The usufructuary-lessor is liable for the
act of the substitute.
(a) A usufructuary who alienates or
leases his right of usufruct shall
answer for any damage which the
things in usufruct may suffer through
136
UP LAW BOC PROPERTY
the fault or negligence of the person
who substitutes him. [NCC, 590]
RIGHT TO IMPROVE THE THING, BUT
IMPROVEMENT INURES TO THE
BENEFIT OF THE NAKED OWNER
(1) Usufructuary is not entitled to
reimbursement.
(2) Whenever the usufructuary can remove the
improvements without injury to the
property in usufruct, he has the right to do
so, and the owner cannot prevent him from
doing so even upon payment of their value.
(3) This right does not involve an obligation –
if the usufructuary does not wish to
exercise it, he cannot be compelled by the
owner to remove the improvements.
(4) This right to remove improvements can be
enforced only against the owner, not
against a purchaser in good faith to whom
a clean title has been issued.
(5) Usufructuary may set off the improvements
against any damage to the property.
(a) The improvements should have
increased the value of the property,
and that the damages are imputable to
the usufructuary.
(b) Increase in value and the amount of
damages are set off against each
other.
(c) If the damages exceed the increase in
value, the difference should be paid by
the usufructuary as indemnity.
(d) If the increase in value exceeds the
damages, and the improvements are of
such nature that they can be removed
without injury to the thing in usufruct,
the settlement of the difference must
be agreed upon by the parties.
(e) If the improvements cannot be
removed without injury, the excess in
value accrues to the owner.
(6) Registration of improvements – to protect
usufructuary against 3rd persons
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CIVIL LAW
D.2. RIGHTS AS TO THE LEGAL RIGHT
OF USUFRUCT ITSELF
RIGHT TO MORTGAGE RIGHT OF
USUFRUCT
(1) The usufructuary may alienate his right of
usufruct, even by a gratuitous title; but all
the contracts he may enter into as such
usufructuary shall terminate upon the
expiration of the usufruct. [NCC. 572]
(2) Does not include parental usufruct
because of personal and family
considerations.
RIGHT TO ALIENATE THE USUFRUCT
EXCEPT IN PURELY PERSONAL
USUFRUCTS OR WHEN TITLE
CONSTITUTING IT PROHIBITS THE
SAME
Parental usufruct is inalienable.
D.3. OBLIGATIONS AT THE BEGINNING
OF THE USUFRUCT OR BEFORE
EXERCISING THE USUFRUCT
(1) To make, after notice to the owner or his
legitimate representative, an inventory of
all the property, which shall contain an
appraisal of the movables and a
description of the condition of the
immovables; and
(2) To give security, binding himself to fulfill
the obligations imposed upon him in
accordance with this Chapter.
Note: These requirements are NOT conditions
precedent to the commencement of the right
of the usufruct but merely to the entry upon
the possession and enjoyment of the property.
TO MAKE AN INVENTORY
(1) Requisites
(a) Immovables must be described; and
(b) Movables must be appraised because
they are easily lost or deteriorated.
UP LAW BOC PROPERTY
(2) Concurrence of the owner in the making of
the inventory.
(3) Expenses for the making of the inventory
are borne by the usufructuary.
(4) The inventory may be in a private
document, except when immovables are
involved. (a public instrument is prescribed
to affect 3rd persons)
(5) Failure to make an inventory does not
affect the rights of the usufructuary to
enjoy the property and its fruits.
(a) A prima facie presumption arises that
the property was received by the
usufructuary in good condition.
(b) Even if he is already in possession, he
may still be required to make an
inventory.
(6) Exception to the requirement of inventory
(a) When no one will be injured, the
usufructuary may be excused from this
obligation.
TO GIVE A BOND FOR THE FAITHFUL
PERFORMANCE OF DUTIES AS
USUFRUCTUARY
(1) Any kind of sufficient security is allowed,
e.g. cash, personal bond, mortgage.
(2) No bond is required in the following:
(a) No prejudice would result; [Art. 585]
(b) Usufruct is reserved by a donor; [Art.
584]
(i) Gratitude on the donee’s part
demands that the donor be
excused from filing the bond.
(c) Title constituting usufruct excused
usufructuary.
(3) A usufructuary may take possession under
a caucion juratoria (bond by oath) [Art. 587]
(a) It is only by way of exception that a
caucion juratoria is allowed, and only
under the special circumstances:
(i) Proper court petition;
(ii) Necessity for delivery of furniture,
implements or house included in
the usufruct;
138
CIVIL LAW
(iii) Approval of the court; and
(iv) Sworn promise.
(b) A usufructuary under this can neither
alienate his right nor lease the property,
for that would mean that he does not
need the dwelling or the implements
and furniture.
(4) Effect of filing a bond
(a) Retroactivity: upon giving the security,
the usufructuary will be entitled to all
the benefits accruing since the time
when he should have begun to receive
them.
(5) Effect of failure to give bond: [NCC 586]
(a) The owner may demand that the
immovable properties be placed
under administration;
(i) That the movable properties be
sold;
(ii) That the public bonds,
instruments of credit payable to
order or to bearer be converted
into registered certificates or
deposited in a bank or public
institution; and
(iii) That the capital or sums in cash
and the proceeds of the sale of
the movable property be invested
in safe securities.
(b) The owner may, until the usufructuary
gives security, retain in his possession
the property in usufruct as
administrator, subject to the
obligation to deliver to the
usufructuary the net proceeds, after
deducting the sums, which may be
agreed upon or judicially allowed him
for such administration.
D.4. DURING THE USUFRUCT
(1) To take care of the thing like a good father
of a family;
(2) To undertake ordinary repairs;
(3) To notify owner of need to undertake
extraordinary repairs;
UP LAW BOC PROPERTY
(4) To pay for annual charges and taxes on the
fruits;
(5) To notify owner of any act detrimental to
ownership;
(6) To shoulder the costs of litigation
regarding the usufruct; and
(7) To answer for fault or negligence of
alienee, lessee or agent of usufructuary.
TO TAKE CARE OF THE THING LIKE A
GOOD FATHER OF A FAMILY
(1) When damages are caused to the property
by the fault or negligence of the
usufructuary, the naked owner need not
wait for the termination of the usufruct
before bringing the action to recover
proper indemnity.
(2) The bad use of a thing, which causes
considerable injury, entitles the owner to
demand the delivery and administration of
the thing.
(3) The exercise of this remedy does NOT
extinguish the usufruct.
TO UNDERTAKE ORDINARY REPAIRS
The usufructuary is obliged to make the
ordinary repairs needed by the thing given in
usufruct. [NCC 592]
(1) Ordinary repairs:
(a) Such as are required by the wear and
tear due to the natural use of the thing
and are indispensable for its
preservation;
(b) Deteriorations or defects arise from the
natural use of the thing;
(c) Repairs are necessary for the
preservation of the thing.
(2) The usufructuary is bound to pay only for
the repairs made during the existence of
the usufruct.
(a) If the defects existed already at the
time the usufruct began, the obligation
to defray the ordinary repairs falls
upon the owner.
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CIVIL LAW
(3) If the defects are caused by the ordinary
use of the thing, the usufructuary may
exempt himself from making the repairs
by returning to the owner the fruits
received during the time that the defects
took place.
Except: When the ordinary repairs are due
to defects caused by the fault of the
usufructuary
(4) If the usufructuary fails to make the
repairs even after demand, the owner may
make them at the expense of the
usufructuary
TO NOTIFY OWNER OF NEED TO
UNDERTAKE EXTRAORDINARY
REPAIRS
(1) Extraordinary repairs
(a) Those caused by exceptional
circumstances, whether or not they are
necessary for the preservation of the
thing; or
(b) Those caused by the natural use of the
thing, but are not necessary for its
preservation.
(2) General Rule: Naked owner must make the
extraordinary repairs.
The usufructuary is obliged to pay legal
interest on the amount while usufruct
lasts.
(3) If the extraordinary repairs are
indispensable, and the naked owner fails
to undertake them, the usufructuary may
make such repairs.
(4) Requisites:
(a) There must be due notification to the
naked owner of the urgency – if it is
not urgent, there is no obligation to
give notice;
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(i) The naked owner failed to make To deliver the thing in usufruct to the owner in
them; and the condition in which he has received it, after
(ii) The repair is needed for undertaking ordinary repairs.
preservation.
(b) The usufructuary that has made the Exception: Abnormal usufruct – A thing of the
extraordinary repairs necessary for same kind, quantity and quality is returned; if
preservation is entitled to recover from with appraised value, must return value
the owner the increase in value, which appraised.
the tenement acquired by reason of
such works. E. SPECIAL CASES OF USUFRUCT
(c) Usufructuary may retain until he is E.1. USUFRUCT OVER A PENSION OR A
paid. PERIODICAL INCOME [NCC 570]
(1) Each payment due shall be considered as
TO PAY FOR ANNUAL CHARGES AND the proceeds or fruits of such right.
TAXES ON THE FRUITS (2) The usufruct shall be distributed as civil
It is well settled that a real tax, being a burden fruits.
upon the capital, should be paid by the owner
of the land and not by a usufructuary. There is E.2. USUFRUCT OF PROPERTY OWNED
no merit in the contention of distinguishing IN COMMON [NCC 582]
public lands into alienable and indisposable. All (1) The usufructuary takes the place of the
properties owned by the government, without owner as to:
any distinction, are exempt from taxation. (a) Management;
[Board of Assessment Appeals of Zamboanga (b) Fruits; and
del Sur v. Samar Mining Company, Inc.(1971)] (c) Interest.
(2) Effect of partition:
TO NOTIFY OWNER OF ANY ACT (a) The right of the usufructuary is not
DETRIMENTAL TO OWNERSHIP affected by the division of the property
(NCC 601) in usufruct among the co-owners.
(b) After partition, the usufruct is
TO SHOULDER THE COSTS OF transferred to the part allotted to the
LITIGATION REGARDING THE co-owner.
USUFRUCT (NCC 602)
E.4. USUFRUCT CONSTITUTED ON A
TO ANSWER FOR FAULT OR FLOCK OR HERD OF LIVESTOCK
NEGLIGENCE OF THE ALIENEE, LESSEE [NCC 591]
OR AGENT OF THE USUFRUCTUARY (1) On sterile stock: same rules on
(NCC 590) consumable property govern. (i.e.
The usufructuary is made liable for the acts of replacement upon termination)
the substitute. While the substitute answers to (2) On fruitful stock:
the usufructuary, the usufructuary answers to (a) Must replace ordinary losses of the
the naked owner. stock with the young if:
(i) Some animals die from natural
D.5. AT THE TIME OF THE TERMINATION causes; or
OF THE USUFRUCT (ii) Some animals are lost due to
rapacity of beasts of prey.

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(b) No obligation to replace if:
(i) There is a total loss of animals
because of some unexpected or
unnatural loss (like contagious
disease or any other uncommon
event, provided the usufructuary
has no fault); or
If all perish, the usufructuary
should deliver the remains to
the owner.
(ii) There is a partial loss.
If a part of the stock perishes,
the usufruct subsists on the
remainder.
E.5. USUFRUCT OVER FRUIT BEARING
TREES AND SPROUT AND WOODLANDS
[NCC 575-576]
The usufructuary can:
(1) Use dead trunks and those cut off or
uprooted by accident;
(2) Make usual cuttings that owner used to do;
and
(3) Cut the trees that are not useful.
E.6. USUFRUCT ON A RIGHT OF ACTION
[NCC 578]
(1) The action may be instituted in the
usufructuary’s name. As the owner of the
usufruct, he is properly deemed a proper
party-in-interest.
(2) If the purpose is the recovery of the
property or right, he is still required under
Art. 578 to obtain the naked owner’s
authority.
(3) If the purpose is to object to or prevent
disturbances over the property, no special
authority from the naked owner is needed.
E.7. USUFRUCT ON MORTGAGED
PROPERTY [NCC 600]
(1) When the usufruct is universal and some
objects are mortgaged, apply Art. 598.
(2) If the usufructuary mortgaged the usufruct
himself, he is liable to pay his own debt.
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CIVIL LAW
E.8. USUFRUCT OVER AN ENTIRE
PATRIMONY [NCC 598]
Applies when:
(1) The usufruct is a universal one
(2) And the naked owner – Has debts or is
obliged to make periodical payments
(whether or not there be known capital)
General rule: The usufructuary is not liable for
the owner’s debts.
Exceptions:
(1) When it is so stipulated; in which case the
usufructuary shall be liable for the debt
specified;
(2) If there is no specification, he is liable only
for debts incurred by the owner before the
usufruct was constituted; or
(3) When the usufruct is constituted in fraud
of creditors.
In no case shall the usufructuary be
responsible for debts exceeding the benefits
under the usufruct. (except when the contrary
intention appears)
E.9. USUFRUCT OVER DETERIORABLE
PROPERTY
(1) The usufructuary shall have the right to
make use thereof in accordance with the
purpose for which they are intended.
(2) It is sufficient if the usufructuary returns
the things in the condition in which they
may have been found at the time of the
expiration of the usufruct despite ordinary
defects caused by use and deterioration
produced by age and time.
Except: when such defects were caused
through the usufructuary’s fraud and
negligence.
(3) If the usufructuary does not return the
things upon the expiration of the usufruct,
he should pay an indemnity equivalent to
the value of the things at the time of such
expiration.
UP LAW BOC
E.10. USUFRUCT OVER CONSUMABLE
PROPERTY [NCC 574]
(1) The usufructuary shall have the right to
make use of them under the obligation of
paying their appraised value at the
termination of the usufruct, if they were
appraised when delivered.
(2) If not appraised, he shall have the right to
return at the same quantity and quality, or
pay their current price at the time the
usufruct ceases.
F. RIGHTS OF THE OWNER
(1) At the beginning of the usufruct
See obligations of usufructuary at the
beginning of the usufruct)
(2) During the usufruct
(a) Retains title to the thing or property.
(b) He may alienate the property: he may
not alter the form or substance of the
thing; nor do anything prejudicial to
the usufructuary.
(c) He may construct buildings, make
improvements and plantings, provided:
(i) The value of the usufruct is not
impaired; and
(ii) The rights of the usufructuary are
not prejudiced.
G. EXTINGUISHMENT / (b) Usufruct is personal and it CANNOT
TERMINATION [NCC 603]
(1) By the death of the usufructuary, unless a
contrary intention clearly appears;
(2) By the expiration of the period for which it
was constituted, or by the fulfillment of any
resolutory condition provided in the title
creating the usufruct;
(3) By merger of the usufruct and ownership in
the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the
person constituting the usufruct; or
(7) By prescription.
PROPERTY CIVIL LAW
G.1. DEATH OF USUFRUCTUARY
Exceptions
(1) In multiple usufructs: it ends at the death
of the last survivor (NCC 611)
(a) If simultaneously constituted: all the
usufructuaries must be alive (or at
least conceived) at the time of
constitution.
(b) If successively constituted:
(i) If by virtue of donation – all the
donees-usufructuaries must be
living at the time of the donation;
(ii) If by will – there should only be 2
successive usufructuaries and
both must have been alive at the
time of testator’s death.
(2) If the period is fixed by reference to the life
of another or there is a resolutory condition.
Death does not affect the usufruct and the
right is transmitted to the heirs of the
usufructuary until the expiration of the
term or the fulfillment of the condition.
(3) When a contrary intention clearly
appears:
(a) If the usufructuary dies before the
happening of a resolutory condition,
the usufruct is extinguished.
be extended beyond the lifetime of
the usufructuary. [Sanchez Roman
and SC]
G.2. EXPIRATION OF PERIOD OR
FULFILLMENT OF RESOLUTORY
CONDITION IMPOSED ON USUFRUCT
BY PERSON CONSTITUTING USUFRUCT
(1) In favor of juridical persons [NCC. 605]
(a) Usufruct cannot be constituted in
favor of a town, corporation, or
association for more than fifty years.
(b) If before the expiration of such period
the town is abandoned, or the
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UP LAW BOC PROPERTY CIVIL LAW

corporation or association is dissolved, Situation Effect

the usufruct shall be extinguished.
(2) Time that may elapse before a 3rd person If usufruct is on the Usufruct continues over
attains a certain age. [NCC. 606] building only the land and materials
(a) Usufruct subsists for the number of (plus interests), if owner
years specified, even if the 3rd person does not rebuild.
should die before the period expired If owner rebuilds,
unless the usufruct has been expressly usufructuary must
granted only in consideration of the allow owner to occupy
existence of the person. the land and to make
use of materials; but
G.3. MERGER OF RIGHTS OF USUFRUCT the owner must pay
AND NAKED OWNERSHIP IN ONE interest on the value of
both the land and the
PERSON
materials.
Illustration: H was the usufructuary of land
owned by X. x dies, leaving in his will, the Art. 608
naked ownership of the land to H. the usufruct If destroyed property is insured before
is extinguished because now H is both the termination of the usufruct
naked owner and the usufructuary. When insurance If owner rebuilds,
premium paid by usufruct subsists on
G.4. RENUNCIATION OF USUFRUCT owner and new building.
(1) Waiver: A voluntary surrender of the rights usufructuary (par. 1) If owner does not
of the usufructuary, made by him with the rebuild, interest upon
intent to surrender them. insurance proceeds
paid to usufructuary.
When the insurance Owner entitled to
(2) Limitations:
taken by the naked insurance money (no
(a) Must be express: tacit renunciation is
owner only because interest paid to
not sufficient;
usufructuary refuses usufructuary).
(b) Does not need the consent of naked
to contribute to the If he does not rebuild,
owner; and
premium (par. 2) usufruct continues over
(c) If made in fraud of creditors, they may
remaining land and/or
rescind the waiver through an action
owner may pay interest
under Article 1381 (accion pauliana).
on value of both
G.5. EXTINCTION OR LOSS OF materials and land
(607).
PROPERTY [NCC 608]
If owner rebuilds,
Situation Effect usufruct does not
Art. 607 continue on new
If destroyed property is not insured building, but owner
must pay interest on
If the building forms Usufruct continues over
value of land and old
part of an the land and materials
materials.
immovable under (plus interests), if owner
usufruct does not rebuild. When insurance Insurance proceeds go

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Situation Effect (3) If usufructuary alone was given the

indemnity, he must give it to the naked
taken by to the usufructuary. owner and compel the latter to return
usufructuary only No obligation to either the interest or to replace the
depends on value of rebuild. property. He may even deduct the interest
usufructuary’s Usufruct continues on himself, if the naked owner fails to object.
insurable interest the land.
Owner has no share in H.2. BAD USE OF THING IN USUFRUCT
insurance proceeds. [NCC 610]
Bad use does not extinguish the usufruct but:
G.6. TERMINATION OF THE RIGHT OF (1) Entitles the owner to demand delivery and
PERSON CONSTITUTING THE USUFRUCT administration of the thing.
Example: usufructs constituted by a vendee a (2) The bad use must cause considerable
retro terminate upon redemption. injury not to the thing, but to the owner.

G.7. PRESCRIPTION
(1) Adverse possession against the owner or IX. Easement
the usufructuary. (1) An encumbrance imposed upon an
(2) It is not the non-use which extinguishes the immovable for the benefit of another
usufruct by prescription, but the use by a immovable belonging to a different
3rd person. owner. [NCC. 613]
(3) There can be no prescription as long as the (2) A real right which burdens a thing with a
usufructuary receives the rents from the prestation of determinate servitudes for
lease of the property, or he enjoys the price the exclusive enjoyment of one who is
of the sale of his right. NOT an owner of a tenement.
(3) A real right by virtue of which the owner
H. CONDITIONS NOT AFFECTING has to ABSTAIN from doing or ALLOW
USUFRUCT somebody else to do something to his
property for the benefit of another.
H.1. EXPRORPIATION OF THING IN Dominant Estate – the immovable in favor of
USUFRUCT [NCC 609] which the easement is established.

3 SITUATIONS Servient Estate – the immovable which is

(1) If naked owner alone was given the subject to the easement .
indemnity, he has the option:
(a) To replace with equivalent thing; or A. CHARACTERISTICS
(b) To pay to the usufructuary legal A.1. ESSENTIAL FEATURES:
interest on the indemnity. This requires (1) It is a real right – it gives an action in rem
a security to be given by the naked or real action against any possessor of the
owner for the payment of the interest. servient estate
(2) If both the naked owner and the (a) Owner of the dominant estate can file
usufructuary were separately given a real action for enforcement of right
indemnity, each owns the indemnity given to an easement
to him, the usufruct being totally
extinguished.

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UP LAW BOC PROPERTY
(b) Action in rem: an action against the
thing itself, instead of against the
person.
(2) It is a right enjoyed over another property
(jus in re aliena) – it cannot exist in one’s
property (nulli res sua servit)
When the dominant and the servient
estates have the same owner, the
easement is extinguished. Separate
ownership is a prerequisite to an
easement.
(3) It is a right constituted over an immovable
by nature (land and buildings), not over
movable properties. [NCC 613]
Immovable: used in its common and not in
the legal sense, meaning only property
immovable BY NATURE can have
easements.
(4) It limits the servient owner’s right of
ownership for the benefit of the dominant
estate.
(a) Right of limited use but no right to
possess the servient estate.
(b) There exists a limitation on ownership:
the dominant owner is allowed to enjoy
or use part of the servient estate, or
imposes on the owner a restriction as
to his enjoyment of his own property.
(i) Being an abnormal limitation of
ownership, it cannot be presumed.
(5) It creates a relation between tenements
There is no transfer of ownership, but a
relationship is created, depending on the
type of easement.
(6) Generally, it may consist in the owner of the
dominant estate demanding that the owner
of the servient estate refrain from doing
something (servitus in non faciendo) or that
the latter permit that something be done
over the servient property (servitus in
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CIVIL LAW
patendo), but not in the right to demand
that the owner of the servient do
something (servitus in faciendo) except if
such act is an accessory obligation to a
praedial servitude (obligation propter rem)
Servient owner merely allows something
to be done to his estate.
Exceptions: Praedial servitudes
(a) Right to place beams in an adjoining
wall to support a structure.
(b) Right to use another’s wall to support
a building.
(7) It is inherent or inseparable from estate to
which they actively or passively belong
(NCC 617)
(a) Easements are merely accessory to
the tenements, and a “quality
thereof.” They cannot exist without
tenements.
(b) Easements exist even if they are not
expressly stated or annotated as an
encumbrance on the titles.
(8) It is intransmissible – it cannot be
alienated separately from the tenement
affected or benefited
Any alienation of the property covered
carries with it the servitudes affecting said
property. But this affects only the portion
of the tenement with the easement,
meaning the portions unaffected can be
alienated without the servitude.
(9) It is indivisible (NCC 618)
(a) If the servient estate is divided
between two or more persons, the
easement is not modified, and each of
them must bear it on the part that
corresponds to him.
(b) If the dominant estate is divided
between two or more persons, each of
them may use the easement in its
entirety, without changing the place
UP LAW BOC
of its use, or making it more
burdensome in any other way.
(10) It has permanence – once it attaches,
whether used or not, it continues and may
be used anytime
Perpetual: exists as long as property exists,
unless it is extinguished.
B. CLASSIFICATION
B.1. AS TO RECIPIENT OF BENEFITS
(1) Real or Praedial: exists for the benefit of a
particular tenement.
(2) Personal: exists for the benefit of persons
without a dominant tenement e.g. usus
habitatio (right to reside in a house) and
operae servorum (right to the labor of
slaves) in Roman law.
B.2. AS TO CAUSE OR ORIGIN
(1) Legal: created by law, whether for public
use or for the interest of private persons.
 Once requisites are satisfied, the owner
of the dominant estate may ask the
Court to declare that an easement is
created.
 Example: Natural drainage of waters,
Abutment of land, Aqueduct, etc.
(2) Voluntary: Created by the will of the
owners of the estate through contract.
Note: There is no such thing as a JUDICIAL
EASEMENT. The Courts cannot create
easements, they can only declare the existence
of one, if it exists by virtue of the law or will of
the parties.
B.3. AS TO ITS EXERCISE [NCC 615]
(1) Continuous: Use is or may be incessant,
without the intervention of any man
(2) Discontinuous: Used at intervals, and
dependent upon the acts of man.
Note: This classification is important in
determining prescription: only continuous and
PROPERTY CIVIL LAW
apparent easements can be created by
prescription.
B.4. AS INDICATION OF ITS EXISTENCE
(1) Apparent: Made known and continually
kept in view by external signs that reveal
the use and enjoyment of the same.
(2) Non-apparent: No external indication of
their existence.
Note: Also important for purposes of
prescription.
B.5. BY THE OBJECT OR OBLIGATION
IMPOSED [NCC 616]
(1) Positive: Imposes upon the owner of the
servient estate the obligation of allowing
something to be done, or doing it himself.
(2) Negative: Prohibits the owner of the
servient estate from doing something that
he could lawfully do if the easement did
not exist.
e.g. Negative Easement of Light and View:
An opening is made on the wall of the
dominant estate, and the easement
consists of imposing upon the servient
estate the obligation to not build anything
that would obstruct the light.
Note: Prescription starts to run from service of
notarial prohibition.
C. GENERAL RULES
(1) Nulli res sua servi: No one can have a
servitude over one’s own property.
(2) Servitus in faciendo consistere nequit: A
servitude cannot consist in doing.
(a) Although some easements seem to
impose a positive prestation upon the
owner of the servient estate, in reality,
the primary obligation is still negative.
(b) Illustration: Under Article 680: the
owner of a tree whose branches
extend over to a neighboring property
is required to cut off the extended
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UP LAW BOC PROPERTY
branches, but the real essence of the
easement is the obligation NOT TO
ALLOW the branches of the tree to
extend beyond the land.
(3) Servitus servitutes esse non potes: There can
be no servitude over another servitude.
(4) A servitude must be exercised civiliter – in a
way least burdensome to the owner of the
land.
(5) A servitude must have a perpetual cause
D. RELEVANCE OF CLASSIFICATIONS
D.1. DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY PRESCRIPTION
Continuous and apparent easements may be
acquired by prescription of 10 years [NCC. 620]
D.2. DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY TITLE
(1) Continuous nonapparent easements, and
discontinuous ones, whether apparent or
not, may be acquired only by virtue of a
title. [NCC. 622]
(2) The existence of an apparent sign of
easement between two estates,
established or maintained by the owner of
both, shall be considered, as a title in order
that the easement may continue actively
and passively.
Unless: At the time the ownership of the
two estates is divided, the contrary should
be provided in the title of conveyance of
either of them, or the sign aforesaid should
be removed before the execution of the
deed. This provision shall also apply in
case of the division of a thing owned in
common by two or more persons.
[NCC. 624]
D.3. DETERMINES HOW TO COMPUTE
THE PRESCRIPTIVE PERIOD [NCC 621]
(1) In positive easements, from the day on
which the owner of the dominant estate, or
the person who may have made use of the
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CIVIL LAW
easement, commenced to exercise it upon
the servient estate.
(2) In negative easements, from the day on
which the owner of the dominant estate
forbade, by an instrument acknowledged
before a notary public, the owner of the
servient estate from executing an act
which would be lawful without the
easement.
D.4. DETERMINES HOW EASEMENT IS
LOST BY PRESCRIPTION [NCC 631 (2)]
By nonuser for 10 years:
(1) With respect to discontinuous easements,
this period shall be computed from the
day on which they ceased to be used.
(2) With respect to continuous easements,
from the day on which an act contrary to
the same took place.
E. CREATION
E.1. BY TITLE
(1) Continuous and apparent easements may
be acquired by virtue of a title. [NCC 620]
(2) Continuous nonapparent easements, and
discontinuous ones, whether apparent or
not, are acquired only by virtue of a title.
[NCC 622]
(3) The absence of a document or proof
showing the origin of an easement which
cannot be acquired by prescription may
be cured by a deed of recognition by the
owner of the servient estate or by a final
judgment. [NCC 623]
(4) The existence of an apparent sign of
easement between two estates,
established or maintained by the owner of
both, shall be considered as a title in
order that the easement may continue
actively and passively.
Unless: at the time the ownership of the
two estates is divided, the contrary should
be provided in the title of conveyance of
either of them, or the sign aforesaid
should be removed before the execution
of the deed. This provision shall also
UP LAW BOC PROPERTY CIVIL LAW

apply in case of the division of a thing (b) By the provisions of Chapter 2, title
owned in common by two or more persons. VII, Book II.
[NCC 624]
F. VOLUNTARY EASEMENTS
E.2. BY LAW (LEGAL EASEMENTS)
(1) Every owner of a tenement or piece of
(1) Easements imposed by law have for their
land may establish thereon the
object either public use or the interest of
easements which he may deem suitable,
private persons. [NCC 634]
and in the manner and form which he may
(2) These easements may be modified by
deem best. [NCC 688]
agreement of the interested parties,
(2) The owner of a thing, the usufruct of
whenever the law does not prohibit it or no
which belongs to another, may impose,
injury is suffered by a third person.
without the consent of the usufructuary,
[NCC 636]
any servitudes which will not injure the
right of usufruct. [NCC 689]
E.3. BY WILL OF THE OWNERS
(3) Whenever the naked ownership belongs
(VOLUNTARY EASEMENTS)
to one person and the beneficial
Every owner of a tenement or a piece of land
ownership to another, no perpetual
may establish the easements that he may
voluntary easement may be established
deem suitable and best. [NCC 688]
thereon without the consent of both
owners. [NCC 690]
Note: If an owner constitutes an easement over
(4) Consent of all co-owners is required to
his own property and makes such easement
impose an easement on an undivided
available to the general public, said owner may
tenement. [NCC 691]
not arbitrarily discriminate against certain
persons by not letting them use the easement.
[Negros Sugar Company v Hidalgo (1936)] H. RIGHTS AND OBLIGATIONS OF
E.4. BY PRESCRIPTION
OWNERS OF DOMINANT AND
Continuous and apparent easements may be SERVIENT ESTATES
acquired by prescription of 10 years. [NCC 620]
H.1. RIGHTS OF DOMINANT ESTATE
G. LEGAL EASEMENTS OWNER
G.1. LAW GOVERNING LEGAL (1) To use the easement and exercise all
rights necessary for it [NCC 625, 626]
EASEMENTS
(a) The owner of the dominant estate is
(1) For public easements
granted the right to use the principal
(a) Special laws and regulations relating
easement, and all accessory
thereto. (ex: PD 1067 and PD 705)
servitudes.
(b) By the provisions of Chapter 2, Title VII,
(b) Example: Easement of drawing water
Book II, NCC.
carries with it the easement of right of
way to the place where water is
(2) For private legal easements
drawn.
(a) By agreement of the interested parties
(c) Limitation: Only for the original
whenever the law does not prohibit it
immovable and the original purpose.
and no injury is suffered by a 3rd
person.

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UP LAW BOC PROPERTY
(2) In a right of way, to ask for change in width
of easement sufficient for needs [NCC 651]
(3) To renounce totally the easement, if he
desires to be exempt from contributing to
the expenses.
The needs of the dominant property ultimately
determine the width of the passage. And these
needs may vary from time to time.
[Encarnacion v. Court of Appeals]
H.2. OBLIGATIONS OF DOMINANT
ESTATE OWNER
(1) To use the easement for the benefit of
immovable and in the manner originally
established [NCC 626]
If established for a particular purpose, the
easement cannot be used for a different
one. However, if established in a general
way, without specific purpose, the
easement can be used for all the needs of
the dominant estate.
(2) To notify the owner of the servient estate
before making repairs and to make repairs
in a manner least inconvenient to the
servient estate [NCC 627(2)]
(3) Not to alter the easement or render it more
burdensome
(a) The owner of the dominant estate may
make repairs at his expense, but he
cannot alter the easement or make it
more burdensome. [NCC 627]
(b) Making the easement more
burdensome means widening the
easement. [Valderrama v. North Negros
Sugar Co. (1925)]
(4) To contribute to expenses of works
necessary for use and preservation of
servitude, if there are several dominant
estates, unless he renounces his interest
[NCC 628]
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CIVIL LAW
(a) The contribution is in proportion to
the benefits which each may derive
from the work.
(b) Anyone who does not wish to
contribute may exempt himself by
renouncing the easement for the
benefit of the others.
(c) If the owner of the servient estate
should make use of the easement in
any manner whatsoever, he shall also
be obliged to contribute to the
expenses in the proportion stated,
saving an agreement to the contrary.
(5) To do at his expense all necessary works
for the use and preservation of the
easement [NCC 627]
The necessity of the works determines
extent of such works.
H.3. RIGHTS OF THE SERVIENT ESTATE
OWNER
(1) To retain ownership and use of his
property
(a) The owner of the servient estate
retains the ownership of the portion
on which the easement is established,
and may use the same in such a
manner as not to affect the exercise of
the easement. [NCC 630]
(b) The servient owner must respect the
use of the servitude, but retains
ownership and use of the same, in a
manner not affecting the easement.
(2) To change the place and manner of the
use of the easement [NCC 629]
General rule: The owner of the servient
estate cannot impair the use of the
servitude.
Exceptions:
(a) By reason of either:
(i) The place/manner originally
assigned, the use of such
UP LAW BOC
easement has become VERY
INCONVENIENT to the owner; or
(ii) The easement should prevent him
from making any important works,
repairs or improvements thereon;
(b) The change must be done at his
expense;
(c) He offers another place or manner
equally convenient; and
(d) he change is done in such a way that
no injury is caused to the dominant
owner or to those who may have a right
to use the easement.
(3) To use the easement
May use the easement but must also
contribute proportionately to the expenses.
H.4. OBLIGATIONS OF SERVIENT
ESTATE OWNER
(1) Not to impair the use of the easement [NCC
629 (1)]
(2) To contribute proportionately to expenses if
he uses the easement [NCC 628(2)]
Unless there is an agreement to the
contrary
(3) To pay for the expenses incurred for the
change of location or form of the easement
I. KINDS OF LEGAL EASEMENTS
(1) Natural drainage [NCC 637]
(2) Riparian banks [NCC 638]
(3) Drainage of buildings [NCC 674]
(4) Dam [NCC 639]
(5) Drawing water [NCC 640-641]
(6) Aqueduct [NCC 642-646]
(7) Sluice gate [NCC 647]
(8) Right of way [NCC 649-657]
(9) Party wall [NCC 658-666]
(10) Light and view [NCC 667-681]
(11) Intermediate distances [NCC 677-681]
(12) Nuisance [NCC 682-683]
PROPERTY CIVIL LAW
(13) Lateral and subjacent support
[NCC 684-687]
I.1. NATURAL DRAINAGE
(1) Lower estates are obliged to receive the
waters which naturally and without the
intervention of man descend from the
higher estates (as well as the stones or
earth which they carry with them).
(2) The owner of the lower estate cannot do
any works that will impede this easement.
(3) The owner of the higher estate cannot do
any works that will increase the burden.
I.2. RIPARIAN BANKS
(1) The banks of rivers and streams are
subject throughout their entire length and
within a zone of 3 meters along their
margins, to the easement of public use in
the general interest of navigation,
floatage, fishing, and salvage.
(2) Estates adjoining the banks of navigable
or floatable rivers are subject to the
easement of towpath for the exclusive
service of river navigation and floatage.
(3) If it be necessary to occupy lands of
private ownership, the proper indemnity
shall first be paid.
I.3. DRAINAGE OF BUILDINGS
(1) The owner of a building is obliged to
construct its roof or covering in such
manner that the rain water shall fall on
his own land or on a street or public place,
and NOT on the land of his neighbor, even
though the adjacent land may belong to
two or more persons, one of whom is the
owner of the roof.
(2) Even if it should fall on his own land, the
owner shall be obliged to collect the
water in such a way as not to cause
damage to the adjacent land or tenement.
I.4. DAM
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Whenever it should be necessary to build a
dam, and the person who is to construct it is
not the owner of the banks, or lands which
must support it, he may establish the
easement of abutment of a dam, after
payment of the proper indemnity.
I.5. DRAWING WATER
(1) Compulsory easements for drawing water
or for watering animals can be imposed
only for reasons of public use in favor of a
town or village, after payment of the proper
indemnity.
(2) Easements for drawing water and for
watering animals carry with them the
obligation of the owners of the servient
estates to allow passage to persons and
animals to the place where such
easements are to be used, and the
indemnity shall include this service.
(3) The width of the easement must not
exceed 10 meters.
I.6. AQUEDUCT
(1) Any person who may wish to use upon his
own estate any water of which he can
dispose shall have the right to make it flow
through the intervening estates, with the
obligation to indemnify their owners, as
well as the owners of the lower estates
upon which the waters may filter or
descend.
(2) Person desiring to make use of this right is
obliged to:
(a) To prove that he can dispose of the
water and that it is sufficient for the
use for which it is intended;
(b) To show that the proposed right of way
is the most convenient and the least
onerous to third persons; and
(c) To indemnify the owner of the servient
estate in the manner determined by
the laws and regulations
(3) Easement of aqueduct for private interest
cannot be imposed on buildings,
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CIVIL LAW
courtyards, annexes, or outhouses, or on
orchards or gardens already existing.
(4) This easement does not prevent the
owner of the servient estate from closing
or fencing it, or from building over the
aqueduct in such manner as not to cause
the latter any damage, or render
necessary repairs and cleanings
impossible.
(5) This easement is considered as
continuous and apparent, even though the
flow of the water may not be continuous,
or its use depends upon the needs of the
dominant estate, or upon a schedule of
alternate days or hours.
I.7. SLUICE GATE
(1) The construction of a stop lock or sluice
gate in the bed of the stream from which
the water is to be taken, for the purpose of
improving an estate.
(2) Such person may demand that the owners
of the banks permit its construction, after
payment of damages, including those
caused by the new easement to such
owners and to the other irrigators.
I.8. RIGHT OF WAY
Who may demand
(1) The owner of the dominant estate; or
(2) Any person with the real right to cultivate
or use the dominant estate e.g. a
usufructuary.
Note: a lessee cannot demand such
easement, because the lessor is the one
bound to maintain him in the enjoyment of
the property.
Requisites
(1) The dominant estate is surrounded by
other immovables owned by other
persons;
(2) There must absolutely be no access to a
public road or highway;
UP LAW BOC PROPERTY CIVIL LAW

(a) Even if there is access, it is difficult or hand, the longest distance may be free
dangerous to use, or grossly of obstructions and the easiest or
insufficient; most convenient to pass
(b) Mere inconvenience in the use of an through. [Quimen v. CA (1996)]
outlet does not render the easement a (b) The fact that LGV had other means of
necessity; egress to the public highway cannot
(c) An adequate outlet is one that is extinguish the said easement, being
sufficient for the purpose and needs of voluntary and not compulsory. The
the dominant owner, and can be free ingress and egress along
established at a reasonable expense; Mangyan Road created by the
(d) Does not necessarily have to be by land voluntary agreement between the
– an outlet through a navigable river if parties is thus legally demandable
suitable to the needs of the tenement with the corresponding duty on the
is sufficient; servient estate not to obstruct the
(3) The isolation of the immovable is NOT due same. [La Vista Association v. CA]
to the dominant owner’s own acts e.g. if he (3) The width of the easement of right of way
constructs building to others obstructing shall be that which is sufficient for the
the old way; and needs of the dominant estate, and may
(4) There is payment of indemnity; accordingly be changed from time to
(a) If right of way is permanent and time. [NCC 651]
continuous for the needs of the
dominant estate = value of the land + Obligations In Permanent And Temporary
amount of damage caused to the Easements Of Right Of Way
servient estate; Temporary
Permanent right of way
(b) If right of way is limited to necessary right of way
passage for cultivation of the estate Indemnity
and for gathering crops, without
Consists of the damages and Consists of
permanent way = damage caused by
the value of the land. the damages
encumbrance.
only.
Rules for establishing Right of Way
(1) Must be established at the point least Necessary repairs
prejudicial to the servient estate. Dominant owner to spend on Servient
[NCC 650] such. owner to
(2) Insofar as consistent with the first rule, spend on
where the distance from the dominant such.
estate to a public highway is shortest.
(a) The criterion of least prejudice to the Share in taxes
servient estate must prevail over the The dominant owner shall Servient
criterion of shortest distance although reimburse a proportionate owner to
this is a matter of judicial share of taxes to the spend on
appreciation. While shortest distance proprietor of the servient such.
may ordinarily imply least prejudice, it estate.
is not always so as when there are
permanent structures obstructing the
shortest distance; while on the other

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Rules on indemnity for estates enclosed building, to carry materials through

through a sale, exchange, partition or donation. the estate of another, or to raise
Sale, exchange or therein scaffolding or other objects
Donation necessary for the work, the owner of
partition
such estate shall be obliged to permit
Buyer, grantee or donee
the act, after receiving payment of the
as dominant owners
proper indemnity for the damage
The buyer or grantee The donee shall pay caused him. [NCC 656]
shall grant the right of the donor indemnity. (3) Right of way for the passage of livestock
way without indemnity. known as animal path, animal trail,
Seller, grantor or donor watering places, resting places, animal
as dominant owners folds. [NCC 657]
(a) Easements of the right of way for the
The seller or grantor The donee shall
passage of livestock known as animal
shall pay indemnity. grant the right of
path, animal trail or any other, and
way without
those for watering places, resting
indemnity.
places and animal folds, shall be
governed by the ordinances and
Extinguishment of Right of Way
regulations relating thereto, and, in
(1) The owner has joined the dominant estate
the absence thereof, by the usages
to another abutting the public road.
and customs of the place.
(2) A new road is opened giving access to the
(b) Without prejudice to rights legally
isolated estate.
acquired, the animal path shall not
Notes on extinguishment exceed in any case the width of 75
(1) Extinguishment is NOT automatic. The meters, and the animal trail that of 37
owner of the servient estate must ask for meters and 50 centimeters.
such extinguishment. (c) Whenever it is necessary to establish a
(2) Indemnity paid to the servient owner must compulsory easement of the right of
be returned: way or for a watering place for
(a) If easement is permanent: value of the animals, the provisions of this Section
land must be returned and those of Articles 640 and 641
(b) If easement is temporary: nothing is to shall be observed. In this case the
be returned width shall not exceed 10 meters

Special Rights of Way I.9. PARTY WALL

(1) Right of way to carry materials for the
construction, repair, improvement,
alteration or beautification of a building
through the estate of another.
(2) Right of way to raise on another’s land
scaffolding or other objects necessary for
the work.
(a) If it be indispensable for the
construction, repair, improvement,
alteration or beautification of a
Refers to all those mass of rights and
obligations emanating from the existence and
common enjoyment of wall, fence, enclosures
or hedges, by the owners of adjacent
buildings and estates separated by such
objects.
Nature
(1) A common wall which separates two
estates, built by common agreement at

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the dividing line such that it occupies a (3) In fences, walls and live hedges dividing
portion of both estates on equal parts. rural lands.
(2) A party wall is a special form of co-
ownership (a kind of compulsory co- Note: A title or an exterior sign, or any other
ownership). proof showing that the entire wall in
(a) Each owner owns part of the wall but it controversy belongs exclusively to one of the
adjoining property-owners may rebut these
cannot be separated from the other presumptions.
portions belonging to the others. A
party wall has a special characteristic When Existence Of An Exterior Sign Is
that makes it more of an easement as Presumed [NCC 660]
it is called by law. (1) Whenever in the dividing wall of buildings
(b) An owner may use a party wall to the there is a window or opening.
extent of the ½ portion on his property. (2) Whenever one side is straight and plumb
on all its facement, and on the other, it
Co-Ownership Party Wall has similar conditions on the upper part,
but the lower part slants or projects
Before division of Shares of the co- outward.
shares, a co-owner owners cannot be (3) Whenever the entire wall is built within
cannot point to any physically segregated the boundaries of one of the estates.
definite portion of the but they can be (4) Whenever the dividing wall bears the
property as belonging physically identified. burden of the binding beams, floors and
to him. roof frame of one of the buildings, but not
None of the co-owners There is no such those of the others.
may use the limitation (5) Whenever the dividing wall between
community property courtyards, gardens, and tenements is
for his exclusive constructed in such a way that the coping
benefit because he sheds the water upon only one of the
would be invading the estates.
rights of the others. (6) Whenever the dividing wall, being built of
In a co-ownership, Any owner may free masonry, has stepping stones, which at
partial renunciation is himself from certain intervals project from the surface
allowed. contributing to the on one side only, but not on the other.
cost of repairs and (7) Whenever lands enclosed by fences or live
construction of a party hedges adjoin others that are not
wall by renouncing all enclosed.
his rights thereto.
Note: The deposit of earth or debris on one
side alone is an exterior sign that the owner of
When Existence Of Easement Of Party Wall Is that side is the owner of the ditch or drain.
Presumed The presumption is an addition to those
(1) In dividing walls of adjoining buildings up enumerated in NCC 660.
to the point of common elevation.
(2) In dividing walls of gardens or yards
situated in cities, or towns, or in rural Right Of Owners Of A Party Wall
communities. (1) Generally, part-owners may use the wall
in proportion to their respective interests,
provided that:

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(a) The right to use by the other party is
not interfered with;
(b) The consent by the other owner is
needed if a party wants to open a
window; and
(c) The condition of the building is
determined by experts.
(2) To increase the height of the wall.
 He does this at his expense, including the
thickening of the wall on his land.
 He shall indemnify the other party for
any damages.
(3) To acquire a half-interest in any increase in
height or thickness of the wall, paying a
proportionate share in the cost of the work
and the value of the land covered.
 Note that the value of the land must be
appraised at the time of acquisition.
(4) To renounce his part ownership of a party
wall if he desires to demolish his building
supported by the wall.
 He shall bear all the expenses of repairs
and work necessary to prevent any
damage which the demolition may cause
to the party wall.
Obligations Of Owners Of A Party Wall
(1) To contribute proportionately to the repair
and maintenance of the party wall unless
he renounces his part-ownership.
(a) This includes the renunciation of the
share in the wall + the land
(b) He cannot renounce his part if his
building is being supported by the
party wall
(2) If he raises the height of the wall, he must:
(a) Bear the cost of maintenance of the
additions;
(b) Bear the cost of construction, if the
wall cannot support the additional
height;
(c) Give additional land, if necessary to
thicken the wall;
(d) Pay for damages, if necessary, even if
temporary; and
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CIVIL LAW
(e) Bear the increased expenses for
preservation
I.10. EASEMENT OF LIGHT AND VIEW
Definition
(1) Easement of light (jus luminum) is the
right to admit light from the neighboring
estate by virtue of the opening of a
window or the making of certain
openings.
(2) Easement of view (jus prospectus) is the
right to make openings or windows, to
enjoy the view through the estate of
another and the power to prevent all
constructions or works which would
obstruct such view or make the same
difficult.
(a) Necessarily includes the easement of
light.
(b) It is possible to have light only without
a view.
Nature
(1) Positive: Opening a window through a
party wall
(a) When a part owner of a party wall
opens a window therein, such act
implies the exercise of the right of
ownership by the use of the entire
thickness of the wall.
(b) The easement is created only after the
lapse of the prescriptive period.
(2) Negative: Formal prohibition upon the
owner of the adjoining land or tenement.
Formal means that the prohibition has
been notarized [Cortes v Yu-Tibo (1903)]
(a) When a person opens a window on his
own building, he is exercising his right
of ownership on his property, which
does not establish an easement.
(b) Coexistent is the right of the owner of
the adjacent property to build on his
own land, even if such structures
cover the window.
(c) If the adjacent owner does not build
structures to obstruct the window,
UP LAW BOC PROPERTY
such is considered mere tolerance and
NOT a waiver of the right to build.
(d) An easement is created only when the
owner opens up a window and
subsequently prohibits or restrains the
adjacent owner from doing anything
that may tend to cut off or interrupt the
light and the prescriptive period has
lapsed.
Rules And Restrictions On Openings And
Structures
Openings for light
(1) When the wall is 2 meters or more away
from another’s tenement:
(a) An owner may build any kind of
opening without restriction.
(2) When the wall is contiguous (less than 2
meters) to another’s tenement:
(a) Openings are made at the height of the
ceiling joists (horizontal beams) or
immediately under the ceiling;
(b) Size: 30 cm square;
(c) With iron grating imbedded in the wall;
(d) With a wire screen.
Openings for view
(1) The following structures cannot be built
without following the prescribed distances:
(a) Window, apertures, balconies and
other projections with a direct view
upon or towards an adjoining land
must have a distance of 2 meters
between the wall and the contiguous
property.
(b) For structures with a side or oblique
view (at an angle from the boundary
line), there should be a distance of 60
centimeters.
(c) Measured from:
(i) The outer line of the wall if the
openings do not project.
(ii) The outer line of the openings if
they project.
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CIVIL LAW
(iii) The dividing line between the two
properties in cases of oblique
views.
Effect If Distances Are Not Complied With
(1) Windows are considered unlawful
openings and may be ordered by the
Court to be closed.
(2) Even if the adjoining owner does not
object to the construction of such
structures at first, he cannot be held to be
in estoppel, unless the 10-year period of
acquisitive prescription has passed.
Note:
(1) In buildings separated by a public way or
alley, not less than 3 meters wide, the
distances required (2 m, 60 cm) do not
apply.
(2) If an easement is acquired to have direct
views, balconies or belvederes, the owner
of the servient estate must not build at
less than 3 meters from the boundary line
of the two tenements.
(a) The distances may be stipulated by
the parties, but should not be less
than what is prescribed by the law (2
meters and 60 cm).
Notes on the Acquisition of the Easement
(1) Period of acquisitive prescription will only
start to run from the time the owner
asserting the servitude has forbidden the
owner of the adjoining tenement from
doing something he could lawfully do.
(2) THUS, although the action to compel the
closure might have prescribed, the owner
of the adjoining estate may still build on
his own land a structure that might
obstruct the view.
I.11. INTERMEDIATE DISTANCES
[NCC 677]
UP LAW BOC
NCC 677, in effect, establishes an easement in
favor of the State. The general prohibition is
dictated by the demands of national security.
The following must comply with the
regulations or customs of the place:
(1) Construction of aqueduct, well, sewer, etc.
(NCC 678)
Constructions, which by reason of their
nature or products are dangerous or
noxious.
(2) Planting of trees (NCC 679)
(a) No trees shall be planted near a
tenement or piece of land belonging to
another except at the distance
authorized by the ordinances or
customs of the place.
(b) In the absence of regulations:
(i) At least 2 meters from the dividing
line of the estates if tall trees are
planted.
(ii) At least 50 centimeters if shrubs or
small trees are planted.
(c) In case of violation, a landowner shall
have the right to demand the
uprooting of the plant even if it has
grown spontaneously.
BRANCHES, ROOTS AND FRUITS
(1) If the branches of any tree should extend
over a neighboring estate, tenement,
garden or yard, the owner of the latter
shall have the right to demand that they be
cut-off.
(2) If it be the roots of a neighboring tree,
which should penetrate into the land of
another, the latter may cut them off
himself within his property.
(3) Fruits naturally falling upon adjacent land
belong to the owner of said land.
I.12. LATERAL AND SUBJACENT
SUPPORT
PROPERTY CIVIL LAW
(1) The proprietor is prohibited from making
dangerous excavations upon his land as
to deprive any adjacent land or building of
sufficient lateral or subjacent support.
(2) Easement of lateral and subjacent
support is deemed essential to the
stability of buildings.
(3) Support is lateral when a vertical plane
divides the supported and supporting
lands.
(4) Support is subjacent when the supported
land is above the supporting land.
J. MODES OF ACQUIRING
EASEMENT
J.1. BY TITLE
A juridical act which gives rise to the servitude
(e.g. law, donations, contracts or wills)
(1) If the easement has been acquired but no
proof of existence of easement available,
and the easement is one that cannot be
acquired by prescription, the defect may
be cured by:
(a) Deed of recognition by owner of
servient estate: By an affidavit or a
formal deed acknowledging the
servitude; or
(b) By final judgment: Owner of the
dominant estate must file a case in
Court to have the easement declared
by proving its existence through other
evidence.
(2) The existence of an apparent sign is
considered as title.
Illustration: The presence of 4 windows
was considered an apparent sign that
created a negative easement of light and
view (altius non tollendi) i.e. not to build a
structure that will cover the windows.
[Amor v. Florentino (1943)].
J.2. BY PRESCRIPTION
Requisites
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(1) The easement must be continuous and
apparent;
(2) The easement must have existed for 10
years; and
(3) There is NO NEED for good faith or just
title.
Note
Mere passage which was permitted and is
under an implied license cannot be a basis of
prescription [Archbishop of Manila v Roxas
(1912)]
K. EXTINGUISHMENT OF
EASEMENTS
(1) By merger in the same person of the
ownership of the dominant and servient
estates;
(2) By non-user for ten years;
(3) When either or both of the estates fall into
such condition that the easement cannot
be used;
(4) By the expiration of the term or the
fulfillment of the condition, if the easement
is temporary or conditional;
(5) By the renunciation of the owner of the
dominant estate; or
(6) By the redemption agreed upon between
the owners of the dominant and servient
estates.
K.1. MERGER
Must be absolute, perfect and definite, and not
merely temporary.
(1) Absolute: Ownership of the property must
be absolute, thus not applicable to lease,
usufruct, etc.
(2) Perfect: Merger must not be subject to a
condition.
(3) If the merger is temporary, there is at most
a suspension of the easement, but no
extinguishment.
K.2. BY A NON-USER FOR 10 YEARS
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CIVIL LAW
(1) Owner of dominant estate does not
exercise right over easement.
(2) This is inaction, and not outright
renunciation.
(3) This is due to the voluntary abstention by
the dominant owner, and not due to a
fortuitous event.
(4) Computation of the period:
(a) Discontinuous easements: counted
from the day they ceased to be used.
(b) Continuous easements: counted from
the day an act adverse to the exercise
of the easement took place.
(i) E.g. in an easement of light and
view, the erection of works
obstructing the servitude would
commence the period of
prescription.
(5) The use by a co-owner of the dominant
estate bars prescription with respect to
the others.
(6) Non-user cannot extinguish servitudes
not yet exercised. [Francisco v Paez
(1930)]
K.3. BY IMPOSSIBILITY OF USE
(1) Impossibility referred to must render the
entire easement unusable for all time.
(2) Impossibility of using the easement due to
the condition of the tenements (e.g.
flooding) only suspends the servitude until
it can be used again.
(3) Except: If the suspension exceeds 10 years,
the easement is deemed extinguished by
non-user.
K.4. EXPIRATION OF THE TERM OR
FULFILLMENT OF RESOLUTORY
CONDITION
Applicable only to voluntary easements.
K.5. RENUNCIATION OF THE OWNER
OF THE DOMINANT ESTATE
Must be specific, clear, express (distinguished
from non-user).
UP LAW BOC PROPERTY
K.6. OTHER CAUSES NOT MENTION IN
NCC 631
(1) Annulment and rescission of the title
constituting the voluntary easement;
(2) Termination of the right of grantor of the
voluntary easement;
(3) Abandonment of the servient estate;
(a) Owner of the servient estate gives up
ownership of the easement (e.g. the
strip of land where the right of way is
constituted) in favor of the dominant
estate.
(b) The easement is extinguished because
ownership is transferred to the
dominant owner, who now owns both
properties.
(4) Eminent domain; or
(a) The government’s power to expropriate
property for public use, subject to the
payment of just compensation.
(5) Special cause for extinction of legal rights
of way; if right of way no longer necessary.
(a) NCC 655
(i) If the right of way granted to a
surrounded estate ceases to be
necessary because its owner has
joined it to another abutting on a
public road, the owner of the
servient estate may demand that
the easement be extinguished,
returning what he may have
received by way of indemnity. The
interest on the indemnity shall be
deemed to be in payment of rent
for the use of the easement.
(ii) The same rule shall be applied in
case a new road is opened giving
access to the isolated estate.
(iii) In both cases, the public highway
must substantially meet the needs
of the dominant estate in order
that the easement may be
extinguished.
(6) Right of way ceases to be necessary:
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CIVIL LAW
(a) Owner of the dominant estate has
joined to another abutting on a public
road.
(b) A new road is opened giving access to
the isolated estate.
(c) Requisite: the public highway must
substantially meet the needs of the
dominant estate in order that the
easement may be extinguished
(d) Owner of the servient estate may
demand that the easement be
extinguished.
(e) Owner of the servient estate must
return indemnity he received (value of
the land)
X. Nuisance
A nuisance is any act, omission,
establishment, business, condition of
property, or anything else which:
(1) Injures or endangers the health or safety
of others;
(2) Annoys or offends the senses;
(3) Shocks, defies or disregards decency or
morality;
(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.
Note: To constitute a nuisance there must be
an arbitrary or abusive use of property or
disregard of commonly accepted standards
set by society.
A municipal body has the power to declare
and abate nuisances. BUT it has no power to
find as fact that a particular thing is a
nuisance. The determination of whether or
not a nuisance exists is a judicial function,
because to declare something a nuisance is to
deprive its use. [Iloilo Cold Storage v Mun.
Council of Iloilo (1913)]
A. NUISANCE V. TRESPASS
UP LAW BOC PROPERTY CIVIL LAW

Nuisance Trespass An act, occupation or structure which is a

nuisance at all times and under any
Use of one’s own property in Direct circumstances, regardless of location or
such a manner as to cause infringement of surroundings.
injury to the property or right another’s right
or interest of another, and of property. (2) Nuisance per accidens or in fact
generally results from the (a) One that becomes a nuisance by
commission of an act beyond reason of circumstances and
the limits of the property surroundings.
affected. (b) It is not a nuisance by its nature but it
Injury is consequential. Injury is may become so by reason of the
immediate. locality, surrounding, or the manner in
which it is conducted, managed, etc.
B. NUISANCE V. NEGLIGENCE Note:
Dams or fishponds on noavigable waters are
Nuisance Negligence
not nuisance per se. (Monteverde v Generoso
Whether the [1928])
Whether it was
defendant’s use of
unreasonable for the
his property was Per se Per accidens
defendant to act as he
unreasonable as to
did in view of the The wrong is Proof of the act and
plaintiff, without
threatened danger or established by proof of its consequences
regard to
harm to one in the mere act. It are necessary.
foreseeability of
plaintiff’s position. becomes a nuisance as
injury.
a matter of law.
Liability for the Liability is based on
resulting injury to a want of proper
C.2. ACCORDING TO SCOPE OF
others regardless of the care
INJURIOUS EFFECTS
degree of care or skill
exercised to avoid such Test: not the number of persons annoyed but
the possibility of annoyance to the public by
injury.
the invasion of its rights – the fact that it is in
Principles ordinarily Principles ordinarily a public place and annoying to all who come
apply where the cause apply where the within its sphere.
of action is for cause of action is for
continuing harm caused harm resulting from (1) Public
by continuing or one act which  The doing of or the failure to do
recurrent acts which created an something that injuriously affects the
cause discomfort or unreasonable risk of safety, health or morals of the public.
annoyance to plaintiff in injury.
 It causes hurt, inconvenience or injury to
the use of his property.
the public, generally, or to such part of
the public as necessarily comes in
C. CLASSES contact with it.
C.1. ACCORDING TO NATURE
(1) Nuisance per se or at law
(2) Private

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 One which violates only private rights
and produces damages to but one or a
few specific persons.
(3) Mixed
D. DOCTRINE OF ATTRACTIVE
NUISANCE
One who maintains on his premises dangerous
instrumentalities or appliances of a character
likely to attract children in play, and who fails to
exercise ordinary care to prevent children from
playing therewith or resorting thereto, is liable
to a child of tender years who is injured
thereby, even if the child is technically a
trespasser in the premises. [Jarco Marketing
Corp. v. CA (1999)]
Basis of liability – The attractiveness is an
invitation to children. Safeguards to prevent
danger must therefore be set up.
Note: A swimming pool or water tank is not an
attractive nuisance, for while it is attractive, it
cannot be a nuisance, being merely an
imitation of the work of nature. [Hidalgo
Enterprises v. Balandan (1952)]
E. LIABILITY IN CASE OF NUISANCE
E.1 WHO ARE LIABLE
Every successive owner or possessor of
property who fails or refuses to abate a
nuisance in that property started by a former
owner or possessor is liable therefor in the
same manner as the one who created it.
(NCC. 696)
E.2. LIABILITY OF CREATOR OF
NUISANCE
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CIVIL LAW
He who creates a nuisance is liable for the
resulting damages and his liability continues
as long as the nuisance continues.
(1) There must be a breach of some duty on
the part of the person sought to be held
liable for damages resulting from a
nuisance before an action will lie against
him.
(2) No one is to be held liable for a nuisance
which he cannot himself physically abate
without legal action against another for
that purpose.
(3) Where several persons, acting
independently, cause damage by acts
which constitute a nuisance, each is liable
for the damage which he has caused or for
his proportionate share of the entire
damage.
E.3. LIABILITY OF TRANSFEREES
The grantee of land upon which there exists a
nuisance created by his predecessors in title is
NOT responsible therefore merely because he
becomes the owner of the premises, or merely
because he permits it to remain.
He shall be liable if he knowingly continues
the nuisance. Generally, he is not liable for
continuing it in its original form, unless he has
been notified of its existence and requested to
remove it, or has actual knowledge that it is a
nuisance and injurious to the rights of others.
If the transferee cannot physically abate the
nuisance without legal action against another
person, then he shall not be liable for such
nuisance.
E.4. NATURE OF LIABILITY
All persons who participate in the creation or
maintenance of a nuisance are jointly and
severally liable for the injury done.
If 2 or more persons who create or maintain
the nuisance act entirely independent of one
UP LAW BOC
another, and without any community of
interest, concert of action, or common design,
each is liable only so far as his acts contribute to
the injury.
For solidary liability, there must be some joint
or concurrent act or community of action or
duty, or the several wrongful acts done at
several times must have concurred in their
effects as one single act to produce the injury
complained of.
E.5. RIGHT TO RECOVER DAMAGES
The abatement of a nuisance does not
preclude the right of any person injured to
recover damages for its past existence. [NCC
697]
Abatement and damages are cumulative
remedies.
NO PRESCRIPTION
The action to abate a public or private
nuisance is NOT extinguished by prescription.
[NCC. 1143(2)]
F. REGULATION OF NUISANCES
F.1. PUBLIC NUISANCE
Remedies
The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any
local ordinance;
(2) A civil action; or
(3) Extrajudicial abatement.
(a) It must be reasonably and efficiently
exercised
(b) Means employed must not be unduly
oppressive on individuals, and
(c) No more injury must be done to the
property or rights of individuals than is
necessary to accomplish the
abatement.
(d) No right to compensation if property
taken or destroyed is a nuisance.
PROPERTY CIVIL LAW
Action for Abatement
(1) The district health officer shall take care
that one or all of the remedies against a
public nuisance are availed of.
(2) If a civil action is brought by reason of the
maintenance of a public nuisance, such
action shall be commenced by the city or
municipal mayor.
(3) The district health officer shall determine
whether or not abatement, without
judicial proceedings, is the best remedy
against a public nuisance.
(4) A private person may file an action on
account of a public nuisance if it is
especially injurious to him.
General rule: An individual has no right of
action against a public nuisance. The
abatement proceedings must be instituted in
the name of the State or its representatives.
Exception: An individual who has suffered
some special damage different from that
sustained by the general public may maintain
a suit in equity for an injunction to abate it, or
an action for damages which he has
sustained.
The action becomes a tort if an individual has
suffered particular harm, in which case the
nuisance is treated as a private nuisance with
respect to such person.
Requisites of the right of a private individual to
abate a public nuisance
(1) That demand be first made upon the
owner or possessor of the property to
abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the
district health officer and executed with
the assistance of the local police; and
(4) That the value of the destruction does not
exceed P3000.
Rules
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(1) The right must be exercised only in cases of (2) To enjoin the sale or destruction of the
urgent or extreme necessity. The thing property;
alleged to be a nuisance must be existing (3) An action for the proceeds of its sale and
at the time that it was alleged to be a damages if it has been sold; or
nuisance. (4) To enjoin private parties from proceeding
(2) A summary abatement must be resorted to to abate a supposed nuisance.
within a reasonable time after knowledge
of the nuisance is acquired or should have
been acquired by the person entitled to
XI. Modes of Acquiring
abate. Ownership
(3) The person who has the right to abate
(1) Occupation
must give reasonable notice of his
(2) By operation of Law
intention to do so, and allow thereafter a
(3) Donation
reasonable time to enable the other to
(4) Tradition
abate the nuisance himself.
(5) Intellectual Property
(4) The means employed must be reasonable
(6) Prescription
and for any unnecessary damage or force,
(7) Succession
the actor will be liable. The right to abate is
not greater than the necessity of the case Mode is a specific cause which produces
and is limited to the removal of only so dominion and other real rights as a result of
much of the objectionable thing as actually the co-existence of special status of things,
causes the nuisance. capacity and intention of persons and
(5) The property must not be destroyed unless fulfillment of the requisites of law.
it is absolutely necessary to do so.
Title is every juridical right which gives a
F.2. PRIVATE NUISANCE
means to the acquisition of real rights but in
Remedies
itself is insufficient to produce them.
The remedies against a private nuisance are:
(1) A civil action; or
(2) Extrajudicial abatement. It is not by contract but by delivery that the
(a) The procedure for extrajudicial ownership of property is transferred (Non
abatement of a public nuisance by a nudis pactis, dominia rerum transferentur).
private person will also be followed. Contracts only constitute titles or rights to
(b) The person extrajudicially abating a transfer or acquisition of ownership, while
nuisance liable for damages if: delivery is the mode of accomplishing the
(i) If he causes unnecessary injury; or same.
(ii) If an alleged nuisance is later
declared by the courts to be not a Mode Title
real nuisance. Directly and Serves merely to give
immediately the occasion for its
Remedies of the property owner produces a real right. acquisition or
A person whose property is seized or destroyed
existence.
as a nuisance may resort to the courts to
determine whether or not it was in fact a Cause Means
nuisance. Proximate cause Remote cause
(1) An action for replevin;

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Mode Title
Essence of the right, Means whereby that
which is to be created “essence” is
or transmitted. transmitted.
A. OCCUPATION
Note: Ownership of land cannot be acquired by
occupation.
A.1. REQUISITES
(1) The property must be a corporeal personal
property susceptible of appropriation;
(2) The property is either res nullius (no owner)
or res derelict (abandoned property);
(3) There is seizure or apprehension with the
intent to appropriate; and
(4) There is an observance of requisites or
conditions prescribed by law.
A.2. KINDS
Of Animals
(1) Wild or feral animals – seizure
(hunting/fishing) in open season by means
NOT prohibited.
(2) Tamed/domesticated animals – General
Rule: belong to the tamer, but upon
recovering freedom, are susceptible to
occupation UNLESS claimed within 20
days from seizure by another.
(3) Tame/domestic animals – not acquired by
occupation EXCEPT when ABANDONED.
Of Other Personal Property
(1) Abandoned – may be acquired
(2) Lost
(3) Hidden treasure – finder gets ½ by
occupation; landowner gets ½ by
accession; EXCEPT in CPG system, share
goes to the partnership.
A.3. SPECIAL RULES
OCCUPATION OF A SWARM OF BEES
PROPERTY CIVIL LAW
The owner of a swarm of bees shall have a
right to pursue them to another’s land,
indemnifying the possessor of the latter for
the damage.
If the owner has not pursued the swarm, or
ceases to do so within 2 consecutive days, the
possessor of the land may occupy or retain
the same.
The 20 days to be counted from their
occupation by another person. This period
having expired, they shall pertain to him who
has caught and kept them.
OCCUPATION OF DOMESTICATED
ANIMALS
Wild animals are possessed only while they
are under one's control; domesticated or
tamed animals are considered domestic or
tame if they retain the habit of returning to
the premises of the possessor.
PIGEONS AND FISH
Pigeons and fish which from their respective
breeding places pass to another pertaining to
a different owner shall belong to the latter,
provided they have not been enticed by some
artifice or fraud.
HIDDEN TREASURE
He who by chance discovers hidden treasure
in another’s property: ½ shall be allowed to
the finder.
If the finder is a trespasser, he shall not be
entitled to any share of the treasure.
If the things found be of interest to science or
the arts, the State may acquire them at their
just price, which shall be divided in conformity
with the rule stated.
LOST MOVABLES; PROCEDURE AFTER
FINDING LOST MOVABLES
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Whoever finds a movable, which is not
treasure, must return it to its previous
possessor.
If unknown, the finder shall immediately
deposit it with the mayor of the city or
municipality where the finding has taken place.
The finding shall be publicly announced by the
mayor for two consecutive weeks in the way he
deems best.
If the movable cannot be kept without
deterioration, or without expenses which
considerably diminish its value, it shall be sold
at a public auction eight days after the
publication.
Six months from the publication having
elapsed without the owner having appeared,
the thing found, or its value, shall be awarded
to the finder. The finder and the owner shall be
obliged, as the case may be, to reimburse the
expenses.
If the owner should appear in time, he shall be
obliged to pay, as a reward to the finder, one-
tenth of the sum or of the price of the thing
found.
B. DONATION
Donation is an act of liberality whereby a
person disposes gratuitously of a thing or right
in favor of another, who accepts it.
B.1. OTHER INSTANCES CONSIDERED AS
DONATION
(1) When a person gives to another a thing or
right on account of the latter's merits or of
the services rendered by him to the donor,
provided they do not constitute a
demandable debt.
(2) When the gift imposes upon the donee a
burden that is less than the value of the
thing given.
B.2. NATURE
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CIVIL LAW
(1) Bilateral contract creating unilateral
obligations on the donor’s part.
(2) Requires CONSENT of BOTH donor and
donee though it produces obligations only
on the side of the DONOR, unless it is an
onerous donation.
B.3. REQUISITES
(1) Consent and capacity of the parties;
(2) Animus Donandi (intent to donate);
(3) Delivery of thing donated;
(4) Form as prescribed by law; and
(5) Impoverishment of donor’s patrimony and
enrichment on part of donee.
B.4. WHAT MAY BE DONATED
All present property or part thereof of the
donor
(1) Provided he reserves, in full ownership or
usufruct, sufficient means for support of
himself and all relatives entitled to be
supported by donor at the time of
acceptance.
(2) Provided that no person may give or
receive by way of donation, more than he
may give or receive by will (NCC 752);
also, reserves property sufficient to pay
donor’s debts contracted before donation,
otherwise, donation is in fraud of creditors
(NCC 759, 1387).
(3) If donation exceeds the disposable or free
portion of his estate, the donation is
inofficious.
(4) EXCEPTIONS:
(a) Donations provided for in marriage
settlements between future spouses –
must be not more than 1/5 of present
property.
(b) Donation propter nuptias by an
ascendant consisting of jewelry,
furniture or clothing not to exceed
1/10 of disposable portion.
B.5. WHAT MAY NOT BE DONATED
FUTURE PROPERTY
UP LAW BOC PROPERTY CIVIL LAW

(1) Donations cannot comprehend future

property.
As to minors
(2) “Future property” is understood as
anything which the donor does not Can’t be made by May be made by
currently own although the donor may or minors minors (FC 78)
may not own it later. (Osorio v Osorio [1921])
(3) Inheritance is NOT considered as future As to future property
property. (Osorio v Osorio [1921])
Cannot include future May include future
property property (same rule
C. KINDS OF DONATIONS
as wills)
C.1. AS TO ITS TAKING EFFECT
(1) Donation Inter Vivos [NCC 729] Limit as to donation of present property
Donation which shall take effect during the No limit to donation of If present property is
lifetime of the donor, though the property present property donated and
shall not be delivered till after the donor's provided legitimes are property regime is
death. not impaired. ACP, limited to 1/5.
Grounds for revocation
Irrevocable EXCEPT for the ff grounds:
(a) Subsequent birth of the donor’s Law on donations See below (FC 86)
children;
(b) Donor’s failure to comply with imposed Causes for revocation of donation propter
conditions; nuptias:
(c) Donee’s ingratitude; or (1) If the marriage is not celebrated or
(d) Reduction of donation by reason of judicially declared void ab initio, except
inofficiousness. donations made in the marriage
settlements;
(2) Donation by Reason of Marriage/ Donation (2) When the marriage takes place without
Propter Nuptias [FC 86] the consent of the parents or guardian, as
Requisites required by law;
(a) Must be made BEFORE the celebration (3) When the marriage is annulled, and the
of marriage; donee acted in bad faith;
(b) Made in CONSIDERATION of the (4) Upon legal separation, the one being the
marriage; and guilty spouse;
(c) Made in FAVOR of ONE or BOTH of the (5) If it is with a resolutory condition and the
future spouses. condition is complied with; or
(6) When the donee has committed an act of
ingratitude as specified by the provisions
of the Civil Code on donations in general.

Ordinary Donations v. Donations Propter

Donation between spouses
Nuptias
General Rule: Every donation or grant of
Ordinary Propter Nuptias
gratuitous advantage, direct or indirect,
Express acceptance between the spouses during the marriage
Necessary Not required shall be VOID. The prohibition applies to

166
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persons living together as husband and wife Inter vivos Mortis causa
without a valid marriage.
premature and
Exception: Moderate gifts which the spouses ineffective because there
may give each other on the occasion of any can be no contract
family rejoicing. regarding future
inheritance.
As to transfer of ownership for right of
(3) Donation Mortis Causa [NCC 728] disposition
(a) It only becomes effective upon the
death of the donor.
Ownership is
(b) The donor’s death ahead of the donee
immediately Upon acceptance by the
is a suspensive condition for the
transferred. donee, but the effect of
existence of the donation.
Delivery of such retroacts to the
Characteristics: possession is time of death of the
(a) The transferor retains ownership and allowed after donor.
control of the property while alive; death.
(b) The transfer is revocable at will before As to revocation
his death; and
Irrevocable – may Revocable upon the
(c) The transfer will be VOID if the
be revoked only for exclusive will of the
transferor should survive the
the reasons donor.
transferee.
provided in CC
Inter Vivos v. Mortis Causa 760, 764, 765.
Inter vivos Mortis causa As to reduction or suppression
As to formalities When it is When it is excessive or
excessive or inofficious, it is reduced
Executed and Must be in the form of a
inofficious, being first, or even suppressed.
accepted with will, with all the
preferred, it is
formalities formalities for the validity
reduced only after
prescribed by CC. of wills.
the donations
As to effectivity mortis causa had
Effective during the been reduced or
Effective after the death exhausted.
lifetime of the
of the donor.
donor.
Notes
As to acceptance
 The NATURE of the act, whether it’s one of
Acceptance must be disposition or of execution, is
made after the death of CONTROLLING to determine whether the
Acceptance must
the donor, the donation donation is mortis causa or inter vivos.
be made during
being effective only after  What is important is the TIME of TRANSFER
the lifetime of the
the death of donor. of ownership even if transfer of property
donor.
Acceptance during the donated may be subject to a condition or a
donor’s lifetime is term.

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 Whether the donation is inter vivos or mortis
causa depends on whether the donor
intended to transfer ownership over the
properties upon the execution of the deed.
[Gestopa v. CA (2002)]
C.2. AS TO CAUSE OR CONSIDERATION
(1) Simple - made out of pure liberality or
because of the merits of the donee.
(2) Remuneratory - made for services already
rendered to the donor.
(3) Onerous - imposes a BURDEN inferior in
value to property donated.
(a) Improper - burden EQUAL in value to
property donated
(b) Sub-modo or modal - imposes a
prestation upon donee as to how
property donated will be applied.
(c) Mixed donations – e.g. sale for price
lower than value of property.
C.3. AS TO EFFECTIVITY OR
EXTINGUISHMENT
(1) Pure – donation is without conditions or
periods
(2) Conditional – donation is subject to
suspensive or resolutory conditions.
(3) With a term
D. FORMALITIES REQUIRED
D.1. HOW MADE AND ACCEPTED
Movable properties [NCC 748]
(1) The donation of a movable may be made
orally or in writing.
(2) Oral donation: requires the simultaneous
delivery of the thing or of the document
representing the right donated.
(3) If the value of the movable donated
exceeds P5,000, the donation and the
acceptance should be in writing, otherwise,
the donation is void.
Immovable properties [NCC 749]
PROPERTY CIVIL LAW
(1) Must be made in a public instrument
specifying the donated property and the
burdens assumed by the donee.
(2) The acceptance must be either:
(a) In the same instrument; or
(b) In another public instrument notified
to the donor in authentic form and
noted in both deeds.
(3) Exceptions:
(a) Donations propter nuptias – need no
express acceptance.
(b) Onerous donations – form governed
by the rules of contracts.
D.2. PERFECTION
Acceptance
(1) Donation is perfected upon the donor’s
learning of the acceptance.
(2) Acceptance may be made during the
lifetime of both donor and donee.
(3) A document merely correcting the deed of
donation does not constitute a new deed
of donation so there is no need for a new
acceptance (Osorio v Osorio [1921])
Who May Accept
Donee: must accept personally or through an
authorized person with special power for the
purpose. [NCC 745]
Note:
A joint donation (donation to two or more
persons) could not be accepted by a done,
independently of the other donee/s. (Genato v
Lorenzo [1968])
Time Of Acceptance
Acceptance must be done during the lifetime
of the donor and the donee.
D.3. QUALIFICATIONS OF DONORS AND
DONEES
Who May Give Donations
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UP LAW BOC PROPERTY
All persons who may contract and dispose of
their property may make a donation. [NCC 735]
Note:
(1) Donor’s capacity shall be determined as of
the time of the making of the donation.
[NCC 737]
(2) Capacity to donate is required for
donations inter vivos and NOT in donations
mortis causa.
(3) Donor’s capacity is determined as of the
time of the donation. Subsequent
incapacity is immaterial.
Who May Receive Donations
(1) All who are not specially disqualified by
law. (NCC 738)
(2) Minors and others who cannot enter into a
contract: acceptance may be made
through their parents or legal
representatives. [NCC 741]
(3) Donations made to conceived and unborn
children: those who would legally
represent them if they were already born
may accept the donations. [NCC 737]
Who May Not Give or Receive Donations
(1) By reason of public policy (NCC 739)
(a) Those made between persons guilty of
adultery or concubinage at the time of
the donation;
(b) Those made between persons guilty of
the same criminal offense if the
donation is made in consideration
thereof; or
(c) Those made to a public officer, his
NCC 1027:
spouse, descendants, and/or
ascendants by reason of the office.
(2) By reason of the donee’s unworthiness [NCC
1032 and 1027 except (d)]
NCC 1032:
(a) Parents who have abandoned their
children or induced their daughters to
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CIVIL LAW
lead a corrupt or immoral life, or
attempted against their virtue;
(b) Any person who has been convicted of
an attempt against the life of the
testator, his or her spouse,
descendants, or ascendants;
(c) Any person who has accused the
testator of a crime for which the law
prescribes imprisonment for six years
or more, if the accusation has been
found groundless;
(d) Any heir of full age who, having
knowledge of the violent death of the
testator, should fail to report it to an
officer of the law within a month,
unless the authorities have already
taken action; this prohibition shall not
apply to cases wherein, according to
law, there is no obligation to make an
accusation;
(e) Any person convicted of adultery or
concubinage with the spouse of the
testator;
(f) Any person who by fraud, violence,
intimidation, or undue influence
should cause the testator to make a
will or to change one already made;
(g) Any person who by the same means
prevents another from making a will,
or from revoking one already made, or
who supplants, conceals, or alters the
latter’s will;
(h) Any person who falsifies or forges a
supposed will of the decedent.
(a) The priest who heard the confession
of the testator during his last illness,
or the minister of the gospel who
extended spiritual aid to him during
the same period;
(b) The relatives of such priest or minister
of the gospel within the fourth degree,
the church, order, chapter,
community, organization, or
UP LAW BOC PROPERTY
institution to which such priest or
minister may belong;
(c) A guardian with respect to
testamentary dispositions given by a
ward in his favor before the final
accounts of the guardianship have
been approved, even if the testator
should die after the approval thereof;
nevertheless, any provision made by
the ward in favor of the guardian when
the latter is his ascendant, descendant,
brother, sister, or spouse, shall be
valid;
(d) Any physician, surgeon, nurse, health
officer or druggist who took care of the
testator during his last illness; or
(e) Individuals, associations and
corporations not permitted by law to
inherit.
(3) By reason of prejudice to creditors or heirs
(voidable)
E. EFFECTS OF DONATION / (2) Donation of naked ownership to one donee
LIMITATIONS
E.1. IN GENERAL
(1) The donee may demand actual delivery of
thing donated;
(2) The donee is SUBROGATED to the rights of
the donor in the property donated;
(3) The donor is NOT obliged to warrant the
things donated EXCEPT in onerous
donations where the donor is liable for
eviction up to the extent of the burden;
[NCC 754]
(4) The donor is liable for EVICTION or
HIDDEN DEFECTS in case of bad faith on
his part; [NCC 754]
(5) In donation propter nuptias, the donor
must RELEASE the property donated from
mortgages and other encumbrances
UNLESS the contrary has been stipulated;
(6) Donations to several donees jointly: NO
right of accretion EXCEPT:
(a) When the donor provides otherwise; or
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CIVIL LAW
(b) When the donation to husband and
wife is joint with the right of accretion
UNLESS the donor provides
otherwise.
(7) Donations by a person to his non-heirs
are collationable. (Liguez v CA)
(8) Donations made to one’s heirs must
expressly prohibit collation to be
exempted from collation. (De Roma v CA
[1987])
E.2. SPECIAL PROVISIONS
(1) Reservation by donor of power to dispose
(in whole or in part) or to encumber
property donated [NCC 755]
 The donor may reserve the right to
dispose of some things donated, or of
some amount, which shall be a charge
thereon.
 But if he should die without having made
use of this right, the property or amount
reserved shall belong to the donee.
and usufruct to another [NCC 756]
 The naked ownership and the usufruct
may be donated separately, provided
that all the donees are living at the time
of the donation.
(3) Conventional reversion in favor of donor or
other person [NCC 757]
 If made in favor of the donor: Reversion
may be for any case and circumstance.
 If made in favor of other persons: Such
persons must be living at the time of
the donation.
 If the rule is violated, the stipulation on
reversion is void but the donation is still
valid.
(4) Payment of donor’s debt [NCC 758]
 If expressly stipulated: the donee must
pay only the debts contracted before the
donation unless specified otherwise. But
UP LAW BOC PROPERTY
in no case shall the donee be responsible
for debts exceeding the value of the
property donated unless clearly intended.
 If there’s no stipulation – the donee will be
answerable only for the donor’s debt only
in case the donation is in fraud of
creditors.
(5) Illegal or impossible conditions [NCC 1183]
 Impossible conditions: those contrary to
good customs or public policy and those
prohibited by law shall annul the
obligation, which depends upon them.
 If the obligation is divisible, that part
thereof which is not affected by the
impossible or unlawful condition shall be
valid.
 The condition not to do an impossible
thing shall be considered as not having
been agreed upon.
(6) Double donations
Rule: Priority in time, priority in right.
 If movable: one who first took possession
in good faith.
 If immovable: one who recorded in registry
of property in good faith
o If there is no inscription, the one who
first took possession in good faith.
o If there is no possession, one who can
present the oldest title.
(7) Excessive/Inofficious Donations
A type of donation in which a person gives or
receives more than what he may give or receive
by will. [NCC 752]
Donation inter vivos, made by a person having
no children or descendants, legitimate or
legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced by the
happening of any of these events:
(a) If the donor, after the donation, should
have legitimate or legitimated or
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illegitimate children, even though
they be posthumous;
(b) If the child of the donor, whom the
latter believed to be dead when he
made the donation, should turn out to
be living; or
(c) If the donor subsequently adopt a
minor child.
The donation shall be revoked or reduced
insofar as it exceeds the portion that may be
freely disposed of by will, taking into account
the whole estate of the donor at the time of
the birth, appearance or adoption of a child.
(8) Inofficious Donations
(a) The donation shall be reduced with
regard to the excess.
(b) But this reduction shall not prevent
the donations from taking effect
during the life of the donor, nor shall
it bar the donee from appropriating
the fruits.
(c) Only those who, at the time of the
donor's death, have a right to the
legitime and their heirs and
successors-in-interest may ask for the
reduction or inofficious donations.
(d) If, there being two or more donations,
the disposable portion is not sufficient
to cover all of them, those of the more
recent date shall be suppressed or
reduced with regard to the excess.
(9) Scope of amount [NCC 750-752]
(a) The donations may comprehend all
the present property of the donor, or
part thereof.
Provided he reserves, in full ownership
or in usufruct, sufficient means for the
support of himself, and of all relatives
who, at the time of the acceptance of
the donation, are by law entitled to be
supported by the donor
UP LAW BOC PROPERTY CIVIL LAW

(b) Donations cannot comprehend future Revocation Reduction

property.
Total withdrawal of
Amount is only insofar
Future property is understood anything amount, whether
as the legitime is
which the donor cannot dispose of at the legitime is
prejudiced
the time of the donation. impaired or not
Benefits the donor’s
(10) In fraud of creditors [NCC 759] heirs (except when
(a) Donation is always presumed to be in Benefits the donor made on the ground of
fraud of creditors, when at the time the appearance of a
thereof the donor did not reserve child)
sufficient property to pay his debts
prior to the donation. G.1. GROUNDS FOR REDUCTION
(b) The donee shall be responsible (1) Inofficiousness
therefor only when the donation has A donation where a person gives or
been made in fraud of creditors. receives more than what he may give or
receive by will is inofficious. [NCC 752]
F. VOID DONATIONS [NCC 739-740, (2) Subsequent birth, reappearance of child or
1027] adoption of minor by donor
F.1. THOSE MADE BETWEEN PERSONS
WHO WERE GUILTY OF ADULTERY OR Effects of subsequent birth, reappearance or
adoption:
CONCUBINAGE AT THE TIME OF THE (a) A donation is VALID if it does not
DONATION exceed the free part computed as of
NOTE: The spouse of the donor or donee may the birth, adoption or reappearance of
bring the action for declaration of nullity and the child.
the guilt of the donor and donee may be (b) The donee must return the property or
proved by preponderance of evidence in the its value at the time of the donation.
same action. (c) The fruits must be returned from the
filing of the action.
F.2. THOSE MADE BETWEEN PERSONS (d) Mortgages by the donee are valid but
FOUND GUILTY OF THE SAME CRIMINAL may be discharged subject to
OFFENSE, IN CONSIDERATION THEREOF reimbursement from the donee.

F.3. THOSE MADE TO A PUBLIC OFFICER Extent of revocation: only to the extent of the
OR HIS WIFE, DESCENDANTS AND presumptive legitime of the child.
ASCENDANTS, BY REASON OF HIS (a) Insufficient means of support
OFFICE (b) In fraud of creditors
(c) Prescription – 4 years from either:
F.4. THOSE MADE TO PERSONS (i) Birth of first legitimate child;
INCAPACITATED TO SUCCEED BY WILL. (ii) Legitimation, adoption,
recognition of first child;
[NCC. 1027]
(iii) Judicial declaration of filiation; or
G. REVOCATION V. REDUCTION

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(iv) Knowledge of information on the

existence of a child believed to be Effect as to fruits [NCC 768]
dead. When the donation is revoked for any of the
causes stated in NCC 760, or by reason of
REVOCATION ingratitude, or when it is reduced because it is
(1) Failure to comply with any of the inofficious, donee shall not return the fruits
conditions imposed by the donor upon the except from the filing of the complaint.
donee
(2) For additional legitime for subsequent  If the revocation is based upon
birth, reappearance or adoption noncompliance with any of the conditions
(3) Ingratitude imposed in the donation, the donee shall
The following cases are forms of return not only the property but also the
ingratitude: fruits thereof which he may have received
(1) If the donee should commit some offense after having failed to fulfill the condition.
against the person, the honor or the property
of the donor, or of his wife or children under his
parental authority;
(2) If the donee imputes to the donor any criminal
offense, or any act involving moral turpitude,
even though he should prove it, unless the
crime or the act has been committed against
the donee himself, his wife or children under
his authority; or
(3) If he unduly refuses him support when
the donee is legally or morally bound
to give support to the donor.

Applies to all donations EXCEPT:

(1) Mortis causa
(2) Propter nuptias
(3) Onerous donations

Notes:
(1) Founded on moral duty: one who received
a donation must be grateful to his
benefactor.
(2) Conviction is NOT necessary.
(3) Time to file action for revocation – within
1yr from knowledge of the offense.

Who may file

Donor must bring action himself; not
transmissible to his heirs.

Effect of revocation on alienations and

encumbrances [NCC 766]
(1) Alienations and mortgages effected
before the notation of the complaint for
revocation in the Registry of Property shall
subsist.
(2) Later ones shall be void.

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What may be donated

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

Effect of non-reservation: reduction of the

donation

(2) He reserves sufficient property at the time of

the donation for the full settlement of his debts

Effect of non-reservation: considered to be a

donation in fraud of creditors, and donee may
be liable for damages
What may not be donated
(1) Future property; those which the donor cannot
dispose of at the time of the donation [NCC 751]
(2) More than what he may give or receive by will
[NCC 752]

If exceeds: inofficious
Donations made to several persons jointly
No accretion – one donee does not get the share Exception: those given to husband and wife,
of the other donees who did not accept (Article except when the donor otherwise provides
753)
Donor
Who are allowed: All persons who may contract (of Who are not allowed:
legal age) and dispose of their property [NCC 735] (1) Guardians and trustees with respect to the
property entrusted to them [NCC 736]
Donor’s capacity is determined at the time of the (2) Made between person who are guilty of
making of donation [NCC 737] adultery or concubinage [NCC 739]

Made between persons found guilty of the same

criminal offense, in consideration thereof [NCC
739]
Donee
Who are allowed to accept donations: Those who Who are not allowed:
are not specifically disqualified by law (Article 738) (1) Made between person who are guilty of
adultery or concubinage [NCC 739]
Those who are allowed, with qualifications: (2) Made between persons found guilty of the
(1) Minors and others who are incapacitated (see same criminal offense, in consideration thereof
Article 38), provided that their acceptance is [NCC 739]
done through their parents or legal (3) Made to a public officer or his wife, descendant
representatives [NCC 741] and ascendants, by reason of his office [NCC

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(2) Conceived and unborn children, provided that 739]

the donation is accepted by those who would (4) Those who cannot succeed by will [NCC 740]
legally represent them if they were already
born Those made to incapacitated persons, although
simulated under the guise of another contract
[NCC 743]
Acceptance of the donation
Who may accept [NCC 745] When to accept: during the lifetime of the donor or
(1) Donee personally donee [NCC 746]
(2) Authorized person with a special power for the
purpose or with a general sufficient power
What the donee acquires with the thing
He shall be subrogated to all the rights and
actions that would pertain to the donor in case of
eviction [NCC 754]
Obligation of the donor
No obligation to warrant [NCC 754] Exception: when the donation is onerous
Obligation of the donee
If the donation so states, the donee may be Exception: when contrary intention appears
obliged to pay the debts previously contracted by
the donor and in no case shall he be responsible
for the debts exceeding the value of the thing
donated [NCC 758]
What may be reserved by the donor
Right to dispose of some of the things donated, or If the donor dies without exercising this right
of some amount which shall be a charge thereon
Reversion
The property donated may be restored or returned Limitation to (2): the third person would be living
to at the time of the donation
(1) Donor or his estate; or
(2) Another person

Revocation/Reduction
Time of Action Transmissibility Effect Liability (Fruits)
Birth, appearance, adoption
Within 4 years from Transmitted to children Property is returned Fruits returned from the
birth, legitimation and and descendants upon If the property has been filing of the complaint
adoption the death of donor sold, its value at the
time of donation shall
be returned.
If the property was
mortgaged, the donor
may redeem the
mortgage, with right to

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Time of Action Transmissibility Effect Liability (Fruits)

recover the amount from
the donee
Non-compliance with condition
Within 4 years from non- May be transmitted to Property returned, Fruits received after
compliance donor’s heirs and may alienations and having failed to fulfill
be exercised against mortgages void subject condition returned
donee’s heirs to rights of third persons
in good faith
Ingratitude
Within 1 year after Generally not Property returned, but Fruits received from the
knowledge of the fact transmitted to heirs of alienations and filing of the complaint
and it was possible for donor/ donee mortgages effected returned
him to bring the action before the notation of
the complaint for
revocation in the registry
of property subsist
Failure to reserve sufficient means for support
At any time, by the Reduced to the extent Donee entitled
donor or relatives Not transmissible necessary to provide
entitled to support support
Inofficiousness for being in excess of what the donor can give by will
Within 5 years from the Transmitted to donor’s Donation takes effect on Donee entitled
death of the donor heirs the lifetime of donor.
Reduction only upon his
death with regard to the
excess
Fraud against creditors
Rescission within 4 Transmitted to creditor’s Returned for the benefit Fruits returned/ if
years from the heirs or successors-in- of the creditor who impossible, indemnify
perfection of donation/ interest brought the action creditor for damages
knowledge of the
donation

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C. TRADITION
It is a derivative mode of acquiring ownership
and other real rights by virtue of which, there
being intention and capacity on the part of the
grantor and grantee and the pre-existence of
said rights in the estate of the grantor, they are
transmitted to the grantee through a just title.
REQUISITES
(1) Pre-existence in the estate of the grantor
of the right to be transmitted;
(2) Just cause or title for the transmission;
(3) Intention on the part of the grantor to
grant and on the part of the grantees to
acquire;
(4) Capacity to transmit and to acquire; and
(5) An act that gives it outward form,
physically, symbolically, or legally.
PURPOSE
(1) Ownership is transferred, among other
means, by tradition.
(2) The delivery of a thing constitutes a
necessary and indispensable requisite for
the purpose of acquiring the ownership of
the same by virtue of a contract.
KINDS
(1) Real Tradition: physical delivery
(2) Constructive Tradition: when the delivery of
the thing is not real or material but
consists merely in certain facts indicative of
the same
(a) Symbolical Tradition: done through the
delivery of signs or things which
represent that which is being
transmitted. (e.g. keys or title itself)
(b) Tradition by public instrument: consists
in the substitution of real delivery of
possession by a public writing with the
delivery of a document which
evidences the transaction.
(c) Tradicio longa manu: made by the
grantor pointing out to the grantee the
thing to be delivered.
(d) Tradicio brevi manu: takes place when
the grantee is already in possession of
the thing. (e.g. when the lessee buys
the thing leased to him)
(e) Tradicion constitutum possessorium:
similar to brevi manu but in the
opposite sense – when the owner
PROPERTY CIVIL LAW
alienates a thing but remains in
possession in another concept as lesee
or depositary.
(3) Quasi tradition: delivery of incorporeal
things or rights by the use by the grantee
of his rights with the grantor’s consent.
(4) Tradicion by operation of law: delivery
which is not included in the foregoing
modes of delivery and where the delivery is
effected solely by virtue of an express
provision of law.
Prescription
DEFINITION
By prescription, one acquires ownership and
other real rights through the lapse of time in
the manner and under the conditions laid
down by law.
In the same way, rights and conditions are lost
by prescription.
It is a means of acquiring ownership and other
real rights or losing rights or actions to enforce
such rights through the lapse of time.
RATIONALE
It is purely statutory in origin. It is founded on
grounds of public policy which requires for the
peace of society, that juridical relations
susceptible of doubt and which may give rise to
disputes, be fixed and established after the
lapse of a determinate time so that ownership
and other rights may be certain for those who
have claim in them.
KINDS OF PRESCRIPTION
(1) Acquisitive prescription
(2) Extinctive prescription
ACQUISITIVE PRESCRIPTION
(1) The acquisition of ownership and other real
rights through possession of a thing in the
manner and condition provided by law.
(2) May be ordinary or extraordinary:
(a) Ordinary: requires possession of things in good
faith and with just title for the time fixed by
law.
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(b) Extraordinary: acquisition of ownership and ownership and other of rights, whether real
other real rights without need of title or of real rights or personal
good faith or any other condition.
Vests the property and Vests the property and
Prescription where possession in good faith raise a new title in the raise a new title in the
converted into possession in bad faith: occupant occupant
Ordinary Results in the Merely results in the
(1) Movable properties - 4 years acquisition of loss of a real or
(2) Immovable properties - 10 years ownership or other personal right, or bars
real rights in a person the cause of action to
Extraordinary: as well as the loss of enforce said right
(1) Movable properties - 8 years said ownership or real
(2) Immovable properties - 30 years rights in another
Can be proven under Should be
As a mode of acquisition, prescription requires the general issue affirmatively pleaded
existence of following: without its being and proved to bar the
(1) Capacity of the claimant to acquire by affirmatively pleaded action or claim of the
prescription; adverse party
(2) A thing capable of acquisition by
prescription;
NO PRESCRIPTION APPLICABLE
(3) Adverse possession of the thing under
certain conditions; and
BY OFFENDER
(4) Lapse of time provided by law.
The offender can never acquire, through
The following are only required in ordinary prescription, movable properties possessed
prescriptions: through a crime.
(1) Good faith of the possessor; and
REGISTERED LANDS
(2) Proof of just title
PD 1529 (AMENDING AND CODIFYING THE
LAWS RELATIVE TO REGISTRATION OF
Note:
PROPERTY AND FOR OTHER PURPOSES)
 For extraordinary prescription, only first 4 are
No title to registered land in derogation of the
required
title of the registered owner shall be acquired
 Possession has to be in the concept of an by prescription or adverse possession.
owner, public, peaceful, and uninterrupted.
RIGHTS NOT EXTINGUISHED BY
EXTINCTIVE PRESCRIPTION PRESCRIPTION [NCC 1143]
The loss or extinguishment of property rights (1) To demand a right of way, regulated by
or actions through the possession by another NCC 649;
of a thing for the period provided by law or (2) To bring an action to abate a public or
through failure to bring the necessary action to private nuisance.
enforce one’s right within the period fixed by
law. ACTION TO QUIET TITLE IF PLAINTIFF IS IN
POSSESSION
Acquisitive Prescription Extinctive Prescription (1) When plaintiff is in possession of the
property: the action to quiet title does not
Requires positive Requires inaction of
prescribe.
action of the possessor the owner out of
(2) The reason is that the owner of the property
(a claimant) who is not possession or neglect
or right may wait until his possession is
the of one with a right to
disturbed or his title is assailed before
Owner bring his action
taking steps to vindicate his right.
Applicable to Applicable to all kinds

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VOID CONTRACTS (1) The action rescribes in 8 years from the

(1) The action or defense for the declaration of time the possession thereof is lost. [NCC
the inexistence of a contract does not 1140]
prescribe. [NCC 1410] (2) However, the action shall not prosper if it is
(2) The title is susceptible to direct as well as brought after 4 years when the possessor
to collateral attack. [Ferrer v. Bautista, has already acquired title by ordinary
1994] acquisitive prescription. [NCC 1132]
(3) If the possessor acquired the movable in
ACTION TO DEMAND PARTITION good faith at a public sale, the owner
No prescription shall run in favor of a co-owner cannot obtain its return without
or co-heir against his co-owners or co-heirs so reimbursing the price paid.
long as he expressly or impliedly recognizes
the co-ownership. [NCC 494] TO RECOVER IMMOVABLES
(1) Real actions prescribe after 30 years [NCC
PROPERTY OF PUBLIC DOMINION 1141]
Prescription, both acquisitive and extinctive, (2) UNLESS the possessor has acquired
does not run against the State in the exercise ownership of the immovable by ordinary
of its sovereign function to protect its interest acquisitive prescription through possession
EXCEPT with respect to its patrimonial of 10 years. [NCC 1134]
property which may be the object of (3) Action for reconveyance
prescription. (NCC 1113) (a) Based on fraud: Prescribes 4 years from
the discovery of fraud.
PRESCRIPTION DISTINGUISHED FROM (b) Based on implied or constructive trust:
LACHES 10 years from the alleged fraudulent
Prescription Laches registration or date of issuance of
certificate of title over the property.
Concerned with the Concerned with the
fact of delay effect of delay OTHER ACTIONS
A question or a matter Principally a question (1) Action to foreclose mortgage: prescribes
of time of inequity of after 10 years from the time the obligation
permitting a claim to secured by the mortgage becomes due and
be enforced, this demandable
inequity being founded (2) Actions that Prescribe in 10 Years [NCC
on some subsequent 1144]
change in the (a) Upon a written contract
condition or the (b) Upon an obligation created by law
relation of the parties (c) Upon a judgment
Statutory NOT statutory The computation of the period of
Applies at law Applies at equity prescription of any cause or right of action,
Cannot be availed of Being a defense of which is the same as saying prescription of
unless it is especially equity, need not be the action, should start from the date the
pleaded as an specifically pleaded cause of action accrues or from the day the
affirmative allegation right of the plaintiff is violated. [Nabus v.
CA, 1991]
Based on a fixed time NOT based on a fixed
time
(3) Actions that Prescribe in 6 Years [NCC 1145]
PRESCRIPTION OR LIMITATION OF ACTIONS (a) Upon an oral contract
(b) Upon a quasi-contract

TO RECOVER MOVABLE PROPERTIES (4) Actions that Prescribe in 4 Years [NCC 1145]

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(a) Upon an injury to the rights of the
plaintiff
(b) Upon a quasi-delict
BUT when the action arises from any act of
any public officer involving the exercise of
powers arising from Martial Law including
the arrest, detention and/or trial of the
plaintiff, the same must be brought within
1 year.
(5) Actions that Prescribe in One Year or Less
[NCC 1147]
(a) For forcible entry or unlawful detainer
(b) For defamation
starts anew the prescriptive period [The
Overseas Bank of Manila v. Geraldez, (1979)]
Not all acts of acknowledgement of a debt
interrupt prescription. To produce such
effect, the acknowledgment must be
“written”, so that the payment, if not
coupled with the communication signed by
the payor would interrupt the running of
the period of prescription [PNB v. Osete
(1968)]

(6) Other Actions that Prescribe in 1 Year under

the Civil Code
(a) To recover possession de facto [NCC
554 (4)]
(b) To revoke a donation on the ground of
ingratitude [NCC 769]
(c) To rescind or recover damages if
immovable is sold with non-apparent
burden or servitude [NCC 1560 (3,4)]
(d) To enforce warranty of solvency in
assignment credits [NCC 629]

(7) Where Periods of Other Actions Not Fixed in

the Civil Code and in Other Laws
All other actions whose periods are not
fixed in the Civil Code or in other laws must
be brought within 5 years from the time
the right of action accrues. [NCC 1149]

(8) Interruption [NCC 1155]

The prescription of actions is interrupted
when:
(a) They are filed before the court
(b) When there is a written extrajudicial
demand by the creditors
(c) When there is any written
acknowledgment of the debt by the
debtor

Civil actions are deemed commenced from

the date of the filing and docketing of the
complaint with the Clerk of Court. [Cabrera
v. Riano (1963)]

A written extrajudicial demand wipes out

the period that has already elapsed and

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CIVIL LAW
OBLIGATIONS

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I. DEFINITION
Art. 1156. An obligation is a juridical necessity
to give, to do or not to do.
Elements of an Obligation
(1) ACTIVE SUBJECT (Obligee/Creditor): The
person who has the right or power to
demand the prestation.
(2) PASSIVE SUBJECT (Obligor/Debtor): The
person bound to perform the prestation.
(3) PRESTATION (Object): The conduct
required to be observed by the
debtor/obligor (to give, to do, or not to
do).
(4) VINCULUM JURIS (Juridical or Legal Tie;
Efficient Cause): That which binds or
connects the parties to the obligation. (De
Leon)
Different Kinds of Prestations
(1) TO GIVE: real obligation; to deliver either
(a) a specific or determinate thing, or (b) a
generic or indeterminate thing.
(2) TO DO: positive personal obligation;
includes all kinds of work or service.
(3) NOT TO DO: negative personal obligation;
to abstain from doing an act; includes the
obligation not to give.
Requisites of a Prestation:
(1) Must be possible, physically and
juridically;
(2) Must be determinate, or at least,
determinable;
(3) Must have a possible equivalent in
money.
Art. 1156 provides the definition of civil
obligations only; it does not cover natural
obligations.
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CIVIL LAW
Classification of Obligations
AS TO SANCTION
(1) CIVIL OBLIGATION (or perfect obligation)
– give a right of action to compel their
performance; the sanction is judicial
process
(2) NATURAL OBLIGATION – midway
between civil and purely moral
obligations; there is a juridical tie, but
performance is left to the will of the
debtor; after voluntary fulfillment by the
obligor, the sanction is the law
(3) MORAL OBLIGATION (or imperfect
obligation) – the sanction is conscience or
morality
Natural Obligations
Art. 1423. Obligations are civil or natural.
Civil obligations give a right of action to
compel their performance. Natural
obligations, not being based on positive law
but on equity and natural law, do not grant
a right of action to enforce their
performance, but after voluntary fulfillment
by the obligor, they authorize the retention
of what has been delivered or rendered by
reason thereof. Some natural obligations are
set forth in the following articles.
Natural obligations are midway between civil
obligations and purely moral obligations. It is
distinguished from moral in that it produces
some juridical effects (ex. Right to retention),
but is distinguished from moral in that it does
not give rise to an action to compel its
performance [Tolentino].
Payment is voluntary when the debtor knows
that the obligation is a natural one.
“Fulfillment” does not refer only to the delivery
of things, but also to the performance of an
act, the giving of security, and the execution of
a document.
UP LAW BOC OBLIGATIONS
Rules:
(1) The promise to perform a natural
obligation is as effective as performance
itself, and converts the natural obligation
to a civil obligation.
(2) Partial payment of a natural obligation
does not make it civil; the part paid
cannot be recovered, but payment of the
balance cannot be enforced. The
exception would be if the natural
obligation is susceptible of ratification.
(3) Guaranties for the performance of a
natural obligation are valid.
(4) Payment of a natural obligation is not
subject to reduction by reason of
inofficiousness, appearance of children or
ingratitude.
The contractor builds additional works, but is
paid the additional cost of such works. Payor
characterizes the payment as a "mistake," and
not a "voluntary" fulfillment under Art. 1423 of
the Civil Code. Hence, it urges the application
of the principle of solution indebiti. However, it
is not enough to prove that the payments
made by payor to contractor were "not due"
because there was no prior authorization or
agreement with respect to additional works.
There is a further requirement that the
payment by the debtor was made either
through mistake or under a cloud of doubt. In
short, for the provisions on solution indebiti to
apply, there has to be evidence establishing
the frame of mind of the payor at the time the
payment was made [Uniwide v Titan-Ikeda,
2006].
Examples of Natural Obligations
Art. 1424. When a right to sue upon a civil
obligation has lapsed by
extinctive prescription, the obligor who
voluntarily performs the contract cannot
recover what he has delivered or the value of
the service he has rendered.
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CIVIL LAW
Requisites under Art 1424
(1) There is a civil obligation
(2) The right to sue upon it has already
lapsed by extinctive prescription
(3) Obligor performs contract voluntarily
Consequence: Obligor cannot recover what he
has delivered or value of the service he
rendered.
Art. 1425. When without the knowledge or
against the will of the debtor, a third person
pays a debt which the obligor is not legally
bound to pay because the action thereon
has prescribed, but the debtor later
voluntarily reimburses the third person, the
obligor cannot recover what he has paid.
Requisites under Art 1425
(1) There is a debt
(2) Action upon the debt has prescribed
(3) A third person, without the knowledge or
against the will of the debtor, pays the
debt
(4) Debtor voluntarily reimburses the third
person
Consequence: Obligor cannot recover what he
has paid.
Art. 1426. When a minor between eighteen
and twenty-one years of age who has
entered into a contract without the consent
of the parent or guardian, after the
annulment of the contract voluntarily
returns the whole thing or price received,
notwithstanding the fact that he has not
been benefited thereby, there is no right to
demand the thing or price thus returned.
Art. 1427. When a minor between eighteen
and twenty-one years of age, who has
entered into a contract without the consent
of the parent or guardian, voluntarily pays a
sum of money or delivers a fungible thing in
fulfillment of the obligation, there shall be
no right to recover the same from the
obligee who has spent or consumed it in
good faith.
UP LAW BOC OBLIGATIONS CIVIL LAW

Art 1426 and 1427 Distinguished law, but one of the intestate heirs, after the
1426 1427 settlement of the debts of the deceased,
Presupposes a prior No prior annulment pays a legacy in compliance with a clause in
annulment is involved the defective will, the payment is effective
Refers to any object Refers to money or and irrevocable.
fungible things
Consumption in Requires Requisites under Art 1430
good faith is not consumption in good (1) There is a will providing for a legacy
required faith (2) The will is declared void because it was
not executed in accordance with the
Art. 1428. When, after an action to enforce a formalities required by law
civil obligation has failed the defendant (3) Heir pays legacy
voluntarily performs the obligation, he
cannot demand the return of what he has
delivered or the payment of the value of the Consequence: Payment is effective and
service he has rendered. irrevocable.

Requisites under Art 1428 As to Subject Matter

(1) There is a civil obligation
(2) An action to enforce such has failed
(3) Defendant voluntarily performs the
obligation
Consequence: Defendant cannot demand
return of what he has delivered or the payment
of the value of the service
Art. 1429. When a testate or intestate heir
voluntarily pays a debt of the decedent
exceeding the value of the property which he
received by will or by the law of intestacy
from the estate of the deceased, the
payment is valid and cannot be rescinded by
the payer.
Requisites under Art 1429
(1) Decedent incurred in debt during his
lifetime
(2) Heir voluntarily pays debt
(3) Value of debt exceeds value of heir’s
inheritance
Consequence: Payment is valid and heir cannot
rescind it.
Art. 1430. When a will is declared void
because it has not been executed in
accordance with the formalities required by
(1) REAL – obligation to give
(2) PERSONAL – obligation to do or not to do
As to the Affirmativeness or Negativeness of the
Obligation
(1) POSITIVE/AFFIRMATIVE – obligation to
give or to do
(2) NEGATIVE: obligation not to give or not
to do
As to Persons Obliged
(1) UNILATERAL – only one of the parties is
bound
(2) BILATERAL – both parties are bound
a. Reciprocal – performance by one is
dependent on the performance by the
other
b. Non-reciprocal – performance by one
is independent of the other [Paras]
Sources of Obligations
Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.

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A single act or omission may give rise to 4. To deliver its 1170)

different causes of action. accessions and 3. To fruits from the
A concurrence of scope in regard to negligent accessories (1166) time the obligation to
acts does not destroy the distinction between (a) accessions – deliver arises (1164)
everything which is 4. Not to be
the civil liability arising from a crime and the produced by a thing, compelled to receive a
responsibility for cuasi-delitos or culpa extra- or which is different one,
contractual. The same negligent act causing incorporated or although of the same
damages may produce civil liability arising attached thereto, value as, or more
from a crime... or create an action for cuasi- excluding fruits valuable than that
delito or culpa extra-contractual. [Barredo vs. (b) accessories – which is due (1244)
things destined for
Garcia, 1942]
the embellishment,
use or preservation of
II. NATURE AND another thing of more
importance
EFFECT OF 5. To pay damages in
case of breach (1170)
OBLIGATIONS To Give a Generic Thing
1. To take care of the 1. To ask that the
thing (1163) obligation be
A.OBLIGATION TO GIVE 2. To deliver a thing of complied with (1165)
the quality intended 2. To ask that the
Limited
Specific Thing Generic Thing by the parties taking obligation be
Generic Thing
into consideration the complied with by a
Particularly Object is When the
purpose of the third person at the
designated or designated generic
obligation and other expense of the debtor
physically only by its objects are
circumstances (1246) 3. To recover
segregated class/ genus/ confined to a
- Creditor cannot damages in case of
from all species. particular
demand a thing of breach (1165)
others of the class.
superior quality; 4. Not to be
same class
neither can the debtor compelled to receive a
(Art. 1460);
deliver a thing of different one,
Identified by
inferior quality. although of the same
individuality.
4. To pay damages in value as, or more
Cannot be Can be case of breach (1170) valuable than that
substituted substituted which is due (1244)
against the by any of the
obligee’s will. same class
and same B. OBLIGATION TO DO OR NOT TO
kind. DO
Rights and Duties of Parties
Duties of the Debtor Rights of the Creditor
Duties of the Debtor Rights of the Creditor To Do
To Give a Specific Thing 1. To do it (1167) 1. To have the
1. To preserve or take 1. To compel delivery 2. To shoulder the obligation executed at
care of the thing due (1165) cost of execution the cost of the debtor
(1163) 2. To recover should he fail to do it (1167)
2. To deliver the thing damages in case of (1167) 2. To recover
itself (1165) breach, exclusive or in 3. To undo what has damages in case of
3. To deliver the fruits addition to specific been poorly done breach (1170)
of the thing (1164) performance (1165; (1167)

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4. To pay damages in Note: The debtor
case of breach (1170) cannot be compelled
to perform his
obligation. The
ultimate sanction of
civil obligations is
indemnification of
damages.
Not To Do
1. Not to do what 1. To ask to undo what
should not be done should not be done, at
2. To shoulder cost of the debtor’s expense.
undoing what should (1168)
not have been done 2. To recover
(1168) damages, where it
3. To pay damages in would be physically or
case of breach (1170) legally impossible to
undo what should not
have been done,
because of :
a. the very nature of
the act itself;
b. rights acquired by
third persons who
acted in good faith;
c. when the effects of
the acts prohibited
are definite in
character and will not
cease even if the thing
prohibited be undone.
C. BREACH
Art. 1170. Those who in the performance of
their obligations are guilty of fraud,
negligence, or delay, and those who in any
manner contravene the tenor thereof, are
liable for damages.
C.1. COMPLETE FAILURE TO PERFORM
Slight or Casual
Substantial Breach
Breach
1. Total breach 1. Partial breach
2. Amounts to non- 2. There is partial/
performance, basis substantial
for rescission performance in good
(resolution) under faith
Art. 1191 and 3. Gives rise to
payment of damages liability for damages
only (1234)
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CIVIL LAW
Art. 1234. If the obligation has been
substantially performed in good faith, the
obligor may recover as though there had been
a strict and complete fulfillment, less damages
suffered by the obligee.
In order that there may be substantial
performance of an obligation, there must have
been an attempt in good faith to perform,
without any willful or intentional departure
therefrom. The deviation from the obligation
must be slight, and the omission or defect
must be technical and unimportant, and must
not pervade the whole or be so material that
the object which the parties intended to
accomplish in a particular manner is not
attained. The non-performance of a material
part of a contract will prevent the performance
from amounting to a substantial compliance…
The compulsion of payment is predicated on
the substantial benefit derived by the obligee
from the partial performance. Although
compelled to pay, the obligee is nonetheless
entitled to an allowance for the sum required
to remedy omissions or defects and to
complete the work agreed upon. [International
Hotel Corp v Joaquin, 2013]
The question of whether a breach of contract is
substantial depends upon the attending
circumstances and not merely on the
percentage of the amount not paid. [Cannu v
Galang, 2005]
C.2. DEFAULT, DELAY, OR MORA
Failure to perform an obligation on time which
constitutes breach of the obligation. [De Leon]
Rules on Default, Delay, or Mora
Unilateral Obligations Reciprocal Obligations
General Rule: Neither party incurs in
“No demand, no delay if the other does
delay.” not comply or is not
ready to comply in a
The mere expiration proper manner with
UP LAW BOC OBLIGATIONS CIVIL LAW

of the period fixed by what is incumbent Mora solvendi – Delay on the part of the debtor
the parties is not upon him. From the to fulfil his obligation either to give (ex re) or to
enough in order that moment one of the do (ex persona).
the debtor may incur parties fulfills his
in delay. obligation, delay by
Those obliged to the other begins. (1169 Requisites:
deliver or to do par. 3) 1. Obligation must be liquidated, due and
something incur in demandable
delay from the time No delay if neither 2. Non-performance by the debtor within the
the obligee judicially performs. period agreed upon
or extrajudicially 3. Demand, judicial or extra-judicial, by the
demands from them
creditor, unless demand is not necessary
the fulfillment of their
obligation. (1169 par. under the circumstances enumerated in
1) Art 1169 par (2).

Exceptions: Demand There is no mora solvendi in:

is not necessary in a) Negative obligations because delay is
order that delay may impossible [De Leon]
exist under the
b) Natural obligations [Tolentino]
circumstances listed
in Art 1169 par 2, (1)-
(3). Effects:
1. The debtor is liable for damages. [Art.
Demand may be judicial or extrajudicial. 1170]
2. For determinate objects, the debtor shall
When demand is not necessary in order that bear the risk of loss, even if the loss is due
delay may exist (Art. 1169 par 2) to fortuitous events.
(1) When the obligation or the law expressly
so declare; Moraaccipiendi – Delay on the part of the
Note: It is insufficient that the law or creditor to accept the performance of the
obligation fixes a date for performance. It obligation
must further state expressly that after the
period lapses, default will commence; OR Requisites:
(2) When from the nature and the
(1) Debtor offers performance.
circumstances of the obligation it appears
(2) Offer must be in compliance with the
that the designation of the time when the
prestation as it should be performed.
thing is to be delivered or the service is to
(3) Creditor refuses performance without just
be rendered was a controlling motive for
cause.
the establishment of the contract; OR
(3) When demand would be useless, as when
Effects:
the obligor has rendered it beyond his
(1) The responsibility of the debtor is reduced
power to perform.
to fraud and gross negligence.
(2) The debtor is exempted from risk of loss
Kinds of Delay; Requisites and Effects
of the thing, which is borne by the
(1) Mora Solvendi
creditor.
(2) Mora Accipiendi
(3) Compensatio Morae

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(3) The expenses incurred by the debtor for Second infractor not Does not appear to
the preservation of the thing after the liable for damages at consider which
mora shall be chargeable to the creditor. all; only the first infractor first
(4) If the obligation bears interest, the debtor infractor is liable, but committed the breach
with his liability
does not have to pay from the time of mitigated
delay.
(5) The creditor is liable for damages. Articles 1192 and 2215 are not irreconcilably
(6) The debtor may relieve himself of the conflicting. The plaintiff referred to in Article
obligation by consigning the thing. 2215(1) should be deemed to be the second
infractor, while the one whose liability for
Compensatiomorae – Delay of both parties in damages may be mitigated is the first
reciprocal obligations. infractor. Furthermore, the directions to
equitably temper the liability of the first
Effects: infractor in Articles 1192 and 2215 are both
1. Delay of the obligor cancels delay of subject to the discretion of the court, despite
obligee (and vice versa) hence it is as if the word "shall" in Article 1192, in the sense
there is no default. that it is for the courts to decide what is
2. The liability of the first infractor shall be equitable under the circumstances. (Ong v
equitably tempered by the courts. If it Bognalbal, 2006)
cannot be determined which of the parties
first violated the contract, the same shall
C.3. FRAUD (DOLO) IN THE
be deemed extinguished, and each shall
PERFORMANCE OF THE OBLIGATION
bear his own damages. [Art. 1192]
Art. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of
Cessation of the Effects of Mora: an action for future fraud is void.
(1) Express or implied renunciation by the
creditor; Fraud (dolo) is the deliberate or intentional
(2) Prescription. evasion of the normal fulfilment of an
obligation. [De Leon]
Equitable Tempering under Art. 1192 vs. Under
Art. 2215 [Ong v Bognalbal, 2006] A waiver of future fraud is void but past fraud
Art 1192 Art 2215 may be subject of a valid waiver by the
“In case both parties “In contracts, quasi- aggrieved party. [De Leon]
have committed a contracts, and quasi-
breach of the delicts, the court may
obligation, the equitably mitigate the Distinguished from Casual Fraud
liability of the first damages under Causal Fraud
infractorshall be circumstances other Fraud in the (dolo causante and
equitably tempered than the case referred Performance
[Art. 1170] dolo incidente)
by the courts. xxx” to in the preceding [Arts. 1338, 1344]
article, as in the ff. Definition
instances: The deliberate and Every kind of
(1) That the plaintiff intentional evasion of deception for the
himself has the normal fulfilment purpose of leading
contravened the of obligations. another party into
terms of the contract [International error and execute a
xxx” Corporate Bank v particular act.

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Gueco, 2001] (2) It must have induced the other party to

When Present enter into the contract;
During the During the time of (3) It must have been serious; and
performance of a pre- birth or perfection of (4) It must have resulted in damage or
existing obligation the obligation
injury to the party seeking annulment.
Purpose
[Tolentino]
To evade normal To secure consent of
fulfilment of another to enter the
obligation contract(dolo C.4. NEGLIGENCE (CULPA) IN THE
causante) PERFORMANCE OF THE OBLIGATION
To influence a party
Art. 1172. Responsibility arising from
regarding an incident
negligence in the performance of every kind
to the contract (dolo
of obligation is also demandable, but such
incidente)
liability may be regulated by the courts,
Result
according to the circumstances.
Breach of the Vitiation of consent
obligation
Remedy The fault or negligence of the obligor consists
Obligee may recover Innocent party may in the omission of that diligence which is
damages (1344) annul the contract(if required by the nature of the obligation and
dolo causante) corresponds with the circumstances of the
Damages (both dolo persons, of the time and of the place. [Art.
causante or incidente) 1173]
Obligation Involved
Valid obligation Voidable obligation(if Diligence Required [De Leon]
dolo causante) (1) By stipulation of the parties
Valid obligation (if
(2) By law, in the absence of stipulation
dolo incidente)
(3) Diligence of a good father of a family, if
Dolo Causante – that which determines or is both the contract and law are silent. (1173
the essential cause of the contract par 2)
(4) Future negligence may be waived except
Dolo Incidente–refers only to some particular in cases where the nature of the
or accident of the obligation obligation or the public requires another
standard of care (i.e. common carriers)
In order that fraud may vitiate consent, it must Note: Only future simple negligence
be the dolo causante and not merely the dolo may be waived. Future gross
incidente, inducement to the making of the negligence may not be waived since
contract. The false representation was used by such negligence amounts to fraud.
plaintiff to get from defendant a bigger share
of net profits. This is just incidental to the
matter in agreement... because despite Exceptions:
plaintiff’s deceit, respondent would have still Common Carriers
entered into the contract. [Woodhouse vs. Art. 1733. Common carriers, from the nature
Halili, 1953] of their business and for reasons of public
policy, are bound to observe extraordinary
Requisites for Fraud to Vitiate a Contract: diligence in the vigilance over the goods and
(1) It must have been employed by one for the safety of the passengers transported
contracting party upon the other; by them, according to all the circumstances

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of each case. Test of Negligence

Such extraordinary diligence in the vigilance
over the goods is further expressed in
articles 1734, 1735, and 1745, Nos. 5, 6, and
7, while the extraordinary diligence for the
safety of the passengers is further set forth
in articles 1755 and 1756.
Did the defendant in doing the alleged
negligent act use the reasonable care and
caution, which an ordinary and prudent person
would have used in the same situation? If not,
then he is guilty of negligence. [Mandarin Villa
Inc. vs. CA, 1996]

Hotel and Inn-keepers Kinds of Civil Negligence

Art. 1998. The deposit of effects made by
travellers in hotels or inns shall also be Culpa Contractual Culpa Aquiliana
regarded as necessary. The keepers of hotels Negligence is merely Negligence is
or inns shall be responsible for them as incidental in the substantive and
depositaries, provided that notice was given performance of an independent.
to them, or to their employees, of the effects obligation.
brought by the guests and that, on the part There is always a pre- There may or may not
of the latter, they take the precautions which existing contractual be a pre-existing
relation. contractual obligation.
said hotel-keepers or their substitutes
The source of obligation The source of obligation
advised relative to the care and vigilance of of defendant to pay is the defendant’s
their effects. damages is the breach negligence itself.
or non-fulfillment of the
Art. 1999. The hotel-keeper is liable for the contract.
vehicles, animals and articles which have Proof of the existence of The negligence of the
been introduced or placed in the annexes of the contract and of its defendant must be
the hotel. breach or non- proved.
fulfillment is sufficient
prima facie to warrant
Art. 2000. The responsibility referred to in recovery.
the two preceding articles shall include the Proof of diligence in the Proof of diligence in the
loss of, or injury to the personal property of selection and selection and
the guests caused by the servants or supervision of the supervision of the
employees of the keepers of hotels or inns as employees is NOT employee is a defense.
well as strangers; but not that which may available as defense.
proceed from any force majeure. The fact
that travellers are constrained to rely on the Extent of Damages to be Awarded
vigilance of the keeper of the hotels or [Art. 2201]
inns shall be considered in determining the Good Faith Bad Faith
degree of care required of him. Obligor is liable for Obligor shall be
those that are the responsible for all
Art. 2001. The act of a thief or robber, who natural and damages which may
has entered the hotel is not deemed force probable be reasonably
majeure, unless it is done with the use of consequences of the attributed to the
arms or through an irresistible force. breach of the non-performance of
obligation, and the obligation.
Art. 2002. The hotel-keeper is not liable for which the parties
compensation if the loss is due to the acts of have foreseen or Any waiver or
the guest, his family, servants or visitors, or could have renunciation made
if the loss arises from the character of the reasonably foreseen in the anticipation of
things brought into the hotel. at the time the such liability is null
obligation was and void.
constituted.

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C.5. CONTRAVENTION OF THE TENOR
OF THE OBLIGATION
This refers to a violation of the terms and
conditions stipulated in the obligation, which
must not be due to a fortuitous event or force
majeure. [De Leon]
“In any manner contravenes the tenor” means
any illicit act, which impairs the strict and
faithful fulfillment of the obligation, or every
kind of defective performance. [Tolentino]
D. LEGAL EXCUSE FOR BREACH:
FORTUITOUS EVENT OR ACTS OF
THE CREDITOR
Art. 1174. Except in cases expressly specified
by the law, or when it is otherwise declared
by stipulation, or when the nature of the
obligation requires the assumption of risk,
no person shall be responsible for those
events which could not be foreseen, or
which, though foreseen, were inevitable.
Fortuitous Event - a happening independent of
the will of the debtor and which makes the
normal fulfillment of the obligation
impossible. [De Leon]
(1) Act of God: An accident, due directly or
exclusively to natural causes without
human intervention, which by no amount
of foresight, pains or care, reasonably to
have been expected, could have been
prevented.
(2) Act of Man: Force majeure is a superior or
irresistible force, which is essentially an act
of man; includes unavoidable accidents,
even if there has been an intervention of
human element, provided that no fault or
negligence can be imputed to the debtor.
Liability in case of Fortuitous Event
No person shall be responsible for fortuitous
events, UNLESS:
OBLIGATIONS CIVIL LAW
(1) expressly specified by law [Arts. 552 (2);
1942, 2147, 2148, 2159]
(2) liability specified by stipulation
(3) the nature of the obligations requires
assumption of risk [Art. 1174]
(4) debtor is guilty of concurrent or
contributory negligence
(5) debtor has promised to deliver the same
thing to two or more persons who do not
have the same interest [Art. 1165 par. 3]
(6) the thing is lost due to the obligor’s fraud,
negligence, delay or contravention of the
tenor of the obligation [Art. 1170]
(7) the obligation to deliver a specific thing
arises from a crime [Art. 1268]
(8) the object is a generic thing, i.e. the genus
never perishes
Note: ‘Genus nunquam perit’ only pertains
to physical perishing. The genus may still
perish legally. [Labitag notes]
Requisites of Exemption Based on Force
Majeure
(1) The event must be independent of the
debtor’s will (fraud or negligence).
(2) The event must be unforeseeable or
inevitable.
(3) The event renders it impossible for
debtor to fulfill his obligation in a normal
manner.
(4) The debtor must be free from any
negligence or participation in the
aggravation of the injury to the creditor
[Tolentino, 1987; De Leon, 2003]
(5) It must be the sole cause, not merely a
proximate cause.
Act of Creditor: The debtor is also released
from liability when the non-performance of the
obligation is due to the act of the creditor
himself. [Tolentino]
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E. REMEDIES AVAILABLE IN CASE OF declaration of rescission, such declaration will

BREACH produce legal effect.

E.1. SPECIFIC PERFORMANCE The party who deems the contract violated
The creditor has a right to compel the debtor may consider it resolved or rescinded, and act
to perform the prestation. accordingly, without previous court action, but
it proceeds at its own risk. For it is only the
E.2. SUBSTITUTED PERFORMANCE final judgment of the corresponding court that
will conclusively and finally settle whether the
A third person may perform another’s
action taken was or was not correct in law. But
obligation to deliver a generic thing or an
the law definitely does not require that the
obligation to do, unless it is a purely personal
contracting party who believes itself injured
act, at the expense of the debtor.
must first file suit and wait for a judgment
before taking extrajudicial steps to protect its
E.3. RESCISSION (RESOLUTION IN
interest. [UP v Delos Angeles, 1970]
RECIPROCAL OBLIGATIONS)
Art. 1191. The power to rescind obligations is Under Art 1191, the right to rescind an
implied in reciprocal ones, in case one of the
obligation is predicated on the violation of the
obligors should not comply with what is
incumbent upon him. reciprocity between parties, brought about by a
breach of faith by one of them. Rescission,
The injured party may choose between the however, is allowed only where the breach is
fulfillment and the rescission of the substantial and fundamental to the fulfillment
obligation, with the payment of damages in of the obligation. [Del Castillo Vda de Mistica v
either case. He may also seek rescission, Naguiat, 2003; Cannu v Galang, 2005]
even after he has chosen fulfilment, if the
latter should become impossible.
Distinguished from Rescission under Art. 1380
The court shall decree the rescission Rescission / Resolution
Rescission [Art. 1380]
[Art. 1191]
claimed, unless there be just cause
authorizing the fixing of a period. Based on non- Based on lesion or
performance or non- fraud upon creditors.
fulfillment of obligation.
This is understood to be without prejudice to Action is instituted only by Action is instituted by
the rights of third persons who have the injured party. either party or by a
acquired the thing, in accordance with third person.
articles 1385 and 1388 and the Mortgage Applies only to reciprocal Applies to either
Law. obligations where one unilateral or reciprocal
party is guilty of non- obligations even when
Rescission – the unmaking of a contract, or its fulfillment the contract has been
fully fulfilled
undoing from the beginning, and not merely its In some cases, court may Court cannot grant a
termination [Pryce Corp v Pagcor, 2005] grant a term for period or term within
performance. which one must
Rescission may take place extrajudicially, by comply.
declaration of the injured party. But if the Non-performance by the Non-performance by
debtor impugns the declaration of rescission, it other party is important. the other party is
shall be subject to judicial determination. If the immaterial.
debtor does not oppose the extrajudicial

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Distinguished from Termination [Pryce Corp v The creditors, after having pursued the
PAGCOR, 2005] property in possession of the debtor to satisfy
Rescission Termination their claims, may exercise all the rights and
May be effected: May be effected by bring all the actions of the latter for the same
(a) by both parties by mutual agreement or purpose, save those which are inherent in his
mutual agreement, or by one party person. [Art.1177]
(b) unilaterally by one exercising one of its
of them declaring a remedies as a
rescission without the consequence of the In order to satisfy their claims against the
consent of the other if default of the other debtor, creditors have the ff. successive rights:
a legally sufficient (1) To levy by attachment and execution
ground exists or if a upon all the property of the debtor,
decree of rescission is except those exempt from execution;
applied for before the (2) To exercise all the rights and actions of
courts
the debtor, except such are inherently
Requires mutual The parties are not
restitution to restore restored to their personal to him; and
the parties to their original situation; (3) To ask for the rescission of the
original situation prior to termination, contracts made by the debtor in fraud
parties are obliged to of their rights.
comply with their
contractual Requisites
obligations (1) The person to whom the right of action
pertains must be indebted to the
Effect of Rescission under Art 1191: creditor
Extinguishes the obligatory relation as if it had (2) The debt is due and demandable
never been created, the extinction having a (3) The creditor must be prejudiced by the
retroactive effect. Both parties must surrender failure of the debtor to collect his debts
what they have respectively received and due him from third persons, either
return each other as far as practicable to their through malice or negligence
original situation. [Tolentino] (4) The debtors assets are insufficient (
debtor is insolvent)
E.4. DAMAGES, IN ANY EVENT (5) The right of action is not purely
Art. 1170. Those who in the performance of personal to the debtor
their obligations are guilty of fraud, Previous approval of the court is not
negligence, or delay, and those who in any necessary to exercise the accion
manner contravene the tenor thereof, are
subrogatoria.
liable for damages.

(b) Accion Pauliana

Rescission, which involves the right of the
E.5. SUBSIDIARY REMEDIES OF
creditor to attack or impugn by means of
CREDITORS
rescissory action any act of the debtor which is
(a) Accion Subrogatoria
in fraud and to the prejudice of his rights as
Right of the creditor to exercise all of the rights
creditor.
and bring all the actions which his debtor may
have against third persons.

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Creditors may also impugn the acts which the rescinded is onerous
debtor may have done to defraud them. [Art. No period for Prescribes in 4 years
prescription from the discovery of the
1177] fraud

Requisites [Cheng v CA, 2001]

(1) There is a credit in favour of the (c) Other Specific Remedies
plaintiff prior to the alienation by the Accion Directa
debtor Subsidiary liability of sublessee to the lessor
(2) The debtor has performed a for rent due from the lessee
subsequent contract conveying
patrimonial benefit to third person/s. Art. 1652. The sublessee is subsidiarily liable
(3) The debtor’s acts are fraudulent to the to the lessor for any rent due from the
prejudice of the creditor. lessee. However, the sublessee shall not be
(4) The creditor has no other legal remedy responsible beyond the amount of rent due
to satisfy his claim from him, in accordance with the terms of
(5) The third person who received the the sublease, at the time of the extra-judicial
demand by the lessor.
property is an accomplice to the fraud.
Payments of rent in advance by the
An accion pauliana thus presupposes the sublessee shall be deemed not to have been
following: 1) A judgment; 2) the issuance by the made, so far as the lessor's claim is
trial court of a writ of execution for the concerned, unless said payments were
satisfaction of the judgment, and 3) the failure effected in virtue of the custom of the place.
of the sheriff to enforce and satisfy the
judgment of the court. It requires that the Vendor has right of action against possessor
creditor has exhausted the property of the whose right is derived from the vendee
debtor. The date of the decision of the trial Art. 1608. The vendor may bring his action
against every possessor whose right is
court is immaterial. What is important is that
derived from the vendee, even if in the
the credit of the plaintiff antedates that of the second contract no mention should have
fraudulent alienation by the debtor of his been made of the right to repurchase,
property. After all, the decision of the trial without prejudice to the provisions of the
court against the debtor will retroact to the Mortgage Law and the Land Registration
time when the debtor became indebted to the Law with respect to third persons.
creditor. [Cheng v CA, 2001]
Laborer/materialsman has right of action
against owner of piece of work up to the
Accion Subrogatoria Accion Pauliana amount owed by the latter to the contractor
Not necessary that Credit must exist before Art. 1729. Those who put their labor upon or
creditor’s claim is prior the fraudulent act furnish materials for a piece of work
to the acquisition of the [Tolentino] undertaken by the contractor have an action
right by the debtorI. against the owner up to the amount owing
Note: Commentators from the latter to the contractor at the time
have conflicting views
the claim is made. However, the following
on WoN new debts
contracted by the debtor shall not prejudice the laborers, employees
fall under the scope of and furnishers of materials:
accion pauliana. (1) Payments made by the owner to the
No need for fraudulent Fraudulent intent is contractor before they are due;
intent required if the contract (2) Renunciation by the contractor of

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any amount due him from the

owner.
This article is subject to the provisions of
special laws. (1597a) Article 1730. If it is
agreed that the work shall be accomplished
to the satisfaction of the proprietor, it is
understood that in case of disagreement the
question shall be subject to expert
judgment.
If the work is subject to the approval of a
third person, his decision shall be final,
except in case of fraud or manifest error.
Its effectivity or extinguishment does not
depend upon the fulfillment or non-fulfillment
of a condition or upon the expiration of a term
or period. A pure obligation is IMMEDIATELY
DEMANDABLE.
B. CONDITIONAL OBLIGATIONS
Art. 1181. In conditional obligations, the
acquisition of rights, as well as the
extinguishment or loss of those already
acquired, shall depend upon the happening
of the event which constitutes the condition.

Principal has right of action against substitute A condition is a future and uncertain event.
of agent in cases when the agent is liable for This includes acquisition of proof/knowledge
acts of appointed substitute of a past event unknown to the parties.

Art. 1893. In the cases mentioned in Nos. 1 Kinds of conditions

and 2 of the preceding article, the principal
1) As to effect on the obligation
may furthermore bring an action against the
substitute with respect to the obligations a. Suspensive
which the latter has contracted under the b. Resolutory
substitution. 2) As to cause/ origin
a. Potestative
Petitioner cannot invoke the credit of a b. Casual
different creditor to justify the rescission of the c. Mixed
subject deed of donation, because the only
creditor who may benefit from the rescission is (1) As to effect
the creditor who brought the action; those who (a) Suspensive – Obligation shall only be
are strangers to the action cannot benefit from effective upon the fulfillment of the
its effects. (Siguan vs. Lim, 1999) condition [1181]. The obligee acquires a
mere hope or expectancy, protected by
law, upon the constitution of the
III. KINDS OF CIVIL obligation.
OBLIGATIONS
Before Fulfillment After Fulfillment
A. PURE OBLIGATIONS The demandability and The obligation arises or
Art. 1179. Every obligation whose performance acquisition/ effectivity of becomes effective.
the rights arisingIII.from The obligor can be
does not depend upon a future or uncertain
the obligation is compelled to comply
event, or upon a past event unknown to the suspended. with what is incumbent
parties, is demandable at once. II. upon him.
The creditor may bring
Every obligation which contains a resolutory the appropriate actions
condition shall also be demandable, without for the preservation of
prejudice to the effects of the happening of the his right. Anything paid
event. by mistake may be

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recovered [Art 1188].

However, this excludes Effects of the Happening of Suspensive
fruits and interests.
Conditions
Doctrine of Constructive Fulfillment of To Give To Do/Not To Do
Suspensive Conditions If reciprocal, the fruits In obligations to do or
Art. 1186. The condition shall be deemed and interests shall be not to do, the court shall
fulfilled when the obligor voluntarily deemed to have been determine the
prevents its fulfillment. mutually compensated retroactive effect of the
a matter of justice and condition that has been
Suspensive condition deemed fulfilled when: convenience complied with
[Art. 1187, par. 1] [Art. 1187, par. 2]
(1) Obligor intends to prevent obligee If unilateral, the debtor The power of the court
from complying with the condition shall appropriate the includes the
(2) Obligor actually prevents obligee from fruits and interests determination of
complying with the condition received, unless from whether or not there will
the nature and be any retroactive effect.
circumstance it should This rule shall likewise
Doctrine does not apply to: be inferred that the apply in obligations with
(1) Resolutory conditions intention of the persons a resolutory condition
(2) External contingency that is lawfully constituting the same [Art. 1190 par. 3]
was different. [Art. 1187
within the control of the obligor [Taylor par 1]
v Uy Tieng, 1922]
(3) Obligor, in preventing the fulfilment of (b) Resolutory – The obligation is
the condition, acts pursuant to a right demandable at once, without prejudice
to the effects of the happening of the
Principle of Retroactivity in Suspensive event (1179 par 2). The rights are
Conditions immediately vested to the creditor but
Art. 1187, par 1. The effects of a conditional always subject to the threat or danger
obligation to give, once the condition has of extinction by the happening of the
been fulfilled, shall retroact to the day of the
resolutory condition [Tolentino].
constitution of the obligation. Nevertheless,
when the obligation imposes reciprocal
prestations upon the parties, the fruits and Before Fulfillment After Fulfillment
interests during the pendency of the
condition shall be deemed to have been Preservation of Whatever may have
mutually compensated. If the obligation is creditor’s rights [Art. been paid or delivered
1188, par. 1] also applies by one or both of the
unilateral, the debtor shall appropriate the
to obligations with a parties upon the
fruits and interests received, unless from the resolutory condition. constitution of the
nature and circumstances of the obligation obligation shall have to
it should be inferred that the intention of the be returned upon the
person constituting the same was different. fulfillment of the
condition (Art. 1190 par
Rationale: Obligation is constituted when its 1). There is no return to
the status quo.
essential elements concur. The condition However, when the
imposed is only an accidental element. condition is not fulfilled,
rights are consolidated
This applies to consensual contracts only. This and they become
absolute in character.
does not apply to real contracts which can only
be perfected by delivery.

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(2) As to Cause/Origin and the price thereof remitted to the islands.

a. Potestative – The fulfilment of the There were still other conditions that had to
condition depends on the sole act or concur to effect the sale, mainly that of the
decision of a party. presence of a buyer, ready, able and willing to
b. Casual – The fulfilment of the condition purchase the property under the conditions set
depends upon chance or upon the will by the intestate. [Hermosa vs. Longara, 1953]
of a third person. (1182)
c. Mixed – The fulfilment of the condition Loss, Deterioration, or Improvement of a
depends partly upon the will of a party Specific Thing Before Fulfillment of Suspensive
to the contract and partly upon chance Condition (Art. 1189) or of Resolutory Condition
and/or will of a third person. in Obligations to Do or Not to Do [Art. 1190 par
3]
Exclusively Condition and obligation are
upon the valid. Art. 1189. When the conditions have been
Creditor’s imposed with the intention of suspending
Will the efficacy of an obligation to give, the
Exclusively Condition and obligation are following rules shall be observed in case of
upon the void because to allow such the improvement, loss or deterioration of the
Debtor’s Will condition would be equivalent thing during the pendency of the condition:
in case of a to sanctioning obligations (1) If the thing is lost without the fault of
Suspensive which are illusory. It also the debtor, the obligation shall be
Condition constitutes a direct extinguished;
(Art. 1182) contravention of the principle
of mutuality of contracts. (2) If the thing is lost through the fault of
There is nothing to demand the debtor, he shall be obliged to pay
until the debtor wishes to. damages; it is understood that the
Exclusively Condition and obligation are thing is lost when it perishes, or goes
upon the valid because in such situation, out of commerce, or disappears in such
Debtor’s Will the position of the debtor is a way that its existence is unknown or it
in case of a exactly the same as the cannot be recovered;
Resolutory position of the creditor when
Condition the condition is suspensive. It (3) When the thing deteriorates without the
(Art. 1179, does not render the obligation fault of the debtor, the impairment is to
par. 2) illusory. be borne by the creditor;

Defendant executed an endorsement saying
that she’ll pay her debt if the house in which
she lives is sold. Such condition depended
upon her exclusive will; thus, it is void.
[Osmeña vs. Rama, 1909]
The condition that payment should be made by
Hermosa as soon as he receives funds from the
sale of his property in Spain is a mixed
condition. The condition implies that the
obligor already decided to sell the house and
all that was needed to make the obligation
demandable is that the sale be consummated
(4) If it deteriorates through the fault of the
debtor, the creditor may choose
between the rescission of the obligation
and its fulfillment, with indemnity for
damages in either case;
(5) If the thing is improved by its nature, or
by time, the improvement shall inure to
the benefit of the creditor;
(6) If it is improved at the expense of the
debtor, he shall have no other right
than that granted to the usufructuary.

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Art. 1190, par 3. As for the obligations to do Positive and Negative Conditions
and not to do, the provisions of the second Positive [Art. 1184] Negative [Art. 1185[
paragraph of article 1187 shall be observed The condition that The condition that
as regards the effect of the extinguishment some event happen at some event will not
of the obligation. a determinate time happen at a
shall extinguish the determinate time
Without Debtor’s obligation shall render the
With Debtor’s Fault/Act
Fault/Act (a) as soon as the obligation effective
Loss time expires or from the moment
IV. Obligation V. is Obligation is converted (b) if it has become (a) the time indicated
extinguished. into one of indemnity for has elapsed, or
damages. indubitable that
Deterioration the event will not (b) if it has become
VI. Impairment to be VII.
borne Creditor may choose take place. evident that the
by the creditor. between bringing an event cannot
action for rescission of occur.
the obligation OR
bringing an action for
specific performance, Where no date of fulfilment is stipulated,
with damages in either condition must be fulfilled within a reasonable
case. time or time probably contemplated according
Improvement
VIII. Improvement atIX. the Improvement by the to the nature of the obligation [Art. 1185, par 2].
debtor’s expense, the thing’s nature or by time
debtor shall ONLY have shall inure to the benefit C. OBLIGATIONS WITH A PERIOD OR
usufructuary rights. of the creditor.
TERM
Art. 1193. Obligations for whose fulfillment a
Upon the happening of the resolutory day certain has been fixed, shall be
condition, the rules of Article 1189 shall be demandable only when that day comes.
applied to the party who is bound to return (i.e.
the creditor in the original obligation). Obligations with a resolutory period take
effect at once, but terminate upon arrival of
Impossible Conditions the day certain.
Art. 1183. Impossible conditions, those
contrary to good customs or public policy A day certain is understood to be that which
and those prohibited by law shall annul the must necessarily come, although it may not
obligation which depends upon them. If the be known when.
obligation is divisible, that part thereof
which is not affected by the impossible If the uncertainty consists in whether the day
or unlawful condition shall be valid. will come or not, the obligation is
conditional, and it shall be regulated by the
The condition not to do an impossible thing rules of the preceding Section.
shall be considered as not having been
agreed upon. Art. 1180. When the debtor binds himself to
pay when his means permit him to do so, the
In testaments (Art. 873) and donations (Art. obligation shall be deemed to be one with a
period, subject to the provisions of Article
727), an unlawful or impossible condition does
1197.
not annul the transaction. The condition is
merely deemed not written. Period or Term: Interval of time, which either
suspends demandability or produces
extinguishment.

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The period must be: future, certain, and This is in contrast to payment by mistake of the
possible.[Tolentino] obligor before the occurrence of the suspensive
condition, where fruits and interests may no
A fortuitous event does not interrupt the longer be recovered.
running of the period. It only relieves the
contracting parties from the fulfillment of their Loss, Deterioration, or Improvement of the
respective obligations during the period. Thing Before Period Expires
Art. 1194. In case of loss, deterioration or
improvement of the thing before the arrival
Term/Period and Condition Distinguished of the day certain, the rules in Article 1189
shall be observed.
Term/Period Condition
X. Interval of time which
XI. is Fact or event which is Benefit of the Period
future and certain future and uncertain Art. 1196. Whenever in an obligation a period
Must necessarily XII.
come, May or may not happen is designated, it is presumed to have been
although it may not be
known when
established for the benefit of both the
XIII. No effect on existence
XIV. of Gives rise to an creditor and the debtor, unless from the
the obligation, only its obligation or tenor of the same or other circumstances it
demandability or extinguishes one already should appear that the period has been
performance existing established in favor of one or of the other.
XV. No retroactive XVI. effect Has retroactive effect
unless there is an Period for the benefit of either creditor or
agreement to the contrary
debtor
Creditor Debtor
XVII. When it is left exclusively
XVIII. When it is leftXIX. Creditor may demand XX. Debtor may oppose any
to the will of the debtor, exclusively to the will of the fulfillment or premature demand on
the existence of the the debtor, the very performance of the the part of the obligee for
obligation is not affected existence of the obligation at any time the performance of the
obligation is affected but the obligor cannot obligation, or if he so
compel him to accept desires, he may renounce
payment before the the benefit of the period
Kinds of Period [Art 1193] expiration of the period. by performing his
obligation in advance.
(1) Ex die – period with a suspensive effect.
Obligation becomes demandable after
If the period is for the benefit of the debtor
the lapse of the period.
alone, he shall lose every right to make use of
(2) In diem – period with a resolutory effect.
it—
Obligation becomes demandable at
(1) When after the obligation has been
once but is extinguished after the lapse
contracted, he becomes insolvent,
of the period.
unless he gives a guaranty or security
Effect of Advance Payment or Delivery for the debt;
Art. 1195. Anything paid or delivered before (2) When he does not furnish to the
the arrival of the period, the obligor being creditor the guaranties or securities
unaware of the period or believing that the which he has promised;
obligation has become due and (3) When by his own acts he has impaired
demandable, may be recovered, with the said guaranties or securities after their
fruits and interests. establishment, and when through a

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fortuitous event they disappear, unless
he immediately gives new ones equally
satisfactory;
(4) When the debtor violates any
undertaking, in consideration of which
the creditor agreed to the period;
(5) When the debtor attempts to abscond
[Art. 1198]
(6) When required by law or stipulation;
(7) If parties stipulated an acceleration
clause [Tolentino]
(c) If the debtor binds himself when his
means permit him to do so.
Art. 1197 does not apply to contract of services
and to pure obligations.
The court, however, to prevent unreasonable
interpretations of the immediate
demandability of pure obligations, may fix a
reasonable time in which the debtor may pay
[Tolentino]

The obligation immediately becomes due and
demandable even if the period has not yet
expired. The obligation becomes a pure one.
[Tolentino]
When Courts May Fix Period
Art. 1197. If the obligation does not fix a
period, but from its nature and the
circumstances it can be inferred that a
period was intended, the courts may fix the
duration thereof.
The courts shall also fix the duration of the
period when it depends upon the will of the
debtor.
In every case, the courts shall determine
such period as may under the circumstances
have been probably contemplated by the
parties. Once fixed by the courts, the period
cannot be changed by them.
General Rule: The court is not authorized to fix
a period for the parties [De Leon]
The only action that can be maintained by the
creditor under Art. 1197 is the action to ask the
courts to fix the term within which the debtor
must comply with his obligation. The
fulfillment of the obligation itself cannot be
demanded until after the court has fixed the
period for compliance therewith, and such
period has arrived.
Art. 1197 applies to a situation in which the
parties intended a period. [Where] no period
was intended by the parties… Their mere
failure to fix the duration of their agreement
does not necessarily justify or authorize the
courts to do so. Based on the reasons [herein],
the agreement subsisted as long as the
parents and the children mutually benefited
from the arrangement. Effectively, there is a
resolutory condition in such agreement. When
a change in the condition occurs, the
agreement may be deemed terminated.
[pMacasaet v Macasaet, 2004]

Exceptions: If the Court determines that one of D. ALTERNATIVE OR FACULTATIVE

the 3 circumstances are present, it must decide OBLIGATIONS
the period “probably contemplated by the Alternative and Facultative Conditions
parties” [Araneta v. Phil. Sugar Estates, 1967] Distinguished
(a) obligation does not fix a period, but
Alternative Obligations Facultative Obligations
from its nature and circumstances, it
can be inferred that a period wasXXI. Several objects are due.
XXII. Only one object is due.
intended XXIII. May be complied withXXIV.
by May be complied with by
delivery of one of the the delivery of another
(b) the period is void, such as when it objects or by object or by the
depends upon the will of the debtor performance of one of performance of another

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the prestations which are
alternatively due.
XXV. Choice may pertain XXVII.
to
debtor, creditor, or third
person.
XXVI.
XXVIII. Loss/impossibility XXXI.
of all
object/prestation due to
fortuitous event shall
extinguish the obligation.
XXIX.
XXX. The loss/impossibility of
one of the things does
not extinguish the
obligation.
XXXII. Culpable loss of any XXXIII.
of
the objects alternatively
due before the choice is
made may give rise to
liability on the part of the
debtor.
Alternative obligations: Several prestations are
due but the performance of one is sufficient.
[De Leon]
prestation in categorically and unequivocally makes his or
substitution of that her choice known. The choice of the debtor
which is due.
Choice pertains only to
must also be communicated to the creditor
the debtor. who must receive notice of it since: The object
of this notice is to give the creditor . . .
opportunity to express his consent, or to
Loss/impossibility of the
object/prestation due to
impugn the election made by the debtor, and
fortuitous event is only after said notice shall the election take
sufficient to extinguish legal effect when consented by the creditor, or
the obligation. if impugned by the latter, when declared
proper by a competent court. [Arco Pulp and
Paper Co., Inc. v Lim, 2014]
Culpable loss of the The effect of the notice is to limit the obligation
object which the debtor
may deliver in to the object or prestation selected. Notice of
substitution before the selection or choice may be in any form
substitution is effected provided it is sufficient to make the other party
does not give rise to any know that the selection has been made. It can
liability on the part of
the debtor. be:
(1) oral
(2) in writing
(3) tacit
(4) any other equivocal means

Right of Choice [Art. 1200] Choice of the debtor when communicated to

Belongs to the debtor, UNLESS—
(1) it is expressly granted to the creditor
(2) it is expressly granted to a third person
Limitations to the right of choice
(1) impossible prestations
(2) unlawful prestations
(3) those which could not have been the
object of the obligation
When choice shall produce effect
Choice shall produce no effect except from the
time it has been communicated. [Art. 1201]
In an alternative obligation, there is more than
one object, and the fulfillment of one is
sufficient, determined by the choice of the
debtor who generally has the right of election."
The right of election is extinguished when the
party who may exercise that option
the creditor does not require the latter’s
concurrence.
In a joint obligation w/ various debtors and
creditors, the consent of all is necessary to
make the selection effective. If the obligation is
solidary, and there is no stipulation to the
contrary, the choice by one will be binding
personally upon him but not as to the others
[Tolentino].
If through the creditor's acts the debtor cannot
make a choice according to the terms of the
obligation, the latter may rescind the contract
with damages. [Art 1203]
If the debtor does not select at the time when
performance should be effected, the choice
can be made for him by the creditor by

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applying Art. 1167 in obligations to do the price/value of the the price/value of the
[Tolentino]. thing lost with right to thing lost with right to
damages. damages.

Instances when obligation is converted into a

Facultative obligations: Only one prestation is
simple obligation
agreed upon, but the obligor may render
(1) The person with the right of choice has
another in substitution. [Art. 1206]
communicated his choice [Arts. 1201,
1205 par 1]
(2) Only one prestation is practicable [Art.
1202]
Loss of Substitute in Facultative Obligations
Loss of Specific Things or Impossibility of
[Art. 1206]
Performance of Alternative
Before Substitution is After Substitution is
Art. 1204: Debtor’s Choice Made Made
Fortuitous Event Debtor’s Fault If due to bad faith or The loss or
All Lost fraud of obligor: obligor is deterioration of the
Debtor is released from Creditor shall have a liable. substitute on account
the obligation. right to indemnity forXXXIV. of the obligor’s delay,
damages based on theXXXV. negligence, or fraud,
value of the last thingXXXVI. renders the obligor
which disappeared or liable because once
service which become the substitution is
impossible. If due to the negligence
made, the obligation is
Some of the obligor: obligor is
converted into a simple
Debtor to deliver that Debtor to deliver that not liable.
one with the
which he shall choose which the creditor shall XXXVII. substituted thing as
from among the choose from among the the object of the
remainder. remainder without obligation.
damages.
One Remains
Debtor to deliver that Debtor to deliver that
which remains. which remains. E. DIVISIBLE AND INDIVISIBLE
OBLIGATIONS
Art. 1205: Creditor’s Choice Divisible Obligations
Fortuitous Event Debtor’s Fault Ones which are susceptible to partial
All Lost performance, that is, the debtor can legally
Debtor is released from Creditor may claim the
the obligation. price/value of any of perform the obligation by parts and the
them with indemnity for creditor cannot demand a single performance
damages. of the entire obligation [Tolentino]
Some
Debtor to deliver that Creditor may claim any
which he shall choose of those subsisting
Indivisible Obligations
from among the without a right to Ones which cannot be validly performed in
remainder. damages OR parts [Tolentino]
price/value of the thing
lost with right to
damages. Rules
One Remains (1) Divisibility/indivisibility refers to the
Creditor may claim the Creditor may claim the performance of the prestation and not to
remaining thing without remaining thing without the thing which is the object thereof. The
a right to damages OR a right to damages OR

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thing may be divisible, yet the obligation
may be indivisible.
(2) When the obligation has for its object
the execution of a certain number of
days of work, the accomplishment of
work by metrical units, or analogous
things which by their nature are
susceptible of partial performance, it
shall be divisible [Art.1225, par. 2].
(3) Even though the object or service may be
physically divisible, an obligation is
indivisible if so provided by law or
intended by the parties.
(4) In obligations not to do, divisibility or
indivisibility shall be determined by the
character of the prestation in each
particular case.
(5) When there is plurality of debtors and
creditors, the effect of
divisibility/indivisibility of the obligation
depend upon whether the obligation is
joint or solidary.
(6) A joint indivisible obligation gives rise to
indemnity for damages from the time
any one of the debtors does not comply
with his undertaking [Art. 1224].
Effect
Creditor cannot be compelled to receive
partially the prestation in which the obligation
consists; neither may the debtor be required to
make the partial payment [Art. 1248], UNLESS:
(1) The obligation expressly stipulates the
contrary.
(2) The different prestations constituting
the objects of the obligation are
subject to different terms and
conditions.
(3) The obligation is in part liquidated and
in part unliquidated.
Cessation of Indivisibility
a) By conversion of the obligation into an
obligation to pay damages
b) By novation of the obligation
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c) By death of creditor or the debtor
(division among heirs of the deceased)
F. OBLIGATIONS WITH A PENAL
CLAUSE
Penal Clause: An accessory undertaking to
assume greater liability in case of breach. It is
attached to an obligation in order to ensure
performance. The enforcement of the penalty
can be demanded by the creditor only when
the non-performance is due to the fault or
fraud of the debtor.
If the principal obligation is void, the penal
clause shall also be void. However, the nullity
of the penal clause does not carry with it the
nullity of the principal obligation [Art.1230].
Purposes of Penalty
(1) Funcioncoercitiva de garantia - to insure
the performance of the obligation.
(2) Funcionliquidatoria - to liquidate the
amount of damages to be awarded to
the injured party in case of breach of the
principal obligation (compensatory).
(3) Funcionrestrictamente penal - to punish
the obligor in case of breach of the
principal obligation (punitive).
Characteristics of Penalty
(1) The penalty shall substitute the indemnity
for damages and payment of interest in
case of non-compliance [Art. 1226],
UNLESS:
a. There is a stipulation to the
contrary
b. The obligor refuses to pay the
penalty
c. The obligor is guilty of fraud
(2) Debtor cannot exempt himself from the
performance of the principal obligation by
paying the stipulated penalty unless this
right has been expressly reserved for him
[Art. 1227].
UP LAW BOC OBLIGATIONS
(3) Creditor cannot demand the fulfillment of
the principal obligation and demanding
the satisfaction of the penalty at the same
time unless the right has been clearly
granted to him [Art. 1227]. Tacit or implied
grant is admissible.
a. If the creditor has chosen fulfillment
of the principal obligation and the
performance thereof becomes
impossible without his fault, he may
still demand the satisfaction of the
penalty.
b. If there was fault on the part of the
debtor, creditor may demand not only
the satisfaction of the penalty but also
the payment of damages.
c. If the creditor chooses to demand the
satisfaction of the penalty, he cannot
afterwards demand the fulfillment of
the obligation.
Proof of Actual Damage
Art. 1228: That proof of actual damages is not
necessary is applicable only to the general rule
stated in Art. 1226, but not to the exceptions.
The penalty is exactly identical with what is
known as “liquidated damages” in Art. 2226.
In cases where there has been partial or
irregular compliance, as in this case, there will
be no substantial difference between a penalty
and liquidated damages insofar as legal
results are concerned... There is no justification
for the Civil Code to make an apparent
distinction between a penalty and liquidated
damages because the settled rule is that there
is no difference between penalty and
liquidated damages insofar as legal results are
concerned and either may be recovered
without the necessity of proving actual
damages and both may be reduced when
proper. [Filinvest v CA, 2005]
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CIVIL LAW
When Penalty may be Reduced [Art. 1229]:
(1) If the principal obligation has been
partly complied with.
(2) If the principal obligation has been
irregularly complied with.
(3) If the penalty is iniquitous or
unconscionable even if there has been
no performance.
The question of whether a penalty is
reasonable or iniquitous can be partly
subjective and partly objective. Its resolution
would depend on such factor as, but not
necessarily confined to, the type, extent and
purpose of the penalty, the nature of the
obligation, the mode of breach and its
consequences, the supervening realities, the
standing and relationship of the parties, and
the like, the application of which, by and large,
is addressed to the sound discretion of the
court. [Ligutan v CA, 2002; Florentino v
Supervalue, 2007]
IV. JOINT AND
SOLIDARY
OBLIGATIONS
A. JOINT OBLIGATIONS
The whole obligation, whether capable of
division into equal parts or not, is to be paid or
performed by several debtors and/or
demanded by several creditors.
Presumption of Joint Obligation
An obligation is presumed joint if there is a
concurrence of several creditors, or of several
debtors, or of several creditors and debtors in
one and the same obligation [Art. 1207]
Exceptions:
(1) When the obligation expressly states
that there is solidarity
UP LAW BOC OBLIGATIONS
(2) When the law requires solidarity, i.e.
quasi-delicts
(3) When the nature of the obligation
requires solidarity
(4) When a charge or condition imposed
upon heirs or legatees, and the
testament expressly makes the charge or
condition in solidum
(5) When the solidary responsibility is
imputed by a final judgment upon
several defendants
Presumption of Divisibility in Joint Obligations
(Joint Divisible Obligations)
Credit or debt shall be presumed to be divided
into as many equal shares as there are
creditors or debtors, the credits or debts being
considered distinct from one another.
[Art.1208]
Joint divisible obligation - One where a
concurrence of several creditors, or of several
debtors, or of several creditors and debtors, by
virtue of which, each of the creditors has a right
to demand, and each of the debtors is bound
to render compliance with his proportionate
part of the prestation which constitute the
object of the obligation (obligacion
mancomunada).
Joint creditor cannot act in representation of
the others, neither can a joint debtor be
compelled to answer for the liability of others.
Principal Effects of Joint Liability
(1) Demand by one creditor upon the
debtor, produces the effects of default
only with respect to the creditor who
demanded and the debtor on whom the
demand was made, but not with respect
to others.
(2) Interruption of prescription by the
judicial demand of one creditor upon a
debtor does not benefit the other
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CIVIL LAW
creditors nor interrupt the prescription
as to other debtors.
(3) Vices of each obligation arising from the
personal defect of a particular debtor or
creditor do not affect the obligation or
right of the others.
(4) Insolvency of a debtor does not increase
the responsibility of his co-debtors, nor
does it authorize a creditor to demand
anything from his co-debtors.
(5) Defense of res judicata is not extended
from one debtor to another.
Joint Indivisible Obligations
Art. 1209. If the division is impossible, the
right of the creditors may be prejudiced only
by their collective acts, and the debt can be
enforced only by proceeding against all the
debtors. If one of the latter should be
insolvent, the others shall not be liable for
his share.
When Indivisible [Art. 1225]
(1) Obligations to give definite things
(2) Obligations not susceptible of partial
performance
(3) Indivisibility is provided by law or
intended by the parties, even though
object or service may be physically
divisible
(4) In obligations not to do, when character
of prestation requires indivisibility
Plurality of Creditors—If one or some of the
creditors demands the prestation, the debtor
may legally refuse to deliver to them. He can
insist that all the creditors together receive the
thing, and if any of them refuses to join the
others, the debtor may deposit the thing in
court by way of consignation [Tolentino]
Plurality of Debtors—If there are two or more
debtors, the fulfillment of or compliance with
the obligation requires the concurrence of all
UP LAW BOC OBLIGATIONS CIVIL LAW

the debtors, although each for his own share Solidarity may exist although the creditors and
and for the enforcement of the obligation. the debtors may not be bound in the same
manner and by the same periods and
Failure of one debtor to perform in a joint conditions. [Art. 1211]
indivisible obligation gives rise to indemnity for
damages In a “joint” obligation, each obligor answers
Art. 1224. A joint indivisible obligation gives only for a part of the whole liability; in a
rise to indemnity for damages from the time “solidary” or “joint and several” obligation, the
anyone of the debtors does not comply with relationship between the active and the
his undertaking. The debtors who may have passive subjects is so close that each of them
been ready to fulfill their promises shall not
contribute to the indemnity beyond the must comply with or demand the fulfillment of
corresponding portion of the price of the the whole obligation. The fact that the liability
thing or of the value of the service in which sought against the CCC is for specific
the obligation consists. performance and tort, while that sought
against the individual respondents is based
Joint Divisible Joint Indivisible solely on tort does not negate the solidary
Obligations Obligations nature of their liability for tortuous acts alleged
In case of breach of In case of breach where in the counterclaims. [Lafarge Cement v
obligation by one of the one of the joint debtors
debtors, damages due fails to comply with his Continental Cement Corp, 2004]
must be borne by him undertaking, the
alone. obligation can no longer Distinguished from Indivisibility
be fulfilled or
Art. 1210. The indivisibility of an obligation
performed. Thus, the
action must be
does not necessarily give rise to solidarity.
converted into one for Nor does solidarity of itself imply
indemnity for damages. indivisibility.

Joint Indivisible Obligations and Prescription Solidarity Indivisibility

The act of a joint creditor which would Refers to the legal Refers to the
ordinarily interrupt the period of prescription tie (vinculum juris), prestation that is not
and consequently to capable of partial
would not have an effect on prescription the subjects or performance
because the indivisible character of the parties of the
obligation requires collective action of the obligation
creditors. More than one Exists even if there is
creditor or more only one creditor
B. SOLIDARY OBLIGATIONS than debtor and/or one debtor
(plurality of subjects)
An obligation where there is concurrence of Each creditor may Each creditor cannot
several creditors, or of several debtors, or of demand the entire demand more than
several creditors and several debtors, by virtue prestation and each his share and each
of which, each of the creditors has the right to debtor is bound to debtor is not bound
demand, and each of the debtors is bound to pay the entire to pay more than his
render, entire compliance with the prestation prestation share
Effect of breach: Effect of breach:
which constitutes the object of the obligation
Solidarity remains Obligation is
(obligacion solidaria). converted to
indemnity for
damages

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All debtors are liable Only the debtors
for breach guilty of breach of
committed by a co- obligation is liable
debtor for damages
All debtors are Other debtors are
proportionately not liable if one
liable for insolvency debtor is insolvent
of one debtor
Kinds of Solidary Obligations
As to Source
(1) Legal – imposed by law
(2) Conventional – agreed upon by parties
(3) Real – imposed by the nature of the
obligation
As to Parties Bound
(1) Active (solidarity among creditors) –
Each creditor has the authority to claim
and enforce the rights of all, with the
resulting obligation of paying everyone
of what belongs to him.
(2) Passive (solidarity among debtors) –
Each debtor can be made to answer for
the others, with the right on the part of
the debtor-payor to recover from the
others their respective shares.
(3) Mixed (solidarity among creditors and
debtors) – Solidarity is not destroyed by
the fact that the obligation of each
debtor is subject to different conditions
or periods. The creditor can commence
an action against anyone of the debtors
for the compliance with the entire
obligation minus the portion or share
which corresponds to the debtor affected
by the condition or period.
As to Uniformity
(1) Uniform – Parties are bound by the same
stipulation
(2) Non-uniform – Parties are bound by
different conditions or terms
Active Solidary Obligation
Art. 1214. The debtor may pay any one of the
solidary creditors; but if any demand,
judicial or extrajudicial, has been made by
one of them, payment should be made to
him.
A relationship of mutual agency is created
among co-creditors. But once one creditor
makes a demand for payment, the tacit
representation by the other creditors is
considered revoked.
The creditor who may have executed any
novation, compensation, confusion, or
remission of the debt, as well as he who
collects the debt, shall be liable to the others
for the share in the obligation corresponding to
them. [Art. 1215, par 2]
A solidary creditor cannot assign his rights
without the consent of the others [Art. 1213].
Such an assignment produces no effect
whatsoever [Tolentino].
Passive Solidary Obligation
Art. 1216. The creditor may proceed against
any one of the solidary debtors or some or
all of them simultaneously. The demand
made against one of them shall not be an
obstacle to those which may subsequently
be directed against the others, so long as
the debt has not been fully collected.
Art. 1217. Payment made by one of the
solidary debtors extinguishes the obligation.
If two or more solidary debtors offer to pay,
the creditor may choose which offer to
accept.
He who made the payment may claim from
his co-debtors only the share which
corresponds to each, with the interest for the
payment already made. If the payment is
made before the debt is due, no interest for
the intervening period may be demanded.
When one of the solidary debtors cannot,

207
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because of his insolvency, reimburse his A creditor’s right to The solidary debtor who
share to the debtor paying the obligation, proceed against the made the payment shall
such share shall be borne by all his co- surety exists have the right to claim
debtors, in proportion to the debt of each. independently of his from his co-debtors the
right to proceed against share which
the principal corresponds to them
Art. 1222. A solidary debtor may, in actions with interest, UNLESS
filed by the creditor, avail himself of all barred by prescription or
defenses which are derived from the nature illegality [Art. 1218].
of the obligation and of those which are
personal to him, or pertain to his own share. Art 2047 specifically calls for the application of
With respect to those which personally the provisions on solidary obligations to
belong to the others, he may avail himself suretyship contracts. In particular, Art 1217
thereof only as regards that part of the debt
for which the latter are responsible. recognizes the right of reimbursement from a
co-debtor (the principal co-debtor, in case of
A relationship of mutual guaranty is created suretyship) in favor of the one who paid (i.e.,
among co-debtors. the surety). In contrast, Art 1218 is definitive on
when reimbursement is unavailing, such that
The interruption of prescription as to one only those payments made after the obligation
debtor affects all the others; but the has prescribed or became illegal shall not
renunciation by one debtor of prescription entitle a solidary debtor to reimbursement.
already had does not prejudice the others. [Diamond Builders v Country Bankers, 2007]

Defenses Available to a Solidary Debtor [Art. Defenses inherent in an obligation include

1222] non-existence of the obligation because of
(1) Those derived from the nature of the absolute simulation or illicit object, nullity due
obligation to defect in capacity or consent of all debtors,
(2) Those personal to him unenforceability, non-performance of
(3) Those pertaining to his own share suspension condition or non-arrival of period,
(4) Those personally belonging to other co- extinguishment of the obligation, res judicata,
debtors but only as regards that part of and prescription.
the debt for which the latter are
responsible. Personal defenses such as minority, insanity,
fraud, violence, or intimidation will serve as a
Demand Upon a Solidary complete exemption of the defendant debtor
Payment by a Debtor
Debtor from liability to the creditor.
The demand made Full payment made by
against one of them one of the solidary
Debtors obligated themselves solidarily, so
shall not be an obstacle debtors extinguishes the
to those which may obligation [Art. 1217]. creditor can bring its action against any of
subsequently be them. Remission of any part of the debt, made
directed against the by the creditor in favor of one of the solidary
others so long as the
debt has not been fully
debtors, inures to the benefit of the rest of
collected [Art. 1216]. them. [Inchausti vs. Yulo, 1914]
The creditor may If two or more solidary
proceed against any one debtors offer to pay, the Loss of the thing or impossibility of
of the solidary debtors creditor may choose
or all simultaneously which offer to accept
performance of the passive/mixed solidary
[Art. 1216]. [Art. 1217]. obligation [Art. 1221]

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Without
The obligation shall be
fault of the
extinguished.
debtors
All debtors shall be responsible
With fault to the creditor, for the price and
of any of the payment of damages and
the interest, without prejudice to
debtors their action against the guilty or
negligent debtor.
Through a All debtors shall be responsible
fortuitous to the creditor, for the price and
event after the payment of damages and
one interest, without prejudice to
incurred in their action against the guilty or
delay negligent debtor.
Effects of Prejudicial and Beneficial Acts
Art. 1212. Each one of the solidary creditors may
do whatever may be useful to the others, but
not anything which may be prejudicial to the
latter.
If the judgment in an action brought by a
solidary creditor against a solidary debtor is
adverse to the former, such judgment may be
set-up against the other co-creditors In
subsequent actions, except if it is founded on a
cause personal to the plaintiff in the first action
[Tolentino].
Art. 1215. Novation, compensation, confusion or
remission of the debt, made by any of the
solidary creditors or with any of the solidary
debtors, shall extinguish the obligation,
without prejudice to the provisions of article
1219.
The creditor who may have executed any of
these acts, as well as he who collects the debt,
shall be liable to the others for the share in the
obligation corresponding to them.
Art. 1219. The remission made by the creditor of
the share which affects one of the solidary
debtors does not release the latter from his
responsibility towards the co-debtors, in case
the debt had been totally paid by anyone of
them before the remission was effected.
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CIVIL LAW
Art. 1220. The remission of the whole
obligation, obtained by one of the solidary
debtors, does not entitle him to
reimbursement from his co-debtors.
Each one of the solidary creditors may do
whatever may be useful or beneficial to the
others, but not anything which may be
prejudicial to the latter.
Where the creditor in a solidary obligation has,
by a subsequent instrument, covenanted with
some of the solidary debtors different periods
of payment and different conditions, the
solidarity stipulated in the original contract is
not destroyed [Inchausti v Yulo, 1914]
As far as the debtors are concerned, a
prejudicial act performed by a solidary creditor
is binding.
As between the solidary creditors, the creditor
who performed such act shall incur the
obligation of indemnifying the others for
damages.
V. EXTINGUISHMENT
OF OBLIGATIONS
Art. 1231. Obligations are extinguished:
(1) By payment or performance;
(2) By the loss of the thing due;
(3) By the condonation or remission of the
debt;
(4) By the confusion or merger of the rights
of creditor and debtor;
(5) By compensation;
(6) By novation.
Other causes of extinguishment of obligations,
such as annulment, rescission, fulfillment of a
resolutory condition, and prescription, are
governed elsewhere in this Code.
UP LAW BOC OBLIGATIONS
A. PAYMENT OR PERFORMANCE
Payment
(1) The delivery of money OR
(2) The performance of an obligation
[Art.1232]
Object of Payment
Principle of Integrity of Payment
Art. 1233. A debt shall not be understood to
have been paid unless the thing or service in
which the obligation consists has been
completely delivered or rendered, as the
case may be.
Article 1244. The debtor of a thing cannot
compel the creditor to receive a different
one, although the latter may be of the same
value as, or more valuable than that which is
due.
In obligations to do or not to do, an act or
forbearance cannot be substituted by
another act or forbearance against the
obligee's will. (1166a)
Exceptions to Art. 1244:
(1) If the obligation is facultative
(2) If the creditor agrees (dation in
payment)
Art. 1248. Unless there is an express stipulation
to that effect, the creditor cannot be compelled
partially to receive the prestations in which the
obligation consists. Neither may the debtor be
required to make partial payments.
However, when the debt is in part liquidated
and in part unliquidated, the creditor may
demand and the debtor may effect the
payment of the former without waiting for the
liquidation of the latter.
Art. 1235. When the obligee accepts the
performance, knowing its incompleteness or
irregularity, and without expressing any
protest or objection, the obligation is deemed
fully complied with.
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CIVIL LAW
By whom
Payor must have free disposal of the thing due
and capacity to alienate it. [Art. 1239]
(1) The debtor or his duly authorized agent
(2) The debtor’s heir or successor in interest
(3) Any person interested in the fulfillment of
the obligation (such as co-debtor,
guarantor) whether the debtor consents to
it or not, and even without debtor’s
knowledge [Art 1302]. This includes
payment by a joint debtor [Monte de
Piedad v Fernando Rodrigo, 1936] but not a
solidary co-debtor.
(4) A third person not interested in the
obligation; but the creditor is not bound to
accept payment by him, unless there is a
stipulation to the contrary [Art 1236].
Payment by a third person
Art. 1236. The creditor is not bound to accept
payment or performance by a third person
who has no interest in the fulfillment of the
obligation, unless there is a stipulation to
the contrary.
Whoever pays for another may demand from
the debtor what he has paid, except that if
he paid without the knowledge or against
the will of the debtor, he can recover only
insofar as the payment has been beneficial
to the debtor.
Art. 1237. Whoever pays on behalf of the
debtor without the knowledge or against the
will of the latter, cannot compel the creditor
to subrogate him in his rights, such as those
arising from a mortgage, guaranty, or
penalty.
Articles 1236 and 1237 merely lay down a
presumption. However, by virtue of the parties’
freedom to contract, the parties could stipulate
otherwise. But such mutual agreement, being
an exception to presumed course of events as
laid down by Articles 1236 and 1237, must be
adequately proven [Carandang v de Guzman,
2006].
UP LAW BOC OBLIGATIONS
Reimbursement & Subrogation Distinguished
Reimbursement Subrogation
Personal action to Includes
recover amount paid reimbursement, but
also the exercise of
other rights attached
to the original
obligation (e.g.
guaranties, securities)
Art. 1238. Payment made by a third person who
does not intend to be reimbursed by the debtor
is deemed to be a donation, which requires the
debtor's consent. But the payment is in any
case valid as to the creditor who has accepted
it.
To whom
(1) The person in whose favor the obligation
has been constituted; or
(2) His successor in interest; or
(3) Any person authorized to receive it [Art.
1240]
Payment to a person who is incapacitated to
administer his property shall be valid:
(1) if he has kept the thing delivered, OR
(2) insofar as the payment has been
beneficial to him. [Art. 1241 par 1]
Payment made in good faith to any person in
possession of the credit shall release the
debtor. [Art. 1242]
Payment made to the creditor by the debtor
after the latter has been judicially ordered to
retain the debt shall not be valid. [Art. 1243]
Payment to a third person [Art. 1241 par 2]
Payment made to a third person shall also be
valid insofar as it has redounded to the benefit
of the creditor.
That payment has redounded to the benefit of
the credit must be proved, except:
(1) If after the payment, the third person
acquires the creditor's rights;
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CIVIL LAW
(2) If the creditor ratifies the payment to the
third person;
(3) If by the creditor's conduct, the debtor
has been led to believe that the third
person had authority to receive the
payment. [Art. 1241]
Place of Payment
(1) In the place designated in the obligation.
(2) In the absence of stipulation—
a. If obligation is to deliver a determinate
thing: wherever the thing might be at
the moment the obligation was
constituted.
b. In any other case: Domicile of debtor
[Art. 1251]
Time of Payment
Upon demand, except-
(1) When time is of the essence
(2) When the debtor loses the benefit of the
period
(3) When the obligation is reciprocal
Form of Payment
Art. 1249. The payment of debts in money
shall be made in the currency stipulated,
and if it is not possible to deliver such
currency, then in the currency which is legal
tender in the Philippines.
The delivery of promissory notes payable to
order, or bills of exchange or other
mercantile documents shall produce the
effect of payment only when they have been
cashed, or when through the fault of the
creditor they have been impaired.
In the meantime, the action derived from the
original obligation shall be held in the
abeyance.
Extraordinary inflation or deflation
Art. 1250. In case an extraordinary inflation
or deflation of the currency stipulated
should supervene, the value of the currency
at
the time of the establishment of the
UP LAW BOC OBLIGATIONS
obligation shall be the basis of payment,
unless there is an agreement to the contrary.
For extraordinary inflation (or deflation) to
affect an obligation, the following requisites
must be proven:
(1) an official declaration of extraordinary
inflation or deflation from the BSP
(2) obligation was contractual in nature;
and
(3) parties expressly agreed to consider
the effects of the extraordinary
inflation or deflation [Equitable PCI
Bank v Ng Sheung, December 19 2007]
A.1 APPLICATION OF PAYMENTS
Designation of the debt to which should be
applied a payment made by a debtor who owes
several debts to the same creditor.
Requisites:
(1) There is a plurality of debts
(2) Debts are of the same kind
(3) Debts are owed to the same creditor and
by the same debtor
(4) All debts must be due, UNLESS parties
so stipulate, or when application is made
by the party for whose benefit the term
has been constituted
(5) Payment made is not sufficient to cover
all debts [Art. 1252]
Rules on Application
(1) Preferential right of debtor - debtor has
the right to select which of his debts he
is paying.
(2) The debtor makes the designation at the
time he makes the payment.
(3) If not, the creditor makes the
application, by so stating in the receipt
that he issues, unless there is cause for
invalidating the contract.
(4) If neither the creditor nor debtor
exercises the right to apply, or if the
application is not valid, the application is
made by operation of law.
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CIVIL LAW
(5) If debt produces interest, the payment is
not to be applied to the principal unless
the interests are covered.
(6) When no application can be inferred
from the circumstances of payment, it is
applied: (a) to the most onerous debt of
the debtor; or (b) if debts due are of the
same nature and burden, to all the debts
in proportion
(7) Rules of application of payment may not
be invoked by a surety or solidary
guarantor.
Rules on application of payment cannot be
made applicable to a person whose obligation
as a mere surety is both contingent and
singular. There must be full and faithful
compliance with the terms of the contract.
[Reparations Commission vs. Universal Deep
Sea Fishing Corp, 1978]
The debtor’s right to apply payment can be
waived and even granted to the creditor if the
debtor so agrees (Premiere Development v
Central Surety, 2009).
A.2. DATION IN PAYMENT
Delivery and transmission of ownership of a
thing by the debtor to the creditor as an
accepted equivalent of the performance of the
obligation (dacionenpago).
Requisites:
(1) Existence of a money obligation
(2) Alienation to the creditor of a property
by the debtor with the creditor’s consent
(3) Satisfaction of the money obligation
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
UP LAW BOC OBLIGATIONS CIVIL LAW

totally extinguished [Tan Shuy v Spouses A.3. TENDER OF PAYMENT AND

Maulawin, 2012]. CONSIGNATION

A.3. PAYMENT BY CESSION Tender of payment: Manifestation made by the

Special form of payment where the debtor
assigns/abandons ALL his property for the
benefit of his creditors in order that from the
proceeds thereof, the latter may obtain
payment of their credits.
debtor to the creditor of his desire to comply
with his obligation, with offer of immediate
performance.
(1) Preparatory act to consignation
(2) Extrajudicial in character

Requisites: Consignation: Deposit of the object of

(1) There is a plurality of debts obligation in a competent court in accordance
(2) There is a plurality of creditors with the rules prescribed by law whenever the
(3) Partial or relative insolvency of debtor creditor unjustly refuses payment or because of
(4) Acceptance of the cession by the creditors some circumstances which render direct
[Art. 1255] payment to the creditor impossible or
inadvisable.
Debtor is released only for the net proceeds (1) Principal act which constitutes a form
unless there is a stipulation to the contrary. of payment
(2) Judicial in character
Cession and Distinguished
Cession Dacion en pago Requisites of consignation
Plurality of creditors One creditor (1) There is a debt due
Debtor must be Debtor not (2) Consignation is made because of some
partially or relatively necessarily in state legal cause
insolvent of financial difficulty
a. There was tender of payment and
Universality of Thing delivered is
property is ceded equivalent of creditor refuses without just cause
performance to accept it
Merely releases Extinguishes b. Instances when consignation alone
debtor for the net obligation to the would suffice as provided under Art.
proceeds of things extent of the value 1256
ceded or assigned, of the thing (3) Previous notice of consignation was
unless there is delivered, as agreed
contrary intention upon, proved or given to those persons interested in the
implied from the performance of the obligation
conduct of the (4) Amount or thing due was placed at the
creditor disposal of the court
Involves all Does not involve all (5) After the consignation has been made,
properties of debtor properties of debtor the persons interested were notified
Creditor does not Creditor becomes thereof
become owner of the owner
ceded property
When Tender and Refusal Not Required [Art.
1256]
(1) Creditor is absent or unknown, or does
not appear at the place of payment.

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(2) Creditor is incapacitated to receive the
thing due at the time of payment.
(3) Without just cause, creditor refuses to
give receipt.
(4) Two or more persons claim the same
right to collect.
(5) Title of the obligation has been lost.
What constitutes valid consignation
In order that the consignation of the thing due
may release the obligor, it must first be
announced to the persons interested in the
fulfilment of the obligation.
The consignation shall be ineffectual if it is not
made strictly in consonance with the provisions
which regulate payment. (Art. 1257)
How consignation is made
Consignation shall be made by depositing the
things due at the disposal of judicial authority,
before whom the tender of payment shall be
proved, in a proper case, and the
announcement of the consignation in other
cases.
The consignation having been made, the
interested parties shall also be notified thereof.
Who bears the expenses
The expenses of consignation, when properly
made, shall be charged against the creditor.
[Art. 1259]
Withdrawal of Consigned Amount
Before the creditor has accepted the
consignation, or before a judicial declaration
that the consignation has been properly made,
the debtor may withdraw the thing or the sum
deposited, allowing the obligation to remain in
force [Art. 1260, par 2].
The amount consigned with the trial court can
no longer be withdrawn by the debtor because
creditor’s prayer in his answer that the amount
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CIVIL LAW
consigned be awarded to him is equivalent to
an acceptance of the consignation, which has
the effect of extinguishing debtor’s obligation
[Pabugais v Sahijwani, 2004].
Effects of Consignation
If accepted by the creditor or declared properly
made by the Court:
(1) Debtor is released in same manner as if
he had performed the obligation at the
time of consignation
(2) Accrual of interest is suspended from the
moment of consignation.
(3) Deterioration or loss of the thing or
amount consigned, occurring without
the fault of debtor, must be borne by
creditor from the moment of deposit
Any increment or increase in the value of the
thing after consignation inures to the benefit of
the creditor
Unless there is an unjust refusal by a creditor
to accept payment from a debtor, Article 1256
cannot apply. The possession of the property
by the petitioners being by mere tolerance as
they failed to establish the existence of any
contractual relations between them and the
respondent, the bank deposit made by the
petitioners intended as consignation has no
legal effect [Llobrera v Fernandez, May 2,
2006].
Effects of Withdrawal by Debtor [Arts. 1260-
1261]
(1) Before approval of the court - Obligation
remains in force.
(2) After approval of the court or acceptance
by the creditor, with the consent of the
latter - Obligation remains in force, but
guarantors and co-debtors are liberated.
Preference of the creditor over the thing
is lost.
(3) After approval of the court or acceptance
by the creditor, and without creditor’s
consent - Obligation subsists, without
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change in the liability of guarantors and (4) Fault or negligence concurs with the
co-debtors, or the creditor’s right of fortuitous event.
preference. (5) Loss occurs after delay.
(6) Debtor has promised to deliver the same
B. LOSS OF THE THING DUE OR thing to two or more different parties.
IMPOSSIBILITY OR DIFFICULTY OF (7) Obligation arises from a criminal act.
(8) Borrower in commodatum: saves his
PERFORMANCE
own things and not the thing of the
creditor during a fortuitous event.
Loss
A thing is lost when it perishes, goes out of
Loss of the thing when in possession of the
commerce or disappears in such a way that its
debtor
existence is unknown or it cannot be recovered
Loss was due to the debtor’s fault. Burden of
[Art. 1189, no. 2]
explaining the loss of the thing falls upon him,
UNLESS due to an earthquake, flood, storm, or
Effects of Loss [Arts. 1262-1263]
other natural calamity [Art. 1265].
Obligation to Deliver a Obligation to Deliver a
Specific Thing Generic Thing
XXXVIII. Obligation XL. is Loss of a generic thing In Reciprocal Obligations
extinguished if the thing does not extinguish an Extinguishment of the obligation due to loss of
was destroyed without obligation, EXCEPT in the thing or impossibility of performance
fault of the debtor and case of delimited
before he has incurred generic things, where affects both the creditor and debtor; the entire
delay. the kind or class is juridical relation is extinguished.
XXXIX. limited itself, and the
whole class perishes. Partial loss
Art. 1264. The courts shall determine whether,
An obligation to pay money is generic;
under the circumstances, the partial loss of the
therefore, it is not excused by fortuitous loss of
object of the obligation is so important as to
any specific property of the debtor [Gaisano v
extinguish the obligation.
Insurance Company, 2006].

Actions Against Third Persons
Article 1269. The obligation having been
extinguished by the loss of the thing, the
creditor shall have all the rights of action
which the debtor may have against third
persons by reason of the loss. (1186)
Other cases where loss is attributed to debtor
(1) Law provides that the debtor shall be
liable even if the loss is due to fortuitous
events [Arts. 1942, 1979, 2147, 2159].
(2) Obligor is made liable by express
stipulation.
(3) Nature of the obligation requires an
assumption of risk.
Partial loss due to a fortuitous event does not
extinguish the obligation. The thing due shall
be delivered in its present condition, without
any liability on the part of the debtor, UNLESS
the obligation is extinguished when the part
lost was of such extent as to make the thing
useless.
Impossibility of Performance
[Arts. 1266-1267]
When prestation becomes legally or physically
impossible (by fortuitous event or force
majeure), the debtor is released.

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Impossibility must have occurred without fault
of debtor, and after the obligation has been
constituted.
Subjective impossibility
Where there is no physical or legal loss, but the
thing belongs to another, the performance by
the debtor becomes impossible. The debtor
must indemnify the creditor for damages.
Partial Impossibility
Courts shall determine whether it is so
important as to extinguish the obligation.
(1) If debtor has performed part of the
obligation when impossibility occurred,
creditor must pay the part done as long
as he benefits from it.
(2) If debtor received full payment from
creditor, he must return excess amount
corresponding to part which was
impossible to perform.
Doctrine of Unforeseen Events
Art. 1267. When the service has become so
difficult as to be manifestly beyond the
contemplation of all the parties, the obligor
may also be released therefrom, in whole or in
part.
C. CONDONATION
Condonation or Remission of the Debt
An act of liberality, by virtue of which, without
receiving any equivalent, the creditor
renounces the enforcement of the obligation.
The obligation is extinguished either in whole
or in such part of the same to which remission
refers.
Requisites:
(1) Debt must be existing and demandable.
(2) Renunciation must be gratuitous;
without any consideration.
(3) Debtor must accept the remission. [Art.
1270]
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CIVIL LAW
If the renunciation is not gratuitous, the nature
of the act changes and it may be:
(1) dation in payment – when the creditor
receives a thing different from that
stipulated;
(2) novation – when the object or principal
conditions of the obligation have
changed;
(3) compromise – when the matter
renounced is in litigation or dispute and
in exchange of some concession which
the creditor receives.
Although the debtor must accept the
remission, nothing prevents the creditor from
making a unilateral declaration of his right,
abandoning and thereby extinguishing his
credit, as expressly allowed by Art 6, CC.
Kinds of Condonation:
A. As to extent
1. Total – extinguishes the entire
obligation.
2. Partial – refers to only a particular
aspect of the obligation, e.g. to the
amount of indebtedness or to an
accessory obligation only.
B. As to Form
Art. 1270. Condonation or remission is
essentially gratuitous, and requires the
acceptance by the obligor. It may be made
expressly or impliedly.
One and the other kind shall be subject
to the rules which govern inofficious donations.
Express condonation shall, furthermore,
comply with the forms of donation.
1. Express Condonation
Made formally; in accordance with
forms of ordinary donations. (Art. 1270)
An express remission must be
accepted in order to be effective.
When the debt refers to movable or
personal property, Art 748 will govern;
UP LAW BOC OBLIGATIONS CIVIL LAW

if it refers to immovable or real (1) In general

property, Art 749 applies. Art. 1275. The obligation is extinguished from
2. Implied Condonation the time the characters of the debtor and
Inferred from the acts of the parties. creditor are merged in the same person.

Presumptions of Condonation:
(2) In case of joint or solidary obligations
(1) Whenever the private document in which
Confusion in Confusion in
the debt is found is in the possession of Joint Obligation Solidary Obligation
the debtor, it shall be presumed that the Extinguishes the Extinguishes the
creditor delivered it voluntarily, unless share of the person in entire obligation, but
the contrary is proved. [Art. 1272] whom the two the other debtors may
(2) Delivery of a private document characters concur (Art be liable for
evidencing credit made voluntarily by 1277) reimbursement if
the creditor to the debtor implies the payment was made
prior to remission.
renunciation of the action of creditor
against the latter. [Art. 1272]
Obligation is not extinguished when confusion
(3) Accessory obligation of pledge has been
takes place in the person of subsidiary debtor
remitted when thing after its delivery is
(e.g. guarantor), but merger in the person of
found in the possession of the debtor or
the principal debtor shall benefit the former.
third person. [Art. 1274]
Note: Where, however, the mortgagee acquires
ownership of the entire mortgaged property,
Effect
the mortgage is extinguished; but this does not
Art. 1273. Renunciation of the principal debt necessarily mean the extinguishment of the
shall extinguish the accessory obligations, but obligation secured thereby, which may become
remission of the latter leaves the principal an unsecured obligation.
obligation in force.
E. COMPENSATION
D. CONFUSION OR MERGER OF Compensation: Offsetting of two obligations
RIGHTS which are reciprocally extinguished if they are
of the same value, or extinguished to the
Confusion: The meeting in one person of the concurrent amount if of different values.
qualities of creditor and debtor of the same
obligation. Requisites [Art. 1279]
(1) Each obligor is bound principally, and at
Requisites the same time a principal creditor of the
(1) It should take place between principal other
debtor and creditor. (Art 1276) (2) Both debts must consist in a sum of
(2) The very same obligation must be money, or if the things due are
involved; FUNGIBLE, of the same kind & quality
(3) The confusion must be total, i.e. as Note: The term ‘consumable’ is
regards the whole obligation. erroneously used in Art 1279. The
appropriate term is ‘fungible’.
Effects (3) Both debts are due

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(4) Debts are liquidated and demandable Compensation Payment

(5) There must be no retention or Capacity to dispose Requires capacity to
controversy over either of the debts, and receive the thing dispose of the thing
commenced by third persons and is unnecessary since paid and capacity to
compensation receive
communicated in due time to the debtor
operates by law
(6) Compensation is not prohibited by law May be partial Must be total
performance
To warrant the application of set off under
Article 1278 of the Civil Code, the debtor’s Compensation Counterclaim
admission of his obligation must be clear and Takes place by Must be pleaded to be
categorical and not one which merely arise by operation of law effectual
inference or implication from the customary
execution of official documents in assuming Kinds of Compensation
the responsibilities of a predecessor [Bangko As to extent
Sentral v COA, 2006]. (1) Total – when two debts are of the
same amount (Art. 1281)
Effects (2) Partial
(1) Both debts are extinguished to the
concurrent amount, even though the As to cause
creditors and debtors are not aware of (1) Legal
the compensation. (2) Voluntary
(2) Accessory obligations are also (3) Judicial
extinguished. (4) Facultative

Effects rise from the moment all the requisites (1) Legal Compensation – takes place by
concur. operation of law from the moment all
requisites are present.
Debtor claiming its benefits must prove Since it takes place ipso jure, when used as a
compensation; once proven, effects retroact defense, it retroacts to the date when all its
from the moment when the requisites requisites are fulfilled.
concurred.
Art. 1290. When all the requisites mentioned
Compensation Distinguished from Other Modes in article 1279 are present, compensation
takes effect by operation of law, and
of Extinguishment
extinguishes both debts to the concurrent
Compensation Confusion amount, even though the creditors and
debtors are not aware of the compensation.
There must always be Involves only one
two obligations. obligation.
Legal compensation may apply to:
There are two persons There is only one person i. Awards of attorney’s fees, against the
who are mutually whom the characters of litigant and not his lawyer [Gan Tion v
debtors and creditors of the creditor and debtor
each other in two meet. CA, 1969]
separate obligations, ii. Bank deposits, against the accounts of a
each arising from the depositor whose checks were
same cause.
dishonoured [BPI v CA, 1996]

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Note: While a bank generally has a right

of set-off over deposits for the payment Art. 1283. If one of the parties to a suit over
of any withdrawals on the part of a an obligation has a claim for damages
creditor, the question of whether the against the other, the former may set it off
remedy is properly exercised is a by proving his right to said damages and the
amount thereof.
separate matter and depends on the
bank’s role as the depository bank and
(4) Facultative Compensation - When it can be
as collecting agent for the check. The
claimed by one of the parties who,
depositary bank must have acted with
however, has the right to object to it.
the highest degree of care, otherwise it
- Compensation which can only be set up
may not exercise such right of setoff.
at the option of a creditor, when legal
[Associated Bank v Tan, 2004]
compensation cannot take place because
some legal requisites in favor of the
Respondent owed petitioner P566,000. Later
creditor are lacking. Creditor may renounce
on, respondent sold a car to petitioner for
his right to compensation, and he himself
P500,000. The claim of respondent that there
may set it up. As opposed to conventional
could be no legal compensation as one of the
compensation, facultative compensation is
obligations consists of delivery of a car and not
unilateral and does not depend upon the
a sum of money must fail. As legal
agreement of the parties.
compensation takes place ipso jure, and
retroacts to the date when its requisites are
Obligations which cannot be compensated
fulfilled, legal compensation has already taken
[Arts. 1287-1288]
place at the time of the sale [Trinidad v
(1) Contracts of depositum
Acapulco, 2006].
(2) Contracts of commodatum
(3) Future support due by gratuitous title
(2) Voluntary Compensation – takes place
(4) Civil liability arising from a penal offense
when parties who are mutually creditors
(5) Obligations due to the government
and debtors of each other agree to
(6) Damage caused to the partnership by a
compensate their respective obligations
partner
even though one of the requisites of
compensation may be lacking
Right of a Guarantor
A guarantor may set up compensation as
Art. 1282. The parties may agree upon the regards what the creditor may owe the
compensation of debts which are not yet
due. principal debtor. [Art. 1280]

The only requisites of conventional Effect of Assignment of Rights by the Creditor

compensation are (1) that each of the parties to a Third Person [Art. 1285]
can dispose of the credit he seeks to Debtor cannot set up against
compensate, and (2) that they agree to the assignee compensation
With
pertaining to him against
mutual extinguishment of their credits [United debtor’s
assignor UNLESS he reserved
Planters v CA, 2009]. consent
such right at the time he gave
his consent
(3) Judicial Compensation – takes place by With Debtor may set up
judicial decree debtor’s compensation of debts previous
knowledge to the assignment but not of

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but subsequent ones stipulated. be claimed only the former

without by the debtor, relations shall
consent or when be extinguished
Debtor may set up ratification in any event
validates acts [Art. 1297]
Without compensation of all credits that are 1. New
debtor’s prior and also later to the voidable [Art. obligation void:
knowledge assignment until he had 1298] No novation
knowledge of the assignment 1. Original 2. New
obligation is obligation
F. NOVATION void: No voidable:
novation Novation is
2. Original effective
Novation obligation
Extinguishment of an obligation by the voidable:
Effective if
substitution or change of the obligation by a contract is
subsequent one which extinguishes or modifies ratified before
the first either by changing the object or novation.
principal conditions, or by substituting the
person of the debtor, or by subrogating a third Accessory obligations are also extinguished,
person in the rights of the creditor. but may subsist only insofar as they may
Unlike other modes of extinguishment, it is a benefit third persons who did not give their
juridical act of dual function—it extinguishes consent to the novation OR those who may be
an obligation, and at the same time, it creates affected, upon agreement between the parties.
a new one in lieu of the old. It operates as a
relative, not an absolute, extinction. Original or new obligation with suspensive or
resolutory condition
Requisites Art. 1299. If original obligation was subject to a
(1) A previous valid obligation suspensive or resolutory condition, the new
(2) Agreement of all the parties to the new obligation shall be under the same condition,
obligation unless it is otherwise stipulated.
(3) Animus novandi or intent to novate
(4) Substantial difference between old and Compatible Conditions Incompatible Conditions
new obligations and, consequently, (a) Fulfillment of both (a) Original obligation is
conditions: new extinguished, while
extinguishment of the old obligation
obligation becomes new obligation exists
(5) Validity of the new obligation demandable
(b) Fulfillment of (b) Demandability shall
condition concerning be subject to
the original fulfillment/
obligation: old nonfulfillment of the
obligation is revived; condition affecting it
Effect new obligation loses
If Original If New force
In General Obligation is Obligation is (c) Fulfillment of
Void Void condition concerning
Old Novation is void New obligation the new obligation:
obligation is if the original is void, the old no novation;
extinguished obligation was obligation requisite of a
and replaced void, except subsists, unless previous valid and
by the new when the parties effective obligation
one annulment may intended that lacking

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retained, unless
Kinds of Novation waived by the debtor.
As to form
(1) Express – declared in an unequivocal As to essence or object
terms (1) Objective/ Real
(2) Implied – the old and new obligations (2) Subjective/ Personal
are on every point incompatible with a. Substitution of debtors
each other i. Expromision
ii. Delegacion
Novation is not presumed b. Subrogation of a third person to the
In the absence of an unequivocal declaration of rights of the creditor
extinguishment of the pre-existing obligation, i. Conventional
only proof of incompatibility between the old ii. Legal
and new obligation would warrant a novation
by implication. [California Bus Line vs. State (1) Objective Novation
Investment, 2003] a. Change of the subject matter
b. Change of cause or consideration
Test of Incompatibility c. Change of the principal conditions or
Whether or not the old and new obligation can terms
stand together, each one having an
independent existence. No incompatibility (2) Subjective Novation
exists when they can stand together. Hence, a. Substitution of debtors
there is no novation. Incompatibility exists
when they cannot stand together. Hence, there Expromision Delegacion
Initiative for change does Debtor (delegante)
is novation. not emanate from the offers or initiates the
debtor, and may even be change, and the
For there to be implied novation, the changes made without his creditor (delegatorio)
must be essential, i.e. referring to the object, knowledge. accepts a third person
(delegado) as
cause, or principal conditions of the obligation. consenting to the
substitution.
As to effect Requisites
(1) Total (1) Consent of the Consent of old debtor,
creditor and the new new debtor, and
(2) Partial debtor creditor
(2) Knowledge or XLII.
Total Partial consent of the old
(1) Transfers to the person A creditor, to whom debtor is not required
subrogated the credit partial payment has
with all the rights been made, may
thereto appertaining, exercise his right for Effects
either against the the remainder, and (1) Old debtor is released (1) Insolvency of the
debtor or third shall be preferred to (2) Insolvency of the new new debtor revives
persons. the person debtor does not the obligation of the
(2) Obligation is not subrogated in his revive the old old debtor if it was
extinguished, even if place in virtue of the obligation in case the anterior and public,
the intention is to pay partial payment. old debtor did not and known to the old
it. XLI. agree to expromision debtor.
(3) Defenses against the (3) If with knowledge (2) New debtor can
old creditor are and consent of old demand

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debtor, new debtor reimbursement of Extinguishes an Refers to the same right

can demand the entire amount he obligation and gives which passes from one
reimbursement of the has paid from the rise to a new one. person to another, without
entire amount paid original debtor. He modifying or extinguishing
and with subrogation may compel creditor the obligation.
of creditor’s rights. to subrogate him to Defects/vices in the Defects/vices in the old
(4) If without knowledge all of his rights. old obligation are obligation are not cured.
of the old debtor, new XLIII. cured.
debtor can demand
reimbursement only ii. Legal Subrogation – takes place by
up to the extent that
the latter has been operation of law
benefited without
subrogation of Legal subrogation is not presumed, except in
creditor’s rights.
the following circumstances:
(1) When creditor pays another creditor who
For subjective novation, it is insufficient that
is preferred, even without the debtor’s
the juridical relation between the parties to the
knowledge
original contract is extended to a third person.
(2) When a third person not interested in the
If the old debtor is not released, no novation
obligation pays with the express or tacit
occurs and the third person who has assumed
approval of the debtor
the debtor’s obligation becomes merely a co-
(3) When, even without the knowledge of
debtor or surety or co-surety. [Conchinyan, Jr. v.
the debtor, a person interested in the
R&B Surety and Insurance Company, 1987]
fulfillment of the obligation pays,
without prejudice to the effects of
An accessory surety may not be released if he
confusion as to the latter’s share (Art.
expressly waives his discharge from the
1302)
obligation in case of change or novation in the
original agreement [Molino v Security Diners
International Corp, 2001].

b. Subrogation
Transfers to the person subrogated the credit
with all the rights thereto appertaining, either
against the debtor or against third persons, be
they guarantors or possessors of mortgages,
subject to stipulation in a conventional
subrogation. [Art. 1303]

i. Conventional Subrogation – takes place by

agreement of parties

Difference between Conventional Subrogation

and Assignment of Credit [Licaros v Gatmaitan,
2001]
Conventional
Assignment of credit
subrogation
Debtor’s consent is Debtor’s consent is not
necessary. required.

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CIVIL LAW
CONTRACTS

223
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I. GENERAL
PROVISIONS
Contract - A contract is a meeting of the minds
between two persons whereby one binds
himself, with respect to the other, to give
something or to render some service [Article
1305]
A. PRINCIPAL CHARACTERISTICS OF
CONTRACTS (MARCO)
A. 1. MUTUALITY
Art. 1308. The contract must bind both
contracting parties; its validity or
compliance cannot be left to the will of one
of them.
General rule: Any contract which appears to be
heavily weighed in favor of one of the parties or
is left solely to the will of one of the parties is
void [Floirendo v Metrobank, 2007].
Exception: The legality of contracts which is
left to the will of either of the parties may be
upheld if there was a finding of the presence of
essential equality of the parties to the
contracts, thus preventing the perpetration of
injustice on the weaker party [GF Equity v
Valenzona, 2005]
A contract may expressly confer upon one
party the right to cancel the contract because
the exercise of that right is a fulfillment of the
provisions of the contract itself [Taylor v Uy
Tieng Pao, 1922]
The determination of the performance may be
left to a third party as long as:
(1) The decision has been made known to
both contracting parties [Article 1309]
(2) The determination is not evidently
inequitable [Article 1310]. If it is
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CIVIL LAW
inequitable, the court shall decide
what is equitable under the
circumstances.
A.2. AUTONOMY (also Freedom to
Contract)
Art. 1306. The contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient,
provided they are not contrary to law, morals,
good customs, public order, or public policy.
Gateway v Land Bank, 2003: Contracting
parties may establish any agreement, term,
and condition they may deem advisable,
provided they are not contrary to law, morals
or public policy. The right to enter into lawful
contracts constitutes one of the liberties
guaranteed by the Constitution. It cannot be
struck down or arbitrarily interfered with
without violating the freedom to enter into
lawful contracts.
It is necessary for the existence of a contract
that two distinct parties enter into it (auto-
contracts).
 The existence of a contract is not
determined by the number of persons who
intervene in it, but by the number of
parties; not by the number of individual
wills but by the number of declarations of
will.
 As long as there are two distinct
patrimonies, even if they are represented
by the same person, the contract will be
valid; e.g. an agent representing both the
buyer and the seller.
Special disqualifications in freedom to contract
Article 87, Family Code: Every donation or grant
of gratuitous advantage, direct or indirect,
between the spouses during the marriage shall
be void, except moderate gifts which the
UP LAW BOC CONTRACTS
spouses may give each other on the occasion of
any family rejoicing. The prohibition shall also
apply to persons living together as husband
and wife without a valid marriage.
Article 1490, Civil Code: The husband and the
wife cannot sell property to each other, except:
(1) When a separation of property was agreed
upon in the marriage settlements; or (2) When
there has been a judicial separation of property
under Article 191.
Article 1491, Civil Code: The following persons
cannot acquire by purchase, even at a public or
judicial auction, either in person or through the
mediation of another:
(1) The guardian, the property of the person
or persons who may be under his
guardianship;
(2) Agents, the property whose
administration or sale may have been
entrusted to them, unless the consent of
the principal has been given;
(3) Executors and administrators, the
property of the estate under
administration;
(4) Public officers and employees, the
property of the State or of any subdivision
thereof, or of any government-owned or
controlled corporation, or institution, the
administration of which has been
entrusted to them; this provision shall
apply to judges and government experts
who, in any manner whatsoever, take
part in the sale;
(5) Justices, judges, prosecuting attorneys,
clerks of superior and inferior courts, and
other officers and employees connected
with the administration of justice, the
property and rights in litigation or levied
upon an execution before the court
within whose jurisdiction or territory they
exercise their respective functions; this
prohibition includes the act of acquiring
by assignment and shall apply to
lawyers, with respect to the property and
rights which may be the object of any
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litigation in which they may take part by
virtue of their profession.
(6) Any others specially disqualified by law.
Article 1782, Civil Code: Persons who are
prohibited from giving each other any donation
or advantage cannot enter into universal
partnership
Limitations to stipulations/what not to
stipulate:
1. Contrary to Law
Pactum commisorium – automatic foreclosure
Article 2088, Civil Code: The creditor cannot
appropriate the things given by way of pledge
or mortgage, or dispose of them. Any
stipulation to the contrary is null and void.
Pactum leonina – one party bears the lion’s
share of the risk
Article 1799, Civil Code: A stipulation which
excludes one or more partners from any share
in the profits or losses is void.
Pactum de non alienundo – a stipulation not to
alienate
Article 2130, Civil Code: A stipulation forbidding
the owner from alienating the immovable
mortgaged shall be void.
2. Contrary to morals
3.Contrary to good customs
4. Contrary to public order
5. Contrary to public policy
Public policy is the principle under which
freedom of contract or private dealing is
restricted by law for the good of the public. In
determining whether a contract is contrary to
public policy, the nature of the subject matter
determines the source from which such
question is to be solved [Ferrazzinni v Gsell,
1916]
A contract which is neither prohibited by law
nor condemned by judicial decision, nor
contrary to public morals, contravenes no
UP LAW BOC CONTRACTS
public policy. In the absence of express
legislation or constitutional prohibition, a
court, in order to declare a contract void as
against public policy, must find that the
contract as to the consideration or thing to be
done, has a tendency to injure the public, is
against the public good, or contravenes some
established interests of society, or is
inconsistent with sound policy and good
morals, or tends clearly to undermine the
security of individual rights, whether of
personal liability or of private property [Gabriel
v Monte de Piedad, 1941]
A.3. RELATIVITY
Article 1311, para.1. Contracts take effect only
between parties, their assigns and heirs,
EXCEPT in case where the rights and
obligations arising from the contract are not
transmissible by their (1) nature, (2) by
stipulation, or (3) by provision of law. The
heir is not liable beyond the value of the
property he received from the decedent
Article 1317. No one may contract in the name
of another without being authorized by the
latter, or unless he has by law a right to
represent him.
A contract entered into in the name of
another by one who has no authority or legal
representation or who has acted beyond his
powers, shall be unenforceable, unless it is
ratified expressly or impliedly by the person
on whose behalf it has been executed,
before it is revoked by the other contracting
party
Exceptions to Relativity (Contracts may bind
and affect strangers in the ff. cases):
1. Stipulations Pour Autrui [Article 1311, par.2]
If a contract should contain some
stipulation in favor of a third person, he
may demand its fulfillment, provided:
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CIVIL LAW
i. He communicated his acceptance to
the obligor before its revocation (by the
original parties)
ii. The contracting parties must have
clearly and deliberately conferred a
favor upon the third person (A mere
incidental benefit or interest of a
person is not sufficient).
iii. The stipulation favoring the third
person is only a part of the contract
iv. No relation of agency exists between
any of the parties and the third person
favored
Florentino v Encarnacion, (1977):
i. Contracts to perform personal acts
which cannot be as well performed by
others are discharged by the death of the
promissor. Conversely, where the service
or act is of such a character that it may
as well be performed by another, or
where the contract, by its terms, shows
that performance by others was
contemplated, death does not terminate
the contract or excuse nonperformance.
ii. In this case the stipulation is a
stipulation pour autrui because the true
intent of the parties is to confer a direct
and material benefit upon a third party.
Accion directa –the creditor is authorized by
the statute to sue on his debtor’s contract
(J.B.L Reyes) e.g.
Lessor v Sublessee [Article 1651, 1652]
Laborers of Contractor v Owner of the work
(Article 1729)
2. Third Person in Possession of Object of
Contract [Article 1312]
In contracts creating real rights, third
persons who come into possession of the
object of the contract are bound thereby,
subject to the provisions of the Mortgage
Law and the Land Registration Laws.
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3. Fraud of Creditors by Contracting Parties A.4. CONSENSUAL

[Article 1313] Article 1315. Contracts are perfected by mere
“Creditors are protected in cases of consent and from that moment, the parties
contracts intended to defraud them.” are bound not only to the fulfillment of what
has been expressly stipulated but also to al
Creditors of the contracting parties may consequences which according to their
rescind contracts intended to defraud them nature may be keeping in good faith, usage,
although they did not intervene therein and law.
(J.B.L. Reyes).
Exceptions: Real contracts, such as deposit,
4. Tortious Interference [Article 1314] pledge and commodatum, are not perfected
Any third person who induces another to until the delivery of the object of the obligation
violate his contract shall be liable for [Article 1316]
damages to the other contracting party
(even though the third person is not bound A.5. OBLIGATORY FORCE
by the stipulations). Article 1159. Obligations arising from
contracts have the force of law between the
Requisites: contracting parties and should be complied
i. Existence of a valid contract with in good faith.
ii. Knowledge of the third person of the
existence of the contract Article 1308. The contract must bind both
iii. Interference by third person without contracting parties; its validity or
legal justification or excuse compliance cannot be left to the will of one
of them
Daywalt v Corp. de PP. Agustinos Recoletos
(1919): The liability of the third person in good
Article 1315. Contracts are perfected by mere
faith cannot exceed the liability of the party to
consent and from that moment, the parties
the contract in whose behalf the third person
are bound not only to the fulfillment of what
intermeddles.
has been expressly stipulated but also to all
consequences which according to their
Lagon v CA (2005):
nature may be keeping in good faith, usage,
(1) The word "induce" refers to situations
and law
where a person causes another to choose
one course of conduct by persuasion or
intimidation.
B. ELEMENTS OF CONTRACTS
(2) Knowledge alone is not sufficient to make 1) Essential – those without which there
a third person liable for tortuous is no contract
Consensual Real Solemn
interference. To sustain a case for
(ordinary) (formal)
tortuous interference, the defendant must
Consent
have acted with malice or must have been Essential
Object
driven by purely impious reasons to injure Elements
Cause
the plaintiff. Delivery of
Formality
Additional the thing
- prescribed
Elements to be
by law
returned

227
UP LAW BOC CONTRACTS
2) Natural – those which are derived from
the nature of the contract and
ordinarily accompany the sane; they
are presumed to exist unless the
contrary is stipulated
3) Accidental – those which exist only if
stipulated
C. CLASSIFICATION OF CONTRACTS
(1) To their subject matter
a. Things, e.g. sale, deposit
b. Services, e.g. agency
(2) To formation (CRS)
a. Consensual – consent is sufficient to
perfect the contract [Art. 1315]
b. Real – delivery, actual or constructive,
is required in addition to consent [Art.
1316]
c. Solemn or formal – where special
formalities are required for perfection
[Art. 1356]
(3) To relation to other contracts (PAP)
a. Principal – may exist alone; e.g. lease
b. Accessory – depends on another
contract for its existence, e.g. guaranty
c. Preparatory – a preliminary step
towards the celebration of a
subsequent contract; e.g. agency
(4) To form
a. Common or informal – may be entered
into in whatever form as long as there
is consent, object and cause
b. Special or formal – required by law to
be in certain specified form
(5) To cause/by equivalence of prestations
(ORG)
a. Onerous – there is an exchange of
correlative values
b. Remuneratory – where the
outstanding prestation is premised
upon services or benefits already
received
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CIVIL LAW
c. Gratuitous – where no correlative
prestation is received by one party
(6) To purpose
a. Transfer of ownership, e.g. sale
b. Conveyance of Use, e.g. commodatum
c. Rendition of Service, e.g. agency
(7) To time of fulfillment
a. Executed – where the obligations are
fulfilled at the time the contract is
entered into
b. Executory – where fulfillment of
obligations does not take place at the
time the contract is made
(8) To risk
a. Commutative – fulfillment is
predetermined in advance
b. Aleatory – fulfillment is dependent
upon chance
(9) To the nature of the vinculum produced
a. Unilateral – only one party is bound by
the prestation; e.g. commodatum
b. Bilateral (synallagmatic)- both parties
are bound by reciprocal prestations,
e.g. sale
 All contracts are bilateral in the
consent, but not all are bilateral in
effects.
(10) To their designation/name
a. Nominate – where the law gives the
contract a special designation or
particular name; e.g. deposit
b. Innominate – where the contract has
no special name
(i) Do ut des (I give so that you may
give)
(ii) Do ut facias (I give so that you may
do)
(iii) Facio ut facias (I do so that you
may do)
(iv) Facio ut des (I do so that you may
give)
Article 1307. Innominate contracts shall be
regulated by the stipulations of the parties,
by the provisions of Titles I and II of this
Book, by the rules governing the most
UP LAW BOC CONTRACTS
analogous nominate contracts, and by the
customs of the place
D. STAGES OF A CONTRACT
(PrePerCon)
(1) Preparation (conception or
“generation”) – when negotiations are
in progress
(2) Perfection (or birth) – when the parties
come to an agreement
(3) Consummation (or death) - when the
contract is fully executed
II. Essential Requisites
There is no contract unless the following
requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject
matter of the contract;
(3) Cause of the obligation which is
established. [Art. 1318, NCC]
Article 1318 of the Civil Code states that no
contract exists unless there is a concurrence of
consent of the parties, object certain as subject
matter, and cause of the obligation established.
[Francisco v. Pastor Herrera, 2002]
A. CONSENT
The meeting of the minds of the parties on the
subject matter and cause of the contract.
Requisites
(1) It must be manifested by the concurrence
of the offer and acceptance [Arts. 1319-
1326].
(2) The contracting parties must possess the
necessary legal capacity [Arts. 1327-1329].
(3) It must be intelligent, free, spontaneous,
and real (not vitiated) [Arts. 1330-1346]
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A contract is perfected by mere consent. From
the moment of a meeting of the offer and the
acceptance upon the object and the cause that
would constitute the contract, consent arises.
However, “the offer must be certain”and “the
acceptance seasonable and absolute; if
qualified, the acceptance would merely
constitute a counteroffer. [Insular Life v. Asset
Builders Corp., 2004]
The offer must be certain and the acceptance
absolute. [Art. 1319]
Offer
A unilateral proposition which one party makes
to the other for the celebration of the contract
[Tolentino]
Requisites of an Offer:
(1) Definite
(2) Intentional
(3) Complete
Invitation to make offers (advertisements)
(1) Business advertisements of things for
sale are NOT definite offers, just
invitations to make an offer, UNLESS the
contrary appears (Art. 1325).
(2) Advertisements for bidders are
invitations to make proposals, the
advertiser is NOT bound to accept the
lowest or highest bid; UNLESS the
contrary appears. The bidder is the
offeror (Art. 1326).
e.g. The Terms and Conditions of the Bidding
disseminated by PUREFOODS constitutes the
"advertisement" to bid on the project. The bid
proposals or quotations submitted by the
prospective suppliers including respondent
FEMSCO, are the offers. The reply of petitioner
Purefoods constitutes the acceptance or
rejection of the respective offers. [Jardine Davies
v. CA, 2000]
UP LAW BOC CONTRACTS
(3) Statements of intention: no contract
results even if accepted.
In a letter informing another that the sender
was “in a position and is willing to entertain” the
purchase of a yacht under some terms, the word
“entertain” applied to an act does not mean the
resolution to perform said act, but simply a
position to deliberate for deciding to perform or
not to perform said act. It was merely a position
to deliberate whether or not he would purchase
the yacht and invitation to a proposal being
made to him, which might be accepted by him
or not. [Rosenstock v. Burke, 1924]
Offer terminates upon—
(1) Rejection by the offeree
(2) Incapacity (death, civil interdiction,
insanity, or insolvency) of the offeror or
offeree before acceptance is conveyed [Art.
1323]
(3) Counter-offer
(4) Lapse of the time stated in the offer
without acceptance being conveyed
(5) Revocation of the offer before learning of
acceptance
(6) Supervening illegality before acceptance
(J.B.L. Reyes)
Acceptance
To produce a contract, the acceptance must
not qualify the terms of the offer. There is no
acceptance sufficient to produce consent,
when a condition in the offer is removed, or a
pure offer is accepted with a condition, or when
a term is established, or changed, in the
acceptance, or when a simple obligation is
converted by the acceptance into an
alternative one; in other words, when
something is desired which is not exactly what
is proposed in the offer. It is necessary that the
acceptance be unequivocal and unconditional,
and the acceptance and the proposition shall
be without any variation whatsoever; and any
modification or variation from the terms of the
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CIVIL LAW
offer annuls the latter and frees the offeror.
[Tolentino]
Requisites of acceptance:
(1) Unqualified and unconditional, i.e. it must
conform with all the terms of the offer,
otherwise it is a counter-offer [Art. 1319]
(2) Communicated to the offeror and learned
by him [Art. 1319] If made through an
agent, the offer is accepted from the time
the acceptance is communicated to such
agent. [Art. 1322]
(3) May be express/implied, but is not
presumed
Acceptance must be absolute, unconditional,
and without variance of any sort from the offer.
It must also be made known to the offeror. An
acceptance not made in the manner prescribed
is not effective but constitutes a counter-offer.
[Malbarosa v. CA, 2003]
Contracts are perfected by mere consent
Contracts are perfected by mere consent, and
from that moment the parties are bound not
only to the fulfillment of what has been
expressly stipulated but also to all the
consequences which, according to their nature,
may be in keeping with good faith, usage and
law. [Art. 1315]
Exceptions:
(1) Real contracts, such as deposit, pledge
and commodatum, are not perfected
until the delivery of the object of the
obligation [Art. 1316]
(2) Formal contracts, where the law
requires that a contract be in some
form or be proved in a certain way; the
intent of the parties have to be
accompanied by the requisite formality
[Art. 1356]
UP LAW BOC CONTRACTS CIVIL LAW

Cognition Theory Code. By contrast, a voidable or annullable

Acceptance made by a letter or telegram does
not bind the offeror except from the time it
came to his knowledge. The contract, in such a
case, is presumed to have been entered into in
the place where the offer was made. [Art. 1319,
2nd par.]
Option Contract
A preparatory contract in which one party
grants to the other, for a fixed period, the
option to decide whether or not to enter into a
principal contract [Art. 1324]
contract is one in which the essential requisites
for validity under Article 1318 are present, but
vitiated by want of capacity, error, violence,
intimidation, undue influence, or deceit.
(Francisco v. Pastor Herrera, 2000)
Persons incapacitated to give consent [Art. 1327]
(MID)
(1) Minors, except—
a. For necessaries [Art.1427]
b. Where the minor actively
misrepresents his age (estoppel)

With consideration Without consideration Mercado v. Espiritu (1917): Minors were held in
estoppel through active misrepresentation.
Offeror cannot Offeror may withdraw Bambalan v. Maramba (1928): There is no
unilaterally withdraw by communicating estoppel if the minority was known by the
his offer. withdrawal to the other party.
offeree before (2) Insane or demented persons, UNLESS they
acceptance. contract during a lucid interval. [Art. 1328]
(3) Deaf-mutes who do not know how to read
Art. 1324 provides the general rule AND write.
regarding offer and acceptance: when the offerer Persons disqualified to contract
gives to the offeree a certain period to accept, (1) Those under civil interdiction for
"the offer may be withdrawn at any time before transactions inter vivos [RPC Art. 34]
acceptance" except when the option is founded (2) Undischarged insolvents [Sec. 24,
upon consideration. If option is founded upon a Insolvency Law]
consideration, the offeror cannot withdraw his (3) Husband and wife cannot donate to each
offer before the lapse of the period agreed upon. other [Art. 123, FC], nor sell to each other if
However, Art. 1479 modifies the general the marriage is under the regime of
rule, which applies to "a promise to buy and sell" Absolute Community of Property [Art.1490]
specifically. This rule requires that a promise to (4) The ff. cannot purchase [Art. 1491]:
sell to be valid must be supported by a Prohibited Party Subject
consideration distinct from the price. The option
Guardian Property of the ward
can still be withdrawn, even if accepted, if the
Agent Property of the
same is not supported by any consideration.
Principal
[Tuazon v. Del Rosario-Suarez, 2010]
Executors and Property under
Capacity to Contract Administrators administration
There are two types of void contracts: (1) Public Officers Property under their
those where one of the essential requisites of a administration
valid contract as provided for by Article 1318 of Justices, judges, Property attached in
the Civil Code is totally wanting; and (2) those prosecutors, clerks of litigation
declared to be so under Article 1409 of the Civil court, lawyers

231
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Incapacity to Give Consent vs. Disqualification To invalidate consent, the error must be
to Contract excusable. It must be real error, and not one
Incapacity to Give Disqualification to that could have been avoided by the party
Consent Contract alleging it. The error must arise from facts
Restrains the exercise Restrains the very unknown to him. He cannot allege an error
of the right to contract right itself which refers to a fact known to him, or which
Based upon subjective Based upon public he should have known by ordinary diligent
circumstances of policy and morality examination of the facts. An error so patent
certain persons and obvious that nobody could have made it, or
Voidable Void one which could have been avoided by ordinary
prudence, cannot be invoked by the one who
Consent made it in order to annul his contract. A
Requisites of Consent: mistake that is caused by manifest negligence
(1) intelligent cannot invalidate a juridical act. [Tolentino]
(2) free
(3) spontaneous Requisites:
(4) real a. The error must be substantial regarding:
a. The object of the contract (error in re)
Vices of Consent which may be:
A contract where consent is given through i. Mistake as to the identity of the thing
a. Mistake (error in corpore)
b. Violence ii. Mistake as to the substance of the thing
c. Intimidation (error in substantia)
d. Undue influence iii. Mistake as to the conditions of the
e. Fraud thing provided, or
is voidable. [Art. 1330] iv. Mistake as to the quantity of the thing
(error in quantitate)
b. The error must be excusable
c. The error must be a mistake of fact and not
of law.
Mistake
Inadvertent and excusable disregard of a Mistake which vitiates consent is an error of
circumstance material to the contract [J.B.L. fact, and not an error of law. Ignorance of the
Reyes] law excuses no one from compliance therewith
[Art. 3]; but the modern tendency is to allow an
In order that mistake may invalidate consent, it excusable mistake of law to be invoked as
should refer to the substance of the thing vitiating consent. [Tolentino]
which is the object of the contract, or to those
conditions which have principally moved one or See also Art. 526, on Possession: Mistake upon
both parties to enter into the contract. a doubtful or difficult question of law may be
[Art.1331] There is no mistake if the party the basis of good faith.
alleging it knew the doubt, contingency or risk
affecting the object of the contract. [Art. 1333]

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Ignorantia Facti Excusat vs. Ignorantia Legis
Neminem Excusat
Mistake of Fact Mistake of Law
One or both One or both parties
contracting parties arrive at an erroneous
believe that a fact conclusion on the
exists when in reality interpretation of a
it does not, or vice question of law or its
versa legal effects
Vitiates consent Does not vitiate
consent except when
it involves mutual
error as to the effect of
an agreement when
the real purpose is
frustrated.
Note: The obligation to show that the terms of
the contract had been fully explained to the
party who is unable to read or understand the
language of the contract, when fraud or
mistake is alleged, devolves on the party
seeking to enforce it. [Art. 1332]
Art. 1332… altered the old rule that said
that a person who affixes his signature to a
document is bound thereby. This was
necessitated by the fact that there continues to
be a number of people without good education;
and that the documents [in question] have been
written in English or Spanish. The provision was
intended to protect a party to a contract
disadvantaged by illiteracy, ignorance, mental
weakness, or some other handicap. If fraud is
alleged, person enforcing the contract must
show that the terms thereof have been fully
explained to the former; and if a party pleads
that he signed without knowing its contents,
burden shifts to other party to show that the
former fully understood the contents. [Leonardo
v. CA, 2004]
Intimidation
One of the contracting parties is compelled by
a reasonable and well-grounded fear of an
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CIVIL LAW
imminent and grave evil upon his person or
property, or upon the person or property of his
spouse, descendants or ascendants, to give his
consent
To determine the degree of intimidation, the
age, sex and condition of the person shall be
borne in mind. [Art. 1335]
The conveyance of several properties by the
wife to her husband’s creditors, though
reluctant, is still consent. She assented to the
requirements of the defendants in order that
the civil and criminal actions against them
would be dropped. A contract is valid even
though one of the parties entered into it
against his wishes and desires, or even against
his better judgment. [Martinez vs HSBC, 1910]
Violence
 Serious or irresistible force used to
extort consent [Art. 1335]
Requisites:
(1) One party is compelled to give his
consent by a reasonable and well-
grounded fear of an evil;
(2) The evil must be imminent and grave;
(3) The evil must be upon his person or
property, spouse, descendants or
ascendants;
(4) The evil must be unjust.
If a contract is signed merely because of “fear
of displeasing persons to whom obedience and
respect are due”, the contract is still valid, for
by itself, reverential fear is not wrong. [PARAS,
Civil Code]
Violence Intimidation
Physical compulsion Moral compulsion
External or prevents Internal or induces the
the will to manifest performance of an act
itself
UP LAW BOC CONTRACTS
Note: Violence or intimidation shall annul the
obligation, although it may have been
employed by a third person who did not take
part in the contract. [Art. 1336]
Undue Influence
When a person takes improper advantage of
his power over the will of another, depriving
the latter of a reasonable freedom of choice.
Requisites:
(1) Improper advantage
(2) Power over the will of another
(3) Deprivation of the latter’s will of a
reasonable freedom of choice
Circumstances to consider:
a. Relationship of the parties (family,
spiritual, confidential etc.)
b. That the person unduly influenced was
suffering from infirmity (mental
weakness, ignorance etc.) [Art.1337]
Note: By analogy, undue influence employed
by a third person may annul the contract.
Test of Undue Influence: Whether or not the
influence exerted has so overpowered or
subjugates the mind of a contracting party as
to destroy his free agency, making him express
the will of another rather than his own. [Coso-
Fernandez Deza, 1921]
In the absence of a confidential or fiduciary
relationship between the parties, the law does
not presume that one person exercised undue
influence upon the other. [Loyola v. CA, 2000]
Fraud
When, through insidious words or
machinations of one of the contracting parties,
the other is induced to enter into a contract
which, without them, he would not have
agreed to. [Art. 1338]
In order that fraud may make a contract
voidable, it should be serious and should not
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CIVIL LAW
have been employed by both contracting
parties. [Art. 1344]
Art. 1339. Failure to disclose facts, when
there is a duty to reveal them, as when the
parties are bound by confidential relations,
constitutes fraud.
Art. 1340. The usual exaggerations in trade,
when the other party had an opportunity to
know the facts, are not in themselves
fraudulent.
Art. 1341. A mere expression of an opinion
does not signify fraud, unless made by an
expert and the other party has relied on the
former's special knowledge.
Art. 1342. Misrepresentation by a third
person does not vitiate consent, unless such
misrepresentation has created substantial
mistake and the same is mutual.
Art. 1343. Misrepresentation made in good
faith is not fraudulent but may constitute
error.
Dolo Causante vs. Dolo Incidente
Dolo Causante Dolo Incidente
Refers to those Refers to those
deceptions or deceptions or
misrepresentations of misrepresentations
a serious character which are not serious
employed by one in character and
party and without without which the
which the other party other party would
would not have have still entered into
entered into the the contract
contract
Renders the contract Renders the party
voidable liable for damages
Dolo incidente, or incidental fraud, which is
referred to in Article 1344, are those which are
not serious in character and without which the
UP LAW BOC CONTRACTS CIVIL LAW

other party would still have entered into the subsequent acts of the parties. [Spouses Lopez
contract. Dolo causante determines or is the v. Spouses Lopez, 2009]
essential cause of the consent, while dolo
incidente refers only to some particular or Requisites (DAP):
accident of the obligation. The effects of dolo (1) A deliberate Declaration contrary to the
causante are the nullity of the contract and the will of the parties;
indemnification of damages, while dolo (2) Agreement of the parties to the
incidente obliges the person employing it to pay apparently valid act, and
damages. [Tankeh v. DBP, 2013] (3) The Purpose is to deceive or to hide from
third persons although it is not
Fraud to vitiate consent must fulfill two necessary that the purpose be illicit or
conditions: (1) The fraud must be dolo causante for purposes of fraud
or it must be fraud in obtaining the consent of
the party. The deceit must be serious. The Absolute Simulation Relative Simulation
fraud is serious when it is sufficient to impress, (Simulados) (Disimulados)
or to lead an ordinarily prudent person into No real transaction Real transaction is
error; that which cannot deceive a prudent is intended. hidden.
person cannot be a ground for nullity. The Fictitious contract. Disguised contract.
circumstances of each case should be Void. (Because there Bound as to hidden
considered, taking into account the personal is an absolute lack of agreement, so long as it
conditions of the victim. (2) The fraud must be declaration of will) does not prejudice a
proven by clear and convincing evidence and third person and is not
not merely by a preponderance thereof. [ECE contrary to law, morals,
Realty v. Mandap, 2014] good customs, public
order or public policy.
Note: However, fraud in its general sense (false The characteristic of simulation is the fact that
representation of a fact) coming about in the the apparent contract is not really desired or
consummation stage of the sale, as opposed to intended to produce legal effects or in any way
the negotiation and perfection stages, entitles alter the juridical situation of the parties. Thus,
the aggrieved party to the rescission of the where a person, in order to place his property
sales contract. [Spouses Tongson v. Emergency beyond the reach of his creditors, simulates a
Pawnshop, 2010] transfer of it to another, he does not really
intend to divest himself of his title and control
Simulation of Contracts of the property; hence, the deed of transfer is
Takes place when the parties do not really but a sham. Lacking, therefore, in a fictitious
want the contract they have executed to and simulated contract is consent which is
produce the legal effects expressed by its essential to a valid and enforceable contract.
wordings. It may be absolute or relative [Arts. [Manila Banking v. Silverio, 2005]
1345-1346]
If the parties [merely] state a false cause in the
The primary consideration in determining the contract to conceal their real agreement, the
true nature of a contract is the intention of the contract is relatively simulated and the parties
parties. Such intention is determined not only are still bound by their real agreement. Hence,
from the express terms of their agreement, but where the essential requisites of a contract are
also from the contemporaneous and present and the simulation refers only to the

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content or terms of the contract, the agreement
is absolutely binding and enforceable between
the parties and their successors in interest.
[Valerio v. Refresca, 2006]
With respect to a third person acting in good
faith, the apparent contract must be
considered as the true contract. The
declaration that the constract is simulated
does not prejudice him.
Note: Relative simulation is presumed by law in
case of Art. 1602 (Contracts presumed to be
Equitable Mortgages)
E. OBJECT OF CONTRACTS
The subject matter; the thing, right or service
which is the subject matter of the obligation
arising from the contract. [Tolentino]
Requisites
(1) Within the commerce of men [Art. 1347]
(2) Not legally or physically impossible
[Art.1348]
(3) In existence or capable of coming into
existence [See Arts. 1461, 1493, 1495]
(4) Determinate or determinable, without
the need of a new contract between the
parties [Arts. 1349, 1460, par.2]
All things or services may be the object of
contracts, EXCEPT:
(1) Things which are outside the commerce
of men
(2) Intransmissible rights
(3) Future inheritance except in cases
authorized by law
Requisites:
a. The succession has not yet been
opened;
b. The object of the contract forms
part of the inheritance; and
c. The promissor has an expectancy of
a right which is purely hereditary in
nature
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Exceptions to the Exception
a. In case of marriage settlements
under Art. 130, NCC
b. In case of partition of properties
inter vivos by the deceased under
Art. 1080, NCC [JLT Agro v.
Balansag, 2005)]
(4) Impossible things or services
(5) Objects which are indeterminable as to
their kind, the genus should be expressed
In order that a thing, right, or service may be
the object of a contract, it should be in
existence at the moment of the celebration of
the contract, or at least, it can exist
subsequently or in the future.
A FUTURE THING may be the object of a
contract. Such contract may be interpreted as
a:
a) Conditional contract, where its efficacy
should depend upon the future existence
of the thing.
b) Aleatory contract, where one of the
contracting parties assumes the risk that
the thing will never come into existence,
e.g. insurance.
In case of doubt about the nature of the
contract, it must be deemed conditional as
doubt shall be resolved in favor of greatest
reciprocity of interests.
F. CAUSE OF CONTRACTS
The essential and impelling reason why a party
assumes an obligation (Manresa). Motive, on
the other hand, is the particular reason for a
contracting party which does not affect the
other.
Requisites (ELT)
(1) Exists at the time of the contract is
entered into [Arts. 1352, 1409, par. 3]
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(2) Lawful (ibid). Contracts Contracts Beneficence

(3) True or real [Art.1353]
The The service or Mere
Cause vs. Object undertaking benefit which is liberality of
Cause Object or the remunerated the
As to Remuneration promise of benefactor
The service or benefit The thing which is the thing or
which is remunerated given in remuneration service by the
As to Donation other party
The liberality of the The thing which is
donor or benefactor given or donated Moral Obligation as a Cause
In Villaroel v. Estrada (1940), where a moral
As to the Thing obligation is based upon a previous civil
Prestation or promise The thing or service obligation which has already been barred by
of a thing or service by itself the statute of limitations at the time the
the other contract is entered into, it constitutes a
sufficient cause or consideration to support a
As to Contracting Parties
contract (natural obligation).
Different with respect May be the same for
to each part both parties
BUT,
In Fisher v. Robb (1939), if the moral obligation
Distinguished from Motive
arises wholly from ethical considerations, it
Cause Motive
cannot constitute a sufficient cause to support
Proximate reason for Remote reason for the
an onerous contract, as when the promise is
contract contract
made on the erroneous belief that one was
Objective or juridical Psychological and
morally responsible for the failure of an
reason purely personal
enterprise (moral obligation).
reason
Always the same for Differs for each Effect of Lack of Cause, Unlawful Cause, False
each contracting contracting party Cause and Lesion (Arts. 1352 – 1355)
party
Cause Effect
Illegality affects Illegality does not
Lack of Cause – If there is no cause
existence or validity of affect existence or
absence or total whatsoever, contract is
the contract validity of contract
lack of cause VOID; a fictitious sale is
VOID.
Motive becomes cause when it predetermines
the purpose of the contract. NOTE: Cause must exist
at the time of the
perfection of the contract;
it need not exist later.
Contrary to law, If cause is unlawful,
morals, good transaction is VOID.
customs, public
Cause in contracts [Art. 1350]
policy and public If parts of a contract are
Onerous Remuneratory Pure order (unlawful illegal but the rest are

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cause) supported by lawful

cause, claimant of such
has the burden of
showing proof; otherwise,
the whole contract is
VOID.
Contract with illegal
cause may still produce
effect in certain cases
where parties are not of
equal guilt: (1) innocent
party can’t be compelled
to perform his obligation
and he may recover what
has already been given;
(2) if both parties are
guilty, neither can sue the
other, the law leaving
them as they are (in pari
delicto).
Falsity of cause – Contract with a false
cause is stated cause is merely
but is untrue revocable/voidable.
GENERAL RULE:
Article 1356, par. 1. Contracts shall be
obligatory, in whatever form they may have
been entered into, provided all the essential
requisites for their validity are present
 “Spiritual System” of the Spanish
Code: The law looks more on the spirit
rather than the form of contracts
EXCEPTION:
(1) When the law requires that a contract be
in some form in order that it may be valid
or enforceable [Art. 1356, par. 2]
(2) When the law requires that a contract be
proved in a certain way to be enforceable
Statute of Frauds) [Art. 1356, par. 2]
(3) When the law requires contract to be in
some form for convenience [Art. 1357 and
1358]
A. KINDS OF FORMALITIES
REQUIRED BY LAW

Parties are given a chance A.1. FOR THE VALIDITY OF CONTRACTS

to show that a cause (AD ESENTIA / AD SOLIMNITATEM/
really exists, and that said SOLEMN CONTRACTS)
cause is true and lawful. Formal or Solemn Special Form Required
Contract by Law
Lesion or Inadequacy of cause shall Donations of Must be in a public
inadequacy of not invalidate the Immovables instrument [Art. 749]
cause – cause is contract except when: (1) Donations of Must be in a written
not proportionate there is fraud, mistake, Movables contract if the donation
to object undue influence (2) when exceeds P500 [Art.
parties intended a 748]
donation Partnerships where Must be in public
real property is instrument; otherwise
Note: Inadequacy of cause may be a badge of contributed the contract of
fraud. partnership is void [Art.
1771, 1773]

III. FORM OF Contracts

antichresis
of The principal loan and
the interest, if any,
CONTRACTS must be specified in
writing; otherwise, the

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contract of antichresis subscribed by the party charged, or by his

is void [Art. 2134] agent; evidence, therefore, of the
Agency to sell real Authority of the agent agreement cannot be received without the
property or any must be in writing; writing, or a secondary evidence of its
interest therein otherwise, the sale is contents:
null and void [Art. a. An agreement that by its terms is not
1874] to be performed within a year from the
Stipulation to pay Must be expressly making thereof;
interest on loans, made in writing [Art. b. A special promise to answer for the
interest for the use of 1956] debt, default, or miscarriage of
money another;
Stipulation limiting
Must be (1) in writing, c. An agreement made in consideration of
common carrier’s
signed by the shipper marriage, other than a mutual promise
duty of extraordinary
or owner; (2) supported to marry;
diligence to ordinary
by a valuable d. An agreement for the sale of goods,
diligence consideration; and (3) chattels or things in action, at a price
reasonable, just, and not less than five hundred pesos,
not contrary to public unless the buyer accept and receive
policy [Art. 1744] part of such goods and chattels, or the
Chattel mortgage Must be recorded in evidences, or some of them, of such
Chattel Mortgage things in action or pay at the time some
Register [Art. 2140] part of the purchase money; but when
Transfer of large Requires transfer of a sale is made by auction and entry is
cattle the certificate of made by the auctioneer in his sales
registration [Rev. Adm. book, at the time of the sale, of the
Code, Sec. 523] amount and kind of property sold,
terms of sale, price, names of the
A.2. FOR THE PURPOSE OF PROVING purchasers and person on whose
THE EXISTENCE OF THE CONTRACT account the sale is made, it is a
sufficient memorandum;
(AD PROBATIONEM/ STATUTE OF
e. An agreement of the leasing for a
FRAUDS)
longer period than one year, or for the
sale of real property or of an interest
Art. 1403, Civil Code. The following contracts
therein;
are unenforceable, unless they are ratified: f. A representation as to the credit of a
1. Those entered into in the name of another third person.
person by one who has been given no
3. Those where both parties are incapable of
authority or legal representation, or who giving consent to a contract.
has acted beyond his powers;
2. Those that do not comply with the Statute
 This article speaks of contracts that cannot
of Frauds as set forth in this number. In the
be proved except by written note or
following cases an agreement hereafter
memorandum, unless the party charged
made shall be unenforceable by action,
waives the objection [Rule 123, Sec. 21,
unless the same, or some note or
Rules of Court]
memorandum, thereof, be in writing, and

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 This article applies to executory contracts
only [Almirol v Monserrat, 1925]
An oral promise to reduce to writing an
agreement that is within the Statute of Frauds
is itself unenforceable [J.B.L. Reyes]
A.3. FOR THE EFFECTIVITY OF THE
CONTRACT AGAINST THIRD PERSONS
Art. 1357, Civil Code. If the law requires a
document or other special form, as in the
acts and contracts enumerated in the
following article, the contracting parties may
compel each other to observe that form,
once the contract has been perfected. This
right may be exercised simultaneously with
the action upon the contract.
Art. 1358, Civil Code. The following must
appear in a public document:
Acts and contracts which have for their
object the creation, transmission,
modification or extinguishment of real rights
over immovable property; sales of real
property or of an interest therein a governed
by Articles 1403, No. 2, and 1405;
The cession, repudiation or renunciation of
hereditary rights or of those of the conjugal
partnership of gains;
The power to administer property, or any
other power which has for its object an act
appearing or which should appear in a
public document, or should prejudice a third
person;
The cession of actions or rights proceeding
from an act appearing in a public document.
All other contracts where the amount
involved exceeds five hundred pesos must
appear in writing, even a private one. But
sales of goods, chattels or things in action
are governed by Articles, 1403, No. 2 and
1405.
Article 1357 and 1358 is only needed for
convenience, not validity or enforceability.
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CIVIL LAW
Registration of the instrument only adversely
affects third parties [Fule v Court of Appeals,
1998].
Before the contracting parties may be
compelled to execute the needed form, the
contract should be:
1) Perfected or valid
2) Enforceable under the Statute of Frauds
Enumerated contracts in Art. 1358 are valid
even when not reduced into writing, although
parties may have recourse under Art. 1357 to
compel execution of the writing, except in the
following cases:
1) Solemn Contracts (action under Art. 1357
is not available at all)
2) Real Contracts (action under Art. 1357 is
available if there is consent, subject
matter, cause, and delivery)
3) Contracts under the Statutes of Fraud
(remedy under Art. 1357 is applicable
only if the defense of the Statute is
waived expressly or impliedly by the
party charged
 The recourse under Article 1357 does NOT
impose an obligation but a privilege on
both parties
 Action under this Article 1357 may be
exercised simultaneously with (i.e. need
not be separate nor need it precede) the
action to enforce the contract, although
questions of form must be decided first.
IV. REFORMATION OF
INSTRUMENTS
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Reformation – remedy in equity by means of terms of their

which a written instrument is made or agreement.
construed so as to express or conform to the equity of reformation intended to declare
real intention of the parties when some error or is ordinarily limited to the inefficiency which
mistake has been committed [J.B.L. Reyes] written agreements, the contract already
and its purpose is to carries in itself and to
Rationale: It would be unjust and inequitable establish and render the contract
to allow the enforcement of a written perpetuate the true inefficacious
instrument which does not reflect or disclose agreement;
the real meeting of the minds of the parties
[J.B.L. Reyes] [Multi-Ventures Capital Management
Corporation v Stalwart, 2007]
REQUISITES [Art. 1359]: (1) The presumption is that an instrument
a. There must be a meeting of the minds of sets out the true agreement of the
the contracting parties parties and that it was executed for
b. Their true intention is not expressed in the valuable consideration. Thus, when there
instrument; is some error or mistake in the contract,
c. Such failure to express their true intention the onus probandi is upon the party who
is due to mistake, fraud, inequitable insists that the contract should be
conduct, or accident; and reformed.
d. There is clear and convincing proof of (2) While intentions involve a state of mind,
mistake, fraud, inequitable conduct, or subsequent and contemporaneous acts
accident of the parties as well as the evidentiary
facts as proved and admitted can be
If mistake, fraud, inequitable conduct, or reflective of one’s intention.
accident has prevented a meeting of the minds (3) Expediency and convenience, which was
of the parties, the proper remedy is not the purpose of the execution of
reformation of the instrument but annulment “purchase and sale agreement”, is not a
of the contract [Art. 1359, par.2] ground for reformation of instrument.

Veluz v Veluz (1968): The action for reformation [Rosello-Bentir v Leanda, 2000]
of instrument should not be confused with the (1) The right of reformation is necessarily
action for annulment of contract. an invasion or limitation of the parol
evidence rule since, when a writing is
Reformation of Annulment reformed, the result is that an oral
Instrument agreement is by court decree made
Presupposes a valid, Presupposes a legally effective.
existing contract, in defective contract in (2) The prescriptive period for actions
which there had been which the minds of based upon a written contract and for
a meeting of the the parties did not reformation of an instrument is ten (10)
minds of the parties meet, or the consent years under Article 1144 of the Civil
but the instrument of one was vitiated. Code.
drawn up and signed
by them does not A. CASES WHERE REFORMATION IS
correctly express the PROPER

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A.1. MISTAKE
The mistake should be of fact generally,
and not of law [BPI v Fidelity and Surety
Co., 1927]
i. Mutual
Art. 1361. When a mutual mistake of the
parties causes the failure of the
instrument to disclose their real
agreement, said instrument may be
reformed.
ii. Unilateral
Art. 1362. If one party was mistaken
and the other acted fraudulently or
inequitably in such a way that the
instrument does not show their true
intention, the former may ask for the
reformation of the instrument.
Art. 1363. When one party was
mistaken and the other knew or
believed that the instrument did not
state their real agreement, but
concealed that fact from the former,
the instrument may be reformed.
A.2. FRAUD
i. Active
Art. 1362. If one party was mistaken
and the other acted fraudulently or
inequitably in such a way that the
instrument does not show their true
intention, the former may ask for the
reformation of the instrument
ii. Passive (concealment) [Art. 1363]
Art. 1363. When one party was
mistaken and the other knew or
believed that the instrument did not
state their real agreement, but
concealed that fact from the former,
the instrument may be reformed.
A.3. INEQUITABLE CONDUCT [ART. 1362]
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CIVIL LAW
Art. 1362. If one party was mistaken and the
other acted fraudulently or inequitably in such
a way that the instrument does not show their
true intention, the former may ask for the
reformation of the instrument.
A.4. ACCIDENT [ART. 1364]
Art. 1364. When through the ignorance, lack of
skill, negligence or bad faith on the part of the
person drafting the instrument or of the clerk
or typist, the instrument does not express the
true intention of the parties, the courts may
order that the instrument be reformed.
 No fraud exists in the sense that
neither of the parties took part therein.
A.5. SEVERE PACTO DE RETRO /
RELATIVE SIMULATION
Art. 1365. If two parties agree upon the
mortgage or pledge of real or personal
property, but the instrument states that the
property is sold absolutely or with a right of
repurchase, reformation of the instrument is
proper.
B. WHO MAY ASK FOR
REFORMATION [ART. 1368]
1. Either party of his successors in interest, if
the mistake was mutual; otherwise,
2. Upon petition of the injured party, or his
heirs and assigns
C. CASES WHERE REFORMATION IS
NOT PROPER
1. Simple donations inter vivos—wherein no
condition is imposed—because donation
is an act of liberality [Art. 725] and cannot
be compelled);
2. Wills—no reformation before the testator
dies because the making of a will is
strictly personal [Art. 784], a free act [Art.
839], and essentially revocable [Art. 828];
3. When the real agreement is void—
because there is nothing to reform
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Implied Ratification/Estoppel: the party who
has brought an action to enforce the
V. INTERPRETATION OF CONTRACTS
CARDINAL TEST: Intention of the parties, to be
derived from the terms of the contract.
Bautista v CA (2000):
(1) Where the language of a contract is plain
and unambiguous, its meaning should
be determined without reference to
extrinsic facts or aids. The intention of
the parties must be gathered from that
language, and from that language alone.
(2) Courts cannot make for the parties better
or more equitable agreements than they
themselves have been satisfied to make,
or rewrite contracts because they operate
harshly or inequitably as to one of the
parties, or alter them for the benefit of
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CIVIL LAW
instrument cannot subsequently ask for its
reformation [Art. 1367]
one party and to the detriment of the
other, or by construction, relieve one of
the parties from the terms which he
voluntarily consented to, or impose on
him those which he did not.
Borromeo v Reyes (1972): While ordinarily the
literal sense of the words employed is to be
followed, such is not the case where they
"appear to be contrary to the evident intention
of the contracting parties." Intention shall
prevail.
Kasilag v Rodriguez (1939): Another
fundamental rule in the interpretation of
contracts is that the terms, clauses and
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conditions contrary to law, morals and public Doubts Absolutely Absolutely

order should be separated from the valid and where it impossible to impossible to
legal contract and when such separation can cannot be settle doubts by settle doubts
be made because they are independent of the known the rules and by the rules
valid contract. A lawful promise made for a what may only refer to and only refer
lawful consideration is not invalid merely have been incidental to incidental
because an unlawful promise was made at the the circumstances, circumstances
same time and for the same consideration. intention the least the doubt shall
EXCEPTION: or will of transmission of be settled in
(1) Where the statute expressly or by the rights and favor of the
necessary implication declares the entire parties, interests shall greatest
contract void the prevail. reciprocity of
(2) Where the terms, clauses, and contract interests.
conditions, by an established connection shall be
or by manifest intention of the parties, is null and
inseparable from the principal void.
obligation, and is a condition, juridically
speaking, of that the nullity of which it
would also occasion [Manresa]

A. RULES ON DOUBTS [ART. 1378]

Principal Gratuitous Onerous
Objects Contracts Contracts

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VI. DEFECTIVE must be known or coud have been known at

the time of making of the contract. [Tolentino]
CONTRACTS Characteristics of Rescissible Contracts:
(1) The defect consists in injury or
A. RESCISSIBLE CONTRACTS damage either to one of the
Contracts which are valid until rescinded. All contracting parties or to third persons;
essential requisites of a contract exist but there (2) Before rescission, they are valid, and
is injury or damage to one of the parties or to therefore, legally effective;
third persons – external or extrinsic defect (3) They can be attacked directly only and
consisting of an economic damage or lesion. not collaterally;
(Paras) (4) They can be attacked only by a
contracting party or a third person
Rescission who is injured or defrauded; and
Process designated to render inefficacious a (5) They are susceptible of convalidation
contract validly entered into and normally only by prescription and not
binding, by reason of external conditions, ratification
causing an economic prejudice to a party or to
his creditors (Scaevola). Distinguished from Rescission/Resolution
under Art. 1191 [Congregation of the Religious
Remedy granted by law to the contracting Virgin Mary vs. Orola, 2008]
parties and to third persons in order to secure Art. 1191 – Rescission
reparation for damages caused them by a Art. 1381 – Rescission by
or Resolution for
contract, even if the contract is valid, by means reason of lesion
Breach of Stipulation
of the restoration of things to their condition Applies only to Applies whether
prior to the celebration of said contract reciprocal obligations are
(Manresa) obligations, such reciprocal or unilateral
that a party’s breach and whether the
Relief to protect one of the parties or a third thereof partakes of a contract has been fully
person from all injury and damages which the tacit resolutory fulfilled
contract may cause, to protect some condition which
preferential right [Aquino v. Tañedo, 1919] entitles the injured
party to rescission.
Rescission is a remedy granted by law to the Predicated on Predicated on injury to
contracting parties and even to third persons, breach of faith. economic interests of
to secure reparation for damages caused to the party
them by a contract, even if this should be valid, plaintiff/lesion.
by means of the restoration of things to their HOWEVER, not all
condition at the moment prior to the economic prejudices
celebration of said contract. [Tolentino] are recognized by law.
Principal action that Subsidiary action.
Lesion is retaliatory in
The injury which one of the parties suffers by character.
virtue of a contract which is disadvantageous
for him. To give rise to rescission, the lesion The reparation of The cause of action is

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damages for the subordinated to the of absentees, if the latter suffer the
breach is purely existence of an lesion stated in the preceding
secondary. economic prejudice. number;
Hence, where the (3) Those undertaken in fraud of creditors
defendant makes good when the latter cannot in any other
the damages caused, manner collect the claims due them;
the action cannot be (4) Those which refer to things under
maintained or litigation if they have been entered
continued. into by the defendant without the
Mutual restitution when declared proper as knowledge and approval of the
between the parties involved litigants or of competent judicial
Constitutes Constitutes abrogation authority;
termination of the of the contract from (5) All other contracts specially declared
obligation and the beginning and to by law to be subject to rescission.
release of the parties restore the parties to
from further their relative positions Requisites before a Contract Entered Into in
obligations from as if no contract has Behalf of Wards or Absentees May Be
each other been made Rescinded on the Ground of Lesion:
Declares the contract (1) Contract was entered into by a
void at its inception guardian in behalf of his ward or by a
and puts an end to it as legal representative in behalf of an
though it never was absentee [Arts. 1381, Nos. 1 and 2]
May be demanded May be demanded by Note: A guardian is authorized
only by a party to the a third party prejudiced only to manage the estate of the ward;
contract in the contract should he dispose a portion thereof
May be denied by Extension of time does without authority from the court by
court when there is not affect the right to way of a contract, the same is
sufficient reason to ask for rescission unenforceable under Art. 1403(1),
justify the extension irrespective of whether there is lesion
of time or not.
Non-performance is Various reasons of
the only ground for equity are grounds for (2) It was entered into without judicial
the right to rescission approval [Art. 1386]
rescission (3) Ward or absentee suffered lesion of
more than one-fourth of the value of
Requisites of a Valid Rescission [Art. 1381-1383, the property which is the object of the
1385, 1389] contract. [Art. 1381, Nos. 1 and 2]
Art. 1381. The following contracts are (4) There is no other legal means of
rescissible: obtaining reparation for the lesion.
(1) Those which are entered into by [Art. 1383]
guardians whenever the wards whom Note for Art. 1381 (4): Any
they represent suffer lesion by more disposition of the thing subject of
than one-fourth of the value of the litigation or any act which tends to
things which are the object thereof; render inutile the court’s impending
(2) Those agreed upon in representation disposition in such case without the

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knowledge and approval of the litigants
or of the court, is unmistakably and
irrefutably indicative of bad faith.
However, even without knowledge or
approval from the court, the conveyance
of a property subject of litigation may
still be valid but is susceptible for
rescission under Art. 1381(4).
A definitive judicial
determination with respect to the thing
subject of litigation is not a condition
sine qua non before the rescissory action
contemplated under Article 1381(4) of the
Civil Code may be instituted. The
primordial purpose of Article 1381(4) of
the Civil Code is to secure the possible
effectivity of the impending judgment by
a court with respect to the thing subject
of litigation. [Ada v. Baylon, 2012]
(5) Person bringing the action must be
able to return whatever he may be
obliged to restore. [Art. 1385(1)]
(6) Object of the contract must not be
legally in the possession of a third
person who did not act in bad faith
[Art. 1385(2)]
Requisites before a Contract Entered Into in
Fraud of Creditors May Be Rescinded:
(1) There is a credit existing prior to the
celebration of the contract;
(2) There is fraud, or at least, the intent to
commit fraud to the prejudice of the
creditor seeking rescission;
(3) Creditor cannot in any legal manner
collect his credit; and
(4) Object of the contract must not be
legally in the possession of a third
person who did not act in bad faith.
Accion Pauliana
The action to rescind contracts in fraud of
creditors. Consequently, accion pauliana
presupposes a judgment and unsatisfied
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CIVIL LAW
execution which cannot exist when the debt is
not yet demandable at the time the rescissory
action is brought. [Tolentino]
Note: Even secured creditors are entitled to
accion pauliana.
Art. 1382. Payments made in a state of
insolvency for obligations to whose
fulfillment the debtor could not be
compelled at the time they were effected,
are also rescissible.
Requisites Before Payment made by Insolvent
Can Be Rescinded:
(1) It was made in a state of insolvency;
(2) Obligation must have been one which
debtor could not be compelled to pay
at the time such payment was effected.
Conflict between Arts. 1382 and 1198 if the
obligation is subject to suspensive period is
more apparent than real
Payment made by an insolvent is rescissible.
(Art. 1382), but a debtor can be compelled to
pay by the creditor even before the expiration
of the period since by his insolvency he has
already lost his right to the benefit of such
period. [Art. Art. 1198(1)]
The conflict can be resolved by considering the
priority of dates between the two debts. If the
obligation with a period became due before
the obligation to the creditor seeking the
rescission became due, then the latter cannot
rescind the payment even if such payment was
effected before the expiration of the period;
but if the obligation with a period became due
after the obligation to the creditor seeking
rescission became due, then the latter can
rescind the payment. [Manresa]
UP LAW BOC CONTRACTS CIVIL LAW

Effects of Rescission persons who did not

It creates an obligation to return the things act in bad faith.
which were the object of the contract, together Otherwise, damages
with their fruits, and the price with its interests. may be demanded
from the person
However, if the object of the contract is in the causing the loss. (Art.
possession of third persons in good faith, 1385)
rescission cannot take place and indemnity for Prescribes in 10 years Prescribes in 4 years
damages may be demanded from the person [Lalicon v. National Housing Authority, 2011]
causing the loss [Art. 1385]
For persons under guardianship and for
See Table, Rescission by Reason of Lesion absentees, the period of four years shall not
Distinguished from Rescission/Resolution begin until the termination of the former's
under Art. 1191 incapacity, or until the domicile of the latter is
known. [Art. 1389]
Rescission
Art. 1191 Art. 1381 Do all creditors benefit from the rescission of
Rescission in Rescission by Reason the contract?
Reciprocal of Lesion As a rule, the rescission should benefit only the
Obligations creditor who obtained the rescission, because
(Resolution) the rescission is to repair the injury caused to
A resolutory condition The action is based on him by the fraudulent alienation. If a balance is
is implied upon a party’s breach of left after satisfying the claim of the creditor
breach of one party. obligation and cannot who brough the action, other creditors who are
be instituted except qualified to bring an accion pauliana should be
when the party given the benefit of rescission, instead of
suffering damage has requiring them to bring other rescissory
no other legal means actions. However, creditors who only became
to obtain reparation. such after the fraudulent alienation, cannot
[Art. 1383] benefit from the rescission.
Grants the injured Creates the obligation
party the option to to return the things Presumption of Fraud
pursue, either a which were the object When alienation of property presumed in fraud
rescission or specific of the contract, of creditors:
performance of the together with their a. Alienation by gratuitous title if the debtor
obligation, with fruits, and the price has not reserved sufficient property to pay
payment of damages with its interests all of his debts contracted before
in either case This can only be alienation [Art. 1387(1), NCC]
carried out when he b. Alienation by onerous title if made by a
who demands debtor against whom some judgment has
rescission can return been rendered in any instance or some
what he is obliged to writ of attachment has been issued [Art.
restore, also when 1387(2), NCC]
there are none See also: Badges of Fraud
endangered third

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The test as to whether or not a conveyance is
fraudulent is if it prejudices the rights of the
creditors. [Tolentino]
A conveyance leaving no property for other
creditors to attach is an evidence of fraud.
Citing Oria v McMicking (1912), the following are
Badges of Fraud:
1) Consideration is fictitious or inadequate;
2) Transfer was made while suit had begun
or pending;
3) Sale was upon credit by insolvent
debtor;
4) There was large indebtedness or
complete insolvency;
5) Transfer consisted of all or nearly all
property especially when insolvent or
greatly;
6) The transfer was made between father
and son when other above
circumstances present; and
7) There was failure of vendee to take
exclusive possession of all property
embarrassed financially.
[China Banking v. CA, March 7, 2000]
B. VOIDABLE CONTRACTS
Contracts which are valid until annulled,
unless ratified. Defect is more or less intrinsic,
as in the case of vitiated consent. [Paras]
Art. 1390. The following contracts are
voidable or annullable, even though there
may have been no damage to the
contracting parties:
(1) Those where one of the parties is
incapable of giving consent to a
contract;
(2) Those where the consent is vitiated by
mistake, violence, intimidation, undue
influence or fraud.
These contracts are binding, unless they are
annulled by a proper action in court. They
are susceptible of ratification.
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CIVIL LAW
Note: Art. 1390 refers to a “proper action in
court”. The validity of a voidable contract may
only be attacked either by way of a direct
action or by way of defense via a counterclaim,
and not a special or affirmative defense.
[Jurado]
Voidable/ Annullable Contracts:
(1) Those where one of the contracting
parties is incapable of giving consent to
a contract, and
(2) Those where the consent is vitiated by
mistake, violence, intimidation, undue
influence or fraud
Characteristics of Voidable Contracts:
(1) Its defect consists of the vitiation of
consent of one of the contracting parties;
(2) It is binding until it is annulled;
(3) It is susceptible of convalidation by
ratification or prescriotion; amd
(4) Its defect or voidable character cannot
be invoked by third persons
Note: Failure of an heir to obtain authority from
his co-heirs does not result in his incapacity to
give consent so as to render the contract
voidable, but rather, renders the contract valid
but unenforceable against Conrado’s co-heirs for
having been entered into without their authority.
[Heirs of Ureta, Sr. v. Heirs of Ureta, September
14, 2011]
Rescission and Annulment Distinguished
Rescission Nullity
Merely produces the Declares the inefficacy
inefficacy of the which the contract
contract, which did already carries in itself
not essentially exist
in the contract
Needs ratification to Requires an act of
be effective ratification to be cured
Private interest Direct influence of the
alone governs. public interest is
involved.
UP LAW BOC CONTRACTS CIVIL LAW

May be compatible Based on a vice of the benefited by the thing or price received by him
with the perfect contract which (Art. 1399)
validity of the invalidates it
contract Art. 1399 cannot be applied to those cases
A remedy A sanction where the incapacitated person can still return
Equity predominates The law predominates the thing which he has received.
May be demanded Can be demanded only
by third parties by parties to the Effects of Failure to Make Restitution (Arts.
affected by the contract 1400-1402)
contract
Three Ways or Modes of Convalidating a
Who may institute action for annulment Voidable Contract [Jurado]
General Rule: Action for annulment may be (1) By prescription of the action for annulment
instituted by all who are thereby obliged [Art.1391]
principally or subsidiarily. (2) By ratification or confirmation [Art. 1392-
Requisites: 1396]
i. Plaintiff must have interest in the (3) By loss of the thing which is the object of
contract; the contract through the fraud or fault of
ii. The victim and not the party the person who is entitled to institute the
responsible for the vice or defect must action for the annulment [Art.1401]
assert the same
Exception: If a third person is prejudiced in his Prescription of the Action for Annulment
rights with respect to one of the contracting The action for annulment shall be brought
parties and can show detriment which would within four years—
postitively result to him from the contract in (1) From the time the defect of the content
which he has no intervention. (Teves v. People’s ceases, in cases of intimidation, violence
Homesite & housing Corp., 1968) or undue influence
(2) From the time of discovery of the fraud
Effects of Annulment or mistake
If contract has not yet been consummated – (3) From the time guardianship ceases, in
parties shall be released from the obligations actions referring to contracts entered
arising therefrom. into by minors or incapacitated persons
If contract has already been consummated -
The contracting parties shall restore to each Constructive Notice
other the things which have been the subject Discovery or fraud must be reckoned from the
matter of the contract, with their fruits, and the time the document was registered in the office
price with its interest, except in cases provided of the register of deeds. Registration
by law. (Art. 1398-1402) constitutes constructive notice to the whole
world. [Carantes v. CA, 1977]
Obligation of Mutual Restitution
When the defect of the contract consists in the Ratification
incapacity of one of the parties, the The act or means by virtue of which efficacy is
incapacitated person is not obliged to make given to a contract which suffers from a vice of
any restitution except insofar as he has been curable nullity [Arts. 1392-1396]
May be

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(1) EXPRESS or
(2) TACIT – When the person who has the KINDS OF UNENFORCEABLE CONTRACTS
right to invoke it, with the knowledge of 1. Unauthorized contracts – those entered
the reason which renders the contract into by one who has no authority or legal
voidable and such reason having ceased, representation, or who has acted beyond
executes an act implying an intention to his powers [Art. 1403, par.1]
waive his right [Art. 1393] 2. Those which did not comply with the
Statute of Frauds [Art. 1403, par.2]
Requisites of Ratification 3. Those where both parties are incapable
(1) Contract is tainted with a vice of giving consent to a contract [Art. 1403,
susceptible of being cured; par.3]
(2) Confirmation is effected by the person Contract Contracts Contract
who is entitled to do so under the law; entered covered by where
(3) It is effected with knowledge of the vice into Statute of both
or defect of the contract; without Frauds parties are
(4) Cause of the nullity or defect have authority incapable
already disappeared. of giving
The right to ratify may be transmitted to the consent
heirs of the party entitled to such right. It may Effect on No effect unless ratified. Cannot be
likewise be exercised by the guardian of the the enforced by a proper action in court
incapacitated person having such right. [Art. Contract
1394] How to Not by Not by Not by
Ratification does not require the conformity of assail direct direct direct
the contracting party who has no right to bring action. action. action.
As a As a As a
an action for annulment. [Art. 1385]
defense, defense, defense,
by motion by motion by motion
Effect of Ratification
to dismiss to dismiss to dismiss
It extinguishes the action for annulment of a
the on the the
voidable contract. [Art. 1392] complaint ground complaint
It cleanses the contract from all its defects on the that the on the
from the moment it was constituted [Art. 1396] ground contract is ground
that the unenforce that the
C. UNENFORCEABLE CONTRACT contract is able; contract is
Unenforceable Contract – contracts that by unenforce Objection unenforce
reason of statutory defects do not confer any able to the able
action to enforce the same until and unless presentati
they are ratified in the manner prescribed by on of oral
law [J.B.L. Reyes] evidence
to prove an
CHARACTERISTICS: oral
1. Cannot be enforced by a proper action in contract
court [see Art.
2. Susceptible of ratification 1405]
3. Cannot be assailed by third persons [Art. Who can By person By party By party
1408] assail whose against against

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name the whom the whom the (3) Applies only to executory contracts, not
cannot contract contract is contract is partially or completely executed
be was being being (consummated) contracts.
assailed entered enforced; enforced; (4) The Statute of Frauds is exclusive that is,
by third into / by or his or his it applies only to the agreements or
persons( owner of privies privies; or contracts enumerated therein [Quintos v
Art. property parents or Morata, 1930]
1408) guardians, (5) The Statute of Frauds is a personal
as it is a defense, that is, a contract infringing it
personal
cannot be assailed by third persons [Art.
defense
1408]
When When a party asks the court to
(6) Contracts infringing the Statute of
enforce the contract
Frauds are not void, they are merely
How to Ratificatio Ratificatio ratificatio
unenforceable [Art. 1403]
Cure n by n by party n of party
Defect person against against
whose whom the whom the EXCEPTIONS TO APPLICATION OF STATUTE
name the contract is contract is OF FRAUD
contract being being (1) The Statute of Frauds cannot apply if the
was enforced enforced; action is neither for damages because of
entered failure to or his the violation of an agreement nor for the
into object to privies; or specific performance of said agreement
the parents or (2) The Statute of Frauds does not
presentati guardians determine the credibility or weight of
on of oral evidence. It merely concerns itself with
evidence The the admissibility thereof.
to prove an ratificatio (3) The Statute of Frauds does not apply if it
oral n by one is claimed that the contract does not
contract or party express the true agreement of the
by the converts parties. As long as the true or real
acceptanc the agreement is not covered by the Statute
e of contract of Frauds, it is provable by oral evidence
benefits into a
[Cayuga v Santos]
under the voidable
contract contract
Swedish Match v CA (2004):
[Art. 1405] [Art. 1407]
(1) The Statute of Frauds simply provides
the method by which the contracts
GENERAL RULES OF APPLICATION OF
enumerated therein may be proved but
STATUTE OF FRAUDS
does not declare them invalid because
(1) The Statute of Frauds is a Rule of
they are not reduced to writing.
Exclusion, i.e. oral evidence might be
(2) For a note or memorandum to satisfy the
relevant to the agreements enumerated
Statute, it:
therein and might therefore be
(a) Must be complete in itself and cannot
admissible were it not for the fact that
rest partly in writing and partly in
the law excludes said oral evidence.
parol.
(2) The defense of the Statute of Frauds may
be waived [Art. 1405]

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(b) Must contain the names of the parties,
the terms and conditions of the
contract, and a description of the
property sufficient to render it capable
of identification.
(c) Must contain the essential elements of
the contract expressed with certainty
that may be ascertained from the note
or memorandum itself, or some other
writing to which it refers or within
which it is connected, without resorting
to parol evidence
Asia Productions v Pano (1992): The purpose of
the Statute is to prevent fraud and perjury in
the enforcement of obligations depending for
their evidence on the unassisted memory of
witnesses, by requiring certain enumerated
contracts and transactions to be evidenced by
a writing signed by the party to be charged.
Limketkai Sons Milling, Inc. v CA (1995): Even if
parol evidence was initially inadmissible, the
same became competent and admissible
because of the cross-examination, which
elicited evidence proving the evidence of a
perfected contract. The cross-examination on
the contract is deemed a waiver of the defense
of the Statute of Frauds.
D. VOID OR INEXISTENT CONTRACTS
Contracts which have no effect at all and
cannot be ratified or validated [Paras]
Those which, because of certain defects,
generally produce no effect at all. They are
considered as inexistent from its inception or
from the very beginning [De Leon]
Art. 1409. The following contracts are
inexistent and void from the beginning:
(1) Those whose cause, object or purpose is
contrary to law, morals, good customs,
public order or public policy;
(2) Those which are absolutely simulated or
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CIVIL LAW
fictitious;
(3) Those whose cause or object did not
exist at the time of the transaction;
(4) Those whose object is outside the
commerce of men;
(5) Those which contemplate an impossible
service;
(6) Those where the intention of the parties
relative to the principal object of the
contract cannot be ascertained;
(7) Those expressly prohibited or declared
void by law
These contracts cannot be ratified. Neither can
the right to set up the defense of illegality be
waived.
Characteristics of Void Contracts :
(1) It does not produce any legal effect;
(2) It is not susceptible of ratification;
(3) The right to set up the defense of
inexistence or absolute nullity cannot
be waived or renounced;
(4) The action or defense for the
declaration of their inexistence or
nullity is imprescriptible; [Art. 1410]
Note: This provision does not apply to
wills. [Gallanosa v. Arcangel, June 21,
1978] and
(5) The inexistence or absolute nullity of a
contract cannot be invoked by a person
whose interests are not directly
affected. [Art. 1421]
Note: Article 1421 is subject to
exceptions. For instance, the creditors of
a party to an illegal contract may, under
the conditions set forth in Article 1177 of
said Code, exercise the rights and
actions of the latter, except only those
which are inherent in his person,
including therefore, his right to the
annulment of said contract, even
though such creditors are not affected
by the same, except indirectly, in the
manner indicated in said legal provision.
UP LAW BOC CONTRACTS CIVIL LAW

[Pascual v. Secretary of Public Works, The law prohibits the spouses from selling
December 29, 1960] property to each other, subject to certain
exceptions. [Art. 1490] Similarly, donations
A contract which is the direct result of a between spouses during marriage are
previous illegal contract is also void and prohibited. The prohibitions apply to common
inexistent. [Art. 1421] law relations. [Ching v. Goyanko, November 10,
2006]
Void v. Inexistent Contracts
Void Inexistent (See: Pactum commissorium, Pactum de non
Those where all the Those where one or alienado, Pactum leonina)
requisites of a some or all of the
contract are present requisites essential for In contracts with separate provisions, the
but the cause, object the validity of a invalidity of one does not automatically render
or purpose is contract are absolutely the other invalid. Art. 1420 of the New Civil
contrary to law, lacking Code holds that "In case of a divisible contract,
morals, good if the illegal terms can be separated from the
customes, public legal ones, the latter may be enforced."
order or public Contrary to the suppositions of petitioners, the
policy, or the invalid stipulation is independent from the rest
contract itself is of the terms of the agreement and can easily
prohibited or be separated therefrom without doing violence
declared void by law to the manifest intention of the parties. This
Principle of pari Principle of pari delicto being so, the legal terms of the contract can be
delicto is applicable is inapplicable enforced. [Spouses Litonjua v. L & R
May produce legal Cannot produce any Corporation, March 27, 2000]
effects effect
Covers Art. 1409 nos. Covers Art. 1409 nos. 2 The Principle of In Pari Delicto
1, 3, 4, 5, 6 and 7 and 3 When the defect of a void contract consists in
the illegality of the cause or object of the
Classification of Void Contracts [Paras] contract and both parties are at fault or in pari
(1) INEXISTENT CONTRACTS: like those where delicto, the law refuses them any remedy and
essential formalities are not complied with leaves them where they are. [Arts. 1411-1419]
 Example: A donation of land in a
private instrument If the act in which the unlawful or forbidden
 Consequence: This produces no effect cause consists does not constitute a criminal
whatsoever. offense... [Art. 1412]
(2) ILLEGAL OR ILLICIT CONTRACTS:
The elements of Art. 1411 are that the nullity
 Example: A donation made because of
proceeds from an illegal cause or object, and
an immoral condition, such as illicit
that that the act of executing the contract
sexual intercourse
constitutes a criminal offense. Illegality of
 Consequence: In some way, the
object or cause gives rise to the in pari delicto
donation produces some effect in that
doctrine. [Ramirez v. Ramirez, March 17, 2006]
that he who gave the donation cannot
get back what he has given.
Exceptions to the Principle of In Pari Delicto:

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(1) Payment of usurious interest [Art. 1413]
(2) Payment of money or delivery of
property for an illegal purpose, where
the party who paid or delivered
repudiates the contract before the
purpose has been accomplished, or
before any damage has been caused to a
third person [Art. 1414] [See: Hulst v. PR
Builders Inc., September 3, 2007]
(3) Payment of money or delivery of
property made by an incapacitated
person [Art. 1415]
(4) Agreement or contract not illegal per se
but merely prohibited by law, and the
prohibition is designed for the plaintiff’s
protection [Art. 1416] Note: When the
assailed contracts are void ab initio, Art.
1416 cannot be applied, as in the case of
aliens purchasing property despite
knowing fully well the constitutional
prohibition against foreigners owning
land in the Philippines at the time of
purchase. [Frenzel v. Catito, July 11, 2003]
(5) Payment of any amount in excess of the
maximum price of any article or
commodity fixed by law (Art. 1417)
(6) Contract whereby a laborer undertakes
to work longer than the maximum
number of hours fixed by law (Art. 1418)
(7) Contract whereby a laborer accepts a
wage lower than the minimum wage
fixed by law (Art. 1419)
(8) In case of divisible contracts, the legal
terms may be enforced separately from
the illegal terms (Art. 1420); and
(9) One who lost in gambling because of
fraudulent schemes practiced on him.
He is allowed to recover his losses (Art.
315(3)(b) even if gambling is prohibited)
The principle of in pari delicto admits of an
exception under Art. 1416 of the Civil Code
Under this article, recovery for what has been
paid or delivered pursuant to an inexistent
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CIVIL LAW
contract is allowed only when the following
requisites are met:
(1) the contract is not illegal per se but
merely prohibited;
(2) the prohibition is for the protection of
the plaintiffs; and
(3) if public policy is enhanced thereby.
[Acabal v. Acabal, March 31, 2005]
See also: Arts. 1345 and 1346
Non-Existing Cause or Object [Paras]
Art. 1409(3) speaks of contracts “whose object
or cause did not exist at the time of the
transaction.” This is not exactly correct
because there can be valid contracts involving
future property; example, sale of future or
after-acquired property. Thus, Justice J. B. L.
Reyes notes: “did not exist at the time of the
transaction” should be “could not come into
existence because the object may legally be a
future thing.”
VII. NATURAL
OBLIGATIONS
NATURAL OBLIGATIONS
Those based on equity and natural law, which
do not grant a right of action to enforce their
performance, but after voluntary fulfillment by
the obligor, authorize the retention of what has
been delivered or rendered by reason thereof
[Art. 1423]
Note: The binding tie is the conscience of man
In order that there may be a natural obligation
there must exist a juridical tie which is not
prohibited by law and which in itself could give
a cause of action but because of some special
circumstances is actually without legal
sanction or means of enforcing compliance by
intervention of courts. [Tolentino]
UP LAW BOC CONTRACTS CIVIL LAW

Four Types of Obligations in Juridical Science protect.

(1) Moral Obligations – duties of conscience
completely outside the field of law
(2) Natural Obligations – duties not
sanctioned by any action but have a
relative judicial effect
(3) Civil Obligations – juridical obligations
that are in conformity with positive law
but are contrary to juridical principles
and susceptible of being annulled;
enforceable by action
(4) Mixed Obligations – full juridical effect;
falls under civil obligations
Two Conditions Necessary for Natural
Obligations:
(1) That there be a juridical tie between two
persons; and
(2) That this tie is not given effect by law
Within the domain of Within the domain of
law morals
The promise made by an organizer of a dog
racing course to a stockholder to return to him
certain amounts paid by the latter in
satisfaction of his subscription upon the belief
of said organizer that he was morally
responsible because of the failure of the
enterprise, is not the consideration required by
Art. 1261 of the Civil Code as an essential
element for the legal existence of an onerous
contract which would bind the promissor to
comply with his promise. The promise was
prompted by a feeling of pity and is, therefore,
purely moral and as such, not demandable in
law but only in conscience, over which human
judges have no consideration. [Fisher v. Robb,
November 2, 1939]

Conversion to Civil Obligations

Natural Civil General Rule: Partial payment of a natural
Obligations Obligations obligation does not make it civil; the part paid
As to Not by court Court action or cannot be recovered but the payment of the
enforceability actions, but the coercive balance cannot be enforced.  applicable only
by good power of to natural obligations because of prescription
conscience of public or lack of formalities (nullity due to form e.g.
debtor authority Art. 1430) and not to natural obligation subject
As to basis Equity and Positive law to ratification or confirmation
natural [Art. 1157] Note: Payment by mistake is not voluntary and
justice may be recovered. Payment is voluntary when
the debtor knew that the obligation is a natural
one. The debtor, however, has the burden of
Natural Obligations Moral Obligations proving the mistake.
There is a juridical tie No juridical tie (1) By novation
between the parties whatsoever. (2) By ratification or confirmation
which is not
enforceable by court Examples:
action. Article 1424. When a right to sue upon a civil
Voluntary fulfillment Voluntary fulfillment of obligation has lapsed by extinctive
of such produces such does not produce prescription, the obligor who voluntarily
legal effects which any legal effect which performs the contract cannot recover what he
the court will the court will recognize has delivered or the value of the service he has
recognize and and protect. rendered.

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Article 1425. When without the knowledge or
against the will of the debtor, a third person
pays a debt which the obligor is not legally
bound to pay because the action thereon has
prescribed, but the debtor later voluntarily
reimburses the third person, the obligor cannot
recover what he has paid.
Article 1426. When a minor between eighteen
and twenty-one years of age who has entered
into a contract without the consent of the
parent or guardian, after the annulment of the
contract voluntarily returns the whole thing or
price received, notwithstanding the fact that he
has not been benefited thereby, there is no
right to demand the thing or price thus
returned.
Article 1427. When a minor between eighteen
and twenty-one years of age, who has entered
into a contract without the consent of the
parent or guardian, voluntarily pays a sum of
money or delivers a fungible thing in
fulfillment of the obligation, there shall be no
right to recover the same from the obligee who
has spent or consumed it in good faith. (1160A)
Article 1428. When, after an action to enforce a
civil obligation has failed the defendant
voluntarily performs the obligation, he cannot
demand the return of what he has delivered or
the payment of the value of the service he has
rendered.
Article 1429. When a testate or intestate heir
voluntarily pays a debt of the decedent
exceeding the value of the property which he
received by will or by the law of intestacy from
the estate of the deceased, the payment is
valid and cannot be rescinded by the payer.
Article 1430. When a will is declared void
because it has not been executed in
accordance with the formalities required by
law, but one of the intestate heirs, after the
settlement of the debts of the deceased, pays a
legacy in compliance with a clause in the
defective will, the payment is effective and
irrevocable.
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CIVIL LAW
Note: In Art. 1247, it is not the voluntary
payment that prevents recovery, but the
consumption or spending of the thing or
money in good faith.
VIII. ESTOPPEL
DEFINITION
A condition or state by virtue of which an
admission or representation is rendered
conclusive upon the person making it, and
cannot be denied or disproved as against the
person relying thereon [Art. 1431]
KINDS OF ESTOPPEL
(1) Estoppel in pais or by conduct [Art. 1433]
a. Estoppel by silence [Art. 1437]
b. Estoppel by acceptance of benefits
(2) Technical Estoppels
a. Estoppel by Deed – a party to a deed is
precluded from asserting as against
the other party, material fact asserted
therein; (Art. 1433) and
b. Estoppel by Record – a party is
precluded from denying the truth of
matters set forth in a record whether
judicial or legislative
(3) Estoppel by Judgment – a party to a case
is precluded from denying the facts
adjudicated by a court of competent
jurisdiction
(4) Estoppel by laches
Note: Estoppel is effective only as between the
parties thereto or their successors-in-interest.
Note: The government is not estopped by
mistake or error on the part of its officials or
agents. In Manila Lodge No. 761 Benevolent and
Protective Order of the Elks v. CA (1976), the sale
executed by the City of Manila to Manila Lodge
was certainly a contract prohibited by law, and
that estoppel cannot be urged even if the City
of Manila accepted the benefits of such
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contract of sale and the Manila Lodge No. 761 Applies in law Applies in equity
had performed its part of the agreement, for to Cannot be availed of Being a defense in
apply the doctrine of estoppel against the City unless it is equity, it need not be
of Manila in this case would be tantamount to specifically pleaded specifically pleaded
enabling it to do indirectly what it could not do as an affirmative
directly. allegation
Based on a fixed Not based on a fixed
LACHES OR “STATE DEMANDS” time time
Failure or neglect, for an unreasonable and
unexplained length of time, to do that which,
by exercising due diligence, could or should
have been done earlier; it is negligence or IX. TRUSTS
omission to assert a right within a reasonable
time, warranting a presumption that the party Trusts – a fiduciary relationship with respect to
entitled to assert it either has abandoned it or property, subjecting the person holding the
declined to assert it. same to the obligation of dealing with the
property for the benefit of another person
Elements [J.B.L. Reyes]
(1) Conduct on the part of the defendant, or
of one under whom he claims, giving rise Characteristics of Trust:
to the situation of which complaint is 1. It is a relationship
made and for which the compaint seeks 2. The relationship is of fiduciary character
a remedy; 3. The relationship is with respect to
(2) Delay in asserting the complainant’s property, not one involving merely
rights, the complainant having had personal duties
knowledge or notice of the defendant’s 4. It involves the existence of equitable
conduct and having been afforded an duties imposed upon the holder of the
opportunity to institute a suit; title to the property to deal with it for the
(3) Lack of knowledge or notice on the part benefit of another
of the defendant that the complaint 5. It arises as a result of a manifestation of
would assert the right on which he bases intention to create the relationship
his suit; and
(4) Injury or prejudice to the defendant in Trust Stipulation pour autrui
the event relief is accorded to the Refers to a specific Involves any
complainant, or the suit is not held to be property stipulation in favor of a
barred [Miguel v. Catalino, November 29, third person
1968]
Trust Condition
Prescription Laches Performance of trust Performance or
Concerned with the Concerned with the is enforceable accomplishment is not
fact of delay effect of delay enforceable
Question or matter Question of inequity of
of time permitting the claim to
be enforced
Statutory Not statutory

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Trust Guardianship or Proof Required:

Executorship 1. No express trusts concerning an
Trustees has legal Guardians or Executors immovable or any interest therein may be
title to the property do not have legal title proved by parol evidence [Art. 1443].
but mere actual o Trusts over real property are
possession and limited unenforceable unless in writing,
powers over the although writing is not required for
property validity, only for proof.
2. Where the trust is over personal property,
A. GOVERNING RULES an oral trust is sufficient between the
Art. 1442. The principles of the general law parties.
of trusts insofar as they are not in conflict 3. But to bind third persons the trust must
with this Code, the Code of Commerce, the be in a public instrument [Art. 1358(1) and
Rules of Court and special laws are hereby (3)]
adopted.
Form of Express Trusts
Art. 1444. No particular words are required
B. PARTIES [ART. 1440]
for the creation of an express trust, it being
1. Trustor – the person who establishes the
sufficient that trust is clearly intended
trust
2. Trustee – one in whom the confidence is
Want of Trustee
reposed as regards property for the
Art. 1445. No trust shall fail because the
benefit of another person
trustee appointed declines the designation,
3. Beneficiary or cestui que trust – person
unless the contrary should appear in the
for whose benefit the trust has been
instrument constituting the trust
created

To permit the trust to fail for want of trustee is

C. KINDS OF TRUST
to defeat the intention of the trustor in creating
the trust.
C.1. EXPRESS TRUST
Created by the intention of the trustor or of Acceptance by beneficiary
the parties [Art. 1441] Acceptance by beneficiary is necessary [Art.
1446]. It may be:
Elements: 1. Express
1. Competent trustor or settlor 2. Implied
2. Trustee  Acceptance by the beneficiary is
3. Ascertainable trust res / Trust property not subject to the formal rules of
4. Sufficiently certain beneficiaries donations [Cristobal v Gomez,
1927]
Trust is created: 3. Presumed – if the trust imposes no
1. By declaration of the trustor or settlor onerous condition upon the beneficiary
that he holds property in trust
2. By conveyance to the trustee:
a. Inter vivos, or
b. By testament

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Termination of Express Trusts
1. Revocation or modification by the
trustor under a reserved power
2. Rescission
3. Expiration of the period or happening
of the resolutory condition
4. Accomplishment of the purpose or its
becoming impossible or illegal
5. Dissolution by the Court if continuation
will defeat the purpose of the trust
6. Dissolution by the consent of all the
beneficiaries and/or the settlor
7. Merger
C.2. IMPLIED TRUST
Come into being by operation of law [Art.
1441].
The essential idea involves a certain
antagonism between the cestui que trust and
the trustee even where the 7trust has not
arisen out of fraud or an immoral transaction
[J.B.L. Reyes]
Proof required
Art. 1457. An implied trust may be proved by
oral evidence
A trust must be proven by clear, satisfactory
and convincing evidence. It cannot rest on
vague and uncertain evidence or on loose,
equivocal or indefinite declarations [De Leon
vs. Molo-Peckson, 1962]
Where a trust is to be established by oral proof,
the testimony supporting it must be sufficiently
strong to prove the right of the alleged
beneficiary with as much certainty as if a
document proving the trust were shown
[Suarez v Tirambulo, 1933]
Examples of Implied Trusts
1. Resulting Trusts - a trust raised by
implication of law and presumed to have
been contemplated by the parties, the
260
CIVIL LAW
intention as to which is to be found in
the nature of their transaction, but not
expressed in the deed or instrument of
conveyance [Salao v Salao, 1976]
Art. 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. The former is the trustee, while
the latter is the beneficiary. However, if the
person to whom the title is conveyed is a child,
legitimate or illegitimate, of the one paying the
price of the sale, no trust is implied by law, it
being disputably presumed that there is a gift
in favor of the child.
Art. 1449. There is also an implied trust when a
donation is made to a person but it appears
that although the legal estate is transmitted to
the donee, he nevertheless is either to have no
beneficial interest or only a part thereof.
Art. 1451. When land passes by succession to
any person and he causes the legal title to be
put in the name of another, a trust is
established by implication of law for the
benefit of the true owner.
Art. 1452. If two or more persons agree to
purchase property and by common consent the
legal title is taken in the name of one of them
for the benefit of all, a trust is created by force
of law in favor of the others in proportion to the
interest of each.
Art. 1453. When property is conveyed to a
person in reliance upon his declared intention
to hold it for, or transfer it to another or the
grantor, there is an implied trust in favor of the
person whose benefit is contemplated.
Constructive Trusts - a trust not created by any
words, either expressly or impliedly evincing a
direct intension to create a trust, but by the
construction of equity in order to satisfy the
demands of justice [Salao v Salao, 1976]
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Art. 1450. If the price of a sale of property is

loaned or paid by one person for the benefit
of another and the conveyance is made to
the lender or payor to secure the payment of
the debt, a trust arises by operation of law in
favor of the person to whom the money is
loaned or for whom it’s is paid. The latter
may redeem the property and compel a
conveyance thereof to him.
Art. 1454. If an absolute conveyance of
property is made in order to secure the
performance of an obligation of the grantor
toward the grantee, a trust by virtue of law is
established. If the fulfillment of the
obligation is offered by the grantor when it
becomes due, he may demand the
reconveyance of the property to him.
Art. 1455. When any trustee, guardian or
other person holding a fiduciary relationship
uses trust funds for the purchase of property
and causes the conveyance to be made to
him or to a third person, a trust is
established by operation of law in favor of
the person to whom the funds belong.
Art. 1456. If property is acquired through
mistake or fraud, the person obtaining it is,
by force of law, considered a trustee of an
implied trust for the benefit of the person
from whom the property comes.

Express trust is a "continuing and subsisting"

trust, not subject to the statute of limitations,
at least, until repudiated, in which event the
period of prescription begins to run only from
the time of the repudiation. [Tamayo v Callejo,
1972]
In constructive trusts, the rule is that laches
constitutes a bar to actions to enforce the
trust, and repudiation is not required, unless
there is a concealment of the facts giving rise
to the trust. [Fabian v Fabian, 1968]

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CIVIL LAW
SALES

262
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I. Definition and
Essential Requisites
A.DEFINITION OF SALES
By the contract of sale one of the contracting
parties obligates himself to transfer the
ownership and to deliver a determinate thing,
and the other to pay therefor a price certain in
money or its equivalent.
A contract of sale may be absolute or
conditional. [Art. 1458, CC]
The essence of a contract of sale is the transfer
of ownership or that the recipient has the
ability to alienate the thing transferred to him.
B. ESSENTIAL REQUISITES OF A
CONTRACT OF SALE
B.1. ESSENTIAL ELEMENTS OF A VALID
CONTRACT OF SALE
[Coronel vs CA, 1996; De Leon]
i. Consent or meeting of the minds to transfer
ownership in exchange for the price
Being a consensual contract, the contract of
sale is perfected at the moment there is a
“meeting of the minds” upon the thing which is
the object of the contract and upon the price.
[Art. 1475]
Requisites:
(1) Legal Capacity
(2) Offer and acceptance, and
(3) No vitiation of consent
A person is not incompetent to contract merely
because of advanced years or by reason of
physical infirmities.
SALES CIVIL LAW
Exceptions to consent being a requisite:
(1) Expropriation,
(2) Ordinary Execution Sale,
(3) Judicial Foreclosure Sale, and
(4) Extra-Judicial Foreclosure Sale
Special Case: If sale involves the conjugal
property of spouses, consent must be given by
both.
ii. Determinate subject matter
 Must be determinate or capable of being
determinate
 Must be licit and within the commerce of
man
iii. Price certain in money or its equivalent
(cause/consideration)
 Must be real, certain, and pecuniary
B.2. NON-ESSENTIAL ELEMENTS OF A
CONTRACT OF SALE
(1) Natural – those deemed to exist in certain
contracts in the absence of any contrary
stipulations.
(Ex. Warranty against eviction, hidden defects)
(2) Accidental – those which may be present or
absent depending on the stipulations of the
parties.
(Ex. Conditions, interest, penalty)
C. STAGES OF CONTRACT OF SALE
PHASES OF A SALE CONTRACT
[De Leon]
(1) Preparation, conception, negotiation, or
generation stage – from the time the
prospective contracting parties indicate
interest in the contract to the time the
contract is perfected
(2) Perfection or “birth” of the contract – upon
the concurrence of the essential elements
of the sale; and
(3) Consummation or “death” of the contract –
begins when the parties perform their
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UP LAW BOC
respective undertakings under the contract
of sale, culminating in the extinguishment
thereof.
D. OBLIGATIONS CREATED
Art. 1165. When what is to be delivered is a
determinate thing, the creditor, in addition to
the right granted him by Article 1170, may
compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may
ask that the obligation be complied with at the
expense of the debtor.
If the obligor delays, or has promised to deliver
the same thing to two or more persons who do
not have the same interest, he shall be
responsible for any fortuitous event until he
has effected the delivery.
(1) Specific or Determinate Thing – capable of
particular designation, e.g. this car, the car
with plate no. XNY 200
(2) Generic or Indeterminate Thing – refers
only to a class, to a genus, and cannot be
pointed out with particularity, e.g. a car
(genus nunquam perit)
NATURE OF OBLIGATIONS CREATED
PER DEFINITION IN ART.1458
[Villanueva]
(1) For the SELLER: To transfer ownership and
to deliver possession of the subject matter
(2) For the BUYER: To pay the price
E. CHARACTERISTICS OF A
CONTRACT OF SALE
(1) Consensual – perfected by mere consent
and without any further acts.
(2) Bilateral and Reciprocal – imposes
correlative obligations on both parties to
the relationship. Consequently, power to
rescind is implied.
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SALES CIVIL LAW
(3) Principal – can stand on its own and does
not depend on another contract for
validity, as contrasted from an accessory
contract.
(4) Onerous – imposes valuable consideration
as prestation, as distinguished from a
gratuitous contract.
Consequence: all doubts in construing an
onerous contract shall be resolved in that
which gives greater reciprocity of interests.
[Art. 1378]
(5) Commutative – because a thing for value is
exchanged for equal value, as contrasted
from an aleatory contract.
Test: As long as the party believes in all
honesty that he is receiving equal for what he
gave up for, then commutative character is
complied with.
(6) Nominate – given a particular name by law
E.1. SALE IS TITLE AND NOT MODE
Delivery or Tradition is the mode to transfer
ownership and possession to the buyer.
When a contract of sale is perfected, the seller
is merely obligated to transfer ownership and
to deliver the property. Transfer of ownership is
effected only upon delivery.
Sale is merely title that creates the obligation
on the part of the seller to transfer ownership
and deliver possession, but on its own, sale is
not a mode that transfers ownership.
[Equatorial Realty Dev. v. Mayfair Theater, 2001]
F. SALE DISTINGUISHED FROM
OTHER CONTRACTS
DONATION
Sale Donation
Onerous Gratuitous
Perfected by mere Must comply with the
consent formalities required
by law. [Art 745, CC]
UP LAW BOC SALES CIVIL LAW

When the price of the contract of sale is The fact that the object were made by the
simulated, the sale may be void but the act seller only when customers placed their orders,
may be shown to have been in reality a does not alter the nature of the contract of
donation or some other contract. [Art.1471, CC] sale, for it only accepted such orders as called
for the employment of such materials as it
F.1. BARTER ordinarily manufactured or was in a position
Sale Barter habitually to manufacture such. [Celestino Co &
Consideration is price Consideration is Co vs. Collector, 1956:]
in money or its another thing
When each product or system executed is
equivalent
always UNIQUE and could not mass-produce
Barter is a contract where one of the parties the product because of its very nature, such is a
binds himself to give one thing in consideration contract for a piece of work.[Commissioner vs.
of the other’s promise to give another thing Engineering Equipment and Supply Co., 1975]
[Art.1638, CC]
F.3. DACION EN PAGO
If consideration consists partly in money and Sale Dacion en pago
partly in another thing, the intention of the No pre-existing debt Pre-existing debt
parties determines whether the contract is one Creates an obligation Extinguishes the
of sale or barter. obligation (mode of
payment)
If manifest intention is not clear: Barter when Price is more freely Price is value of the
the value of thing is more than the amount of agreed upon, fixed by thing given
money or its equivalent; otherwise, sale. the parties
[Art.1468] Buyer has to pay the Payment is received
price by the debtor before
If the local currency is exchanged with other contract is perfected
denominations of local currency also, there is
barter. There is a novation of the contract of loan into
a contract of sale when the creditor agrees to
accept a thing in payment of the debt. Hence, if
F.2. CONTRACT FOR A PIECE OF WORK the thing given in payment turns out to belong
Contract for a Piece of to another, the creditor’s remedy should be
Sale
Work governed by the law on sales, not loan.
Goods are Goods are [Baviera]
manufactured or manufactured for
procured in the customer upon his Bilateral promise to buy and sell [Asked in 80,
ordinary course of special order 91]
business A promise to buy and sell a determinate thing
For the general For a specific for a price certain is reciprocally demandable.
market, whether on customer [Art 479, CC]
hand or not
Governed by Statute of Not within Statute of Like a sale, the thing must be determinate and
Frauds Frauds the price, certain.

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F.4. CONTRACT OF SALE/CONTRACT TO

SELL Permanent Temporary
Contract of Sale Contract to sell Seller must be owner Lessor neet not be
at time of delivery owner
Ownership is Ownership is only
transferred upon transferred upon full
delivery payment of price
Non-payment is a Full payment is a G. KINDS OF CONTRACT OF SALE
resolutory condition positive suspensive (1) Absolute – when sale is not subject to any
condition, hence non- condition and the title immediately passes
payment would not to the purchaser upon delivery
give rise to the (2) Conditional – ownership of the object
obligation to transfer remains with the vendor until fulfillment of
ownership the condition/s

Conditional Contract of
II. Parties to a Contract
Contract to sell
Sale of Sale
Sale is already No perfected sale yet
perfected
A subsequent buyer is A subsequent buyer All persons who have capacity to enter into
presumed to be a is presumed to be a obligations may enter into a contract of sale
buyer in bad faith buyer in good faith [Art 1489, CC]

Sale Agency to sell

A. KINDS OF INCAPACITY
Buyer receives the Agent receives good (1) Absolute incapacity – when persons cannot
goods as owner as goods of the bind themselves at all
principal (2) Relative incapacity – only with regard to
Agent delivers the certain persons and certain class of
Buyer pays the price price which he got property
from his principal (3) Specific incapacity/Special disqualifications
Buyer cannot return Agent can’t return
the object sold as a the goods A.1. ABSOLUTE INCAPACITY
general rule [ARTS. 1327, 1397, 139]

Seller warrants the Agent makes no (MIND-CI) [ART. 1327, CC]

thing sold warranty (1) Minors
Not unilaterally Essentially revocable (2) Insane or Demented
revocable (3) Deaf-mutes who do not know how to write
(4) Civil Interdiction
Sale Lease (5) Judicially-declared Incompetents (Art. 39)
(a) Prodigal
Ownership transferred No transfer of (b) Imbeciles
by delivery ownership (c) Absence & presumption of death

266
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(d) Persons not of unsound mind but
by reason of age, disease, weak
mind, and other similar causes,
cannot take care of themselves and
manage their property without
outside aid (Easy prey for deceit
and exploitation)
A.2. RELATIVE INCAPACITY: MARRIED
PERSONS
(1) Husband and wife [Art. 1490]
General Rule: Cannot sell property to each
other
Exceptions:
(a) Separation of property in marriage
settlement, OR
(b) Judicial separation of property.
Although certain transfers from husband to
wife or vice versa are prohibited, such
prohibition can be taken advantage of only to
persons who bear such relation to parties
making transfer with their rights or interest.
Unless such a relationship appears, the
transfer cannot be attacked. [Cook v.
McMicking, 1914]
Sale by husband in favor of a concubine after
he had abandoned his family and left conjugal
home where his wife and children lived and
from whence they derived their support, is void.
[Ching v. Goyanko, Jr., 2006]
Similarly, donations are prohibited. This is so
because if such transfers are allowed during
marriage, then the same would destroy the
system of conjugal partnership, a basic policy
in civil law.
(2) Alienage[Art. 39]
General Rule: Aliens are disqualified from
purchasing or acquiring real property.
Exception: If acquisition is through
hereditary succession
SALES CIVIL LAW
(3) Trusteeship [Art. 39]
A.3. SPECIAL DISQUALIFICATIONS
[ARTS. 1491-1492] (AGE-PLJ)
The sale entered into by agents, guardians,
and executors and adminsitrators shall be
voidable because it affects only private
interests.
The sale entered into by public officers,
lawyers, justices and judges, and others
specially disqualified by law shall be void
because it affects the public interest.
(1) Agents - Cannot purchase or acquire
property whose administration or sale was
entrusted to them
Exception: Principal gives consent.
Requisites:
(a) Property is owned by the principal of the
agent
(b) Administration/sale of the property is
entrusted to the agent
(c) Consent of the principal is not given
(2) Guardian - Cannot purchase property of
person under his guardianship
Guardianship is a trust of the highest order,
and the trustee cannot be allowed to have any
inducement or neglect his ward’s interest. [Phil
Trust Co v Roldan, 1956]
Relation so intimate, dependence so great,
and influence so great, that every transaction
entered into while the relationship exists is
suspicious and presumptively fraudulent. [De
Leon]
Requisites:
(a) Property must be owned by the ward
(b) Ward must be under the guardianship of
the guardian
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Art. 1491(2) in relation to Art. 1409 does not
apply where the sale was under a special
power attached to the real estate mortgage,
pursuant law. Under Act No. 3135, a
mortgagee-creditor is allowed, as an
exception, to participate in the bidding under
the same condition as any other
bidder.[Fiestan v. CA, 1990]
(3) Executors and Administrators - Cannot
acquire or purchase property of estate under
their administration
Does not apply to purchase of hereditary
rights, as these are not under their
administration
The prohibition on executors and
administrators does not apply if the principal
consents to the sale.[Distajo v. CA, 2000]
(4) Public Officers and Employees - Cannot
acquire or purchase property of State/any of its
subdivisions, GOCC or administration, the
administration of which was entrusted to
them.
Includes judges and government experts who,
in any manner whatsoever take part in the
sale.
Requisites:
(a) Properties must belong to the State, any of
its subdivisions, or of any GOCC
(b) Administration of these properties are
entrusted to the public officers/officials
(5) Lawyers - Cannot acquire or purchase
property or rights in litigation in which they
take part by virtue of their profession
Lawyers may have undue influence over client;
greed may get the better of the sentiments of
268
SALES CIVIL LAW
loyalty and disinterestedness. [Valencia v
Cabanting, 1991]
Prohibition is definite and permanent and
cannot be cured by ratification. [Rubias v
Batiller, 1973]
Exceptions: An assignment to a lawyer by his
client of an interest in the property does not
violate Art 1491, where:
(a) A judgment has been rendered and has
become final; and
(b) In case of contingency fee arrangements:
the interest of the lawyer may be
annotated as an adverse claim on the
property awarded to his client [Director of
Lands v Ababa, 1979]
Contract stipulating a contingent fee is not
prohibited because payment of such fee is not
made during pendency of litigation but only
after judgment. A lawyer may have lien over
funds and property of client and may apply as
may be necessary to satisfy his lawful fees and
disbursements. As long as the lawyer does not
exert undue influence, and that no fraud is
committed, or no imposition applied, or that
compensation is clearly not excessive as to
amount to extortion, a contract for contingent
fee is valid and enforceable. Also, a reading of
contract is 40% of the value of
properties.[Fabillo v. IAC, 1991]
(6) Justices, Judges, prosecuting attorneys,
clerks and other officers and employees
connected with the administration of justice -
Cannot acquire or purchase property or rights
in litigation or levied upon on execution before
the court within whose jurisdiction or territory
they exercise their respective functions.
Rationale: to prevent fraud and to surround
their profession with prestige.
UP LAW BOC SALES CIVIL LAW

Prohibition applies only on sales or assignment BUT if already sold to a third person who relied
during the pendency of litigation involving the on the title of his immediate seller,
property. [Macariola v Asuncion, 1963] reconveyance to the seller spouse is no longer
available [Cruz v CA, 1997]
(7) Others specially disqualified by law
(a) Unpaid sellers with goods in transit from B.3. SPECIFIC INCAPACITY/ SPECIAL
buying the goods DISQUALIFICATIONS
(b) Officer conducting the execution sale of Contracts expressly prohibited by law are void
deputies and cannot be ratified. Neither can the right to
set-up the defense of illegality be waived. [Art.
Art 1492: The prohibitions in the two preceding 1409 (7)]
articles (Arts. 1490, 1491) are applicable to
sales in legal redemption, compromises and
Sales entered into by guardians,
renunciations.
administrators, and agents (specific
B. EFFECTS OF INCAPACITY incapacities) in violation of Art. 1491 may be
ratified by means of and in the form of a new
B.1. ABSOLUTE INCAPACITY
contract when the cause of nullity has ceased
(1) If both parties are incapacitated:
to exist. Ratification is valid only from date of
UNENFORCABLE [Art. 1403 (3)]
execution of the new contract and does not
(2) If only 1 party is incapacitated: VOIDABLE
retroact.
If necessaries are sold and delivered to an
Those entered into by public
incapacitated person: pay a reasonable price
officers/employees, justices and judges, and
therefor. [Art 1489]
lawyers in violation of Art. 1491 are inexistent
and void from the beginning. [Rubias v Batiller,
“Necessaries” – those which are indispensable
1973]
for sustenance, dwelling, clothing, medical
attendance, education and transportation. [Art
194, Family Code] III. Subject Matter
A. REQUISITES OF A VALID SUBJECT
B.2. RELATIVE INCAPACITY
MATTER
Sale between spouses is VOID.
[ARTS. 1459-1465]
Rationale:
(1) To protect 3rd persons who may have
For Rights:
contracted with the spouse
(1) Transmisible or personal
(2) To avoid undue advantage of the dominant
(2) Licit
spouse over the weaker spouse.
(3) To avoid circumvention of the prohibition
For Things:
against donations between spouses.
(1) Licit
[Medina v CIR, 1961]
(2) Existing, Future, Contingent
(3) Determinate or determinable
Such prohibition shall likewise apply to
common law spouses. [Calimlim-Canulas v
Fortun, 1984] A.1. MUST BE LICIT
[Art. 1459]
The thing is licit when—

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(1) Within the commerce of man [Art 1347, CC] (3) Sale of animals if the use or service for
(2) Example of properties that are not within which they are acquired has been stated in
the commerce of man: the contract, and they are found to be unfit
(a) Those belonging to the State or its therefor [Art 1575]
political subdivisions intended for
public use or public service. (Art 420) (4) Sale of land in violation of Cosntitutional
(b) Church prohibition against the transfer of lands to
(c) Narcotics or dangerous drugs except aliens. [Art XII of Constitution]
upon prescription (RA 6425, the
dangerous drugs act of 1972) When the subject matter is illicit, the contract
(3) When right is not intransmissible [Art 1347] of sale is void [Art. 1409 (7)]
(4) It does not contemplate a future
inheritance, unless expressly authorized by A.2. EXISTING, FUTURE, CONTINGENT
law The goods which form the subject of a contract
of sale may either be—
i. Kinds of illicit things: (1) Existing goods owned or possessed by the
(1) Per Se – of its nature seller;
(2) Per Accidens – due to provision of law. (2) Goods to be manufactured, raised, OR
acquired by the seller – “FUTURE GOODS”;
Art 1347, paragraph 2, characterizes a contract [Art 1462, CC]
entered into upon future inheritance as void. 1. It is valid only as an executory contract to be
Art. 1347 applies when the following requisities fulfilled by acquisition and delivery of goods
concur: specified.
(1) Succession has not yet been opened; (3) Things having POTENTIAL existence may be
(2) The object of the contract forms part of the the object of a contract of sale. [Art 1461, CC]
inheritance; and 2. The thing sold must be specific and identified,
(3) The promissor has, with respect to the and owned by the vendor at that time.
object, an expectancy of a right which is
purely hereditary in nature.[Vda. de Cabatu Sale of MERE hope or Sale of VAIN hope or
v. Spouses Tabu, 2012] expectancy expectancy
Valid BUT subject to Void
ii. Examples of illicit sale condition that the
thing will come into Example: Sale of a
(1) Sale of future inheritance is void[Art. 1347] existence falsified raffle ticket
which will never win.
The rights to succession are transmitted from Example: “Next catch”
the moment of the death of the decedent [Art. of a fisherman.
777, CC]. Thus, one cannot sell or promise to
sell what he expects to inherit from a living Emptio Rei Speratei Emptio Spei
person. [Rivero v. Serrano, 1950]
Valid Void
Sale of a thing not yet Sale of the hope itself
(2) Sale of animals suffering from contagious
in existence but will that a thing will come
diseases [Art 1575]
exist into existence
Upon the failure of the Where it is agreed

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Emptio Rei Speratei Emptio Spei
condition, the contract that buyer will pay
becomes ineffective the price even if the
thing does not come
into existence
Future thing is certain Not certain that the
as to itself, but thing itself will exist
incertain as to quantity
and quality
Deals with a future Thing which exists or
thing is present – the hope
or expectancy
In case of doubt, the presumption is in favor of
emptio rei speratae since it is more in keeping
with the commutative character of the
contract.
(4) Sale of SPECIFIC THINGS
(a) Sale of things in litigation [Art 1381(4)]
Sale of things under litigation entered into by
defendant, without the approval of the
litigants or the court is rescissible. [Art 1381 (4)]
NO RESCISSION where the thing is legally in
the possession of 3rd persons who did not act
in bad faith [Art 1385 (2)]
(b) Sale of an undivided interest in a thing [Art
1463]
LEGAL EFFECT: Make the buyer a co-owner in
the thing sold:
(i) acquire full ownership of his part
(ii) may sell his part even without conent of
other co-owners
(c) Sale of undivided share of a specific mass
[Art 1464]
The sale of an undivided share in a specific
mass of fungible goods makes the buyer a co-
owner of the entire mass in proportion to the
amount he bought.
SALES CIVIL LAW
If later on it was discovered that the mass of
fungible goods contain less than what was
agreed upon, the buyer becomes owner of
whole mass and seller must make up for the
difference.[De Leon]
A Co-owner cannot sell more than his share
[Yturralde v CA, 1972]
(d) Sale of things subject to reolutory condition
[Art 1465]
Examples: Things acquired under legal or
conventional right of redemption; or subject to
reserva troncal; pacto de retro sale
DETERMINATE OR DETERMINABLE
A thing is DETERMINATE when it is particularly
designated or physically segregated from all
others of the same class. [Art 1460]
A thing is DETERMINABLE when it is capable
of being made determinate at the time the
contract was entered into without the necessity
of a new or further agreement between the
parties. [Art 1460]
Art. 1165 of NCC: If the obligation to deliver is a
determinate thing, the creditor has the right to
compel specific performance and to recover
damages for breach of the obligation. [Jurado]
Failure to state the exact location of the land
does not make the subject matter
indeterminate, so long as it can be
located.[Camacho v CA, 2007]
The fact that the exact area of the land
specified in the contract of sale is subject to the
result of a survey does not render the subject
matter indeterminate.[Heirs of Juan San Andres
v. Rodriguez, 2000]
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IV. Obligations of the
Seller
A. OBLIGATIONS OF THE VENDOR IN
GENERAL
(1) To transfer ownership of the thing[Art.
1495]
(2) To deliver the thing, with its accessions
and accessories, if any[Arts 1164, 1166]
(3) To warrant against eviction and against
hidden defects[Arts 1545-1581]
(4) To take care of the thing, pending delivery,
with proper diligence[Art 1163]
(5) To pay for the expenses of the deed of
sale[Art1487]
B. WHEN SELLER IS NOT THE
OWNER
General Rule: Ownership is not acquired by the
buyer. One cannot give what one does not
have. [Art 1505]
Exceptions:
(1) Seller has a right to transfer ownership
Seller need not be the owner of the thing at the
time of perfection of the contract. It is sufficient
that seller has a right to transfer ownership
thereof at the time it is delivered. [Art. 1459]
One who sells something he does not own yet
is bound by the sale when he acquires the
thing later. [Bucton vs Gabar, 1974]
(2) Estoppel: Owner is, by his conduct,
precluded from denying the seller’s authority
to sell. [Art. 1434]
(3) Registered land bought in good faith
General rule: Buyer need not go beyond the
Torrens Title
SALES CIVIL LAW
Exception: When he has actual knowledge of
facts and circumstances that would impel a
reasonably cautious man to make further
inquiry
(4) Order of courts; Statutory Sale
In execution sale, the buyer merely steps into
the shoes of the judgment debtor [Rule 39, sec.
33, ROC]
(5) When goods are purchased in Merchant’s
store, Fair, or Market [Art 1505]
The policy of the law has always been that
where the rights and interest of the vendor
clash with that of an innocent buyer for value,
the latter must be protected. [Sun Brothers and
Co. vs. Velasco, 1958]
C. SALE BY PERSON HAVING A
VOIDABLE TITLE
(1) True owner may recover the thing when the
ff. requisites concur:
(a) Subject matter is movable
(b) Owner has either lost the thing or has
been unlawfully deprived. [Art 559]
(2) Reimbursement is necessary before owner
can recover when:
(a) Buyer acted in good faith
(b) Acquired at a public auction [Art 559]
(3) Recovery no longer possible when:
(a) Buyer in good faith
(b)Acquired it at a merchant’s store, fair or
market. [Art 1506]
V. Price
A. MEANING OF PRICE
(Arts. 1469-1474)
Price signifies the sum stipulated as the
equivalent of the thing sold and also every
incident taken into consideration for the fixing
of the price put to the debit of the buyer and
agreed to by him [Inchausti v. Cromwell, 1911]
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B. REQUISITES FOR A VALID PRICE
(Ce-MoRe)
(1) Certain or ascertainable at the time of
perfection
(2) In Money or its equivalent
(a) Example of “equivalent”: Letters of
credit
(b) If price is partly in money and partly in
another thing: Determine manifest
intention of the parties to see whether
it was barter or sale. [Art 1468]
(c) If intention does not clearly appear, it
shall be considered a barter if the value
of the thing exceed the amount of
money or its equivalent. [Art 1468]
(3) Real
When buyer has an intention to pay and the
seller has an expectation to receive the price
(a) If simulated: Sale is VOID; BUT act may
be shown to have been a donation or
some other act or contract. [Art 1471]
(b) An admission of non-payment of any
centavo in exchange of a property in a
contract of sale renders the sale VOID.
[Labagala vs. Santiago, 2001]
(c) If Price is false – when the real
consideration is not the price stated in
the contract:
(i) Sale is void
(ii) UNLESSproved to be founded on
another true and lawful price [Art
1353]
C. HOW PRICE IS DETERMINED/
CERTAIN
(1) Fixed by agreement of the parties
(a) Fixing of price cannot be left to the
discretion of one of the parties
(b) BUT if such is accepted by the other,
sale is perfected. [Art 1473]
(2) Determination is left to the judgment of a
specified person
SALES CIVIL LAW
General Rule: Price fixed by 3rd persons
designated by the parties is binding upon them
Exceptions:
(a) If unable or unwilling: Sale is inefficacious
UNLESS parties subsequently agree about
the price.
(b) If in bad faith/by mistake: Courts may fix
price (but mere error in judgment cannot
serve as basis for impugning price fixed)
(c) If 3rd person is prevented from fixing price
by fault of seller or buyer: Innocent party
may avail of remedies (rescission or
fulfillment of obligation, with damages)
(d) If 3rd person disregards specific
instructions/data/procedure, thereby
fixing an arbitrary price
(3) The price is made in reference to another
thing, or when the price fixed is the price of the
commodity on a definite day, or in a particular
exchange or market, OR when the amount
fixed is above or below the price on such day,
exchange or market. [Art 1472]
When the price is not certain, the contract is
without effect and no obligation arises from it.
Exception: When the thing is already delivered,
the buyer must apy a reasonable price therefor.
This exception only arises when the means
contemplated by the parties for fixing the price
have become ineffectual.
D. INADEQUACY OF PRICE
(ARTS. 1355, 1470)
General Rule: Does not affect a contract of
sale’s validity. [Art. 1470]
The stipulation in a contract of sale which
states that the consideration is “Php1 and
other valuable considerations” does not make
the contract void. Gross inadequacy of price
does not affect the contract of sale except that
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it may indicate a defect in consent. [Bagnas v.
C.A., 1989]
Exceptions:
(1) In Voluntary sales
(a) Where low price indicates a vice of
consent, sale may be annulled.
(b) Where price is so low to be shocking to
the conscience (fraud, mistake, undue
influence), then sale may be set aside.
(c) Where price is simulated such as when
the real intention was a donation or
some other contract.
(d) Where the parties did not intend to be
bound at all, sale is void.
(2) In Involuntary sales
A judicial or execution sale is one made by a
court with respect to the property of a debtor
for the satisfaction of his indebtedness.
(a) Where price is so low to be shocking to
the conscience, such that a reasonable
mind would not be likely to consent to
it, then judicial sale will be set aside.
(b) If in event of a resale, a better price can
be obtained.
(3) Rescissible contracts of sale
Inadequacy of price is a ground for rescission of
conventional sale under Art 1381 (a-b)
E. WHEN NO PRICE AGREED
(ART. 1474)
(1) Sale is inefficacious [Art. 1474]
(2) But if the thing or part thereof has been
delivered and appropriated by the buyer, he
must pay a reasonable price therefor.
(a) What is a reasonable price is a question
of fact dependent on the circumstances
of each particular case. [Art 1474]
(b) The reasonableness of a price may be
determined on the basis of a
company’s balance sheet showing the
book value or fair market value of its
SALES CIVIL LAW
shares. [Philippine Free Press vs. CA,
2005]
Generally, the reasonable price is the market
price at the time and place fixed by the
contract or by law for delivery of goods.
F. FALSE PRICE VS SIMULATED PRICE
(1) False Price – there is a true price but it was
not written down in the contract. Parties
intended to be bound.
(2) Simulated Price
(a) Absolute - When the parties never
intended to be bound at all. Thus, void!
Parties may recover from each other
what they may have given under the
contract.
(b) Relative - When parties conceal their
true agreement. When it does not
prejudice 3rd persons and is not
intended for any purpose contrary to
law, morals, public policy, etc., it binds
the parties to their real agreement.
Effect of simulated price:
(1) If price is simulated when vendor intended
to transfer thing gratuitously, the sale is void,
but the contract shall be valid as a donation.
(2) If contract is not a donation or any other act
transferring ownership because parties did not
intend to be bound, it is void.
Disagreement on the manner of payment is
tantamount to a failure to agree on the price.
[Toyota Shaw vs. CA, 1995]
G. EARNEST MONEY VS. OPTION MONEY
[ART. 1482]
Earnest Money: paid in advance of the
purchase price agreed upon by the parties in a
contract of sale, given by the buyer to the
seller, to bind the latter to the bargain.
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[Limson vs. CA, 2001]

Option Money Earnest Money
VI. Formation of Contract
Separate and distinct Part of purchase of Sale
consideration from the price [Art 1482]
purchase price A. PREPARATORY
Given when sale is not Given only when [ART. 1479]
yet perfected there is already a sale
When given, the When given, the (1) Offer [Art. 1475]
would-be-buyer is not buyer is bound to pay In General:
required to buy, but the balance (a) The contract of sale is perfected at the
may even forfeit it moment there is meeting of the minds
depending on the upon the thing which is the object of the
terms of the option contract and upon the price. [Art. 1475,
Grantee of option is Buyer manifests his par.1]
still undecided earnest desire to buy (b) From that moment, the parties may
whether or not to buy the property reciprocally demand performance, subject
or sell the property to the provisions of law governing the form
[Baviera] of contracts. [Art. 1475, par. 2]
(c) A private instrument signed by the
Non-payment of defendant reciting that he bought from the
False Price
Price plaintiff a property at a specific address for
Real price is not Failure of buyer to a specific price to be paid as soon as a bill
declared pay the price of sale is signed is not a mere draft but a
Contract is void if it Contract is not void perfected agreement and hence,
should not be proved but gives rise to a obligatory, even if there was no statement
that it was founded right to demand as to area or price per meter. [Goyena v.
upon another casue fulfillment or Tambunting, 1902]
which is true and cancellation of the
lawful [Art 1353] obligation General Rule: Offer may be withdrawn at any
time without even communicating such
There can be sale even when no price is agreed withdrawal to the interested buyer.
upon. When the price cannot be determined in
accordance with Arts 1469-1473, the contract is Exception: When the offerer has allowed the
inefficious. offeree a certain period to accept, the offer
Exception: when the thing or part thereof has may be withdrawn at any time before
been delivered to and appropriated by the acceptance by communicating such
buyer, in which case the buyer has to pay a withdrawal. [Art 1324, CC]
reasonable price therefor.
Exception to the exception: Cannot be
withdrawn within a certain period if offer is
founded upon a consideration. [Art 1324 and
1479, CC]

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Form and Type
(a) Offer must be certain as to the object and
price [Art. 1319]
(b) Business advertisements of things for sale
are not offers but mere invitations to make
an offer
Exception: If otherwise provided [Art. 1325]
(c) Advertisements for bidders are simply
invitations to make proposals. Advertiser is
not bound to accept the highest or lowest
bid.
Exception: Unless the contrary appears
[Art. 1326]
Fixing terms of offer: The person making the
offer may fix time, place, and manner of
acceptance [Art. 1321]
When effective: From the time acceptance is
communicated to him or his agent. [Art. 1322]
When ineffective: Offer becomes ineffective
upon death, civil interdiction, insanity, or
insolvency of either party before acceptance is
conveyed [Art 1323]
(2) Acceptance
(a) The acceptance must be absolute.
(b) The acceptance must be plain and
unconditional.
(c) To bind the offeror, the offeree must
comply with the conditions of the offer.
Where the acceptance was not in
accordance with the terms and
conditions of the offer, the offer lapsed
even though the offeree later on was
willing to accept the terms and
conditions of the offer.
Acceptance of payment is an indication of
consent
The acceptance referred to which determines
consent is the acceptance of the offer, and not
SALES CIVIL LAW
of the goods delivered. [National Grains
Authority v. IAC, 1989]
For price, fixing cannot be left to only one
party, but price fixed by one and accepted,
leads to a perfected sale. For consent, offer
without acceptance means there is no contract.
The decision to accept proposal must be
communicated to the bidder. But a binding
contract may exist between parties whose
minds are set, although there are no
signatures anywhere, as acceptance may be
expressed ir implied, recognizing existence of
contract of sale. [Robern Development
Corporation v. People’s Landless Association,
2013]
Receipt of installment payments is not proof of
acceptance. Except where formal acceptance is
so required, although the acceptance must be
affirmatively and clearly made and must be
evidenced by some acts or conduct
communicated to the offeror, it may be made
either in a formal or an informal manner, and
may be shown by acts, conduct, or words of
accepting party that clearly manifest a present
intention to accept offer to buy or sell.[Heirs of
Ignacio v. Home Bankers Savings and Trust
Company, 2013]
An acceptance may contain a request for
certain changes in the terms of the offer and
yet still be a binding acceptance (but the
requests should be mere suggestions only, not
counter-offers), so long as clear that meaning
of acceptance is positively and unequivocally to
accept offer, whether such request is granted
or not, a contract is formed. [Villonco Realty
Company v. Bormaheco, Inc., 1975]
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(3) Option Contract [Arts. 1479, 1324]
(a) Definition
(i) An accepted unilateral promise
to buy or sell supported by a
consideration distinct from the
price [Art 1479]
(ii) An option contract is a
privilege existing in one
person, for which he had paid a
consideration, which gives him
the right to buy, for example,
certain merchandise or certain
specified property, if he
chooses, at any time within the
agreed period, at a fixed price.
[De la Cavada vs. Diaz, 1918]
(iii) An option is not of itself a
purchase, but merely secures
the privilege to buy.
(iv) A consideration for an optional
contract is just as important as
the consideration for any other
kind of contract. If there was no
consideration for the option,
then it cannot be enforced any
more than any other contract
where no consideration exists.
[Baviera]
(b) Elements of an Option Contract
(i) Consent
(ii) Subject matter: an option right
or accepted unilateral offer to
buy, or an option right or
accepted unilateral offer to sell
a determinate object for a price
certain, including the mannerof
payment thereof
(iii) Prestation: a consideration
separate and distinct from the
purchase price for the option
given
SALES CIVIL LAW
(c) Sale vs. Option Contract
Sale Option Contract
Bilateral Unilateral: gives a
right to buy or to
sell, but imposes no
obligation on the
part of the option-
holder, aside from
the consideration for
the offer
Sale of property Sale of right to
purchase
(4) Right of First Refusal
As to enforceability
If the right to the first offer is embodied in the
contract, it should be executed according to
the terms stipulated. The right should be
enforced according to the law on contracts and
not on the panoramic and indefinite rule on
human relations. This juridical relation is not
amorphous nor is it merely preparatory.
[Equatorial Realty Development vs. Mayfair,
1996]
When the grantee fails to exercise the right
Only after the grantee fails to exercise its right
of 1st priority under the same terms and
conditions within the period agreed upon,
could the grantor validly offer to sell the
property to a 3rd person under the same terms
as offered to the grantee. [Paranaque Kings vs.
CA, 1997]
As to the effects of the violation of the right
(a) A sale made in violation of a right of
first refusal is valid but rescissible, and
may be the subject ofan action for
specific performance. [Rosencor Devt.
Corp. Vs. Inquing, 2001]
(b) However, before the sale to the 3rd
person may be rescinded, he must
have been actually or constructively
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aware of the right of 1st refusal at the (2) It is the proof of all the essential elements
time he bought it. of the contract of sale, and not the mere
(c) The sanction for the enforcement of giving of earnest money, which establishes
the right of first refusal against third the existence of a perfected sale. [Platinum
persons is based on Art. 19 of NCC, as Plans Phils. vs. Cucueco, 2006]
no real right was created on the
property. Effect of Perfection
From the moment of the perfection of the
Difference from Sale contract of sale, the parties may reciprocally
Sale Right of 1st Refusal demand performance, subject to the provisions
Bilateral Unilateral of the Statute of Frauds. [Art 1475]
Price and other terms Price and other terms
of payment are certain are yet to be agreed Perfection of Sale by Auction [Art 1476]
upon (1) Contract is perfected when the auctioneer
The thing to be sold must be determinate accepts the bid by the fall of the hammer
or gavel or in any other customary manner.
Distinction from Option Contract (2) If auction is announced to be “without
reserve,” goods cannot be withdrawn from
Option Contract Right of 1st Refusal
the sale after the bid is made.
Separate No need for a (3) By taking part in the auction and offering
consideration is separate bidding, the buyer voluntarily submitted to
necessary consideration the terms and conditions of the auction
Grantee has the right No right to buy or sale announced in the notice.
to buy or sell sell, only a right to (4) Puffing/by-bidding is illegal – means
match the 1st offer to employed by owner to increase the price of
buy should the the bids; illegal.
grantor decide to sell
C. CONSUMMATION
(5) Mutual Promise to Buy and Sell [Art. 1479] When parties fulfill their obligations.
A promise to buy and sell a determinate thing
for a price certain is reciprocally demandable.
FORMALITIES OF THE CONTRACT
[Art. 1403 (d) (e)]
The promise made by one party is the
General rule: No form required as to validity
consideration for the promise made by the
provided all the essengtial requisites are
other. [Baviera]
present.

B. PERFECTION The sale may be [Art.1483, CC]:

[Arts. 1475, 1319, 1325, 1326] (1) Written
(2) Oral
When Perfected (3) Partly written and partly oral
(1) Contract of sale is a consensual contract, (4) Inferred from the conduct of the parties
hence perfected at the moment of the
meeting of the minds of the parties as to
the object of the contract and the price.
[Art 1475]

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Exceptions:
(1) For enforceability: Statute of Frauds
[Art,1403 (2)]
(a) Contract or some memorandum thereof
must be in writing and subscribed by
the party or his agent, otherwise
contract is unenforceable; unless
ratified by failure to object to oral
evidence or acceptance of benefits
under the contract
(b) Statute of Frauds covers:
(i) Sale of personal property at price
not less than 500 pesos
(ii) Sale not to be performed within 1
year
(iii) Sale of real property or an interest
therein [Art 1358]
(c) Applies only to executory contracts, not
to contracts either totally or partially
performed. [Iñigo v. Estate of Maloto,
1967]
(d) Purpose: to prevent fraud or perjury in
the enforcement of obligations
(e) Ratified when defense fails to object to
the introduction of parol evidence, or
ask questions on cross-examination
The acceptance of a definite agreement on the
manner of payment of the price is essential
determining consent.[Limketkai Sons Milling,
Inc. v. CA, 1996]
Sale is consensual, and thus binding when
there is meeting of minds as to price. Such sale
is valid despite manner of payment, or even
breach as to such manner of payment. If real
price is not stated in the contract, then the
remedy would be reformation of the contract.
Payment has no effect on the validity of the
sale, for payment merely goes into the
performance of the contract. Failure to pay
consideration is not lack thereof.[Spouses
Buenaventura v. CA, 2003]
SALES CIVIL LAW
Continued possession of the object of an oral
contract has been held to constitute partial
performance, where accompanied by other
acts which characterize the continued
possession and refer to the contract of sale. A
tender of payment, declined by the vendor, has
been said to be equivalent to actual payment,
for purposes of determining if there has been
partial performance. [Ortega v. Leonardo, 1958]
(2) Sale of realty by an agent
Agent’s authority must be in writing, otherwise
the sale is void [Art.1874]
(3) Sale of large cattle
To be valid, transfer of large cattle must be
registered with the municipal treasurer [Sec.
529, Revised Administrative Code]
(4) For public convenience: In a public
document – to compel third parties [Art 1358]
(a) Acts and contracts which have for their
object the creation, transmission,
modification or extinguishment of real
rights over immovable property; sales of
real property or of an interest therein a
governed by Articles 1403, No. 2, and
1405;
(b) The cession, repudiation or renunciation
of hereditary rights or of those of the
conjugal partnership of gains;
(c) The power to administer property, or any
other power which has for its object an
act appearing or which should appear in
a public document, or should prejudice a
third person;
(d) The cession of actions or rights
proceeding from an act appearing in a
public document.
(e) All other contracts where the amount
involved exceeds five hundred pesos
must appear in writing, even a private
one. But sales of goods, chattels or
things in action are governed by Articles,
1403, No. 2 and 1405.
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Intention to transfer ownership

VII. Transfer of Ownership (1) All forms of delivery shall be coupled with
intention of delivering the thing sold.
(2) Seller must be owner or authorized by
OBLIGATIONS OF THE VENDOR: owner of the thing sold
(1) To transfer ownership of the thing
(2) To deliver the thing, with its accessions When right to transfer ownership must exist: At
and accessories, if any the time of delivery and not at the time of
(3) To warrant against eviction and against perfection of contract of sale.
hidden defects
(4) To take care of the thing, pending delivery,
B. CONCEPT OF DELIVERY
with proper diligence
(5) To pay for the expenses of the deed of sale
B.1. REQUISITES
(1) Identity – between what must be delivered
and what is actually delivered
A. MANNER OF TRANSFER
(2) Integrity – in a condition suitable for
[ARTS. 1477, 1496-150]
enjoyment
(3) Intentional
General Rule: Ownership of the thing sold shall
be transferred to the vendee upon actual or
constructive delivery thereof [Art 1477]
B.2. WHAT TO DELIVER
(1) Thing sold [Art. 1495]
Obligation to transfer ownership and to deliver (2) Fruits [Art. 1164 & 1537] – belong to the
is implied in every contract of sale [Arts. 1458- vendee from day of perfection.
1459] (3) Accessions and accessories [Art. 1166 &
1537] – in the same condition they were in
Transfer of ownership requires delivery [Art. on day of perfection
1495] (a) Improvements by seller at his expense
grants him a usufructuary right [Art
Exceptions 1138, 1189]
(1) Contrary stipulation (b) No indemnification
(2) Contract to sell (c) But he may remove it to the extent that
(3) Contract of insurance there is no damage [Art. 1538]
(4) Sale on acceptance/Trial
(5) When seller is not the owner or has B.3. WHERE TO DELIVER
voidable title (1) A hierarchy is followed:
(a) Stipulation
A.1. GENERAL CONCEPTS (b) Usage of trade
Transfer of ownership is effected even if the (c) Seller’s place of business (office)
purchase has been made on credit. (d) Seller’s residence

Payment of the purchase price is not essential (2) In case of specific goods, which the parties
to transfer of ownership as long as the knew to be at some other place when the
property sold was delivered. contract was perfected, that place is the
place of delivery

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(3) If goods are at the time of sale are
possessed by a third person, then there is
no delivery until he acknowledges to the
buyer that he holds the goods for the
buyer.
B.4. WHEN TO DELIVER
Absent a stipulation as to time, delivery must
be made within a reasonable time; demand or
tender of delivery shall be made at a
reasonable hour.
(b) Buyer does any other act adopting the
transaction (i.e. sale to a third person)
(c) Retains the goods without giving notice
of rejection after the time fixed has
expired; if no time has been fixed, after
the expiration of a reasonable time [Art
1502]
Loss or destruction of the property prior to
return falls upon the buyer and makes him
responsible for the purchase price.

Hour of delivery: usually during business hours Sale on Approval vs Sale on Return
Sale on Approval Sale on Return
C. WHEN DELIVERY DOES NOT Ownership does not Ownership passes
TRANSFER TITLE pass upon delivery upon delivery, but
buyer may revest
(1) Sale on Approval or Trial ownership in the
General Rule: Title remains with the seller. seller by returning or
Buyer has option to purchase goods if proven tendering the goods
satisfactory, the approval of the buyer being a within the time fixed
condition precedent. (Same exceptions with in the contract
sale on return) Depends on the Depends on the will
character or quality of of the buyer
The relationship between seller and buyer, if goods
no absolute sale yet, is that of a bailor and Subject to a Subject to a
bailee suspensive condition resolutory condition
Risk of loss remains Risk of loss remains
If there is no time for approval specified but with the seller with the buyer
with period for trial, then approval shall be
made within a reasonable period after the trial Express Reservation
period expires. If it was stipulated that ownership in the thing
shall not pass to the purchaser until he has
(2) Sale on Return or Satisfaction fully paid the price then ownership remains
with seller even when delivery is made [Art
General Rule: Title remains with the seller 1478]
when parties agree that buyer shall
temporarily take the goods into his possession Implied Reservation
to see if they are satisfactory to him (return if The following are instances when there is an
unsatisfactory) implied reservation of ownership:
(a) Goods are shipped, but by the bill of lading
Exceptions: goods are deliverable to the seller or his
(a) Buyer signifies his approval or agent, or to the order of the seller or his
acceptance to the seller agent

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(b) Bill of lading is retained by the seller or his
agent.
(c) When the seller of the goods draws on the
buyer for the price and transmits the bill of
exchange and bill of lading to the buyer,
and the latter does not honor the bill of
exchange by returning the bill of lading to
the seller.
(3) When Sale Not Valid
i.e. When the thing sold is a public property
(4) When Seller is Not the Owner
General Rule: Ownership is not acquired by the
buyer. One cannot give what one does not
have. [Art 1505]
Exceptions:
(a) Seller has a Right to transfer ownership
(i) Seller need not be the owner of the thing
at the time of perfection of the
contract. It is sufficient that seller has a
right to transfer ownership thereof at
the time it is delivered. [Art. 1459]
(ii) One who sells something he does not
own yet is bound by the sale when he
acquires the thing later [Bucton vs
Gabar, 1974]
(b) Estoppel: Owner is, by his conduct,
precluded from denying the seller’s authority
to sell. [Art. 1434]
(c) Registered land bought in good faith
General rule: Buyer need not go beyond the
Torrens title
Exception: When he has actual knowledge of
facts and circumstances that would impel a
reasonably cautious man to make further
inquiry
(d) Order of courts; Statutory Sale
SALES CIVIL LAW
In execution sale, the buyer merely steps into
the shoes of the judgment debtor [Rule 39, sec.
33, ROC]
(e) When goods are purchased in Merchant’s
store, Fair, or Market [Art 1505]
The policy of the law has always been that
where the rights and interest of the vendor
clash with that of an innocent buyer for value,
the latter must be protected. [Sun Brothers and
Co. vs. Velasco, 1958]
(5) Sale by Person Having a Voidable Title
(a) True owner may recover the thing when
the ff. requisites concur:
(i) Subject matter is movable
(ii) Owner has either lost the thing or
has been unlawfully deprived. [Art
559]
(b) Reimbursement is necessary before
owner can recover when:
(i) Buyer acted in good faith
(ii) Acquired at a public auction [Art
559]
(c) Recovery no longer possible when:
(i) Buyer in good faith
(ii) Acquired it at a merchant’s store,
fair or market. [Art 1506]
D. KINDS OF DELIVERY
D.1.ACTUAL DELIVERY
(1) When deemed made: when the thing sold is
placed in the control and possession of the
vendee [Art. 1497]
(2) Not always essential to passing of title [Art.
1475]
(3) Parties may agree when and on what
conditions the ownership shall pass to the
buyer [E.g.: Art 1478 where ownership will only
pass after full payment of the price]
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D.2. CONSTRUCTIVE DELIVERY
i. Execution of public instrument [Art 1498, par.
1]
General Rule: produces the same legal effects
of actual delivery.
Exceptions:
(a) The intention of the parties is
otherwise.
(b) At the time of execution, the subject
matter was not subject to the control of
the seller which must subsist for a
reasonable length of time after
execution. [Pasagui v Villablanca, 1975]
“Control” over thing sold must be such that
seller is capable of physically transferring it to
buyer.
Although parties may stipulate that the
execution of a public instrument is equivalent
to delivery, this legal fiction holds true only
when there is no impediment that may prevent
the passing of the property from the vendor to
the vendee. [Vda. de Sarmiento v. Lesaca, 1960]
If, notwithstanding execution of the
instrument, the buyer cannot enjoy material
tenancy and make use of the object himself or
through another in his name, there is no
delivery. [Power Commercial v. CA, 1997]
Execution of a public instrument gives rise only
to a prima facie presumption of delivery,
negated by failure of the buyer to take actual
possession of land sold. A person who does not
have actual possession cannot transfer
constructive possession by execution and
delivery of public instrument. [Spouses
Santiago v. Villamor, 2012]
There is symbolic delivery, unless from the
express terms of the instrument, or by clear
inference therefrom, that the same was not the
intention of the parties, e.g. where the vendor
SALES CIVIL LAW
has no control over the thing sold at the
moment of the sale, and, therefore, its material
delivery could not have been made. [Villamor v.
Mangaoil, 2012]
ii. Symbolic Delivery
Delivery of keys of the place or depositary
where the movable is stored or kept. [Art 1498]
Unless otherwise agreed, when symbolic
delivery has been made, the seller is not
obliged to remove tenants to place the buyer in
actual possession of the property as he has
already complied with his obligation to
transfer ownership of and deliver the thing
sold. [Power Commercial and Industrial Corp. v.
CA, 1997; Sabio v. The International Corporate
Bank, Inc., 2001]
(a) Tradition Longa Manu (Long Hand)
Delivery of thing by mere agreement.
Example: Seller points to the property without
actually transferring physical possession
thereof.
When an employer assigned all its rights and
title to all surplus property salvaged by the
contractor, tradition longa manu takes place.
Delivery is upon the moment a thing is
salvaged. [Board of Liquidators v. Floro, 1960]
(b) Tradition Brevi Manu (Short Hand)
MOVABLE is delivered when the buyer had the
thing already in his possession before the sale
took place, not as owner but as lessee,
borrower, or depositary.
(c) Tradition Constitutum Possessorium
Seller continues to be in possession of the
property sold, by virtue of a lease contract
agreement with the vendee.
(d) Delivery to a Common Carrier
General Rule: Delivery to the courier or carrier
is tantamount to delivery to buyer, whether
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carrier is named by buyer or not. The buyer
assumes the risk of loss.
Exceptions
i. Seller reserved title by the form of the
bill of lading, with intent to remain the
owner, not merely for the purpose of
securing payment, OR
ii. Contrary intention appears in the
contract (i.e. seller is required to
deliver goods to buyer at the point of
destination)
iii. F.O.B. (Free on Board or Freight on
Board) - When seller bears the
expenses of transportation up to the
F.O.B. point.
iv. C.I.F. (Cost, Insurance, Freight) - Price
quoted includes the costs of the goods,
insurance, and freight charges on the
goods up to the point of destination.
v. F.A.S. (Free Alongside) -Seller bears
the expenses of transportation until he
delivers the goods alongside a vessel
at a named port.
E. DOUBLE SALES
[ART. 1544]
General Rule: Prior tempore, potior jure (“he
who is first in time is preferred in right”)
applies.
Requisites [Cheng v Genato, 1998]:
(1) 2 or more valid sales;
(2) Same subject matter;
(3) 2 or more buyers with conflicting
interests over the rightful ownership of
the thing sold;
(4) Same seller
E.1. RULES GOVERNING SALE OF
MOVABLES, IMMOVABLES AND
UNREGISTERED LANDS
(1) Sale of Movables
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SALES CIVIL LAW
Ownership shall be transferred to the person
who may have first taken possession in good
faith.
(2) Sale of Immovables
(a) Ownership belongs to the person who:
(i) In good faith first recorded the sale in the
Registry of Property; OR
(ii) If there is no inscription of sale on the
title, ownership passes to the person
who in good faith was first in
possession; OR
(iii) In the absence thereof, to the person
who presents the oldest title,
PROVIDED there is good faith.
Possession - refers to any of the modes of
possession in Articles 1497-1501
Oldest Title – any public document showing
acquisition of the land in good faith. To
constitute “title,” the transmission of
ownership must appear in a public document
[Art. 1358 (1)]
Examples: Deed of Sale, Deed of Donation,
Deed of Trust
(b) Registration includes any entry made in the
Primary Entry Book of the registry, including
both registration in its ordinary and strict sense
and cancellation, annotation, and even
marginal notes. [Cheng v. Genato, 1998]
Pencilled entries on the title are not considered
registration. [AFPMBAI v. Court of Appeals,
1999]
(3) Second Sale Made by Virtue of Execution
and Attachment
Art. 1544 does NOT apply in cases where the
first sale of an unregistered immovable
occurred prior to an execution sale and the
second sale occurred by virtue of an execution
UP LAW BOC
sale. This is because a buyer of unregistered
land at an execution sale only steps into the
shoes of the judgment debtor (the person who
sold the property prior to the execution sale).
The second buyer merely acquires the latter's
interest in the property sold as of the time the
property was levied upon. [Carumba v. CA,
1970]
(a) Unregistered by both buyers: the first
sale is preferred
(b) Registered by both buyers: the second
sale is preferred
(c) If the first buyer did not register but the
second buyer registered property, then
the first buyer is preferred.
(4) Sale of Unregistered Land
(a) Instrument or deeds establishing,
transmitting, acknowledging,
modifying or extinguishing rights with
respect to lands not registered under
the Land Registration Act or the
Spanish Mortgage Law, are required to
be registered in the Registry of
Property to prejudice 3rd persons,
although such registration is
understood to be “w/o prejudice to a
3rd party with a better right”. [PD 1528
Sec 113]
(b) Art. 1544 applies to unregistered land
subject to a conventional sale (because
of Art. 1358) but NOT to unregistered
land subject to judicial sale.
(c) Unregistered by both buyers, the first
buyer is preferred.
(d) If first buyer did not register but second
buyer registered property, second
buyer is preferred.
F. PROPERTY REGISTRATION
DECREE
(1) Requisites for Registration of Deed of Sale
in Good Faith
Purchaser in Good Faith
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SALES CIVIL LAW
One who buys the property of another, without
notice that some other person has a right to or
interest in such property, and who pays a full
and fair price for the sale, at the time of the
purchase or before he has notice of the
claim/interest of some other person in the
property. [Agricultural and Home Extension
Development Group v CA, 1992]
General Rule: As a rule, he who asserts the
status of a purchaser in good faith and for
value has the burden of proving such assertion.
This onus probandi cannot be discharged by
mere invocation of the legal presumption of
good faith, i.e., that everyone is presumed to
act in good faith [Mathay v CA, 1998]
When buyer is presumed to be in bad faith:
(a) Annotation of adverse claim: Places any
subsequent buyer of the registered
land in bad faith. [Balatbat v CA, 1996]
(b) Annotation of Lis Pendens: Buyer
cannot be considered an innocent
purchaser for value where it ignored
the lis pendens on the title.
(c) A purchaser of a parcel of land cannot
close his eyes to facts which should put
a reasonable man upon his guard, such
as when the property subject of the
purchase is in the possession of
persons other than the seller. A buyer
who could not have failed to know or
discover that the land sold to him was
in the adverse possession of another is
a buyer in bad faith. [Heirs of Ramon
Durano v Uy, 2010]
Annotation of Adverse
Lis Pendens
Claim
May be cancelled even May be cancelled
before the action is only in one instance,
finally terminated for i.e., after the claim is
causes which may not adjudged invalid or
be attributable to the unmeritorious by the
claimant Court
UP LAW BOC
Both protect the interest of a claimant by
cautioning other persons that said property is
subject to a claim.
The two are not contradictory or repugnant to
one another; nor does the existence of one
automatically nullify the other, and if any of
the registrations should be considered
unnecessary or superfluous, it would be the
notice of lis pendens [A. Doronila Resources
Development Inc v CA, 1988]
(2) Accompanied by vendors duplicate
certificate of title, payment of capital gains tax,
and documentary tax registration fees
Must be accompanied by:
(a) Vendor’s duplicate certificate of title
(b) Payment of capital gains tax – 6% of
the selling price or zonal value,
whichever is higher
(c) Documentary tax registration fees –
1.5% of the selling price or zonal value,
whichever is higher
VIII. Risk of Loss
A. GENERAL RULE
[ARTS. 1263, 1189]
Res perit domino: Owner bears risk of loss
Basis: Ownership is not transferred until
delivery.
B. PRIOR TO PERFECTION
CONTRACT
Seller bears risk of loss and deterioration.
C. AT TIME OF PERFECTION
[ARTS. 1493 AND 1494]
Seller bears risk of loss and deterioration.
SALES CIVIL LAW
Partial Loss (Or loss
which results in
Total Loss
substantial change in
character)
Contract is ineffective Buyer may withdraw
because the object did from the contract
not exist at the time of OR
the transaction. Buy the remainder at
a proportionate price
D. AFTER PERFECTION BUT BEFORE
DELIVERY
D.1.LOSS
General Rule: Stipulations in the contract will
govern.
In the absence of stipulation, there are two
conflicting views:
(1) Res perit creditori or the buyer bears the risk
of loss. This is an exception to the rule of res
perit domino.
Basis: Art 1504 only covers goods.
Pursuant to Article 1262, if the thing is
destroyed without the fault of the
debtor/seller, the obligation to pay shall
subsist.
(2) Res perit domino or the seller bears the risk
of loss.
Basis: The rule on loss is different from the rule
on deterioration for the loss would be for the
account of the seller, while the deterioration
OF would be for the account of the buyer.
In reciprocal obligations, the extinguishment of
the obligation due to loss of the thing
extinguishes the entire juridical relation.
D.2. DETERIORATION
[ART 1189]
Impairment is borne by the buyer if the thing
deteriorates without the fault of the seller.
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therein without having to effect actual

If it deteriorates through the fault of the delivery thereof [Villanueva]
debtor, the creditor may choose between (3) The custody of a negotiable warehouse
rescission of obligation and fulfillment, either receipts issued to the order of the owner, or
case with indemnity for damages. to bearer, is a representation of title upon
which bona fide purchasers for value are
E. AFTER DELIVERY entitled to rely, despite breaches of trust or
Buyer bears risk of loss and deterioration. violations of agreement on the part of the
apparent owner. [Siy Cong Bieng vs. HSBC,
Exceptions [Art 1504 (1) and (2)] 56 Phil 598]
(1) Where delivery has been made either to
the buyer or to the bailee for the buyer, but C. NEGOTIABLE DOCUMENTS OF
ownership in the goods has been retained TITLE
by the seller merely to secure performance A document of title which states that the
by the buyer of his obligations under the goods referred to therein will be delivered to
contract; and the bearer, or to the order of any person
(2) Where actual delivery has been delayed named in such document [Art. 1508]
through the fault of either the buyer or
seller, the goods are at the risk of the party Terms of the Document How negotiated
in fault.
Goods are deliverable By delivery of the
to bearer document to another
IX. Documents of Title
Endorsed in blank by
A. DEFINITION the person to whose
order the goods were
[Art. 1636]
supposed to be
A document used in the ordinary course of
delivered
business in the sale or transfer of goods, as
Goods are deliverable By indorsement of
proof of the possession or control of the goods,
to the order of a such person [Art.
or authorizing or purporting to authorize the
specified person 1509, CC]
possessor of the document to transfer or
receive, either by endorsement or by delivery,
goods represented by such document. [Art. C.1. WHO MAY NEGOTIATE IT?
1636] [Art.1512]
(1) Owner
Examples: bill of lading, quedan, warehouse (2) Person to whom the possession or custody
receipts, trust receipts, dock warrant of the document has beenentrusted by the
owner
(a) If bailee undertakes to deliver the
B. PURPOSE OF DOCUMENTS OF
goods to such person
TITLE (b) If document is in such form that it may
(1) As evidence of possession or control of be negotiated by delivery
goods described therein
(2) As a medium of transferring title and
A person to whom a document has been
possession over the goods described
negotiated acquires:

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UP LAW BOC SALES CIVIL LAW

(1) Title of person negotiating the document, Negotiation [Art. 1508] Transfer
over goods covered by document document of title, the than his transferor
(2) Title of depositor/owner over such goods buyer may acquire a
(3) Direct obligation of bailee/carrier to hold better title than his
possession of goods for him transferor.

D. NON-NEGOTIABLE DOCUMENTS
OF TITLE E. WARRANTIES OF SELLER OF
Goods described in a non-negotiable DOCUMENTS OF TITLE
document of title are deliverable only to a [ART. 1516]
specified person.
A person who negotiates a document of title
Carrier will not deliver the goods to any holder warrants that:
of the document or to whom such document (1) Genuineness of document
may have been endorsed by the consignee. (2) Legal right to negotiate or transfer
(3) No knowledge of fact which would impair
Must present the deed of sale or donation in the validity or worth of the document
his favor. (4) Right to transfer the title to the goods and
merchantability or fitness for a particular
A person to whom a document has been
purpose, whenever such warranties would
negotiated acquires have been implied
(1) Title to goods as against the transferor
(2) Right to notify the bailee of the transfer
He does not warrant that:
thereof
(1) Common carrier will fulfill its obligation to
(3) Right, thereafter, to acquire the obligation
deliver the goods
of the to hold goods for him
(2) Previous endorsers will fulfill their
obligation [Art. 1516-1517]
“Negotiation” [negotiable document of title]
vs. “Transfer” [non-negotiable document of
Goods in the hands of the carrier covered by a
title]
negotiable document cannot be attached or
Negotiation [Art. 1508] Transfer levied upon, unless:
Delivery of a The assignment of (1) Document is first surrendered to the
negotiable document rights of the carrier; or
of title to another if by consignee of a non- (2) Impounded by the court; or
the terms thereof, the negotiable document (3) Its negotiation is enjoined. [Art. 1519-1520]
goods are deliverable of title to another; or
to bearer, or when the F. RULES ON LEVY/GARNISHMENT
document was Document of title OF GOODS
endorsed in blank by was ordered sold or
[ARTS. 1514, 1519, 1520]
the person to whose assigned, without
order the goods are indorsement.
Goods in the hands of the carrier covered by a
deliverable.
negotiable document cannot be attached or
Transferee does not
levied upon, unless:
In a negotiable acquire a better title

288
UP LAW BOC
(1) Document is first surrendered to the carrier;
or
(2) Impounded by the court; or
(3) Its negotiation is enjoined. [Art. 1519-1520]
The levy of an attachment of execution upon
the goods by a creditor of the transferor, may
defeat the title of the transferee and the right
to acquire the obligation of such bailee, when:
(1) It was done prior to the notification to such
bailee by the transferor of a non-
negotiable document of title or
(2) By a notification to such bailee by the
transferor or a subsequent purchaser from
the transferor of a subsequent sale of the
goods by the transferor. [Art 1514 (3rd par)]
A creditor whose debtor is the owner of a
negotiable document of title shall be entitled
to such aid from courts in regard to property
which cannot be readily attached or levied by
ordinary legal process [Art 1520]
X. Remedies of an Unpaid
Seller
A. DEFINITION OF UNPAID SELLER
[ART. 1525]
A seller is considered to be an unpaid seller if
the whole price has not been paid or tendered,
or when check received as a conditional
payment was dishonored by non-payment or
insolvency of the buyer [Baviera]
An seller is unpaid within such definition
whether or not title has been passed. Partial
payment of the price does not extinguish the
unpaid seller’s lien. [De Leon]
Term also includes:
(1) The agent of the seller to whom the bill of
lading was endorsed,
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SALES CIVIL LAW
(2) The consignor or agent who had paid the
price or is responsible for the price
(3) Any other person who is in the position of a
seller (i.e. buyer who paid the price and
had a right to return the goods). [Baviera]
B. REMEDIES OF UNPAID SELLER
JUDICIAL REMEDIES OF AN UNPAID
SELLER
(1) Action for the price or specific performance
[Art. 1595]
Instances:
(a) The goods has passed to the buyer and
the buyer wrongfully neglects or
refuses to pay the price
(b) Price is payable on a certain day and
the buyer wrongfully neglects or
refuses to pay the price, irrespective of
delivery of the goods or transfer of title,
or
(c) When the goods cannot readily be
resold for a reasonable price, and the
buyer wrongfully refuses to accept the
goods even before ownership passed, if
NCC1596, paragraph 4 is inapplicable.
(d) Seller was notified by the buyer of his
repudiation of the contract after the
seller has completed the manufacture
of the goods or had procured the goods
to be delivered and the goods could
not readily be resold for a reasonable
price
Buyer can set up the defense that seller at any
time before judgment could not or did not
intend to deliver the goods.
Unless the contrary appears, payment and
delivery are presumed to be concurrent acts,
and the obligation of each party to perform the
contract is dependent upon the simultaneous
performance by the other party
UP LAW BOC
If ownership has not yet passed to the buyer,
the seller cannot maintain an action for the
price, unless it involves (b) or (c).
Title to goods passes from the moment the
goods are placed at the buyer’s disposal when
refusal to accept is without just cause.
(2)Action for damages for non-acceptance, if
buyer wrongfully neglects or refuses to accept
and pay for the goods (Art. 1596)
Measure of damages: Estimated loss directly
and naturally resulting in the ordinary course
of events from the buyer’s breach. Not only
actual damages, but also unrealized profits. It
is the difference between the contract price
and the market or current price. [De Leon]
(a) Where there is available market for
goods: Difference between the contract
price and the market price at the time
the goods ought to have been
accepted or if no time was fixed, at the
time of refusal to accept
(b) If the resale was made with diligence:
resale price is evidence of market
value, taking into account whether or
not the goods could be readily sold
(c) Where labor/expense was necessary for
seller to fulfill his obligation: Labor
performed and expenses made by
seller before receiving notice of buyer’s
repudiation or countermand
(d) Profit that the seller would have made if
sale had been fully performed
(3) Rescission by giving the buyer notice of the
election to rescind [Art. 1597]
Under this rule, rescission would bar an action
on the contract because it means cancellation
of the contractual obligations between the
parties. [Baviera]
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SALES CIVIL LAW
The unpaid seller’s right to rescind for non-
performance is not absolute. Exceptions:
(a) 3rd persons possessing the objects of
the contract to whom no bad faith is
imputable
(b) Casual breach
The seller cannot unilaterally and
extrajudicially rescind a contract absent
express stipulation to do so, except as provided
in Art. 1597.
(4) Special rule for sale of movables by
installments – Recto Law [Arts. 1484, 1485]
Applies in cases of:
(a) Sale of movables in installment
The rule is intended to apply to sales of
movables, the price of which is payable
in two or more installments, but not to
straight-term sales where the price is
payable in full, after making a down
payment because the law aims to
protect improvident buyers who may
be tempted to buy beyond their means.
[Levy Hermanos vs. Gervacio, 1939]
(b) Lease of personal property with option
to buy
(i) When lessor has deprived the lessee
of the possession or enjoyment of
the thing (Ex.: When lessor files a
complaint for replevin against
lessee)
(ii) Also applies when seller assigns his
credit to someone else
C. ALTERNATIVE REMEDIES OF THE
UNPAID SELLER UNDER RECTO LAW
(a) Specific Performance
(b) Cancellation of sale: If vendee fails to pay 2
or more installments
When the seller cancels the sale by
repossessing the property sold, he is barred
from exacting payment for its price.
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(c) Foreclosure of Chattel Mortgage: If vendee
fails to pay 2 or more installments
(i) If seller chooses this remedy, he
shall have no further action to
recover any unpaid balance, and
any stipulation to the contrary
shall be void
(ii) What Art 1484 (3) prohibits is
“further action against the
purchaser to recover any unpaid
balance of the price;” and although
this Court has construed the word
“action” to mean “any judicial or
extrajudicial proceeding by virtue
of which the vendor may lawfully
be enabled to exact recovery of the
supposed unsatisfied balance of
the purchase price from the
purchaser or his privy,” there is no
occasion at this stage to apply the
restrictive provision of the said
article because there has not yet
been a foreclosure sale resulting in
a deficiency. The payment of the
sum of P1,250 of Sapinoso was a
voluntary act on his part and did
not result from a “further action”
instituted by Northern Motors.
[Motors vs. Sapinoso, 1970]
(iii) The purpose of the law is to
remedy the abuses committed in
foreclosure of chattel mortgages.
It prevents mortgagees from
seizing the mortgaged property,
buying it at foreclosure sale for a
low price and then bringing the
suit against the mortgagor for a
deficiency judgment. The almost
invariable result of this procedure
was that the mortgagor found
himself minus the property and
still owing practically the full
amount of his original
indebtedness. [Bachrach Motor Co.,
Inc. v. Millan, 1935]
SALES CIVIL LAW
(iv) Remedies are ALTERNATIVE, not
cumulative, i.e. exercise of one
bars exercise of the others. [Nonato
vs. IAC, 1985]
Where the mortgagor unjustifiably refused to
surrender the chattel subject of the mortgage
upon failure of two or more installments, or if
he concealed the chattel to place it beyond the
reach of the mortgagee, that thereby
constrained the latter to seek court relief, the
expenses incurred for the prosecution of the
case, such as attorney's fees, could rightly be
awarded. [Borbon II v. Servicewide, 1996]
XI. Performance of
Contract
A. DELIVERY OF THING SOLD
(1) Sale of movables [Arts. 1522, 1537, 1480]
(a) When Quantity less than expected
(i) Buyer may reject all
(ii) Buyer accepts with knowledge of
seller’s inability to deliver the rest –
buyer pays at contract price
(iii) Buyer has used or disposed prior to
knowing seller’s inability to deliver the
rest – buyer pays fair value
(b) Quantity more than expected
(i) If divisible, buyer may reject excess
(ii) If indivisible, buyer may reject all
If the buyer accepts all goods delivered, he
makes himself liable for the price of all of
them.
(c) Quality different or different goods
(i) If divisible, buyer may accept the goods
compliant with contract and reject
those that are not
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(ii) If indivisible, buyer may reject all [Art.
1522]
(d) Sale of specific mass of goods
In the sale of fungibles where the measure
or weight has not been agreed upon
nor is there a fixed rate based upon a
measurement, the subject matter of
the sale is a determinate object – the
specific mass; seller is merely required
to deliver such mass even if actual
quantity falls short of parties’ estimate
[Art. 1480]
(e) Delivery by installments
(i) By default, buyer is not bound to accept
delivery of goods by installments
(ii) In a contract of delivery by installment
to be paid by installment as well, delay
or breach may not necessarily mean
breach of the entire contract;
depending on the circumstances, breach
may be severable and the aggrieved
party is entitled to damages and not
rescission. [Art. 1583]
(2) Sale of immovables [Arts. 1539, 1543]
(a) Sale at a fixed rate per unit of measure
(i) Seller bound to deliver entire land, i.e.,
the entire area stated in the contract
(ii) If the area is less than that stated, buyer
may rescind or demand a within the stipulated boundaries prevails,
proportionate reduction in price
(iii) If a part of the land is not of the quality
stated in the contract, buyer may
rescind or demand a proportionate
reduction in price
(iv) Buyer may only avail of rescission if the
area deficiency is 10% or more of total
area or if the inferior value of the part
of the land exceeds 10% of the price
agreed upon. [Art. 1539]
(v) If the area turns out to be greater than
that stated, buyer may accept area
included and reject the excess or
accept all and pay a proportionate
increase in price [Art. 1540]
SALES CIVIL LAW
(b) Sale for a lump sum
(i) Follows the same rule as the sale of a
specific mass which is explained above
(ii) There is no change in price even if area
or number turns out to be greater or
lesser than that stated [Art. 1542]
(iii) Exception: when the excess or
deficiency is no longer reasonable
[Asian v Jalandoni, 1923]
(iv) Exception to the exception: when buyer
expressly assumes risk on actual area
of the land. [Garcia v Veloso, 1941]
(v) If the price per unit or measure is not
provided for in the contract, then the
rules of lump sum sale should prevail.
[Sta. Ana v Hernandez, 1966]
If sale for lump sum, the cause of the contract
is the thing sold, independent of
number/measure. The law presumes that the
purchaser had in mind a determinate price for
real estate and the ascertained area and
quality. The purchaser intended to buy thing in
entirety, not just any unit of measure or
number. [De Leon]
When there is conflict between the area
stipulated in the contract, the area included
provided such boundaries are certain, and no
alteration thereof has been proven.
(3) Inspections and Acceptance Inspections
Right of Inspection - The buyer has reasonable
opportunity to examine the goods upon
delivery. If there is a stipulation that delivery is
preconditioned on payment, then buyer has no
right of inspection until he has paid. [Art.1584]
Exception: in case such right of inspection is
permitted by agreement or usage of trade.
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Acceptance
(a) Form
Express: buyer intimates acceptance
Implied:
(i) Goods are delivered to the buyer and he
does any act in relation to the goods
delivered that is inconsistent with the
ownership of the seller.
(ii) After the lapse of a reasonable time, the
buyer retains the goods without
intimating to the seller that he has
rejected them. [Art.1585]
(b) Effect of Refusal to Accept
If buyer refuses to accept goods, having the
right to do so, he is not bound to return them
to the seller, it being sufficient that he notifies
the seller of his refusal to accept
(i) If he voluntarily constitutes himself a
depositary of the goods, he shall be
liable as such. [Art.1587]
(ii) Unjust refusal to accept still results to
transfer of ownership. In such case,
title to the goods passes to the buyer
from the moment they are placed at
his disposal, except if ownership has
been reserved by the seller [Art.1588]
B. PAYMENT OF PRICE
[Art. 1582]
(1) Payment of interest:
Buyer is liable for interest when: (SFD)
(a) Interest is stipulated;
(b) Thing sold produces fruits or income;
(c) Buyer is in default - interest accrues
from the time of judicial or extrajudicial
demand for payment
(2) Suspension of payments:
Buyer may suspend payment when:
(a) His ownership or possession of the
thing is disturbed; OR
SALES CIVIL LAW
(b) He has reasonable grounds to fear such
disturbance by a vindicatory action or a
foreclosure of mortgage
Exceptions: Buyer cannot suspend payment
when:
(a) Seller gives security for the return of
the price in a proper case
(b) It has been stipulated that,
notwithstanding any such contingency,
the buyer shall be bound to pay [Art.
1590]
(i) Suspension may continue until
the seller has caused the
disturbance or danger to cease
(ii) However, a mere act of
trespass shall not authorize the
suspension of the payment.
[Art.1590]
(3) Sale of real property
(a) In the sale of immovable property,
buyer may pay even beyond the
expiration of the period agreed upon,
as long as no demand for rescission of
the contract has been made upon him
either judicially or by a notarial act,
despite a stipulation providing for ipso
jure rescission [Art.1592]
(b) Mere failure to fulfill the contract does
not ipso facto entitle the offended party
to rescind. A judicial or notarial act is
necessary before rescission can take
place, whether or not automatic
rescission has been stipulated. A letter
informing the buyer of automatic
rescission is not demand if such letter
is not notarized. [De Leon]
(c) After demand, court may not grant him
a new term [Heirs of Escanlar, et.al. v.
CA, 1997]
(d) R.A. 6552 (Maceda Law) applies to sale
or financing of real estate on
installment [Rillo v. Court of
Appeals,1997]
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(i) Buyer is awarded a grace period of 1
month per year of installments
paid or 60 days, whichever is
higher, within which he may pay
without additional interest
May be used once every 5 years of the
life of the contract or any of its
extensions
(ii) If contract is to be cancelled, seller
must first:
(1) Give a 30-day notice of
cancellation, and
(2) Refund cash surrender value to
buyer;
(3) CSV is equivalent to 50% of
total payments made including
deposits, options and down-
payments plus 5% for every
year in excess of 5 years of the
life of the contract or any of its
extensions.
Cancellation of the contract under Section 4 of
R.A. 6552 as a two-step process. First, the
seller should extend the buyer a grace period
of at least 60 days from the due date of the
installment. Second, at the end of the grace
period, the seller shall furnish the buyer with a
notice of cancellation or demand for rescission
through a notarial act, effective 30 days from
the buyer‘s receipt thereof. [Jestra Development
v. Pacifico, 2007]
XII. Warranties
A statement or representation made by the
seller contemporaneously and as part of the
contract of sale, having reference to the
character, quality, or title of the goods, and by
which he promises or undertakes to ensure
that certain facts are or shall be as he then
represents.
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Not every false representation voids the
contract, only those matters substantially
affecting the buyer’s interest, not matters of
opinion, judgment, probability, or expectation.
When the buyer undertakes his own
investigation, and the seller does nothing to
prevent it from being as full as the buyer
chooses, the buyer cannot afterwards allege
misrepresentations. [Songco v. Sellner, 1917]
Condition vs. Warranty
Condition Warranty
Pertains to and affects Goes into the
the existence of the performance of an
obligation obligation and may,
in itself, be an
obligation
Non-happening does Non-fulfillment
not amount to breach constitutes breach of
of contract contract
Must be stipulated Stipulation or
operation of law
May attach either to Always relates to the
the seller’s duty to subject matter or the
deliver thing or some seller’s obligations as
other circumstance to the subject matter
If seller has promised that the condition should
happen or be performed, the buyer may treat
the nonperformance of the condition as a
breach of warranty. [Art.1545]
A. EXPRESS WARRANTIES
For there to be express warranty, the following
requisites must concur: (APIR)
(1) An affirmation of fact or any promise
relating to the thing sold;
(2) The natural tendency of such affirmation or
promise is to induce the buyer to buy;
(3) The buyer buys the thing relying thereon.
[Art. 1546]
(4) Made before the sale not upon delivery or
any other point
UP LAW BOC SALES
An express warranty can be made by and also
be binding on the seller even in the sale of a
second hand article. [Moles v. IAC, 1989]
Express Warranty vs. Dealer’s or Trader’s Talk
Dealer’s or Trader’s
Express Warranty
Talk
What is specifically Affirmation of the
represented as true in value of the thing or
said document cannot statement of the
be considered as mere seller’s opinion only
dealer's talk. [Moles v. is not a warranty
IAC, 1989] unless:
The seller made it as
an expert;
It was relied upon by
the buyer. [Art.1546]
Ordinarily, what does
not appear on the
face of the written
instrument [Moles v.
IAC, 1989]
Express Warranty vs. False Representation
Express Warranty False Representation
Concealment of facts When concealment
does not necessarily of facts comes with
amount to false an active
representation misstatement of fact
or a partial statement
of fact such that
withholding of that
unsaid portion makes
that which is stated
absolutely false
However, buyer who
fails to inspect
condition of property
despite ample
opportunity to do so
when there is no
opposition on the
part of seller to
inspect cannot later
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CIVIL LAW
Express Warranty False Representation
on allege false
representation. [Phil
Mftg Co. v Go Jucco,
1926]
Reason: buyer’s duty
to inspect remains
despite false
representation by the
seller; he has the
duty to exercise due
diligence.
B. IMPLIED WARRANTIES
[ART. 1547]
An implied warranty is derived by law by
implication or inference from the nature of the
transaction or relative situation, or
circumstances of the parties, irrespective of
any intention of the seller to create it.[De Leon]
(1) Implied Warranty of Title
(2) Implied Warranty against Encumbrance/
Non-Apparent Servitudes
(3) Implied Warranty against Hidden Defects
[Art. 1547]
(a) Implied warranty as to Merchantable
Quality and Fitness of Goods
(b) Implied warranty against Redhibitory
Defect in the Sale of Animals [Art.
1572]
(c) Quality and Fitness of Goods in Sale by
Sample or Description
(4) Other Warranties
B.1. IMPLIED WARRANTY OF TITLE
(1) Implied warranty arises by operation of law
and need not be stipulated in the contract
of sale.
(2) Warranty of Seller’s Right to Sell: Seller
warrants his right to sell at the time the
ownership is to pass.
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Inapplicable to a sheriff, auctioneer,
mortgagee, pledgee, or other person
professing to sell by virtue of authority in fact
or law. [Art. 1547]
(3) Warranty against Eviction: seller warrants
that buyer, from the time ownership
passes, shall have and enjoy legal and
peaceful possession of the thing. Its
requisites are:
(a) Buyer is deprived of the whole or a
part of the thing sold;
(b) Eviction is by final judgment
(c) Final judgment based on a right
prior to the sale or an act
imputable to the vendor
(d) Seller is summoned and made co-
defendant in the suit for eviction at
the instance of the buyer. [Power
Commercial and Industrial Corp. v.
CA, 1997]
B.2. IMPLIED WARRANTY AGAINST
ENCUMBRANCE/NON-APPARENT
SERVITUDES
Requisites for breach:
(1) Thing sold is an immovable
(2) Burden or servitude encumbering the thing
sold is:
(a) Non-apparent to the naked eye
(b) Not mentioned in the agreement
(c) Of such nature that it must be
presumed that the buyer would not
have bought it had he been aware of it
(d) Not recorded in the Registry of
Property unless there is an express
warranty that the thing is free from all
burdens and encumbrances [Art.1560]
B.3. IMPLIED WARRANTY AGAINST
HIDDEN DEFECTS
Requisites for breach:
(1) The defect renders the thing sold unfit for
the use for which it was intended OR
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SALES CIVIL LAW
diminishes its fitness for such use to such
an extent that had the buyer been aware
thereof, he would not have bought it or
would have paid a lower price;
(2) The defect is not patent or visible;
(3) The buyer is not an expert who, by reason
of his trade or profession, should have
known the defect
(4) The seller is aware of the hidden fault or
defect, OR even if he is not aware thereof,
if there is no stipulation to the contrary
[Arts.156, 1566]
The buyer must also give notice of such
redhibitory defect within a reasonable time.
The use contemplated must be that which is
stipulated, and in absence of stipulation, that
which is adopted to the nature of the thing,
and to the business of the buyer.
B.4. IMPLIED WARRANTY AS TO
MERCHANTABLE QUALITY AND FITNESS
OF GOODS
Warranty of merchantability is warranty that
goods are reasonably fit for the general
purpose for which the same are sold. Warranty
of fitness is warranty that goods are suitable
for the special purpose of the buyer which will
not be satisfied by mere fitness for general
purposes.
Merchantable Quality:
(1) Where the goods are brought by
description from a seller who deals in
goods of that description [Art.1562]
(2) In a sale by sample, if the seller is a dealer
in goods of that kind and the defect is not
apparent on reasonable examination of the
sample [Art.1566]
In a sale by sample, there is implied warranty
that goods are free from defects not apparent
on reasonable examination of sample and
UP LAW BOC
which render goods unmerchantable.
[Mendoza v. David, 2004]
Fitness for a particular purpose:
Where the buyer expressly or impliedly makes
known to the seller the particular purpose for
which the goods are acquired AND it appears
that the buyer relied on the seller’s skill or
judgment [Art.1562(1)]
B.5. IMPLIED WARRANTY AGAINST
REDHIBITORY DEFECT IN THE SALE OF
ANIMALS
[Art. 1572]
Redhibitory defect – a hidden defect of animals
of such nature that expert knowledge is not
sufficient to discover it, even in a case where a
professional inspection has been made
No warranty in case of [Art. 1574]
(1) Animals sold at fairs or public auctions
(2) Livestock sold as condemned
The following sales are void [Art. 1575]
(1) Sale of animals suffering from contagious
diseases
(2) Sale of animals unfit for the purpose for
which they are acquired as stated in the
contract
Veterinarian liable if he fails to discover or
disclose the hidden defect through ignorance
or bad faith [Art 1576]
Seller liable if animal dies within 3 days after
its purchase due to a disease that existed at
the time of sale. [Art 1578]
C. EFFECTS OF WARRANTIES
(1) Natural tendency is to induce buyer to
purchase the subject matter
(2) Buyer purchases subject matter relying
thereon
(3) Seller liable for damages in case of breach
SALES CIVIL LAW
D. EFFECTS OF WAIVERS
Only applicable to waiver of warranty against
eviction; parties may increase or decrease
warranty against eviction but the effect
depends on good/bad faith of the seller:
(1) Seller in bad faith and there is warranty
against eviction – null and void
(2) Buyer without knowledge of a particular
risk and made general renunciation of
warranty – not waiver but merely limits
liability of seller in case of eviction (pay
value of subject matter at the time of
eviction)
(3) Buyer with knowledge of risk of eviction
assumed its consequences and made a
waiver – vendor not liable
(4) Waiver to a specific case of eviction – wipes
out warranty as to that specific risk but not
as to eviction caused by other reasons
One who purchases real estate with knowledge
of defect or lack of title cannot claim he
acquired title thereto in good faith, as against
true owner of land or of interest therein. [J.M.
Tuason v. CA, 1979]
The same rule must be applied to one who has
knowledge of facts which should have put him
upon such inquiry and investigation as might
be necessary to acquaint him with the defects
in the title of his vendor. A purchaser cannot
close his eyes to facts which should put a
reasonable man upon his guard and then
claim that he acted in good faith under the
belief that there was no defect in the title of
the vendor.
E. BUYER’S OPTIONS IN CASE OF
BREACH OF WARRANTY
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[ART. 1599] Total Eviction Partial Eviction

Enforce liability for Enforce liability
(1) Express Warranty eviction (demand VICED)
Prescriptive Period: Period specified in express OR
warranty OR 4 years, if no period is specified Demand from seller: Rescind
(following the general rule on rescission of (VICED) (a) If he would not
contracts) (a) Value of thing sold have bought the thing
at time of eviction sold without the part
Remedies: (b)Income or fruits, if lost;
(a) Accept goods + demand diminution/ he has been ordered (b) BUT he must
extinction of price to deliver them to the return the thing
(b) Accept goods + damages party who won the without other
(c) Refuse to accept goods + damages eviction suit encumbrances than
(d) Rescind (Refuse to accept or return or offer (c) Costs of eviction those which it had
to return) + recover price paid suit and in a proper when he acquired it
case, suit against
Rescission not available when buyer: seller for warranty
(a) Knew of breach of warranty when he (d) Expenses of the
accepted the goods without protest contract, if buyer has
(b) Fails to notify the seller about election to paid them
rescind within a reasonable period of time (e) Damages and
(c) Fails to return or offer to return the goods interests, and
to the seller in substantially a good ornamental expenses,
condition as they were when delivered, IF sale was made in
unless deterioration was due to breach of bad faith
warranty
Rules:
Measure of damages: Difference between value (1) Buyer need not appeal from decision to
of goods at the time of delivery and the value hold seller liable for eviction
they would have had if they had answered to (2) When adverse possession commenced
the warranty before sale, but prescription period
completed after transfer: seller is not liable
Effects of rescission: (3) If property sold for nonpayment of taxes
(a) Buyer no longer liable for price: Entitled to due and not made known to the buyer
the return of any part of price paid, before the sale: seller liable
concurrently with or immediately after an
(4) Judgment debtor also responsible for
offer to return the goods eviction in judicial sales, unless it is
(b) If seller refuses to accept offer to return otherwise decreed in the judgment
goods: buyer deemed as bailee for seller
and has right of lien to secure payment of
If there is waiver of warranty:
part of price paid
(1) Seller acted in bad faith: Waiver is void,
seller liable for eviction
(2) Implied Warranty against Eviction [Arts.
(2) Buyer made waiver without knowledge of
1555, 1556]
risks of eviction: Seller liable only for the
Total Eviction Partial Eviction value of the thing sold at time of eviction

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(3) Buyer made waiver with knowledge of only 3 months after. Within such time, the
risks: Seller not liable; buyer assumed the feeds could have been contaminated by other
consequences factors. [Nutrimix Feeds v. CA, 2004]

(3) Implied Warranty against Encumbrances
[Art. 1560]
(a) Rescission: Within 1 year from execution of
deed of sale OR
(b) Damages: Within 1 year from execution of
deed of sale or discovery of the burden or
servitude
(4) Implied Warranty against Hidden Defects
[Arts. 1567-1571]
If thing is not lost:
(a) Withdraw from contract (accion
redhibitoria) + damages
(b) Demand a proportionate reduction of
the price (accion quanti minoris) +
damages
One of the express warranties stipulated was
that the stockholdings are on a clean balance
sheet. An important sense of a deed of sale is
the transfer of ownership over the subject
properties to the buyer. The failure of the
seller to effect a change in ownership of the
subject properties amounts to a hidden defect.
[PNB v. Mega Prime Realty and Holdings, 2008]
(5) Implied Warranty against Redhibitory
Defects of Animals
Remedies
(a) Withdraw from contract + damages
(b) Demand a proportionate reduction of
the price + damages

If thing is lost: If sale is rescinded:

Due to fortuitous event (a) Buyer must return animal in the
Due to hidden fault
or fault of buyer condition in which it was sold and
If seller aware of Demand: delivered
defect, buyer may (a) Price paid minus (b) Buyer shall be liable for injury due to
demand: value of thing when it his negligence.
(a) Return of price was lost
(b) Refund of (b) Damages, if seller Prescriptive period: 40 days from delivery
expenses acted in bad faith
(c) Damages F. WARRANTY IN SALE OF
If seller not aware of CONSUMER GOODS
defect: [RA 7394, Sec 68]
Buyer may demand If implied warranty accompanies express
price and expenses warranty, both will be of equal duration.
BUT NOT damages
Express Warranty Implied Warranty
Prescriptive period: 6 months from delivery
(1) Demand repair (1) Retain the goods
Nature of animal feeds makes it necessarily within 30 days and recover damages
difficult for private respondent to prove the Extendible for causes OR
defect existing when the feeds were bought beyond the control of (2) Reject the goods,
from petitioner. Facts allege that when feeds the warrantor cancel contract and
were delivered, rat poison was contained (2) Demand refund of recover from seller so
therein, but strange since the animals died price minus amount much of the purchase

299
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Express Warranty Implied Warranty
directly attributable price as has been paid
to the use of the + damages
consumer prior to the
discovery of the non-
conformity
XIII. Breach of Contract
A. GENERAL REMEDIES [ART 1191]
The following remedies arise from the bilateral
nature of the contract of sale:
(1) Specific performance
(2) Rescission
General rule: Rescission of a contract will not
be permitted for a slight or casual breach, but
only for such substantial and fundamental
breach as would defeat the very object of the
parties in making the agreement. [Song Fo &
Co. vs. Hawaiian-Philippine Co., 1925]
(3) Damages
Prescriptive periods
(1) 10 years if based on written contract
(2) 6 years if based on oral contract
B. REMEDIES OF THE SELLER
[ARTS. 1636, 1594]
B.1. SALE OF MOVABLES
Extrajudicial or Self-Help Remedies- No need to
resort to the courts as long as possession of
the goods has not yet passed to the buyer
i. Possessory Lien Over The Goods
Right to retain possession of goods until
payment or tender of the whole price, or unless
he agrees to sell on credit [Arts. 1526-1529,
1503, 1535]
When available [Art 1527]
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SALES CIVIL LAW
(1) Goods are sold without stipulation as to
credit
(2) Goods are sold on credit, but term of credit
has expired
(3) Buyer becomes insolvent
The seller may exercise his right of lien
notwithstanding that he is in possession of the
goods as agent or bailee for the buyer [Art
1527, par. 2]
When Unpaid Seller Loses His Lien [Art 1529]
(1) Seller delivers goods to carrier or other
bailee for transmission to the buyer
without reserving ownership or right of
possession (i.e. under a straight or non-
negotiable bill of lading)
(2) Buyer or his agent lawfully obtains
possession of goods
(3) Seller waives the lien
(a) But it is not lost with respect to the
remainder of the goods when only
partial delivery is made (unless such is
symbolic delivery of the whole)
(b) It is not lost by the mere fact that seller
obtained a judgment for the price
When Lien May Be Revived After Delivery
(1) If the buyer refuses to receive the goods
after the same are delivered to the carrier
or other bailee on his behalf, though the
seller has parted with both ownership and
possession. Here, the seller may reclaim
the goods and revest the lien.[Art 1531,
par.1(2)]
(2) If the buyer returns the goods in wrongful
repudiation of the sale, then the lien is
revived.
Possessory lien is lost after the seller loses
possession but his lien as an unpaid seller
remains. His preference can only be defeated
by the government’s claim to the specific tax
on the goods. [Arts 2241, 2247]
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ii. Right Of Stoppage In Transitu
An extension of the lien for the price; entitles
unpaid seller to resume possession of the
goods while they are in transit before the
goods come in possession of the vendee [Arts.
1530-1532, 1535, 1636[2]]
Requisites for the exercise of stoppage in
transitu
(1) The seller is unpaid
(2) The buyer is insolvent
(3) The goods are in transit
(4) The seller either takes actual possession,
or gives notice of claim to the carrier or
other person possessing the goods
(5) The seller must surrender the negotiable
instrument or title, if any, issued by the
carrier/bailee
(6) The seller must bear the expenses of the
delivery of the goods after exercise of such
right.
When Goods Are In Transit [Art 1531, par. 1]
(1) From the time of delivery to the carrier or
other bailee by the seller, for the purpose
of transmission to the buyer, until the
buyer or his agent takes such delivery from
the carrier.
(2) Even when goods have reached their
ultimate destination, if buyer rejects them
and carrier retains possession
To terminate transit by delivery to a
middleman, delivery must be to keep, not to
transport.
In case of misdelivery, the goods are still
considered in transit, hence, the seller may still
exercise his right pursuant to Article 1523.
When Goods Are No Longer In Transit [Art 1531,
par. 2]
SALES CIVIL LAW
(1) Buyer obtained delivery of the goods
before they have reached their appointed
destination
(2) Goods have arrived at the appointed
destination, and the carrier/bailee
acknowledges to hold the goods on behalf
of the buyer
(3) Goods have arrived at the appointed
destination, but carrier wrongfully refuses
to deliver to buyer/his agent
How Right Is Exercised [Art 1532]
(1) By obtaining actual possession of the
goods
(2) By giving notice of his claim to the
carrier/other bailee who has possession of
the goods
(a) Carrier must redeliver goods to seller,
or according to his instructions
(b) Carrier not obliged to redeliver until
the negotiable document of title, if any,
has been surrendered for cancellation
Effect When Buyer Has Sold the Goods [Art
1535]
General Rule: Seller’s right to stoppage in
transitu is not affected even if buyer has sold or
disposed of the goods unless the seller has
given his assent thereto.
Exceptions:
(1) When seller has given consent thereto
(2) When a negotiable document of title has
been issued for the goods to a purchaser
for value in good faith
iii. Special right of resale
Available to unpaid seller who has a right of
lien or who has stopped the goods in transitu
[Art. 1533]
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When available
When the unpaid seller has either a right of
lien or has stopped the goods in transitu and
under any of the following conditions:
(1) The goods are perishable in nature
(2) The right to resell is expressly reserved in
case the buyer should default
(3) The buyer delays in paying the price for an
unreasonable time
The right to resell the goods is not mandatory,
but permissive.
How exercised
(1) He must do so within a reasonable time
and in such manner as to obtain the best
price possible.
(2) Resale is deemed to be a fair sale if it is
undertaken in accordance with established
business practices, with no attempt to take
advantage of the original buyer.
(3) Resale may be in a private or public sale,
but seller cannot buy directly or indirectly.
(4) For resale to be valid, buyer need not be
notified of an intention to resell or the time
and place of the resale.
Effects of Resale
(1) Seller is no longer liable to the original
buyer upon the contract of sale or for any
profit made by the resale
(2) Buyer at resale acquires good title as
against the original owner
(3) In case resale is at a loss, seller is entitled
to recover the difference from the original
buyer
(4) Seller may recover damages from original
buyer for breach of contract
iv. Special right to rescind
Return of the title over the undelivered goods
to the seller, and right to recover damages for
breach of contract [Art. 1534]
When available
SALES CIVIL LAW
When the unpaid seller has either a right of
lien or has stopped the goods in transitu and
under any of the following conditions:
(1) Seller expressly reserved his right to
rescind in case buyer defaults
(2) Buyer has been in default in payment for
an unreasonable time
Transfer of title shall not be held to have been
rescinded by the unpaid seller until he
manifests by notice to the buyer or some other
overt act an intention to rescind.
Communication to buyer of rescission is not
always necessary (it can be an overt act). But
giving/failure to give notice is relevant in
determining reasonableness of time given to
the buyer to make good his obligation under
contract. [De Leon]
v. Whole Price not Paid
When the whole of the price has notbeen paid
or tendered;
vi. Dishonor of Bill of Exchange or Negotiable
Instrument
When a bill of exchange or other negotiable
instrument has been received as conditional
payment and the condition on which it was
received has been broken by reason of the
dishonor of the instrument, the insolvency of
the buyer, or otherwise.
C. RECTO LAW: SALE OF MOVABLES
ON INSTALLMENT – ARTS. 1484-1486
C.1. WHEN APPLICABLE
(1) Sale of movables in installment
The rule is intended to apply to sales of
movables, the price of which is payable in 2 or
more installments, but not to straight-term
sales where the price is payable in full, after
making a down payment because the law aims
to protect improvident buyers who may be
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tempted to buy beyond their means. [Levy
Hermanos vs. Gervacio, 1939]
(2) Lease of personal property with option to
buy
(a) When lessor has deprived the lessee of
the possession or enjoyment of the
thing (i.e. lessor files a complaint for
replevin against lessee)
(b) Also applies when seller assigns his
credit to someone else
C.2. ALTERNATIVE AND EXCLUSIVE
REMEDIES
The exercise of one remedy bars the exercise of
the others.
(1) Specific Performance
General Rule: When the seller has chosen
specific performance, he can no longer seek for
rescission or foreclosure of the chattel
mortgage
Exception: If specific performance has become
impossible, the seller may still choose
rescission [Art 1191]
(2) Cancellation of sale if vendee fails to pay 2
or more installments
(a) When the seller cancels the sale by
repossessing the property sold, he is
barred from exacting payment for its
price.
(b) It can only be carried out when he who
demands rescission can return
whatever he may be obliged to restore
[Art 1385]
(3) Foreclosure of Chattel Mortgage if vendee
fails to pay 2 or more installments
(a) If seller chooses this remedy, he shall
have no further action to recover any
unpaid balance, and any stipulation to
the contrary shall be void.
(b) The purpose of the law is to remedy the
abuses committed in foreclosure of
SALES CIVIL LAW
chattel mortgages. It prevents
mortgagees from seizing the
mortgaged property, buying it at
foreclosure sale for a low price and
then bringing the suit against the
mortgagor for a deficiency judgment.
The almost invariable result of this
procedure was that the mortgagor
found himself minus the property and
still owing practically the full amount
of his original indebtedness. [Bachrach
Motor Co., Inc. v. Millan, 1935]
D. SALE OF IMMOVABLES
D.1. RESCISSION FOR ANTICIPATORY
BREACH
[Art. 1591]
This is applicable to both cash sales and to
sales in installments.
Requisites
(1) There is delivery of immovable property
(2) Vendee has not yet paid the price; and
(3) Vendor has reasonable ground to fear the
loss of property and the loss of price
If there is no such reasonable ground, Art 1191
applies (specific performance or rescission with
damages).
Court has no discretion to compel the seller to
wait for the expiration of the period to pay, or
to grant the buyer more time to pay.
D.2. SPECIFIC PERFORMANCE +
DAMAGES OR RESCISSION + DAMAGES
[Art. 1191]
(1) Seller may choose between specific
performance and rescission, with damages
in either case.
(2) Court has discretion, for a just cause, to
give the buyer more time to pay even if the
seller chooses rescission.
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(3) If seller chose specific performance, and
such becomes impossible, he may still
avail of rescission
(4) If absolute sale, seller must make a
demand for rescission
(a) Judicially, OR
(b) By a notarial act
(5) Demand necessary even if automatic
rescission is stipulated
(a) Effect of lack of demand: Buyer can
still pay
(b) Effect of demand: Court may not
grant buyer a new term
E. PD 957, SECTIONS 23 AND 24
Non-forfeiture of payments
(1) No installment payment made by the
buyer shall be forfeited in favor of the
owner or developer of the condominium or
subdivision project, after due notice, when
the buyer desists from paying due to the
failure of the developer or owner to
develop the project according to the
approved plans or within the time limit
stated.
(2) Buyer’s Remedy: At his option, he may
reimburse the total amount paid including
amortization interest with interest thereon
at the legal rate
(3) If the buyer fails to pay the installments for
reasons other than the failure of the owner
or developer to develop the project, his
rights shall be governed by RA 6552.
F. MACEDA LAW (RA 6552): SALE OF
IMMOVABLES ON INSTALLMENT
RA 6552 does NOT apply to:
(1) Industrial lots
(2) Commercial buildings
(3) Sale to tenants under Agricultural Reform
Code [RA 3844]
304
SALES CIVIL LAW
(4) Sale of lands payable in straight terms [RA
6552, Sec 3]
Rights of the Buyer:
The law imposes additional requirements on
the part of the seller for a valid rescission
(1) If buyer has paid at least 2 years of
installments: (GRN)
(a) Grace period of 1 month per year of
installment payment made
BUT the buyer may only avail of the
grace period once every 5 years
(b) Refund of Cash Surrender Value (CSV):
50% of total amount paid + 5% for
every year after the first 5 years of
installments
BUT total CSV should not be greater
than 90% of total amount paid
(c) Notice of cancellation of demand for
rescission by notarial act effective 30
days from the buyer’s receipt thereof
and upon full payment of CSV
(2) If buyer has paid less than 2 years of
installments: (GN)
(a) Grace period of at least 60 days
(b) Notice of cancellation or demand for
rescission by notarial act, effective 30
days upon receipt thereof
(3) During the grace period, the buyer shall
also have the right:
(a) To sell or assign his rights, evidenced
in a notarial instrument
(b) To update his account
(c) To pay in advance any installment, or
the full unpaid balance of the price,
without any interest
Down payments, deposits, or options on the
contract shall be included in the total number
of installments made.
UP LAW BOC SALES CIVIL LAW

The seller may go to court for judicial If thing deteriorates

rescission in lieu of a notarial act of rescission. Without fault of seller Through fault of seller
NO BREACH. Rescission + damages
Cancellation pertains to extrajudicial Impairment shall be OR
cancellation. Absence of notice does not bar borne by buyer Specific performance
the filing of an action to cancel the contract. + damages

A decision in an ejectment case can operate as

(2) Remedy for breach of obligation to deliver
notice of cancellation as required by RA6552.
However, mere filing of an unlawful detainer
Delivery of wrong quantity [Art. 1522]
suit by the seller does not operate as such
Goods are MORE
notice. [De Leon] Goods are LESS THAN
THAN what was
what was contracted
contracted
Reject the goods Reject the excess OR
G. REMEDIES OF THE BUYER OR the whole, if
General rule: Courts will refuse to decree Accept and pay indivisible
specific performance with respect to chattels (a) At contract rate if OR
because damages are a sufficient remedy buyer accepts Accept the whole and
knowing that seller pay at contract rate
Exception: Buyer is entitled to the specific thing won’t perform in full
which to him has special value and which he (b) At fair value: If
cannot readily obtain in the market OR where goods were used
damages would not furnish a complete and before knowing that
adequate remedy [Baviera] seller won’t be able to
perform in full
G.1. SALE OF MOVABLES
Buyer becomes the
(1) Remedy for breach of obligation to owner of the whole
preserve mass and the seller is
bound to make good
If thing is lost— the deficiency [Art
Through fault of seller 1464]
/
Without fault of seller
Through Fortuitous
G.2. SALE OF IMMOVABLES
Event (if seller is liable)
[Art 1539 – 1543]
NO BREACH. Damages
Obligation is
(1) If at the rate of a certain price per unit of
extinguished.
measure or number:
A thing is lost when it—
Less (in area or More (in area or
(1) Perishes
quality) than what was quality) than what was
(2) Goes out of commerce
agreed upon: agreed upon:
(3) Disappears in such a way that its existence
Proportional Reject the excess
is unknown or it cannot be recovered
reduction of price OR

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OR
Rescission, if:
Accept the whole and
pay at contract rate
XIV. Extinguishment of
(a) Lack in area is at
least 1/10 of what is
Sale
stated, or inferior
value of thing sold A. CAUSES
exceeds 1/10 of price [ARTS. 1600, 1231]
(b) Buyer would not Generally, extinguished by the same causes as
have bought the all other obligations [Arts.1600, 1231]
property has he been
aware of the inferior (P-PLAN-C3-R3)
quality or smaller (1) Payment/performance
area (2) Prescription
(3) Loss of thing due
This rule also applies to judicial sales [Art. (4) Annulment
1541] (5) Novation
(6) Condonation/remission
(2) If for a lump sum: (7) Confusion/merger
(8) Compensation
Everything is within (9) Rescission
boundaries, even if Not everything is within (10) Resolutory condition fulfilled
less or more than the boundaries (11) Redemption (Conventional or Legal)
stated area
No remedy Proportional reduction
in price B. CONVENTIONAL REDEMPTION
Where both the area OR [ART. 1601]
and the boundaries Rescission
of the immovable B.1. DEFINITION
are declared, the (1) Vendor reserves the right to repurchase the
area covered within thing sold, with the obligation to comply
the boundaries of with the provisions of Article 1616 and other
the immovable stipulations which may have been agreed
prevails over the upon. [Art 1601,CC]
stated area. [Rudolf (2) Available when the seller reserves the right
Lietz, Inc. v. CA, to repurchase the thing sold in the same
2005] instrument of sale as one of the
stipulations of the contract [Villarica v CA,
Prescriptive period: 6 months counted from 1968]
date of delivery
B.2. PERIOD
General Rule: Follow period stipulated in
contract, but should not exceed 10 years.
(1) If no period stipulated, then it shall be four
years from the execution of the contract

306
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(2) But vendor may still exercise the right to
repurchase within thirty days from the time
final judgment was rendered in a civil
action on the basis that the contract was a
true sale with right to repurchase
B.3. BY WHOM EXERCISED
(1) Vendor
(2) His heirs, assigns or agents
(3) Creditor, if he has exhausted the property
of the vendor
(4) Co-owners of an immovable, if they sold
their interests to the same person, may
only redeem their respective shares
(a) Vendee cannot be compelled to agree
to a partial redemption
(b) If the co-owners sold their interest to
the same person who previously
bought the share of a co-owner subject
to a right of redemption, then the latter
may be compelled to redeem the
whole property
B.4. FROM WHOM TO REDEEM
(1) Vendee a retro
(2) His heirs, assigns or agents
(3) Subsequent purchaser of property, even if
the right to redeem was not mentioned in
the subsequent contract; except if
registered land, where the right to redeem
must be annotated on the title
(4) If several heirs, then the right of
redemption can be exercised against each
heir for his share of the property
B.5. HOW EXERCISED
(1) By returning the ff. to the buyer: (PEN)
(a) Price of the sale;
(b) Expenses of the contract and other
legitimate payments made by reason
of the sale;
(c) Necessary and useful expenses made
on the thing sold
(2) Complying with any other stipulation
agreed upon, if any.
SALES CIVIL LAW
The general rule in redemption is that it is not
sufficient that a person offering to redeem
manifests his desire to do so. The statement of
intention must be accompanied by an actual
and simultaneous tender of payment for the
full amount of the repurchase price. [BPI
Family Savings Bank, Inc. v. Veloso, 2004]
Tender of payment is enough (consignation is
not necessary), if made on time, as a basis for
action against the buyer to compel him to
resell. But that tender does not in itself relieve
the buyer from his obligation to pay the price
when redemption is allowed by the court. [Paez
v. Magno, 1949]
B.6. EFFECT OF REDEMPTION
(1) The seller shall receive the thing free from
all charges or mortgages constituted by
the buyer BUT he shall respect leases
executed by the buyer in good faith and in
accordance with local custom.
(2) If there are growing fruits at the time of sale
and at the time of redemption: no
reimbursement or prorating if the buyer
did not pay indemnity at the time of sale
(3) If there were no growing fruits at the time of
sale, but some exist at the time of
redemption: fruits prorated (buyer entitled
to part corresponding to time he possessed
the land in the last year, counted from the
anniversary of the date of sale)
B.7. EFFECT OF NON-REDEMPTION
Ownership is consolidated in the buyer BUT
the consolidation shall not be recorded in the
Registry of property without a judicial order,
after the vendor has been duly heard.
Stipulation that installments paid shall not be
returned is valid insofar as the same may not
be unconscionable under Art. 1486. Since the
defendant admitted using the units, this
means they did not pay the monthly
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installments, using units free to prejudice of C. EQUITABLE MORTGAGE

petitioner. Under the circumstances, the [ARTS. 1602-1604]
treatment of the installment payments as
rentals cannot be said to be Definition: An equitable mortgage is defined as
unconscionable.[Delta Motor Sales v. Niu Kim one which, although lacking in some formality,
Duan, 1992] or form or words, or other requisites demanded
by a statute, nevertheless reveals the intention
of the parties to charge real property as
B.7. RIGHT TO REDEEM VS. OPTION TO security for a debt, and contains nothing
PURCHASE impossible or contrary to law. [Molina v. CA,
Right to Redeem Option to Purchase 2003]
Not a separate Generally a principal
contract but part of a contract and may be The Valdehuezas having remained in
main contract of sale, created independent possession of the land and the realty taxes
and cannot exist of another contract having been paid by them, the contracts which
unless reserved at the purported to be pacto de retro transactions are
time of the perfection presumed to be equitable mortgages, whether
of the main contract registered or not, there being no third parties
of sale involved. [Tan v. Valdehueza, 2003]
Does not need its Must have a
separate consideration A pactum commissorium is a stipulation
consideration to be separate and distinct enabling the mortgagee to acquire ownership
valid and effective from the purchase of the mortgaged properties without need of
price to be valid and foreclosure proceedings which is a nullity
effective [Arts. 1324 being contrary to the provisions of Article 2088
and 1479] of the Civil Code. The inclusion of such
stipulation in the deed shows the intention to
The maximum period The period of the mortgage rather than to sell. [Legaspi v.
for the exercise of the option contract may Spouses Ong, 2005]
right to repurchase be beyond the 10-year
cannot exceed 10 period A pactum commissorium is contrary to the
years nature of a true pacto de retro sale since
Requires in addition a May be exercised by ownership of the property sold is immediately
tender of payment of notice of its exercise transferred to the vendee a retro upon
the amount required to the offeror execution of the sale, subject only to the
repurchase of a vendor a retro within the
by law, including
consignment thereof stipulated period.
if tender of payment
cannot be made C.1. PRESUMPTION THAT A CONTRACT
effectively on the IS AN EQUITABLE MORTGAGE (5P-R)
buyer [Art. 1602]
(1) Price unusually inadequate;
(2) Possession retained by the seller as lessee
or otherwise;

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(3) Period of redemption extended (or granted
anew) upon or after the expiration of the
right to repurchase;
(4) Part of the purchase price retained by the
seller;
(5) Payment of taxes on the thing sold borne
by the seller;
(6) Any other case where it may be fairly
inferred that the Real intention of the
parties is for the transaction to secure a
debt or other obligation.
The right of repurchase is not a right granted
to the seller by the buyer in a subsequent
instrument, but one reserved by the seller in
the same instrument as the sale contract. Any
right granted after the execution of the sale
instrument is not a right to repurchase, but
some other right like an option to buy. [Roberts
v. Papio, 2007]
C.2. REQUISITES FOR PRESUMPTION OF
AN EQUITABLE MORTGAGE
[Molina v. CA, 2003]
(1) That the parties entered into a contract
denominated as a contract of sale, and
(2) That their intention was to secure an
existing debt by way of a mortgage.
In case of doubt, a contract purporting to be a
sale with right to repurchase shall be
construed as an equitable mortgage [Art. 1603]
C.3. RATIONALE BEHIND PROVISION ON
EQUITABLE MORTGAGE
(1) Circumvention of usury law
(2) Circumvention of prohibition against
pactum commissorium – creditor cannot
appropriate the things given by way of
pledge or mortgage since remedy is
foreclosure.
C.4. REMEDIES OF APPARENT VENDOR
(1) If the instrument does not reflect the true
agreement: remedy is reformation
309
SALES CIVIL LAW
(2) If decreed to be an equitable mortgage:
any money, fruits or other benefit to be
received by the buyer as rent or otherwise
considered as interest.
(3) If decreed as a true sale with right to
purchase: seller may redeem within 30
days from finality of judgment, even if the
period for redemption has expired.
C.5. PERIOD OF REDEMPTION
[ART. 1606]
(a) No stipulation: 4 years from the date of
contract
(b) When there is agreement: Period not to
exceed 10 years
(c) General Rule: Period starts to run from the
date of the execution of the contract
(d) Exception: When the efficacy of the sale is
subject to a suspensive condition, period
should be counted not from the date
appearing on the instrument, but from the
date when the condition is fulfilled,
marking the consummation of the sale
[Tolentino citing Manresa].
Additional 30 days for Repurchase
The last paragraph of Art. 1606 giving the
vendor the right to repurchase within 30 days
from the time of the rendition of final judgment
applies only where the nature and the
character of the transaction, whether as a
pacto de retro or an equitable mortgage, was
put in issue before the court [Gonzales v. De
Leon, 4 SCRA 332]
When an unrecorded pacto de retro sale was
construed as an equitable mortgage, the
plaintiff had the right to enforce his lien in a
separate proceeding notwithstanding the fact
that he had failed to obtain judgment
declaring him the sole and absolute owner of
the land. [Heirs of Arches v. Diaz, 1973]
Where the petition of the buyer in a pacto de
retro sale is for a judicial orders pursuant Art.
UP LAW BOC
1607, so that there may be consolidation of
ownership since there was failure to redeem
during the redemption period, the right of
action to foreclose or to collect the
indebtedness arises from the court judgment
declaring the contract an equitable mortgage.
C.6. EXERCISE OF THE RIGHT TO
REDEEM
[ART. 1616]
The seller can avail himself of the right of
repurchase by returning to the buyer:
(a) the price of the sale
(b) the expenses of the contract and any other
legitimate payments made by reason of
the sale
(c) the necessary and useful expenses made
on the thing sold [Art.1616].
C.7. HOW REDEMPTION IS EXERCISED
(a) The vendor de retro must complete the
repurchase before the expiration of the
redemption period [Panganiban v. Cuevas,
7 Phil 477].
(b) A sincere or genuine tender of payment is
enough. The deposit of the amount of the
repurchase money with the Clerk of Court
was simply and additional security
[Legazpi v. Court of Appeals, 1986]
(c) When tender of payment cannot be validly
made because the buyer cannot be
located, it becomes imperative for the
seller a retro to file a suit for consignation
with the courts of the redemption price
[Catangcatang v. Legayada, 1978].
(d) If the offer or tender of payment for
repurchase is refused, it is not necessary
for the vendor a retro to consign in court or
make judicial deposit of the repurchase
price [Rosales v. Reyes, 25 Phil 495].
The seller a retro is given no option to require
the buyer a retro to remove the useful
improvements on the land subject of the sale a
retro, unlike that granted the owner of a land
SALES CIVIL LAW
under Arts. 546 and 547. Under Art. 1616, the
seller a retro must pay for useful
improvements introduced by the buyer a retro;
otherwise, the latter may retain possession of
the land until reimbursement is made.
[Gargollo v. Duero, 1961]
D. LEGAL REDEMPTION
[ART. 1619]
D.1. DEFINITION
(1) Right to be subrogated:
(a) upon the same terms and conditions
stipulated in the contract,
(b) in the place of one who acquires a
thing by purchase or dation in
payment, or by any other transaction
whereby ownership is transmitted by
onerous title [Art 1619, CC]
(2) Applies to transfers of ownership by
onerous title where subrogation is
possible. Hence, it cannot apply to barter
or to transfer by gratuitous title or
hereditary succession.
(3) Applies to sales with pacto de retro
[Baviera citing MANRESA]
D.2. MANNER
(1) a formal offer to redeem or
(2) filing of an action in court together with the
consignation of the redemption price
within the reglementary period
D.3. PERIOD TO REDEEM
To whom granted Period
Co-owner [Art 1620] 30 days from notice
(a) In writing
Adjoining owner of (b) By the seller
Rural Land [Art 1621] (c) Of the actual
execution and delivery
Adjoining owner of of the deed of sale
urban land [Art. 1622]
Actual knowledge of
the sale is immaterial
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To whom granted Period To whom granted Period

, absent any showing 3135. Sec. 6.]
that the co-owner has Debtor-mortgagor in 90 days from finality
been shown a copy of case of judicial of judgment
the deed of sale foreclosure of real
through a written estate mortgage IF
communication. the mortgagee is a
[Doromal v. CA, 1975] bank or a banking
institution. [The
The law did not General Banking Law
provide for a of 2000]
particular mode of Agricultural lessee 2 years from the
written notice, thus w/o knowledge of registration of the
any compliance with sale of landholding sale
“written notice” [Agrarian Land
should suffice, Reform Code, Sec.12]
including the giving of
a copy of the deed of The notice required in Art. 1623 must be given
sale. [[Cronejero v. by the seller, because the seller is in a better
CA, 1966]] position to identify who his co-owners are. Said
Debtor in case a credit 30 days from the date provision is clear.[Francisco v. Boiser, 2000]
or the assignee
incorporeal right in demands payment
litigation is sold from debtor D.4. INSTANCES OF LEGAL
[Art.1634] REDEMPTION
Taxpayer in case of 1 year from date of
tax sale [Sec. 215, forfeiture i. Redemption by Co-owners
NIRC] [Art. 1621]
Judgment debtor, 1 year from the date of A co-owner of a thing may exercise the right of
successor–in- registration of the redemption in case the shares of all the co-
interest, or creditor certificate of sale owners or any of them are sold to a third
with subsequent lien, person
in case of execution (a) “Third person” refers to all persons who
sale [Rule 39, Sec.27, are not heirs of the vendor, by will or
ROC] intestate succession
Debtor-mortgagor, 1 year from the date of (b) The right is available not only to original
successors-in- the sale co-owners, but to those who had later
interest, acquired the share of the co-owner
judicial/judgment (c) But the right of redemption may be
creditor, any person exercised by a co-owner only when part of
having a lien on the the community property is sold to a
property, in case of stranger. When the portion is sold to
extrajudicial another co-owner, the right does not arise
foreclosure of because a new participant is not added to
mortgage [Act No.

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the co-ownership [Fernandez v. Tarun,

2002] Right of Pre-emption Right of Redemption
Owner of any If the resale has been
If the price of the alienation is grossly
adjoining land has a perfected, the owner
excessive, the redemptioner shall pay only a
right of pre-emption of the adjoining land
reasonable one.
at a reasonable price shall have a right of
Should two or more co-owners desire to
when: redemption, also at a
exercise the right, they may also do so in
(a) Urban land is so reasonable price
proportion to the share they may respectively
small and so situated
have in the thing owned in common.
that a major portion Priority if 2 or more
of it cannot be used adjoining owners
Rationale: Public Policy, since co-ownership is
for any practical want to redeem:
a hindrance to the development and
purpose w/in a owner whose
administration of the property. [Baviera]
reasonable time; intended use of the
(b) Was bought land appears to be
ii. Redemption by Adjoining Land-owners of
merely for best justified
rural land [Art. 1621] speculation;
The ff. Requisites must concur: (c) Was resold
(a) A piece of rural land is alienated
Arises before sale Arises after sale
(b) Area does not exceed one hectare
No rescission because There can be
no sale exists yet rescission of the
When not applicable:
original sale
(a) The grantee does not own any rural
The action is directed Action is directed
land
against prospective against buyer
(b) Adjacent lands are separated by
seller
brooks, drains, roads and other
apparent servitudes for the benefit of
iv. Redemption of Credit
other estates
Available when it is sold while in litigation
(From the time the complaint is answered)
Order of preference if two or more wishes to
exercise the right:
NOT available when the assignment is in favor
(a) Owner with smaller land area
of:
(b) If same land area, then the one who
(a) Co-heir/co-owner of right assigned
first requested the redemption
(b) Creditor in payment of his credit
(c) Possessor of a tenement or piece of
What constitutes “rural” or “urban” is to be
land which is subject to the right
determined from the character of the
assigned
community or vicinity in which it is found, and
NOT from the nature of the land itself nor the
How exercised: reimburse the assignee for the:
purpose to which it is devoted. [Ortega v.
(a) Price paid
Orcine, 1971]
(b) Judicial expenses incurred
(c) Interest on the price from date of
iii. Redemption by adjoining land-owners of
payment
urban land (applies only to small portions of
urban land) [Art. 1621]

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v. Under the Public Land Act Who may redeem

Coverage: said debtor judgment or
(a) Every conveyance of land acquired (d) Junior mortgage on the
under a free patent or homestead encumbrancer property subsequent
(b) The ownership of the land must have to the judgment
been transferred to another. If the Period to redeem
transaction is a mere promise to sell,
Extra judicial Execution If land is
there is no right yet to redeem
foreclosure sale mortgaged in
(c) This refers to conveyances made after
within 1 year within 12 favor of a
the prohibited 5 years from the
from the date months after bank
issuance of the patent or grant
of the sale the sale within 1 year
after the sale
Period: (not available
(a) Within 5 years from the date of in case of a
conveyance corporate
(b) If pacto de retro sale, the period to mortgagor)
redeem cannot be less than 5 years
Amount of redemption
(a) Amount of the purchase
Who may redeem:
(b) Interest at 1% per month from the time of
(a) General Rule: Applicant, widow, or
the sale up to the time of redemption
heirs
(c) Any assessment or taxes which the
(b) Exception: land is sold to another
purchaser may have paid
member of the family of the applicant,
or his direct descendant or heir
vii. Under the Agrarian Land Reform Code
(c) From whom: Subsequent purchasers
Lessee’s right of pre-emption
(1) The agricultural lessee shall have the
The right to redeem can be exercised against
preferential right to buy under the same
any subsequent purchaser even if the land is
reasonable terms and conditions, in case
registered under the Torrens System
the lessor decides to hold the landholding
becausethe fact that it was acquired through a
(2) Conditions:
homestead or free patent can be seen from the
(a) The landholding must be pre-empted
description of the property in the certificate of
by the DAR
title.
(b) When two or more lessees, each shall
have preferential right only to the
vi. Redemption in Foreclosure and Execution
extent of the area cultivated by him
Sales
(3) Period: 180 days from notice in writing

Who may redeem Lessee’s right of redemption

In extra judicial In execution sales (a) Sec. 12 RA 3844: In case landholding is sold
foreclosure (a) Judgment debtor to 3rd person without the knowledge of the
(a) Debtor (b) Successor in lessee, the latter shall have the right to redeem
(b) Successor in interest the same at a reasonable price and
interest (c) Creditor having a consideration
(c) Judicial or lien on the property (b) Period: within 180 days from notice in
judgment creditor of sold by attachment, writing

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XV. The Law on Sale of
Subdivision and
Condominium (PD 957)
A. DEFINITIONS
A.1. DEFINITION OF "SALE" OR "SELL"
(a) include every disposition, or attempt to
dispose, for a valuable consideration, of a
subdivision lot, including the building and
other improvements thereof, if any, in a
subdivision project or a condominium unit
in a condominium project.
(b) also include a contract to sell, a contract of
purchase and sale, an exchange, an
attempt to sell, an option of sale or
purchase, a solicitation of a sale, or an
offer to sell, directly or by an agent, or by a
circular, letter, advertisement or otherwise.
(c) privilege given to a member of a
cooperative, corporation, partnership, or
any association and/or the issuance of a
certificate or receipt evidencing or giving
the right of participation in, or right to, any
land in consideration of payment of the
membership fee or dues, shall be deemed
a sale within the meaning of this definition.
A.2. DEFINITION OF "BUY" OR
"PURCHASE"
include any contract to buy, purchase, or
otherwise acquire for a valuable consideration
a subdivision lot, including the building and
other improvements, if any, in a subdivision
project or a condominium unit in a
condominium project.
"Owner" shall refer to the registered owner of
the land subject of a subdivision or a
condominium project.
SALES CIVIL LAW
"Developer" shall mean the person who
develops or improves the subdivision project or
condominium project for and in behalf of the
owner thereof.
"Dealer" shall mean any person directly
engaged as principal in the business of buying,
selling or exchanging real estate whether on a
full-time or part-time basis.
"Broker" shall mean any person who, for
commission or other compensation,
undertakes to sell or negotiate the sale of a
real estate belonging to another.
"Salesman" shall refer to the person regularly
employed by a broker to perform, for and in his
behalf, any or all functions of a real estate
broker.
B. REQUIREMENTS FOR OWNERS
AND DEVELOPERS
(1) Registration of projects
(subdivision/condominium) with the NHA
(2) Registration of the owner
(3) License to sell of owner or dealer with
performance bond [PB, exceptions in
Section 7]
B.1. REGISTRATION OF PROJECTS
[SECTION 4, PD 957]
The registered owner of a parcel of land who
wishes to convert the same into a subdivision
project shall submit his subdivision plan to the
National Housing Authority. The same
procedure shall be followed in the case of a
plan for a condominium project except that
NHA also approves the building thereon in
accordance with the National Building Code.
B.2. REGISTRATION OF OWNER
[SECTION 4, PD 957]
The owner or the real estate dealer interested
in the sale of lots or units, respectively, in such
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subdivision project or condominium project
shall register the project with the Authority by
filing therewith a sworn registration statement.
i. Publication and issuance of registration
certificate [Section 4, PD 957]
A notice of the filing of the registration
statement at the expense of the applicant-
owner or dealer, in two newspapers general
circulation, one published in English and
another in Pilipino, once a week for two
consecutive weeks. Notice shall state that
subdivision lots or condominium units are open
to inspection during business hours by
interested parties. The project shall be deemed
registered upon completion of the publication
requirement. The fact of registration shall be
evidenced by a registration certificate issued to
the applicant-owner or dealer.
B.3. LICENSE TO SELL [SECTION 5, PD
957]
The registration certificate does NOT authorize
the owner or dealer to sell any unit. They must
first obtain a license to sell within two weeks
from the registration of the project. The license
to sell is issued upon examination of the
registration statement filed by the owner or
dealer showing that:
(1) the owner or dealer is of good repute
(2) that his business is financially stable
(3) that the proposed sale of subdivision lots
or condominium units to the public would
not be fraudulent
i. Performance bond [Section 6, PD 957]
A license to sell can only be issued by the NHA
if the owner or dealer files a performance bond
guaranteeing the construction and
maintenance of the roads, gutters, drainage,
sewerage, water system, lighting systems, and
full development of the subdivision project or
the condominium project and the compliance
by the owner or dealer with the applicable laws
and rules and regulations. The bond shall be
SALES CIVIL LAW
executed in favor of the Republic of the
Philippines and shall authorize the Authority to
use the proceeds thereof for the purposes of its
undertaking in case of forfeiture as provided in
this Decree.
ii. When license to sell and performance bond
not required [Section 7, PD 957]
A license to sell and performance bond shall
not be required in any of the following
transactions:
(a) Sale of a subdivision lot resulting from
the partition of land among co-owners
and co-heirs.
(b) Sale or transfer of a subdivision lot by
the original purchaser thereof and any
subsequent sale of the same lot.
(c) Sale of a subdivision lot or a
condominium unit by or for the account
of a mortgagee in the ordinary course
of business when necessary to
liquidate a bona fide debt.
iii. Grounds for suspension of license to sell
[Section 8, PD 957]
(a) misleading, incorrect, inadequate, or
incomplete information in registration
statement
(b) fraud upon prospective buyers on the
sale or offering for a sale
Note: suspension is confidential unless orer of
suspension has been violated.
iv. Grounds for revocation of registration
certificate and license to sell [Section 9, PD
957]
(1) Insolvency of owner/dealer
(2) Violation of owner of PD 957 or its IRR or
any undertaking of his/its performance
bond
(3) Has been or is engaged or is about to
engage in fraudulent transactions
(4) Misrepresentation in any prospectus,
brochure, circular or other literature about
the subdivision project or condominium
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project that has been distributed to
prospective buyers
(5) Bad business repute of owner/dealer
(6) Does not conduct his business in
accordance with law or sound business
principles
C. REQUIREMENT FOR DEALERS,
BROKERS, AND SALESMEN (DBS)
C.1. REGISTRATION
i. Dealers, brokers, and salesmen (DBS) must
be registered (Section 11, PD 957)
Requisites of registration:
(1) Good reputation and compliance with NHA
rules
(2) Payment of prescribed fee
(3) Filing of bond or other security (amount
fixed by NHA) conditioned upon his faithful
compliance with provisions of PD 957
When registration of DBS terminates
(1) Termination of employment with dealer or
broker
(2) Expiration (31st day of Dec each year)
Registration of DBS may be renewed not less
than 30 nor more than 60 days before Jan 1
and by payment of fee. If renewal is not within
said period, it shall be treated as an original
application.
ii. Revocation of registration as DBS [Section 12,
PD 957]
Grounds
(1) Has violated any provision of this Decree or
any rule or regulation made hereunder; or
(2) Has made a material false statement in his
application for registration; or
(3) Has been guilty of a fraudulent act in
connection with any sale of a subdivision
lot or condominium unit; or
SALES CIVIL LAW
(4) Has demonstrated his unworthiness to
transact the business of dealer, broker, or
salesman, as the case may be.
The NHA may suspend the DBS' registration
pending hearing of the case. The suspension or
revocation of the registration of a dealer or
broker (DB) shall carry with it all the
suspension or revocation of the registration of
all his salesmen (S).
D. CHARACTERISTICS OF SALE OF A
CONDOMINIUM OR SUBDIVISION
UNIT AND SIMILAR CONTRACTS
(1) Contracts to sell, deeds of sale, and other
similar instruments must be registered
with the Register of Deeds
(2) Mortgages on unit or lot by
owner/developer needs prior written
approval by NHA for the protection of
buyers
(3) Advertisements by owner of developer
become part of sales warranties
enforceable against owner or developer
(4) No forfeiture of installments already paid
by buyer if buyer stops paying because of
failure by owner or developer to develop
subdivision or condominium
(5) Failure to pay installments governed by
Maceda Law [RA 6552]
(6) Title is issued to the buyer upon full
payment
(7) Realty tax is paid by owner or developer
while not fully paid; but if the buyer
occupies the unit/lot, the owner/developer
may recover the taxes from the buyer
(8) Owner or developer cannot demand any
other charges allegedly for community
benefit (may be done by homeowner's
association)
D.1. REGISTRATION OF SALE, ETC
[SECTION 17, PD 957]
All contracts to sell, deeds of sale and other
similar instruments relative to the sale or
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conveyance of the subdivision lots and
condominium units, whether or not the
purchase price is paid in full, shall be
registered by the seller in the Office of the
Register of Deeds of the province or city where
the property is situated.
D.2. MORTGAGES ON UNIT OR LOT BY
OWNER OR DEVELOPER [SECTION 18,
PD 957]
(1) Need prior written approval of the NHA
(2) Must show that proceeds of mortgage will
be used for development of the
condominium or subdivision
(3) Value of each lot or unit determined by the
buyer (if there is one) and the buyer shall
be notified before release of loan
(4) Buyer may pay directly to mortgagee
D.3. ADVERTISEMENTS BY THE OWNER
OR DEVELOPER [SECTION 19, PD 957]
(1) Must reflect real facts, must not mislead or
deceive public
(2) Owner or developer shall be liable for any
misrepresentation as to facilities, etc.
(3) Advertisements shall form part of the sales
warranties enforceable against the owner
or developer
(4) Failure to comply with sales warranties is
punishable under PD 957
D.4. NON-FORFEITURE OF PAYMENTS
(SECTION 23, PD 957)
No installment payment made by a buyer in a
subdivision or condominium project for the lot
or unit he contracted to buy shall be forfeited
in favor of the owner or developer when the
buyer, after due notice to the owner or
developer, desists from further payment due to
the failure of the owner or developer to
develop the subdivision or condominium
project according to the approved plans and
within the time limit for complying with the
same. Such buyer may, at his option, be
SALES CIVIL LAW
reimbursed the total amount paid including
amortization interests but excluding
delinquency interests, with interest thereon at
the legal rate.
Section 23 does not require that a notice be
given first by the buyer to the seller before a
demand for refund can be made, as the notice
and demand can be made in the same letter or
communication. This is designed to stem the
tide of fraudulent manipulations perpetrated
by unscrupulous subdivision and condominium
sellers and operators.
Section 23 vests upon the buyer to either
demand reimbursement, or wait for further
development.
D.5. FAILURE TO PAY INSTALLMENTS
[SECTION 24, PD 957]
The rights of the buyer in the event of this
failure to pay the installments due for reasons
other than the failure of the owner or
developer to develop the project shall be
governed by Republic Act No. 6552 [Maceda
Law].
D.6. ISSUANCE OF TITLE [SECTION 25,
PD 957]
The owner or developer shall deliver the title of
the lot or unit to the buyer upon full payment
of the lot or unit. No fee, except those required
for the registration of the deed of sale in the
Registry of Deeds, shall be collected for the
issuance of such title. In the event a mortgage
over the lot or unit is outstanding at the time of
the issuance of the title to the buyer, the owner
or developer shall redeem the mortgage or the
corresponding portion thereof within six
months from such issuance in order that the
title over any fully paid lot or unit may be
secured and delivered to the buyer in
accordance herewith.
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D.7. REALTY TAX [SECTION 26, PD 957]
Real estate tax and assessment on a lot or unit
shall de paid by the owner or developer
without recourse to the buyer for as long as the
title has not passed the buyer; Provided,
however, that if the buyer has actually taken
possession of and occupied the lot or unit, he
shall be liable to the owner or developer for
such tax and assessment effective the year
following such taking of possession and
occupancy.
D.7. NO OTHER CHARGES [SECTION 27,
PD 957]
No owner or developer shall levy upon any lot
or buyer a fee for an alleged community
benefit. Fees to finance services for common
comfort, security and sanitation may be
collected only by a properly organized
homeowners association and only with the
consent of a majority of the lot or unit buyers
actually residing in the subdivision or
condominium project.
XVI. The Condominium
Act (RA 4726)
A. DEFINITION OF A CONDOMINIUM
Sec. 2. A condominium is an interest in real
property consisting of separate interest in a
unit in a residential, industrial or commercial
building and an undivided interest in common,
directly or indirectly, in the land on which it is
located and in other common areas of the
building. A condominium may include, in
addition, a separate interest in other portions
of such real property. Title to the common
areas, including the land, or the appurtenant
interests in such areas, may be held by a
corporation specially formed for the purpose
(hereinafter known as the "condominium
corporation") in which the holders of separate
SALES CIVIL LAW
interest shall automatically be members or
shareholders, to the exclusion of others, in
proportion to the appurtenant interest of their
respective units in the common areas.
(1) separate interest in a unit in a residential,
industrial or commercial building
(2) undivided interest in the land on which the
building is located and other common
areas
(a) common areas may not be
partitioned even by judicial decree
[Section 7]
(3) title to land and common areas held by
condominium corporation - owners of
separate interest are automatically
members/shareholders, exclusively.
A.1. OTHER DEFINITIONS
Sec. 3. As used in this Act, unless the context
otherwise requires:
(1) "Condominium" means a condominium as
defined in Section 2.
(2) "Unit" means a part of the condominium
project intended for any type of
independent use or ownership, including
one or more rooms or spaces located in
one or more floors (or part or parts of
floors) in a building or buildings and such
accessories as may be appended thereto.
(3) "Project" means the entire parcel of real
property divided or to be divided in
condominiums, including all structures
thereon,
(4) "Common areas" means the entire project
excepting all units separately granted or
held or reserved.
(5) "To divide" real property means to divide
the ownership thereof or other interest
therein by conveying one or more
condominiums therein but less than the
whole thereof.
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B. TRANSFERS OR CONVEYANCES OF A
UNIT OR AN APARTMENT, OFFICE OR
STORE, OR OTHER SPACE THEREIN
[SECTION 5, RA 4726]
(1) Transfer or conveyance of a unit or a space
therein includes the transfer or conveyance
of the
(a) undivided interests in common areas
(b) membership or shareholding in the
condominium corporation
(2) Proviso: only Filipino citizens or
corporations at least 60% of the capital
stock are owned by Filipino citizens may be
the transferee of common areas in cases
where the common areas are owned by the
owners of separate units as co-owners (not
by condominium corporation)
(3) Exception to proviso: hereditary succession.
Shareholdings in a condominium corporation
may be conveyed only in a proper case. Not
every purchaser of a condominium unit is a
shareholder of a condominium corporation.
The Condominium Act leaves to the Master
Deed the determination of when the
shareholding will be transferred the buyer of
the unit. But ownership of a unit is an
indispensable requisite to being a shareholder
in the corporation. [Sunset View Condominium
Corporation v. Campos (1981)]
C. RIGHTS OF A CONDOMINIUM UNIT
OWNER (ASIDE FROM RIGHTS ARISING
FROM OWNERSHIP) [SECTION 6]
(1) Absolute right to sell or dispose of his
condominium unless the master deed
unless there is a right of first refusal in
favor of condominium owners
(2) Exclusive right to mortgage, pledge or
encumber his condominium and to have
the same appraised independently of the
other condominiums but any obligation
incurred by such condominium owner is
personal to him
SALES CIVIL LAW
D. PARTITION BY SALE [SECTION 8]
This is an action that may be brought by one or
more persons owning condominiums in a
condominium project for the partition of the
project by the sale thereof. The effect is as if
the owners of all the condominiums in such
project were co-owners of the entire project in
the same proportion as their interests as their
interests in the common areas.
A partition by sale can only be done upon
showing any of the following:
(1) That three years after damage or
destruction to the project which renders
material part thereof unfit for its use prior
thereto, the project has not been rebuilt or
repaired substantially to its state prior to
its damage or destruction
(2) That damage or destruction to the project
has rendered one-half or more of the units
therein untenantable and that
condominium owners holding in aggregate
more than thirty percent interest in the
common areas are opposed to repair or
restoration of the project
(3) That the project has been in existence in
excess of fifty years, that it is obsolete and
uneconomic, and that condominium
owners holding in aggregate more than
fifty percent interest in the common areas
are opposed to repair or restoration or
remodeling or modernizing of the project
(4) That the project or a material part thereof
has been condemned or expropriated and
that the project is no longer viable, or that
the condominium owners holding in
aggregate more than seventy percent
interest in the common areas are opposed
to continuation of the condominium
regime after expropriation or
condemnation of a material portion thereof
(5) That the conditions for such partition by
sale set forth in the declaration of
restrictions, duly registered in accordance
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with the terms of the Condominium Act,
have been met
E. DECLARATION OF RESTRICTIONS BY
OWNER OF PROJECT - PRECONDITION
TO CONVEYANCE [SECTION 9]
(1) The owner must register with the Register
of Deeds a declaration of restrictions before
the conveyance of any condominium in the
project
(2) The restrictions constitute a lien upon each
condominium in the project and shall
insure to and bind all condominium owners
in the project
(3) The lien may be enforced by any
condominium owner or by the
management body of the project
F. ASSESSMENT IN ACCORDANCE WITH
DECLARATION OF RESTRICTIONS
[SECTION 20]
This is the "tax imposition power" of the
condominium corporation. If unpaid, the
management body may cause a notice of
assessment to be registered with the Register
of Deeds, which may be released only upon
payment of the assessed fees. This lien is
superior to all other subsequent liens except
real property taxes liens and other liens
provided for in the declaration of restrictions.
G. HOW LIEN ENFORCED AFTER NON-
PAYMENT OF ASSESSED FEES [SECTION
20]
Judicial or extra-judicial foreclosure of real
property mortgages, where the management
body may bid unless disallowed by the
declaration of restrictions.
H. CONTENTS OF A DECLARATION OF
RESTRICTIONS [SECTION 9]
(1) Provisions for the management of the
project by any of the ff bodies:
(a) Condominium corporation
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(b) Association of condominium owners
(c) Board of governors elected by
condominium owners
(d) Management agent elected by the
owners or by the board named in the
declaration
(2) Provisions for voting majorities quorums,
notices, meeting date, and other rules
governing such body or bodies
(3) Powers of the management body
(4) Maintenance of insurance policies (fire,
casualty, workmen's compensation, etc)
(5) Maintenance, utility, gardening and other
services for the common areas
(6) Amendment of the restrictions
(7) Reasonable assessment to meet
expenditures
(8) And many other provisions - the common
thread is the management and
maintenance of the common areas and the
manner of exercise of the management
body's powers
I. INVOLUNTARY DISSOLUTION OF THE
CONDOMINIUM CORPORATION
[SECTION 12]
In case of involuntary dissolution, the common
areas held by the corporation shall be
transferred pro-indiviso and in proportion to
their interest to the members/stockholders of
the corporation, subject to the rights of
creditors of the corporation. The common
areas remain in undivided co-ownership.
J.POWER OF ATTORNEY HELD BY
CORPORATION IN CASE OF VOLUNTARY
DISSOLUTION OF CONDOMINIUM
CORPORATION [SECTION 15]
The condominium corporation is deemed to
hold a power of attorney from all
members/stockholders to sell and dispose of
their separate interests in the project. To
liquidate, the condominium corporation will
sell the entire project as if it owned the whole
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project itself, subject to the corporate and

individual condominium creditors.

K. SALE, EXCHANGE, LEASE, OR

DISPOSITION BY CORPORATION OF THE
COMMON AREAS [SECTION 16]
Generally not allowed unless authorized by
affirmative vote of all of the
stockholders/members.

L. STOCKHOLDER/MEMBER
DEMANDING PAYMENT FOR SHARES OR
INTEREST AKA APPRAISAL RIGHT
[SECTION 17]
By-laws of the condominium corporation shall
provide that any shareholder/member
demanding payment for his share or interest
must also consent to sell his separate interest in
the project to the corporation or any buyer of
the corporation's choice.

M. REQUIREMENT FOR REGISTRATION

OF CONVEYANCE WITH THE REGISTER
OF DEEDS [SECTION 18]
Certificate of the management body of the
project that the conveyance is in accordance
with the declaration of restrictions

N. REALTY TAX ON CONDOMINIUMS

[SECTION 25]
Each condominium separately owned shall be
separately assessed, for purposes of real
property taxation and other tax purposes to the
owners thereof and the tax on each such
condominium shall constitute a lien solely
thereon.

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CIVIL LAW
SUCCESSION

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I. GENERAL
PROVISIONS
A. DEFINITION
Succession - a mode of acquisition by virtue of
which the property, rights and obligations to
the extent of the value of the inheritance, of a
person are transmitted through his death to
another or others either by his will or by
operation of law. [Art. 774, CC]
Kinds of Succession
(1) Testamentary – that which results from the
designation of an heir, made in a will
executed in the form prescribed by law.
[Art. 779, CC]
(2) Legal or Intestate – that which takes place
by operation of law in the absence of a
valid will.
(3) Mixed – that which is effected partly by will
and partly by operation of law. [Art. 780,
CC]
(4) Compulsory – succession to the legitime
and prevails over all other kinds of
succession [Balane, 2010]
B. OBJECT OF SUCCESSION AND
TRANSMISSION
Inheritance includes:
(1) All the property, rights and obligations of a
person which are not extinguished by his
death [Art. 776, CC]
(2) Not only the property and the
transmissible rights and obligations
existing at the time of his death, but also
those which have accrued thereto since the
opening of the succession [Art. 781, CC]
What are transmitted?
(1) Rights and obligations which are not
strictly personal (intuit personae) [Balane,
2010]
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CIVIL LAW
(2) Money debts of the decedent are not
transmitted to the heirs nor paid by them.
The estate pays them. [Balane, 2010]
Rule on Transmission:
General rule: All property rights which have
accrued to the hereditary estate since the
opening of succession are transmitted to the
heirs
Exception: Property acquired after the making
of a will shall not pass to the heirs unless it
should expressly appear in the will that such
was the intention of the testator. [Art. 793, CC]
Rules on Opening of Succession:
(1) The rights to succession are transmitted
from the moment of the death of the
decedent. [Art. 777, CC]
Implications of this principle:
(a) The law in effect at the time of death of
the decedent governs the succession
[Art. 2236, CC]
(b) The heir becomes the owner of his
share as well as all fruits which accrue
after the death of the decedent.
(c) Upon death of the decedent, heirs may
immediately possess, administer and
dispose of their shares in the estate (in
the absence of existing debts/claims
against the estate);
(d) The possession of hereditary property
is deemed transmitted to the heir
without interruption and from the
moment of death of the decedent, in
case the inheritance is accepted [Art.
533, CC]
(e) Estate taxes accrue upon death of the
decedent, even if the heirs come into
possession only later.
(2) A person may be “presumed” dead for the
purpose of opening his succession. In this
case, succession is only of provisional
character because there is always a chance
UP LAW BOC SUCCESSION CIVIL LAW

that the absentee may still be alive. [Arts.

390-391, CC].
II.Testamentary
C. SUBJECTS OF SUCCESSION
Succession
Decedent – person whose property is A. WILLS
transmitted through succession, whether or
not he left a will. [Art. 775, CC] A.1. IN GENERAL

Testator – a decedent who left a will [Art. 775,
CC]
Kinds of Successors
(1) Heirs – those who are called to the whole
or an aliquot portion of the inheritance
either by will or by operation of law [Art.
782, CC]
(2) Devisees – persons to whom gifts of real
property are given by virtue of a will
(3) Legatees – persons to whom gifts of
personal property are given by virtue of a
will
Will - an act whereby a person is permitted,
with the formalities prescribed by law to
control to a certain degree the disposition of
his estate to take effect after his death. [Art.
783, CC]
i. KINDS OF WILLS
(5) Notarial – an ordinary or attested will,
which must comply with the requirements
of the law [Arts. 804-808, CC]
(6) Holographic – a will entirely written, dated
and signed by the hand of the testator [Art.
810, CC]

Note: The distinction is significant in case of ii. CHARACTERISTICS OF WILLS

preterition. (1) Purely personal – will-making is non-
delegable
Kinds of Heirs  making of a will cannot be left in whole
(1) Compulsory Heirs – those who succeed by or in part of the discretion of a third
force of law to some portion of the person, or accomplished through the
inheritance, in an amount predetermined instrumentality of an agent or attorney
by law known as the legitime, of which they [Art. 784, CC]
cannot be deprived by the testator, except
 testator may not make a testamentary
by a valid disinheritance. They succeed
disposition in such manner that another
regardless of a will.
person has to determine whether or not
(2) Voluntary or Testamentary Heirs – those
it is to be operative [Art. 787, CC]
who are instituted by the testator in his
will, to succeed to the portion of the
What cannot be
inheritance of which the testator can freely What may be entrusted
delegated to 3rd
dispose. They succeed by reason of a will. to 3rd persons
persons
(3) Legal or Intestate Heirs – those who
succeed to the estate of the decedent who (1) designation of (1) designation of
dies without a valid will, or to the portion of heirs, devisees and person/institution
such estate not disposed of by will, or legatees falling under a
when certain grounds are met (2) duration/efficacy class specified by
of designation testator
(3) determination of (2) manner of

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portions, when distribution of
referred to by property specified
name [Art. 785, by testator [Art.
CC] 786, CC]
Note: testator must
first specify the class
and the amount of
property for proper
delegation
(2) Free and intelligent [Art. 839, CC]
(3) Solemn and formal - if the form is
defective, the will is void
(4) Revocable and ambulatory – will can be
revoked at any time before the testator’s
death [Art. 828, CC]
(5) Mortis causa - takes effect upon the
testator’s death
(6) Individual – prohibition against joint wills
[Art. 818, CC]
(7) Executed with animus testandi – intent to
dispose of the property
(8) Executed with testamentary capacity
(9) Unilateral act - does not involve an
exchange of values or depend on
simultaneous offer and acceptance
(10) Dispositive – disposes of property
General rule: Wills contain disposition of
the testator’s estate mortis causa.
Exceptions: (non-dispositive wills)
 will recognizing an illegitimate child
 will disinheriting a compulsory heir
(11) Statutory grant – permitted only by law,
not a constitutional right
As it is a statutory grant, a will must be
made in accordance with the formalities
prescribed by the law [Art. 783, CC; Balane
(2004)]
SUCCESSION CIVIL LAW
iii. RULES OF CONSTRUCTION AND
INTERPRETATION
[Arts. 788-795]
Main rule: All rules are designed to ascertain
and give effect to the intention of the testator.
Rationale: Testamentary succession is
preferred to intestacy.
(1) Different interpretations, in case of doubt,
that which would make the will operative
[Art. 788, CC]
(2) Words to be taken in their ordinary and
grammatical sense unless there is a clear
intention to use them in another sense
[Art. 790, CC]
(3) Technical words are to be taken in their
technical sense unless there is a contrary
intention or when testator was
unacquainted with such technical sense
[Art. 790, CC]
(4) Words must be of an interpretation to give
effect to every expression. To make it
operative rather than inoperative; that
which will prevent intestacy [Art. 791, CC]
(5) Invalidity of one of several dispositions does
not result in invalidity of others unless the
testator would not have made such
dispositions if the first invalid disposition
had not been made [Art. 792, CC]
(6) Every devise and legacy shall convey all the
interest unless it clearly appears the
intention was to convey a less interest [Art.
794, CC]
(7) Where there are ambiguities (i.e. imperfect
description or no person or property
exactly answers to the description,
mistakes, omissions), intrinsic or extrinsic
evidence may be used to ascertain the
intention of the testator
 Oral declarations of the testator as to his
intention must be excluded. [Art 789, CC]
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UP LAW BOC SUCCESSION CIVIL LAW

Kinds of Ambiguities
Patent or Extrinsic Latent or Intrinsic Requisites:
Ambiguity Ambiguity He must not be expressly prohibited by law to
make a will [Art. 796, CC]
one which appears one which cannot be
upon the face of the seen from the reading (a) Age Requirement
instrument of the will but which The testator must not be under 18 years of
appears only upon age [Art. 797, CC]
consideration of
extrinsic “Year” shall be understood to be 12
circumstances calendar months [Sec. 31, Book 1, Admin
Code]
There is no distinction between patent and (b) Soundness of Mind of the Testator
latent ambiguities in so far as the admissibility The testator is of sound mind at the time of
of parol or extrinsic evidence to aid execution [Art. 798, CC]
testamentary disposition is concerned.
Sanity is negatively stated in Art. 799:
 Not necessary that the testator be in full
iv. GOVERNING LAWS, IN GENERAL
possession of reasoning faculties
 Not necessary that the testator’s mind be
Aspect of the Will Governing Law
wholly unbroken, unimpaired,
Formal Validity Law in force at the time the unshattered by disease, injury or other
will was executed [Art. 795, cause [Art. 799, CC]
CC]
Intrinsic Validity Law of decedent’s To be of sound mind, the testator must
nationality at the time of his know:
death [Arts. 16 and 2263, CC]  The nature of the estate to be disposed
of;
Aspects of the Will Governed by the National  The proper objects of his bounty;
Law of the Decedent  The character of the testamentary act
(1) Order of succession; [Art. 799, CC]
(2) Amount of successional rights;
(3) Intrinsic validity of testamentary General rule: Soundness of mind is
provisions; and presumed [Art. 800, CC]
(4) Capacity to succeed [Art. 16, CC]
Exception: When the testator, one month
A.2. TESTAMENTARY CAPACITY AND or less before the execution of the will, was
INTENT publicly known to be insane
Testamentary capacity must exist at the time
of the execution of the will A.3. FORM

Supervening incapacity does not invalidate an IN GENERAL [Art. 804, CC]

effective will nor is the will of an incapable (1) The will must be in writing
validated by a supervening of capacity [Art. (2) It must be in a language or dialect known
801, CC] to the testator

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country; or
Applicable Laws as to Formal Validity (4) Philippine Law [Art.
 Formal validity is governed by the law in 816, CC]
force at the time the will was executed [Art.
795, CC] ATTESTED OR NOTARIAL WILLS
 As to the place, forms and solemnities of a
will are governed by the law of the country in Specific Requirements for Notarial Wills
which the will was executed [Art. 17, CC] (1) Subscribed at the end
 Arts. 815-817 (summarized in the table (2) Attestation clause
below) provide for the various governing laws (3) Marginal signatures
in these instances: (4) Page numbers
(1) A will was made in a foreign country by a (5) Acknowledged by a notary public
Filipino [Art. 815] (6) Additional requirements for handicapped
(2) A will was made in a foreign country by testators
an alien [Art. 816] (7) Subscribed by 3 or more witnesses in the
(3) A will was made in the Philippines by an presence of the testator and of one another
Alien [Art. 817]
(1) Subscription: Subscribed to, at the end of
Governing Law as to Place of Execution of Will the will [Art. 805, CC]
Place of  By the testator himself; or
Testator Execution of Governing Law  By the testator’s name written by a
Will representative in his presence and under
Philippines Philippine Law [Art. 16, his express direction.
CC]
(2) Attestation: Attested and subscribed by 3
Outside of (1) Law of the country or more credible witnesses in the presence
Filipino the in which it is of the testator and of one another [Art.
Philippines executed [Art. 805, CC]
17,CC]; or
(2) Philippine Law [Art.
Attestation Subscription
815, CC]
Mental act (act of the Mechanical act (act of
Philippines (1) Philippine Law; or
senses) the hand)
(2) Law of the country
of which testator is a Purpose is to render Purpose of
citizen or subject available proof during identification
[Art. 817, CC] probate of will, not
only of the authenticity
Outside of (1) Law of the place
Alien of the will but also of
the where the will is
its due execution
Philippines executed [Art. 17,
CC]; or
The attestation clause shall state the
(2) Law of the place
following:
where the testator
(1) Number of pages;
resides; or
(2) The fact that the testator or his
(3) Law of the testator’s
representative under his express

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direction signed the will and every
page in the presence of instrumental
witnesses
(3) That the witnesses signed the will and
all its pages in the presence of the
testator and of one another.
The signatures of the witnesses must be at
the bottom of the attestation clause [Cagro
v. Cagro (1953)]
The notary public cannot be counted as an
attesting witness [Cruz v. Villasor (1973)]
Test of presence: Not whether they actually
saw each other sign, but whether they
might have seen each other sign had they
chosen to do so considering their mental
and physical condition and position with
relation to each other at the moment of
inscription of each signature. [Jaboneta v.
Gustilo (1906)]
(3) Marginal Signatures
General rule: Testator or his representative
shall write his name, and the witnesses
shall sign each and every page except the
last page [Art. 805, CC]
Exceptions:
(1) When the will consists of only one page
(2) When the will consists of only two
pages, the first of which contains all
dispositions and is signed at the
bottom by the testator and the
witnesses, and the second page
contains only the attestation clause
duly signed at the bottom by the
witnesses. [Abangan v. Abangan (1919)]
The use of thumbprint was allowed [Matias
v. Salud (1957)]
The inadvertent failure of one witness to
affix his signature to one page of a
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CIVIL LAW
testament, due to the simultaneous lifting
of two pages in the course of signing, is not
per se sufficient to justify denial of probate.
[Icasiano v. Icasiano (1964)]
(4) Page Numberings: Numbered correlatively
in letters placed on the upper part of each
page (i.e. Page One of Five Pages). [Art.
805, CC]
 Mandatory part: pagination by means of
a conventional system
 Directory part: pagination in letters on
the upper part of each page [Balane
(2010)]
(5) Acknowledged before a notary public by
the testator and the witnesses [Art. 806,
CC]
Notary public cannot be considered a third
witness. He cannot acknowledge before
himself his having signed the will. To allow
such would have the effect of having only
two attesting witnesses to the will. [Cruz v.
Villasor (1973)]
The certification of acknowledgement need
not be signed by the notary in the presence
of the testator and the witnesses.
[Javellana v. Ledesma (1955)]
(6) Additional rules for handicapped testators:
(a) Deaf Mute [Art. 807, CC]
 Testator must personally read the
will; or
 Testator shall personally designate
two persons to read the contents and
communicate it to him in some
practicable manner.
(b) Blind [Art. 808, CC]
 The will shall be read to the testator
twice - By one of the subscribing
witnesses and by the notary public
acknowledging the will.
UP LAW BOC SUCCESSION CIVIL LAW

 A testator suffering from glaucoma is Examples:

considered as legally blind [Garcia v.  Whether all pages are consecutively
Vasquez (1970)] numbered
 Whether the signatures appear in each and
(7) Witnesses every page
Qualifications [Art. 820, CC]  Whether the subscribing witnesses are three
(1) Of sound mind  Whether the will was notarized [Caneda v CA
(2) Aged 18 years or over (1993)]
(3) Not blind, deaf or dumb
(4) Able to read and write Omissions which can be supplied by an
examination of the will itself, without the need
Disqualifications [Art. 821, CC] of resorting to extrinsic evidence, will not be
(1) Person not domiciled in the Philippines fata and will not prevent allowance of the will.
(2) Those who have been convicted of
falsification, perjury, or false testimony. Omissions which cannot be supplied except by
extrinsic evidence or evidence aliunde are fatal
Rules on Interested Witness [Art. 823, CC] and would result in the invalidation of the will.
General Rule Exception
Example: Whether the testator signed in the
Devises or legacies in If there are three other presence of the witnesses, or the witnesses
favor of a spouse, competent witnesses, signed in the presence of the testator and of
parent or child who the device or legacy one another.
also attests to the will shall be valid and the
as a witness shall be interested witness HOLOGRAPHIC WILLS
void shall be treated as a
mere surplusage Requisites:
(a) In writing [Art. 804, CC]
Creditors are not incompetent to be (b) In a language known to the testator [Art.
witnesses [Art. 824, CC] 804, CC]
(c) Entirely written, dated and signed in the
Supervening incompetency shall not hand of the testator himself [Art. 810, CC]
prevent the allowance of the will [Art. 822,
CC] Advantages Disadvantages
 Simple and easy to  No guarantee as to
Substantial Compliance Rule (as to the form of
make the capacity of the
the attestation clause)
Substantial compliance rule applies only in  Induces foreigners in testator
cases when such defects and imperfections can this jurisdiction to  No protection
be supplied by an examination of the will itself. set down their last against violence,
wishes intimidation or
There must be no bad faith, forgery, fraud, or  Guarantees the undue influence
undue and improper pressure and influence for absolute secrecy of  May not faithfully
substantial compliance to be allowed. [Art. the testamentary express the will of
809, CC] dispositions the testator due to
faulty expressions
 Can be easily

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falsified and
concealed
Witnesses Required for Probate [Art. 811, CC]
 At least one witness who knows the
handwriting and signature of the testator;
explicitly declare that it is the testator’s
 If contested – at least 3 of such witnesses
 In the absence of a competent witness,
expert testimony may be resorted to
General rule: The holographic will itself must
be presented for probate [Gan v. Yap (1958)]
Exception: If there is a photostatic copy or
xerox copy of the holographic will, it may be
presented for probate [Rodelas v. Aranza
(1982)]
Additional Dispositions
In holographic wills, the dispositions of the
testator written below his signature must be
dated and signed by him in order to make
them valid as testamentary dispositions [Art.
812, CC]
When a number of dispositions appearing in a
holographic will are signed without being
dated, and the last disposition has a signature
and date, such date validates the dispositions
preceding it, whatever be the time of prior
dispositions. [Art. 813, CC]
Insertion, Cancellation, Erasure or Alteration
[Art. 814, CC]
Testator must authenticate by his full
signature.
Full signature does not necessarily mean the
testator’s full name; it rather means his usual
and customary signature. [Balane (2010)]
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CIVIL LAW
Effect of insertion written by another person on
the validity of a holographic will
When Made Effect
After the execution, Insertion considered
without consent of not written. Validity
testator cannot be defeated by
the malice or caprice
of a third person
After execution, with Will is valid, insertion
consent is void
After execution, Insertion becomes part
validated by testator’s of the will. Entire will
signature becomes void because
it is not wholly written
by the testator
Contemporaneous to Will is void because it
the execution of the is not written entirely
will by the testator
Joint Wills
(1) A single testamentary instrument,
(2) Which contains the wills of two or more
persons,
(3) Jointly executed by them,
(4) Either for their reciprocal benefit or for the
benefit of a third person.
Mutual Wills
(1) Executed pursuant to an agreement
between two or more persons,
(2) Jointly executed by them,
(3) Either for their reciprocal benefit or for the
benefit of a third person.
Reciprocal Wills
(1) Testators name each other as beneficiaries
in their own wills,
(2) Under similar testamentary plans
Note: A will that is both joint and mutual is one
executed jointly by two or more persons, the
provisions of which are reciprocal and which
shows on its face the devises are made in
consideration of each other. Such is prohibited
UP LAW BOC SUCCESSION CIVIL LAW

under Art. 819, CC. Prohibition is applicable revoking it, by the testator himself, or by
only to joint wills executed by Filipinos, even if some other person in his presence, and by
execution is made in a foreign country which his express direction.
allows joint wills.
The act contemplating revocation must be
A.4. CODICILS done at any time before the death of the
Codicil testator. The right of revocation cannot be
(1) It is a supplement or addition to a will, waived or restricted. [Art. 828, CC]
(2) made after the execution of a will,
(3) and annexed to be taken as a part of the Law Governing Revocation [Art. 829, CC]
will, Place of Testator’s Governing Law
(4) by which any disposition made in the Revocation Domicile
original will is explained, added to, or Philippines Philippines, or Philippine Law
altered. some other
(5) in order that it may be effective, it shall be country
executed as in the case of a will. [Arts.
Philippines Philippine law
825-826, CC]
Foreign (1) Law of the
A.5. INCORPORATION BY REFERENCE Country place where
Outside the the will was
Requisites [Art. 827, CC]
Philippines made; or
(a) The document or paper referred to in the
will must be in existence at the time of the (2) Law of the
execution of the will. place in which
(b) The will must clearly describe and identify the testator
the same, stating among other things the had his
number of pages thereof. domicile at
(c) It must be identified by clear and the time of
satisfactory proof as the document or revocation
paper referred to therein; and
(d) It must be signed by the testator and the Doctrine of Dependent Relative Revocation
witnesses on each and every page, except
Molo v. Molo (1951)
in case of voluminous books of account or
The rule that where the act of destruction is
inventories.
connected with the making of another will so
A.6. REVOCATION as to fairly raise the inference that the testator
A will may be revoked by the testator at any meant the revocation of the old to depend
time before his death [Art. 828, CC] upon the efficacy of the new disposition
intended to be substituted, the revocation will
Modes of Revocation [Art. 830, CC] be conditional and dependent upon the
(1) By implication of law; or efficacy of the new disposition; and if for any
(2) By the execution of a will, codicil or other reason, the new will intended to be made as a
writing executed as provided in the case of substitute is inoperative, the revocation fails
wills; or and the original will remain in full force.
(3) By burning, tearing, canceling, or
obliterating the will with the intention of The failure of the new testamentary disposition
upon whose validity the revocation depends is

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equivalent to the non-fulfillment of a operates to revoke the prior will immediately

suspensive condition and hence prevents the upon the execution of the will containing it.
revocation of the original will. The revocation of the 2nd will does not revive
the 1st will which has already become a nullity.
Revocation vs. Nullity
Revocation Nullity Republication vs. Revival
Revocation Nullity
 By the act of the  Proceeds from law
testator  Inherent in the  Takes place by an  Takes place by
 Presupposes a valid testament, be it an act of the testator operation of law
act intrinsic or an  Corrects extrinsic  Restores a revoked
 Takes place during extrinsic defect and intrinsic defects will
the lifetime of the  Invoked after the
testator testator’s death by
 Testator cannot his heirs A.8. ALLOWANCE AND DISALLOWANCE
renounce the right to  Nullity of a will can OF WILLS
revoke be disregarded by
the heirs through i. PROBATE REQUIREMENT
voluntary No will shall pass either real or personal
compliance property unless it is proved and allowed in
therewith accordance with the Rules of Court [Art. 838,
CC]
A.7. REPUBLICATION AND REVIVAL
The execution of a codicil referring to a Probate – a proceeding in rem required to
previous will has the effect of republishing the establish the validity of a will and in order to
will as modified by the codicil. [Art. 836, CC] pass real or personal property [Art. 838, CC]

The testator cannot republish without
reproducing in a subsequent will, the
dispositions contained in a previous one which
is void as to its form. [Art. 835, CC]
Reproduction in the codicil is required only
when the original will is void as to it form; in all
other cases, reference to the original will
suffices to republish it through the codicil.
[Tolentino]
If after making a will, the testator makes a
second will expressly revoking the first, the
revocation of the second will does not revive
the first will, which can be revived only by
another will or codicil. [Art. 837, CC]
Principle of instanter – Revoking clause in the
2nd will is not testamentary in character but
The testator himself may, during his lifetime
petition the court having jurisdiction for the
allowance of his will. [Art. 838, CC]
Matters to be proved in probate
(1) Identity – Whether the instrument which is
offered for probate is the last will and
testament of the decedent
(2) Due Execution – Whether the will has been
executed in accordance with the
formalities prescribed by law
(3) Capacity – Whether the testator had
testamentary capacity at the time of
execution of the will
Scope of probate proceedings [Art. 839, CC]
General rule: The probate court cannot inquire
into the intrinsic validity of testamentary

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provisions. Only the extrinsic validity of such testator or after his death, shall be conclusive
wills may be examined. as to due execution. [Art. 838, CC]

Exception: When practical considerations
demand that the intrinsic validity of the will be
resolved
When the will is intrinsically void on its face
(e.g., when there is clearly a preterition) such
that to rule on its formal validity would be a
futile exercise. [Acain v. Diongson (1987)]
Claimants are all heirs and they consent, either
expressly or impliedly, to the submission of the
question of intrinsic validity to the court.
[Valera v. Inserto (1987)]
Probate court may pass upon the title to a
property, but such determination is provisional
and not conclusive, and is subject to the final
decision in a separate action to resolve title.
[Pastor v.CA (1983)]
Probate court may decide on the ownership of
a property when the estate contains only one
property to be adjudicated upon. [Portugal v.
Portugal-Beltran (2005)]
Revocation vs. Disallowance
Revocation Disallowance
Voluntary act of the Given by judicial
testator decree
The probate of a will by the probate court
having jurisdiction thereof is usually
considered as conclusive as to its due
execution and validity, and is also conclusive
that the testator was of sound and disposing
mind at the time when he executed the will,
and was not acting under duress, menace,
fraud, or undue influence, and that the will is
genuine and not a forgery. [Mercado v. Santos
(1938)]
ii. GROUNDS FOR DENYING PROBATE
(1) If the signature of the testator was
procured by fraud;
(2) If it was procured by undue and improper
pressure and influence, on the part of the
beneficiary or some other person;
(3) If the testator acted by mistake or did not
intend that the instrument he signed
should be his will at the time affixing his
signature thereto;
(4) If the testator was insane or otherwise
mentally incapable of making a will at the
time of its execution;
(5) If the formalities required by law have not
been complied with; or
(6) If it was executed through force or under
duress, or the influence of fear, or threats.
[Art. 839, CC]

With or without cause Must always be for a

legal cause
May be partial or total Always total, except
when the ground of
fraud or influence for
example affects only
certain portions of the
will
Effect of Final Decree of Probate, Res Judicata
on Formal Validity
Subject to the right of appeal, the allowance of
the will, either during the lifetime of the
B. INSTITUTION OF HEIR
Institution of Heirs – an act by virtue of which
the testator designates in his will the person or
persons who are to succeed him in his property
and transmissible rights and obligation [Art.
840, CC]
A will shall be valid even though it
(1) should not contain an institution of an heir
or

333
UP LAW BOC SUCCESSION
(2) such institution should not comprise the
entire estate or
(3) the person so instituted should not accept
the inheritance or be incapacitated to
succeed.
In such cases, the testamentary dispositions
made in accordance with law shall be
complied with and the remainder of the estate
shall pass to the legal heirs. [Art. 841, CC]
Extent of Grant [Art. 842, CC]
Freedom of disposition depends upon the
existence, kind and number of compulsory
heirs.
 No compulsory heirs – Testator has full
power of disposition
 One with compulsory heirs cannot disregard
the rights of the latter; may only dispose of
the free portion of his estate
Effect of Predecease of Heir [Art. 856, CC]
Any heir who dies before the testator or is
incapacitated to succeed or renounces the
inheritance transmits no rights of the testator
to his own heirs. This is without prejudice to
the rights of representation. [Tolentino]
MANNER OF INSTITUTION
Rules on Identity of Heirs [Arts. 843-849, CC]
The heir must be designated with sufficient
clarity
 If an unknown person is instituted, the
disposition is void (unless by some event, the
identity becomes certain)
 If a definite class or group of persons is
instituted, institution is valid.
The heir shall be designated by name or
surname.
 If there are two or more persons with the
same names, indicate some circumstance by
which the heir may be known.
 Even though the name may have been
omitted but there can be no doubt as to who
has been instituted, the institution is valid.
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CIVIL LAW
 If there is error in the name but identity can
still be identified through other proof,
institution is still valid.
 If heir is unidentifiable, none is deemed
instituted.
MANNER OF DISTRIBUTION
 Heirs instituted without designation of
shares shall inherit in equal parts [Art. 846]
 If the institution pertains to some heirs
individually and others collectively, the
presumption is that all are individually
instituted. [Art. 847]
 If siblings are instituted (whether full or half-
blood), the presumption is that the
inheritance is to be distributed equally [Art.
848]. This is different from the rules of
distribution in intestate succession.
 If parents and children are instituted, they
are presumed to have been instituted
simultaneously and not successively. [Art.
849]
Every disposition in favor of an unknown
person shall be void, unless by some event or
circumstance his identity becomes certain.
A disposition in favor of a definite class or
group of persons shall be valid. [Art. 845, CC]
INTENT OF THE TESTATOR
False Cause [Art. 850, CC]
The statement of a false cause for the
institution of an heir shall be considered as not
written unless it appears from the will that the
testator would not have made such institution
if he had known the falsity of such cause.
Austria v. Reyes (1973)
Falsity of stated cause for institution will set
aside or annul the institution if the following
are present:
(1) The cause for the institution is stated in the
will
(2) The cause is shown to be false
UP LAW BOC SUCCESSION
(3) It appears on the face of the will that the
testator would not have made such
institution if he had known the falsity of the
cause.
Scope of Institution [Arts. 852-853, CC]
(1) There are more than one instituted heir
(2) The testator intended them to get the
whole estate or the whole disposable
portion
(3) The testator has designated a definite
portion for each heir
(4) Under Art. 852: the total of all portions is
less than the whole estate (or free portion)
 Therefore, a proportionate increase is
necessary
 The difference cannot pass by intestacy
because the intention of the testator is
clear—to give the instituted heirs the
entire amount
(5) Under Art. 853: The total exceeds the
whole estate (or free portion)
 Therefore, a proportionate reduction
must be made on the remaining part of
the estate.
Preterition
The preterition or omission of one, some, or all
of the compulsory heirs in the direct line,
whether living at the time of the execution of
the will or born after the death of the testator,
shall annul the institution of heir; but the
devises and legacies shall be valid insofar as
they are not inofficious.
If the omitted compulsory heirs should die
before the testator, the institution shall be
effectual, without prejudice to the right of
representation. [Art. 854, CC]
Concept [Art. 854, CC]
(1) There must be a total omission of one,
some or all of the heir/s from the
inheritance. [Seangio v. Reyes (2006)]
(2) The omission must be that of a compulsory
heir.
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CIVIL LAW
(3) The compulsory heir omitted must be of
the direct line.
(4) The omitted compulsory heir must be living
at the time of the testator’s death or must
at least have been conceived before the
testator’s death.
(a) Compulsory Heirs in the Direct Line
A direct line is that constituted by the
series of degrees among ascendants and
descendants (ascending and descending).
[Art. 964, par.2, CC]
(b) Dispositions Less Than Legitime But No
Preterition [Balane]
If the heir in question is instituted in the
will but the portion given to him by the will
is less than his legitime – there is no
preterition. [Reyes v. Barretto-Datu (1967)]
If the heir is given a legacy or devise –
there is no preterition. [Aznar v. Duncan
(1966)]
If the heir had received a donation inter
vivos from the testator – the better view is
that there is no preterition. The donation
inter vivos is treated as an advance on the
legitime under Articles 906, 909, 910 and
1062.
The remedy, if the value of inheritance,
legacy or devise, or donation inter vivos is
only for completion of his legitime under
Articles 906 and 907.
(c) Distinguished from Disinheritance
Preterition Disinheritance
 Tacit deprivation of a  Express deprivation
compulsory heir of of a compulsory heir
his legitime of his legitime
 May be voluntary but  Always voluntary
the presumption of  For some legal
UP LAW BOC SUCCESSION CIVIL LAW

law is that it is cause Kinds

involuntary  If the disinheritance
 Law presumes there is valid, the
has been merely compulsory heir
oversight or mistake disinherited is
on the part of the totally excluded
testator from the
 Since preterition inheritance. In case
annuls the of invalid
institution of heirs, disinheritance, the
the omitted heir gets compulsory heir is
not only his legitime merely restored to
but also his share in his legitime
the free portion not
disposed of by way
of legacies and
devises
(d) Effects of Preterition [Art. 854, CC]
(1) The institution of the heir is annulled.
(2) Devises and legacies shall remain valid
as long as they are not inofficious.
(3) If the omitted compulsory heir should
die before the testator, the institution
shall be effective, without prejudice to
the right of representation.
When there are no devises and legacies,
preterition will result in the annulment of
the will and give rise to intestate
succession. [Neri v. Akutin (1941)]
C. SUBSTITUTION OF HEIRS
Substitution - is the appointment of another
heir, so that he may enter into the inheritance
in default of the heir originally instituted. [Art.
857, CC]
The substitute shall be subject to the same
charges and conditions imposed upon the
instituted heir, unless the testator has
expressly provided the contrary, or the charges
or conditions are personally applicable only to
the heir instituted. [Art. 862, CC]
(1) Brief or Compendious
(2) Reciprocal
(3) Simple or Common
(4) Fideicommissary
(1) Brief or Compendious [Art. 860, CC]
Brief – Two or more persons were
designated by the testator to substitute for
only one heir
Compendious – One person is designated
to take the place of two or more heirs
(2) Reciprocal [Art. 861, CC]
If the heirs instituted in unequal shares
should be reciprocally substituted, the
substitute shall acquire the share of the
heir who dies, renounces, or is
incapacitated, unless it clearly appears
that the intention of the testator was
otherwise. If there is more than one
substitute, they shall have the same share
in the substitution as the institution.
Example (only 1 substitute): If two heirs are
reciprocally substituted, then if one of
them dies before the testator dies,
renounces, or turns out to be
incapacitated, the other will get his share,
regardless of whether or not their shares
are equal.
Example (more than 1 substitute): A is
instituted to 1/3, B to 1/6, and C to ½. If C
dies before the testator, renounces or turns
out to be incapacitated, then the other two
will get his shares in the same proportion
as in the institution. A will get twice as
much as B (because his share of 1/3 in the
institution is twice the size of B’s share of
1/6)
(3) Simple Substitution [Art. 859, CC]

336
UP LAW BOC SUCCESSION
The testator may designate one or more
persons to substitute the heir/s instituted
in case the heirs should:
(1) die before him (predecease),
(2) should not wish to accept the
inheritance (repudiation), or
(3) should be incapacitated to accept the
inheritance (incapacitated).
(4) Fideicommissary Substitution
The testator institutes an heir with an
obligation to preserve and to deliver to
another the property so inherited. The heir
instituted to such condition is called the
First Heir or the Fiduciary Heir; the one to
receive the property is the Fideicommissary
or the Second Heir. [Art. 863, CC]
Requisites: [Arts. 863-865, CC]
(a) A Fiduciary or First Heir instituted is
entrusted with the obligation to
preserve and to transmit to a
Fideicommissary Substitute or Second
Heir the whole or part of the
inheritance.
(b) The substitution must not go beyond
one degree from the heir originally
instituted.
(c) The Fiduciary Heir and the
Fideicommissary are living at the time
of the death of the testator.
(d) The fideicommissary substitution must
be expressly made.
(e) The fideicommissary substitution is
imposed on the free portion of the
estate and never on the legitime
In the absence of an obligation on the part
of the first heir to preserve the property for
the second heir, there is no
fideicommissary substitution. [PCIB v.
Escolin (1974)]
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CIVIL LAW
Effects of predecease of the first heir/fiduciary
or the second heir/fideicommissary
Situation 1: If the first heir dies followed by the
second heir, then the testator dies, who will
inherit? The legal heirs. There is no
fideicommissary substitution because first and
second heirs are not living at the time of the
testator’s death. [Art. 863, CC]
Situation 2: The testator dies first followed by
the second heir. The first heir survived them
but subsequently dies, who will inherit? The SH
and his heirs under Art. 866, CC. This is
because the SH passes his rights to his own
heirs when he dies before FH.
Situation 3: If the first heir dies, followed by the
testator, then the second heir, who will inherit?
No specific provision in law, but SH inherits
because the T intended him to inherit.
D. TESTAMENTARY DISPOSITIONS
WITH A CONDITION, A TERM, AND A
MODE
3 Kinds of Testamentary Dispositions
(1) Conditional [Art. 871, CC]
(2) Dispositions with a term [Art. 885, CC]
(3) Dispositions with a mode/modal
dispositions [Art. 882, CC]
CONDITIONAL DISPOSITIONS
Basis of testator’s right to impose conditions,
terms or modes: Testamentary freedom
Prohibited conditions: (considered as not
imposed)
(1) Any charge, condition or substitution
whatsoever upon the legitimes. [Art. 872]
(2) Impossible and illegal conditions. [Art.
873]
(3) Absolute condition not to contract a first
marriage. [Art. 874]
UP LAW BOC SUCCESSION
(4) Absolute condition not to contract a
subsequent marriage unless imposed on
the widow or widower by the deceased
spouse, or by the latter’s ascendants or
descendants. [Art. 874]
(5) Scriptura captatoria or legacy-hunting
dispositions - dispositions made upon the
condition that the heir shall make some
provision in his will in favour of the testator
or of any other person. [Art. 875]
Scriptura captatoria/ Legacy-Hunting
Dispositions
Reasons for prohibition:
(1) The captatoria converts the testamentary
grants into contractual transactions;
(2) It deprives the heirs of testamentary
freedom;
(3) It gives the testator the power to dispose
mortis causa not only of his property but
also of his heir’s.
Effect: Entire disposition is void
Potestative, Casual and Mixed Conditions
(1) Potestative Conditions
General rule: Must be fulfilled as soon as
the heir learns of the testator’s death
Exception: If the condition was already
complied with at the time the heir learns of
the testator’s death; or if the condition is of
such a nature that it cannot be fulfilled
again.
Constructive Compliance: deemed fulfilled
(2) Casual or mixed
Casual condition – one whose fulfillment
depends on chance or the will of a third
person.
Mixed condition – one whose fulfillment
depends partly on the will of the heir and
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CIVIL LAW
partly on chance or the will of a third
person.
General rule: May be fulfilled at any time
(before or after testator’s death), unless
testator provides otherwise.
Exception: If already fulfilled at the time of
execution of will:
(1) if testator unaware of the fact of
fulfillment – deemed fulfilled
(2) if testator aware:
 can no longer be fulfilled again:
deemed fulfilled
 can be fulfilled again: must be
fulfilled again.
Constructive Compliance:
 if casual – not applicable
 if mixed – applicable only if dependent partly
on the will of a third party not interested.
DISPOSITIONS WITH A TERM
A term may either be suspensive or resolutory.
(1) If the term is suspensive:
Before the arrival of the term, the property
should be delivered to the legal or
intestate heirs.
A caución muciana has to be posted by the
heirs.
(2) If the term is resolutory:
Before the arrival of the term, the property
should be delivered to the instituted heir.
No caución muciana required as the heir
has a right over the property during the
period.
MODAL DISPOSITIONS
Dispositions with an obligation imposed upon
the heir, without suspending the effectivity of
the institution, as a condition does
UP LAW BOC SUCCESSION CIVIL LAW

Must be clearly imposed as an obligation in (a) Legitimate Parents and Legitimate

order to be considered as one. Mere Ascendants, with respect to their
preferences or wishes expressed by the Legitimate Children and Descendants.
testator are not modes. (They will inherit only in default of
legitimate children and their
A mode functions similarly to a resolutory descendants)
condition. (b) Illegitimate Parents with respect to
their Illegitimate Children. (They will
In modal institutions, the testator states (1) the inherit only in default of the
object of the institution, (2) the purpose or illegitimate and legitimate children
application of the property left by the testator, and their respective descendants).
or (3) the charge imposed by the testator upon Note that other illegitimate
the heir. [Rabadilla v. CA (2000)] ascendants are not included.
(3) Concurring: Those who succeed together
Caución Muciana with the primary or the secondary
A security to guarantee the return of the value compulsory heirs:
of property, fruits, and interests, in case of (a) Widow or Widower / Surviving Spouse
contravention of condition, term or mode (Legitimate)
(b) Illegitimate Children and Illegitimate
Instances when it is needed: Descendants
(1) Suspensive term [Art. 885,CC]
(2) Negative potestative condition - when the If the testator is a If the testator is an
condition imposed upon the heir is legitimate child: illegitimate child:
negative, or consists in not doing or not
(1) LC and (1) LC and
giving something [Art. 879, CC]
descendants descendants
(3) Mode [Art. 882, par 2, CC]
(2) In default of No. 1, (2) ILC and
LP and ascendants descendants
E. LEGITIME (3) SS (3) In default of Nos.
(4) IC and 1-2 ILP only
It is that part of the testator’s property which
descendants (4) SS
he cannot dispose of because the law has
reserved it for his compulsory heirs. [Art. 886,
Specific Rules on Legitimes
CC]
(1) Direct Descending Line
(a) Rule of Preference between lines [Arts.
COMPULSORY HEIRS AND VARIOUS
COMBINATIONS
978 and 985, CC]
 Those in the direct descending line
Classes of Compulsory Heirs [Art. 887, CC] shall exclude those in the direct
(1) Primary: Those who have precedence over ascending and collateral lines; and
and exclude other compulsory heirs:  Those in the direct ascending line
 Legitimate Children and Legitimate shall, in turn, exclude those in the
Descendants with respect to their collateral line.
Legitimate Parents and Ascendants  Rule of Proximity [Art. 926, CC]: The
(2) Secondary: Those who succeed only in the relative nearest in degree excludes
absence of the Primary compulsory heirs: the farther one

339
UP LAW BOC SUCCESSION CIVIL LAW

(b) Right of representation ad infinitum in
case of predecease, incapacity, or
disinheritance [Arts. 972 and 992, CC]
 For decedents who are Legitimate
Children, only the Legitimate
Descendants are entitled to right of
representation.
 For decedents who are Illegitimate
Children, both the Legitimate and
the Illegitimate Descendants can
represent, only with respect to the
decedent’s illegitimate parents.
(c) If all the Legitimate Children repudiate
their legitime, the next generation of
Legitimate Descendants may succeed
in their own right.
(2) Direct Ascending Line
(a) Rule of division between lines
 The father and the mother shall
inherit equally if both living. One
parent succeeds to the entire estate
of the child if the other parent is
dead. [Art. 986, CC]
 In default of the mother and the
father, the ascendants nearest in
degree will inherit. [Art. 987]
 If there is more than one relative of
the same degree but of different
lines, one half will go to the paternal
ascendants and the other half to the
maternal ascendants. [Art. 987]
(b) Rule of equal division
 The relatives who are in the same
degree shall inherit in equal shares.
[Art. 987]

Summary of Legitimes of Compulsory Heirs

Legend:
LC – Legitimate Children
SS – Surviving Spouse
LP – Legitimate Parents
ILP – Illegitimate Parents

Surviving LC & SS ILC LP &

ILP
Relatives Descendants Ascendants
1 LC alone 1/2 of the
estate in equal
portions
2 1 LC, SS 1/2 1/4
3 LC, SS 1/2 in equal Same portion as 1LC
portions
4 LC, ILC 1/2 in equal 1/2 share of 1 LC (for
portions each ILC)
5 1 LC, SS, ILC 1/2 1/4 (preferred) 1/2 share of 1 LC (for
each child)

N.B. The share of the

ILC may suffer
reduction pro rata

340
UP LAW BOC SUCCESSION CIVIL LAW

because spouse is
given preference
6 2 or more LC, 1/2 in equal Same as share of 1LC 1/2 share of 1 LC (for
SS, ILC portions each child)
7 LP alone 1/2
8 LP, ILC 1/4 in equal portions 1/2
9 LP, SS 1/4 1/2
10 LP, SS, ILC 1/8 1/4 1/2
11 ILC alone 1/2 in equal portions
12 ILC, SS 1/3 1/3 in equal portions
13 SS alone 1/2

*SS alone where

marriage is in articulo
mortis and testator
dies within 3 months
from marriage – 1/3

But if they have been

living together as
husband and wife for
more than 5 years – 1/2
14 ILP alone 1/2
15 ILP, SS 1/4 1/4

Steps in Determining the Legitime of disposable free portion and restore it to the
Compulsory Heirs estate if the donation is inofficious.
(1) Determine the gross value of the estate at (7) Distribute the residue of the estate in
the time of the death of the testator. accordance with the will of the testator.
(2) Determine all debts and charges which are
chargeable against the estate. Remedy of a Compulsory Heir in case of
(3) Determine the net value of the estate by Impairment of Legitime
deducting all the debts and charges from Extent and Nature of
Remedy
the gross value of the estate. Impairment
(4) Collate or add the value of all donations Total omission of a Annulment of
inter vivos to the net value of the estate. compulsory heir who is institution and
(5) Determine the amount of the legitime from a direct descendant or reduction of legacies
the total thus found. ascendant (preterition) and devises [Art. 854,
(6) Impute the value of all donations inter CC]
vivos made to strangers against the
Testamentary Reduction of the
dispositions impairing disposition insofar as

341
UP LAW BOC SUCCESSION
or diminishing the they may be inofficious
legitime or excessive [Art. 907,
CC]
Partial impairment Completion of the
legitime [Art. 906, CC]
Impairment by Collation – reduction
inofficious donations of donations [Arts. 771
and 911, CC]
RESERVA TRONCAL
Art. 891, CC. The ascendant who inherits from
his descendant any property which the latter
may have acquired by gratuitous title from
another ascendant, or a brother or sister, is
obliged to reserve such property as he may
have acquired by operation of law for the
benefit of relatives who are within the third
degree and who belong to the line from which
said property came.
Concept of Reserva Troncal
(1) A descendant (prepositus) inherits or
acquires property from an ascendant or
from a brother or sister (origin or mediate
source) by gratuitous title
(2) The same property is inherited by another
ascendant (reservista) or is otherwise
acquired by him by operation of law from
the said descendant (prepositus)
(3) The said ascendant (reservista) must
reserve the property for the benefit of the
relatives of the deceased descendant
within the third civil degree and who
belong to the line from which the said
property came (reservatarios).
Parties: [Balane]
(1) Origin or Mediate Source – either an
ascendant of any degree of ascent or a
brother or sister of the Prepositus;
responsible for the 1st transfer
(2) Prepositus – the first transferee of the
reserved property
(3) Reservista – an ascendant of the
Prepositus other than the Origin or
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CIVIL LAW
Mediate Source; the one obligated to
reserve the property
(4) Reservatarios – within the 3rd degree of
consanguinity from the Prepositus
[Cabardo v. Villanueva (1922)] belonging to
the line from which the property came
Requisites for Reserva Troncal [Chua vs. CFI
(1977)]:
(a) That the property was acquired by a
descendant (Prepositus) from an
ascendant or from a brother or sister
(Origin or Mediate Source) by gratuitous
title,
(b) That the Prepositus died without
(legitimate*) issue,
(c) That the property is inherited by another
ascendant (Reservista) by operation of law,
and
(d) That there are relatives within the 3rd
degree (Reservatarios) belonging to the
line from which said property came.
Only legitimate descendants will prevent the
property from being inherited by the legitimate
ascending line by operation of law [Balane]
3 transmissions involved: [Balane]
(1) 1st transfer – by gratuitous title, from a
person to his descendant, brother or sister
(2) 2nd transfer – by operation of law, from the
transferee in the 1st transfer to another
ascendant. This creates the reserva.
(3) 3rd transfer – from the transferee in the
second transfer to the relatives
JURIDICAL NATURE OF RIGHTS
Nature of the reservista’s right: [Balane citing
Edroso v. Sablan]
 The reservista’s right over the reserved
property is one of ownership
 The right of ownership is subject to a
resolutory condition, i.e. the existence of
reservatarios at the time
UP LAW BOC SUCCESSION
 The right of ownership is alienable, but
subject to the same resolutory condition.
 The reservista’s right of ownership is
registrable.
Nature of reservatarios’ right: [Sienes v.
Esparcia]
 The reservatarios have a right of expectancy
over the property.
 The right is subject to a suspensive condition,
i.e. the expectancy ripens into ownership if
the reservatarios survive the reservistas.
 The right is alienable but subject to the same
suspensive condition.
 The right is registrable.
Reserva Minima vs. Reserva Maxima
(1) The prepositus acquired property
gratuitously from an ascendant, a brother
or sister
(2) In his will, he institutes as his heir his
ascendant (who is also a compulsory heir)
such that the ascendant receives half of
the estate by operation of law as legitime
and the other half by testamentary
disposition
Two Views
(1) Reserva Maxima: The entire property will
be considered acquired as legitime and
therefore wholly reservable
(2) Reserva Minima: One half is reservable, the
other half is not subject to reserva troncal
[Tolentino, p. 284]
Extinguishment of the Reserva
(1) Loss of the reservable property
(2) Death of the reservista
(3) Death of all the relatives within the third
degree belonging to the line from which
the property came
(4) Renunciation by the reservatarios
(5) Registration of the reservable property
under the Torrens system as free
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CIVIL LAW
(6) Prescription, when the reservista holds the
property adversely against the
reservatarios, as free from reservation
F. DISINHERITANCE
Definition [Art. 915, CC]
(1) It is the act by which the testator
(2) For just cause
(3) Deprives a compulsory heir of his right to
the legitime.
Requisites of a Valid Disinheritance
(a) Heir disinherited must be designated by
name or in such a manner as to leave no
room for doubt as to who is intended to be
disinherited.
(b) It must be for a cause designated by law.
(c) It must be made in a valid will.
(d) It must be made expressly, stating the
cause in the will itself.
(e) The cause must be certain and true, and
must be proved by the interested heir if the
person should deny it.
(f) It must be unconditional.
(g) It must be total.
F.1. DISINHERITANCE OF CHILDREN AND
DESCENDANTS
[Art. 919, CC]
(1) When a child or descendant has been
found guilty of an attempt against the life
of the testator, his or her spouse,
descendants, or ascendants;
(2) When a child or descendant has accused
the testator of a crime for which the law
prescribes imprisonment for six years or
more, if the accusation has been found
groundless;
(3) When a child or descendant has been
convicted of adultery or concubinage with
the spouse of the testator;
(4) When a child or descendant by fraud,
violence, intimidation, or undue influence
causes the testator to make a will or to
change one already made;
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(5) A refusal without justifiable cause to
support the parent or ascendant who
disinherits such child or descendant;
(6) Maltreatment of the testator by word or
deed, by the child or descendant;
(7) When a child or descendant leads a
dishonorable or disgraceful life;
(8) Conviction of a crime which carries with it
the penalty of civil interdiction.
causes the testator to make a will or to
change one already made;
(6) The loss of parental authority for causes
specified in this Code;
(7) The refusal to support the children or
descendants without justifiable cause;
(8) An attempt by one of the parents against
the life of the other, unless there has been
a reconciliation between them.

F.2. DISINHERITANCE OF PARENTS AND F.3. DISINHERITANCE OF A SPOUSE

ASCENDANTS
[Art. 920, CC]
(1) When the parents have abandoned their
children or induced their daughters to live
a corrupt or immoral life, or attempted
against their virtue;
(2) When the parent or ascendant has been
convicted of an attempt against the life of
the testator, his or her spouse,
descendants, or ascendants;
(3) When the parent or ascendant has accused
the testator of a crime for which the law
prescribes imprisonment for six years or
more, if the accusation has been found to
be false;
(4) When the parent or ascendant has been
convicted of adultery or concubinage with
the spouse of the testator;
(5) When the parent or ascendant by fraud,
violence, intimidation, or undue influence
[Art. 921, CC]
(1) When the spouse has been convicted of an
attempt against the life of the testator, his
or her descendants, or ascendants;
(2) When the spouse has accused the testator
of a crime for which the law prescribes
imprisonment of six years or more, and the
accusation has been found to be false;
(3) When the spouse by fraud, violence,
intimidation, or undue influence cause the
testator to make a will or to change one
already made;
(4) When the spouse has given cause for legal
separation;
(5) When the spouse has given grounds for the
loss of parental authority;
(6) Unjustifiable refusal to support the
children or the other spouse.

Summary of Causes of Disinheritance

CC 919 CC 920 CC 921 CC 1032
Grounds for Disinheritance Children & Parents & Spouse Unworthiness
Descendants Ascendants
1 Guilty or Convicted of Attempt Against
the Life of the Testator, Spouse, ✓ ✓ ✓ ✓
Ascendant or Descendant
2 Accused Testator or Decedent of Crime
Punishable by Imprisonment of 6 years ✓ ✓ ✓ ✓
or more, and Found Groundless or False
3 Causes testator or decedent to Make a
Will or Change one by Fraud, Violence,

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Intimidation, or Undue Influence ✓ ✓ ✓ ✓

4 Unjustified Refusal to Support Testator ✓ ✓ ✓
5 Convicted of Adultery or Concubinage ✓ ✓ ✓
with Spouse of Testator or Decedent
6 Maltreatment of testator by Word and ✓
Deed
7 Leading a Dishonorable or Disgraceful ✓
Life
8 Conviction of Crime which carries the ✓
penalty of Civil Interdiction
9 Abandonment of Children or Inducing
Children to Live Corrupt and Immoral ✓ ✓
Life or Against Attempted Virtue
10 Loss of Parental Authority ✓ ✓
11 Attempt by One Parent Against the Life
of the Other Unless there is ✓
Reconciliation Between Parents
12 Spouse Has Given Cause for Legal ✓ ✓
Separation
13 Failure to Report Violent Death of
Decedent Within One Month Unless ✓
Authorities Have Already Taken Action
14 Force, Violence, Intimidation, or Undue
Influence to Prevent Another from
Making a Will or Revoking One Already ✓
Made or Who Supplants or Alters the
Latter’s Will
15 Falsifies or Forges Supposed Will of ✓
Decedent

Modes of Revocation of Disinheritance rules on disinheritance. Thus, reconciliation

(1) Reconciliation [Art. 922, CC]
(2) Subsequent institution of the disinherited
heir
(3) Nullity of the will which contains the
disinheritance.
Note: The moment that testator uses one of
the acts of unworthiness as a cause for
disinheritance; he thereby submits it to the
renders the disinheritance ineffective.
Reconciliation [Art. 922, CC]
Effect of Reconciliation between Offender and
Offended Person: If no disinheritance has been
made yet, the offended person will be deprived
of his right to disinherit.
If disinheritance has been effected, it will be
rendered ineffectual.

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Persons Charged With the Duty to Give

Rights of descendants of person disinherited
[Art. 923, CC]
Disinheritance gives rise to the right of
representation in favor of the children and
descendants of the disinherited person with
respect to his legitime.
This is inconsistent with Art. 1033.
disinheritance, reconciliation is sufficient. It
need not be in writing. In unworthiness,
however, it needs to be in writing. [Balane]
INEFFECTIVE DISINHERITANCE [Art. 918, CC]
Instances of Ineffective disinheritance:
(1) There is no specification of the cause.
(2) The cause is not proved.
(3) The cause is not among those specified in
the provisions.
Effect of Ineffective Disinheritance: if the
disinheritance lacks one or other of the
requisites mentioned in this article, the heir in
question gets his legitime. [Balane]
Ineffective
Preterition
Disinheritance
Person disinherited Person omitted must
may be any be a compulsory heir
compulsory heir in the direct line
Only annuls the Annuls the entire
institution in so far as institution of heirs
it prejudices the
person disinherited
G. LEGACIES AND DEVISES
Legacy Devise
A gift of personal A gift of real property
property given in a will given in a will
It is bequeathed It is devised
Legacies and Devises in a Will
(1) Compulsory heir, provided, their legitimes
are not impaired [Art. 925, CC]
(2) Voluntary heir
(3) Legatee or devisee can be charged with the
duty of giving a sub-legacy or sub-devise
but only to the extent of the value of the
legacy or devise given him [Art. 925, CC]
In (4) The estate represented by the executor or
administrator, if no one is charged with this
duty to pay or deliver the legacy or devise
in the will
 If there is an administration proceeding,
it constitutes a charge upon the estate.
 If there is no administration proceeding,
it is a charge upon the heirs.
Validity and Effect of Legacy or Devise
Legacy or devise of a thing belonging to another
[Art. 930, CC]
Testator erroneously believed Void
that the property belonged to
him
The thing bequeathed Effective
afterwards becomes his by
whatever title
Legacy or devise of thing already belonging to
the legatee or devisee
The thing already belongs to Ineffective
the legatee or devisee at the
time of the execution of the
will [Art. 932, CC]
The thing is subject to an Valid only as to
encumbrance or interest of the interest or
another person [Art. 932, CC] encumbrance
Legatee or devisee Ineffective
subsequently alienates the
thing [Art. 933,CC]
After alienating the thing, the Ineffective
legatee or devisee
subsequently reacquires it

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gratuitously [Art. 933, CC] or estate

After alienating the thing, the Legatee or
legatee or devisee acquires it devisee can
by onerous title [Art. 933, CC] demand
reimbursement
from the heir

Different Objects of Legacies and Devises [Art. 934-944, CC]

Objects of Legacy or Devise Effect
Thing pledged or mortgaged to  Estate is obliged to pay the debt
secure a debt  Other charges pass to the legatee or devisee
Credit or remission or release of  Effective only as regards the credit or debt existing at the time of
a debt the testator’s death
 Legacy lapses if the testator later brings action against the debtor
 If generic, comprises all credits/debts existing at time of execution
of will
Thing pledged by debtor Only the pledge is extinguished; the debt remains
To a creditor Shall not be applied to his credit unless the testator so declares
Order of payment of a debt  If testator does not really owe the debt, the disposition is void
 If the order is to pay more than the debt, the excess is not due
 This is without prejudice to the payment of natural obligations
Alternative legacies and devises  The choice is with the heir, or the executor or administrator
 If the heir, legatee or devisee dies, the right passes to their heirs
 Once made, the choice is irrevocable
Legacy of generic personal  Legacy is valid even if there are no things of the same kind in the
property or indeterminate real estate
property  Devise of indeterminate real property valid only if there are
immovable property of the same kind in the estate
 The choice belongs to the heir, legatee or devisee or the executor
or administrator
Legacy of education  Lasts until the legatee is of age or beyond the age of majority in
order that he may finish some professional, vocational or general
course provided he pursues his course diligently
 If testator did not fix the amount, it is fixed in accordance with the
social standing and circumstances of the legatee and the value of
the estate
Legacy of support  Lasts during lifetime of legatee
 If the testator used to give the legatee a sum of money for support,
give the same amount unless it is markedly disproportionate to the
estate
 If testator did not fix the amount, it is fixed in accordance with the
social standing and circumstances of the legatee and the value of
the estate

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Order of Payment in Case the Estate Is Not Sufficient to Cover All the Legacies and Devises
Art. 911 Art. 950
Order of Preference
 Legitime of compulsory heirs  Remuneratory legacy/devise
 Donations inter vivos  Preferential legacy/devise
 Preferential legacies or devises  Legacy for support
 All other legacies or devises pro rata  Legacy for education
 Legacy/devise of specific, determinate thing
which forms a part of the estate
 All others pro rata
Application
 When the reduction is necessary to preserve the  When there are no compulsory heirs and the
legitime of compulsory heirs from impairment entire estate is distributed by the testator as
whether there are donations inter vivos or not; or legacies or devises; or
 When, although, the legitime has been  When there are compulsory heirs but their
preserved by the testator himself there are legitime has already been provided for by the
donations inter vivos. testator and there are no donations inter vivos.

Art. 911, CC governs when there is a conflict Art. 950, CC governs when the question of
between compulsory heirs and the devisees and reduction is exclusively among legatees and
legatees. devisees themselves.

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Delivery of Legacy/Devise [Art. 951, CC]
(1) The very thing bequeathed shall be
delivered and not its value
(2) With all its accessions and accessories
(3) In the condition in which it may be upon
the death of the testator
(4) Legacies of money must be paid in cash
Effect of ineffective legacies or devises [Art.
956, CC]
In case of repudiation, revocation or incapacity
of the legatee or devisee, the legacy or devise
shall be merged with the mass of the
hereditary estate, except in cases of
substitution or accretion.
Revocation of Legacies and Devises [Art. 957,
CC]
(1) Testator transforms the thing such that it
does not retain its original form or
denomination
(2) Testator alienates the thing by any title or
for any cause. Reacquisition of the thing by
the testator does not make the legacy or
devise valid, unless it is effected by right of
repurchase.
(3) Thing is totally lost during the lifetime or
after the death of the testator
(4) Other causes: nullity of will, non-
compliance with suspensive condition, sale
of the thing to pay the debts of the
deceased during the settlement of his
estate.
III. Legal or Intestate
Succession
A. GENERAL PROVISIONS
Intestacy – that which takes place by operation
of law in default of compulsory and
testamentary succession. Not defined in the
Civil Code.
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CIVIL LAW
Instances when Legal or Intestate Succession
operates [Art. 960, CC]
(1) If a person dies without a will, or with a
void will, or one which has subsequently
lost its validity
(2) When the will does not institute an heir
(3) Upon the expiration of term, or period of
institution of heir [Balane, 426]
(4) Upon fulfillment of a resolutory condition
attached to the institution of heir,
rendering the will ineffective [Balane, 426]
(5) When the will does not dispose of all the
property belonging to the testator. Legal
succession shall take place only with
respect to the property which the testator
has not disposed (mixed succession)
(6) If the suspensive condition attached to the
institution of the heir does not happen or is
not fulfilled
(7) If the heir dies before the testator
(8) If the heir repudiates the inheritance, there
being no substitution, and no right of
accretion takes place
(9) When the heir instituted is incapable of
succeeding, except in cases provided in the
Civil Code
(10) Preterition – Intestacy may be total or
partial depending on whether or not there
are legacies or devises [Balane, 426]
Note: In all cases where there has been an
institution of heirs, follow the ISRAI order:
(1) If the Institution fails, Substitution occurs.
(2) If there is no substitute, the right of
Representation applies in the direct
descending line to the legitime if the
vacancy is caused by predecease,
incapacity, or disinheritance.
(3) The right of Accretion applies to the free
portion when the requisites in Art. 1016 are
present.
(4) If there is no substitute, and the right of
Representation or Accretion are not
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proper, the rules on Intestate succession
shall apply.
The Intestate or Legal Heirs:
(1) Relatives
(a) Legitimate ascendants
(b) Illegitimate parents
(c) Legitimate children
(d) Illegitimate children
(e) Surviving Spouse
(f) Brothers, sisters, nephews and nieces
(BSNN)
(g) Other collateral relatives
(2) Surviving spouse
(3) State (through escheat proceedings)
Intestate succession is based on the presumed
will of the decedent. That is, to distribute the
estate in accordance with the love and
affection he has for his family, and in default of
these persons, the presumed desire to promote
charitable and humanitarian activities.
[Balane]
Fundamental Principles in Intestate Succession:
(1) Rule of Preference between Lines
 Those in the direct descending line shall
exclude those in the direct ascending
and collateral lines;
 Those in the direct ascending line shall,
in turn, exclude those in the collateral
line.
(2) Rule of Proximity
 The relative nearest in degree excludes
the farther one [Art. 962(1), CC], saving
the right of representation when it
properly takes place.
(3) Rule of Equal Division
 The relatives who are in the same degree
shall inherit in equal shares. [Arts.
962(2), 987 and 1006, CC]
Exceptions: [Balane, 427-428]
(a) Rule of preference between Lines
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CIVIL LAW
(b) Distinction between legitimate and
illegitimate filiation. The ratio under
present law is 2:1. [Art. 983, in relation
to Art. 895 as amended by Art. 176, FC]
(c) Rule of division by line in the ascending
line [Art. 987 (2), CC]
(d) Distinction between full-blood and
half-blood relationship among
brothers and sisters, as well as
nephews and nieces. [Art. 1006 and
1008, CC]
(e) Right of representation.
(4) Rule of Barrier between the legitimate
family and the illegitimate family (the iron-
curtain rule)
The illegitimate family cannot inherit by
intestate succession from the legitimate
family and vice-versa. [Art. 992, CC]
(5) Rule of Double Share for full blood
collaterals
When full and half-blood brothers or
sisters, nephews or nieces, survive, the full
blood shall take a portion in the
inheritance double that of the half-blood.
[Arts. 895 and 983, CC]
Note:
 If one of the legitimate ascendants,
illegitimate parents, legitimate children or
illegitimate children survives, the brother,
sisters, nephews, and nieces (BSNN) are
excluded.
 If one of the legitimate ascendants,
illegitimate parents, legitimate children,
illegitimate children or surviving spouse
survives, the other collateral relatives and
the state are excluded.
 If any of the heirs concur in legitimes, then
they also concur in intestacy.
A.1. RELATIONSHIP
The number of generations determines the
proximity of the relationship. Each generation
forms one degree. [Art. 963, CC]
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A series of degrees forms a line. This line may
either be direct or collateral. [Art. 964, CC]
 A direct line is that constituted by the series
of degrees among ascendants and
descendants.
 The direct line is either ascending (brings a
person with those from whom he descends)
and descending (connecting the head of the
family with those who descend from him).
[Art. 965, CC]
 A collateral line is that constituted by the
series of degrees among persons who are not
ascendants or descendants, but who come
from a common ancestor.
Note: It is important to distinguish between
direct and collateral as the direct has
preference over the collateral.
In a line, as many degrees are counted as there
are generations. [Art. 966, CC]
(1) In the direct line, ascent is made up to the
common ancestor or progenitor.
(2) In the collateral line, ascent is made to the
common ancestor. Then descent to the
person with whom the computation is to be
made.
Note: Descending line is preferred over
ascending.
Blood relationship is either full or half-blood.
[Art. 967, CC]
Note: As among brothers and sisters and
nephews and nieces, there is a 2:1 ratio for full-
blood and half-blood relatives. Direct relatives
are preferred. But this distinction does not
apply with respect to other collateral relatives.
Incapacity [Art. 968, CC]
General rule: If there are several relatives of the
same degree, and one or some of them are
unwilling or incapacitated to succeed, his
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CIVIL LAW
portion shall accrue to the others of the same
degree.
Exception: When the right of representation
should take place.
Note: This accretion in intestacy takes place in
case of predecease, incapacity, or renunciation
among heirs of the same degree. The relatives
must be in the same relationship because of
the Rule of Preference of Lines.
Repudiation [Arts. 968-969, CC]
There is no right of representation in
repudiation. If the nearest relative/s repudiates
the inheritance, those of the following degree
shall inherit in their own right.
In case of repudiation by all in the same
degree, the right of succession passes on the
heirs in succeeding degrees: descending line
first, ascending line next, and collateral line
next. [Balane]
Adoption [Art. 189, FC]
In adoption, the legal filiation is personal and
exists only between the adopter and the
adopted. The adopted is deemed a legitimate
child of the adopter, but still remains as an
intestate heir of his natural parents and other
blood relatives. (Note, however, Section 16 of
the Domestic Adoption Act [RA 8552], which
provides that all legal ties between the
biological parent(s) and the adoptee shall be
severed and the same shall then be vested on
the adopter(s).”
A.2. RIGHT OF REPRESENTATION
Representation – right created by fiction of
law, by virtue of which the representative is
raised to the place and the degree of the
person represented, and acquires the rights
which the latter would have if he were living or
if he could have inherited [Art. 970, CC]
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Effect of Representation
The representative heir acquires the rights
which the person represented would have if he
were living or if he could have inherited.
When it occurs
Representation is allowed with respect to
inheritance conferred by law (legitime and
intestate based on Art. 923)
It occurs only in the following instances: (DIP)
(1) Predecease of an heir
(2) Incapacity or unworthiness
(3) Disinheritance [Art. 923, CC]
There is no representation in testamentary
succession. [Art. 856, CC]
There is no representation in repudiation.
A renouncer can represent, but cannot be
represented. Rationale is found in Art. 971
which states that “The representative does not
succeed the person represented but the one
whom the person represented would have
succeeded.”
Representation in the Direct Descending Line
Representation takes place ad infinitum in the
direct descending line but never in the direct
ascending line. [Art. 972, CC]
General rule: Grandchildren inherit from the
grandparents by right of representation, if
proper.
Exception: Whenever all the children repudiate,
the grandchildren inherit in their own right
because representation is not proper. [Art.
969, CC]
Representation in Collateral Line
In the collateral line, representation takes
place only in favor of the children of the
brothers or sisters (i.e., nephews and nieces)
whether of the full or half-blood [Art. 972, CC]
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CIVIL LAW
and only if they concur with at least one uncle
or aunt. In this case, they share in the
inheritance per stirpes.
If the children survive alone, they inherit in
their own right and share in equal proportions
or per capita. [Art. 975, CC]
Right of representation in the collateral line is
only possible in intestate succession. It cannot
take place in testamentary succession.
Per stirpes
 Inheritance per stirpes means that the
representative/s shall receive only what the
person represented would have received, if
he were living or could inherit. [Art.975, CC]
 If there are more than one representative in
the same degree, then it shall be divided
equally, without prejudice to the distinction
between legitimate and illegitimate, if
applicable.
The Double Heirship Test
 In determining whether or not representation
is proper, it is necessary that the
representative must be a legal heir of both
the person he is representing and the
decedent. [Art. 973, CC]
 But the representative need not be qualified
to succeed the person represented. [Art. 971,
CC] In the same manner, the person
represented need not be qualified to succeed
the decedent, as it is his disqualification
which gives rise for representation to apply.
 Legitimate children may not be
represented by their illegitimate
descendants (because of the bar in Art.
992). In contrast, illegitimate children may
be represented by their legitimate and
illegitimate descendants. [Art. 902]
 Illustration: A has legitimate son J and
illegitimate son K. J has an illegitimate son
J-1 while K also has an illegitimate son K-1.
K-1 may inherit from A by representation of
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K (under Art. 902), but J-1 may not inherit the former in the inheritance of the parents
from A (because of the barrier under Art. or ascendants of the adopter. The adopted
992) child is not related to the deceased in that
case, because filiation created by fiction of
Representation in Adoption law is exclusively between the adopter and
 If the adopting parent should die before the the adopted. [Tolentino, 448-449]
adopted child, the latter cannot represent
B. ORDER OF INTESTATE SUCCESSION
Decedent is a Legitimate Child Decedent is an Illegitimate Child Decedent is an Adopted Child
1 Legitimate children or Legitimate children or Legitimate children or
descendants (LCD) descendants (LCD) descendants (LCD)
2 Legitimate parents or Illegitimate children or Illegitimate children or
ascendants (LPA) descendants (LPA) descendants (ICD)
3 Illegitimate children or Illegitimate parents (IP) Legitimate or illegitimate
descendants (ICD) parents, or legitimate
ascendants, adoptive parents
4 Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)
5 Brothers and sisters, nephews, Illegitimate brothers and Brothers and sisters, nephews,
nieces (BS/NN) sisters, nephews, nieces nieces (BS/NN)
(IBS/NN)
6 Legitimate collateral relatives State State
within the 5th degree (C5)
7 State

Rules of Exclusion and Concurrence in Intestate Shares

Intestate Heirs Excludes Excluded By Concurs With
LC + LD Ascendants, Collaterals No one SS + ILC
and State
ILC + D ILP, Collaterals and No one SS, LC, LP
State
LP + LA Collaterals and State LC ILC + SS
ILP Collaterals and State LC and ILC SS
SS Collaterals other than No one LC, ILC, LP, ILP,
siblings, nephews and Siblings, Nephews,
nieces, State Nieces

Siblings, Nephews, All other collaterals and LC, ILC, LP, ILP SS
Nieces State
Other collaterals within Collateral more remote LC, ILC, LP, ILP and SS Collaterals in the same
5th degree in degree and State degree
State No one Everyone No one

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Outline of Intestate Shares
(1) Legitimate children only
Divide entire estate equally among all
legitimate children [Art. 979, CC]
Legitimate children include an adopted
child.
(2) Legitimate children and Illegitimate children
Divide entire estate such that each
illegitimate child gets ½ of what a
legitimate child gets [Art. 983, CC and Art.
176, FC]
Ensure that the legitime of the legitimate
children are first satisfied.
(3) Legitimate children and surviving spouse
Divide entire estate equally between the
legitimate children and the surviving
spouse, the latter deemed as one child. The
same rule holds where there is only one
child.
“Children” as used in Art. 996 is interpreted
to include a situation where there is only
one child.
(4) Legitimate children. Surviving spouse, and
Illegitimate children
Divide the entire estate such that the
surviving spouse is deemed one legitimate
child and each illegitimate child getting ½
of what the legitimate child gets. [Art. 996,
CC and Art. 176, FC]
Ensure that the legitime of the legitimate
children and the spouse are first satisfied.
(5) Legitimate parents only
Divide the entire estate equally. [Art. 985,
CC]
(6) Legitimate ascendants only (excluding
parents)
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CIVIL LAW
Divide the entire estate equally but with the
observance of the rule of division by line.
[Art. 987, CC]
(7) Legitimate parents and illegitimate children
Legitimate parents get ½ of the estate,
illegitimate children get the other ½. [Art.
991, CC]
(8) Legitimate parents and surviving spouse
Legitimate parents get ½ of the estate; The
surviving spouse gets the other ½. [Art. 997,
CC]
(9) Legitimate parents, surviving spouse and
illegitimate children
Legitimate parents get ½ of the estate;
surviving spouse and the illegitimate child
each get ¼ each, the latter to share among
themselves if more than one. [Art. 1000, CC]
(10) Illegitimate children only
Divide the entire estate equally. [Art. 988,
CC]
(11) Illegitimate children and surviving spouse
Illegitimate children get ½ of the estate; the
surviving spouse gets the other ½. [Art. 998,
CC]
(12) Surviving spouse only
Entire estate goes to the surviving spouse.
[Art. 994/995, CC]
(13) Surviving spouse and illegitimate parents
Illegitimate parents get ½ and the spouse
gets the other ½. [by analogy with Art. 997,
CC]
(14) Surviving spouse and legitimate brothers
and sisters, nephews and nieces
Surviving spouse gets ½ of the estate, while
the rest gets the other ½ with the nephews
and nieces inheriting by representation if
proper. [Art. 1001]
UP LAW BOC SUCCESSION
(15) Surviving spouse and illegitimate brothers
and sisters, nephews and nieces
Surviving spouse gets ½ of the estate while
the rest gets the other ½ with the nephews
and nieces inheriting by representation, if
proper; Note that all the other relatives
should be “illegitimate” because of the iron-
curtain rule. [Art. 994, CC]
(16) Illegitimate parents only
Entire estate goes to the illegitimate
parents. [Art. 993, CC]
(17) Illegitimate parents and children of any kind
(whether legitimate or illegitimate child)
Illegitimate parents are excluded and do
not inherit; For the rule on the respective
shares of the children, see numbers 1, 2 or
10, whichever is applicable.
(18) Legitimate brothers and sisters only
Divide the entire estate such that full-blood
brothers/sisters gets a share double the
amount of a half-blood brother or sister.
[Art. 1004 and 1006, CC]
(19) Legitimate brothers and sisters, nephews
and nieces
Divide the entire estate observing the 2 is to
1 ratio for full and half-blood relationships
with respect to the brothers and sisters,
with the nephews and nieces inheriting by
representation, if proper. [Art. 1005 & 1008,
CC]
(20) Nephews and nieces only
Divide the entire estate per capita,
observing the 2 is to 1 ratio. [Arts. 975 and
1008, CC]
(21) Other collaterals [Arts. 1009 and 1010]
Divide entire estate per capita. Collateral
relatives must be with the 5th degree of
consanguinity.
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CIVIL LAW
Note: the nearer relative excludes the more
remote relatives.
(22) State
If there are no other intestate heirs, the
State inherits the entire estate through
escheat proceedings. [Art. 1011, CC]
IV. Provisions Common
to Testate and Intestate
Succession
A. RIGHT OF ACCRETION
Definition of Accretion [Art. 1015, CC]
It is a right by virtue of which, when two or more
persons are called to the same inheritance,
devise or legacy, the part assigned to one who
renounces or cannot receive his share or who
died before the testator is added or
incorporated to that of his co-heirs, co-devisees,
or co-legatees.
Requisites: [Tolentino p. 497-499]
(a) Unity of object and plurality of subjects (two
or more persons are called to the same
inheritance or same portion thereof)
(b) Vacancy of share (one of the heirs dies
before the testator, or renounces the
inheritance, or is incapacitated)
When does Accretion Occur?
Accretion happens when there is repudiation,
incapacity, or predecease of an heir. (RIP)
It is the mechanism where the share of an heir is
increased by vacant shares vacated by heirs who
cannot inherit for various reasons. (Rationale:
the decedent intended to give the property to
nobody but the co-heirs.)
UP LAW BOC SUCCESSION CIVIL LAW

There can only be accretion if there is an

institution of heirs with respect to specific
properties. [Art. 1016, CC]
Among compulsory heirs, there can only be
accretion with respect to the free portion. There
can be no accretion with respect to the
legitimes. [Arts. 1021 and 1018, CC]
The heirs to whom the portion goes by the right
of accretion take it in the same proportion that
they inherit. [Art. 1019, CC]
Exceptions [Balane]
(1) In testamentary succession, if the testator
provides otherwise
(2) If the obligation is purely personal, and
hence intransmissible
The heirs to whom the inheritance accrues shall
succeed to all the rights and obligations which
the heir who renounced or could not receive it
would have had. [Art. 1020, CC]
In testamentary succession, when the right of
accretion does not take place, the vacant
portion of the instituted heirs, if no substitute
has been designated, shall pass to the legal
heirs of the testator, who shall receive it with
the same charges and obligations. [Art. 1022,
CC]
Accretion shall also take place among devisees,
legatees and usufructuaries under the same
conditions established for heirs. [Art. 1023, CC]

Effect of Predecease, Incapacity, Disinheritance or Repudiation

Cause of Vacancy Testamentary Succession
Intestate Succession
Legitime Free Portion
Predecease Representation Accretion Representation
Intestate Succession Intestate Succession Intestate
Succession
Incapacity Representation Accretion Representation
Intestate Succession Intestate Succession Intestate Succession
Disinheritance Representation - -
Intestate Succession
Repudiation Intestate Succession Accretion Accretion
B. CAPACITY TO SUCCEED BY WILL PERSONS INCAPABLE OF SUCCEEDING [Arts.
1027, 739, 1032]
OR INTESTACY
Based on undue influence or interest [Art. 1027,
Requisites for Capacity to Succeed by Will or by CC]
Intestacy: [Art. 1024 – 1025, CC] (1) Priest who heard the last confession of the
(a) The heir, legatee or devisee must be living testator during his last illness, or the
or in existence at the moment the minister of the gospel who extended
succession opens; [Art 1025] and spiritual aid to him during the same period;
(b) He must not be incapacitated or (2) Individuals, associations and corporations
disqualified by law to succeed. [Art 1024, not permitted by law to inherit;
par.1] (3) Guardian with respect to testamentary
dispositions given by a ward in his favor
before the final accounts of the

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guardianship have been approved, even if (4) Any heir of full age who, having knowledge
the testator should die after the approval of the violent death of the testator, should
thereof; except if the guardian is his fail to report it to an officer of the law
ascendant, descendant, brother, sister, or within a month, unless the authorities have
spouse; already taken action; this prohibition shall
(4) Relatives of the priest or minister of the not apply to cases wherein, according to
gospel within the fourth degree, the law, there is no obligation to make an
church, order, chapter, community, accusation;
organization, or institution to which such (5) Any person convicted of adultery or
priest or minister may belong; concubinage with the spouse of the
(5) Attesting witness to the execution of a will, testator;
the spouse, parents, or children, or any one (6) Any person who by fraud, violence,
claiming under such witness, spouse, intimidation, or undue influence should
parents, or children; cause the testator to make a will or to
(6) Physician, surgeon, nurse, health officer or change one already made;
druggist who took care of the testator (7) Any person who by the same means
during his last illness. prevents another from making a will, or
from revoking one already made, or who
Based on morality or public policy [Arts. 739 supplants, conceals, or alters the latter's
and 1028, CC] will;
(1) Those made in favor of a person with (8) Any person who falsifies or forges a
whom the testator was guilty of adultery or supposed will of the decedent.
concubinage at the time of the making of
the will. Pardon of Acts of Unworthiness
(2) Those made in consideration of a crime of Express Implied
which both the testator and the beneficiary
have been found guilty. Made by the execution Effected when the
(3) Those made in favor of a public officer or of a document or any testator makes a will
his spouse, descendants and ascendants, writing in which the instituting the
by reason of his public office. decedent condones unworthy heir with
the cause of incapacity knowledge of the
Based on acts of unworthiness [Art. 1032, CC] cause of incapacity
The following are incapable of succeeding by Cannot be revoked Revoked when the
reason of unworthiness: testator revokes the
(1) Parents who have abandoned their will or the institution
children or induced their daughters to lead
a corrupt or immoral life, or attempted Unworthiness vs. Disinheritance
against their virtue;
Unworthiness Disinheritance
(2) Any person who has been convicted of an
attempt against the life of the testator, his Unworthiness renders Disinheritance is the
or her spouse, descendants, or ascendants; a person incapable of act by which a
(3) Any person who has accused the testator succeeding to the testator, for just cause,
of a crime for which the law prescribes succession, whether deprives a compulsory
imprisonment for six years or more, if the testate or intestate heir of his right to the
accusation has been found groundless; legitime [Art. 815, CC]

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(1) Express Acceptance – one made in a public

Determination of Capacity [Tolentino p. 539] or private document. [Art. 1049 par. 1]
General Rule: At the death of the decedent (2) Tacit Acceptance – one resulting from acts
[Art. 1034, CC] by which the intention to accept is
necessarily implied or from acts which one
Exceptions: would have no right to do except in the
(1) Those falling under 2, 3, and 5 of Art. 1032 capacity of an heir.
– when the final judgment is rendered (3) Implied Acceptance - Within thirty days
(2) Those falling under 4 of Art. 1032 – when after the court has issued an order for the
the month allowed for the report expired distribution of the estate in accordance
(3) If the institution is conditional – when the with the Rules of Court, the heirs, devisees
condition is complied with and legatees shall signify to the court
having jurisdiction whether they accept or
C. ACCEPTANCE AND REPUDIATION repudiate the inheritance; if they do not do
OF THE INHERITANCE so within that time, they are deemed to
have accepted the inheritance. [Art 1057,
Characteristics [Arts. 1041 – 1042, 1056, CC] CC]
(1) Acceptance and repudiation must be
voluntary and free [Art. 1041, CC] An inheritance is deemed accepted:
(2) They are irrevocable except if there is (a) If the heir sells, donates, or assigns his
vitiation of consent or an unknown will right to a stranger, or to his co-heirs, or
appears [Art. 1056, CC] to any of them – the heir must first
(3) They have a retroactive effect [Art. 1042, accept the inheritance before he can
CC] dispose of it.
(b) If the heir renounces the same, even
Requisites [Art. 1043, CC] though gratuitously, for the benefit of
(a) Certainty of death of the decedent one or more of his co-heirs – this is
(b) Certainty of the right to the inheritance actually a donation. The heir must first
accept the inheritance before he can
Acceptance Repudiation donate it.
(c) If the heir renounces it for a price in
Involves the  Renders the
favor of all his co-heirs indiscriminately
confirmation of transmission of
– this is actually an onerous
transmission of successional rights
disposition. The heir must first accept
successional rights ineffective
the inheritance before he can dispose
 Equivalent to an act of it.
of disposition or
alienation Note: But if the renunciation should be
 Publicity gratuitous, and in favor of all the co-heirs (to
requirement is whom the portion renounced should devolve
necessary for the by accretion), the inheritance shall not be
protection of other deemed as accepted. [Art. 1050] This is a true
heirs and creditors case of renunciation.

Forms of Acceptance [Arts. 1049 – 1050, CC] Forms of Repudiation [Art. 1051, CC]

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(1) in In a public instrument acknowledged
before a notary public; or
(2) In an authentic document – equivalent of
an indubitable writing or a writing whose
authenticity is admitted or proved; or
(3) By petition presented to the court having
jurisdiction over the testamentary or
intestate proceeding
Heirs in Two Capacities [Art. 1055, CC]
(1) If a person is called to the same
inheritance as an heir by will and by law
and he repudiates the inheritance in his
capacity as a testamentary heir, he will be
considered to have also repudiated the
inheritance as a legal heir.
(2) If he repudiates it as a legal heir, without
knowledge of his being a testamentary
heir, he may still accept it in the latter
capacity.
D. COLLATION
Concept of Collation
To collate is to bring back or to return to the
hereditary mass in fact or by fiction property
which came from the estate of the decedent,
during his lifetime by donation or other
gratuitous title but which the law considers as
an advance from the inheritance. [Art. 1061,
CC]
It is the act by virtue of which, the compulsory
heir who concurs with other compulsory heirs
in the inheritance brings back to the common
hereditary mass the property which they may
have received from the testator so that a
division may be effected according to law and
the will of the testator.
In reducing inofficious donations, the last to be
donated should be the first to be reduced.
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CIVIL LAW
Rationale for collation: If donations inter vivos
will not be collated, then the rule on legitimes
shall be circumvented or disregarded.
Operations Related to Collation
(1) Collation – adding to the mass of the
hereditary estate the value of the donation
or gratuitous disposition.
(2) Imputing or Charging – crediting the
donation as an advance on the legitime (if
the donee is a compulsory heir) or on the
free portion (if the donee is a stranger, i.e.,
not a compulsory heir). [Balane, p. 522]
(3) Reduction – determining to what extent
the donation will remain and to what
extent it is excessive or inofficious.
(4) Restitution – returning or the act of
payment of the excess to the mass of
hereditary estate.
Persons Obliged to Collate
General rule: Compulsory heirs
Exceptions:
(1) When the testator should have so expressly
provided [Art. 1062, CC]
(2) When the compulsory heir should have
repudiated his inheritance [Art. 1062, CC]
Grandchildren who survive with their uncles,
aunts, or first cousins and inherit by right of
representation [Art. 1064, CC]
Note: Grandchildren may inherit from their
grandparents in their own right, i.e., as heirs
next in degree, and not by right of
representation if their parent repudiates the
inheritance of the grandparent, as no living
person can be represented except in cases of
disinheritance and incapacity. In this case, the
grandchildren are not obliged to bring to
collation what their parent has received
gratuitously from their grandparent.
UP LAW BOC SUCCESSION
Surviving spouse is not obliged to collate.
What to Collate
(1) Any property or right received by
gratuitous title during the testator’s
lifetime [Art. 1061, CC]
(2) All that they may have received from the
decedent during his lifetime. [Art. 1061, CC]
(3) Expenses incurred by the parents in giving
their children a professional, vocational or
other career shall not be brought to
collation unless the parents so provide, or
unless they impair the legitime; but when
their collation is required, the sum which
the child would have spent if he had lived
in the house and company of his parents
shall be deducted therefrom. [Art. 1068,
CC]
(4) Any sums paid by a parent in satisfaction
of the debts of his children, election
expenses, fines, and similar expenses shall
be brought to collation. [Art. 1069, CC]
Note: Only the value of the thing donated shall
be brought to collation.
PROPERTIES NOT SUBJECT TO COLLATION
Absolutely no collation
Expenses for support, education (only
elementary and secondary), medical
attendance, even in extraordinary illness,
apprenticeship, ordinary equipment, or
customary gifts [Art. 1067, CC]
Generally not imputable to legitime/ cannot be
collated, subject to exceptions
(1) Expenses incurred by parents in giving
their children professional, vocational or
other career unless the parents so provide,
or unless they impair the legitime. [Art.
1067, CC]
(2) Wedding gifts by parents and ascendants,
consisting jewelry, clothing and outfit,
except when they exceed 1/10 of the sum
disposable by will. [Art. 1070, CC]
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CIVIL LAW
(3) Neither shall donations to the spouse of
the child be brought to collation; but if
they have been given by the parent to the
spouses jointly, the child shall be obliged
to bring to collation one-half of the thing
donated. [Art. 1066, CC]
Note: Parents are not obliged to bring to
collation in the inheritance of their ascendants
any property which may have been donated by
the latter to their children. [Art. 1065, CC]
E. PARTITION AND DISTRIBUTION
OF ESTATE
E.1. IN GENERAL
Separate, Divide, Assign. Partition is the
separation, division and assignment of a thing
held in common among those to whom it may
belong. The thing itself or its value may be
divided. [Art. 1079, CC]
Owned in common. Before partition, the whole
estate of the decedent is owned in common by
the heirs. [Art. 1078, CC]
Thing or value may be divided. [Art. 1079]
Acts deemed partition. Every act which is
intended to put an end to indivision among
heirs and legatees or devisees is deemed a
partition, although it should purport to be a
sale, an exchange, a compromise, or any other
transaction. [Art. 1082, CC]
A void partition may be valid if:
(1) The will was in fact a partition
(2) The beneficiaries of the void will were legal
heirs
The titles of acquisition or ownership of each
property shall be delivered to the co-heir to
whom said property has been adjudicated.
[Art. 1089, CC]
UP LAW BOC SUCCESSION
JUDICIAL vs. EXTRAJUDICIAL PARTITION
Judicial – Partition done by Court pursuant to
an Order of Distribution which may or may not
be based on a project of partition.
Extra-judicial – partition made by the decedent
himself by an act inter vivos or by will or by a
third person entrusted by the decedent or by
the heirs themselves. [Paras]
 Partition Inter Vivos: It is one that merely
allocates specific items or pieces of property
on the basis of the pro-indiviso shares fixed
by law or given under the will to heirs or
successors. [Art. 1080, CC]
Who May Effect Partition
(1) The Decedent, during his lifetime by an act
inter vivos or by will [Art.1080, CC]
(2) The decedent’s heirs [Art.1083, CC]
(3) A competent court [Art. 1083,CC]
(4) A third person not an heir designated by
the decedent [Art.1081, CC]
Who Can Demand Partition
(1) Compulsory heir
(2) Voluntary heir upon fulfillment of condition
if any [Art. 1084, CC]
(3) Legatee or devisee
(4) Any person who has acquired interest in
the estate
When Partition Cannot Be Demanded
(1) When expressly Prohibited by the testator
for a period not exceeding 20 years [Art.
1083, CC]
(2) When the co-heirs Agreed that the estate
shall not be divided for a period not
exceeding 10 years, renewable for another
10 years
(3) When Prohibited by law
(4) When to partition the estate would render
it unserviceable for the use for which it is
intended
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CIVIL LAW
Prohibition to Partition
(1) The prohibition to partition for a period not
exceeding 20 years can be imposed even
on the legitime.
(2) If the prohibition to the partition is for
more than 20 years, the excess is void.
(3) Even if a prohibition is imposed, the heirs
by mutual agreement can still make the
partition.
Effects of Inclusion of Intruder in Partition [Art.
1108, CC]
(1) Between a true heir and several mistaken
heirs – partition is void.
(2) Between several true heirs and a mistaken
heir – transmission to mistaken heir is void
(3) Through error or mistake, share of true heir
is allotted to mistaken heir – partition shall
not be rescinded unless there is bad faith
or fraud on the part of the other persons
interested, but the latter shall be
proportionately obliged to pay the true heir
of his share. The partition with respect to
the mistaken heir is void. [Sempio-Dy]
Right of Redemption in Partition
Should any of the heirs sell his hereditary
rights to a stranger before the partition, any or
all of the co-heirs may be subrogated to the
rights of the purchaser by reimbursing him for
the price of the sale, provided they do so within
the period of one month from the time they
were notified in writing of the sale by the
vendor [Art. 1088, CC]
Strangers – those who are not heirs on the
succession.
E.2. EFFECTS OF PARTITION
Effect
A partition legally made confers upon each
heir the exclusive ownership of the property
adjudicated to him [Art. 1091, CC]
Warranty
UP LAW BOC SUCCESSION
After the partition has been made, the co-heirs
shall be reciprocally bound to warrant the title
to, and the quality of, each property
adjudicated [Art. 1092, CC]
The reciprocal obligation of warranty shall be
proportionate to the respective hereditary
shares of the co-heirs;
If any one of them should be insolvent, the
other co-heirs shall be liable for his part in the
same proportion, deducting the part
corresponding to the one who should be
indemnified.
Those who pay for the insolvent heir shall have
a right of action against him for
reimbursement, should his financial condition
improve [Art. 1093, CC]
An action to enforce the warranty among the
co-heirs must be brought within ten years from
the date the right of action accrues. [Art. 1094,
CC]
If a credit should be assigned as collectible, the
co-heirs shall not be liable for the subsequent
insolvency of the debtor of the estate, but only
for his insolvency at the time the partition is
made. [Art. 1095, CC]
The warranty of the solvency of the debtor can
only be enforced during the five years following
the partition.
Co-heirs do not warrant bad debts, if so known
to, and accepted by the distributee.
But if such debts are not assigned to a co-heir,
and should be collected, in whole or in part,
the amount collected shall be distributed
proportionately among the heirs. [Art. 1095,
CC]
End of Warranty
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CIVIL LAW
The obligation of warranty among co-heirs
shall cease in the following cases:
(1) The testator himself has made the
partition
 Unless it appears, or it may be
reasonably presumed, that his intention
was otherwise, but the legitime shall
always remain unimpaired.
(2) When it has been so expressly stipulated in
the agreement of partition
 Unless there has been bad faith
(3) When the eviction is due to a cause
subsequent to the partition, or has been
caused by the fault of the distributee of the
property. [Art. 1096, CC]
E.3. RESCISSION AND NULLIFICATION
OF PARTITION
Causes for Rescission or Annulment
(1) A partition may be rescinded or annulled
for the same causes as contracts. [Art.
1097, CC]
(2) A partition, judicial or extra-judicial, may
also be rescinded on account of lesion,
when any one of the co-heirs received
things whose value is less by at least one-
fourth, than the share to which he is
entitled, considering the value of the
things at the time they were adjudicated
[Art. 1098, CC]
 This article applies only to cases of
partition among-coheirs
 Lesion is the injury suffered in
consequence of inequality of situation by
one party who does not receive the full
equivalent for what she gives in a sale or
any commutative contract
(3) The partition made by the testator cannot
be impugned on the ground of lesion,
except when the legitime of the
compulsory heirs is thereby prejudiced, or
when it appears or may be reasonably be
presumed, that the intention of the
testator was otherwise. [Art. 1099, CC]
UP LAW BOC SUCCESSION CIVIL LAW

(4) Preterition of a compulsory heir in the Nullity – the act is supposed to never have
partition [Art. 1104, CC]: existed
 Partition shall not be rescinded unless Rescission – the act is valid at the origin
bad faith or fraud on the part of other though it afterwards became ineffective
heirs is proved. Important Periods in Partition
 The culpable heirs shall share in the Testator, if publicly known to
1 month or
damages of the prejudiced compulsory be insane, burden of proof is
less before
heir proportionately. on the one claiming validity of
making a will
(5) A partition which includes a person the will
believed to be an heir, but who is not, shall Maximum period testator can
be void only with respect to such person. 20 years prohibit alienation of
[Art. 1105, CC] dispositions
5 years from
To claim property escheated
The action for rescission on account of lesion delivery to the
to the State
shall prescribe after four years from the time State
the partition was made. [Art. 1100, CC] To report knowledge of violent
1 month death of decedent lest he be
The heir who is sued shall have the option of considered unworthy
indemnifying the plaintiff for the loss, or 5 years from
consenting to a new partition Action for declaration of
the time
incapacity & for recovery of
disqualified
Indemnity may be made: the inheritance, devise or
person took
(1) By payment in cash or legacy
possession
(2) By the delivery of a thing of the same kind 30 days from
and quality as that awarded to the Must signify
issuance of
plaintiff. acceptance/repudiation
order of
otherwise, deemed accepted
distribution
If a new partition is made, it shall affect neither
1 month form Right to repurchase hereditary
those who have not been prejudiced nor those
written notice rights sold to a stranger by a
who have not received more than their just
of sale co-heir
share [Art. 1101, CC]
To enforce warranty of
An heir who has alienated the whole or a title/quality of property
10 years adjudicated to co-heir from
considerable part of the real property
the time right of action
adjudicated to him cannot maintain an action
accrues
for rescission on the ground of lesion, but he
shall have a right to be indemnified in cash To enforce warranty of
[Art. 1102, CC] 5 years from solvency of debtor of the
partition estate at the time partition is
The omission of one or more objects or made
securities of the inheritance shall not cause the 4 years from Action for rescission of
rescission of the partition on the ground of partition partition on account of lesion
lesion, but the partition shall be completed by
the distribution of the objects or securities
which have been omitted. [Art. 1103, CC]
Difference of Nullity from Rescission

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CIVIL LAW
AGENCY

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I. Definition of Agency or actions; and on the part of the agent there

must be an intention to accept the
appointment and act on it, and in the absence
A. AS A TYPE OF CONTRACT of such intent, there is generally no agency.
[Victorias Milling v. CA]
Art 1868. By a contract of agency, a person
binds himself to render some service or to do A.3. BEING A CONTRACT, IT HAS COC
something in representation or on behalf of (1) Consent
another, with the consent or authority of the
But the legal relationship may still arise
latter.
even without consent
A.1. ELEMENTS (STATUTORY): (2) Object: the performance of acts by the
agent in representation of the principal
(a) A person binds himself to render some
(3) Cause: it is presumed to be for
service or to do something
compensation
(b) In representation or on behalf of
another
(c) With the consent or authority of the B. AS A LEGAL RELATIONSHIP
latter
It is possible for an agency to arise even
A.2. ELEMENTS (JURISPRUDENTIAL) without a contract. In such cases, an agency is
(a) There is consent, express or implied of more properly described as a legal
the parties to establish the relationship relationship.
(b) The object is the execution of a juridical
act in relation to a third person It is (a relationship) whereby one party, called
(c) The agent acts as a representative and the principal, authorizes another, called the
not for himself agent, to act for and in his behalf in
(d) The agent acts within the scope of his transactions with third persons. [Rallos v. Felix
authority Go Chan]

Note: the first two elements reflect the C. EFFECTS OF AGENCY

elements given by 1868, while the last two
elements merely limit the acts of the agent, i.e. C.1. INTEGRATION (MERGER) OF THE
violation of these elements does not mean that PERSONALITY OF THE PRINCIPAL AND
no agency was created. THE AGENT

There must be a showing of consent on the C.2. EXTENSION (REPRODUCTION) OF

part of an alleged principal to allow an alleged THE PERSONALITY OF THE PRINCIPAL
agent to act on her behalf. [Bordador v. Luz] THROUGH THE AGENT
Mere closeness of relationship is not
C.3. CONSEQUENCES
tantamount to an agency relationship. [Apex v.
(1) Merger
Southeast Mindanao Mining]
In an agency relationship, the agent, by legal
fiction, becomes the principal, authorized to
(MUTUAL INTENT) On the part of the principal,
perform all acts which the latter would have
there must be an actual intention to appoint or
him do. [Orient Air Services v. CA]
an intention naturally inferable from his words

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(2) Agent is not a real party in interest
The agent is not a party to the contract
between the principal and the third person. He
is not a real party in interest and cannot
therefore sue in his own behalf on a contract
for his principal, except if he is an assignee of
such contract. [Uy and Roxas v. CA]
(3) Imputed Knowledge
Knowledge of facts acquired or possessed by
an officer or agent of a corporation in the
course of his employment, and in relation to
matters within the scope of his authority, is
notice to the corporation, whether he
communicates such knowledge or not.
[Francisco v. GSIS]
The theory of imputed knowledge ascribes
knowledge of the agent to the principal, not
the other way around. [Sunace Internation v.
NLRC]
The general rule is that the principal is
chargeable with and bound by the knowledge
of or notice to his agent, received while the
latter was acting as such. The well-established
exception is where the conduct and dealings of
the agent are such as to raise a clear
presumption that he will not communicate to
the principal the facts in controversy. [Cosmic
Lumber v. CA]
(4) Bad faith of the Agent is Bad faith of the
Principal [Caram v. Laureta]
AGENCY CIVIL LAW
II. Powers
A. RIGHTS OF AGENTS
A.1. COMPENSATION
Art. 1875. Agency is presumed to be for a
compensation, unless there is proof to the
contrary.
The effect of this presumption is that an agent
does not need to prove that the agency is for a
fee, while the principal must prove that it is not
if he contests it.
Art 1909. The agent is responsible not only for
fraud, but also for negligence, which shall be
judged with more or less rigor by the courts,
according to whether the agency was or was
not for a compensation.
Note that an agent is judged with less rigor
when there is no compensation.
(1) Procuring Cause
To be entitled to compensation, the agent’s
services must be the procuring cause of the
transaction, i.e., it must contribute towards
bringing about such transaction. [Danon v.
Brimo]
On the other hand, brokers must only show
that they “set the sale in motion” in order to be
entitled to their commission. [Tan v. Gullas]
The agent is entitled to commission even if the
(transaction) is consummated after the
revocation of his authority, if the revocation
was done in bad faith by the principal to avoid
payment of commission. [Infante v. Cunanan]
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(2) Test
Even if the agent is not the procuring cause of
the transaction, he may still be awarded a sum
of money if he is “somehow instrumental in
bringing the parties together again and finally
consummating the transaction.” [Prats v. CA]
When there is a close, proximate and causal
connection between the agent’s efforts and
labor and the principal’s sale of his property,
the agent is entitled to commission. [Manotok
Brothers v. CA]
(3) Forfeiture of Right to Commission
An agent who takes a secret profit without
revealing the same to his principal is guilty of a
breach of his loyalty to the principal and
forfeits his right to collect the commission from
his principal, even if the principal does not
suffer any injury, or he obtained better results,
or the agency is gratuitous, or that usage or
custom allows it. The rule is to prevent the
possibility of any wrong, not to remedy an
actual damage. [Domingo v. Domingo]
A.2. LEND MONEY TO / BORROW
MONEY FROM THE AGENCY
Art. 1890. If the agent has been empowered to
borrow money, he may himself be the lender at
the current rate of interest. If he has been
authorized to lend money at interest, he
cannot borrow it without the consent of the
principal.
(1) Borrow Money From
Conditions:
(a) The agent is empowered to borrow
money
(b) The agent must borrow at the current
rate of interest
AGENCY CIVIL LAW
Power:
The Agent may himself be the lender to his
Principal.
(2) Lend Money To
Conditions:
(a) The agent is authorized to lend money
at interest
(b) The principal consents
Power:
The Agent may himself borrow the money
at interest.
Note: The language of the provision is
mandatory. The Agent cannot therefore lend
the money to the Agency at a higher rate of
interest or borrow from it without the
Principal’s consent.
A.3. APPOINT A SUBSTITUTE
Art. 1892. The agent may appoint a substitute
if the principal has not prohibited him from
doing so; but he shall be responsible for the
acts of the substitute:
(1) When he was not given the power to
appoint one
(2) When he was given such power, but
without designating the person, and the
person appointed was notoriously
incompetent or insolvent.
All acts of the substitute appointed against the
prohibition of the principal shall be void.
Art. 1893. In the cases mentioned in Nos.1 and
2 of the preceding article, the principal may
furthermore bring an action against the
substitute with respect to the obligations
which the latter has contracted under the
substitution.
(1) When Allowed: when the principal does
not prohibit it.
Presumption: the agent is authorized to
appoint a substitute
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(2) Responsibility for the Substitute
General Rule: If the Agent validly appoints
a substitute, the Principal is liable for the
Substitute’s acts
Exception: [1892]
(a) If the agent appoints a substitute
although he was not given the power
to appoint one
(b) If the agent was given the power to
appoint a substitute, and the principal
did not designate the person he can
appoint, but he appoints someone who
is notoriously incompetent or insolvent.
(3) Validity of the Substitute’s acts
If the principal prohibits the agent from
appointing a substitute, then all the acts of the
substitute are void.
What may a third person who has contracted
with a prohibited Substitute do?
(a) If the principal is aware that a Substitute
is acting on his behalf without authority
yet he fails to repudiate the substitute’s
acts, then there may be implied agency
(act will not be void)
(b) If the principal was not aware of the acts,
or that when he became aware he
repudiates the acts, then the Agent may
be held liable.
(4) The Substitute is an Alternate, not a
Delegate
An agent cannot delegate to another the same
agency. Potestas delegate non delegare
potest. Re-delegation is detrimental to the
principal as the second agent has no privity of
contract with the principal... Article 1892
allows the agent to appoint a substitute (not a
delegate). [Baltazar v. Ombudsman]
368
CIVIL LAW
The law on agency allows the appointment by
an agent of a substitute in the absence of an
express agreement to the contrary. (An agent’s
act of entrusting jewelry to a substitute is
therefore not an abuse of confidence such as to
constitute estafa) [Serona v. People]
A.4. RETAIN IN PLEDGE THE OBJECTS
OF AGENCY
Art. 1914. The agent may retain in pledge the
things which are the object of the agency until
the principal effects the reimbursement and
pays the indemnity set forth in the two
preceding articles.
Art 1912. The principal must advance to the
agent, should the latter so request, the sums
necessary for the execution of the agency.
Should the agent have advanced them, the
principal must reimburse him therefore, even if
the business or undertaking was not
successful, provided the agent is free from
fault.
The reimbursement shall include interest on
the sums advanced, from the day on which the
advance was made.
Art. 1913. The principal must also indemnify
the agent for the damages which the execution
of the agency may have caused the latter,
without fault or negligence on his part.
(1) Two scenarios under which the Agent may
retain in pledge the objects of the agency:
(a) if the agent advances funds for the
execution of the agency, or
(b) if the agent has suffered injury caused
by the execution of the agency
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B. OBLIGATIONS OF AGENTS
B.1. ACT WITHIN SCOPE OF AUTHORITY
Art. 1881. The agent must act within the scope
of his authority. He may do such acts as may be
conducive to the accomplishment of the
purpose of the agency. (1714a)
(1) In General
An agent can bind his principal if he acts within
the scope of authority granted to him.
Powers of attorney are generally construed
strictly. The general rule is that the power of
attorney must be pursued within legal
strictures, and the agent can neither go beyond
it; nor beside it. The act done must be legally
identical with that authorized to be done.
[Woodchild v. Roxas]
(2) Conducive Acts
Acts “conducive to the accomplishment of the
purpose of the agency” are deemed to be
within the agent’s authority.
The power of attorney does not need to list
everything the agent is allowed to do and the
agent does not need to go to the principal for
authorization for each new act he seeks to
perform.
(3) Advantageous Acts
Art. 1882. The limits of the agent's authority
shall not be considered exceeded should it
have been performed in a manner more
advantageous to the principal than that
specified by him. (1715)
The agent may do acts more advantageous to
the principal than what is indicated in the
power of attorney.
For example, if the agent was authorized to
sell a car for P2,500,000 but was able to sell it
AGENCY CIVIL LAW
for P5,000,000 to a third person, then that
would be an advantageous act.
But the principal may later contest whether
such act is indeed advantageous to him.
However, if a special power of attorney is
required for the transaction, then the agent
must obtain it. Advantageous and conducive
acts do not apply if a SPOA is required. [c.f.
Woodchild v. Roxas]
(4) Collateral Acts
(The agent has the implied authority) to do all
of the collateral acts which are the natural and
ordinary incidents of the main act or business
authorized. [Guinhawa v. People]
(5) With Respect to Third Persons
Art. 1900. So far as third persons are
concerned, an act is deemed to have been
performed within the scope of the agent's
authority, if such act is within the terms of the
power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority
according to an understanding between the
principal and the agent. (n)
The Situation: the principal provided
limitations to the authority of the agent orally
or through a document other than the written
power of attorney.
Rule: The third person can rely completely on
the written power of attorney to determine
whether the agent’s act is within the limits of
his authority.
Exception: If the third person is aware of the
secret understanding between the principal
and the agent.
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(6) Authority of Corporate Officers
The general principles of agency govern the
relation between the corporation and its
officers or agents, subject to the articles of
incorporation, bylaws, or relevant provisions of
law. [San Juan v. CA]
A corporate officer intrusted with the general
management and control of its business, has
implied authority to make any contract or do
any other act which is necessary or appropriate
to the conduct of the ordinary business of the
corporation. As such officer, he may, without
any special authority from the Board of
Directors, perform all acts of an ordinary
nature, which by usage or necessity are
incident to his office...
Where similar acts have been approved by the
directors as a matter of general practice,
custom and policy, the general manager may
bind the company without formal
authorization of the board of directors. [Board
of Liquidators v. Kalaw]
B.2. ACT IN ACCORDANCE WITH
INSTRUCTIONS
Art. 1887. In the execution of the agency, the
agent shall act in accordance with the
instructions of the principal.
In default thereof, he shall do all that a good
father of a family would do, as required by the
nature of the business. (1719)
The agent must act within the specific limits of
his authority (See B.1.) and perform the acts in
the manner dictated by the principal.
If the principal did not provide instructions as
regards the manner, then the agent must do
all that a good father of a family would do.
What if a person refuses to be an agent but
goods have already been forwarded to him?
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CIVIL LAW
Art. 1885. In case a person declines an agency,
he is bound to observe the diligence of a good
father of a family in the custody and
preservation of the goods forwarded to him by
the owner until the latter should appoint an
agent or take charge of the goods. (n)
Art. 1899. If a duly authorized agent acts in
accordance with the orders of the principal, the
latter cannot set up the ignorance of the agent
as to circumstances whereof he himself was, or
ought to have been, aware. (n)
If the Principal was aware of certain
circumstances, and the agent simply followed
the former’s instructions without being aware
of those circumstances thereby causing injury
to a third person, then the principal cannot
blame the agent later on.
B.3. CARRY OUT THE AGENCY
(1) In General
Art. 1884 par. 1 The agent is bound by his
acceptance to carry out the agency, and is
liable for the damages which, through his non-
performance, the principal may suffer.
The agent is bound to carry out his duties as
agent once he accepts the authorization
granted by the principal. Else, he is liable for
damages if the principal suffers injury.
(2) Continuing Business
Art. 1884 par. 2 He must also finish the
business already begun on the death of the
principal, should delay entail any danger.
(1718)
(3) In case of Withdrawal
Art. 1929. The agent, even if he should
withdraw from the agency for a valid reason,
must continue to act until the principal has
had reasonable opportunity to take the
necessary steps to meet the situation. (1737a)
UP LAW BOC AGENCY
Even if the agent withdraws, he must continue
to act until the principal “has had reasonable
opportunity to take the necessary steps to
meet the situation.” The wording now is more
forgiving for the agent because in the old Civil
Code, the agent had to wait for the principal “is
able to take the necessary measures to fill his
place.” Now it’s sufficient that the principal
had opportunity to appoint without actually
doing so.
(4) Agent not required to carry out
Art. 1888. An agent shall not carry out an
agency if its execution would manifestly result
in loss or damage to the principal. (n)
Example: If the Agent is obliged to buy palay
whose price suddenly spiked and, if bought,
will lead to the principal’s ruin, then the agent
may not carry out the agency.
B.4. ADVANCE FUNDS
Art. 1886. Should there be a stipulation that
the agent shall advance the necessary funds,
he shall be bound to do so except when the
principal is insolvent. (n)
Conditions:
(a) There is a stipulation stating that the agent
shall advance the necessary funds, and
(b) The principal must be solvent
B.5. PREFER THE PRINCIPAL’S
INTEREST OVER HIS OWN
(1) In General
Art. 1889. The agent shall be liable for
damages if, there being a conflict between his
interests and those of the principal, he should
prefer his own. (n)
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CIVIL LAW
Note: Agency is a fiduciary relationship. A
breach of that relationship will expose the
agent to liability for damages.
(2) Over Property Being Administered
Art. 1491. The following persons cannot acquire
by purchase, even at a public or judicial
auction, either in person or through the
mediation of another:
(2) Agents, the property whose administration
or sale may have been intrusted to them,
unless the consent of the principal has been
given;
The relations of an agent to his principal are
fiduciary and it is an elementary and very old
rule that in regard to property forming the
subject matter of the agency, he is stopped
from acquiring or asserting a titled adverse to
that of the principal. His position is analogous
to that of a trustee and he cannot consistently,
with the principles of good faith, be allowed to
create in himself an interest in opposition to
that of his principal or cestui que trust.
[Severino v. Severino]
(3) Double Sales
Art. 1916. When two persons contract with
regard to the same thing, one of them with the
agent and the other with the principal, and the
two contracts are incompatible with each
other, that of prior date shall be preferred,
without prejudice to the provisions of article
1544. (n)
Art. 1917. In the case referred to in the
preceding article, if the agent has acted in
good faith, the principal shall be liable in
damages to the third person whose contract
must be rejected. If the agent acted in bad
faith, he alone shall be responsible. (n)
Art. 1544. If the same thing should have been
sold to different vendees, the ownership shall
be transferred to the person who may have first
taken possession thereof in good faith, if it
UP LAW BOC
should be movable property.
Should it be immovable property, the
ownership shall belong to the person acquiring
it who in good faith first recorded it in the
Registry of Property.
Should there be no inscription, the ownership
shall pertain to the person who in good faith
was first in the possession; and, in the absence
thereof, to the person who presents the oldest
title, provided there is good faith. (1473)
The Situation: the principal and the agent each
contracts with different people for the same
thing, and the contracts are incompatible.
Parsed:
(1) General Rule: the contract “of a prior date”
shall prevail IF
(a) None of the buyers had obtained
possession over the movable, or
(b) None of the buyers had recorded,
possessed or has title over the
immovable
BUT IF
(a) The property is a movable, then the
person who takes first possession in
good faith (PGF) prevails
(b) The property is immovable, then the
person who first records it in good faith
in the register of deeds prevails. If
there is no record, the PGF prevails. If
there is no PGF, then the person who
has the oldest title. (record > PGF >
title)
Liability
(a) If the Agent was in good faith, then the
principal is liable for damages to the
third person whose contract won’t be
honoured
(b) If the Agent was in bad faith, then he is
liable for damages to the third person
and to the principal [see Art 1889]
B.6. RENDER ACCOUNT/DELIVER
AGENCY CIVIL LAW
Art. 1891. Every agent is bound to render an
account of his transactions and to deliver to
the principal whatever he may have received by
virtue of the agency, even though it may not be
owing to the principal.
Every stipulation exempting the agent from the
obligation to render an account shall be void.
(1720a)
If an agent receives a secret gift from a client,
he must report it and deliver it to the principal.
The law imposes upon the agent the absolute
obligation to make a full disclosure or
complete account to his principal of all his
transactions and other material facts relevant
to the agency. If he makes a secret profit, he is
guilty of breach of his loyalty, and he forfeits
his right to his commission. [Domingo v.
Domingo]
B.7. PAY INTEREST
Art. 1896. The agent owes interest on the sums
he has applied to his own use from the day on
which he did so, and on those which he still
owes after the extinguishment of the agency.
(1724a)
Note: The agent may only borrow funds from
the agent if he has been authorized to lend
money at interest [Art 1890]. If he does borrow,
then he should pay interest for the amount he
borrowed.
B.8. LIABLE FOR FRAUD/NEGLIGENCE
Art. 1909. The agent is responsible not only for
fraud, but also for negligence, which shall be
judged with more or less rigor by the courts,
according to whether the agency was or was
not for a compensation. (1726)
To whom should the fraud or negligence be
directed? Art 1909 does not say. But it has
been applied against an agent for negligence
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which caused damage against itself, thereby
preventing it from recovering from the
principal what it lost. [see Metrobank v. CA
1991]
C. LIABILITY OF AGENTS
C.1. WHEN SOLIDARY
Art. 1894. The responsibility of two or more
agents, even though they have been appointed
simultaneously, is not solidary, if solidarity has
not been expressly stipulated. (1723)
(1) Each of the agents can be held solidarily
liable for the non-fulfilment of the agency or
for injuries caused by fault or negligence IF:
(a) The principal simultaneously appoints
more than one agent, and
(b) There is an express stipulation that
such agents are solidarily liable
(2) Not solidarily liable IF
The fellow agents acted beyond the scope of
their authority.
C.2. WHEN PERSONAL
(1) Expressly Bound or In Excess of Authority
General Rule: the agent who transacts as an
agent is not personally liable to the third
person for the obligation entered into
Exceptions:
(a) When the agent expressly binds
himself
(b) When the agent exceeds the limits of
his authority without giving the person
he is transacting with sufficient notice
of his powers [Art 1897]
(c) When all of the ff are present:
a. The person transacting with the
agent is aware of the limits of the
agent’s authority
AGENCY CIVIL LAW
b. The agent exceeded the scope of
his authority
c. The agent undertook to secure the
principal’s ratification, and
d. The principal did not ratify the
contract
If the agent acts beyond the scope of his
authority, the third person can recover from
either the principal or the agent but not from
both. [Eurotech v. Cuizon]
(2) Acts in His Own Name
Art. 1883. If an agent acts in his own name, the
principal has no right of action against the
persons with whom the agent has contracted;
neither have such persons against the
principal.
In such case the agent is the one directly
bound in favor of the person with whom he has
contracted, as if the transaction were his own,
except when the contract involves things
belonging to the principal.
The provisions of this article shall be
understood to be without prejudice to the
actions between the principal and agent. (1717)
This is called an “Agency with an undisclosed
principal.
If the agent enters contract without notice to
the third party that he was acting as an agent,
the agent is directly bound as a party to the
contract, and the principal and the third
person have no right of action against one
another.
What if the contract “involves things belonging
to the principal?” Does the agent go away
scot-free?
The exception under Art 1883 “does not say
that (a third party) does not have, and cannot
bring an action against the agent also.”
[Beaumont v. Prieto]
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III. Express vs Implied
Agency
A. EXPRESS
Art. 1869. Agency may be express, or implied
from the acts of the principal, from his silence
or lack of action, or his failure to repudiate the
agency, knowing that another person is acting
on his behalf without authority.
Agency may be oral, unless the law requires a
specific form. (1710a)
The manner by which consent to establish the
agency is manifested may be express or
implied.
It is express when the principal expressly
authorizes the agent and the agent expressly
accepts such authority.
B. IMPLIED
Art. 1870. Acceptance by the agent may also
be express, or implied from his acts which carry
out the agency, or from his silence or inaction
according to the circumstances. (n)
Articles 1869 and 1870 show that an agency
relationship may be implied from the acts of
the principal or those of the agent.
B.1. ACTS OF THE PRINCIPAL
The act of the principal which constitutes
consent may be in the form of silence, lack of
action, or failure to repudiate the agency
knowing that another person is acting on his
behalf without authority. [See Art 1869]
AGENCY CIVIL LAW
Requisites:
(a) The alleged principal should be aware of
the acts of the alleged agent
(b) The alleged principal has had reasonable
opportunity under the circumstances to
repudiate the acts of the alleged agent
(c) A third party has transacted with the
alleged agent without being made aware
of the alleged agent’s lack of authority
(d) There were no facts or circumstances
which may raise any suspicion on the part
of the third person that the agent was not
authorized
Where no third party was prejudiced, and it
was emphasized in no uncertain terms to the
alleged agent that no agency exists (therefore
both principal and agent knew that the agent
had no authority) then Art 1869 has no room
for operation. [Uniland Resources v. DBP]
B.2. ACTS OF THE AGENT
Acceptance of the agent may be implied from
(1) His acts which carry out the agency
(2) His silence or inaction according to the
circumstances
Art. 1871. Between persons who are present,
the acceptance of the agency may also be
implied if the principal delivers his power of
attorney to the agent and the latter receives it
without any objection. (n)
Art. 1872. Between persons who are absent,
the acceptance of the agency cannot be
implied from the silence of the agent, except:
(1) When the principal transmits his power of
attorney to the agent, who receives it
without any objection;
(2) When the principal entrusts to him by
letter or telegram a power of attorney with
respect to the business in which he is
habitually engaged as an agent, and he did
not reply to the letter or telegram. (n)
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(1) Difference:
Under Art 1871, the agent impliedly accepts the
agency in the presence of the principal.
Under Art 1872, they are both “absent,” i.e.
they are not within the presence of each other.
Generally, there is no implied acceptance
except for the 2 cases.
(2) 1871 Conditions
(a) The principal delivers his power of
attorney to the agent
(b) The agent receives it without any
objection, and
(c) The agent must be aware of the
contents of the document containing
the powers of attorney
Only then will the agent be deemed to have
impliedly accepted.
(3) Art 1872 Conditions
General Rule: there is no implied acceptance
from the silence of the agent if the principal
and the agent are not within each other’s
presence.
Exceptions:
(a) The principal transmits the power of
attorney
(b) The principal entrusts the power of
attorney by letter or telegram, and the
power of attorney pertains to a business
that the agent is habit
IV. Agency by Estoppel
A. BASED ON STATUTE
Art. 1873 par.1. If a person specially informs
another or states by public advertisement that
he has given a power of attorney to a third
person, the latter thereby becomes a duly
authorized agent, in the former case with
respect to the person who received the special
information, and in the latter case with regard
to any person.
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CIVIL LAW
A.1. TWO MODES
(1) Specific Information
If a person specially informs another that he
has given a power of attorney to a third person,
then that third person becomes his agent with
respect to the person who received the special
information.
(2) Public Advertisement
If a person states by public advertisement that
he has given a power of attorney to a third
person, then that third person becomes his
agent with respect to any person.
A.2. HOW RESCINDED
Art. 1873 par.2. The power shall continue to be
in full force until the notice is rescinded in the
same manner in which it was given. (n)
Note: This is agency by estoppel and not
implied agency because no acceptance by the
agent is required.
B. BASED ON JURISPRUDENCE
By remaining silent and thereby clothing the
alleged agent with authority, the alleged
principal is barred from questioning the
alleged agent’s authority. [Pahud v. CA,
applying estoppel in general]
B.1. REQUISITES
The requisites for agency by estoppel to exist
are:
(a) The principal manifested a representation
of the agent’s authority or knowingly
allowed the agent to assume such
authority
(b) The third person, in good faith, relied upon
such representation
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(c) Relying upon such representation, such To be a General Agent, it is sufficient that the
third person has changed his position to listed authorized transactions apparently cover
his detriment. all that is required to run the business of the
principal. It is not necessary that the power
Agency by estoppel is similar to the doctrine of granted actually says “all the business of the
apparent authority. It requires proof of reliance principal.” [Dominion Insurance v. CA]
upon the representation and that the
representation predated the action which B. SPECIAL AGENCY
relied on the representation. [Litonjua v.
Eternit] If the agent handles only specific aspects of the
principal’s business and not all of it, the he is a
With respect to hospitals in relation to special agent. [See Art 1876]
physicians who are independent contractors,
General Agency Special Agency
there are only two requisites [Nogales v.
Capitol Medical]: The Agent handles all The Agent only
(a) (Representation) The hospital acted in a of the business of the handles specific
manner which would lead a reasonable principal. aspects of the
person to conclude that the individual who business.
was alleged to be negligent was an
employee or agent of the hospital
(b) (Reliance) The plaintiff acted in reliance
upon the conduct of the hospital or its
VI. Agency Couched In
agent, consistent with ordinary care and
prudence
General Terms (ACGT)
This refers to a type of authority granted to the
V. General vs. Special agent, not to the scope.

Agency If the power granted refers to acts of

administration, then the agency is properly
A. GENERAL AGENCY called an ACGT.

Art. 1876. An agency is either general or General Agency ACGT

special.
This refers to the scope This refers to the type
The former comprises all the business of the of the agency, i.e. it of authority granted,
principal. The latter, one or more specific comprises all of the i.e. only acts of
transactions. (1712) business. administration.

Whether an agency is general or special

depends on the scope of the agency.

If the agency comprises all the business of the

principal, the agency is general. Else, it is
special.

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VII. Agency Requiring
Special Power of
Attorney
A. IN GENERAL
Like ACGT, this also refers to a type of
authority granted to the agent, i.e. acts of strict
dominion.
Article 1878. Special powers of attorney are
necessary in the following cases:
(1) To make such payments as are not usually
considered as acts of administration;
(2) To effect novations which put an end to
obligations already in existence at the time the
agency was constituted;
(3) To compromise, to submit questions to
arbitration, to renounce the right to appeal
from a judgment, to waive objections to the
venue of an action or to abandon a prescription
already acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the
ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable
consideration;
(6) To make gifts, except customary ones for
charity or those made to employees in the
business managed by the agent;
(7) To loan or borrow money, unless the latter
act be urgent and indispensable for the
preservation of the things which are under
administration;
(8) To lease any real property to another person
for more than one year;
(9) To bind the principal to render some service
without compensation;
(10) To bind the principal in a contract of
partnership;
(11) To obligate the principal as a guarantor or
surety;
(12) To create or convey real rights over
immovable property;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations
contracted before the agency;
(15) Any other act of strict dominion. (n)
AGENCY CIVIL LAW
A Special Power of Attorney (SPOA) is not a
document. Instead it pertains to the nature of
the power granted to the agent.
What matters is the specificity of the authority
granted, not the name given to the instrument.
If a power of attorney is denominated as a
“general power of attorney” but it contains a
specific power to sell, then there is no need to
execute a separate SPOA to confer such power
to sell. [Veloso v. CA]
The requirement of a SPOA refers to the nature
of the authorization, not its form. A SPOA may
be oral or written, but if it is oral, it must be
duly established by evidence. [Lim Pin v. Liao
Tan]
Art. 1879. A special power to sell excludes the
power to mortgage; and a special power to
mortgage does not include the power to sell.
(n)
Art. 1880. A special power to compromise does
not authorize submission to arbitration. (1713a)
B. EFFECT OF ABSENCE OF SPECIFIC
AUTHORITY
B.1. IN GENERAL
If an agent performs a transaction under Art
1878 without specific authority therefor, the
transaction is unenforceable. However, the
agent can still seek the principal’s ratification.
[Dungo v. Lopena]
B.2. SALE OF LAND OR ANY INTEREST
THEREIN
Art. 1874. When a sale of a piece of land or any
interest therein is through an agent, the
authority of the latter shall be in writing;
otherwise, the sale shall be void. (n)
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Elements:
(a) Sale
(b) Of land or any interest therein
Required:
The authorization must be
(a) Written, and
(b) Specific
Only specific authorization is required:
(a) If the contract is a sale of an immovable
other than land
(b) If the contract transmits ownership over an
immovable other than land
(c) If the contract transmits ownership over
land thru a transaction other than a sale
B.3. EFFECT OF SPECIFIC
AUTHORIZATION
Where an instrument specifies and defines
powers and duties, all such powers and duties
are limited and confined to those which are
specified and defined, and all other powers
and duties are excluded. [BPI v. De Coster]
VIII. Agency By
Operation of Law
Normally, an agency is established only if there
is mutual intent on the part of the principal
and agent to establish the agency. [Victorias
Milling v. CA]
An agency may be established by operation of
law, however, in the following cases:
(1) In a partnership, every partner is an agent
of the partnership for the purpose of its
business [Art. 1818];
(2) Agency by estoppel (both statutory and
jurisprudential), where the principal’s
actions would reasonably lead a third
person to conclude that an agency exists;
AGENCY CIVIL LAW
(3) In case of certain necessity or emergency,
an agency by necessity may arise. [De
Leon]
IX. Rights and
Obligations of Principal
A. OBLIGATIONS
A.1. COMPLY WITH THE OBLIGATIONS
CONTRACTED BY THE AGENT
Art. 1910. The principal must comply with all
the obligations which the agent may have
contracted within the scope of his authority.
As for any obligation wherein the agent has
exceeded his power, the principal is not bound
except when he ratifies it expressly or tacitly.
(1727)
If the agent acts within the scope of his
authority, then the principal must comply.
Otherwise, the principal is bound to comply
only if he ratifies the agent’s act that was done
beyond the scope of his authority.
(1) Acts Within the Scope of Authority
(a) Those expressly specified in the power
of attorney
(b) Conducive acts
(c) Advantageous acts
(d) Collateral acts
(2) Ratified Acts
Art. 1901. A third person cannot set up the fact
that the agent has exceeded his powers, if the
principal has ratified, or has signified his
willingness to ratify the agent's acts. (n)
If the principal ratifies or signifies to ratify the
act of the agent, then that effectively binds the
third person to the unauthorized act of the
agent. The principal, by implication, also
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becomes bound to the act simply by signifying
his willingness to ratify.
By benefitting from the unauthorized act of an
agent, the principal is said to have ratified the
acts of the agent and is estopped from denying
said authority. [Filipinas Life v. Pedroso]
In some cases, the mere acceptance of benefits
is not tantamount to ratification by the
principal. The principal must have full
knowledge at the time of ratification of all the
material facts and circumstances relating to
the unauthorized act of the person who
assumed to act as agent. If the material facts
were suppressed or unknown, there can be no
ratification. [Manila Memorial v. Linsangan]
(3) When Estoppel Applies
Art. 1911. Even when the agent has exceeded
his authority, the principal is solidarily liable
with the agent if the former allowed the latter
to act as though he had full powers. (n)
Even if there was no express authority, the
principal is still solidarily liable because he
allowed the agent to act as if he had authority.
(This is not actually estoppel, but implied
agency.)
A.2. ADVANCE OR REIMBURSE SUMS
NECESSARY
Article 1912. The principal must advance to the
agent, should the latter so request, the sums
necessary for the execution of the agency.
Should the agent have advanced them, the
principal must reimburse him therefor, even if
the business or undertaking was not
successful, provided the agent is free from all
fault.
The reimbursement shall include interest on
the sums advanced, from the day on which the
advance was made. (1728)
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CIVIL LAW
Art. 1918. The principal is not liable for the
expenses incurred by the agent in the following
cases:
(1) If the agent acted in contravention of the
principal's instructions, unless the latter
should wish to avail himself of the benefits
derived from the contract;
(2) When the expenses were due to the fault of
the agent;
(3) When the agent incurred them with
knowledge that an unfavorable result
would ensue, if the principal was not aware
thereof;
(4) When it was stipulated that the expenses
would be borne by the agent, or that the
latter would be allowed only a certain sum.
(n)
General Rule: the principal must advance or
reimburse (with interest) the sums necessary to
execute the agency.
Exceptions:
(1) Expenses incurred through acts which
contravene the principal’s instructions, and
the principal does not want to derive
benefit therefrom
(2) Expenses due to the fault of the agent
(3) Expenses incurred by the agent with the
knowledge that an unfavourable result
would ensue, and the principal was
unaware
(4) If there is a stipulation that expenses would
be borne by the agent or that he would be
allowed only a certain sum
A.3. INDEMNIFY THE AGENT FOR INJURY
Art. 1913. The principal must also indemnify
the agent for all the damages which the
execution of the agency may have caused the
latter, without fault or negligence on his part.
(1729)
UP LAW BOC
The Situation: the agent suffers damage as a
result of performing his duties as an agent,
and such damage did not result from the
agent’s fault or negligence
A.4. COMPENSATE THE AGENT
Art. 1875. Agency is presumed to be for a
compensation, unless there is proof to the
contrary. (n)
Steps to determine whether the agent is
entitled to compensation:
(1) Determine whether the person is an agent
or a broker
(2) If he is an agent, determine whether he is
the procuring cause, i.e. if there is a close,
proximate and causal relation between the
agent’s efforts and the sale
B. LIABILITY OF THE PRINCIPAL
B.1. IN GENERAL
The principal is bound and liable for the acts of
the agent done within the scope of his
authority (express, conducive, advantageous,
and collateral acts), for unauthorized acts
which the principal has ratified and for acts
which is estopped from denying.
B.2. BE SOLIDARILY LIABLE
Art. 1911. Even when the agent has exceeded
his authority, the principal is solidarily liable
with the agent if the former allowed the latter
to act as though he had full powers. (n)
If the principal allowed the agent to act as if he
had full powers, then the principal is solidarily
liable with the agent even he exceeds his
authority.
Art. 1915. If two or more persons have
appointed an agent for a common transaction
or undertaking, they shall be solidarily liable to
AGENCY CIVIL LAW
the agent for all the consequences of the
agency. (1731)
If several principals appoint an agent for a
common transaction, then they are all
solidarily liable to the agent.
B.3. IF THE CONTRACT INVOLVES
THINGS BELONGING TO THE PRINCIPAL
Art. 1883. If an agent acts in his own name, the
principal has no right of action against the
persons with whom the agent has contracted;
neither have such persons against the
principal.
In such case the agent is the one directly
bound in favor of the person with whom he has
contracted, as if the transaction were his own,
except when the contract involves things
belonging to the principal.
The provisions of this article shall be
understood to be without prejudice to the
actions between the principal and agent. (1717)
General Rule: If the agent acts in his own
name, then the contract is between the agent
and the third person. Neither the third person
nor the principal has a right of action against
the other.
Except: If the contract involves things
belonging to the principal, then the principal is
also liable to the third party. (Agency with an
Undisclosed Principal) It is not the case that
the agent escapes liability by simply
contracting things belonging to the principal.
There are two effects of the exception,
according to jurisprudence:
(1) Principal and third persons now have a
right of action against each other. [Syjuco
v. Syjuco]
(2) The principal is not bound by the contract
if the act is beyond the scope of the agent’s
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authority. [PNB v. Agudelo] This operates
as an exception to the exception.
X. Irrevocable Agency
Art. 1920. The principal may revoke the agency
at will, and compel the agent to return the
document evidencing the agency. Such
revocation may be express or implied. (1733a)
Art. 1927. An agency cannot be revoked if a
bilateral contract depends upon it, or if it is the
means of fulfilling an obligation already
contracted, or if a partner is appointed
manager of a partnership in the contract of
partnership and his removal from the
management is unjustifiable. (n)
Art. 1930. The agency shall remain in full force
and effect even after the death of the principal,
if it has been constituted in the common
interest of the latter and of the agent, or in the
interest of a third person who has accepted the
stipulation in his favor. (n)
General Rule: The principal may revoke the
agency at will and compel the agent to return
the power of attorney
Exception: An agency cannot be revoked if:
(1) A bilateral contract depends upon it; or
(2) It is the means of fulfilling an obligation
already contracted; or
(3) A partner is appointed manager of a
partnership in the contract of partnership
and his removal from the management is
unjustifiable;
(4) If it is an agency couple with an interest
(a) If the agency was constituted in the
common interest of the principal and
of the agent, or
(b) If the agency was constituted in the
interest of a third person who has
accepted the stipulation in his favour.
AGENCY CIVIL LAW
A mere statement in the power of attorney that
it is coupled with an interest is not enough. The
power of attorney must state what that interest
is. [Del Rosario v. Abad]
Lim v. Saban enumerates certain rules with
respect to an agency coupled with an interest:
(1) It is one where there is mutual benefit on
the part of the principal and agent, or the
principal and third person
(2) The agency coupled with an interest
cannot be revoked for as long as the
interest of the agent or third person exists
(3) The agent’s interest must be “the subject
matter of the power conferred and not
merely an interest in the exercise of the
power because it entitles him to
compensation.”
(4) If the agent’s interest is limited to
compensation, then it is not an agency
coupled with an interest. [Lim v. Saban]
The agency coupled with an interest is
irrevocable because ”the agency becomes part
of another obligation or agreement. It is not
solely the rights of the principal but also that
of the agent and third persons which are
affected. [Republic v. Evangelista]
An agency coupled with an interest can still be
revoked, but only for just cause, i.e. bad faith,
breach of confidence, or betrayal of trust.
[Coleongco v. Claparols]
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XI. Modes of
Extinguishment
A. IN GENERAL
Art. 1919. Agency is extinguished:
(1) By its revocation;
(2) By the withdrawal of the agent;
(3) By the death, civil interdiction, insanity or
insolvency of the principal or of the agent;
(4) By the dissolution of the firm or corporation
which entrusted or accepted the agency;
(5) By the accomplishment of the object or
purpose of the agency;
(6) By the expiration of the period for which the
agency was constituted. (1732a)
The provision enumerates only those which are
peculiar to agency and is, therefore, not
exclusive. Agency may also be extinguished by
the modes of extinguishment of obligations in
general [De Leon (2010)]
The modes of extinguishment may be
classified into three:
(1) By agreement (Nos. 5 and 6);
(2) By subsequent acts of the parties:
(a) By the act of both parties or by mutual
consent; or
(b) By the unilateral act of one of them
(Nos. 1 and 2);
(3) By operation of law (Nos. 3 and 4).
B. REVOCATION
B.1. IN GENERAL
Art. 1920. The principal may revoke the agency
at will, and compel the agent to return the
document evidencing the agency. Such
revocation may be express or implied. (1733a)
General Rule: The principal may revoke the
agency at will.
382
CIVIL LAW
The principal can revoke the agency even if the
period fixed in the contract has not yet expired.
[CMS Logging v. CA]
The contract of agency can subsist only so long
as the principal has confidence in his agent,
because from the moment such confidence
disappears, the principal has the perfect right
to revoke the power. [Barreto v. Santa Maria]
Art. 1925. When two or more principals have
granted a power of attorney for a common
transaction, any one of them may revoke the
same without the consent of the others. (n)
Qualifications: The right of the principal to
terminate the authority of his agent is absolute
and unrestricted, except that he is liable for
damages in case:
(1) He revokes the agency in bad faith [Danon
v. Brimo (1921)]; or
(2) He revokes the agency before the
expiration of the period stipulated in the
agency contract.
Exception: Agency cannot be revoked if it is
coupled with an interest, such that:
(1) A bilateral contract depends upon it;
(2) It is the means of fulfilling an obligation
already contracted; or
(3) A partner is appointed manager of a
partnership in the contract of partnership
and his removal from the management is
unjustifiable.
UP LAW BOC AGENCY
B.2. WHEN REVOCATION IS NOT
BINDING ON THIRD PERSONS
(1) When Notice is Required
Art. 1921. If the agency has been entrusted for
the purpose of contracting with specified
persons, its revocation shall not prejudice the
latter if they were not given notice thereof.
(1734)
(2) When a Third Person in Good Faith Has No
Knowledge of Revocation
Art. 1922. If the agent had general powers,
revocation of the agency does not prejudice
third persons who acted in good faith and
without knowledge of the revocation. Notice of
the revocation in a newspaper of general
circulation is a sufficient warning to third
persons. (n)
What does “agent with general powers” mean?
Most likely, it is an agent authorized to
transact with the general public in
contradistinction to the agent who contracts
with specified persons under Art. 1921.
B.3. APPOINTMENT OF NEW AGENT
Art. 1923. The appointment of a new agent for
the same business or transaction revokes the
previous agency from the day on which notice
thereof was given to the former agent, without
prejudice to the provisions of the two
preceding articles. (1735a)
Revocation takes effect when notice is given to
the former agent, not when the new agent is
appointed.
383
CIVIL LAW
B.4. DIRECT MANAGEMENT BY THE
PRINCIPAL
Art. 1924. The agency is revoked if the principal
directly manages the business entrusted to the
agent, dealing directly with third persons. (n)
If the principal believes that the agent is in
breach of the contract and thereby decides to
deal with the business directly, then the
agency is said to be revoked. [CMS Logging v.
CA] The mere act of direct management by the
principal is not enough to revoked the agency.
B.5. SPECIAL AUTHORITY REVOKES THE
GENERAL AUTHORITY WHERE A
SPECIAL MATTER IS INVOLVED
Art. 1926. A general power of attorney is
revoked by a special one granted to another
agent, as regards the special matter involved
in the latter. (n)
Art. 1926 refers to a general agency (entirety of
business) and special agency (only aspects of
the business).
If Agent 1 is given a general agency, and Agent
2 is later given a special agency, then Agent 1
can no longer perform the powers granted to
Agent 2 under the special agency.
B.6. WHEN AGENCY CANNOT BE
REVOKED
Art. 1927. An agency cannot be revoked if a
bilateral contract depends upon it, or if it is the
means of fulfilling an obligation already
contracted, or if a partner is appointed
manager of a partnership in the contract of
partnership and his removal from the
management is unjustifiable. (n)
Art. 1930. The agency shall remain in full force
and effect even after the death of the principal,
UP LAW BOC
if it has been constituted in the common
interest of the latter and of the agent, or in the
interest of a third person who has accepted the
stipulation in his favor. (n)
Please refer to the Chapter X. Irrevocable
Agency.
C. WITHDRAWAL BY THE AGENT
Art. 1928. The agent may withdraw from the
agency by giving due notice to the principal. If
the latter should suffer any damage by reason
of the withdrawal, the agent must indemnify
him therefor, unless the agent should base his
withdrawal upon the impossibility of
continuing the performance of the agency
without grave detriment to himself. (1736a)
General Rule: The agent may withdraw so long
as he gives due notice to the principal. If the
principal suffers damage because of the
withdrawal, then the agent must indemnify
him, except if the basis of his withdrawal is
because continuing the performance of the
agency is impossible without grave detriment
to the agent.
If the Agent files a complaint against his
principal, then he is understood to have
renounced the agency because hi act was more
expressive than words and could not have
caused any doubt. [Valera v. Veloso]
D. DEATH, CIVIL INTERDICTION,
INSANITY OR INSOLVENCY
D.1. IN GENERAL
By reason of the very nature of the relationship
between the principal and agent, agency is
extinguished by the death of the principal or
the agent. Any act of an agent after the death
of his principal is void ab initio unless the same
falls under the exceptions provided for in the
aforementioned Articles 1930 and 1931.
AGENCY CIVIL LAW
D.2. EXCEPTIONS
1. Agency Coupled with an Interest.
Art. 1930. The agency shall remain in full force
and effect even after the death of the principal,
if it has been constituted in the common
interest of the latter and of the agent, or in the
interest of a third person who has accepted the
stipulation in his favor. (n)
2. Contract between Agent without
knowledge of Death and Third Person in
Good Faith
Art. 1931. Anything done by the agent, without
knowledge of the death of the principal or of
any other cause which extinguishes the
agency, is valid and shall be fully effective with
respect to third persons who may have
contracted with him in good faith. (1738)
3. Unfinished business
Art. 1884 par.2. He must also finish the
business already begun on the death of the
principal, should delay entail any danger.
(1718)
D.3. DEATH OF AGENT
If the agent dies, his heirs must:
(1) Notify the principal thereof; and
(2) In the meantime adopt such measures as
the circumstances may demand in the
interest of the latter [Article 1932].
E. DISSOLUTION /
ACCOMPLISHMENT / EXPIRATION
Art. 1919. Agency is extinguished:
xxx
(4) By the dissolution of the firm or corporation
which entrusted or accepted the agency;
(5) By the accomplishment of the object or
purpose of the agency;
(6) By the expiration of the period for which the
agency was constituted. (1732a)
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Accomplishment
The fulfillment of the purpose for which agency
was created ipso facto terminates agency even
though it was expressly made irrevocable. If
the purpose has not been accomplished, the
agency continues indefinitely for as long as the
intent to continue is manifested through words
or actions of the parties.

Dissolution
The dissolution of a partnership or corporation
which entrusted (principal) or accepted (agent)
the agency extinguishes its juridical existence,
except for the purpose of winding up its affairs.
It is equivalent to death.

Expiration
(1) If created for fixed period, expiration of the
period extinguishes agency even if the
purpose was not accomplished.
(2) If no time is specified, the courts may fix
the period as under the circumstances
have been probably contemplated by the
parties [Art. 1197]. Otherwise, the agency
terminates at the end of a reasonable
period of time. Either party can terminate
the relationship at will by giving notice to
the other [De Leon (2010)].
The period contemplated may be implied from
terms of agreement, purpose of agency, and
the circumstances of the parties.

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THE FOLLOWING MAY BE SAFELY ERASED
As a type of contract:
a. Art 1868.
i. A person binds himself to render some
service or to do something
ii. In representation or on behalf of
another
iii. With the consent or authority of the
latter
b. Being a contract, it has COC
i. Consent
But the legal relationship may still
arise even without consent
ii. Object: the performance of acts by the
agent in representation of the principal
iii. Cause: it is presumed to be for
compensation
As a legal relationship (Common law or true
agency)
a. It is characterized by
i. Fiduciary relationship
An agency is a fiduciary relationship
such that the agent is stopped from
asserting a title adverse from the
principal [Severino v. Severino]
ii. Control
Elements of Agency
(1) Under the Civil Code (1868)
a. A person must bind himself to render
some service or to do something in
representation or on behalf of another
person
b. It is with the consent or authority of the
other person
(2) By jurisprudence
a. There must be consent to establish the
relationship
i. There must be a showing of
consent on the part of an alleged
principal to allow an alleged agent
to act on her behalf. [Bordador v.
Luz]
AGENCY CIVIL LAW
ii. Mere closeness of relationship is
not tantamount to an agency
relationship. [Apex v. Southeast
Mindanao Mining]
iii. Without mutual intent, there is
generally no agency. [Victorias
Milling v. CA]
1. The principal must have the
intention to appoint, thru his
words or acts
2. The agent must have the
intention to accept the
appointment and to act upon it
b. The object is the execution of a juridical
act in relation to a third person
i. Representation is the subject
matter and basis of agency.
ii. Even if the parties never intended
for there to be an agency, but they
later acted as if they were principal
and agent, there is an agency.
[Tuazon v. Heirs]
c. The agent must act as a representative
and not for himself
i. If the agent acts for himself, it does
not invalidate the contract of
agency, but the agent will only be
liable for breach of contract
ii. Note: the agency relationship can
be established even if the agent
never acts as an agent
d. The agent must act within the scope of
his authority
i. This is not a condition for the
existence of the contract of agency,
but only a consequence of the
agency relationship
ii. An agency may exist even if the
agent acts beyond the scope of his
authority
(3) In reality, there are only two elements:
consent to establish the agency + object
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Effects of Agency whether such knowledge is

(1) Personality communicated [Francisco v. GSIS]
a. Integration d. GR: The principal is chargeable with
i. The personality of the principal and and bound by knowledge of or notice
the agent are merged. to the agent
b. Extension E: where the conduct and dealings of
i. The personality of the principal is the agent are such as to raise a clear
reproduced thru the agent. presumption that the agent will not
(2) Authority to Act communicate to the principal the facts,
a. The agent becomes the principal by there is no imputed knowledge.
legal fiction, authorized to perform all (5) Bad faith on the part of the agent is bad
acts which the principal would have faith on the part of the principal. [Caram v.
him do. Laureta]
b. NA: personal acts (e.g. right to vote,
make a will, take an oath)
(3) The Agent is not a Real-Party-In-Interest
a. The agent is only an extension of the
principal’s personality
i. 3rd party –(1)-- Agent –(2)—
Principal
1. If there is a breach of contract
(1), then only the 3rd party and
the Principal may seek
enforcement against one
another.
ii. Exception: If the agent is an
assignee of the contract, then the
agent may bring an action on a
contract made for the principal
iii. GR: The principal is the proper
party to a case
BUT the agent is not excuse from
criminal liability [Ong v. CA]
(4) Notice to the Agent is Notice to the
Principal
a. Otherwise known as “Imputed
knowledge” [Sunace v. NLRC]
b. But the reverse is not true (i.e. notice to
the principal is not notice to the agent).
c. Knowledge of facts by an officer or
agent of a corporation in the course of
his employment in relation to matters
within the scope of his authority is
notice to the corporation regardless

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Nature of Agency: General and Special i. The transaction entered into by the
(1) General Agency agent is unenforceable
a. To be a General Agent, it is sufficient 1. But the agent may still have the
that the listed authorized transactions principal ratify it
apparently cover all that is required to ii. If the principal is a corporation, then
run the business of the principal. It is the specific authorization must come
not necessary that the power granted in the form of a Board resolution
actually says “all the business of the 1. Except to the extent that such
principal.” [Dominion Insurance v. CA] power is given to the agent
b. General Agency refers to the scope of expressly or by reasonable
the business covered, not to the extent implication from the
of discretion or responsibility given to circumstances [Vicente v
the Agent Geraldes]
(2) Agency Couched in General Terms iii. If the transaction is sale of a piece of
a. A type of agency that only grants the land, then there must be a written
agent power to perform acts of and specific authorization to sell
administration 1. Else, the sale is void
b. Test: if the nature of the business
requires performance of certain acts
repeatedly and without express
authorization, then those are acts of
administration
(3) Specific Agency
a. Refers to the scope of the agent’s
authority
b. The agency must comprise of one or
more specific transactions, short of the
entire business
c. Cf. General Agency
(4) Special Power of Attorney (SPA)
a. It is not merely the name of a
document but a description of the
power granted to an agent
b. Certain transactions require a SPA,
and these transactions usually involve
acts of strict dominion (i.e. acts of
ownership)
c. If the power is couched in general
terms, then the agent may do only acts
of administration; if the power is
couched in specific terms then the
agent is empowered to perform such
specific act of strict dominion
d. Effect of Lack of SPA

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CIVIL LAW
PARTNERSHIP

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I. Contract of Partnership
A. DEFINITION
Article 1767. By the contract of partnership two
or more persons bind themselves to contribute
money, property, or industry to a common
fund, with the intention of dividing the profits
among themselves.
Two or more persons may also form a
partnership for the exercise of a profession.
(1665a)
A.1. ELEMENTS (STATUTORY):
(1) Two or more persons bind themselves to
contribute money, property, or industry to
a common fund,
(2) with the intention of dividing the profits
among themselves
A.2. ELEMENTS (JURISPRUDENCE)
(1) There must be an agreement to contribute
money, property or industry [Evangelista v
CIR], or
(2) The fact of contribution [AFISCO v CIR],
and
(3) There is the intention to divide profits
[Evangelista v CIR], or
(4) There is a joint interest in the profits
[AFISCO v CIR]
The two sets of elements are generally the
same: common fund + intention to divide
profits.
(1) Common Fund
The Civil Code requires the parties “bind
themselves to contribute” to a common
fund. The partnership may therefore exist
even before the common fund is created.
The common fund may not even come
from the partners themselves but may be
borrowed from third persons. [Lim Tong
Lim v Philippine Fishing Gear]
The form of the common fund may not
even be cash or property; it can be in the
form of credit or industry.
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CIVIL LAW
Generally, the Supreme Court has liberally
construed the concept of the common
fund.
Even if one of the parties argues that it did
not bind itself to contribute, but did in fact
contribute to the common fund, that lone
is sufficient to constitute the common
fund. [Philex Mining v CIR]
(2) Intention to Divide Profits
If the common fund’s work is
“indispensable, beneficial and
economically useful to the business” of the
partners and the profit motive is the
primordial reason to establish the
partnership, even if there are no actual
profits, then there is partnership. [AFISCO
v CA]
B. ESSENTIAL FEATURES
(1) There must be a valid contract;
(2) The parties must have legal capacity;
(3) There must be a mutual contribution of
money, property, or industry to a common
fund;
(4) The object must be lawful;
(5) The primary purpose must be to obtain
profits and to divide the same among the
parties;
(6) The partnership has a juridical personality
separate from individual partners [Article
1768].
B.1. LAWFUL PURPOSE
Article 1770 (1). A partnership must have a
lawful object or purpose, and must be
established for the common benefit or interest
of the partners.
If there is no lawful purpose, then the
partnership agreement is void ab initio.
Contracts whose purpose is contrary to law are
void from the beginning. [Art1409 (1)].
UP LAW BOC PARTNERSHIP
Article 1770 (2). When an unlawful partnership
is dissolved by a judicial decree, the profits
shall be confiscated in favor of the State,
without prejudice to the provisions of the Penal
Code governing the confiscation of the
instruments and effects of a crime.
Upon the dissolution of an unlawful
partnership, the profits are simply confiscated
by the State. The previous rule is to give such
profits to a charitable institution.
Art 1770 (2) talks of “profits.” When it comes
to the original contributions of the partners,
the same must be reimbursed to them. [Arbes
v Polistico]
B.2. COMMON BENEFIT
Article 1770. A partnership must have a lawful
object or purpose, and must be established for
the common benefit or interest of the partners.
A partnership must be established for the
common benefit of the partners. Is “common
benefit” always pecuniary? Yes, based on Art
1799.
Article 1799. A stipulation which excludes one
or more partners from any share in the profits
or losses is void.
B.3. JURIDICAL PERSONALITY
Article 1768. The partnership has a juridical
personality separate and distinct from that of
each of the partners, even in case of failure to
comply with the requirements of article 1772,
first paragraph. [n]
C. PARTIES
General rule: Any person capacitated to
contract may enter into a contract of
partnership.
The following persons cannot enter into a
contract of partnership:
(1) Those suffering from civil interdiction;
(2) Minors;
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CIVIL LAW
(3) Insane or demented persons;
(4) Deaf-mutes who do not know how to write;
(5) Incompetents who are under guardianship.
Exceptions : The capacity of the following
persons to enter into a contract of partnership,
though capacitated to contract generally, are
limited:
(1) Those who are prohibited from giving each
other any donation or advantage cannot
enter into a universal partnership [Article
1782];
(2) A corporation cannot enter into a
partnership in the absence of express
authorization by statute or charter.
Although a corporation cannot enter into a
partnership contract, it may, however, engage
in a joint venture with others [Aurbach vs.
Sanitary Wares Manufacturing Corp]
On the other hand, there is no prohibition
against a partnership being a partner in
another partnership [De Leon (2010)].
D. OBJECT
D.1. OBJECT OF UNIVERSAL
PARTNERSHIP
A universal partnership may refer to:
(1) All present property :
(a) The partners contribute all the
property which belongs to them to a
common fund, with the intention of
dividing the same among themselves,
as well as the profits they may acquire
therewith [Article 1778].
(b) The property contributed includes all
those belonging to the partners at the
time of the constitution of the
partnership.
(c) A stipulation for the common
enjoyment of any other profits may
also be made. However, the property
which the partners may acquire
subsequently by inheritance, legacy or
donation cannot be included in such
UP LAW BOC PARTNERSHIP
stipulation, except the fruits thereof
[Article 1779].
(2) All the profits:
(a) It comprises all that the partners may
acquire by their industry or work during
the existence of the partnership.
(b) Only the usufruct over the property of
the partners passes to the partnership
[Article 1780].
When the articles of universal partnership do
not specify its nature (all present property or
all the profits), the partnership will be
considered as one only of all the profits [Article
1781].
D.2. OBJECT OF PARTICULAR
PARTNERSHIP
A particular partnership has for its object
determinate things, their use or fruits, or a
specific undertaking, or the exercise of a
profession or vocation [Article 1783].
D.3. EFFECT OF UNLAWFUL OBJECT
If the partnership has an unlawful object or
purpose:
(1) The contract is void ab initio [Article
1409(1)].
(2) Once dissolved by judicial decree:
(a) The profits shall be confiscated by
favor of the State;
(b) The instruments or tools and proceeds
of the crime shall also be forfeited in
favor of the State [Article 1770].
(3) The contributions of partners shall not be
confiscated unless they are instruments or
tools of the crime [De Leon (2010)].
E. FORM
General rule: The contract may be constituted
in any form [Article 1771].
Exceptions:
(1) Where immovable property or real rights
are contributed:
(a) The contract must appear in a public
instrument; and
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CIVIL LAW
(b) Attached to such instrument must be
an inventory, signed by the parties, of
the property contributed [Articles 1771
and 1773];
(2) Where the capital is at least P3,000, in
money or property:
(a) The contract must appear in a public
instrument; and
(b) It must be recorded in the Office of the
Securities and Exchange Commission
(SEC).
As to the second, failure to comply with these
requirements, however, does not affect the
liability of the partnership and the partners to
third persons [Articles 1768 and 1772].
F. DURATION
F.1. COMMENCEMENT
Art 1784. A partnership begins from the
moment of the execution of the contract,
unless otherwise stipulated
F.2. TERM
As to period, a partnership may either be:
(1) For a fixed term or particular undertaking;
or
(2) At will, the formation and dissolution of
which depend on the mutual desire and
consent of the parties. Any one of the
partners may, at his sole pleasure, dictate
the dissolution of the partnership, even in
bad faith, subject to liability for damages
[Ortega v. CA [(995)].
F.3. EXTENSION
A partnership term may be extended by:
(1) Express renewal; or
(2) Implied renewal, when these requisites
concur:
(a) The partnership is for a fixed term or
particular undertaking;
(b) It is continued after the termination of
the fixed term or particular
UP LAW BOC PARTNERSHIP
undertaking without any express
agreement [Article 1785].
G.RULES TO DETERMINE EXISTENCE
When the intent of the parties is clear, such
intent shall govern. When it does not clearly
appear, the following rules apply:
(1) Persons who are not partners to each other
are not partners as to third persons,
subject to the provisions on partnership by
estoppel.
(2) Co-ownership or co-possession does not of
itself establish a partnership, even when
there is sharing of profits in the use of the
property.
(3) Sharing of gross returns does not of itself
establish a partnership, even when the
parties have joint or common interest in
any property from which the returns are
derived.
(4) The receipt by a person of a share in the
profits of a business is prima facie evidence
that he is a partner.
As to the fourth, no such inference is drawn if
the profits are received in payment:
(1) As a debt by installments or otherwise;
(2) As wages of an employee of rent to a
landlord;
(3) As an annuity to a widow or representative
of a deceased partner;
(4) As interest on a loan, though the amount
of payment vary with the profits of the
business;
(5) As the consideration for the sale of a
goodwill of a business or other property by
installments or otherwise [Article 1769].
H. KINDS OF PARTNERSHIPS
H.1. AS TO THE LEGALITY OF ITS
EXISTENCE:
(1) Partnership de jure is one which has
complied with all the requisites for its
lawful establishment;
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CIVIL LAW
(2) Partnership de facto is one which failed to
so comply.
H.2. AS TO ITS OBJECT:
(1) Universal partnership:
(a) Of all present property;
(b) Of profits;
(2) Particular partnership.
H.3. AS TO ITS DURATION:
(1) For a fixed term or particular undertaking;
(2) At will.
H.4. AS TO THE LIABILITY OF THE
PARTNERS:
(1) General partnership, consisting of general
partners only, who are liable pro rata for
partnership obligations with all their after
exhaustion of partnership assets;
(2) Limited partnership, includes, aside from
general partner/s, limited partners, who
are not personally liable for partnership
obligations.
H.5. AS TO ITS PUBLICITY:
(1) Secret partnership, where the existence of
certain persons as partners is not made
known by the partners;
(2) Open or notorious partnership, the
existence of which is made known to the
public by the partners.
H.6. AS TO ITS PURPOSE:
1. Commercial or trading partnership, for
transaction of business;
2. Professional or non-trading partnership, for
the exercise of profession.
A profession has been defined as “a group of
men pursuing a learned art as a common
calling in the spirit of public service – no less a
public service because it may incidentally be a
means of livelihood” [In the Matter of the
Petition for Authority to Continue Use of Firm
name “Sycip, Salazar, etc.”/“Ozaeta, Romulo,
UP LAW BOC PARTNERSHIP CIVIL LAW

etc.” (1979)]. A professional partnership is a (16) Incoming partner, who is about to be taken
particular partnership [Article 1783]. as a member into an existing partnership;
I. KINDS OF PARTNERS (17) Retiring partner, who is withdrawing from
(1) Capitalist partner, whose contribution is the partnership.
money or property;
(2) Industrial partner, contribution is only his Industrial Capitalist
industry; partner partner
(3) General partner, whose liability to third Form of contribution
persons extends to his separate property;
(4) Limited partner, whose liability to third Industry Money or property
persons is limited to his capital Share in profits
contribution; Just and equitable According to
(5) Managing partner, who was designated to share agreement; if none,
manage the affairs or business of the in proportion to
partnership; contribution
(6) Liquidating partner, who takes charge of
the winding up of partnership affairs; Share in losses
(7) Partner by estoppel, who is not really a Exempted as to According to
partner but is liable as such for the losses as between agreement; if none,
protection of innocent third persons; partners, but liable in the same
(8) Continuing partner, who continues the to third persons, proportion as the
business after dissolution of the without prejudice to agreed share in
partnership by admission of a new partner, reimbursement profits; if none, in
or retirement, death or expulsion of from capitalist proportion to
existing partners; partners contribution
(9) Surviving partner, who remains a partner Engagement in business
after dissolution by death of any partner;
(10) Subpartner, who is not a member of the Cannot engage in Cannot engage, for
partnership but contracts with a partner business for himself, his own account, in
with regard to the share of the latter in the unless the the same kind of
partnership; partnership business as that of
(11) Ostensible partner, who takes active part expressly permits the partnership,
in the business of the partnership and is him to do so; should unless there is a
known by the public; he do so without stipulation to the
(12) Secret partner, who takes active part in the permission, the contrary; should he
business, but is unknown to the third capitalist partners do so, he shall bring
persons as a partner; may: [1] exclude him to the common fund
(13) Silent partner, who does not take active from the firm; or [2] any profits accruing
part in the business, but may be known to avail themselves of to him from his
be a partner by third persons; the benefits transactions and
(14) Dormant partner, who does not take active obtained in violation shall personally
part in the business and is not known or of the prohibition, bear all the losses
held out as a partner; with right to [Article 1808]
(15) Original partner, who has been a partner damages in either
since the constitution of the partnership; case [Article 1789]

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of a partner of a co-owner does

J. PARTNERSHIP, DISTINGUISHED dissolves the not dissolve the co-
FROM OTHER CONTRACTS partnership ownership
Partnership Joint venture A partner cannot A co-owner can
Operates with firm Operates without dispose of his dispose of his share
name and legal firm name and legal interest, so as to without consent of
personality personality make the assignee a others
partner, without
Generally relates to Usually limited to a consent of others
a continuing single transaction
business of various
transactions of a Partnership Corporation
certain kind Has juridical personality separate and
Corporations may Corporations may distinct from its individual members
not enter into a enter into joint Can only act through agents
partnership ventures Composed of an aggregate of individuals
Distributes its profits to those who
Under Philippine law, a joint venture is a form
contributed capital to the business
of partnership and should thus be governed by
the laws of partnership [Auerbach vs. Sanitary Can only be organized where there is a law
Wares Manufacturing Corp. [(989)]. authorizing its organization
Taxable as in a corporation
Partnership Co-ownership Created by Created by
Generally created by Generally created by agreement operation of law
either express or law and may exist Involves at least two Except for
implied contract even without a persons corporation sole,
contract requires at least five
Has a separate Has no separate incorporators
juridical personality juridical personality Personality Personality
Generally, the The purpose is the commences from commences from
purpose is to obtain common enjoyment the moment of the issuance of
profits of a thing or right execution of the certificate of
Duration has no An agreement to contract incorporation
limitation keep a thing Can exercise any Can exercise only
undivided for more power authorized by powers conferred by
than ten years is not partners the Corporation
allowed, but may be Code or by its
extended articles of
There is mutual There is no mutual incorporation, and
agency between representation such as are
partners among co-owners necessary or
incidental to the
Death or incapacity Death or incapacity exercise of such

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powers marriage and any

When management Management is stipulation to the
is not agreed upon, vested in the board contrary is void
every partner may of directors or Share in profits may Share in profits is
act for the trustees be stipulated; equal
partnership otherwise, in
Partners are Stockholders are proportion to
generally liable for liable only to the contribution
partnership debts extent of their Management Administration
shares shared by all belongs to the
A partner cannot A stockholder has partners, unless spouses jointly, but
dispose of his the right to transfer otherwise agreed decision of husband
interest, so as to his shares without upon prevails in case of
make the assignee a consent of others disagreement
partner, without Partner can dispose Spouse cannot
consent of others of interest even dispose of interest
Duration has no The term limit is 50 without consent of during marriage,
limitation years, but may be others even with consent
extended
May be dissolved at May only be
any time by one or dissolved with the
all of the partners consent of the state

Conjugal
Partnership
partnership of gains
Created by Arises in case the
voluntary spouses, of opposite
agreement of two or sex, agree before
more partners of marriage
either sex
Governed by Governed by law
agreement
Has juridical Has no juridical
personality personality
Commencement Commencement is
date may be on the date of the
stipulated celebration of the

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Voluntary (a) To warrant against eviction in the same

Partnership manner as a vendor; and
association
(b) To deliver to the partnership the fruits
Has juridical Has no juridical
of the property promised to be
personality personality
contributed, from the time they should
Organized for profit Not always have been delivered, without need of
organized for profit demand [Article 1786];
Capital is Capital is not (3) In case a sum of money is to be
contributed contributed, contributed, or in case he took any amount
although fees are from the partnership coffers, to indemnify
collected from the partnership for:
members (a) Interest; and
(b) Damages, from the time he should
The partnership is The members are
have complied with his obligation, or
primarily liable; the liable individually
from the time he converted the amount
partners are liable for debts which they
to his own use, respectively [Article
only subsidiarily authorized or
1788].
ratified
Share in profits may Share in profits is I. AMOUNT OF CONTRIBUTION
be stipulated; equal General rule: Partners are to contribute equal
otherwise, in shares to the capital of the partnership.
proportion to
contribution Exception: When there is an agreement to the
contrary, the contribution shall follow such
II. Rights and Obligations agreement [Article 1790].

of the Partnership II. ADDITIONAL CAPITAL CONTRIBUTION

A. RIGHT TO CONTRIBUTION
The partnership has a right to the contribution
(or the partners are obliged to contribute). The
money or property thus contributed, or their
use or fruits, become the property of the
partnership.
A.1. CONTRIBUTION OF MONEY OR
PROPERTY
With respect to contribution of property, a
partner is obliged to:
(1) To contribute, at the beginning of the
partnership or at the stipulated time, the
money, property or industry which he
undertook to contribute;
(2) In case a specific and determinate thing is
to be contributed:
Requisites:
(1) There is an imminent loss of the business
of the partnership;
(2) The majority of the capitalist partners are
of the opinion that an additional
contribution to the common fund would
save the business;
(3) The capitalist partner refuses deliberately
[not because of financial inability] to
contribute an additional share to the
capital; and
(4) There is no agreement that even in case of
imminent loss of the business, the partners
are not obliged to contribute.
Any partner who refuses to contribute an
additional share to the capital, except an
industrial partner, to save the venture, shall be

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obliged to sell his interest to the other
partners, unless there is an agreement to the
contrary [Article 1791].
A.2. CONTRIBUTION OF INDUSTRY
An industrial partner is obliged to contribute
his industry at the stipulated time.
General rule: An industrial partner cannot
engage in business for himself. Should he do
so, the capitalist partners, as well as industrial
partners [De Leon (2010)] may either:
(1) Exclude him from the firm; or
(2) Avail themselves of the benefit which he
may have obtained.
Exception: He may engage in business for
himself when the partnership expressly permits
him to do so [Article 1789].
B. RIGHT TO APPLY PAYMENT
RECEIVED TO PARTNERSHIP CREDIT
General rule: A partner authorized to manage,
who collects a demandable sum owed to him
in his own name from a person who also owes
the partnership a demandable sum, is obliged
to apply the sum collected to both credits pro
rata, even if he issued a receipt for his own
credit only.
B.1. REQUISITES:
(1) There exist at least two debts, one where
the collecting partner is creditor, and the
other, where the partnership is the
creditor;
(2) Both debts are demandable; and
(3) The partner who collects is authorized to
manage and actually manages the
partnership.
B.2. EXCEPTIONS:
(1) In case the receipt was issued for the
account of the partnership credit only,
however, the sum shall be applied to the
partnership credit alone.
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CIVIL LAW
(2) When the debtor declares, pursuant to
Article 1252, at the time of making the
payment, to which debt the sum must be
applied, it shall be so applied [Article
1792].
C. RIGHT TO RETURN OF CREDIT
RECEIVED
A partner, authorized to manage or not, who
already received, in whole or in part, his share
of a partnership credit, is obliged to bring to
the partnership capital what he received when:
(1) The other partners have not collected their
shares; and
(2) The partnership debtor has become
insolvent.
This obligation exists even when he issued a
receipt for his share only [Article 1793].
Ratio: In this case, the debt becomes a bad
debt. It would be unfair for the partner who
already collected not to share in the loss of the
other partners.
D. RIGHT TO INDEMNITY FOR
DAMAGES
Every partner is responsible to the partnership
for damages suffered by it through his fault.
D.1. SET-OFF OF LIABILITY
General rule: The liability for damages cannot
be set-off or compensated by profits or
benefits which the partner may have earned for
the partnership by his industry.
Ratio: The partner has the obligation to secure
the benefits for the partnership. As such, the
requirement for compensation, that the
partner be both a creditor and a debtor of the
partnership at the same time, is not complied
with [Article 1278; De Leon (2010)].
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Exception : The court may equitably lessen the
liability if, through his extraordinary efforts in
other activities of the partnership, unusual
profits were realized [Article 1794]. Note,
however, that there is still no compensation in
this case.
D.2. SUIT FOR DAMAGES
Before a partner may sue another for alleged
fraudulent management and resultant
damages, liquidation must first be effected to
determine the extent of the damage. Without
liquidation of partnership affairs, a partner
cannot claim damages [Soncuya v. De Luna
(1939)].
E. RESPONSIBILITY TO PARTNERS
In the absence of any stipulation to the
contrary, every partner is an agent of the
partnership for the purpose of its business. As
such, it is responsible to every partner:
(1) For amounts, and the corresponding
interest from the time the expenses were
made, which he may have disbursed on
behalf of the partnership;
(2) For obligations he may have contracted in
good faith in the interest of the partnership
business; and
(3) For risks in consequence of the
management of the partnership [Article
1796].
III. Rights and
Obligations of Partners
among Themselves
A. RIGHT TO ASSOCIATE ANOTHER
IN SHARE
Every partner may associate another person
with him in his share. The admission of the
associate to the partnership, however, requires
consent of all the other partners even if the
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CIVIL LAW
partner having an associate is a managing
partner [Article 1804].
This arrangement refers to a contract of
subpartnership, which is a partnership within a
partnership, distinct and separate from the
main partnership. It is considered a
modification of the original contract [De Leon
(2010)].
B. RIGHT TO INSPECT PARTNERSHIP
BOOKS
The partnership books shall be kept:
(1) At a place agreed upon by the partners;
(2) When there is no such agreement, at the
principal place of business of the
partnership.
Every partner shall, at any reasonable hour,
have access to and may inspect and copy any
of them.
Any reasonable hour means reasonable hours
on business days throughout the year [Pardo v.
Lumber Co. (1925)].
C. RIGHT TO A FORMAL ACCOUNT
General rule: The right to a formal account of
partnership affairs accrues only when the
partnership is dissolved.
Exceptions: In the special and unusual cases
mentioned in Article 1809, formal accounting
may be demanded by any partner even before
dissolution:
(1) If he is wrongfully excluded from the
partnership business or possession of its
property by his co-partners;
(2) If the right exists under the terms of any
agreement;
(3) If, without his consent, a partner has
derived profits from any transaction
connected with the formation, conduct, or
liquidation of the partnership or from any
use of partnership property;
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(4) Whenever other circumstances render it

just and reasonable [Article 1809]. F. RIGHTS IN SPECIFIC PROPERTY
(1) The partners have equal rights to possess
D. PROPERTY RIGHTS OF PARTNERS partnership property for partnership
D.1. IN GENERAL purposes.
The property rights of a partner are: (2) For other purposes, the consent of his
(1) Rights in specific partnership property; partners is necessary.
(2) Interest in the partnership; and (3) If the partner is excluded, he may ask for:
(3) Right to participate in the management (a) Formal accounting [Article 1809]; or
[Article 1810]. (b) Dissolution by judicial decree [Article
1831].
D.2. PROPERTY AND CAPITAL (4) A partner’s right in such property is not
DISTINGUISHED assignable, except when all the partners
assign their rights in the same property;
Partnership
Partnership capital (5) The right is not subject to attachment or
property
execution, except on claim against the
With constant value Value varies with partnership. In case of such attachment,
market conditions the partners, or any of them, or the
Includes only Includes the representatives of a deceased partner,
actually contributed contributions and cannot claim any right under the
and promised property acquired homestead or exemption laws.
capital by the partnership (6) The right is not subject to legal support
under Article 291 [Article 1811].
E. OWNERSHIP OF CERTAIN
G. INTEREST IN THE PARTNERSHIP
PROPERTIES
A partner’s interest in the partnership is his
(1) The ownership of property used by the
share of the profits and surplus [Article 1812].
partnership depends on the intention of the
parties, which may be drawn from an
express agreement or their conduct.
G.1. ASSIGNMENT OF INTEREST
(a) A partner may allow the property to be Assignment by a partner of his whole interest
used by the partnership without in the partnership, of itself:
transfer of ownership, contributing (1) Does not dissolve the partnership; or
only the use or enjoyment thereof. (2) Does not entitle the assignee to:
(b) He may also hold title to partnership (a) Interfere in the management or
property, without acquiring ownership administration of the partnership
thereof [Article 1819]. business or affairs;
(2) Property acquired by a partner with (b) Require information or account of
partnership funds is presumed to be partnership; or
partnership property. (c) Inspect the partnership books.
(3) The same presumption also arises when
the property is indicated in the partnership It merely entitles the assignee to:
books as partnership asset. (1) Receive the profits to which the assigning
(4) Other factors may be considered to partner was entitled;
determine ownership of the property. (2) In case of fraud in management, avail
himself of the usual remedies;

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(3) In case of dissolution:

(a) Receive his assignor’s interest; and H.1. POWERS OF A MANAGING PARTNER
(b) Require an accounting from the date General rule: The partner designated as
only of the last account agreed to by all manager in the articles may execute all acts of
the partners [Article 1813]. administration despite opposition by the other
partners.
G.2. CHARGING OF INTEREST BY
PERSONAL CREDITORS Exception: He cannot do so when he acts in
General rule: Partnership creditors are bad faith.
preferred over the personal creditors of the
partners as regards partnership property. H.2. REVOCATION OF POWER OF
MANAGING PARTNER
Exception: On due application by any judgment The powers of the managing partner may be
creditor of a partner, a competent court may: revoked:
(1) Charge the interest of the partner for the (1) If appointed in the articles of partnership,
satisfaction of the judgment debt; when:
(2) Appoint a receiver of the share of the (a) There is just or lawful cause for
profits and of any other money due or to revocation; and
fall due to the partner; and (b) The partners representing the
(3) Make all other orders, directions, accounts controlling interest revoke such power.
and inquiries, which the debtor partner (2) If appointed after the constitution of the
might have made, or which the partnership, at any time and for any cause
circumstances may require. [Article 1800].

The interest charged may be redeemed before
foreclosure or, in case of sale directed by the
court, may be purchased without causing
dissolution:
(1) With separate property, by one or more of
the partners; or
(2) With partnership property, by one or more
of the partners, will consent of all, except
the debtor partner [Article 1814].
H. RIGHT TO PARTICIPATE IN
MANAGEMENT
Management of the partnership is primarily
governed by the agreement of the partners in
the articles of partnership. It may be stipulated
that the partnership will be managed by:
(1) All the partners; or
(2) A number of partners appointed as
managers, which may be appointed:
(a) In the articles of partnership; or
(b) After constitution of the partnership.
H.3. MANAGEMENT BY TWO OR MORE
PARTNERS
When there are two or more managing
partners appointed, without specification of
their duties or without a stipulation on how
each one will act:
(1) Each one may separately execute all acts
of administration.
(2) If any of them opposes the acts of the
others, the decision of the majority
prevails.
(3) In case of a tie, the partners owning the
controlling interest will decide [Article
1801].
Requisites:
(1) Two or more partners have been appointed
as managers;
(2) There is no specification of their respective
duties; and

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(3) There is no stipulation that one of them
shall not act without the consent of all the
others.
H.4. STIPULATION OF UNANIMITY
In case there is a stipulation that none of the
managing partners shall act without the
consent of others, the concurrence of all is
necessary for the validity of the acts.
The absence or disability of one cannot be
alleged, unless there is imminent danger of
grave or irreparable injury to the partnership
[Article 1802].
H.5. MANAGEMENT WHEN MANNER
NOT AGREED UPON
When there is no agreement as to the manner
of management, the following rules apply:
(1) All the partners are considered agents
[mutual agency]. Whatever any one does
alone binds the partnership, unless there is
a timely opposition to the act, under Article
1801.
(2) Any important alteration in the immovable
property of the partnership, even if useful
to the partnership, requires unanimity. If
the alteration is necessary for the
preservation of the property, however,
consent of the others is not required [De
Leon (2010)].
If the refusal is manifestly prejudicial to the
partnership, court intervention may be sought
[Article 1803].
H.6. MUTUAL AGENCY
In addition to the Article 1801, there is
effectively a mutual agency in the following
cases:
(1) Partners can dispose of partnership
property even when in partnership name
[Article 1819].
(2) An admission or representation made by
any partner concerning partnership affairs
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is evidence against the partnership [Article
1820].
(3) Notice to any partner of any matter
relating to partnership affairs is notice to
the partnership [Article 1821].
(4) Wrongful act or omission of any partner
acting for partnership affairs makes the
partnership liable [Article 1822].
(5) Partnership is bound to make good losses
for wrongful acts or misapplications of
partners [Article 1823].
I. RIGHT TO PROFITS AND
OBLIGATION FOR LOSSES
I.1. RULES FOR DISTRIBUTION OF
PROFITS AND LOSSES
The distribution of profits and losses shall be in
accordance with the following rules:
(1) They shall be distributed in conformity with
the agreement.
(2) If only the share in profits has been
stipulated, the share in the losses shall be
in the same proportion.
(3) In the absence of any stipulation:
(a) The share in the profits of the capitalist
partners shall be in proportion to their
contributions.
(b) The losses shall be borne by the
capitalist partners, also in proportion
to the contributions.
(c) The share of the industrial partners in
the profits is that share as may be just
and equitable. If he also contributed
capital, he will receive a share of the
profits in proportion to his
contribution; and
(d) The industrial partner, who did not
contribute capital, is not liable for
losses [Article 1797].
I.2. EXCLUSION OF PARTNER FROM SHARE
General rule: A stipulation excluding one or
more partners from any share in the profits or
losses is void [Article 1799].
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Exception: A stipulation exempting an
industrial partner from losses is valid, since, if
the partnership fails to realize profits, he can
no longer withdraw his work or labor [De Leon
(2010)].
J. OBLIGATION TO RENDER
INFORMATION
Partners shall render on demand true and full
information of all things affecting the
partnership to:
(1) Any partner;
(2) The legal representative of any deceased
partner; or
(3) The legal representative of any partner
under legal disability [Article 1806].
K. OBLIGATION TO ACCOUNT AND
ACT AS TRUSTEE
Every partner must (1) account to the
partnership for any benefit and (2) hold as
trustee for it any profits derived by him without
the consent of the other partners:
(1) From any transaction connected with the
formation, conduct, or liquidation of the
partnership; or
(2) From any use by him of its property [Article
1807].
IV. Obligations of
Partnership / Partners
to Third Persons
A. OBLIGATION TO OPERATE UNDER
A FIRM NAME
Every partnership shall operate under a firm
name, which may or may not include the name
of one or more of the partners.
Those who, not being members of the
partnership, include their names in the firm
name, shall be subject to the liability of a
partner [Article 1815].
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General rule: The partners may adopt any firm
name desired.
Exceptions:
(1) They cannot use a name which is “identical
or deceptively or confusingly similar to an
existing or corporation [or partnership] or
to any other name already protected by
law or is patently deceptive, confusing or
contrary to existing laws” [Section 18,
Corporation Code].
(2) Use of names of deceased partner in law
firms is “permissible provided that the firm
indicates in all its communications that
said partner is deceased” [Rule 3.02, Code
of Professional Responsibility].
B. LIABILITY OF PARTNERS FOR
PARTNERSHIP CONTRACTS
The partnership is primarily liable for contracts
entered into:
(1) In its name and for its account;
(2) Under its signature; and
(3) By a person authorized to act for it.
Upon exhaustion of its assets, all partners are
liable pro rata with all their property.
Any partner may enter into a separate
obligation to perform a partnership contract
[Article 1816].
B.1. NATURE OF INDIVIDUAL LIABILITY
I. SUBSIDIARY
General rule: The partners are liable
subsidiarily. It only arises upon exhaustion of
partnership assets [Cia. Maritima v. Muñoz
(1907)].
Exceptions:
(1) A third person who transacted with the
partnership can hold the partners solidarily
[rather than subsidiarily] liable for the
whole obligation if the case falls under
Articles 1822 or 1823 [Muñasque v. CA
UP LAW BOC
(1985)]. The provisions refer to wrongful
acts or omission and misapplication of
money or property by a partner in the
ordinary course of business.
(2) A person admitted as a partner into an
existing partnership is liable for all the
obligations of the partnership arising
before his admission, except that his
liability shall be satisfied only out of
partnership property, unless there is a
stipulation to the contrary [Article 1826]. In
other words, he is not personally liable.
II. PRO RATA
The partners are liable pro rata.
This liability is not increased even when a
partner:
(1) Has left the country and the payment of his
share of the liability cannot be enforced
[Co-Pitco v. Yulo (1907)]; or
(2) His liability is condoned by the creditor
[Island Sales v. United Pioneers (1975)].
B.2. LIABILITY OF AN INDUSTRIAL
PARTNER
An industrial partner, who is not liable for
losses, is not exempt from this liability.
However, he can recover the amount he has
paid from the capitalist partners, unless there
is a stipulation to the contrary [Cia. Maritima v.
Muñoz (1907)].
B.3. STIPULATION AGAINST INDIVIDUAL
LIABILITY
Any stipulation against this liability is:
(1) Void against third persons; but
(2) Valid among the partners [Article 1817].
C. LIABILITY OF PARTNERS FOR
PARTNERSHIP CONTRACTS
C.1. ACTS APPARENTLY FOR THE
CARRYING ON OF USUAL BUSINESS
PARTNERSHIP CIVIL LAW
General rule: Any act of a partner which is
apparently for the carrying on of the usual
business of the partnership binds the latter,
including the execution of any instrument in
the partnership name.
Exception: The partnership is not bound when
the following concur:
(1) The partner has in fact no authority to act;
and
(2) The person with whom he deals has
knowledge of such fact [Article 1818 (1)].
C.2. ACTS NOT APPARENTLY FOR
CARRYING ON OF THE USUAL BUSINESS
General rule: Acts of a partner which is not
apparently for carrying on of the usual
business does not bind the partnership.
Exception: The partnership is bound if the
other partners authorized him to do the act
[Article 1818, 2nd par.].
C.3. ACTS OF STRICT DOMINION
General rule: One or some of the partners have
no authority to do the following acts of strict
dominion:
(1) Assign the partnership property in trust for
creditors or on the assignee’s promise to
pay the debts of the partnership;
(2) Dispose of the goodwill of the business;
(3) Do any other act which makes it impossible
to carry on the ordinary business of the
partnership;
(4) Confess a judgment;
(5) Enter into a compromise concerning a
partnership claim or liability;
(6) Submit a partnership claim or liability to
arbitration;
(7) Renounce a claim of the partnership.
Exceptions: They may do so if:
(1) Authorized by all the partners; or
(2) The other partners have abandoned the
business [Article 1818, 3rd par.].
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C.4. ACTS IN CONTRAVENTION OF A
RESTRICTION
Any act of a partner in contravention of a
restriction on authority does not bind the
partnership to persons having knowledge of
the restriction [Article 1818, 4th par.].
D. CONVEYANCE OF PARTNERSHIP
REAL PROPERTY
D.1. TITLE IN PARTNERSHIP NAME
Any partner may convey the real property in
the name of the partnership.
The partnership can recover it, except when:
(1) The act of the partner binds the
partnership, when he has authority to carry
out the usual business of the partnership,
under Article 1818, 1st par.; or
(2) If not so authorized, the property has been
conveyed by the grantee, or a person
claiming under him, to a holder for value
and without knowledge that the partner
exceeded his authority [Article 1819, 1st
par.].
A partner authorized to carry out the usual
business may convey, in his own name, the
equitable interest of the partnership [Article
1819, 2nd par.].
D.2. TITLE IN THE NAME OF OTHER
PERSONS
Where the title is in the name of one or more
but not all the partners, and the record does
not disclose the right of the partnership:
(1) The partners having title may convey title.
(2) The partnership may recover it when the
partners conveying title have no authority
to carry on the usual business of the
partnership, unless the purchaser or his
assignee is:
(a) A holder for value; and
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(b) Without knowledge that the act
exceeded authority [Article 1819, 3rd
par.].
Where the title is in the name of one or more or
all the partners, or in a third person in trust for
the partnership a partner authorized to carry
on the usual business may convey equitable
title in the partnership name or in his own
name [Article 1819, 4th par.].
Where the title is in the names of all the
partners, a conveyance executed by all of them
passes all the rights to the property [Article
1819, 5th par.].
E. LIABILITY OF THE PARTNERSHIP
FOR ADMISSION BY A PARTNER
An admission or representation by any partner
may be used as evidence against the
partnership when:
(1) It concerns partnership affairs;
(2) Such affairs are within the scope of his
authority [Article 1820].
F. LIABILITY OF THE PARTNERSHIP
FOR WRONGFUL ACTS OF A
PARTNER
The partnership is solidarily liable with the
partner who causes loss or injury to any person
not a partner, or incurs any penalty through
any wrongful act or omission:
(1) In the ordinary course of the business of
the partnership; or
(2) Not in such ordinary course of business,
but with the authority of his co-partners
[Article 1822].
G. LIABILITY OF THE PARTNERSHIP
FOR MISAPPLICATION OF MONEY
OR PROPERTY
The partnership is liable for losses suffered by
a third person whose money or property was:
(1) Received by a partner:
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(a) Acting within the scope of his apparent
authority; and
(b) Misapplied it;
(2) Received by the partnership:
(a) In the course of its business; and
(b) Misapplied by any partner while it is in
the custody of the partnership [Article
1823].
H. LIABILITY OF THE OTHER
PARTNERS UNDER ARTICLES 1822
AND 1823
All partners are solidarily liable with the
partnership for its liabilities under Articles
1822 and 1823 [Article 1824].
This is without prejudice to the guilty partner
being liable to the other partners. However, as
far as third persons are concerned, the
partnership is answerable [De Leon (2010)].
I. LIABILITY IN CASE OF
PARTNERSHIP BY ESTOPPEL
I.1. PARTNER BY ESTOPPEL
A partner by estoppel is a person who, by
words spoken or written or by conduct [1]
represents himself as a partner or [2] consents
to another representing him to anyone as a
partner:
(1) In an existing partnership; or
(2) With one or more persons not actual
partners [Article 1825, 1st par.].
I.2. LIABILITY OF A PARTNER BY
ESTOPPEL
I. PERSONAL REPRESENTATION
A partner by estoppel is liable to any such
persons:
(1) To whom such representation has been
made; and
(2) Who has, on the faith of such
representation, given credit to the actual or
apparent partnership [Article 1825, 1st
par.].
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II. PUBLIC REPRESENTATION
If he has made such representation or
consented to its being made in a public
manner, whether the representation has or has
not been [personally] made or communicated
to such persons so giving credit by or with his
knowledge, and:
(1) Partnership liability results, he is liable as
though he were an actual member of the
partnership.
(2) No partnership liability results, he is liable
pro rata with the other persons, if any, so
consenting to the contract or
representation.
(3) When there are no such other persons, he
is separately liable [Article 1825, 1st par.].
I.3. EFFECT ON EXISTING PARTNERSHIP
OR OTHER PERSONS NOT ACTUAL
PARTNERS
(1) When a person has been represented to be
a partner (a) in an existing partnership, or
(b) with one or more persons not actual
partners, he is an agent of the persons
consenting to such representation to bind
them to the same extent and in the same
manner as though he were a partner in
fact, with respect to persons who rely upon
the representation.
(2) When all the members of the existing
partnership consent to the representation,
a partnership act or obligation results.
(3) In all other cases, it is the joint act or
obligation of the person acting and the
persons consenting to the representation
[Article 1825, 2nd par.].
I.4. NATURE OF LIABILITY
Summarizing Article 1825, a partner by
estoppel is liable in the following manner:
(1) He is liable as though he were a partner
when:
(a) There is an existing partnership;
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(b) All the partners consented to the
representation; and
(c) A partnership liability results.
(2) He is liable jointly and pro rata (as though
he were a partner in fact) with those who
consented to the representation when:
(a) There is an existing partnership but not
all the partners consented; or
(b) There is no existing partnership and all
those represented as partners
consented to the representation.
(3) He is liable separately when:
(a) There is an existing partnership but
none of the partners consented; or
(b) There is no existing partnership and
not all of those represented as partners
consented to the representation.
J. LIABILITY OF AN INCOMING
PARTNER
A person admitted as a partner is liable:
(1) For obligations incurred subsequent to his
admission as the other partners are liable;
(2) For obligations incurred before his
admission, but will be satisfied only out of
the partnership property, unless otherwise
stipulated that he fully assumes such
obligations.
Ratio:
(1) The new partner partakes of the benefits of
the partnership property and an already
established business.
(2) He has every means of obtaining full
knowledge of the debts of the partnership
and remedies that amply protect his
interest [De Leon (2010)].
K. NOTICE TO OR KNOWLEDGE OF
THE PARTNERSHIP
The following operate as notice to or
knowledge of the partnership:
(1) Notice to any partner of any matter
relating to partnership affairs;
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(2) Knowledge of the partner acting in the
particular matter acquired while a partner;
(3) Knowledge of the partner acting in the
particular matter then present to his mind;
or
(4) Knowledge of any other partner who
reasonably could and should have
communicated it to the acting partner.
These do not apply in case of fraud on the
partnership committed by or with the consent
of the partner [Article 1821].
V. Dissolution
A. CONCEPTS
Dissolution – the change in the relation of the
partners caused by any partner ceasing to be
associated in the carrying on of the business. It
is different from the winding-up of the
business [Article 1828]. It does not terminate
the partnership, which continues until the
winding up of partnership affairs is completed
[Article 1829].
Winding up – the actual process of settling the
partnership business or affairs after
dissolution. It involves collection and
distribution of partnership assets, payment of
debts, and determination of the value of the
interest of the partners in the partnership.
Termination – the point in time when all
partnership affairs are completely wound up
and finally settled. It signifies the end of the
partnership life [De Leon (2010)].
B. CAUSES OF DISSOLUTION
B.1. WITHOUT VIOLATION OF THE
AGREEMENT
(1) By the termination of the definite term or
particular undertaking specified in the
agreement;
(2) By the express will of any partner, who
must act in good faith, when no definite
term or particular is specified.
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(3) By the express will of all the partners who
have not assigned their interests or
suffered them to be charged for their
separate debts, either before or after the
termination of any specified term or
particular undertaking;
(4) By the expulsion of any partner from the
business bona fide in accordance with such
a power conferred by the agreement
between the partners [Article 1830(1)].
If, after the expiration of the definite term or
particular undertaking, the partners continue
the partnership without making a new
agreement, the firm becomes a partnership at
will [Article 1785].
Any one of the partners may, at his sole
pleasure, dictate the dissolution of the
partnership at will. He must, however, act in
good faith, not that the attendance of bad faith
can prevent the dissolution of the partnership
but that it can result in a liability for damages
[Ortega v. CA (1995)].
B.2. IN CONTRAVENTION OF THE
AGREEMENT
Where circumstances do not permit dissolution
under any other provision of Article 1830, it
may also be dissolved by the express will of any
partner at any time.
Thus, even if there is a specified term, one
partner can cause its dissolution by expressly
withdrawing even before the expiration of the
period, with or without justifiable cause. If the
cause is not justified or no cause was given, the
withdrawing partner is liable for damages but
in no case can he be compelled to remain in
the firm [Rojas v. Maglana (1990)].
B.3. BY OPERATION OF LAW
(1) By any event which makes it unlawful for
the business of the partnership to be
carried on or for the members to carry it on
in partnership;
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(2) When a specific thing which a partner had
promised to contribute, perishes before
delivery, or by the loss of the thing, only
the use or enjoyment of which has been
contributed; the loss of a specific thing,
however, does not dissolve the corporation
after its ownership has already been
transferred to the partnership;
(3) By the death of any partner;
(4) By the insolvency of any partner or of the
partnership;
(5) By the civil interdiction of any partner;
B.4. BY DECREE OF COURT
A partner may apply for dissolution in court
when:
(1) A partner has been declared insane in any
judicial proceeding or is shown to be of
unsound mind;
(2) A partner becomes in any other way
incapable of performing his part of the
partnership contract;
(3) A partner has been guilty of such conduct
as tends to affect prejudicially the carrying
on of the business;
(4) A partner willfully or persistently commits
a breach of the partnership agreement, or
otherwise so conducts himself in matters
relating to the partnership business that it
is not reasonably practicable to carry on
the business in partnership with him;
(5) The business of the partnership can only
be carried on at a loss;
(6) Other circumstances render a dissolution
equitable.
A person who acquires the interest of a partner
may likewise apply:
(1) After the termination of the specified term
or particular undertaking;
(2) At any time if the partnership was a
partnership at will when the interest was
assigned or when the charging order was
issued
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B.5. OTHER CAUSES
(1) When a new partner is admitted into an
existing partnership;
(2) When any partner retires;
(3) When the other partners assign their rights
to the sole remaining partner;
(4) When all the partners assign their rights in
the partnership property to third persons
[Article 1840].
The statutory enumeration of the causes of
dissolution is exclusive [De Leon (2010)].
C. EFFECTS OF DISSOLUTION
C.1. ON AUTHORITY OF THE PARTNERS
In general, upon dissolution, the authority of
the partners to represent the partnership is
confined only to acts necessary to:
(1) Wind up partnership affairs; or
(2) Complete transactions begun but not then
finished [Article 1832, 1st. par.].
C.1.A. WITH RESPECT TO PARTNERS
The authority of partners to act for the
partnership is terminated, with respect to
partners:
(1) When the dissolution is not by the act,
insolvency or death of a partner; or
(2) When the dissolution is by such act,
insolvency or death, when the partner
acting for the partnership has knowledge
or notice of the cause [Articles 1832 and
1833].
In other cases, each partner is still liable for his
share in the liability created by the partner
acting for the partnership [Article 1833].
C.1.B. WITH RESPECT TO THIRD
PERSONS
With respect to persons not partners:
(1) After dissolution, a partner can bind the
partnership by any act appropriate for:
(a) Winding up partnership affairs; or
PARTNERSHIP CIVIL LAW
(b) Completing transactions unfinished at
dissolution.
(2) He can also bind it by any transaction
which would bind the partnership as if
dissolution had not taken place, provided
the other party to the transaction:
(a) Had extended credit to the partnership
prior to dissolution and had no
knowledge or notice thereof; or
(b) Had not so extended credit but had
known of the partnership prior to
dissolution, and having no knowledge
or notice of dissolution, the fact had
not been advertised in a newspaper of
general circulation in the place [or in
each place if more than one] at which
the partnership business was regularly
carried on [Article 1834, 1st par.].
Note the character of the notice required:
(1) As to persons who extended credit to the
partnership prior to dissolution, notice
must be actual.
(2) As to persons who merely knew of the
existence of the partnership, publication in
a newspaper of general circulation in the
place of business of the partnership is
sufficient.
C.2. ON LIABILITY FOR TRANSACTIONS
AFTER DISSOLUTION
The liability of a partner, in general, is the
same as in ordinary contracts (pro rata and
subsidiary).
In the following cases, however, the liability
shall be satisfied out of the partnership assets
alone (i.e., there is no subsidiary liability):
1. When the partner had been, prior to the
dissolution, unknown as a partner to the
person with whom the contract is made;
2. When the partner had been, prior to the
dissolution, so far unknown or inactive in
partnership affairs that the business
reputation of the partnership could not
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be said to have been in any degree due to
his connection with it [Article 1834].
Any act of a partner after dissolution in no case
binds the partnership in the following cases:
(1) Where the partnership is dissolved because
it is unlawful to carry on the business,
unless the act is appropriate for winding up
partnership affairs;
(2) Where the partner has become insolvent;
(3) Or, where the partner has no authority to
wind up partnership affairs, except by a
transaction with one who:
(a) Had extended credit to the partnership
prior to dissolution and had no
knowledge or notice of his want of
authority; or
(b) Had not extended credit to the
partnership prior to dissolution, and,
having no knowledge or notice of his
want of authority, the fact of his want
of authority has not been advertised
[Article 1834].
Article 1834 does not affect the liability under
Article1825 of any person who, after
dissolution, represents himself or consents to
another representing him as a partner in a
partnership engaged in carrying on business
[Article 1834].
C.3. ON LIABILITY FOR CONTRACTS
AFTER DISSOLUTION BY SPECIFIC
CAUSES
General rule: A contract entered into by a
partner acting for the partnership after
dissolution by act, death or insolvency of a
partner binds the other partners.
Exceptions:
(1) The dissolution being by act of any partner,
the partner acting for the partnership had
knowledge of the dissolution; or
(2) The dissolution being by death or
insolvency of a partner, the partner acting
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CIVIL LAW
for the partnership had knowledge or
notice of the death or insolvency [Article
1833].
C.4. ON EXISTING LIABILITY OF
PARTNERS
General rule: Dissolution does not of itself
discharge the existing liability of any partner.
Exception: A partner may be relieved when
there is an agreement to that effect between:
(1) Himself;
(2) The partnership creditor; and
(3) The person or partnership continuing the
business.
Such agreement may be inferred from the
course of dealing between the creditor having
knowledge of the dissolution and the person or
partnership continuing the business.
In case of dissolution by death, the individual
property of a deceased partner is liable for
obligations of the partnership incurred while
he was a partner, after payment of his separate
debts [Article 1835].
D. WINDING UP PARTNERS
D.1. WHO MAY WIND UP
The following partners have the right to wind
up the partnership affairs:
(1) Those designated in an agreement;
(2) Those who have not wrongfully dissolved
the partnership; or
(3) The legal representative of the last
surviving partner, who was not insolvent.
Any partner or his legal representative or
assignee may obtain winding up by the court,
upon cause shown [Article 1836].
D.2. MANNER OF WINDING UP
1. Extrajudicial, by the partners themselves;
or
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2. Judicial, under the control and direction
of the proper court.
The action for liquidation of the partnership is
personal. The fact that sale of assets, including
real property, is involved does not change its
character, such sale being merely a necessary
incident of the liquidation of the partnership,
which should precede and/or is part of its
process of dissolution [Claridades v. Mercader
(1966)].
E. RIGHTS OF PARTNERS IN CASE OF
DISSOLUTION
E.1. DISSOLUTION WITHOUT VIOLATION
OF THE AGREEMENT
Each partner may have:
(1) The partnership property applied to
discharge the partnership liabilities; and
(2) The surplus applied in cash to the net
amount owing to the respective partners.
This is a right as against his co-partners and all
partners claiming through them in respect of
their interests in the partnership. It cannot be
availed if there is an agreement to the contrary
[Article 1837 (1)].
E.2. DISSOLUTION IN CONTRAVENTION
OF THE AGREEMENT
I. PARTNER WHO DID NOT CAUSE THE
DISSOLUTION
The partners who did not cause the dissolution
wrongfully has the following rights:
(1) To demand the right under Article 1837, 1st
par.;
(2) To be indemnified for damages for breach
of the agreement against the partner who
caused the dissolution wrongfully [Article
1837(1)];
(3) To continue the business:
(a) In the same name;
(b) By themselves or jointly with others;
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CIVIL LAW
(c) During the agreed term for the
partnership.
For the purpose of continuing the business, the
said partners may possess the partnership
property provided:
(1) They secure the payment by bond
approved by the court; or
(2) They pay any partner who has caused the
dissolution wrongfully the value of his
interest in the partnership, less any
damages recoverable, and indemnity
against all present or future partnership
liabilities [Article 1837(2)].
II. PARTNER WHO CAUSED THE
DISSOLUTION
The partner who caused the dissolution
wrongfully has the following rights:
(1) If the business is not continued, all the
rights Article 1837, 1st par., subject to
liability for damages;
(2) If the business is continued, the right, as
against his co-partners and all claiming
through them, to:
(a) Ascertainment, without considering the
value of the goodwill of the business,
and payment to him in cash the value
of his partnership interest, less any
damage, or have the payment secured
by a bond approved by the court; and
(b) Be released from all existing liabilities
of the partnership [Article 1837(3)].
The goodwill of a business may be defined to
be the advantage which it has from its
establishment or from the patronage of its
customers, over and above the mere value of
its property and capital. The goodwill [which
includes the firm name] is part of the
partnership assets and may be subject of sale
[De Leon (2010)].
F. RIGHTS OF PARTNERS IN CASE OF
RESCISSION
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A partner, who is induced by fraud or
misrepresentation to become such partner,
may rescind the contract. Without prejudice to
any other right, he is entitled:
(1) To a lien on, or right of retention of, the
surplus of the partnership property after
satisfying the partnership liabilities to third
persons for any sum of money paid by him
for the purchase of an interest in the
partnership and for any capital or advances
contributed by him;
(2) To stand, after all liabilities to third
persons have been satisfied, in the place of
the creditors of the partnership for any
payments made by him in respect of the
partnership liabilities; and
(3) To be indemnified by the person guilty of
the fraud or making the representation
against all debts and liabilities of the
partnership [Article 1838].
G. SETTLING OF ACCOUNTS
BETWEEN PARTNERS
Subject to any agreement to the contrary, the
following rules shall be observed in settling
accounts between partners after dissolution.
G.1. COMPOSITION OF PARTNERSHIP
ASSETS
(1) The partnership property; and
(2) The contributions of the partners necessary
for the payment of all the liabilities [Article
1839(1)].
In accordance with the subsidiary liability of
the partners, the partnership property shall be
applied first to satisfy any liability of the
partnership [Article 1839(3)].
G.2. AMOUNT OF CONTRIBUTION FOR
LIABILITIES
The rules for distribution of losses shall
determine the contributions of the partners
[Article 1839(4)]. As such:
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CIVIL LAW
(1) The contribution shall be in conformity
with the agreement.
(2) If only the share in profits has been
stipulated, the contribution shall be in the
same proportion.
(3) In the absence of any stipulation, the
contribution shall be in proportion to the
capital contribution [Article 1797].
G.3. ENFORCEMENT OF CONTRIBUTION
The following persons have the right to enforce
the contributions:
(1) An assignee for the benefit of creditors;
(2) Any person appointed by the court; or
(3) To the extent of the amount which he has
paid in excess of his share of the
partnership liability, any partner or his
legal representative [Article 1839(5) and
(6)].
The individual property of a deceased partner
shall be liable for the contributions [Article
1839(7)].
G.4. ORDER OF APPLICATION OF
ASSETS
The partnership liabilities shall rank, in order
of payment, as follows:
(1) Those owing to creditors other than
partners;
(2) Those owing to partners other than for
capital and profits;
(3) Those owing to partners in respect of
capital;
(4) Those owing to partners in respect of
profits [Article 1839(2).
G.5. DOCTRINE OF MARSHALING OF
ASSETS
When partnership property and the individual
properties of the partners are in possession of
a court for distribution:
(1) Partnership creditors have priority on
partnership property;
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(2) Separate creditors have priority on
individual property, saving the rights of lien
of secured creditors.
(3) Anything left from either shall be applied
to satisfy the other [Article 1839(8)].
G.6. DISTRIBUTION OF PROPERTY OF
INSOLVENT PARTNER
Where a partner has become insolvent or his
estate is insolvent, the claims against his
separate property shall rank in the following
order:
(1) Those owing to separate creditors;
(2) Those owing to partnership creditors;
(3) Those owing to partners by way of
contribution [Article 1839(9)].
H. RIGHTS OF CREDITORS OF
DISSOLVED PARTNERSHIP
H.1. AS CREDITORS OF THE NEW
PARTNERSHIP
In the following cases, creditors of the
dissolved partnership are also creditors of the
person or partnership continuing the business:
(1) When the business is continued without
liquidation, and the cause of dissolution is:
(a) Admission of a new partner into the
existing partnership;
(b) Retirement or death of any partner,
and his rights to partnership property
are assigned to [1] two or more of the
partners, or [2] one or more of the
partners and one or more third
persons;
(c) Retirement of all but one partner, and
their rights to partnership property are
assigned to the remaining partner,
who continues the business, either
alone or with others;
(d) Wrongful dissolution by any partner,
and the remaining partners continue
the business, either alone or with
others;
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CIVIL LAW
(e) Expulsion of a partner, and the
remaining partners continue the
business, either alone or with others.
(2) When the cause of dissolution is the
retirement or death of any partner, and
business is continued with the consent of
the retired partner or the representative of
the deceased partner, without assignment
of their rights to partnership property.
(3) When the cause of dissolution is the
assignment by all the partners or their
representatives of their rights in
partnership property to one or more third
persons who promise to pay the debts and
who continue the business of the
partnership [Article 1840, 1st par.].
H.2. LIABILITY OF A NEW PARTNER
The liability to the creditors of the dissolved
partnership of a new partner in the partnership
continuing the business shall be satisfied out
of the partnership property alone. However, he
may, through agreement, assume individual
liability [Article 1840, 2nd par.].
H.3. PRIORITY OF CREDITORS OF
DISSOLVED PARTNERSHIP
Creditors of the dissolved partnership have
prior right to any claim of the retired partner or
the representative of the deceased partner
against the person or partnership continuing
the business [Article 1840, 3rd par.].
This is without prejudice to the right of
creditors to set aside any assignment on the
ground of fraud [Article 1840, 4th par.].
I. RIGHTS OF A RETIRED PARTNER
OR A REPRESENTATIVE OF
DECEASED PARTNER
Unless otherwise agreed upon, when any
partner retires or dies, and the business is
continued without any settlement of accounts
as between him or his estate and the person or
partnership continuing the business, he or his
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legal representative, as against such person or (2) The business is controlled or managed by
partnership, subject to the prior rights of one or more general partners, who are
creditors of the dissolved partnership: personally liable to creditors [Articles 1848
(1) May have the value of his interest at the and 1850].
date of dissolution ascertained; and (3) One or more limited partners contribute to
(2) Shall receive as an ordinary creditor: the capital and share in the profits but do
(a) An amount equal to the value of his not manage the business and are not
interest in the dissolved partnership personally liable for partnership
with interest; or obligations beyond their capital
(b) At his option or at the option of his contributions [Articles 1845, 1848 and
legal representative, in lieu of interest, 1856].
the profits attributable to the use of his (4) Obligations or debts are paid out of the
right in the property of the dissolved partnership assets and the individual
partnership [Article 1841]. property of the general partners [Article
1843].
J. RIGHT TO AN ACCOUNT (5) The limited partners may have their
In the absence of any agreement to the contributions back subject to conditions
contrary, the right to an account of his interest prescribed by law [Articles 1844 and 1957].
shall accrue to any partner, or his legal
representative at the date of dissolution, as A limited partnership has the following
against: advantages:
(1) The winding up partners; (1) For general partners, to secure capital
(2) The surviving partners; or from others while retaining control and
(3) The person or partnership continuing the supervision for the business;
business [Article 1842]. (2) For limited partners, to have a share in the
profits without risk of personal liability.
VI. Limited Partnership C. GENERAL AND LIMITED
A. DEFINITION
PARTNERS DISTINGUISHED
A limited partnership is:
(1) A partnership; General partner Limited partner
(2) Formed by two or more persons; Extent of liability
(3) Having as members: Personally, but Liable only to the
(a) One or more general partners; and subsidiarily, liable extent of his capital
(b) One or more limited partners. for obligations of contributions
the partnership
The limited partners as such shall not be
bound by the obligations of the partnership Right to participate in management
[Article 1843]. Unless otherwise No right to
agreed upon, all participate in
B. CHARACTERISTICS general partners management
(1) A limited partnership is formed by have an equal right
compliance with the statutory to manage the
requirements [Article 1844]. partnership
Nature of contribution

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Cash, property or Cash or property Article 1844; and [2]

industry only, not industry file the certificate
Proper party in proceedings by or against for record in the SEC
partnership Composition
Proper party Not proper party, Only general One or more
unless [1] he is partners general, and one or
also a general more limited
partner; or [2] where partners
the object of the Firm name
proceedings is to
enforce his right Must contain the Must include the
against or liability to word “Company” word “Limited” [SEC
the partnership [SEC Memo Circ No. Memo. Circ. No. 14-
14-00], except for 00]
Firm name professional
Name may appear Name must not partnerships Must not include
in the firm name appear in the firm name of limited
name May or may not partners, unless: [1]
Prohibition to engage in other business include the name of it is also the
one or more of the surname of a
Prohibited [subject Not prohibited partners general partner, or
to qualifications] [2] prior to the time
Effect of retirement, death, insanity or when the limited
insolvency partner became
Dissolves Does not dissolve such, the business
partnership partnership; rights has been carried on
transferred to under a name in
executor or which his surname
administrator for appeared
selling his estate Rules governing dissolution
Assignability of interest Articles1828-1842 Articles 1860-1863
Not assignable Assignable
E. FORMATION
D. GENERAL AND LIMITED E.1. GENERAL REQUIREMENTS
Two or more persons desiring to form a limited
PARTNERSHIP DISTINGUISHED
partnership shall:
General Limited (1) Sign and swear to a certificate stating the
partnership partnership
items in Article 1844; and
Creation (2) File for record the certificate in the SEC
May be constituted Partners must: [1] [Article 1844].
in any form, subject sign and swear to a
to exceptions certificate in A limited partnership is formed if there is
compliance with substantial compliance in good faith with the

415
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requirements. When there is failure to
substantially comply with the requirements:
(1) In relation to third persons, the partnership
is general, unless they recognized that the
firm is a limited partnership; and
(2) As between the partners, the partnership
remains limited, since they are bound by
their agreement [De Leon (2010)].
E.2. PURPOSE OF FILING
The purpose of filing the certificate in the SEC
is:
(1) To give actual or constructive notice to
potential creditors or persons dealing with
the partnership; and
(2) To acquaint them with its essential
features, including the limited liability of
limited partners [De Leon (2010)].
E.3. FIRM NAME
General rule: The surname of a limited partner
shall not appear in the partnership name.
Exceptions:
(1) It is also the surname of a general partner;
or
(2) Prior to the time when the limited partner
became such, the business had been
carried on under a name in which his
surname appeared.
A limited partner whose surname appears in a
partnership name contrary to this prohibition is
liable as a general partner to partnership
creditors who extend credit without actual
knowledge that he is not a general partner.
E.4. FALSE STATEMENT IN THE
CERTIFICATE
If the certificate contains a false statement,
one who suffers loss by reliance thereon may
hold liable any party to the certificate who
knew the statement to be false:
(1) At the time he signed the certificate; or
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CIVIL LAW
(2) Subsequently, but within a sufficient time
before the statement was relied upon to
enable him to cancel or amend the
certificate, or to file a petition for its
cancellation or amendment [Article 1847].
REQUISITES:
(1) The partner knew the statement to be
false:
(a) At the time he signed the certificate; or
(b) Subsequently, but having sufficient
time to cancel or amend it, or file a
petition for its cancellation or
amendment, and he failed to do so;
(2) The person seeking to enforce liability has
relied upon the false statement in
transacting business with the partnership;
and
(3) The person suffered loss as a result of
reliance upon such false statement.
E.5. GENERAL AND LIMITED PARTNER
AT THE SAME TIME
A person may be a general and a limited
partner in the same partnership at the same
time. This fact must be stated in the certificate.
A person who is a general, and also at the
same time a limited partner, shall have all the
rights and powers, and be subject to all the
restrictions of a general partner, except that, in
respect to his contribution as a limited partner,
he shall have the rights against the other
members which he would have had if he were
not also a general partner [Article 1853].
F. MANAGEMENT
Only general partners have the right to
manage the partnership. If a limited partner
takes part in the control of the business, he
becomes liable as a general partner [Article
1848].
A general partner shall have the rights and
powers and be subject to all restrictions and
liabilities of a partner in a partnership without
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limited partners. Thus, he has general
authority over the business.
However, written consent or ratification by all
limited partners is necessary to authorize the
general partners to:
(1) Do any act in contravention of the
certificate;
(2) Do any act which would make it impossible
to carry on the ordinary business of the
partnership;
(3) Confess a judgment against the
partnership;
(4) Possess partnership property, or assign
their rights in specific property, for other
than a partnership purpose;
(5) Admit a person as a general partner;
(6) Admit a person as a limited partner, unless
the right to do so is given in the certificate;
(7) Continue the business with partnership
property on the death, retirement, insanity,
civil interdiction or insolvency of a general
partner, unless the right so to do is given in
the certificate
G. OBLIGATIONS OF A LIMITED
PARTNER
G.1. OBLIGATIONS RELATED TO
CONTRIBUTION
The contributions of a limited partner may be
cash or other property, but not services [Article
1845].
A limited partner is liable for partnership
obligations when he contributes services
instead of only money or property to the
partnership [De Leon (2010)].
A limited partner is liable to the partnership:
(1) For the difference between his actual
contribution and that stated in the
certificate as having been made; and
(2) For any unpaid contribution which he
agreed in the certificate to make in the
future at the time and on the conditions
stated in the certificate [Article 1858, 1st
par.].
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CIVIL LAW
He holds as trustee for the partnership:
(1) Specific property stated in the certificate as
contributed by him, but which was not
contributed or which has been wrongfully
returned; and
(2) Money or other property wrongfully paid or
conveyed to him on account of his
contribution [Article 1858, 2nd par.].
These liabilities can be waived or compromised
only by the consent of all members. Such
waiver or compromise, however, shall not
affect the right to enforce said liabilities of a
creditor:
(1) Who extended credit; or
(2) Whose claim arose, after the filing or
before a cancellation or amendment of the
certificate, to enforce such liabilities
[Article 1858, 3rd par.].
Even after a limited partner has rightfully
received the return in whole or in part of his
capital contribution, he is still liable to the
partnership for any sum, not in excess of such
return with interest, necessary to discharge its
liabilities to all creditors:
(1) Who extended credit; or
(2) Whose claims arose before such return
[Article 1858, 4th par.].
A person who has contributed capital to a
partnership, erroneously believing that he has
become a limited partner, but his name
appears in the certificate as a general partner
or he is not designated as a limited partner, is
not personally liable as a general partner by
reason of his exercise of the rights of a limited
partner, provided:
(1) On ascertaining the mistake, he promptly
renounces his interest in the profits of the
business or other compensation by way of
income [Article 1852];
UP LAW BOC PARTNERSHIP
(2) He does not participate in the
management of the business [Article
1848]; and
(3) His surname does not appear in the
partnership name [Article 1846].
G.2. LIABILITY TO PARTNERSHIP
CREDITORS
General rule: A limited partner is not liable as a
general partner. His liability is limited to the
extent of his contributions [Article 1843].
Exceptions: The limited partner is liable as a
general partner when:
(1) His surname appears in the partnership
name, with certain exceptions [Article
1846, 2nd par.].
(2) He takes part in the control of the business
[Article 1848].
G.3. LIABILITY TO SEPARATE
CREDITORS
On due application to a court of competent
jurisdiction by any separate creditor of a
limited partner, the court may:
(1) Charge his interest with payment of the
unsatisfied amount of such claim;
(2) Appoint a receiver; and
(3) Make all other orders, directions and
inquiries which the circumstances of the
case may require.
The interest so charged may be redeemed with
the separate property of any general partner,
but may not be redeemed with partnership
property [Article 1862].
Note: In a general partnership, the interest
may be redeemed with partnership property
with the consent of all the partners whose
interests are not charged [Article 1814].
H. RIGHTS OF A LIMITED PARTNER
H.1. IN GENERAL
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CIVIL LAW
A limited partner shall have the same rights as
a general partner to:
(1) Require that the partnership books be kept
at the principal place of business of the
partnership;
(2) To inspect and copy any of them at a
reasonable hour;
(3) To demand true and full information of all
things affecting the partnership;
(4) To demand a formal account of
partnership affairs whenever
circumstances render it just and
reasonable;
(5) To ask for dissolution and winding up by
decree of court;
(6) To receive a share of the profits or other
compensation by way of income; and
(7) To receive the return of his contribution
provided the partnership assets are in
excess of all its liabilities [Article 1851].
H.2. RIGHT TO TRANSACT BUSINESS
WITH THE PARTNERSHIP
A limited partner may:
(1) Loan money to the partnership;
(2) Transact other business with the
partnership; and
(3) Receive a pro rata share of the partnership
assets with general creditors if he is not
also a general partner [Article 1854, 1st
par.].
Limitations: A limited partner, with respect to
his transactions with the partnership, cannot:
(1) Receive or hold as collateral security any
partnership property; or
(2) Receive any payment, conveyance, or
release from liability if it will prejudice the
right of third persons [Article 1854, 1st
par.].
Violation of the prohibition is considered a
fraud on the creditors of the partnership
[Article 1854, 2nd par.].
UP LAW BOC PARTNERSHIP
H.3. RIGHT TO SHARE IN PROFITS
A limited partner may receive from the
partnership the share of the profits or the
compensation by way of income stipulated for
in the certificate.
This right is subject to the condition that
partnership assets will still be in excess of
partnership liabilities after such payment
[Article 1856]. The partnership liabilities being
referred to exclude the liabilities to the limited
and general partners.
Ratio: Otherwise, he will receive a share to the
prejudice of third-party creditors.
H.4. RIGHT TO RETURN OF
CONTRIBUTION
A limited partner may have his contributions
withdrawn or reduced when:
(1) All the liabilities of the partnership, except
liabilities to general partners and to
limited partners on account of their
contributions, have been paid or there
remains property of the partnership
sufficient to pay them;
(2) The consent of all members is had, unless
the return may be demanded as a matter
of right; and
(3) The certificate is cancelled or so amended
as to set forth the withdrawal or reduction
[Article 1857, 1st par.].
The return of his contributions may be
demanded, as a matter of right [i.e., even when
not all the other partners consent], when (1)
and (2) above are complied with:
(1) On the dissolution of the partnership;
(2) Upon the arrival of the date specified in the
certificate for the return; or
(3) After the expiration of a 6-month notice in
writing given by him to the other partners,
if no time is fixed in the certificate for:
(a) The return of the contribution; or
(b) The dissolution of the partnership
[Article 1857, 2nd par.].
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CIVIL LAW
General rule: A limited partner, irrespective of
the nature of his contribution has only the right
to demand and receive cash in return for his
contribution.
Exceptions: He may receive his contribution in
a form other than cash when:
(1) There is a statement in the certificate to
the contrary; or
(2) All the members of the partnership
consent [Article 1857, 3rd par.].
H.5. PREFERENCE OF LIMITED
PARTNERS
General rule: The limited partners stand on
equal footing.
Exception: By an agreement of all the partners
[general and limited] in the certificate, priority
or preference may be given to some limited
partners over others with respect to:
(1) The return of contributions;
(2) Their compensation by way of income; or
(3) Any other matter [Article 1855].
H.6. RIGHT TO ASSIGN INTEREST
The interest of a limited partner is assignable.
The assignee may become:
(1) A substituted limited partner; or
(2) A mere assignee.
A substituted limited partner is a person
admitted to all the rights of a limited partner
who has died or has assigned his interest in a
partnership. He has all the rights and powers,
and is subject to all the restrictions and
liabilities of his assignor, except those
liabilities which:
(1) The assignee was ignorant of; and
(2) Cannot be ascertained from the certificate
[Article 1859, 2nd and 6th pars.i.
An assignee is only entitled to receive the share
of the profits or other compensation by way of
UP LAW BOC
income, or the return of contribution, to which
the assignor would otherwise be entitled. He
has no right:
(1) To require any information or account of
the partnership transactions;
(2) To inspect the partnership books [Article
1859, 3rd par.].
An assignee has the right to become a
substituted limited partner if:
(1) All the partners consent thereto; or
(2) The assignor, being empowered to do so by
the certificate, gives him that right [Article
1859, 4th par.].
An assignee becomes a substituted limited
partner when the certificate is appropriately
amended [Article 1859, 5th par.].
H.7. RIGHT TO ASK FOR DISSOLUTION
A limited partner may have the partnership
dissolved and its affairs wound up when:
(1) He rightfully but unsuccessfully demands
the return of his contribution; or
(2) He has a right to contribution but his
contribution is not paid because the
partnership property is insufficient to pay
its liabilities [Article 1857, 4th par.].
I. DISSOLUTION
A limited partnership is dissolved in much the
same way and causes as an ordinary
partnership [De Leon (2010)].
General rule: The retirement, death, insolvency,
insanity or civil interdiction of a general partner
dissolves the partnership.
Exception: It is not so dissolved when the
business is continued by the remaining general
partners:
(1) Under a right to do so stated in the
certificate; or
(2) With the consent of all members [Article
1860].
PARTNERSHIP CIVIL LAW
Upon the death of a limited partner, his
executor or administrator shall have:
(1) All the rights of a limited partner for the
purpose of settling his estate; and
(2) The power to constitute an assignee as a
substituted limited partner, if the deceased
was so empowered in the certificate.
The estate of a deceased limited partner shall
be liable for all his liabilities as a limited
partner [Article 1861].
J. SETTLEMENT OF ACCOUNTS
J.1. ORDER OF PAYMENT
In settling accounts after dissolution, the
liabilities of the partnership shall be
entitled to payment in the following order:
(1) Those to creditors, including limited
partners except those on account of their
contributions, in the order of priority as
provided by law;
(2) Those to limited partners in respect to their
share of the profits and other
compensation by way of income in their
contributions;
(3) Those to limited partners in respect to the
capital of their contributions;
(4) Those to general partners other than for
capital and profits;
(5) Those to general partners in respect to
profits;
(6) Those to general partners in respect to
capital [Article 1863, 1st par.].
Note: In settling accounts of a general
partnership, those owing to partners in respect
to capital enjoy preference over those in
respect to profits.
J.2. SHARE IN THE PARTNERSHIP
ASSETS
The share of limited partners in respect to their
claims for capital, profits, or for compensation
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by way of income, is in proportion of their K.3. REQUIREMENTS FOR AMENDMENT

contribution, unless: OR CANCELLATION
(1) There is a statement in the certificate as to To amend or cancel a certificate:
their share in the profits; or (1) The amendment or cancellation must be in
(2) There is a subsequent agreement fixing writing;
their share [Article 1863]. (2) It must be signed and sworn to by all the
members including the new members, and
K. AMENDMENT OR CANCELLATION the assigning limited partner in case of
OF CERTIFICATE substitution or addition of a limited or
K.1. CANCELLATION OF CERTIFICATE general partner; and
The certificate shall be cancelled when: (3) The writing to amend (with the certificate,
(1) The partnership is dissolved; or as amended) or to cancel must be filed for
(2) All limited partners cease to be such record in the SEC.
limited partners.
When a person required to sign the writing, a
K.2. AMENDMENT OF CERTIFICATE person desiring the cancellation or
A certificate shall be amended when: amendment may petition the court to order
(1) There is a change in the name of the cancellation or amendment. The court shall
partnership or in the amount or character order the SEC to record the cancellation or
of the contribution of any limited partner; amendment if it finds that the petitioner has a
(2) A person is substituted as a limited right to have the writing executed.
partner;
(3) An additional limited partner is admitted; From the moment the amended
(4) A person is admitted as a general partner; certificate/writing or a certified copy of a court
(5) A general partner retires, dies, becomes order granting the petition for amendment has
insolvent or insane, or is sentenced to civil been filed, such amended certificate shall
interdiction and the business is continued; thereafter be the certificate of partnership
(6) There is a change in the character of the [Article 1865].
business of the partnership;
(7) There is a false or erroneous statement in
the certificate;
(8) There is a change in the time as stated in
the certificate for the dissolution of the
partnership or for the return of a
contribution;
(9) A time is fixed for the dissolution of the
partnership, or the return of a contribution,
no time having been specified in the
certificate; or
(10) The members desire to make a change in
any other statement in the certificate in
order that it shall accurately represent the
agreement among them [Article 1864].

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CIVIL LAW
CREDIT TRANSACTIONS

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I. Loan COMMODATUM VS. MUTUUM

Commodatum Mutuum
CONTRACTS OF LOAN
(1) Commodatum – a contract where one Ordinarily involves Involves money or
party delivers to another something not something not other consumable
consumable so that the latter may use the consumable* thing
same for a certain sum and return it. [Art. [Art.1936]
1933] Ownership of the thing Ownership is
(2) Mutuum (Simple Loan) – a contract where loaned is retained by transferred to the
one party delivers to another money or lender [Art.1933] borrower
other consumable thing, upon the
Essentially gratuitous May be gratuitous or
condition that the same amount of the
[Art.1933] onerous, i.e. with
same kind and quality shall be paid. [Art.
stipulated interest
1933]
Borrower must return Borrower need only
CONTRACT OF LOAN VS. CONTRACT the same thing loaned pay an equal amount
[Art.1933] of the same kind and
TO LOAN
quality [Art. 1953]
Contract of Loan Contract to Loan
May involve real or Refers only to personal
Real Contract; Consensual Contract: personal property property
perfected, not by mere perfected by mere [Art.1937]
consent, but the consent.
Loan for use or Loan for consumption
delivery of the
temporary possession
contract.
[Art.1935]
Ownership of the thing Ownership is
Bailor may demand Lender may not
loaned is retained by transferred to the
the return of the thing demand its return
lender [Art.1933] borrower
loaned before the before the lapse of the
expiration of the term term agreed upon
SIMPLE LOAN VS. BARTER in case of urgent need
In simple loan, the primary purpose of the [Art.1946]
contract is the permissive use of the money or
Bailor suffers the loss Borrower suffers the
consumable property. Ownership is transferred
of the subject matter loss even if caused
as a necessary consequence of the permissive
since he is the owner exclusively by a
use of the property loan
[Art.1942; Art.1174] fortuitous event and
he is not, therefore,
In barter, the primary purpose of the contract is
discharged from his
the transfer of ownership of a non-fungible
duty to pay
property, and payment is made by giving some
thing of the same kind, quantity and quality Purely personal in Not purely personal in
character [Art 1939] character

A. COMMODATUM
Commodatum – an essentially gratuitous
contract where one party delivers to another

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something not consumable so that the latter
may use the same for a certain time and return
it. [Art. 1933]
A.1. KINDS OF COMMODATUM
(1) Ordinary commodatum – the use of the
thing by the bailee is for a certain period of
time [Art. 1933]
(2) Precarium – one where the bailor may
demand the thing loaned at will; if any one
of the following is present
(a) The duration and purpose of the
contract is not stipulated
(b) The use of the thing is merely tolerated
by the owner [Art. 1947]
A.2. PARTIES
The Civil Code refers to the parties in a
commodatum as the bailor (creditor) or bailee
(debtor).
Who may be a bailor in commodatum?
Anyone. The bailor in commodatum need not
be the owner of the thing loaned. [Art. 1938]
But the bailee himself may not lend nor lease
the thing loaned to him to a third person. [Art.
1939 (2)]
A.3. OBLIGATIONS OF THE BAILEE
(1) Obligation to take care of it with the proper
diligence of a good father of a family. [Art.
1163]
(2) Obligation to use the thing loaned only for
the purpose for which it was loaned and
not for any other purpose. [Art. 1935, 1939
[2], 1942 [1]]
(3) Obligation to not lend the thing to a third
person who is not a member of his
household. [Art. 1942 [4]]
(4) Obligation to return the thing upon the
expiration of the period stipulated or after
the accomplishment of the use for which it
has been constituted. [Art. 1944, 1946]
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CIVIL LAW
(5) Obligation to pay for the ordinary expenses
for the use and preservation of the thing
loaned. [Art. 1941]
(6) Obligation to be solidarily liable when
there are two or more bailees to whom a
thing is loaned in the same contract. [Art.
1945]
A.4. OBLIGATIONS OF THE BAILOR
(1) Obligation to refund the extraordinary
expenses during the contract for the
preservation of the thing loaned. [Art.
1949]
(2) Obligation to bear equally the
extraordinary expenses arising on the
occasion of actual use of the thing by the
bailee. [Art. 1949]
Exception: Contrary stipulation
(3) Obligation to pay damages to the bailee
for hidden flaws known to the bailor. [Art.
1951]
NOTE: Bailor has no right of abandonment; he
cannot exempt himself from payment of
expenses or damages to the bailee by
abandoning the thing to the latter. [Art. 1952]
A.5. LIABILITY FOR DETERIORATION
General rule: the bailee is liable for the
deterioration of the thing loaned.
Exception: when the deterioration of the thing
is due only to the use thereof and without his
fault. [Art. 1943]
A.6. RIGHT OF RETENTION
General Rule: the Bailee has no right of
retention of the thing loaned on the ground
that the Bailor owes him something, even
though it may be by reason of expenses.
Exception: the Bailee has the right of retention
for damages arising from hidden flaws. [Art.
1944]
UP LAW BOC CREDIT TRANSACTIONS
B. MUTUUM
Mutuum – a contract where one of the parties
delivers to another money or other consumable
thing upon the condition that the same
amount of the same kind and quality shall be
paid.
B.1. OBLIGATIONS OF THE BORROWER
(1) Obligation to pay to the creditor an equal
amount of the same kind and quality. [Art.
1953]
(2) If stipulated, the borrower has the
obligation to pay interest. [Art. 1956]
B.2. INTEREST AND SUSPENSION OF
USURY LAW
Interest – the compensation allowed by law or
fixed by the parties for the loan or forbearance
of money, goods or credits.
B.3. KINDS OF INTEREST
(1) Simple interest – Paid for the principal at a
certain rate fixed or stipulated by the
parties.
(2) Compound Interest – that which is imposed
upon interest due and unpaid.
(3) Legal Interest – that which the law directs
to be charged in the absence of any
agreement as to the rate between the
parties.
(4) Lawful Interest – that which the laws allow
or do not prohibit.
(5) Unlawful or Usurious Interest – paid or
stipulated to be paid beyond the maximum
fixed by law. However, by virtue of CB
Circular 905, usury has become “legally
inexistent.”
B.4. WHEN IS COMPOUND INTEREST
ALLOWED?
(1) When there is an express written
stipulation to that effect [Art.1956]
(2) Upon judicial demand. However, debtor is
not liable to pay compound interest even
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CIVIL LAW
after judicial demand when there is no
stipulation for payment of interest.
[Art.2212]
B.5. REQUISITES FOR INTEREST TO BE
CHARGEABLE
(1) Must be expressly stipulated [Art. 1956]
Exceptions:
(a) The debtor in delay is liable to pay
legal interest (6% or 12% per annum)
as indemnity for damages [Art.2209]
(b) Interest accruing from unpaid interest
– Interest demanded shall earn
interest from the time it is judicially
demanded [Art.2212] or where there is
an express stipulation [Art.1959]
(2) Agreement must be in writing [Art.1956]
(3) Must be lawful
Rules for award of interest in the concept of
actual and compensatory damages [Nacar v.
Gallery Frames, G.R. No. 189871 [2013]
modifying Eastern Shipping Lines vs. CA,
[1994] in light of BSP-MB Circular No. 799]
(1) 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.
Furthermore, the interest due shall itself
earn legal interest from the time it is
judicially demanded. In the absence of
stipulation, the rate of interest shall be 6%
per annum to be computed from default,
i.e., from judicial or extrajudicial demand
under and subject to the provisions of
Article 1169 of the Civil Code.
(2) When an obligation, not constituting a loan
or forbearance of money, is breached, an
interest on the amount of damages
awarded may be imposed at the discretion
of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on
unliquidated claims or damages, except
when or until the demand can be
UP LAW BOC CREDIT TRANSACTIONS
established with reasonable certainty.
Accordingly, where the demand is
established with reasonable certainty, the
interest shall begin to run from the time
the claim is made judicially or
extrajudicially [Art. 1169, Civil Code], but
when such certainty cannot be so
reasonably established at the time the
demand is made, the interest shall begin
to run only from the date the judgment of
the court is made [at which time the
quantification of damages may be deemed
to have been reasonably ascertained]. The
actual base for the computation of legal
interest shall, in any case, be on the
amount finally adjudged.
(3) When the judgment of the court awarding a
sum of money becomes final and executory,
the rate of legal interest, whether the case
falls under paragraph 1 or paragraph 2,
above, shall be 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.
Forbearance – within the context of usury law,
is a contractual obligation of lender or creditor
to refrain, during given period of time, from
requiring borrower or debtor to repay loan or
debt then due and payable [Bataan Seedling v.
Republic, 383 SCRA 590]
THE USURY LAW (Act No.2566) – an act fixing
rates of interests upon loans and declaring the
effect of receiving or taking usurious rates and
for other purposes. [Arevalo v. Dimayuga,
1927]
CB Circular No. 905 abolished interest rate
ceilings. With the promulgation of such
circular, usury has become “legally inexistent”
as the parties can now legally agree on any
interest that may be charged on the loan.
B.6. ELEMENTS OF USURY
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CIVIL LAW
(a) A loan or forbearance of money
(b) An understanding between parties that the
loan shall and may be returned
(c) An unlawful intent to take more than the
legal rate for the use of money or its
equivalent
(d) The taking or agreeing to take for the use
of the loan of something in excess of what
is allowed by law.
Note: A usurious loan transaction is not a
complete nullity but defective only with respect
to the agreed interest. [Carpo v. Chua, G.R.
Nos. 150773 and 153599, September 30, 2005]
II. Deposit
A deposit is constituted from the moment a
person receives a thing belonging to another,
with the obligation of safely keeping it and of
returning the same. [Art. 1962]
OBJECT OF DEPOSIT
Art. 1966 provides that only movable things
may be the object of a deposit. However, Art.
2006 provides that movable as well as
immovable property may be the object of
sequestration or judicial deposit.
PRINCIPAL PURPOSE
Safekeeping of the thing; if NOT, there is NO
DEPOSIT but some other contract. [Art. 1962]
CONSIDERATION
A deposit is generally gratuitous, except:
(1) If there is an agreement to the contrary
(2) Unless the depositary is engaged in the
business of storing goods [Art. 1965]
KINDS OF DEPOSIT
(1) Extrajudicial
(a) Voluntary – obligation arises as a
consequence of contract
UP LAW BOC CREDIT TRANSACTIONS
(b) Necessary – obligation arises as a
consequence of law or quasi-contract
(2) Judicial – obligation arises as a
consequence of a law allowing the
issuance of a judicial order constituting a
deposit
A. VOLUNTARY DEPOSIT
Voluntary deposit – an agreement to constitute
a deposit is binding, but the deposit itself is a
real contract, as it is not perfected until the
delivery of the thing. [Art. 1963]
HOW ENTERED INTO: Orally or in writing [Art.
1969]
HOW PERFECTED: The deposit is perfected
upon delivery, which is made by the will of the
depositor. [Arts. 1963, 1968]
A deposit may be made by two or more
persons (who believe that they are entitled to
the thing deposited with a third person). Said
person is to deliver the thing to the one to
whom it belongs. [Art. 1968]
A.1. EXTINGUISHMENT
(1) Loss or destruction of thing deposited, or
(2) In case of a gratuitous deposit, upon the
death of either the depositor or depositary
[Art. 1995]. The depositary is not obliged to
continue with the contract of deposit
(3) By other modes provided in the Civil Code,
e.g. novation, merger, etc. [See Art.1231]
A.2. OBLIGATIONS OF DEPOSITOR
(1) Depositor is obliged to reimburse the
depositary for expenses incurred for
preservation – if deposit is gratuitous.
[Art.1992]
(2) Depositor is obliged to pay losses incurred
due to character of thing deposited. [Art.
1993]
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CIVIL LAW
General rule: The depositor shall reimburse the
depositary for any loss arising from the
character of the thing deposited [Art. 1993]
Exceptions:
(1) Depositor was not aware of the danger;
(2) Depositor was not expected to know the
dangerous character of the thing;
(3) Depositor notified the depositary of such
dangerous character;
(4) Depositary was aware of the danger
without advice from the depositor.
B. NECESSARY DEPOSIT
Made in compliance with a legal obligation, or
on the occasion of any calamity, or by travelers
in hotels and inns [Arts.1996-2004] or by
travelers with common carriers [Arts.1734-
1735]
B.1. KINDS OF NECESSARY DEPOSIT
(1) It is made in compliance with a legal
obligation, in which case it is governed by
the law establishing it, and in case of
deficiency, the rules on voluntary deposit,
e.g., Arts. 538, 586 and 2104
(2) It takes place on the occasion of any
calamity, such as fire, storm, flood, pillage,
shipwreck, or other similar events. There
must be a causal relation between the
calamity and the constitution of the
deposit. In this case the deposit is
governed by the rules on voluntary deposit
and Art. 2168
(3) Made by passengers with common carriers.
[Art.1754]
(4) Made by travelers in hotels or inns. [Art.
1998]
B.2. DEPOSIT BY TRAVELERS IN HOTELS
AND INNS
Before keepers of hotels or inns may be held
responsible as depositaries with regard to the
effects of their guests, the following must
concur:
UP LAW BOC CREDIT TRANSACTIONS
(a) They have been previously informed about
the effects brought by the guests; and
(b) The latter have taken the precautions
prescribed regarding their safekeeping.
B.3. EXTENT OF LIABILITY UNDER
ART.1998
(1) Those in hotel rooms which come under
the term “baggage” or articles such as
clothing as are ordinarily used by travelers
(2) Include those lost or damaged in hotel
annexes such as vehicles in the hotel’s
garage.
B.4. WHEN HOTEL-KEEPER LIABLE
Regardless of the amount of care exercised the
hotel-keeper is liable when—
(1) The loss or injury to personal property is
caused by his servants or employees as
well as by strangers [Art. 2000].
(2) The loss is caused by the act of a thief or
robber done without the use of arms and
irresistible force. [Art. 2001]
B.5. WHEN HOTEL-KEEPER NOT LIABLE
(1) The loss or injury is caused by force
majeure, like flood, fire, [Art.2000] theft or
robbery by a stranger—not the hotel-
keeper’s servant or employee—with the use
of firearms or irresistible force [Art.2001]
Exception: Hotel-keeper is guilty of fault or
negligence in failing to provide against the
loss or injury from his cause. [Arts.1170 and
1174]
(2) The loss is due to the acts of the guests, his
family, servants, visitors [Art.2002]
(3) The loss arises from the character of the
things brought into the hotel [Ibid.]
The hotel-keeper cannot free himself from
responsibility by posting notices to the effect
that he is not liable for the articles brought by
the guest. Such kind of stipulation shall be
void. [Art. 2003]
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CIVIL LAW
Regarding the legal deposit of a vehicle that
was stolen while parked with Saisaki
restaurant, “the depositary may not exempt
itself from responsibility for loss or damage of
the thing deposited with it, by exclusionary
stipulation. Such stipulations are void for being
contrary to law.” [Triple-V Food Services v.
Filipino Merchants Insurance Company,
February 21, 2005]
B.6. HOTEL-KEEPER’S RIGHT TO
RETENTION
The hotel-keeper has a right to retain the
things brought into the hotel by the guest, as a
security for credits on account of—
(1) lodging, and
(2) supplies usually furnished to hotel guests
[Art. 2004]
The right of retention recognized in this article
is in the nature of a pledge created by
operation of law.
C. JUDICIAL DEPOSIT
Takes place when an attachment or seizure of
property in litigation is ordered [Arts. 2005-
2009]
C.1. NATURE AND PURPOSE
It is auxiliary to a case pending in court. The
purpose is to maintain the status quo during
pendency of the litigation or to insure the right
of the parties to the property in case of a
favorable judgment.
C.2. DEPOSITARY OF SEQUESTERED
PROPERTY
A person is appointed by the court [Art. 2007]
with the obligations—
(1) To take care of the property with the
diligence of a good father of the family.
[Art. 2008]
(2) To continue in his responsibility until the
controversy which give rise thereto is
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW

ended unless the court so orders. [Art. Surety Guaranty

2007] if the debtor does not
A surety is usually The contract of
C.3. APPLICABLE LAW bound with his guaranty is the
Judicial deposit law is remedial or procedural. principal by the same guarantor's own
The Rules of Court shall govern matters not instrument, executed separate undertaking,
provided for in the Civil Code. [Art. 2009] at the same time, and in which the principal
on the same does not join. It is
consideration. He is usually entered into
III. Guaranty and an original promissor
and debtor from the
before or after that of
the principal, and is
Suretyship beginning, and is often supported on a
held, ordinarily, to separate
Guaranty – a contract whereby a person, called
know every default of consideration from
the guarantor, binds himself to the creditor to
his principal. that supporting the
fulfill the obligation of the principal debtor in
contract of the
case the latter should fail to do so. [Art. 2047]
principal. The original
While a surety undertakes to pay if the contract of his
principal is not his
principal does not pay, the guarantor only
binds himself to pay if the principal cannot pay. contract, and he is not
bound to take notice
[See benefit of excussion, Art. 2058]
of its non-
Suretyship – a relation which exists where one performance
person [principal] has undertaken an A surety will not be A guarantor is often
obligation and another person (surety) is also discharged, either by discharged by the
under a direct and primary obligation or other the mere indulgence mere indulgence of
duty to a third person (obligee), who is entitled of the creditor to the the creditor to the
to but one performance, and as between the principal, or by want principal, and is
two who are bound, the one rather than the of notice of the usually not liable
other should perform. default of the unless notified of the
principal, no matter default of the
If a person binds himself solidarily with the how much he may be principal
principal debtor, the contract is called injured thereby
suretyship and the guarantor is called a surety. A surety is the insurer A guarantor is the
of the debt, and he insurer of the solvency
Guaranty distinguished from suretyship [Zobel, obligates himself to of the debtor and thus
Inc. vs. CA, 1998] pay if the principal binds himself to pay if
Surety Guaranty does not pay the principal is unable
An accessory promise A collateral to pay
by which a person undertaking to pay
binds himself for the debt of another in A. NATURE AND EXTENT OF
another already case the latter does GUARANTY
bound, and agrees not pay the debt. A guaranty is generally gratuitous [Art. 2048]
with the creditor to General rule: Guaranty is gratuitous
satisfy the obligation Exception: When there is a stipulation to the

429
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contrary
On the cause of a guaranty contract
A guarantor or surety is bound by the same
consideration that makes the contract effective
between the principal parties thereto.
[Severino v. Severino, 1931]
Presence of cause which supports principal
obligation: Cause of the contract is the same
cause which supports the obligation as to the
principal debtor. The consideration which
supports the obligation as to the principal
debtor is a sufficient consideration to support
the obligation of a guarantor or surety.
Absence of direct consideration or benefit to
guarantor: Guaranty or surety agreement is
regarded valid despite the absence of any
direct consideration received by the guarantor
or surety, such consideration need not pass
directly to the guarantor or surety; a
consideration moving to the principal will
suffice.
A married woman who is a guarantor binds only
her separate property, generally [Art. 2049]
Exceptions:
(1) With her husband’s consent, bind the
community or conjugal partnership
property
(2) Without husband’s consent, in cases
provided by law, such as when the
guaranty has redounded to the benefit of
the family.
A guaranty need not be undertaken with the
knowledge of the debtor [Art. 2050]
Guaranty is unilateral. It exists for the benefit
of the creditor and not for the benefit of the
principal debtor
Creditor has every right to take all possible
measures to secure payment of his credit—
guaranty can be constituted even against the
430
CIVIL LAW
will of the principal debtor
However, as regards payment made by a third
person—
(1) If payment is without the knowledge or
against the will of the debtor—
(a) Guarantor can recover only insofar as
the payment has been beneficial to the
debtor [Art. 1236]
(b) Guarantor cannot compel the creditor
to subrogate him in his rights [Art.
1237]
(2) If payment is with knowledge or consent of
the debtor: Subrogated to all the rights
which the creditor had against the debtor
The guaranty must be founded on a valid
principal obligation [Art. 2052 (1)]
Guaranty is an accessory contract: It is an
indispensable condition for its existence that
there must be a principal obligation. Hence, if
the principal obligation is void, it is also void.
A guaranty may secure the performance of a
voidable, unenforceable, and natural obligation
[Art. 2052(2)]
A guaranty may secure the performance of a:
(1) Voidable contract – such contract is
binding, unless it is annulled by a proper
court action
(2) Unenforceable contract – because such
contract is not void
(3) Natural obligation – the creditor may
proceed against the guarantor although he
has no right of action against the principal
debtor for the reason that the latter’s
obligation is not civilly enforceable. When
the debtor himself offers a guaranty for his
natural obligation, he impliedly recognizes
his liability, thereby transforming the
obligation from a natural into a civil one.
A guaranty may secure a future debt [Art.
2053]
Continuing Guaranty
UP LAW BOC CREDIT TRANSACTIONS
(1) Not limited to a single transaction but
which contemplates a future course of
dealings, covering a series of transactions
generally for an indefinite time or until
revoked.
(2) It is prospective in its operation and is
generally intended to provide security with
respect to future transactions.
(3) Future debts, even if the amount is not yet
known, may be guaranteed but there can
be no claim against the guarantor until the
amount of the debt is ascertained or fixed
and demandable.
Rationale: A contract of guaranty is subsidiary
(1) To secure the payment of a loan at
maturity – surety binds himself to
guarantee the punctual payment of a loan
at maturity and all other obligations of
indebtedness which may become due or
owing to the principal by the borrower.
(2) To secure payment of any debt to be
subsequently incurred – a guaranty shall
be construed as continuing when by the
terms thereof it is evident that the object is
to give a standing credit to the principal
debtor to be used from time to time either
indefinitely or until a certain period,
especially if the right to recall the guaranty
is expressly reserved.
(3) To secure existing unliquidated debts –
refers to debts existing at the time of the
constitution of the guaranty but the
amount thereof is unknown and not to
debts not yet incurred and existing at that
time.
(4) The surety agreement itself is valid and
binding even before the principal obligation
intended to be secured thereby is born; for
example, those securing obligations
subject to a condition precedent are valid
and binding before the occurrence of the
condition precedent.
A guaranty may secure the performance of a
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CIVIL LAW
conditional obligation [Art. 2053]
(1) Principal obligation subject to a suspensive
condition – the guarantor is liable only
after the fulfillment of the condition.
(2) Principal obligation subject to a resolutory
condition – the happening of the condition
extinguishes both the principal obligation
and the guaranty
A guarantor’s liability cannot exceed the
principal obligation [Art. 2054]
General rule: Guaranty is a subsidiary and
accessory contract – guarantor cannot bind
himself for more than the principal debtor and
even if he does, his liability shall be reduced to
the limits of that of the debtor. But the
guarantor may bind himself for less than that
of the principal.
Exceptions:
(1) Interest, judicial costs, and attorney’s fees
as part of damages may be recovered –
creditors suing on a suretyship bond may
recover from the surety as part of their
damages, interest at the legal rate, judicial
costs, and attorney’s fees when
appropriate, even without stipulation and
even if the surety would thereby become
liable to pay more than the total amount
stipulated in the bond.
Interest runs from:
 Filing of the complaint (upon judicial
demand); or
 The time demand was made upon the
surety until the principal obligation is
fully paid (upon extra-judicial demand)
Rationale: Surety is made to pay, not by
reason of the contract, but by reason of his
failure to pay when demanded and for
having compelled the creditor to resort to
the courts to obtain payment.
(2) Penalty may be provided – a surety may be
UP LAW BOC CREDIT TRANSACTIONS
held liable for the penalty provided for in a
bond for violation of the condition therein.
Principal’s liability may exceed guarantor’s
obligations
The amount specified in a surety bond as the
surety’s obligation does not limit the extent of
the damages that may be recovered from the
principal, the latter’s liability being governed
by the obligations he assumed under his
contract
The existence of a guaranty is not presumed
[Art. 2055]
Guaranty requires the expression of consent on
the part of the guarantor to be bound. It
cannot be presumed because of the existence
of a contract or principal obligation.
Rationale:
(1) There be assurance that the guarantor had
the true intention to bind himself;
(2) To make certain that on making it, the
guarantor proceeded with consciousness of
what he was doing.
Contract of guaranty is covered by the Statute
of Frauds [See Art. 1403 (2) (b)]
Guaranty must not only be expressed but must
so be reduced into writing. Hence, it shall be
unenforceable by action, unless the same or
some note or memorandum thereof be in
writing, and subscribed by the party charged,
or by his agent; evidence, therefore, of the
agreement cannot be received without the
writing, or a secondary evidence of its contents.
However, it need not appear in a public
document
B. NATURE AND EXTENT OF
SURETYSHIP
Liability is contractual and accessory but direct.
Liability is limited by the terms of the contract.
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CIVIL LAW
Liability arises only if principal debtor is held
liable
(1) In the absence of collusion, the surety is
bound by a judgment against the principal
even though he was not a party to the
proceedings;
(2) The creditor may sue, separately or
together, the principal debtor and the
surety;
(3) A demand or notice of default is not
required to fix the surety’s liability
Exception: Where required by the
provisions of the contract of suretyship
(4) A surety bond is void where there is no
principal debtor because such an
undertaking presupposes that the
obligation is to be enforceable against
someone else besides the surety, and the
latter can always claim that it was never
his intention to be the sole person
obligated thereby.
Note: A surety is not entitled to exhaustion
The undertaking is to the creditor, not the
debtor
The surety makes no covenant or
agreement with the principal that it will fulfill
the obligation guaranteed for the benefit of the
principal. The surety’s undertaking is that the
principal shall fulfill his obligation and that the
surety shall be relieved of liability when the
obligation secured is performed; unless
otherwise expressly provided.
Prior demand by the creditor upon the principal
is not required. The surety is not exonerated by
neglect of the creditor to sue the principal.
Strictissimi juris rule is applicable only to
accommodation surety.
Reason: An accommodation surety acts
without motive of pecuniary gain and hence,
should be protected against unjust pecuniary
impoverishment by imposing on the principal,
UP LAW BOC CREDIT TRANSACTIONS
duties akin to those of a fiduciary. This rule will
apply only after it has been definitely
ascertained that the contract is one of
suretyship or guaranty.
Strictissimi juris rule is not applicable to
compensated sureties
Reasons:
(1) Compensated corporate sureties are
business associations organized for the
purpose of assuming classified risks in
large numbers, for profit and on an
impersonal basis.
(2) They are secured from all possible loss by
adequate counter-bonds or indemnity
agreements.
Such corporations are in fact insurers and in
determining their rights and liabilities, the
rules peculiar to suretyship do not apply.
The stipulation in the indemnity agreement
allowing the surety to recover even before it
paid the creditor is enforceable. In accordance
therewith, the surety may demand from the
indemnitors even before paying the creditors.
[Mercantile Insurance Company v. Ysmael, 169
SCRA 66, 1989]
C. EFFECT OF GUARANTY
C.1. EFFECTS OF GUARANTY BETWEEN
THE GUARANTOR AND THE CREDITOR
1. The guarantor has the right to benefit from
excussion/ exhaustion [Art. 2058]
The guarantor cannot be compelled to pay
the creditor unless the latter has:
(a) Exhausted all of the property of the
debtor; and
(b) Resorted to all the legal remedies
against the debtor.
Exceptions to benefit of excussion [Art. 2059]
(1) As provided in Art. 2059:
433
CIVIL LAW
(a) If the guarantor has expressly
renounced it.
(b) If he has bound himself solidarily with
the debtor. Here, the liability assumed
is that of a surety. The guarantor
becomes primarily liable as a solidary
co- debtor. In effect, he renounces in
the contract itself the benefit of
exhaustion.
(c) In case of insolvency of the debtor –
guarantor guarantees the solvency of
the debtor. If the debtor becomes
insolvent, the liability of the guarantor
arises as the debtor cannot fulfill his
obligation
(d) When the debtor has absconded, or
cannot be sued within the Philippines –
the creditor is not required to go after a
debtor who is hiding or cannot be sued
in our courts, and to incur the delays
and expenses incident thereto.
Exception: When the debtor has left a
manager or representative
(e) If it may be presumed that an execution
on the property of the principal debtor
would not result in the satisfaction of
the obligation – If such judicial action
including execution would not satisfy
the obligation, the guarantor can no
longer require the creditor to resort to
all such remedies against the debtor as
the same would be but a useless
formality. It is not necessary that the
debtor be judicially declared insolvent.
“The right of guarantors…to demand
exhaustion of the property of the principal
debtor, exists only when a pledge or a
mortgage has not been given as special
security for the payment of the principal
obligation.” [Southern Motors, Inc. v.
Barbosa, 1956]
“The surety in the present case bound itself
"jointly and severally" [in solidum] with the
UP LAW BOC CREDIT TRANSACTIONS
defendant; and excussion [previous
exhaustion of the property of the debtor]
shall not take place "if he [the guarantor]
has bound himself solidarily with the
debtor." [Luzon Steel Corp. v. Sia, 1969]
(2) If he does not comply with Art. 2060
In order that the guarantor may make use
of the benefit of excussion, he must:
(a) Set it up against the creditor upon the
latter’s demand for payment from him;
(b) Point out to the creditor:
(i) Available property of the debtor –
the guarantor should facilitate the
realization of the excussion since
he is the most interested in its
benefit.
(ii) Within the Philippine territory –
excussion of property located
abroad would be a lengthy and
extremely difficult proceeding and
would not conform with the
purpose of the guaranty to provide
the creditor with the means of
obtaining the fulfillment of the
obligation.
(iii) Sufficient to cover the amount of
the debt
(3) If he is a judicial bondsman and sub- surety
[Art. 2084]
(4) Where a pledge or mortgage has been
given by him as a special security
(5) If he fails to interpose it as a defense
before judgment is rendered against him.
2. The creditor has the right to secure a
judgment against the guarantor prior to the
excussion
General rule: An ordinary personal
guarantor (not a pledgor or mortgagor),
may demand exhaustion of all the property
of the debtor before he can be compelled
to pay.
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CIVIL LAW
Exception: The creditor may, prior thereto,
secure a judgment against the guarantor,
who shall be entitled, however, to a
deferment of the execution of said
judgment against him, until after the
properties of the principal debtor shall
have been exhausted, to satisfy the latter’s
obligation.
3. The creditor has the duty to make prior
demand for payment from the guarantor
[Art. 2060]
The demand is to be made only after
judgment on the debt.
Joining the guarantor in the suit against
the principal debtor is not the demand
intended by law. Actual demand has to be
made.
4. The guarantor has the duty to set up the
benefit of excussion [Art. 2060]
As soon as he is required to pay, guarantor
must also point out to the creditor
available property (not in litigation or
encumbered) of the debtor within the
Philippines.
5. The creditor has the duty to resort to all
legal remedies [Arts. 2058, 2061]
After the guarantor has fulfilled the
conditions required for making use of the
benefit of excussion, it becomes the duty of
the creditor to:
(1) Exhaust all the property of the debtor
pointed out by the guarantor;
(2) If he fails to do so, he shall suffer the
loss for the insolvency of the debtor,
but only to the extent of the value of
the said property
6. The creditor has the duty to notify the
guarantor in the action against the debtor
UP LAW BOC CREDIT TRANSACTIONS
[Art. 2062]
Notice to the guarantor is mandatory in the
action against the principal debtor. The
guarantor, however, is not duty bound to
appear in the case, and his non-
appearance shall not constitute default, w/
its consequential effects.
Rationale: To give the guarantor the
opportunity to allege and substantiate
whatever defenses he may have against
the principal obligation, and chances to set
up such defenses as are afforded him by
law
7. A compromise shall not prejudice the
person not party to it [Art. 2063]
A compromise between creditor and
principal debtor benefits the guarantor but
does not prejudice him.
A compromise between guarantor and the
creditor benefits but does not prejudice the
principal debtor.
8. Co-guarantors are entitled to the benefit of
division [Art. 2065]
The benefit of division applies only when
there are several guarantors and one
debtor for a single debt. Except when
solidarity has been stipulated, a co-
guarantor is liable only to the extent of his
share in the obligation as divided among
all the co-guarantors.
C.2. EFFECTS OF GUARANTY BETWEEN
THE DEBTOR AND THE GUARANTOR
1. The guarantor who pays has the right to be
435
CIVIL LAW
subrogated to the rights of the creditor [Art.
2067]
A guarantor who pays the debt is entitled
to every remedy which the creditor has
against the principal debtor, to enforce
every security and all means of payments;
to stand in the place of the creditor not
only through the medium of the contract,
but even by means of the securities entered
into without the knowledge of the surety;
having the right to have those securities
transferred to him though there was no
stipulation for it, and to avail himself of all
securities against the debtor
The need to enforce the provisions on
indemnity in Article 2066 forms the basis
for the subrogation clause of Article 2067.
The assumption, however, is that the
guarantor who is subrogated to the rights
of the creditor, has the right to be
reimbursed for his answering for the
obligation of the debtor. Absent this right
of reimbursement, subrogation will not be
proper.
2. The guarantor has the duty to notify the
debtor before paying the creditor [Art.
2068]
Should payment be made without
notification, and supposing the debtor has
already made a prior payment, the debtor
would be justified in setting up the defense
that the obligation has already been
extinguished by the time the guarantor
made the payment. The guarantor will
then lose the right of reimbursement and
consequently the right of subrogation.
3. The guarantor cannot demand
reimbursement for payment made by him
before the obligation has become due [Art.
2069]
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW

in view of the probability that he would be

General rule: Since a contract of guaranty called upon to pay the debt. As such, he
is only subsidiary, the guarantor cannot be may, in the alternative, obtain release from
liable for the obligation before the period the guaranty; or demand security that shall
on which the debtor’s liability will accrue. protect him from any proceeding by the
Any payment made by the guarantor creditor, and against the insolvency of the
before the obligation is due cannot be debtor.
indemnified by the debtor.
Art. 2066 and 2071 Distinguished
Exception: Prior consent or subsequent Art. 2066 Art. 2071
ratification by the debtor Provides for the Provides for the
enforcement of the protection before
4. The guarantor may proceed against the guaranty/surety against he has paid but
debtor even before payment has been made the debtor after he has after he has
[Art. 2071] paid the debt become liable
Gives a right of action Protective remedy
General rule: Guarantor has no cause of after payment before payment
action against the debtor until after the Substantive Right Preliminary
former has paid the obligation. remedy

Exceptions [Art. 2071]: C.3. EFFECTS OF GUARANTY AS

(a) When he is sued for the payment;
(b) In case of insolvency of the principal
debtor;
(c) When the debtor has bound himself to
relieve him from the guaranty within a
specified period, and this period has
expired;
(d) When the debt has become
demandable, by reason of the
expiration of the period for payment;
(e) After the lapse of 10 years, when the
principal obligation has no fixed period
for its maturity, unless it be of such
nature that it cannot be extinguished
except within a period longer than 10
years;
(f) If there are reasonable grounds to fear
that the principal debtor intends to
abscond;
(g) If the principal debtor is in imminent
danger of becoming insolvent.
Rationale: To enable the guarantor to take
measures for the protection of his interest
BETWEEN CO-GUARANTORS
When there are two or more guarantors, one
debtor and one debt:
(a) The one who pays may demand from each
of the others the share proportionally
owing to him
(b) If any of the guarantors is insolvent, his
share shall be borne by the others,
including the payer, in the same proportion
[Art. 2073]
For purposes of proportionate reimbursement,
the other guarantors may interpose such
defenses against the paying guarantor as are
available to the debtor against the creditor,
except those that are personal to the debtor
[Art. 2074]
Requisites for the applicability of Art. 2073
(1) Payment has been made by one guarantor;
(2) The payment was made because
(a) Of the insolvency of the debtor, or

436
UP LAW BOC CREDIT TRANSACTIONS
(b) By judicial demand
(3) The paying guarantor seeks to be
indemnified only to the extent of his
proportionate share in the total obligation.
D. EXTINGUISHMENT OF GUARANTY
Once the obligation of the debtor is
extinguished in any manner provided in the
Civil Code, the obligation of the guarantor is
also extinguished [Art. 2076]. However, there
may be instances when, after the
extinguishment of the guarantor’s obligation
(as in the case of a release from the guaranty),
the obligation of the debtor still subsists.
Although the guarantor generally has to make
payment in money, any other thing of value, if
accepted by the creditor, is valid payment and
therefore releases the guarantor (dacion en
pago) [Art. 2077].
If one guarantor is released without the
consent of the others, the release would
benefit the co-guarantors to the extent of the
proportionate share of the guarantor released
[Art. 2078].
A guarantor is released if the creditor, without
the guarantor’s consent, extends the time
within which the debtor may perform his
obligation [Art. 2079]. This is to protect the
interest of the guarantor should the debtor be
insolvent during the period of extension and
deprive the guarantor of his right to
reimbursement.
The guarantors are released if by some act of
the creditor they cannot be subrogated to the
rights, mortgages and preferences of the
latter. [Art. 2080]
In order to constitute an extension discharging
the surety, it should appear that the extension
was for (1) a definite period, (2) pursuant to an
enforceable agreement between the principal
437
CIVIL LAW
and the creditor, and (3) that it was made
without the consent of the surety or with a
reservation of rights with respect to him.
[Filipinas Textile Mills v. CA, November 12,
2003]
E. LEGAL AND JUDICIAL BONDS
Bond – an undertaking that is sufficiently
secured, and not cash or currency.
Bondsman – a surety offered in virtue of a
provision of law or a judicial order.
Qualifications of personal bondsman [2082 in
relation to Art. 2056]
(1) He possesses integrity;
(2) He has capacity to bind himself;
(3) He has sufficient property to answer for the
obligation which he guarantees.
Pledge or mortgage in lieu of bond [2083]
Guaranty or suretyship is a personal security.
Pledge or mortgage is a property or real
security. If the person required to give a legal
or judicial bond should not be able to do so, a
pledge or mortgage sufficient to cover the
obligation shall be admitted in lieu thereof.
Bondsman not entitled to excussion [2084]
A judicial bondsman and the sub-surety are
not entitled to the benefit of excussion.
Reason: They are not mere guarantors, but
sureties whose liability is primary and solidary.
Effect of negligence of creditor
Mere negligence on the part of the creditor in
collecting from the debtor will not relieve the
surety from liability.
IV. Pledge
Pledge – is a contract constituted to secure the
fulfillment of a principal obligation where the
thing pledged, which may be a movable, or an
UP LAW BOC CREDIT TRANSACTIONS
incorporeal right evidenced by a document, is
placed in the possession of the creditor or a
third person by common agreement. [Art.
2093 in relation to Art. 2085]
The pledgor must be the absolute owner of the
thing pledged, and he must have the free
disposal of the property, and in the absence
thereof, that he be legally authorized for the
purpose. [Art. 2085 (2) and (3)]
A. CHARACTERISTICS
(1) Real – perfected upon the delivery of the
thing pledged [Art. 1316]
(2) Accessory – cannot exist independently
(3) Unilateral – obligation on the part of the
creditor to return the thing pledged upon
the fulfillment of the principal obligation
(4) Subsidiary– obligation incurred does not
arise until the fulfillment of the secured
principal obligation
B. KINDS
(1) Voluntary or Conventional – created by
agreement of the parties.
(2) Legal – created by operation of law.
LEGAL PLEDGE / PLEDGE BY
OPERATION OF LAW [ARTS. 2121-2122]
(1) Necessary expenses shall be refunded to
every possessor, but only a possessor in
good faith may retain the thing until he has
been reimbursed.
Useful expenses shall be refunded only
to the possessor in good faith with the
same right of retention, the person who
has defeated him in the possession having
the option of refunding the amount of the
expenses or of paying the increase in value
which the thing may have acquired and by
reason thereof [Art. 546]
(2) He who has executed work upon a movable
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CIVIL LAW
has a right to retain it by way of pledge
until he is paid. This is called the
mechanic’s lien. [Art. 1731]
(3) The agent may retain the things which are
the objects of agency until the principal
effects the reimbursement and pays the
indemnity. This is called the agent’s lien.
[Art. 1914]
(4) The laborer’s wages shall be a lien on the
goods manufactured or the work done.
[Art. 1707]
NOTE:
(1) In legal pledges, the remainder of the price
of the sale shall be delivered to the obligor.
(2) Public auction of legal pledges may only
be executed after demand of the amount
for which the thing is retained. It shall take
place within one month after the demand,
otherwise the pledgor may demand the
return of the thing pledged, provided s/he
is able to show that the creditor did not
cause the public sale without justifiable
grounds. [Article 2122]
C. ESSENTIAL REQUISITES
Common to pledge and mortgage [Art. 2085]
(1) Constituted to secure the fulfillment of a
principal obligation.
(2) Pledgor or mortgagor must be the
absolute owner of the thing pledged or
mortgaged.
(3) The persons constituting the pledge or
mortgage have the free disposal of their
property, and in the absence thereof, that
they be legally authorized for the purpose.
(4) Cannot exist without a valid obligation.
(5) Debtor retains the ownership of the thing
given as a security.
(6) When the principal obligation becomes
due, the thing pledged or mortgaged may
be alienated for the payment to the
creditor. [Art. 2087]
UP LAW BOC CREDIT TRANSACTIONS
PROVISIONS APPLICABLE ONLY TO
PLEDGE
(1) Transfer of possession to the creditor or to
third person by common agreement is
essential [Art. 2093].
(a) Actual delivery is important.
(b) Constructive or symbolic delivery of the
key to the warehouse is sufficient to
show that the depositary appointed by
common consent of the parties was
legally placed in possession.
(2) All movables within the commerce of man
may be pledged as long as they are
susceptible of possession [Art. 2094].
(3) Incorporeal rights may be pledged. The
instruments representing the pledged
rights shall be delivered to the creditor; if
negotiable, must be indorsed [Art. 2095].
(4) Pledge shall take effect against 3rd
persons only if the following appear in a
public instrument:
(a) Description of the thing pledged.
(b) Date of the pledge [Art. 2096].
(5) The thing pledged may be alienated by the
pledgor or owner only with the consent of
the pledgee. Ownership of the thing
pledged is transmitted to the vendee or
transferee as soon as the pledgee consents
to the alienation, but the latter shall
continue to have possession [Art. 2097].
(6) Creditor has the right to retain the thing in
his possession or in that of a third person
to whom it has been delivered, until the
debt is paid [Art. 2098].
(7) Special Laws apply to pawnshops and
establishments engaged in making loans
secured by pledges. Provisions of the Civil
Code shall apply subsidiarily to them.
In case of doubt as to whether a transaction is
a pledge or a dacion in payment, the
presumption is in favor of pledge, the latter
being the lesser transmission of rights and
interests. [Manila Banking Corp. v. Teodoro,
1989]
439
CIVIL LAW
D. REQUISITES FOR PERFECTION
(1) The thing pledged is placed in the
possession of the creditor or a third person
[Art. 2093]
(2) For the pledge to take effect as against
third persons, a description of the thing
pledged and the date of the pledge should
appear in a public instrument [Art. 2096]
E. OBLIGATIONS OF PLEDGEE
(1) The pledgee cannot deposit the thing
pledged with a 3rd person, unless there is
a contrary stipulation [Art. 2100].
(2) Is responsible for the acts of his agents or
employees with respect to the thing
pledged [Art. 2100].
(3) Has no right to use the thing or to
appropriate its fruits without authority
from the owner [Art. 2104]
(4) May cause the public sale of the thing
pledged if, without fault on his part, there
is danger of destruction, impairment or
diminution in value of the thing. The
proceeds of the auction shall be a security
for the principal obligation [Art. 2108].
F. RIGHTS OF PLEDGOR
(1) Takes responsibility for the flaws of the
thing pledged [Art. 2101 in relation to Art.
1951].
(2) Cannot ask for the return of the thing
against the will of the creditor, unless and
until he has paid the debt and its interest,
with expenses in a proper case [Art. 2105].
(3) Subject to the right of the pledgee under
article 2108, pledgor is allowed to
substitute the thing which is in danger of
destruction or impairment without any
fault on the part of the pledgee with
another thing of the same kind and quality
[Art. 2107].
(4) May require that the thing be deposited
with a 3rd person, if through the
negligence or willful act of the pledgee the
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW

thing is in danger of being lost or impaired less than the amount due.
[Art. 2106]. (2) If the price of sale is more than amount
due, the debtor is not entitled to the excess
The pledgee can temporarily entrust the unless the contrary is provided.
physical possession of the chattels pledged to (3) If the price of sale is less, the creditor is not
the pledgor without invalidating the pledge. entitled to recover the deficiency. A
The pledgor is regarded as holding the contrary stipulation is void.
pledged property merely as trustee for the
pledgee. The type of delivery will depend upon H. PLEDGE AS DISTINGUISHED
the nature and the peculiar circumstances of FROM CHATTEL MORTGAGE [ARTS.
each case. [Yuliongsiu v. PNB (1968)]
2140, 1484]
Chattel Mortgage Pledge
A pledgee cannot become the owner of, nor
Delivery of Personal Property
appropriate to himself, the thing given in
pledge. If by the contract of pledge the pledgor Not required Delivery is required for
validity
continues to be the owner of the thing pledged
during the pendency of the obligation, it Registration in the Chattel Mortgage Register
stands to reason that in case of loss of the Necessary for validity Not necessary;
property, the loss should be borne by the of the CM against Public document is
pledgor. [PNB v. Atendido (1954)] third persons enough to bind third
persons
Right to Excess of Proceeds of Sale
G. FORECLOSURE
The excess goes to The excess goes to the
G.1. Requirements in sale of the thing
the debtor/ pledgee/creditor,
pledged by a creditor, if credit is not paid mortgagor unless otherwise
on time stipulated
[Art. 2112] Right to Recover Deficiency
(1) Debt is due and unpaid. Creditor/ mortgagee Creditor/ mortgagee is
(2) Sale must be at a public auction. can recover from the not entitled to recover
(3) Notice to the pledgor and owner, stating debtor/ mortgagor, any deficiency after the
the amount due. except if covered by property is sold,
(4) Sale must be made with the intervention of Recto Law notwithstanding
a notary public. contrary stipulation
(5) If at the first auction the thing is not sold, a The provisions of the Civil Code on pledge,
second one with the same formalities shall insofar as they are not in conflict with the
be held. Chattel Mortgage Law shall be applicable to
(6) If at the second auction, there is no sale chattel mortgages [Art. 2141]
either, the creditor may appropriate the
thing pledged but he shall give an
I. PACTUM COMMISSORIUM
acquittance (release) for his entire claim.
It is a stipulation that allows the creditor to
appropriate the collateral, or dispose of it, in
G.2. EFFECTS OF THE SALE OF THE
contravention of the provisions on foreclosure,
THING PLEDGED and as such, is considered null and void
[Art. 2115] [Gomez-Somera].
(1) Extinguishes the principal obligation,
whether the proceeds of the sale is more or

440
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ELEMENTS
(1) There is property pledged [collateral] by
way of security for the payment of the
principal obligation
(2) There is a stipulation for automatic
appropriation by the creditor in case of
non-payment of the principal obligation
within the stipulated period
EFFECT ON PLEDGE
The nullity of the pactum commissorium does
not affect the validity of the contract of pledge.
The creditor may recover the credit from the
proceeds of a foreclosure sale effected in
accordance with law [Gomez-Somera].
J. EQUITABLE MORTGAGE
It is a contract that reveals the intention of the
parties to charge property as security for a
debt, but contains nothing impossible or
contrary to law [Gomez-Somera].
ESSENTIAL REQUISITES
(1) Parties entered into a contract
denominated as a contract of sale
(2) The true intention is to secure an existing
debt by way of mortgage
V. Real Mortgage
Mortgage – a contract whereby the debtor
secures to the creditor the fulfillment of a
principal obligation, immediately making
immovable property or real rights answerable
to the principal obligation in case it is not
complied with at the time stipulated.
A. OBJECTS OF REAL MORTGAGE
[Art. 2124]
1. Immovables
2. Alienable real rights over immovables.
Future property cannot be an object of
mortgage; however, a stipulation subjecting to
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CIVIL LAW
the mortgage improvements which the
mortgagor may subsequently acquire, install
or use in connection with real property already
mortgaged belonging to the mortgagor is
valid.
B. CHARACTERISTICS
(1) As a general rule, the mortgagor retains
possession of the property. He may deliver
said property to the mortgagee without
altering the nature of the contract of
mortgage.
(2) It is not an essential requisite that the
principal of the credit bears interest, or
that the interest as compensation for the
use of the principal and the enjoyment of
its fruits be in the form of a certain
percentage thereof.
(3) Mortgage creates an encumbrance over
the property, but ownership of the property
is not parted with. It merely restricts the
mortgagor’s jus disponendi over the
property. The mortgagor may still sell the
property, and any stipulation to the
contrary is void [Art. 2130]
(4) Mortgage extends to the natural
accessions, to the improvements of
growing fruits and the rents or income not
yet received when the obligation becomes
due, including indemnity from insurance,
and/or amount received from
expropriation for public use [Art. 2127]
(a) Applies only when the accessions and
accessories subsequently introduced
belongs to the mortgagor.
(b) To exclude them, there must be an
express stipulation, or the fruits must
be collected before the obligation
becomes due.
(c) Third persons who introduce
improvements upon the mortgaged
property may remove them at any time
C. KINDS
(1) Voluntary – constituted by the will of the
UP LAW BOC CREDIT TRANSACTIONS
owner of the property on which it is created
(2) Legal – required by law to be executed in
favor of certain persons:
(a) Persons in whose favor the law
establishes a mortgage have no other
right than to demand the execution
and recording of the document in
which the mortgage is formalized
[Article 2125]
(b) The bondsman who is to be offered in
virtue of a provision of law or of a
judicial order shall have the
qualifications prescribed in Art 2056
[integrity, capacity to bind himself, and
sufficient property to answer for the
obligation], and in other laws [Article
2082]
(c) If the person bound to give a bond
should not be able to do so, a pledge
or mortgage considered sufficient to
recover his obligation shall be
admitted in lieu thereof [Article 2083]
(3) Equitable – One which, although lacking
the proper formalities of a mortgage,
shows the intention of the parties to make
the property a security for the debt.
(a) Lien created by equitable mortgage
ought not to be defeated by requiring
compliance with formalities necessary
to the validity of voluntary real estate
mortgage. Ex.: Pacto de retro
(b) Provisions governing equitable
mortgage: Arts. 1365, 1450, 1454,
1602, 1603, 1604 and 1607.
D. PRINCIPLE OF INDIVISIBILITY OF
PLEDGE/MORTGAGE
[Arts. 2089 to 2090]
A mortgage directly and immediately subjects
the property upon which it is imposed. It is
indivisible even though the debt may be
divided, and such indivisibility is likewise
unaffected by the fact that the debtors are not
solidarity liable. [Dayrit v. CA]
442
CIVIL LAW
Where only a portion of the loan is released, the
mortgage becomes enforceable only as to the
proportionate value of the loan [Central Bank
v. CA]
Indivisibility applies only as to
pledgors/mortgagors who are themselves
debtors in the principal obligation, and not to
accommodation pledgors/ mortgagors
When several things are pledged or mortgaged,
each thing for a determinate portion of the
debt, the pledges or mortgage, are considered
separate from each other. But when the
several things are given to secure the same
debt in its entirety, all of them are liable for the
debt, and the creditor does not have to divide
his action by distributing the debt among the
various things pledged or mortgaged. Even
when only a part of the debt remains unpaid,
all the things are still liable for such balance.
[Tolentino]
The question is whether or not the written
instrument in controversy was a mortgage or a
conditional sale. The correct test, where it can
be applied, is the continued existence of a debt
or liability between the parties. If such exists,
the conveyance may be held to be merely a
security for the debt or an indemnity against
the liability. [Reyes v. Sierra, 93 SCRA 473]
E. ESSENTIAL REQUISITES COMMON
TO PLEDGE AND MORTGAGE
(a) Constituted to secure the fulfillment of a
principal obligation.
(b) Pledgor or mortgagor must be the
absolute owner of the thing pledged or
mortgaged.
(c) The persons constituting the pledge or
mortgage have the free disposal of their
property, and in the absence thereof, that
they be legally authorized for the purpose.
Note: Third persons who are not parties to
the principal obligation may secure the
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW

latter by pledging or mortgaging their own Kinds of foreclosure

property. [Art. 2085] 1. Judicial Foreclosure
(d) Cannot exist without a valid obligation. 2. Extrajudicial Foreclosure
(e) Debtor retains the ownership of the thing
given as a security. Judicial Foreclosure vs. Extrajudicial
(f) When the principal obligation becomes Foreclosure
due, the thing pledged or mortgaged may Judicial Extrajudicial
be alienated for the payment to the Court intervenes No court intervention
creditor. [Art. 2087] There is equity of There is right of
(g) Must be recorded in the Registry of redemption – period redemption – period
Property in order to be validly constituted. starts from the finality start from date of
Note: The mortgage would still be binding of the judgment until registration of
between the parties even if the instrument order of confirmation certificate of sale
is not recorded. Decisions are Not appealable
appealable
F. FORECLOSURE OF MORTGAGE No need for a special Special power of
Foreclosure – is the remedy available to the power of attorney in attorney in favor of
mortgagee by which he subjects the the contract of the mortgage is
mortgaged property to the satisfaction of the mortgage required in the
obligation secured by the mortgage. contract

In general, an action for foreclosure of a F.1. JUDICIAL FORECLOSURE

mortgage is limited to the amount mentioned
in the mortgage, except when the mortgage
contract intends to secure future loans or
advancements
Blanket Mortgage/Dragnet – mortgage that
subsumes all debts of past or future origin
Mortgage may be used as a “continuing
security” which secures future advancements
and is not discharged by the repayment of the
amount in the mortgage
Alienation or assignment of mortgage credit is
valid even if it is not registered
Acceleration clause allowed
Acceleration clause, or the stipulation stating
that on the occasion of the mortgagor’s
default, the whole sum remaining unpaid
automatically becomes due and demandable,
is ALLOWED
[Rule 68, Rules of Court]
(1) May be availed of by bringing an action in
the proper court which has jurisdiction over
the area wherein the real property involved
or a portion thereof is situated
(2) If the court finds the complaint to be well-
founded, it shall order the mortgagor to
pay the amount due with interest and
other charges within a period of not less
than 90 days nor more than 120 days from
the entry of judgment
(3) If the mortgagor fails to pay at time
directed, the court, upon motion, shall
order the property to be sold to the highest
bidder at a public auction.
(4) Upon confirmation of the sale by the court,
also upon motion, it shall operate to divest
the rights of all parties to the action and to
vest their rights to the purchaser subject to
such rights of redemption as may be
allowed by law

443
UP LAW BOC CREDIT TRANSACTIONS
(5) Before the confirmation, the court retains
control of the proceedings; execution on
judgment
(6) The proceeds of the sale shall be applied
to the payment of the:
(a) costs of the sale;
(b) amount due the mortgagee;
(c) claims of junior encumbrancers or
persons holding subsequent
mortgages in the order of their priority;
and
(d) the balance, if any shall be paid to the
mortgagor
(7) Sheriff’s certificate is executed,
acknowledged and recorded to complete
the foreclosure
Nature of judicial foreclosure proceedings
(1) Quasi in rem action. Hence, jurisdiction
may be acquired through publication.
(2) Foreclosure is only the result or incident of
the failure to pay debt.
(3) Survives death of mortgagor.
F.2. EXTRAJUDICIAL FORECLOSURE
[Act 3135]
(1) Applies to mortgages where the authority
to foreclose is granted to the mortgagee.
(2) Authority is not extinguished by death of
mortgagor or mortgagee. This is an agency
coupled with interest.
(3) Public sale should be made after proper
notice to the public, otherwise it is a
jurisdictional defect which could render the
sale voidable.
(4) There is no need to notify the mortgagor,
where there is no contractual stipulation
therefor.
Proper notice consists of:
(a) posting notice in three public places
and/or
(b) publication in newspaper of general
circulation
Purpose of notice is to obtain the best bid
for the foreclosed property
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CIVIL LAW
(5) Surplus proceeds of foreclosure sale
belong to the mortgagor.
(6) Debtor (who must be a natural person) has
the right to redeem the property sold
within 1 year from and after the date of
sale.
(a) If the mortgagee is a bank and the
debtor is a juridical person, then there
is no right of redemption. However, it
may redeem the property before the
registration of the TCT to the buyer,
which is similar to the equity of
redemption. The TCT must be
registered within three months after
the foreclosure.
(b) The mortgagor can only legally
transfer the right to redeem and the
use of the property during the period of
redemption.
(7) Remedy of party aggrieved by foreclosure
is a petition to set aside sale and the
cancellation of writ of possession.
However, if the mortgagee is a bank, the
mortgagor is required to post a bond equal
to the value of the mortgagee’s claim.
(8) Republication of the notice of sale is
necessary for the validity of the postponed
extrajudicial sale
(9) In foreclosure of real estate mortgage
under Act 3135, the buyer at auction may
petition the land registration court for a
writ of possession pending the one-year
period of redemption of the foreclosed
property.
F.4. NATURE OF POWER OF
FORECLOSURE BY EXTRAJUDICIAL SALE
(1) Conferred for mortgagee’s protection.
(2) An ancillary stipulation.
(3) A prerogative of the mortgagee.
Note:
(a) Both should be distinguished from
UP LAW BOC CREDIT TRANSACTIONS
execution sale governed by Rule 39, ROC.
(b) Foreclosure retroacts to the date of
registration of mortgage.
(c) A stipulation of upset price, or the
minimum price at which the property shall
be sold to become operative in the event of
a foreclosure sale at public auction, is null
and void.
F.5. RIGHT OF MORTGAGEE TO
RECOVER DEFICIENCY
(1) Mortgagee is entitled to recover deficiency.
(2) If the deficiency is embodied in a
judgment, it is referred to as deficiency
judgment.
(3) Action for recovery of deficiency may be
filed even during redemption period.
(4) Action to recover prescribes after 10 years
from the time the right of action accrues.
F.6. EFFECT OF INADEQUACY OF PRICE
IN FORECLOSURE SALE
(1) Where there is right to redeem, inadequacy
of price is immaterial because the
judgment debtor may redeem the property.
Exception: Where the price is so
inadequate as to shock the conscience of
the court, taking into consideration the
peculiar circumstances.
(2) Property may be sold for less than its fair
market value, upon the theory that the
lesser the price the easier it is for the owner
to redeem.
(3) The value of the mortgaged property has
no bearing on the bid price at the public
auction, provided that the public auction
was regularly and honestly conducted.
A suit for the recovery of the deficiency after
the foreclosure of a mortgage is in the nature
of a mortgage action because its purpose is
precisely to enforce the mortgage contract.
[Caltex v. IAC, 176 SCRA 741]
445
CIVIL LAW
G. WAIVER OF SECURITY BY
CREDITOR
(1) Mortgagee may waive the right to foreclose
his mortgage and maintain a personal
action for recovery of the indebtedness.
(2) Mortgagee cannot have both remedies.
This is because he only has one cause of
action, the non-payment of the mortgage
debt.
H. REDEMPTION
It is a transaction by which the mortgagor
reacquires the property which may have
passed under the mortgage or divests the
property of the lien which the mortgage may
have created
KINDS:
(1) Equity of redemption – in judicial
foreclosure of real estate mortgage under
the ROC, it is the right of the mortgagor to
redeem the mortgaged property by paying
the secured debt within the 120 day period
from entry of judgment or after the
foreclosure sale, but before the sale of the
mortgaged property or confirmation of sale
A formal offer to redeem preserves the
right of redemption, e.g., by filing an action
to enforce the right to redeem
(2) Right of redemption – in extrajudicial
foreclosure of real estate mortgage, the
right of the mortgagor to redeem the
property within a certain period after it was
sold for the satisfaction of the debt. (If the
mortgagee is a bank, the redemption
period expires after registration of the
sale.)
(a) For natural persons – one year from
the registration of the TCT
(b) For juridical persons – three months
from the foreclosure
(c) Formal offer to redeem must be with
tender of redemption price to preserve
right of redemption
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW

Note: There is no right of redemption in pledge Note: The obligation to pay interest is not the
and chattel mortgage. essence of the contract of antichresis; there
being nothing in the Code to show that
The rule up to now is that the right of a antichresis is only applicable to securing the
purchaser at a foreclosure sale is merely payment of interest-bearing loans. On the
inchoate until after the period of redemption contrary, antichresis is susceptible of
has expired without the right being exercised. guaranteeing all kinds of obligations, pure or
The title to land sold under mortgage conditional.
foreclosure remains, in the mortgagor or his
grantee until the expiration of the redemption C. AS DISTINGUISHED FROM OTHER
period and conveyance by the master's deed CONTRACTS
[Medida v. CA] Antichresis Pledge
Kind of property
VI. Antichresis Real property Personal property
Antichresis – a real security transaction that Perfection
arises by contract, with the antichretic creditor Mere consent Delivery of thing
acquiring the right to receive the fruits of an pledged
immovable of the antichretic debtor, and the
obligation to apply them to the payment of the Antichresis Real mortgage
interest, if owing, and thereafter to the Possession
principal. [Art. 2132] Delivered to creditor Retained by debtor
Right to the fruits
A. CHARACTERISTICS Creditor acquires only Creditor does not
(1) Accessory contract – it secures the the right to receive have the right to
performance of a principal obligation fruits receive fruits, but a
(2) Formal contract – it must be in a specified real right over the
form to be valid [Art. 2134] property is created
Payment of taxes and charges
B. SPECIAL REQUISITES Creditor is generally Creditor has no
(1) It can cover only the fruits of an immovable obliged to pay obligation to pay
property Application of fruits
(2) Delivery of the immovable is necessary for First applied to the Mortgagee has no
the creditor to receive the fruits, not to payment of interest, such obligation
make the contract binding and then to principal
(3) Amount of principal and interest must be
specified in writing; otherwise, the
contract of antichresis shall be void D. OBLIGATIONS OF ANTICHRETIC
[Art.2134] CREDITOR
(4) Express agreement that debtor will give (1) To pay taxes and charges on the estate,
possession of the property to creditor and including necessary expenses [Art.2135]
that the latter will apply the fruits to the (a) The creditor may avoid said obligation
interest, if any, then to the principal of his by:
credit (b) Compelling the debtor to reacquire
enjoyment of the property

446
UP LAW BOC CREDIT TRANSACTIONS
(c) By stipulation to the contrary
(2) To apply all the fruits, after receiving them,
to the payment of interest, if owing, and
thereafter to the principal
(3) To render an account of the fruits to the
debtor
(4) To bear the expenses necessary for its
preservation and repair
E. REMEDIES OF CREDITOR IN CASE
OF NON-PAYMENT OF DEBT
(1) Action for specific performance
(2) Petition for the sale of the real property as
in a foreclosure of mortgage under Rule 68
of the Rules of Court [Art.2137]
(a) The parties, however, may agree on an
extrajudicial foreclosure in the same
manner as they are allowed in
contracts of mortgage and pledge –
[Tavera v. El Hogar Filipino, Inc.; Art.
1939]
(b) A stipulation authorizing the
antichretic creditor to appropriate the
property upon the non-payment of the
debt within the agreed period is void
[Art. 2088]
Because of the right of the creditor to judicially
foreclose, antichresis is generally viewed as a
species of real estate mortgage, in which the
mortgagee retains possession of the collateral
and takes the fruits of the property in lieu of
interest on the debt. [Gomez-Somera]
VII. Chattel Mortgage
A “conditional sale” of personal property as
security for the payment of a debt, or the
performance of some other obligation
specified therein, the condition being that the
sale shall be void upon the seller paying to the
purchaser a sum of money or doing some other
act named. If the condition is performed
according to its terms, the mortgage and sale
immediately become void, and the mortgagee
447
CIVIL LAW
is thereby divested of his title. [Section 3, Act
1508]
It is a contract by virtue of which personal
property is recorded in the Chattel Mortgage
Register as a security for the performance of an
obligation. [Art. 2140]
A. CHARACTERISTICS
(1) It is an accessory contract because it
secures performance of a principal
obligation
(2) It is a formal contract because it requires
registration in the Chattel Mortgage
Register for its validity [but only as against
third persons]
(3) It is a unilateral contract because it
produces only obligations on the part of
the creditor to free the thing from the
encumbrance on fulfillment of the
obligation.
(4) The excess of the proceeds of the sale goes
to the debtor or mortgagor
(5) Creditor or mortgagee can recover
deficiency from the debtor or mortgagor,
except if covered by the Recto Law
B. OBLIGATIONS SECURED
A chattel mortgage can only cover obligations
existing at the time the mortgage is
constituted. It cannot secure after-incurred
obligations even if these future debts are
accurately described.
An increase or extension of the chattel
mortgage obligation becomes a new chattel
mortgage in itself. Although a contract TO
mortgage that includes future debts is a
binding commitment, the contract OF chattel
mortgage itself is not perfected until after an
agreement covering the newly contracted debt
is executed. [Gomez-Somera]
C. PROPERTIES COVERED
UP LAW BOC CREDIT TRANSACTIONS
Generally, only personal or movable property
can be covered by a chattel mortgage.
However, the parties may agree to treat real
property as personal property for purposes of
executing a chattel mortgage. There must be a
description of the property as would enable the
parties or other persons to identify the same
after reasonable investigation and inquiry.
D. VALIDITY OF CHATTEL
MORTGAGE
Chattel mortgage shall not be valid against
any person except the mortgagor, his
executors or administrators unless:
(1) The possession of the property is delivered
to and retained by the mortgagee or
(2) The mortgage is recorded. [Sec. 4, Act
1508]
E. FORMAL REQUISITES
(1) It should substantially comply with the
form prescribed by law
(2) It should be signed by the person/s
executing the same in the presence of two
witnesses who shall sign the mortgage as
witnesses to the execution thereof and
(3) Each mortgagor and mortgagee or, in the
absence of the mortgagee, his agent or
attorney, shall make and subscribe an
affidavit in the form prescribed by law,
which affidavit, signed by the parties to the
mortgage and the two witnesses and the
certificate of the oath signed by the person
authorized to administer an oath shall be
appended to such mortgage and recorded
therewith. [Sec. 5, Act 1508]
F. REGISTRATION OF CHATTEL
MORTGAGE
F.1. PERIOD
There is substantial and sufficient compliance
with the law when registration is made by the
mortgagee before the mortgagor has complied
448
CIVIL LAW
with his principal obligation, and no right of
innocent third persons is prejudiced.
F.2. VENUE
If the mortgagor resides in the Philippines – in
the office of the register of deeds of the
province in which the mortgagor resides at the
time of the making of the chattel mortgage
If the mortgagor does not reside in the
Philippines – in the province in which the
property is situated
If the property is located in a different province
– registration in both provinces is required
F.3. EFFECT
(1) Creates real rights which follows the
chattel
(2) It is an effective and binding notice to other
creditors
(3) Registration gives the mortgagee
symbolical possession
Affidavit of good faith is required, and it states
that the chattel mortgage is—
(1) Made solely for the purpose of securing the
obligation specified in the chattel
mortgage, and
(2) The principal obligation is a just and valid
obligation, and one not entered into for the
purpose of fraud
The effect of absence of affidavit of good faith
is that the chattel mortgage is vitiated only as
against third persons without notice
Effect of failure to register in the Chattel
Mortgage Registry
The mortgage is binding between the parties.
However, the right of the person in whose favor
the law establishes a mortgage is to demand
the execution and the recording of the
instrument.
UP LAW BOC CREDIT TRANSACTIONS
Registration of assignment of mortgage not
required
A chattel mortgage may be alienated or
assigned to a third person
The debtor is protected if he pays his creditor
without actual knowledge that the debt has
been assigned
Failure of mortgagee to discharge the
mortgage
If the mortgagee, assign, administrator,
executor, or either of them,
(1) After performance of the condition before
or after the breach thereof, or
(2) After tender of the performance of the
condition, at or after the time fixed for the
performance,
does not within ten days after being requested
thereto by any person entitled to redeem,
discharge the mortgage in the manner
provided by law, the person entitled to redeem
may recover of the person whose duty it is to
discharge the same, twenty pesos for his
neglect and all damages occasioned thereby in
an action in any court having jurisdiction of the
subject-matter thereof. [Act 1508, Sec. 8]
When the condition of the chattel mortgage is
broken, a mortgagor or person holding a
subsequent mortgage, or a subsequent
attaching creditor may redeem the same by
paying or delivering to the mortgagee the
amount due on such mortgage and the
reasonable costs and expenses incurred by
such breach of condition before the sale
thereof. An attaching creditor who so redeems
shall be subrogated to the rights of the
mortgagee and entitled to foreclose the
mortgage in the same manner that the
mortgagee could foreclose it.
G. FORECLOSURE
The mortgagee, his executor, administrator or
assign may cause the mortgaged property or
449
CIVIL LAW
any part thereof to be sold at a public auction
by a public officer:
(1) After 30 days from the time of condition
broken
(2) At a public place in the municipality where
the mortgagor resides, or where the
property is situated
(3) Provided at least 10 day-notice of the time,
place, and purpose of such sale has been
posted at 2 or more public places in such
municipality, and
(4) The mortgagee, his executor,
administrator, or assign shall notify the
mortgagor or person holding under him
and the persons holding subsequent
mortgages of the time and place of sale at
least 10 days previous to the sale:
(a) Either by notice in writing directed to
him or left at his abode, if within the
municipality, or
(b) Sent by mail if he does not reside in
such municipality
DISPOSITION OF PROCEEDS
The proceeds of the sale shall be applied to the
payment:
(1) Costs and expenses of keeping and sale
(2) Payment of the obligation secured by the
mortgage
(3) The residue shall be paid to persons
holding subsequent mortgages in their
order
(4) The balance shall be paid to the mortgagor
or person holding under him on demand
VIII. Quasi-Contracts
A quasi-contract is that juridical relation
resulting from a lawful, voluntary and
unilateral act, and which has for its purpose
the payment of indemnity to the end that no
one shall be unjustly enriched or benefited at
the expense of another [Art. 2142]
UP LAW BOC CREDIT TRANSACTIONS
A. NEGOTIORUM GESTIO (UNAUTHORIZED
MANAGEMENT)
Negotiorum gestio – takes place when a
person voluntarily takes charge of another’s
abandoned business or property without the
owner’s authority [Art. 2144]. Reimbursement
must be made to the gestor (i.e., one who
carried out the business) for necessary and
useful expenses, as a rule.
The obligation does not arise:
(1) When the property or business is not
neglected or abandoned;
(2) If in fact the manager has been tacitly
authorized by the owner.
In the first case, the provisions of Articles 1317,
1403, No. 1, and 1404 regarding unauthorized
contracts shall govern.
In the second case, the rules on agency in Title
X of this Book shall be applicable. [Art. 2144]
A.1. OBLIGATIONS OF A GESTOR
(1) Perform his duties with all the diligence of
a good father of a family
(2) Pay the damages which through his fault
and negligence may be suffered by the
owner of the property/business under his
management [Art. 2145]
(3) Be liable for the acts of the persons to
whom he delegated all or some of his
duties. This is without prejudice to the
direct obligation of the delegate to the
owner of the business. [Art. 2146]
(4) Be liable for any fortuitous event under the
following conditions:
(a) If he undertakes risky operations which
the owner was not accustomed to
embark upon
(b) If he has preferred his own interest to
that of the owner
450
CIVIL LAW
(c) If he fails to return the property or
business after demand of the owner
(d) If he assumed management in bad
faith [Art. 2147]
(e) If he is manifestly unfit to carry on the
management
(f) If by his intervention he prevented a
more competent person from taking up
the management. [Art. 2148]
Note: The gestor shall not be liable for (e)
and (f) if the management was assumed to
save the property or business from
imminent danger.
(5) Be personally liable for contracts which he
entered into with third persons, even
though he acted in the name of the owner,
and there shall be no right of action
between the owner and third persons.
The gestor shall not be personally liable for
such contracts, provided:
(a) The owner has expressly or tacitly
ratified the management, or
(b) When the contract refers to things
pertaining to the owner of the
business. [Art. 2152]
Note: The responsibility of two or more
gestors shall be solidary, unless the
management was assumed to save the
thing or business from imminent danger.
A.2. OBLIGATIONS OF THE OWNER OF
THE PROPERTY OR BUSINESS
Although the management was not expressly
ratified, the owner who enjoys the advantages
of the same shall:
(a) Be liable for the obligations incurred in his
interest
(b) Reimburse the gestor for the necessary
and useful expenses and for the damages
the latter may have suffered in the
performance of his duties
UP LAW BOC CREDIT TRANSACTIONS
The above obligations shall be incumbent
upon the owner if the management had for its
purpose the prevention of an imminent and
manifest loss, although no benefit may have
been derived. [Art. 2150]
If the owner did not derive any benefit and
there was no imminent and manifest danger to
the property or business, the owner would still
be liable for the abovementioned obligations
and expenses, provided:
(5) The gestor has acted in good faith; and
(6) The property or business is intact, ready to
be returned to the owner. [Art. 2151]
A.3. EFFECT OF RATIFICATION
The ratification of the management by the
owner of the business produces the effects of
an express agency, even if the business may
not have been successful. [Art. 2149]
A.4. EXTINGUISHMENT OF
MANAGEMENT
(1) When the owner repudiates or puts an end
thereto
(2) When the gestor withdraws from the
management, subject to Art. 2144
(3) By the death, civil interdiction, insanity or
insolvency of the owner or the gestor. [Art.
2153]
B. SOLUTIO INDEBITI (UNDUE
PAYMENT)
Solution indebiti – takes place when something
is received when there is no right to demand it,
and it was unduly delivered through mistake.
The recipient has the duty to return it [Art.
2154].
This situation covers payment by reason of a
mistake in the construction or application of a
doubtful or difficult question of law [Art. 2155]
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CIVIL LAW
WHEN DEBT NOT YET DUE
If the payer was in doubt whether the debt was
due, he may recover if he proves that it was not
due. [Art. 2156]
RESPONSIBILITY OF TWO OR MORE
PAYEES
When there has been payment of what is not
due, their responsibility is solidary.
WHEN MONEY OR THING DELIVERED IS
OWNED BY THIRD PERSON
The payee cannot demand that the payor
prove his ownership of the thing delivered.
Nevertheless, should he discover that the thing
has been stolen and who its true owner is, he
must advise the latter.
If the owner, in spite of such information, does
not claim it within the period of one month, the
payee shall be relieved of all responsibility by
returning the thing deposited to the payor.
If the payee has reasonable grounds to believe
that the thing has not been lawfully acquired
by the payor, the former may return the same.
[Art. 2158]
LIABILITY OF PAYEE
If in bad faith, he shall be liable:
(1) For legal interest if a sum of money is
involved, or
(2) For the fruits received or which should
have been received if the thing produces
fruits, and
(3) For any loss or impairment of the thing for
any cause, and
(4) For damages to the person who delivered
the thing, until it is recovered. [Art. 2159]
If in good faith, he shall be liable:
(1) For the impairment or loss of the thing
certain and determinable or its accessories
UP LAW BOC CREDIT TRANSACTIONS
and accessions insofar as he has thereby
been benefited.
(2) For the return of the price or assign the
action to collect the sum if he has
alienated the same. [Art. 2160]
EXEMPTION FROM THE OBLIGATION TO
RESTORE THE PAYMENT UNDULY MADE
A person who, believing in good faith that the
payment was being made of a legitimate and
subsisting claim,
(1) destroyed the document, or
(2) allowed the action to prescribe, or
(3) gave up the pledges, or
(4) cancelled the guaranties for his right shall
be exempt from the obligation to restore.
The person who paid unduly may proceed only
against the true debtor or the guarantors with
regard to whom the action is still effective.
[Art. 2162]
PRESUMPTION OF PAYMENT BY
MISTAKE, DEFENSE
The presumption arises if something which
had never been due or had already been paid
was delivered; but he from whom the return is
claimed may prove that the delivery was made
out of liberality or for any other just cause.
C. OTHER QUASI-CONTRACTS
(1) When, without the knowledge of the
person obliged to give support, it is given
by a stranger, the latter shall have a right
to claim the same from the former, unless
it appears that he gave it out of piety and
without intention of being repaid. [Art.
2164]
(2) When funeral expenses are borne by a
third person, without the knowledge of
those relatives who were obliged to give
support to the deceased, said relatives
shall reimburse the third person, should
the latter claim reimbursement. [Art. 2165]
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CIVIL LAW
(3) When the person obliged to support an
orphan, or an insane or other indigent
person unjustly refuses to give support to
the latter, any third person may furnish
support to the needy individual, with right
of reimbursement from the person obliged
to give support. The provisions of this
article apply when the father or mother of
a child under eighteen years of age
unjustly refuses to support him. [Art. 2166]
(4) When through an accident or other cause a
person is injured or becomes seriously ill,
and he is treated or helped while he is not
in a condition to give consent to a contract,
he shall be liable to pay for the services of
the physician or other person aiding him,
unless the service has been rendered out of
pure generosity. [Art. 2167]
(5) When during a fire, flood, storm, or other
calamity, property is saved from
destruction by another person without the
knowledge of the owner, the latter is
bound to pay the former just
compensation. [Art. 2168]
(6) When the government, upon the failure of
any person to comply with health or safety
regulations concerning property,
undertakes to do the necessary work, even
over his objection, he shall be liable to pay
the expenses. [Art. 2169]
(7) When by accident or other fortuitous event,
movables separately pertaining to two or
more persons are commingled or confused,
the rules on co-ownership shall be
applicable. [Art. 2170]
(8) The rights and obligations of the finder of
lost personal property shall be governed by
Articles 719 and 720. [Art. 2171]
(9) The right of every possessor in good faith
to reimbursement for necessary and useful
UP LAW BOC CREDIT TRANSACTIONS
expenses is governed by Article 546. [Art.
2172]
(10) When a third person, without the
knowledge of the debtor, pays the debt,
the rights of the former are governed by
Articles 1236 and 1237. [Art. 2173]
(11) When in a small community a nationality
of the inhabitants of age decide upon a
measure for protection against
lawlessness, fire, flood, storm or other
calamity, any one who objects to the plan
and refuses to contribute to the expenses
but is benefited by the project as executed
shall be liable to pay his share of said
expenses. [Art. 2174]
(12) Any person who is constrained to pay the
taxes of another shall be entitled to
reimbursement from the latter. [Art. 2175]
IX. Concurrence and
Preference of Credits
Concurrence of credits – implies possession by
two or more creditors of equal rights or
privileges over the same property or all of the
property of the debtor.
Preference of credits – is the right held by a
creditor to be preferred in the payment of his
claim above others out of the debtor’s assets.
Preference – is merely a method adopted to
determine and specify the order in which
credits should be paid, as opposed to a lien,
which creates a charge on a particular
property. [DBP v. NLRC (1990)]
A. WHEN RULES ON PREFERENCE
ARE APPLICABLE
(1) There are two or more creditors
(2) With separate and distinct claims
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CIVIL LAW
(3) Against the same debtor
(4) Who has insufficient property AND
(5) Is insolvent
B. CLASSIFICATION OF CREDITS
(1) Special Preferred Credits
(a) These are considered as mortgages or
pledges of real or personal property, or
liens within the purview of legal
provisions governing insolvency. [NCC
2243]
(b) Taxes in NCC 2241 and 2242 shall first
be satisfied. [NCC 2243] Only taxes
enjoy a preference; for all other claims,
there is only a concurrence of credits.
[Gomez-Somera]
(c) They exclude all other claims to the
extent of the value of the affected
property.
(d) These take precedence over ordinary
preferred credits insofar as the
property, to which the liens attach, is
concerned. [Gomez-Somera]
(e) Pro-rating – total amount to be paid is
equal to:
Credit
------------------ x value of property
Total amount of
concurring
debts
(2) Ordinary Preferred Credits
(a) These enjoy a preference, excluding
the credits that are later in order, but
only as against the value of the
property not otherwise subjected to
any special preferred credit. [Gomez-
Somera]
(b) NCC 2244 does not create a lien on
specific property; rather, it create
rights in favor of certain creditors to
have the free property of the debtor
applied in accordance with an order of
preference.
UP LAW BOC CREDIT TRANSACTIONS
(3) Common Credits
These enjoy no preference, and there is only a
concurrence of credits, which must be paid pro
rata regardless of dates [NCC 2245, 2251].
B.1. SPECIAL PREFERRED CREDITS ON
SPECIFIC MOVABLE PROPERTY
Art. 2241. With reference to specific movable
property of the debtor, the following claims or
liens shall be preferred:
(1) Duties, taxes and fees due thereon to the
State or any subdivision thereof;
(2) Claims arising from misappropriation,
breach of trust, or malfeasance by public
officials committed in the performance of
their duties, on the movables, money or
securities obtained by them;
(3) Claims for the unpaid price of movables
sold, on said movables, so long as they are
in the possession of the debtor, up to the
value of the same; and if the movable has
been resold by the debtor and the price is
still unpaid, the lien may be enforced on
the price; this right is not lost by the
immobilization of the thing by destination,
provided it has not lost its form, substance
and identity; neither is the right lost by the
sale of the thing together with other
property for a lump sum, when the price
thereof can be determined proportionally;
(4) Credits guaranteed with a pledge so long
as the things pledged are in the hands of
the creditor, or those guaranteed by a
chattel mortgage, upon the things pledged
or mortgaged, up to the value thereof;
(5) Credits for the making, repair, safekeeping
or preservation of personal property, on
the movable thus made, repaired, kept or
possessed;
(6) Claims for laborers' wages, on the goods
manufactured or the work done;
(7) For expenses of salvage, upon the goods
salvaged;
(8) Credits between the landlord and the
tenant, arising from the contract of
tenancy on shares, on the share of each in
the fruits or harvest;
(9) Credits for transportation, upon the goods
carried, for the price of the contract and
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CIVIL LAW
incidental expenses, until their delivery and
for thirty days thereafter;
(10) Credits for lodging and supplies usually
furnished to travellers by hotel keepers, on
the movables belonging to the guest as
long as such movables are in the hotel, but
not for money loaned to the guests;
(11) Credits for seeds and expenses for
cultivation and harvest advanced to the
debtor, upon the fruits harvested;
(12) Credits for rent for one year, upon the
personal property of the lessee existing on
the immovable leased and on the fruits of
the same, but not on money or instruments
of credit;
(13) Claims in favor of the depositor if the
depositary has wrongfully sold the thing
deposited, upon the price of the sale.
In the foregoing cases, if the movables to
which the lien or preference attaches have
been wrongfully taken, the creditor may
demand them from any possessor, within thirty
days from the unlawful seizure.
B.2. SPECIAL PREFERRED CREDITS ON
SPECIFIC IMMOVABLE PROPERTY AND
REAL RIGHTS
Art. 2242. With reference to specific
immovable property and real rights of the
debtor, the following claims, mortgages and
liens shall be preferred, and shall constitute an
encumbrance on the immovable or real right:
(1) Taxes due upon the land or building;
(2) For the unpaid price of real property sold,
upon the immovable sold;
(3) Claims of laborers, masons, mechanics and
other workmen, as well as of architects,
engineers and contractors, engaged in the
construction, reconstruction or repair of
buildings, canals or other works, upon said
buildings, canals or other works;
(4) Claims of furnishers of materials used in
the construction, reconstruction, or repair
of buildings, canals or other works, upon
said buildings, canals or other works;
(5) Mortgage credits recorded in the Registry
of Property, upon the real estate
mortgaged;
(6) Expenses for the preservation or
improvement of real property when the law
authorizes reimbursement, upon the
UP LAW BOC CREDIT TRANSACTIONS
immovable preserved or improved;
(7) Credits annotated in the Registry of
Property, in virtue of a judicial order, by
attachments or executions, upon the
property affected, and only as to later
credits;
(8) Claims of co-heirs for warranty in the
partition of an immovable among them,
upon the real property thus divided;
(9) Claims of donors or real property for
pecuniary charges or other conditions
imposed upon the donee, upon the
immovable donated;
(10) Credits of insurers, upon the property
insured, for the insurance premium for two
years.
B.3. ORDINARY PREFERRED CREDITS
Art 2244. With reference to other property, real
and personal, of the debtor, the following
claims or credits shall be preferred in the order
named:
(1) Proper funeral expenses for the debtor, or
children under his or her parental authority
who have no property of their own, when
approved by the court;
(2) Credits for services rendered the insolvent
by employees, laborers, or household
helpers for one year preceding the
commencement of the proceedings in
insolvency;
(3) Expenses during the last illness of the
debtor or of his or her spouse and children
under his or her parental authority, if they
have no property of their own;
(4) Compensation due the laborers or their
dependents under laws providing for
indemnity for damages in cases of labor
accident, or illness resulting from the
nature of the employment;
(5) Credits and advancements made to the
debtor for support of himself or herself,
and family, during the last year preceding
the insolvency;
(6) Support during the insolvency
proceedings, and for three months
thereafter;
(7) Fines and civil indemnification arising from
a criminal offense;
(8) Legal expenses, and expenses incurred in
the administration of the insolvent's estate
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CIVIL LAW
for the common interest of the creditors,
when properly authorized and approved by
the court;
(9) Taxes and assessments due the national
government, other than those mentioned
in Articles 2241, No. 1, and 2242, No. 1;
(10) Taxes and assessments due any province,
other than those referred to in Articles
2241, No. 1, and 2242, No. 1;
(11) Taxes and assessments due any city or
municipality, other than those indicated in
Articles 2241, No. 1, and 2242, No. 1;
(12) Damages for death or personal injuries
caused by a quasi-delict;
(13) Gifts due to public and private institutions
of charity or beneficence;
(14) Credits which, without special privilege,
appear in [a] a public instrument; or (b) in
a final judgment, if they have been the
subject of litigation. These credits shall
have preference among themselves in the
order of priority of the dates of the
instruments and of the judgments,
respectively.
Worker preference in case of bankruptcy
PD 442 Labor Code, as amended, Art. 110. In
the event of bankruptcy or liquidation of an
employer’s business, his workers shall enjoy
first preference as regards their wages and
other monetary claims, any provisions of law to
the contrary notwithstanding. Such unpaid
wages and monetary claims shall be paid in
full before claims of the government and other
creditors may be paid.
B.4. COMMON CREDITS
Art. 2245. Credits of any other kind or class, or
by any other right or title not comprised in the
four preceding articles, shall enjoy no
preference.
C. ORDER OF PREFERENCE OF
CREDITS
(1) Credits which enjoy preference with respect
to specific movables exclude all others to
the extent of the value of the personal
property to which the preference refers
[Art.2246].
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW

(2) If there are two or more credits with (2) Future property:
respect to the same specific movable (a) A debtor who obtains a discharge from
property, they shall be satisfied pro rata, his debts on account of insolvency, is
after the payment of duties, taxes and fees not liable for the unsatisfied claims of
due the State or any subdivision thereof his creditors with said property [Sec.
[Art.2247] 68 and 69, Insolvency Law, Act 1956]
(3) Those credits which enjoy preference in (3) Property in custodia legis and of public
relation to specific real property or real dominion
rights exclude all others to the extent of
the value of the immovable or real right to
which the preference refers [Art.2248].
(4) If there are two or more credits with
respect to the same specific real property
or real rights, they shall be satisfied pro
rata, after the payment of the taxes and
assessment of the taxes and assessments
upon the immovable property or real right
[Art. 2249].
(5) The excess, if any, after the payment of the
credits which enjoy preference with respect
to specific property, real or personal, shall
be added to the free property which the
debtor may have, for the payment of other
credits [Art.2250].
(6) Those credits which do not enjoy any
preference with respect to specific
property, and those which enjoy
preference, as to the amount not paid,
shall be satisfied according to the
following rules:
(a) Order established by NCC 2244
(b) Common credits referred to in NCC
2245 shall be paid pro rata regardless
of dates [Art.2251].

D. EXEMPT PROPERTY
(1) Present property
(a) Family home [Arts. 152, 153 and 155]
(b) Right to receive support, as well as
money or property obtained by such
support, shall not be levied upon on
attachment or execution. [Art. 205]
(c) Rule 39, Sec. 13
(d) Sec 118, Public Land Act [CA 141, as
amended]

456
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW

CIVIL LAW
LAND, TITLES, &
DEEDS

457
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW

I. Torrens System (a) Fee Simple – An absolute title in

perpetuity; Title to land is conferred
Land Title – It is the evidence of the right of the upon a man and his heirs absolutely
owner or the extent of his interest, by which he and without any limitation imposed
can maintain control, and as a rule, assert right upon the estate
to exclusive possession and enjoyment of the (b) Fee Tail – One designed to pass title
property. [Pena, Registration of Land Titles from grantee to his heirs, in the intent
and Deeds, p. 3] of the grantor being to keep the
property in the grantee’s line of issue
Title and Certificate of Title Distinguished (c) Life Estate – One held for the duration
of the life of the grantee; In some
Title Certificate of Title cases, it may terminate earlier as by
forfeiture
Definition
Lawful cause or It is a mere evidence (2) Less-than-Freehold Estate – Signifies some
ground of possessing of ownership; it is not sort of right short of title
that which is ours. the title to the land (a) Estate for Years – In the nature of a
itself.1 lease; grantee or lessee takes over
That which possession of the land for a period
constitutes a just agreed upon but the grantor retains
cause of exclusive
the legal title to the property
possession, or which
is the foundation of (b) Tenancy from period to period – Also in
ownership of property. the nature of a lease which may run
from month to month or from year to
Deed – A written instrument executed in year, with the peculiarity of automatic
accordance with law, wherein a person grants renewal from time to time, unless
or conveys to another certain land, tenements expressly terminated by either party
or hereditaments. (c) Tenancy at will – Another form of lease
agreement where a person is permitted
ELEMENTS OF A DEED: to occupy the land of another without
(a) Grantor any stipulation as to period, but either
(b) Grantee party reserves the right to terminate
(c) Words of Grant the occupation at will or at any time
(d) Description of the property involved
(e) Signature of the grantor Land Registration – A judicial or administrative
(f) At least two (2) witnesses proceeding whereby a person’s claim of
(g) Notarial acknowledgment ownership over a particular land is determined
and confirmed or recognized so that such land
Estate – An estate, strictly speaking, and the ownership thereof may be recorded in
represents the nature, extent, degree, and a public registry.
quantity of a person’s interest in land.
TYPES OF ESTATE: Nature of Land Registration – Judicial
(1) Freehold Estate – Indicates title of proceedings for the registration of lands
ownership throughout the Philippines shall be in Rem
and shall be based on the generally accepted
1 Castillo v. Escutin

458
UP LAW BOC LAND TITLES AND DEEDS
principles underlying the Torrens system [Sec.
2, par. 1, PD 1529]
It is therefore binding on the whole world
because “by the description in the notice (of
initial hearing of the application for
registration) “To Whom It May Concern,” all
the world are made parties defendant.”
[Aquino, Land Registration and Related
Proceedings, p. 3, citing Esconde v. Borlongay,
152 SCRA 603, 1987]
A. LAWS IMPLEMENTING LAND
REGISTRATION
(1) Property Registration Decree [PD 1529, as
amended]
(2) Cadastral Act [Act 2259, as amended]
(3) Public Land Act [CA 141, as amended]
(4) Emancipation Decree [PD 27, as amended]
(5) Comprehensive Agrarian Reform Law of
1988 [RA 6657, as amended]
(6) Indigenous Peoples Rights Act of 1997
[RA 8371]
To simplify and streamline land registration
proceedings, Presidential Decree No. 1529 was
issued on June 11, 1978, otherwise known as the
Property Registration Decree, governing
registration of lands under the Torrens system
as well as the recording of transactions
relating to unregistered lands, including
chattel mortgages. This Decree consolidates,
in effect, all pre-existing laws on property
registration with such appropriate
modifications as are called for by existing
circumstances. [Pena, p. 9]
B. PURPOSES OF LAND
REGISTRATION
(1) To notify and protect the interests of
strangers to a given transaction, who may
be ignorant thereof [Sapto, et al. v.
Fabiana, 103 Phil. 683, 1958]
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CIVIL LAW
(2) As held in Legarda v. Saleeby [31 Phil. 590
(1915)]
(a) To quiet title to the land and to stop
forever any question as to the legality
of said title
(b) To relieve the land of unknown claims
(c) To guarantee the integrity of land titles
and to protect their indefeasibility once
the claim of ownership is established
and recognized
(d) To give every registered owner
complete peace of mind
(e) To issue a certificate of title to the
owner which shall be the best evidence
of his ownership of the land
(f) To avoid conflicts of title in and to real
estate and to facilitate transactions
(3) As held in Capitol Subdivisions, Inc. v.
Province of Negros Occidental [7 SCRA 60
(1963)]
(a) To avoid possible conflicts of title in
and to real property, and
(b) To facilitate transactions relative
thereto by giving the public the right to
rely upon the face of the Torrents
certificate of title and to dispense with
the need of inquiring further
Object of Registration – Only real property or
real rights may be the object of registration
under the existing land registration laws.
CLASSIFICATION OF LANDS:
(1) Private or public
(2) Alienable or inalienable
(3) Registered or unregistered
(4) Registrable or Non-registrable
Registrable lands are:
(1) Alienable public agricultural lands,
 If in the public domain, the land must
be classified as alienable and
disposable. It must be classified as
such at the time of filing the
UP LAW BOC LAND TITLES AND DEEDS
application for registration. [Republic v.
CA and Naguit, 2005]
(2) Private lands
Non-registrable lands - those found in the Civil
Code dealing with non-registrable properties
(e.g. property of public dominion)
Torrens System - A system for registration of
land under which, upon landowner’s
application, the court may, after appropriate
proceedings, direct the issuance of a certificate
of title. [Black’s Law Dictionary]
The boldest effort to grapple with the problem
of simplification of title to land was made by
Mr. (afterwards Sir Robert) Torrens, a layman,
in South Australia in 1857. . . . In the Torrens
system title by registration takes the place of
"title by deeds" of the system under the
"general" law. A sale of land, for example, is
effected by a registered transfer, upon which a
certificate of title is issued. The certificate is
guaranteed by statute, and, with certain
exceptions, constitutes indefeasible title to the
land mentioned therein. The object of the
Torrens system, them, is to do away with the
delay, uncertainty, and expense of the old
conveyancing system.
The Torrens system was introduced in the
Philippines by Act No. 496, which took effect
on Jan. 1, 1903. This was later amended and
superseded by PD 1529 which took effect on
June 11, 1978.
The underlying principle of the Torrens system
is security with facility in dealing with land.
This is made possible by defining the absolute
status of a given property in a certificate of title
with a governmental and universal guaranty.
This certificate of title should better be known
as certificate of title and encumbrances. In the
words of Torrens himself the main objects are
“to simplify, quicken, and cheapen the transfer
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CIVIL LAW
of real estate and to render title safe and
indefeasible.” [The Philippine Torrens System
by Florencio Ponce 1964]
By "Torrens" system generally are meant those
systems of registration of transactions with
interest in land whose declared object is, under
governmental authority, to establish and
certify to the ownership of an absolute and
indefeasible title to realty, and to simplify its
transfer. [Grey-Alba v. Dela Cruz, GR No. L-
524]
ADVANTAGES
(1) Secures title
(2) Protection against fraud
(3) Simplified dealings
(4) Restoration of the estates to its just value,
whose depreciation is caused by some blur,
technical defect
(5) Barred the recurrence of faults in the title
[Legarda v. Saleeby]
Nature: Judicial in nature.
Purpose: The real purpose of the Torrens
system of registration is to quiet title to land;
to put a stop forever to any question of the
legality of the registration, in the certificate, or
which may arise subsequent thereto. [Pena, p.
47]
C. ADMINISTRATION OF THE
TORRENS SYSTEM
(1) Land Registration Authority
 The agency charged with the efficient
execution of the laws relative to the
registration of lands
 Under the executive supervision of the
DOJ
 Consists of an Administrator assisted by
2 Deputy Administrators
(2) Register of Deeds
UP LAW BOC LAND TITLES AND DEEDS
 Constitutes a public repository of
records of instruments affecting
registered or unregistered lands and
chattel mortgages in the province or city
wherein such office is situated
 Headed by the Register of Deeds,
assisted by a Deputy
CERTIFICATE OF TITLE
The Torrens Title – Certificate of ownership
issued by the Register of Deeds naming and
declaring the owner of the real property
described therein free from all liens and
encumbrances, except such as may be
expressly noted thereon or otherwise reserved
by law
(1) Original Certificate of Title (OCT) – it is the
first certificate of title issued in the name
of the registered owner by the Register of
Deeds covering a parcel of land which had
been registered under the Torrens
System, by virtue of judicial or
administrative proceedings
(2) Transfer Certificate of Title (TCT) – the
subsequent certificate of title pursuant to
any deed of transfer or conveyance to
another person. The Register of Deeds
shall make a new certificate of title and
give the registrant an owner’s duplicate
certificate. The previous certificate shall
be stamped “cancelled.”
(3) Patents – Whenever public land is by the
Government alienated, granted or
conveyed to any person, the same shall be
brought forthwith under the operation of
this Decree [PD 1529, Sec. 103, par. 1]
(a) Patents only involve public lands
which are alienated by the
Government pursuant to the Public
Land Act (CA 141, as amended]
(b) The patent (even if denominated as
deed of conveyance) is not really a
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CIVIL LAW
conveyance but a contract between
the grantee and the Government and
evidence of authority to the Register
of Deeds to make registration.
(c) The act of registration is the operative
act to affect and convey the land.
Probative Value: A Torrens Certificate of Title is
valid and enforceable against the whole world.
It may be received in evidence in all courts of
the Philippines, and shall be conclusive as to
all matters contained therein, principally the
identity of the owner of the covered land
thereby and identity of the land.
A Torrens title, once registered, cannot be
defeated, even by adverse, open and notorious
possession. A registered title under the
Torrens system cannot be defeated by
prescription. The title, once registered, is
notice to the whole world. All persons must
take notice. No one can plead ignorance of the
registration. [Egao v. CA, 1989]
D. EFFECT OF REGISTRATION
UNDER THE TORRENS SYSTEM
(1) Land is placed under the operation of the
Torrens system
(2) Claims and liens of whatever character
existing against the land prior to the
issuance of the certificate of title are cut off
by such certificate and the certificate so
issued binds the whole world, including the
government
(a) It is an elemental rule that a decree of
registration bars all claims and rights
which arose or may have existed prior
to the decree of registration. By the
issuance of the decree, the land is
bound and title thereto quieted,
subject only to certain exceptions
under the property registration decree.
[Heirs of Alejandra Delfin, namely,
Leopoldo Delfin, et al. v. Avelina
UP LAW BOC LAND TITLES AND DEEDS
Rabadon, G.R. No. 165014, July 31,
2013]
(b) Exceptions:
(i) Those claims noted on the
certificate
(ii) Liens, claims, or rights arising or
existing under the laws and the
Constitution, which are not by law
required to appear on record in the
Register in order to be valid
(iii) Unpaid real estate taxes levied and
assessed within 2 years
immediately preceding the
acquisition of any right over the
land by an innocent purchaser for
value
(3) Title to the land becomes non-prescriptible
(a) Even adverse, notorious, and
continuous possession under claim of
ownership for the period fixed by law is
ineffective against a Torrens title [JM
Tuason and Co. Inc. v. CA, 1979]
(b) The fact that the title to the land was
lost does not mean that the land
ceased to be registered land before the
reconstitution of its title. It cannot
perforce be acquired by prescription.
[Ruiz v. CA, 1977]
(4) Land becomes incontrovertible and
indefeasible. A decree of registration and
registered title cannot be impugned,
enlarged, altered, modified, or diminished
either in collateral or direct proceeding
after the lapse of the 1-year period
prescribed by the law.
(a) Exceptions:
(i) If previous valid title of the same
land exists
(ii) When the land covered is not
capable of registration
(iii) When acquisition of certificate is
attended by fraud
(5) Torrens certificate is presumed valid and
devoid of flaws.
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CIVIL LAW
Note: Registration is not equivalent to legal
title
 Under the Torrens system, registration only
gives validity to the transaction or creates a
lien upon the land. It merely confirms, but
does not confer, ownership [Lu v. Manipon,
GR No. 147072, 2002]
E. EFFECT OF NON-REGISTRATION
If a purchaser, mortgagee or grantee should
fail to register his deed the conveyance, in light
of our existing registration laws, shall not be
valid against any person unless registered.
Exceptions:
(1) The grantor,
(2) His heirs and devisees, and
(3) Third persons having actual notice or
knowledge thereof.
It is a settled rule that lands under a Torrens
title cannot be acquired by prescription or
adverse possession. Section 47 of P.D. No.
1529, the Property Registration Decree,
expressly provides that no title to registered
land in derogation of the title of the registered
owner shall be acquired by prescription or
adverse possession. [Dream Village
Neighborhood Association, Inc., represented
by its Incumbent President Greg Seriego v.
Bases Conversion Development Authority, G.R.
No.192896, July 24, 2013.]
DEALINGS IN LAND BEFORE ISSUANCE
OF DECREE:
With the filing of an application for
registration, the land described therein does
not cease to become open to any lawful
transaction. If the transaction takes place
before the issuance of the decree of
registration, Section 22 of PD 1529 provides
that the instrument is to be presented to the
RTC, together with a motion praying that the
UP LAW BOC LAND TITLES AND DEEDS
same be considered in relation with the
pending application.
However, if the motion is filed after the
decision of adjudication has become final but
before the issuance of the decree by the
Administrator of Land Registration Authority,
the court shall require the interested party to
pay the fees prescribed as if such instrument
had been presented for registration in the
office of the Register of Deeds. [Pena, p. 72-73]
LACHES, WHEN IT APPLIES.
Laches sets in if it would take 18 years for a
person to file an action to annul the land
registration proceedings, especially so if the
registrant has already subdivided the land and
sold the same to innocent third parties. A
party’s long inaction or passivity in asserting
his rights over disputed property precludes him
from recovering the same. [Heirs of Teodoro
dela Cruz vs. CA, 298 SCRA 172; Aurora
Ignacio v. Valeriano Basilio, et al., G.R. No.
122824, Sept. 26, 2001]
II. The Regalian Doctrine
A western legal concept that was first
introduced by the Spaniards into the country
through the laws of the Indies and the Royal
Cedulas. Whereby the Philippines passed to
Spain by virtue of “discovery” and conquest.
Consequently, all lands became the exclusive
patrimony and dominion of the Spanish Crown.
[Agcaoili]
Sec. 2, Art. XII of the 1987 Constitution
All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the
State. With the exception of agricultural lands,
all other natural resources shall not be
alienated. The exploration, development, and
463
CIVIL LAW
utilization of natural resources shall be under
the full control and supervision of the State.
The State may directly undertake such
activities, or it may enter into co-production,
joint venture, or production-sharing
agreements with Filipino citizens, or
corporations or associations at least 60 per
centum of whose capital is owned by such
citizens. Such agreements may be for a period
not exceeding twenty-five years, renewable for
not more than twenty-five years, and under
such terms and conditions as may be provided
by law. In cases of water rights for irrigation,
water supply, fisheries, or industrial uses other
than the development of waterpower,
beneficial use may be the measure and limit of
the grant.
The State shall protect the nation’s marine
wealth in its archipelagic waters, territorial
sea, and exclusive economic zone, and reserve
its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale
utilization of natural resources by Filipino
citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fish
workers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with
foreign-owned corporations involving either
technical or financial assistance for large-scale
exploration, development, and utilization of
minerals, petroleum, and other mineral oils
according to the general terms and conditions
provided by law, based on real contributions to
the economic growth and general welfare of
the country. In such agreements, the State
shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of
every contract entered into in accordance with
this provision, within thirty days from its
execution.
The principle of State ownership of lands and
all other natural resources had its roots in the
1935 Constitution, which expressed the
overwhelming sentiment in the Convention in
UP LAW BOC LAND TITLES AND DEEDS
favor of the principle of State ownership of
natural resources and the adoption of the
Regalian doctrine as articulated in Sec. 1, Art
XIII.
The 1973 Constitution reiterated the Regalian
Doctrine in Sec. 8, Art. XIV.
The present Constitution provides that, except
for agricultural lands of the public domain
which alone may be alienated, forest or timber,
and mineral lands, as well as all other natural
resources must remain with the State, the
exploration, development, and utilization of
which shall be subject to its full control and
supervision albeit allowing it to enter into co-
production, joint venture, or production-
sharing agreements, or into agreements with
foreign-owned corporations involving technical
or financial assistance for large-scale
exploration, development, and utilization.
[Secs. 2 and 3, Art. XII; La Bugal-B’laan Tribal
Association, Inc. v. Ramos]
Enshrined in the Constitution [Art 12, Sec 2 &
3], it states that all lands of public domain
belong to the state, thus private title to land
must be traced to some grant, express or
implied, from the state, i.e. The Spanish Crown
or its successors, the American Colonial
government and thereafter the Philippine
Republic
It does not negate native title to lands held in
private ownership since time immemorial [Cruz
v. Sec. of Environment and Natural Resources]
It recognized ownership of land by Filipinos
independent of any grant from the Spanish
crown on the basis of possession since time
immemorial [cf: Carino v. Insular Government],
it is presumed to have been held prior the
Spanish conquest and never to have been
public land.
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CIVIL LAW
A. EFFECTS
(1) All lands of public domain belong to the
state, and that the State is the source of
any asserted right to ownership in land and
charged with the conservation of such
patrimony [Republic v. IAC, GR No. 71285]
(2) All lands not otherwise appearing to be
clearly within private ownership are
presumed to belong to the State [Dir. Of
Lands v. IAC, 1993, 219 SCRA 339]
(3) Any applicant for judicial confirmation of
an imperfect title has the burden of
proving, by incontrovertible evidence, that
the (a) land applied for is alienable and
disposable public land; and, (b) the
applicant, by himself or through his
predecessors-in-interest had occupied and
possessed the land, in the concept of
owner, openly, continuously, exclusively,
and adversely since June 12, 1945, or
earlier. [Pelbel Manufacturing Corp. v. CA,
GR No. 141325]
B. CONCEPT OF NATIVE TITLE, TIME
IMMEMORIAL POSSESSION
A recognized exception to the theory of jura
regalia, the ruling in Carino v. Insular
Government institutionalized the recognition
of the existence of native title to land, or
ownership of land by Filipinos by virtue of
possession under a claim of ownership since
time immemorial and independent of any
grant from the Spanish Crown [Agcaoili]
Lands under native title are not part of public
domain, “lands possessed by an occupant and
his predecessors since time immemorial, such
possession would justify the presumption that
the land had never been part of the public
domain or that it had been private property
even before the Spanish conquest [Republic v.
CA, GR No. 130174]
Certificate of Ancestral Domain Title: A formal
recognition, when solicited by Indigenous
UP LAW BOC LAND TITLES AND DEEDS
Cultural Communities/Indigenous People
(ICCs/IPs) concerned, shall be embodied in a
Certificate of Ancestral Domain Title (CADT),
which shall recognize the title of the concerned
ICCs/IPs over the territories identified and
delineated [Sec. 11, IPRA]
Like a Torrens title, a CADT is evidence of
private ownership of land by native title. Native
title, however, is a right of private ownership
particularly granted to ICCs/IPs over their
ancestral lands and domains. The IPRA
categorically declares ancestral lands and
domains held by native title as never to have
been public land. [Cruz v. Sec. of Environment
and Natural Resources, 2000, GR No. 135385]
III. Citizenship
Requirement
A. INDIVIDUALS
Art. XII, Sec. 3, 1987 Constitution provides, in
part:
Lands of the public domain are classified into
agricultural, forest or timber, mineral lands
and national parks. Agricultural lands of the
public domain may be further classified by law
according to the uses to which they may be
devoted. Alienable lands of the public domain
shall be limited to agricultural lands. Private
corporations or associations may not hold such
alienable lands of the public domain except by
lease, for a period not exceeding twenty-five
years, renewable for not more than twenty-five
years, and not to exceed one thousand
hectares in area. Citizens of the Philippines
may lease not more than five hundred
hectares, or acquire not more than twelve
hectares thereof, by purchase, homestead, or
grant.
The Krivenko Doctrine - The capacity to acquire
private land is made dependent upon the
capacity to acquire or hold lands of public
465
CIVIL LAW
domain. Private land may be transferred or
conveyed only to individuals or entities
‘qualified to acquire lands of public domain’ [II
Bernas]
The 1935 Constitution reserved the right xxx for
Filipino citizens or corporations at least sixty
percent of the capital of which was owned by
Filipinos. Aliens, whether individuals or
corporations, have been disqualified from
acquiring public lands; hence they have also
been disqualified from acquiring private lands.
[Krivenko v. Register of Deeds, GR No. L-630:
Ong Ching Po v CA, GR. No. 113427]
General Rule: Non-Filipinos cannot acquire or
hold title to private lands of public domain,
except only by way of legal succession [Halili v.
CA, GR No. 113539, Sec 2, 5 Art XII
Constitution]
Exceptions:
(1) Aliens by way of hereditary succession
(2) Natural born citizens who have lost their
citizenship- limited to 5,000 sq. m. for
urban land and 3 hectares for rural land
[RA No. 7042 as amended by RA No. 8179]
(3) Aliens, although disqualified to acquire
lands of public domain, may lease private
land for a reasonable period provided, that
such lease does not amount to a virtual
transfer of ownership. They may also be
given an option to buy property on the
condition that he is granted Philippine
citizenship. [Llantino v. Co liong Chong, GR
No. 29663]
(4) Lands acquired by an American citizen
prior the proclamation of Philippine
Independence on July 4, 1946 but after the
passage of the 1935 Constitution may be
registered, based on the ordinance
appended to the 1935 Constitution [Moss v.
Director of Lands, GR No. L-27170]
(5) Land sold to an alien which is now in the
hands of a naturalized citizen can no
UP LAW BOC LAND TITLES AND DEEDS
longer be annulled [De Castro v. Tan, GR
No. L-31956]. The litigated property is now
in the hands of a naturalized Filipino. It is
no longer owned by a disqualified vendee.
The purpose of the prohibition ceases to be
applicable. [Barsobia v. Cuenco, GR No. L-
33048]
B. CORPORATIONS
Private corporations may not hold alienable
lands of the public domain except by lease for
a period not exceeding twenty-five years,
renewable for not more than twenty-five years,
and not to exceed one thousand hectares in
area. [1987 Constitution, Art. XII, Sec. 3]
Limitations to Ownership of Land by
Corporations:
(1) For private lands:
(a) At least 60% Filipino [Sec. 7, Art. XII,
1987 Constitution]
(b) Restricted as to extent reasonably
necessary to enable it to carry out the
purpose for which it was created
(c) If engaged in agriculture, it is restricted
to 1,024 hectares
(2) For patrimonial property of the State [Sec.
3, Art. XII, 1987 Constitution]
(a) Lease only for a limited period of 25
years; cannot own land of the public
domain
(b) Limited to 1,000 hectares
(c) Applies to both Filipino and Foreign
Corporations
A corporation sole may acquire and register
private agricultural land [RC Apostolic
Administrator of Davao v. LRC GR No. L-8415]:
A corporation sole, which consists of one
person only, is vested with the right to
purchase and hold real estate and register the
same in trust for the faithful or members of the
religious society or church for which the
corporation was organized
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CIVIL LAW
IV. Original Registration
Original Registration - This is a proceeding
brought before the land registration court to
determine title or ownership of land on the
basis of an application for registration or
answer by a claimant in a cadastral
registration.
A decree of registration merely confirms, but
does not confer ownership. [City Mayor of
Parañaque City v. Ebio] Registration does not
vest title or give title to the land, but merely
confirms and thereafter protects the title
already possessed by the owner, making it
imprescriptible by occupation of third parties.
The registration does not give the owner any
better title than he has. He does not obtain
title by virtue of the certificate. He secures his
certificate by virtue of the fact that he has a fee
simple title. [Legarda v. Saleeby]
Distinguished from subsequent
(1) Original Registration – When right of
ownership or title to land is for the first
time made of public record
(2) Subsequent Registration – Any transaction
affecting such originally registered land, if
in order, may be registered in the Office of
the Register of Deeds concerned
A. KINDS OF ORIGINAL
REGISTRATION:
(1) Voluntary – by filing with the proper court
under:
(a) PD 1529, Property Registration Decree
(b) CA 141, Public Land Act
(c) RA 8371, IPRA
(2) Involuntary – as in Cadastral Proceedings
(1) This is compulsory registration
initiated by the government to
adjudicate ownership of the land
(2) Involuntary on the part of the claimant
but they are compelled to substantiate
their claim or interest
UP LAW BOC LAND TITLES AND DEEDS
B. WHO MAY APPLY:
(1) Under Sec. 14, PD 1529
(a) Those who by themselves or through
their predecessors-in-interest, have
been in open, continuous, exclusive
and notorious possession and
occupation of alienable and disposable
lands of the public domain under a
bona fide claim of ownership since
June 12, 1945, or earlier.
(b) Those who have acquired ownership of
private lands by prescription under the
provisions of existing laws.
(c) Those who have acquired ownership of
private lands or abandoned river beds
by right or accession or accretion under
the existing laws.
(d) Those who have acquired ownership of
land in any other manner provided for
by law.
(i) If land is owned in common, ALL
co-owners shall file the application
jointly
(ii) If land has been sold under pacto
de retro, the vendor a retro may file
an application for the original
registration of the land, provided,
however that should the period for
redemption expire during the
pendency of the registration
proceedings and ownership to the
property consolidated in the
vendee a retro, the latter shall be
substituted for the applicant and
may continue the proceedings.
(iii) A trustee on behalf of his principal
may apply for original registration
of any land held in trust by him,
unless prohibited by the
instrument creating the trust.
(2) Under Sec. 12, CA 141; Any person who:
(a) Is a citizen of the Philippines over the
age of 18, or the head of a family
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CIVIL LAW
(b) Does not own more than 24 hectares of
land in the Philippines, or has not had
the benefit of any gratuitous allotment
of more than 24 hectares of land since
the occupation of the Philippines by
the United States
(c) NOTE: they may enter a homestead of
not exceeding 24 hectares of
agricultural land of the public domain
(3) Under RA 8371
(a) Sec. 11 – Formal recognition of
ancestral domains by virtue of Native
Title may be solicited by ICCs/IPs
concerned
(b) Sec. 12 – Option to secure certificate of
title under CA 141 or Land Registration
Act 496
(i) Individual members of cultural
communities with respect to
individually-owned ancestral lands
who, by themselves or through
their predecessors-in -interest,
have been in continuous
possession and occupation of the
same in the concept of owner since
time immemorial or for a period of
not less than thirty (30) years
immediately preceding the
approval of this Act and
uncontested by the members of the
same ICCs/IPs shall have the
option to secure title to their
ancestral lands
(ii) Option granted shall be exercised
within 20 years from the approval
of RA 8371
Where to File: The court that should take
cognizance of a registration case is that which
has territorial jurisdiction over the property.
General Rule: RTC of the province, city, or
municipality where the property is situated
UP LAW BOC LAND TITLES AND DEEDS
The RTC shall have exclusive jurisdiction over
all applications original for registration of title,
with power to hear and determine all questions
arising upon such applications or petition.
[Sec. 2, par. 2, P.D. No. 1529]
Exception: Delegated jurisdiction to the MTC,
MeTC, and MCTC by the Supreme Court in
cadastral and land registration cases IF:
(1) There is no controversy over the land, OR
(2) Its value is less than P100,000 [Sec. 34, BP
129]
C. PROCEDURE IN ORDINARY LAND
REGISTRATION
STEP 1: Survey of the land by the Bureau of
Lands or a duly registered private surveyor
Note: No plan of such survey, whether it be
original or subdivision, may be admitted in
land registration proceedings until approved
by the Director of lands [Sec. 1858,
Administrative Code]
STEP 2: Filing of application for registration by
the applicant;
(a) Form of the application
(1) In writing
(2) Signed by the applicant/s or person
duly authorized in his behalf
(3) Sworn before any officer authorized to
administer oath for the province or city
where the application was actually
signed
(4) Application is presented in duplicate
(b) Contents of the application:
(1) A description of the land
(2) The citizenship and civil status of the
applicant, whether single or married,
and, if married, the name of the wife or
husband, and, if the marriage has been
legally dissolved, when and how the
marriage relation terminated. It shall
also state
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CIVIL LAW
(3) The full names and addresses of all
occupants of the land and those of the
adjoining owners, if known, and, if not
known, it shall state the extent of the
search to find them.
(4) Whether the property is conjugal,
paraphernal or exclusively owned by
the applicant.
(c) Documents to accompany the application
[from Regulations in Ordinary Land
Registration Cases]
(1) Tracing-cloth plan duly approved by
the Director of Lands, together with
two blueprint or photographic copies
thereof;
(2) Three copies of the corresponding
technical descriptions;
(3) Three copies of the surveyor’s
certificate;
(4) All original muniments of title in the
possession of the applicant which
prove his rights, to the title he prays for
or to the land he claims; and
(5) Certificate in quadruplicate of the city
or provincial treasurer of the assessed
value of the land, at its last assessment
for taxation, or, in the absence thereof,
that of the next preceding year.
However, in case the land has not been
assessed, the application may be
accompanied with an affidavit in
quadruplicate of the fair market value
of the land, signed by three
disinterested persons.
(d) Amendments to the Application
(1) Sec. 19, PD 1529 permits the applicants
to amend the application at any stage
of the proceedings upon such just and
reasonable terms as the court may
order;
(2) However, Sec. 23, PD 1529 mandates
that there is a need to comply with the
required publication and notice as in
UP LAW BOC LAND TITLES AND DEEDS
an original application if the
amendment is substantial as in:
(i) A change in the boundaries
(ii) An increase in the area of the land
applied for; or
(iii) The inclusion of an additional land
(e) Special Cases:
(1) If the land bounded by a road, the
applicant must state in his application
if he claims any portion of the land
within the limits of the road, or if he
likes to have the boundaries
determined. [Sec. 20, PD 1529]
(2) If the applicant is a non-resident, he
shall appoint an agent or
representative who is a Philippine
resident. [Sec. 16, PD 1529]
(3) Intestate Estate of Don Mariano San
Pedro v. CA (1996): A person claiming
ownership of real property must clearly
identify the land claimed by him.
(4) In re: Application for Land Registration
v. Republic (2008): An applicant in a
land registration case must prove the
facts and circumstances evidencing the
alleged ownership of the land applied
for. General statements which are
mere conclusions of law and not
factual proof of possession are
unavailing. The deeds in its favor only
proved possession of its predecessors-
in-interest as early as 1948. (The law
now stands that a mere showing of
possession for 30 years is not
sufficient. OCEN possession must be
shown to have stated on June 12, 1945
or earlier.)
STEP 3: Setting of the date for the initial
hearing of the application by the Court;
(a) The court shall issue an order setting the
date and hour of the initial hearing within
5 days from filing of the application
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CIVIL LAW
(b) The initial hearing shall be 45 – 90 days
from the date of the order [Sec. 23, PD
1529]
STEP 4: Transmittal to the LRA
The application and the date of initial hearing
together with all the documents or other
evidences attached thereto are transmitted by
the Clerk of Court to the Land Registration
Authority (LRA)
STEP 5: Publication of a notice of the filing of
the application and date and place of hearing
(a) Publication shall be sufficient to confer
jurisdiction upon the court. [Sec. 23, PD
1529]
(b) Form and contents of the notice:
(1) Addressed to all persons appearing to
have an interest in the land involved
(2) Requires all persons concerned to
appear in court on the date and time
indicated to show cause why the
application for registration should not
be granted
(c) The public shall be given notice of the
initial hearing of the application by
publication
(1) The Commissioner of Land
Registration (CLR) shall cause it to be
published once in the Official gazette
AND once in a newspaper of general
circulation
(2) This is sufficient to confer jurisdiction
to the court
(d) It is not necessary to give personal notice
to the owners or claimants of the land
sought to be registered to vest the court
with authority over the res. Land
registration proceedings are actions in
rem. [Dir. Of Lands v. CA, 276 SCRA 276]
(e) Once the registration court had acquired
jurisdiction over a certain parcel, or
parcels, of land in the registration
proceedings in virtue of the publication of
the application, that jurisdiction attaches
UP LAW BOC LAND TITLES AND DEEDS
to the land or lands mentioned and
described in the application. If it is later
shown that the decree of registration had
included land or lands not included in the
original application as published, then the
registration proceedings and the decree of
registration must be declared null and void
insofar — but only insofar — as the land not
included in the publication is concerned.
[Benin v. Tuason, 57 SCRA 531]
STEP 6: Service of notice upon contiguous
owners, occupants and those known to have
interest in the property by the Sheriff;
(a) Mailing:
(1) Within 7 days from publication, the
CLR shall mail a copy of the notice
(2) Copies of the notice shall be mailed to:
(i) Every person named in the notice
whose address is known.
(ii) the Secretary of Public Highways,
to the Provincial Governor, and to
the Mayor of the municipality or
city, in which the land lies, if the
applicant requests to have the line
of a public way or road determined
(iii) Secretary of Agrarian Reform, the
Solicitor General, the Director of
Lands, the Director of Mines
and/or the Director of Fisheries
and Aquatic Resources, (as
appropriate) if the land borders on
a river, navigable stream or shore,
or on an arm of the sea where a
river or harbor line has been
established, or on a lake, or if it
otherwise appears from the
application or the proceedings that
a tenant-farmer or the national
government may have a claim
adverse to that of the applicant
(b) Posting:
470
CIVIL LAW
(1) CLR shall cause the sheriff or his
deputy to post the notice at least 14
days before the hearing:
(2) In a conspicuous place on each parcel
of land included in the application and
in a conspicuous place on the bulletin
board of the municipal building of the
municipality or city in which the land or
portion thereof is situated.
(3) The court may also cause notice to be
served to such other persons and in
such manner as it may deem proper.
(c) Notice of application and initial hearing by
publication is sufficient and the mere fact
that a person purporting to have a
legitimate claim in the property did not
receive personal notice is not a sufficient
ground to invalidate the proceedings
although he may ask for the review of the
judgment or the reopening of the decree of
registration, if he was made the victim of
actual fraud. [Republic v. Abadilla, CA;
G.R. No. 6902-R, Oct. 6, 1951]
STEP 7: Filing of answer or opposition to the
application by any person whether named in
the notice or not;
(a) Who may file? Any person claiming an
interest, whether named in the notice or
not
(b) When to file? On or before the date of
initial hearing, or within such further time
as may be allowed by the court.
(c) What shall it contain? It shall state all the
objections and the interest claimed by the
party the remedy desired.
(d) How shall it be made? It shall be signed
and sworn to by him or by some other duly
authorized person. Sec. 25, PD 1529
provides for the requisites of an opposition:
UP LAW BOC LAND TITLES AND DEEDS
(1) It shall set forth “all the objections to
the application” and
(2) It shall state the “interest claimed by
the party filing the same”
(e) Effect of Failure to Answer:
(1) If no one appears/files an answer,
upon motion, the court shall order a
default to be recorded.
(2) By the description in the notice "To all
Whom It May Concern", all the world
are made parties defendant and shall
be concluded by the default order.
(3) Where an appearance has been
entered and an answer filed, a default
order shall be entered against persons
who did not appear and answer.
(4) Absence of opposition does not justify
outright registration. [Director of Lands
vs. Agustin, 1921]
(f) Effects of Default:
(1) With respect to the Applicant – he has
the right to present or adduce evidence
ex parte
(2) With respect to those covered by the
default order – they have no legal
standing in court; therefore, they are
no longer allowed to participate and
no opportunity to present evidence
(g) For relief from an order of default, see Sec.
3, Rule 18, Rules of Court
STEP 8: Hearing of the case by the court
(a) Applicable procedural law:
(1) Reception of evidence is governed by
PD 1529
(2) Rules of Court shall, insofar as not
inconsistent with the provisions of the
Decree, be applicable to land
registration and cadastral cases by
analogy or in a suppletory character
and whenever practicable and
convenient [Sec. 34, PD 1529]
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CIVIL LAW
(b) Sec. 27, PD 1529: Court may either:
(1) Hear the parties and their evidence, or
(2) Refer the case or any part thereof to a
referee
(a) Referee shall hear the parties,
receive their evidence, and submit
his report thereon to the Court
within 15 days after termination of
such hearing
(b) Hearing before a referee may be
held at any convenient place within
the province or city as may be fixed
by him and after reasonable notice
thereof shall have been served to
the parties concerned
(c) Upon receipt of the report the
Court may:
(i) Adopt the same
(ii) Set aside the report
(iii) Modify the report
(iv) Refer back or recommit the
case to the referee for
presentation of evidence
STEP 9: Promulgation of judgment by the
Court;
(a) This is the adjudication, determination,
and resolution of the issue of ownership
(b) Forms of Judgment:
(1) Dismissal of the application – with
prejudice or without prejudice
(2) Partial Judgment – in a case where
only a portion of the land subject of
registration is contested, the court may
render partial judgment provided that
a subdivision plan showing the
contested and uncontested portions
approved by the Director of Land is
previously submitted to said court.
[Sec. 28, PD 1529]
(3) Judgment Confirming Title - Judgment
may be rendered confirming the title of
the applicant, or the oppositor as the
UP LAW BOC LAND TITLES AND DEEDS
case may be, to the land or portions
thereof upon finding that the party
concerned has sufficient title proper for
registration. [Sec. 29, PD 1529]
(c) Finality of Judgment - Sec. 30, par. 1, PD
1529 provides that the judgment becomes
final upon the expiration of 30 days
counted from receipt of notice of
judgment.
Note: This has been MODIFIED to the lapse
of 15 days counted from receipt of notice of
judgment as per Sec. 39, BP 129
STEP 10: Issuance of the decree
(a) If the court finds after hearing that the
applicant or adverse claimant has title as
stated in his application or adverse claim
and proper for registration, a decree of
confirmation and registration shall be
entered
(b) The Court declares the decision final and
instructs the LRA to issue a decree of
confirmation and registration within 15
days from entry of judgment
 Note: it is not the court that issues the
decree, but the LRA
(c) One year after issuance of the decree, it
becomes incontrovertible and
amendments of the same will not be
allowed except in cases of clerical errors
(1) Court retains jurisdiction over the case
until after the expiration of 1 year from
the issuance of the decree of
registration. [Gomez v. CA, 1988]
(2) Note: While a decision in land
registration proceeding becomes final
after the expiration of thirty days from
the date of service of its notice, the
decree of registration does not become
final until after the lapse of one year
from the date of its issuance and entry.
STEP 11: Entry of the decree of registration
472
CIVIL LAW
(a) Decree is entered in the LRA
(b) Every decree of registration shall:
(1) Bear the day of the year, hour, and
minute of its entry,
(2) Be signed by the Administrator of the
Land Registration Authority in his ex
officio capacity as Clerk of Court in
land registration matters
(3) State whether the owner is:
(i) Married or unmarried, and if
married, the name of the husband
or wife, provided that if the land
adjudicated is conjugal property, it
shall be issued in the names of
both spouses.
(ii) If the owner is under disability, it
shall state the nature of the
disability,
(iii) If the owner is a minor, his age
(4) Contain a description of the land as
finally determined by the court,
(5) Set forth the estate of the owner, and
also, in such manner as to show their
relative priority, all particular estates,
mortgages, easements, liens,
attachments and other encumbrances,
including rights of tenant-farmer, if
any, to which the land or owner’s
estate is subject,
(6) Contain any other matter properly to
be determined
STEP 12: Sending of copy of the decree of
registration to the corresponding Register of
Deeds (Registrar of Land Titles and Deeds)
STEP 13: Transcription of the decree of
registration
(a) It is transcribed in the registration book of
the Registrar of Land Titles and Deeds
(b) Registrar issues owner’s duplicate OCT of
the applicant by the Registrar of Land
UP LAW BOC LAND TITLES AND DEEDS
Titles and Deeds, upon payment of the
prescribed fees.
D. EVIDENCE NECESSARY
Proofs necessary in land registration
(1) Proofs that land has been declassified
from the forest zone, is alienable or
disposable, and is registrable (e.g.
Presidential proclamation, legislative acts)
(2) Identity of the land (e.g. survey plan)
(3) Possession and occupation of the land for
the length of time and in the manner
required by law [Sec. 4, PD 1073 amending
Sec. 48(b) and (c) of Public Land Act]
(4) If he claims private ownership not because
of his possession, he must prove the basis
of such claim by submitting muniments of
title.
Proving Private Ownership:
(1) Spanish titles are inadmissible and
ineffective proof of ownership in land
registration proceedings filed AFTER Aug.
16, 1976 [PD 892 as discussed in Santiago
v. SBMA, GR No. 156888, 2006]
(2) Tax declaration and receipts are not
conclusive but have strong probative value
when accompanied by proof of actual
possession. [Municipality of Santiago vs.
CA, 1983]
(3) Other proofs such as testimonial evidence
E. REMEDIES:
An aggrieved party in a registration proceeding
may avail himself of the following remedies:
(1) Motion for New Trial [see Rule 37, ROC]
(2) Appeal
(3) Relief from Judgment [see Rule 38, ROC]
(4) Annulment of Judgment [see Rule 47,
ROC]
(5) Reconveyance
(6) Recovery of Damages
(7) Reversion
(8) Review of Decree of Registration
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CIVIL LAW
Appeal – Sec. 30, PD 1529 as amended by BP
129 provides that an appeal may be taken from
the judgment of the court as in ordinary civil
cases.
 Period in Sec. 30, PD 1529 has been
modified to 15 days as per Sec. 39, BP 129
Unlike ordinary civil actions, the adjudication
of land in a cadastral or land registration
proceeding does not become final in the sense
of incontrovertibility until after the expiration
of one (1) year after the entry of the final decree
of registration. As long as a final decree has
not been entered by the LRA and the period of
1 year has not elapsed from date of such
decree, the title is not finally adjudicated and
the decision in the registration proceeding
continues to be under the control and sound
discretion of the court rendering it. [Gomez v.
CA, 168 SCRA 503, 1988]
Action for Reconveyance:
(a) When to file:
(1) Before issuance of decree, or
within/after 1 year from entry
(2) If based on implied trust, 10 years;
(3) If based on expressed trust and void
contract, imprescriptible
(4) If based on fraud, 4 years from the
discovery
(b) Not available if the property has already
been transferred to an innocent purchaser
for value.
(c) It does not reopen proceedings but a mere
transfer of the land from registered owner
to the rightful owner [Esconde v.
Barlongay, 1987]
Action for Damages - It can be availed of when
reconveyance is no longer possible as when the
land has been transferred to an innocent
purchaser for value [Ching v. CA, 1990]
UP LAW BOC LAND TITLES AND DEEDS
Reversion - Instituted by the government, thru
Solicitor General in all cases where lands of
public domain are held in violation of the
Constitution or were fraudulently conveyed.
Indefeasibility of title, prescription, laches, and
estoppel do not bar reversion suits.
Petition to Reopen or Review Decree of
Registration – Sec. 32, PD 1529
(a) To whom available: Only to an aggrieved
party who has been deprived of land or any
estate or interest therein by decree of
registration
(b) When to file: Within 1 year from entry of
decree of registration
(1) Upon expiration of the 1 year period,
every decree becomes incontrovertible
(2) The Court held that the petition may be
filed at any time after rendition of the
court’s decision (no need to wait for
actual entry in the LRA) and before
expiration of one year from entry of the
final decree of registration. [Rivera v.
Moran, 48 Phil. 836; Director of Lands
v. Aba, et al., 68 Phil. 85.]
(c) Sole and ONLY Ground: Actual Fraud
(1) Actual fraud proceeds from an
intentional deception practiced by
means of misrepresentation or
concealment of material fact
(2) The fraud must consist in an
intentional omission of fact required by
law to be stated in the application or a
wilful statement of a claim against the
truth
(d) Requisites for Petition to Reopen or Review
(1) That the plaintiff is the owner of the
land ordered registered in the name of
the defendant, or that the plaintiff’s
lien or interest in said property does
not appear in the decree or title issued
in the defendant’s name;
(2) That the registration was procured
through actual fraud, or that the
474
CIVIL LAW
omission of the lien or interest was
fraudulent;
(3) That the property has not been
transferred to an innocent purchaser
for value; and
(4) That the action is fi led within one year
from the issuance and entry of the
decree of registration. [Cruz v. Navarro,
GR No. L-27644, 1973]
F. PETITIONS AND MOTIONS AFTER
ORIGINAL REGISTRATION
(a) Lost Duplicate Certificate
(1) Person in interest must file a sworn
statement that the certificate is lost
before the Register of Deeds
(2) A petition will then be filed for the
issuance of new title
(3) Court will order issuance of new title
after due notice and hearing, with
memorandum that it is issued in place
of a lost certificate
(b) Petition seeking surrender of duplicate title
(1) In voluntary and involuntary
conveyances; when the duplicate
cannot be produced, the party must
petition the court to compel surrender
of duplicate certificate of title to
Register of Deeds
(2) After hearing, court may order
issuance of a new certificate and annul
the old certificate
(c) Amendment and alteration of certificate of
title
(1) A certificate of title cannot be altered
or amended except in a direct
proceeding in court which is summary
in nature
(2) Grounds:
(i) New interest that does not appear
on the instrument have been
created
UP LAW BOC LAND TITLES AND DEEDS
(ii) Interest have been terminated or
ceased
(iii) Omission or error was made in
entering certificate
(iv) Name of person on certificate has
been changed
(v) Registered owner has married
(vi) Marriage has terminated
(vii) Corporation has dissolved and has
not conveyed the property within
3 years after its dissolution
(viii) Allowable corrections as long as
the rights or interest of persons
are not impaired
(d) Reconstitution of Certificate of title
(1) The restoration of the instrument
which is supposed to have been lost or
destroyed in its original form and
condition, under the custody of the
Register of Deeds
(2) To have the same reproduced after
proper proceedings in the same form
they were when the loss or destruction
occurred [Heirs of Pedro Pinote v.
Dulay, 1990]
(3) Kinds:
(i) Judicial
(1) A petition is filed before the
RTC
(2) Petition is published in the
Official Gazette for
consecutive issues and posted
on main entrance
municipality for at least 30
days before hearing
(3) Hearing is then conducted
(4) Court may then order
reconstitution if meritorious
(ii) Administrative, which may be
availed only in case of:
(1) Substantial loss or destruction
of original land titles due to
CIVIL LAW
fire, flood, or other force
majeure as determined by the
LRA
(2) Number of certificates of title
lost or damaged should be at
least 10% of the total number
in possession of the Register of
Deeds
(3) In no case shall the number of
certificates of title lost or
damaged be less than 500;
AND
(4) Petitioner must have the
duplicate copy of the certificate
of title [RA 6732]
V. Judicial Confirmation
Of Imperfect Or
Incomplete Titles
Applicable law: CA 141, as amended
No title or right to, or equity in, any lands of the
public domain may be acquired by prescription
or by adverse possession or occupancy except
as expressly provided by law. [CA 141, Sec 57]
The Public Land Act recognizes the concept of
ownership under the civil law. This ownership
2 is based on adverse possession and the right of
acquisition is governed by the Chapter on
of judicial confirmation of imperfect or
incomplete titles.
When applicable: This applies only to alienable
and disposable agricultural lands of the public
domain. Under Sec. 6 of CA 141, the
classification of public lands into alienable and
disposable forest lands, or mineral lands is the
prerogative of the Executive Department.
The rule on confirmation of imperfect title does
not apply unless and until the land classified
475
UP LAW BOC LAND TITLES AND DEEDS
as, say, forest land, is released in an official
proclamation to that effect so that if may form
part of the disposable agricultural lands of the
public domain. [Bracewell vs. CA, 2000]
The law, as presently phrased, requires that
possession of lands of the public domain must
be from June 12, 1945 or earlier, for the same
to be acquired through judicial confirmation of
imperfect title [Republic v. Doldol, 1998]
Who may apply:
(a) Individuals:
(1) Filipino citizens who by themselves or
through their predecessors-in-interest
have been in open, continuous,
exclusive, and notorious possession
and occupation of alienable and
disposable lands of public domain
under a bona fide claim of acquisition
since June 12, 1945 or prior thereto
since time immemorial [Sec. 48, CA
141, as amended by Sec. 4, PD 1073]
(2) Filipino citizens who by themselves or
their predecessors-in-interest have
been, prior to effectivity of PD 1073 on
Jan. 25, 1977, in open, continuous,
exclusive, and notorious possession
and occupation of agricultural lands of
the public domain, under a bona fide
claim of acquisition of ownership for at
least 30 years, or at least since Jan. 24,
1947 [RA 1942]
(3) Natural born citizens of the Philippines
who have lost their citizenship and who
has legal capacity to enter into a
contract under Philippine laws may be
a transferee of private land up to a
maximum area of 5,000sqm, in case of
urban land, or 3 hectares in case of
rural land to be used by him for
business or other purposes [Sec. 5, RA
8179]
476
CIVIL LAW
(4) Natural-born citizens of the
Philippines, who have lost their
Philippine citizenship, who have
acquired disposable and alienable
lands of the public domain from
Filipino citizens who had possessed the
same in the same manner and for the
length of time indicated in numbers (1)
and (2) above.
(b) Corporations
(1) Private domestic corporations or
associations which had acquired lands
from Filipino citizens who had
possessed the same in the manner and
for the length of time indicated in
numbers (1) and (2) above.
Notwithstanding the prohibition in the
1973 and 1987 Constitutions against
private corporations holding lands of
the public domain except by lease not
exceeding 1000 hectares, still a private
corporation may institute confirmation
proceedings under Sec. 48, (b) of the
Public Land Act if, at the time of
institution of the registration
proceedings, the land was already
private land. On the other hand, if the
land was still part of the public
domain, then a private corporation
cannot institute such proceedings. [Dir.
Of Lands v. IAC and ACME, 146 SCRA
509, 1986]
A. FILING OF THE APPLICATION:
Period of Filing is EXTENDED: RA No. 9176
extended the period to file an application for
judicial confirmation of imperfect or
incomplete title to December 31, 2020. Prior to
RA 9176 the deadline for filing was on Dec. 31,
1987.
UP LAW BOC LAND TITLES AND DEEDS
Scope of the Application: RA 9176 also limited
the area subject of the application to 12
hectares. Prior to RA 9176, the maximum area
applied for was 144 hectares.
Applicant must Prove:
(1) The land is alienable and disposable land
of public domain; and
(2) They have been in open, continuous,
exclusive, and notorious possession and
occupation of the land for the length of
time and in the manner and concept
provided by law [Dir. Of Lands v. Buyco,
1992]
B. PROCEDURE IN JUDICIAL
CONFIRMATION:
Sec. 48, par.1, of CA 141 as amended provides,
“The following-described citizens of the
Philippines, occupying lands of the public
domain or claiming to own any such lands or
an interest therein, but whose titles have not
been perfected or completed, may apply to the
Court of First Instance of the province where
the land is located for confirmation of their
claims and the issuance of a certificate of title
therefor under the Land Registration Act…”
Hence, the procedure in original registration
discussed in the previous section is also
followed in judicial confirmation of imperfect
or incomplete title.
C. EVIDENCE NECESSARY TO
SUBSTANTIATE APPLICATION:
The applicant must prove:
(1) That the land applied for has been
declassified and is a public agricultural
land, is alienable and disposable, or
otherwise capable of registration.
Specifically, the following may be
presented:
(a) Presidential proclamation
(b) Executive Order
477
CIVIL LAW
(c) Administrative Order issued by the
DENR Secretary
(d) Bureau of Forest Development Land
Classification Map
(e) Certification by the Director of Forestry
(f) Investigation reports of Bureau of
Lands Investigator
(g) Legislative act or statute
(2) The identity of the land; the following may
be submitted:
(a) Survey plan
(b) Tracing cloth plan and blue print
copies of plan
(c) Technical description of the land
(d) Tax declarations
(e) Boundaries and area
(3) Possession and occupation of the land for
the length of time and in the manner
required by law
VI. Cadastral
Registration
Nature: It is a proceeding in rem, initiated by
the filing of a petition for registration by the
government, not by the persons claiming
ownership of the land subject thereof, and the
latter are, on the pain of losing their claim
thereto, in effect compelled to go to court to
make known their claim or interest therein,
and to substantiate such claim or interest.
Unlike other kinds of registration, this is
compulsory as it is initiated by the government.
The government does not seek the registration
of land in its name. The objective of the
proceeding is the adjudication of title to the
lands or lots involved in said proceeding.
A. DISTINGUISHED FROM ORDINARY
REGISTRATION
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW

STEP 3: Director of Lands gives notice to

Ordinary Cadastral interested persons
Registration Registration
Contents of the Notice:
Voluntary Compulsory (a) Day on which the survey will begin
Applicant is a person (b) Full and accurate description of the lands
Applicant is the
claiming title to the to be surveyed
Director of Lands
land
Usually involves STEP 4: Publication of notice
land; it may also (a) Published once in the Official Gazette
refer to public (b) A copy of the notice in English or the
agricultural lands if national language shall be posted in a
the object of the conspicuous place on the bulletin board of
All classes of land are
action is judicial the municipal building of the municipality
covered
confirmation of in which the lands or any portion thereof is
imperfect or situated
incomplete title (in
which case CA 141 STEP 5: A copy of the notice shall also be sent
applies) to:
Applicant comes to (a) Mayor of the municipality
Government asks the (b) Barangay captain
court to confirm his
court to settle and (c) Sangguniang Panlalawigan and
title and seek
adjudicate the title of Sangguniang Bayan concerned
registration of the
the land
land in his name
In cadastral STEP 6: Geodetic engineers or other Bureau of
If the applicant fails Land employees in charge of the survey shall
registration, if the
to prove his title, give notice reasonably in advance of the date
applicant cannot
application may be of the survey
prove that he is
dismissed without
entitled to the land,
prejudice They shall also mark the boundaries of the
the land becomes
Res judicata DOES lands with monuments
public land.
NOT apply
There IS res judicata.
STEP 7: Interested persons should
Procedure in Cadastral Registration: Sec. 35 communicate with the geodetic engineer if he
and 36, PD 1529 requests for any information about the land

STEP 1: Determination of the President that
public interest requires title to unregistered
lands be settled and adjudicated
 President then orders the Director of Lands
to conduct cadastral survey
STEP 2: Director of lands shall make a
cadastral survey
STEP 8: Actual survey and plotting of the land
STEP 9: Director of Lands represented by
Solicitor General shall institute original
registration proceedings
(a) Petition is filed in the appropriate RTC
where the land is situated

478
UP LAW BOC LAND TITLES AND DEEDS
(b) Contents of the Petition:
(1) That public interest requires that the
title to such lands be settled and
adjudicated and praying that such
titles be so settled and adjudicated
(2) Description of the lands
(3) Accompanied by a plan thereof
(4) Such other data as may serve to
furnish full notice to the occupants of
the lands and to all persons who may
claim any right or interest therein
STEP 10: Publication, mailing posting
STEP 11: Hearing
Jurisdiction of the Cadastral Court:
(1) Adjudicate title to any claimant thereto
(2) Declare land as a public land
(3) Order correction of technical description
(4) Order the issuance of new title in place of
the title issued under voluntary registration
proceedings
(5) Determine the priority of overlapping title
(6) Order the partition of the property
STEP 12: Decision
STEP 13: Issuance of the decree and certificate
of title
Note: Reopening of cadastral cases no longer
allowed
RA 931, effective June 20, 1953 for five (5)
years, authorizing the reopening of cadastral
cases under certain conditions and which had
been extended until Dec. 31, 1968, is no longer
in force.
Courts are thus without jurisdiction or authority
to reopen a cadastral proceeding since Dec. 31,
1968. [Aquino, p. 107, citing Republic v.
Estenzo, 158 SCRA 282, 1988]
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CIVIL LAW
VII. Subsequent
Registration
Subsequent registration - a proceeding where
incidental matters AFTER original registration
may be brought before the land registration
court by way of motion or petition filed by the
registered owner or a party n interest
A. NECESSITY AND EFFECTS OF
REGISTRATION
[Sec. 51 and 52, PD 1529]
The deed, mortgage, lease, or other voluntary
instrument, except a will shall ONLY operate
as:
(1) A contract between the parties and
(2) Evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the operative
act to convey or affect the land insofar as third
persons are concerned.
Also, by registration, it creates constructive
notice to the world.
General Rule: A forged deed is an absolute
nullity and conveys no title.
Exception: If there is good faith, a TCT has
already been issued to the purchaser, the latter
being an innocent purchaser for value
according to Sec. 39, PD 1529, then the title is
good.
General Rule: A person dealing with registered
property need not go beyond, but only has to
rely on, the title. [Campillo v. PNB, 1969]
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW

He is charged with notice only of such burdens

and claims which are annotated on the title, Voluntary Dealings Involuntary Dealings
for registration is the operative act that binds
the property. Presentation of the
owner’s duplicate
Entry in the day book is
Exception: When should a purchaser certificate of title is
sufficient notice to all
investigate? required to notify;
persons
(1) Banks are required to exercise more care mere entry
and prudence in dealing with registered insufficient
lands for their business is one affected with An innocent
public interest. The general rule does not purchaser for value
apply. of registered land
(2) When party concerned has actual becomes the
knowledge of facts and circumstances that registered owner
would impel a reasonably cautious man to the moment he
make inquiry. [Leung Yee v. Strong presents and files a Lenin v. Bass, (1952):
Machinery, 1918] duly notarized and Entry thereof in the day
(3) When purchaser is in bad faith; e.g. he had valid deed of sale book of the ROD is
full knowledge of a previous sale. [Jamoc v. and the same is sufficient notice to all
CA, 1991] entered in the day persons even if the
(4) When a person buys land from one whose book and at the owner’s duplicate
rights over the land is evidenced only by a same time he certificate of title is not
deed of sale and an annotation in the surrenders or presented to the ROD.
certificate of title but no TCT. [Quiniano v. presents the
CA, 1971] owner’s duplicate
certificate of title
B. TWO TYPES OF DEALINGS covering the land
(1) Voluntary Dealings – these are deeds, sold and pays the
instruments, documents which are the registration fees.
results of free and voluntary acts of parties Villasor v. Camon,
thereto. (1951): It is
(2) Involuntary Dealings – these refer to writ, necessary to Dir. Of Lands v. Reyes,
order, or process issued by the court of register the deed or (1976): Entry in the day
record affecting registered land, also other instrument in the book is sufficient notice
instruments which are not willful acts of entry book and a to all persons of an
the registered owner, executed without his memorandum adverse claim without
knowledge or consent. thereof shall also be the same being
made in the annotated at the back
owner’s duplicate of the certificate of title
certificate and its
original

480
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW

(2) File instrument creating or transferring interest

Voluntary Dealings Involuntary Dealings and certificate of title with Register of Deeds
together with:
Spouses Labayen v. (a) Owner’s duplicate - the issuance of a new
transfer certificate without presentation of
Leonardo Serafica,
an owner’s duplicate is unwarranted and
(2008): At the time AFP Mutual Benefit
confers no right on the purchaser [PNB v.
of the filing of the Association v. Santiago, Fernandez, 1935]
petition for (2008): Entry of the (b) Payment of fees & documentary stamp tax
cancellation of attachment in the books (c) Evidence of full payment of real estate tax
encumbrance, the is sufficient notice to all (d) Document of transfer – 1 copy additional
lease contract persons. Hence, the for city/provincial assessor
already lost its fact that the deed of
efficacy. Thus, there sale was already (3) Payment of fees and DST
is no basis to save annotated is of no (a) After payment of entry fee the Register of
its annotation on moment with regard to Deeds shall enter the instruments in a
defendant’s title. third persons. The primary entry book [Sec. 56, PD 1529]
The fact that the preference created by (b) The national, provincial and city
governments are exempted from payment
cancellation of the the levy on attachment
of entry fees
lease contract was is not diminished by the
(c) RA 456 prohibits registration of
forged is of no subsequent registration
documents affecting real property which is
moment, for there of the deed of sale. delinquent in the payment of real estate
was no violation of a taxes. Further, if evidence of such payment
right. is not presented with 15 days from the date
of entry of said document in the primary
C. VOLUNTARY DEALINGS entry book of the register of deeds the
entry shall be deemed cancelled.
Registration of Voluntary Instruments in General
(4) Entry of the Instrument in the Primary Entry
Process of Registration [Sec. 55, PD 1529]
Book:
(1) The deed or other voluntary instrument must
Instruments are regarded as registered from
contain:
the time the Register of Deeds enters them in
(a) The following details of the grantee or
the book
other person acquiring or claiming interest:
(1) Full name
(5) TCT shall then be issued
(2) Nationality
(3) Residence
Registration of Dealings Less than Ownership [Sec.
(4) Postal address
54, PD 1529]
(5) Civil status (if married, include name in
full of spouse)
If an instrument does not divest ownership or title
(b) If grantee is a corporation: from owner or from transferee of the registered
It must contain a recital showing that such
owners, then NO NEW CERTIFICATE shall be
corporation or association is legally
entered or issued.
qualified to acquire private lands

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Process of Registration for Dealings less than
Ownership
(1) Filing of the instrument with the Register of
Deeds
(2) A brief memorandum thereof is made:
(a) On the certificate of title by the Register of
Deeds and signed by him, and
(b) On the owner’s duplicate
Cancellation or extinguishment of such interests
shall be registered in the same manner.
Registration of Deeds of Sale and Transfers
(a) If ENTIRE property is the subject [Sec. 57,
PD 1529]
(1) Owner executes and registers the deed
which must be sufficient in form.
(2) A new certificate of title is issued and
Register of Deeds prepares and
delivers to grantee his owner's
duplicate certificate
(3) Register of Deeds notes upon the OCT
and the duplicate certificate
the date of transfer, the volume and
page of the registration book where
the new certificate is registered
(4) The original and the owner's duplicate
of the grantor's certificate shall be
stamped "cancelled".
(5) The deed of conveyance shall be filed
and indorsed with the number and the
place of registration of the certificate of
title of the land conveyed.
(b) If ONLY A PORTION of property is the
subject [Sec. 58, PD 1529]
(1) Include a plan which shows all the portions
already subdivided with verified and
approved technical description.
(2) That plan with the certified copy of the
technical descriptions shall be filed with
the Register of Deeds for annotation in the
TCT.
(3) Register of Deeds shall issue a TCT and
cancel the grantor's certificate partially
OR it may be cancelled totally and a
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CIVIL LAW
new one issued describing therein the
remaining portion
(c) If there are SUBSISTING encumbrances
and annotations:
 They shall be carried over in the new
certificate or certificates; except when
they have been simultaneously
discharged.
Registration of Mortgages and Leases [Sec. 60,
PD 1529]
Sec. 60, PD 1529 provides that mortgages and
leases shall be registered in the manner
provided in Sec. 54 (Dealings less than
ownership)
The deed shall take effect upon the title only
from the time of registration.
When a deed of mortgage is presented, the
Register of Deeds will enter upon the OCT and
upon the owner’s duplicate a memorandum
thereof and shall sign said memorandum.
Registration of Powers of Attorneys
[Sec. 64, PD 1529]
Powers of attorney and revocations shall be
registered with the Register of Deeds of the
province or city where the land lies.
Any instrument revoking such power shall be
registered in like manner.
Registration of Trusts
Registration is by memorandum:
(1) A memorandum by the words “in trust” or
“upon condition” or other apt words is
made if a deed or other instrument is filed
in order to:
(a) Transfer registered land in trust, or
upon any equitable condition or
limitation expressed therein, or
(b) Create or declare a trust or other
equitable interests in such land
without transfer [Sec. 65, PD 1529]
UP LAW BOC LAND TITLES AND DEEDS
(2) A memorandum by the words “with power
to sell,” or “power to mortgage” or other
apt words is made when:
The instrument creating or declaring a
trust or other equitable interest contains
an EXPRESS POWER to sell, mortgage, or
deal with the land in any manner
However, if an implied or constructive trust is
claimed, person claiming such must execute a
sworn statement thereof with the Register of
Deeds, containing a description of the land,
the name of the registered owner and a
reference to the number of the certificate of
title. Such claim shall not affect the title of a
purchaser for value and in good faith before its
registration. [Sec. 68, PD 1529]
D. INVOLUNTARY DEALINGS
The following involuntary dealings affecting
registered land must be registered:
(1) Attachments [Sec. 69, PD 1529]
(2) Sale on execution or for taxes or for any
assessment [Sec. 74, PD 1529]
(3) Adverse claim [Sec. 70, PD 1529]
(4) Notice of lis pendens [Sec. 76, PD 1529]
Registration of Attachment
Attachment is a writ issued at the institution or
during progress of an action commanding the
sheriff to attach the property, rights, credits or
effects of the defendant to satisfy demands of
the plaintiff.
Kinds
(1) Preliminary
(2) Garnishment
(3) Levy on execution
Process of Registration
(1) Copy of writ in order to preserve any lien,
right or attachment upon registered land
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CIVIL LAW
shall be filed with the Register of Deeds
where the land lies, containing number of
certificate of title of land to be affected or
description of land [PD 1529, Sec 69]
(2) Register of Deeds to index attachment in
names of both plaintiff & defendant or
name of person whom property is held or
in whose name stands in the records
(a) If duplicate of certificate of title is not
presented:
(i) Register of Deeds shall within 36
hours send notice to registered
owner by mail stating that there
has been registration & requesting
him to produce duplicate so that
memorandum be made
(ii) If owner neglects or refuses –
Register of Deeds shall report
matter to court.
(b) Court after notice shall enter an order
to owner to surrender certificate at
time & place to be named therein.
(3) Although notice of attachment is not noted
in duplicate, notation in book of entry of
Register of Deeds produces effect of
registration already
Effect of registration of attachment
(1) Creates real right
(2) Has priority over execution sale
(3) But between 2 attachments – one that is
earlier in registration is preferred
Duty of Register of Deeds - Duty is ministerial
but may refuse registration in the following
circumstances:
(1) Title to land is not in the name of
defendant
Exception: If petitioner is an heir
(2) No evidence is submitted to show that he
has present or possible future interest in
land
REGISTRATION OF EXECUTION AND TAX
DELINQUENCY SALES
UP LAW BOC LAND TITLES AND DEEDS
Execution sale
(1) To enforce a lien of any description on
registered land, any execution or affidavit
to enforce such lien shall be filed with
Register of Deeds where the land lies
(2) Register in the registration book &
memorandum upon proper certificate of
title as adverse claim or as an
encumbrance
(3) To determine preferential rights between 2
liens: priority of registration of attachment
Tax sale
(a) Sale of land for collection of delinquent
taxes and penalties due the Government
(b) In personam (all persons interested shall
be notified so that they are given
opportunity to be heard)
(1) Notice to be given to delinquent tax
payer at last known address
(2) Publication of notice must also be
made in English, Spanish & local
dialect & posted in a public &
conspicuous place in place wherein
property is situated & at the main
entrance of the provincial building
(c) Sale cannot affect rights of other lien
holders unless they are given the right to
defend their rights: due process must be
strictly observed
(d) Tax lien superior to attachment
Note: No need to register tax lien because
it is automatically registered once the tax
accrues. However sale of registered land to
foreclose a tax lien needs to be registered.
Process of Registration
(1) Officer’s return shall be submitted to
Register of Deeds together with duplicate
title
(2) Register in the registration book
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CIVIL LAW
(3) Memorandum shall be entered in the
certificate as an adverse claim or
encumbrance
(4) After the period of redemption has expired
& no redemption (2 years from registration
of auction sale) is made: cancellation of
title & issuance of a new one
(5) Before cancellation, notice shall be sent to
registered owner: to surrender title & show
cause why it shall not be cancelled
Note: Actual knowledge is equivalent to
registration
Registration of Notice Lis Pendens
Purpose of notice of lis pendens: To keep the
subject matter within the power of the court
until the entry of final judgment. It therefore
creates merely a contingency & not a lien.
When notice of lis pendens is proper:
(1) To recover possession of real estate
(2) To quiet title
(3) To remove clouds upon the title thereof
(4) For partition
(5) Other proceedings of any kind in court
directly affecting the title to land or the use
or occupation thereof or the buildings
thereon
When notice of lis pendens is NOT proper:
(1) Proceedings for the recovery of money
judgments
(2) Attachments
(3) Proceedings on the probate of wills
(4) Administration of the estate of deceased
persons
(5) Levies on execution
(6) Foreclosure
Process of Registration: By Memorandum or
Notice stating
(1) The institution of the action or proceeding
(2) The court wherein the same is pending
(3) The date of the institution of the action
UP LAW BOC LAND TITLES AND DEEDS
(4) Reference to the number of the certificate
of title
(5) Adequate description of the land affected
and registered owner thereof
Other parties who need to register
(1) Assignee in involuntary proceeding for
insolvency
(a) Duty of the officer serving notice to file
a copy of the notice to the Register of
Deeds where the property of debtor
lies
(b) Assignee elected or appointed by court
shall be entitled to entry of new
certificate of registered land upon
presentment of copy of assignment
with bankrupt’s certificate of title
(duplicate)
(c) New certificate shall note that it is
entered to him as assignee or trustee in
insolvency proceedings
(2) Government in eminent domain
(a) Copy of judgment shall be filed in the
Register of Deeds which states
description of property, certificate
number, interest expropriated, nature
of public use
(b) Memorandum shall be made or new
certificate of title shall be issued
Effect of registration
(1) Impossibility of alienating the property in
dispute during the pendency of the suit –
may be alienated but purchaser is subject
to final outcome of pending suit
(2) Register of Deeds is duty bound to carry
over notice of lis pendens on all new titles
to be issued
Cancellation of lis pendens
[PD 1529, Sec. 77]
(1) Before final judgment – court may order
cancellation after showing that notice is
only for the purpose of molesting an
adverse party or it is not necessary to
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CIVIL LAW
protect the rights of the party who caused
it to be registered
(2) Register of Deeds may also cancel upon
verified petition of the party who caused
such registration
(3) Deemed cancelled when certificate of clerk
of court stating manner of disposal of
proceeding is registered
Registration of Adverse Claim
A claim is adverse when: [Sec. 70, par. 1, PD
1529]
(1) Claimant’s right or interest in registered
land is adverse to the registered owner,
and
(2) Such right arose subsequent to date of
original registration, and
(3) No other provision is made in the Decree
for the registration of such right or
claimant
Requisites for registration of an adverse claim:
(1) The adverse claimant must give a
statement of the following in writing:
(a) His alleged right or interest
(b) How and under whom such alleged
right or interest is acquired
(c) The description of the land in which the
right or interest is claimed and
(d) The number of the certificate of title
(2) The statement must be:
(a) Signed by the adverse claimant
(b) Sworn before a notary public
(3) The statement must also state his
residence or the place to which all notices
may be served upon him.
Duration of an adverse claim
(a) 30 days from the date of registration.
(b) After that the annotation of adverse claim
may be cancelled upon filing of a verified
petition by the party in interest.
UP LAW BOC LAND TITLES AND DEEDS
(c) When cancelled, no second adverse claim
based on the same ground may be
registered by the same claimant.
VIII. Non-Registrable
Properties
All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the
State. [Sec. 2, Art. XII, 1987 Constitution]
With the exception of agricultural lands, all
other natural resources shall not be alienated.
[Sec. 2, Art. XI, 1987 Constitution]
The classification of public lands is an
exclusive prerogative of the Executive
Department of the Government and not of the
courts. In the absence of such classification,
the land remains as unclassified land until it is
released therefrom and rendered open to
disposition. [Aquino, p. 41, citing Dir. Of Lands
and Dir. Of Forest Development v. CA, 129
SCRA 689, 1984]
Civil Code provisions dealing with non-
registrable properties
(1) Properties of public dominion [Art. 420,
Civil Code]
(a) Those intended for public use, such as
roads, canals, rivers, torrents, ports
and bridges constructed by the State,
banks, shores, roadsteads, and others
of similar character;
(b) Those which belong to the State,
without being for public use, and are
intended for some public service or for
the development of the national
wealth.
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CIVIL LAW
(2) Waters under Art. 502, Civil Code
(a) Rivers and natural beds
(b) Continuous or intermittent waters of
springs and brooks running in their
natural beds and the beds themselves
(c) Waters rising continuously
intermittently on lands of public
or
dominion
(d) Lakes and lagoons formed by Nature
on public lands, and their beds
(e) Rain waters running through ravines or
sand beds, which are also part of
public dominion;
(f) Subterranean waters on public lands
(g) Waters found within the zone of
operation of public works, even if
constructed by a contractor
(h) Waters rising continuously or
intermittently on lands belonging to
private persons, to the State, to a
province, or to a city or municipality
from the moment they leave such
lands
(i) The waste waters of fountains, sewers,
and public establishments
Specific kinds of non-registrable properties or
lands
(1) Forest or timberland, public forest, forest
reserves
(2) Mangrove swamps - Mangrove swamps or
mangroves should be understood as
comprised within the public forests of the
Philippines as defined in Sec. 1820,
Administrative Code of 1917. [Dir. Of
Forestry v. Villareal, 170 SCRA 598, 1980]
(3) Mineral lands - Both under the 1987
Constitution and Sec. 2 of the Public Land
Act, mineral lands are not alienable and
disposable. [Lepanto Consolidated Mining
Co. v. Dumyung, 89 SCRA 532, 1979]
(4) Foreshore land and seashore - Seashore,
foreshore, and/or portions of territorial
waters and beaches, cannot be registered.
Even alluvial formation along the seashore
UP LAW BOC LAND TITLES AND DEEDS
is part of public domain. [Aquino, p. 45,
citing Dizon v. Rodriguez, 13 SCRA 704,
1965]
(5) Lakes - Lakes are part of public dominion.
[Art. 502(4), Civil Code]
(6) Military Reservations - The reservation
made segregates it from the public domain
and no amount of time in whatever nature
of possession could have ripen such
possession into private ownership.
[Republic v. Marcos, 52 SCRA 238, 1973]
(7) Watershed - The Constitution expressly
mandates the conservation and utilization
of natural resources, which includes the
country’s watershed. [Tan v. Dir. Of
Forestry, 125 SCRA 302, 1983]
(8) Grazing lands - While the 1987 Constitution
does not specifically prove that grazing
lands are not disposable, yet if such lands
are part of a forest reserve, there can be no
doubt that the same are incapable of
registration. [Aquino, p. 49, citing Dir. Of
Lands v. Rivas]
(9) Previously titled land - Proceeds from the
indefeasibility of the Torrens title.
(10) Alluvial deposit along river when man-
made - Such deposit is really an
encroachment of a portion of the bed of
the river, classified as property of the
public domain under Art. 420, par. 1 and
Art. 502 (1) of the Civil Code, hence not
open to registration. [Republic v. CA, 132
SCRA 514, 1984]
The land registration court has no jurisdiction
over non-registrable property and cannot
validly adjudge the registration of title thereof
in favor of a private applicant. [Pena, p. 105]
Thus, where it has so been adjudged, the river
not being capable of private appropriation or
acquisition by prescription, the title thereto
may be attacked, either directly or collaterally,
by the State which is not bound by any
prescriptive period provided by the Statute of
487
CIVIL LAW
Limitation. [Pena citing Martinez v. CA, GR No.
L-31271, 1974]
IX. Dealings With
Unregistered Lands
No deed, conveyance, mortgage, lease, or
other voluntary instrument affecting land not
registered under the Torrens system shall be
valid, except as between the parties thereto,
unless such instrument shall have been
recorded in the manner herein prescribed in
the office of the Register of Deeds for the
province or city where the land lies. [Sec. 113,
par. 1, PD 1529]
EFFECTS OF TRANSACTIONS COVERING
UNREGISTERED LAND
(1) As between the parties – The contract is
binding and valid even if not registered
(2) As among third persons – There must be
registration for the transaction to be
binding against third persons
PRIMARY ENTRY BOOK AND
REGISTRATION BOOK
The Register of Deeds for each province or city
shall keep a Primary Entry Book and a
Registration Book.
(1) The Primary Entry Book shall contain,
among other particulars:
(a) Entry number
(b) Names of the parties
(c) Nature of the document
(d) Date, hour and minute it was
presented and received
(2) The Registration Book – Provides spaces
whereon the annotation is made after the
instrument has been entered in the
Primary Entry Book
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW

Process of Registration
(1) Registration is by way of annotation
(2) The instrument dealing with unregistered
land is presented before the Register of
Deeds
(3) The Register will then determine if it can
be registered:
(a) If, on the face of the instrument, it
appears that it is sufficient in law, the
Register of Deeds shall forthwith
record the instrument
(b) In case the Register of Deeds refuses
its administration to record, he shall
advise the party in interest in writing of
the ground or grounds for his refusal
 The latter may appeal the matter to
the Commissioner of Land
Registration

Third Party with a better right NOT prejudiced

It shall be understood that any recording made
under this section shall be without prejudice to
a third party with a better right. [Sec. 113, PD
1529]

Better right – refers to a right which must have

been acquired by a third party independently
of the unregistered deed, such, for instance, as
title by prescription, and that it has no
reference to rights acquired under that
unregistered deed itself. [Pena, p. 600]

Involuntary dealings in unregistered lands

PD 1529 now permits the registration of
involuntary dealings in unregistered lands.

Tax sale, attachment and levy, notice of lis

pendens, adverse claim and other instruments
in the nature of involuntary dealings with
respect to unregistered lands, if made in the
form sufficient in law, shall likewise be
admissible to record under Sec. 113. [Sec. 113
(d), PD 1529]

488
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CIVIL LAW
TORTS

489
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I. Preliminary
Considerations
A. DEFINITION OF TORT
A.1. ACCORDING TO MANNER OF
COMMISSION
(1) Negligent Tort – consists in the failure to
act according to the standard of diligence
required under the attendant
circumstances. It is a voluntary act or
omission which results in injury to others,
without intending to cause the same.
Note: While the term “tort” has been used
interchangeably with the term “quasi-
delict”, the latter merely represents an
area of tort law concerned with damage
resulting from fault (by doing a positive act
constituting negligence) or negligence (by
omitting to do an act due to negligence) of
the defendant.
(2) Intentional Tort – perpetrated by one who
intends to do that which the law has
declared to be wrong. It is conduct where
the actor desires to cause the
consequences of the act, or that he
believes that the consequences are
substantially certain to result therefrom.
(3) Strict Liability – one is liable independent
of fault or negligence. It only requires proof
of a certain set of facts. Liability here is
based on the breach of an absolute duty to
make something safe. It most often
applies to ultra-hazardous activities or in
product liability cases. It is also known as
“absolute liability” or liability without
fault.”
Strict liability is imposed by articles 1314,
1711, 1712, 1723, 2183, 2184, 2187, 2189,
2190, 2191, 2192, 2193.
TORTS CIVIL LAW
A.2. ACCORDING TO SCOPE
(1) General – Tort liability is based on any of
the three categories: intentional,
negligent, strict liability
(2) Specific – Includes trespass, assault,
battery, negligence, products liability, and
intentional infliction of emotional distress
B. DEFINITION OF QUASI-DELICT
Art. 2176. Whoever by act or omission causes
damage to another, there being fault or
negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no
pre-existing contractual relation between the
parties, is called a quasi-delict and is governed
by the provisions of this Chapter.
Quasi-delict, known in Spanish legal treatises
as culpa aquiliana, is a civil law concept while
torts is an Anglo-American or common law
concept. Torts is much broader than culpa
aquiliana because it includes not only
negligennce, but intentional criminal acts such
as assualt and battery, false imprisonment and
deceit. In the general scheme of the Philippine
legal system envisioned by the Commission
responsible for drafting the New Civil Code,
intentional and malicious acts with certain
exceptopms, are to be governed by the Revised
Penal Code while negligent acts or omissions
are to be covered by Article 2176 of the Civil
Code. In between these opposite spectrums
are injurious acts which, in the absence of
Article 21, would have been beyond redress.
Thus, Article 21 fills that vacuum [Baksh v. CA
(1993)].
Cangco v. Manila Railroad (1918): The concept
of quasi-delict does not cover intentional acts.
The liability arising from from extra-
contractual culpa is always based upon a
voluntary act or omission, which, without
willful intent, but by mere negligence or
inattention, has caused damage to another.
490
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Cinco v. Canonoy (1979): The concept of quasi-
delict is so broad that it includes not only
injuries to persons but also damage to
property.
C. CULPA AQUILIANA
DISTINGUISHED FROM CRIME
A quasi-delict is a separate source of
obligation under Article 1157.
Art. 2177. Responsibility for fault or negligence
under the preceding article is entirely separate
and distinct from the civil liability arising from
negligence under the Penal Code. But the
plaintiff cannot recover damages twice for the
same act or omission of the defendant.
RPC, Art. 100. Every person criminally liable
for a felony is also civilly liable.
Barredo v. Garcia (1942): A quasi-delict or
culpa aquiliana is a separate legal institution
under the Civil Code, with a substantivity all its
own, and individuality that is entirely apart and
independent from a delict or crime. However,
the same negligent act causing damage may
produce civil liability arising from a crime
under Article 100 of the Revised Penal Code, or
create an action for quasi-delict.
L.G. Foods v. Philadelfa (2006): An act or
omission causing damage to another may give
rise to two separate civil liabilities on the part
of the offender—for civil liability ex delicto, and
independent civil liabilities. The choice is with
the plaintiff who makes known his cause of
action in his initiatory pleading or complaint.
TORTS CIVIL LAW
D. CULPA AQUILIANA
DISTINGUISHED FROM CULPA
CONTRACTUAL; PRESENCE OF
CONTRACTUAL RELATIONS
D.1. AS TO SOURCE
In Culpa Aquiliana or non-contractual
obligation, it is the wrongful or negligent act or
omission itself which creates the vinculum
juris, whereas in contractual relations, the
vinculum exists independently of the breach of
voluntary duty assumed by the parties when
entering into the contractual relation [Cangco
v. Manila Railroad (1918)].
D.2. AS TO BURDEN OF PROOF
When the source of the obligation upon which
the plaintiff’s cause of action depends is a
negligent act or omission, the burden of proof
rests upon the plaintiff to prove the
negligence—if he does not his action fails. But
when the facts averred show a contractual
undertaking by defendant for the benefit of the
plaintiff, and it is alleged that the plaintiff has
failed or refused to perform the contract, it is
not necessary for the plaintiff to specify in his
pleadings whether the breach of the contract is
due to willful fault or to negligence on the part
of the defendant, or of his servants or agents.
Proof of the contract and of its
nonperformance is sufficient prima facie to
warrant a recovery. [Cangco v. Manila Railroad
(1918)].
D.3. AS TO APPLICABILITY OF THE
DOCTRINE OF PROXIMATE CAUSE
The doctrine of proximate cause [to establish
the fault or negligence of the defendant] is
applicable only in actions for quasi-delict, not
in actions involving breach of contract [Calalas
v. CA (2000)].
491
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D.4. AS TO THE DEFENSE OF AN
EMPLOYER FOR THE NEGLIGENCE OF
AN EMPLOYEE
As it is not necessary for the plaintiff in an
action for breach of contract to show that the
breach was due to the negligent conduct of the
defendant or his servants, proof on the part of
the defendant that the negligence or omission
of his servants or agents caused the breach of
contract would not constitute a defense to the
action [Cangco v. Manila Railroad (1918)].
Presence of Contactual Relations
The Supreme Court held there may instances
where there can be a quasi-delict even when
there is a contract between the parties. The
test (whether a quasi-delict can be deemed to
underlie the breach of a contract) can be
stated thusly: Where, without a pre-existing
contract between two parties, an act or
omission can nonetheless amount to an
actionable tort by itself, the fact that the
parties are contractually bound is no bar to the
application of quasi-delict provisions to the
case [Far East v. CA (1995)].
II. QUASI-DELICT
Elements: [PNR v. Brunty (2006)]
(a) Damage to the plaintiff
(b) Negligence by act/omission of the
defendant
(c) Connection of the cause and effect
between the fault/negligence of the
defendant and the damage incurred by the
plaintiff.
A. NEGLIGENCE
Art. 1173. The fault or negligence of the obligor
consists in the omission of that diligence which
is required by the nature of the obligation and
corresponds with the circumstances of the
persons, of the time and of the place. When
TORTS CIVIL LAW
negligence shows bad faith, the provisions of
Articles 1171 and 2201, paragraph 2, shall
apply.
If the law or contract does not state the
diligence which is to be observed in the
performance, that which is expected of a good
father of a family shall be required.
Negligence is the omission to do something
which a reasonable man, guided by those
considerations which ordinarily regulate the
conduct of human affairs, would do, or the
doing of something which a prudent and
reasonable man would not do [Layugan v. IAC
(1988)].
Jorge v. Sicam (2007): The diligence with
which the law requires the individual to at all
times govern his conduct varies with the nature
of the situation in which he is placed and the
importance of the act which he is to perform.
To determine whether there has been
negligence by the defendant, this 2-step
analysis may be used: 1) determine the
diligence required of the actor under the
circumstances, and 2) determine whether the
actor has performed the diligence required.
Failing the second step would lead to the
conclusion that the defendant has been
negligent.
Amedo v. Rio (1954): By jumping into the sea,
the employee failed to exercise even slight care
and diligence and displayed a reckless
disregard of the safety of his person. His death
was caused by his notorious negligence.
Notorious negligence has been held to be
tantamount to gross negligence which is want
of even slight care and diligence.
A.1. DEFAULT STANDARD OF CARE:
GOOD FATHER OF A FAMILY
Picart v. Smith (1918):
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UP LAW BOC
Test: Did the defendant in doing the alleged
negligent act use that reasonable care and
caution which an ordinarily prudent man
would have used in the same situation? If not,
then he is negligent. Negligence in a given
case is not determined by reference to the
personal judgment of the actor in the situation
before him, but is determined in the light of
human experience and the facts involved in the
particular case. Conduct is said to be negligent
when a prudent man in the position of the
tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to
warrant his foregoing the conduct or guarding
against its consequences.
A.2. STANDARD OF CARE NEEDED IN
SPECIFIC CIRCUMSTANCES
(1) Operators of Motor Vehicles
Anonuevo v CA (2004): Because of
inherent differences between motorists
and cyclists, the former being capable of
greater speed and destruction, operators
of motor vehicles have a higher standard in
his duty of care.
(2) Banks
Consolidated Bank v CA (2003): The law
imposes on banks high standards in view
of the fiduciary nature of banking. Section
2 of Republic Act No. 8791 (RA 8791),
which took effect on 13 June 2000,
declares that the State recognizes the
‘fiduciary nature of banking that requires
high standards of integrity and
performance.’ This fiduciary relationship
means that the bank’s obligation to
observe high standards of integrity and
performance is deemed written into every
deposit agreement between a bank and its
depositor. The fiduciary nature of banking
requires banks to assume a degree of
diligence higher than that of a good father
of a family.
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(3) Experts (In General)
Far Eastern Shipping v CA (1998): Those
who undertake any work calling for special
skills are required not only to exercise
reasonable care in what they do but also
possess a standard minimum of special
knowledge and ability. In all employments
where peculiar skill is requisite, one who
offers his services is understood as holding
himself out to the public as possessing the
degree of skill commonly possessed by
others in the same employment.
Culion v Philippine Motors (1930): When a
person holds himself out as being
competent to do things requiring
professional skill, he will be held liable for
negligence if he fails to exhibit the care
and skill of one ordinarily skilled in the
particular work which he attempts to do.
(4) Doctors
Cruz v. CA (1997): Whether or not a
physician has committed an ‘inexcusable
lack of precaution’ in the treatment of his
patient is to be determined according to
the standard of care observed by other
members of the profession in good
standing under similar circumstances
bearing in mind the advanced state of the
profession at the time of treatment of
present state of medical science. It is in this
aspect of medical malpractice that expert
testimony is essential to establish not only
the standard of care of the profession but
also that the physician’s conduct in the
treatment and care falls below such
standard.
(5) Pharmacists
US v. Pineda (1918): The profession of
pharmacy, it has been said again and
again, is one demanding care and skill.
Even under the first conservative
expression, "ordinary care" with reference
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to the business of a druggist…must be held
to signify "the highest practicable degree
of prudence, thoughtfulness, and vigilance,
and most exact and reliable safeguards
consistent with the reasonable conduct of
the business in order that human life may
not constantly be exposed to the danger
flowing from the substitution of deadly
poisons for harmless medicine.”
Mercury Drug v De Leon (2008): Mistake is
negligence and care is no defense.
(6) Possessor of Extremely Dangerous
Instrumentalities
Pacis v Morales (2010): Indeed, a higher
degree of care is required of someone who
has in his possession or under his control
an instrumentality extremely dangerous in
character, such as dangerous weapons or
substances. Such person in possession or
control of dangerous instrumentalities has
the duty to take exceptional precautions to
prevent any injury being done thereby.
Unlike the ordinary affairs of life or
business which involve little or no risk, a
business dealing with dangerous weapons
requires the exercise of a higher degree of
care.
(7) Children
Taylor v. Manila Railroad (1910): The
conduct of an infant of tender years is not
to be judged by the same rule, which
governs that of an adult. …The care and
caution required of a child is according to
his maturity and capacity only, and this is
to be determined in each case by the
circumstances of the case.
Jarco Marketing v. CA (1999):No
contributory negligence can be imputed to
children below 9 years old.
TORTS CIVIL LAW
Ylarde v. Aquino (1988): The degree of care
required to be exercised must vary with the
capacity of the person endangered to care
for himself. …The standard of conduct to
which a child must conform for his own
protection is that degree of care ordinarily
exercised by children of the same age,
capacity, discretion, knowledge and
experience under the same or similar
circumstances.
(8) In case of insane persons
US v. Baggay (1911): A lunatic or insane
person who, in spite of his irresponsibility
on account of the deplorable condition of
his deranged mind, is still reasonably and
justly liable with his property for the
consequences of his acts.
A.3. PRESUMPTIONS OF NEGLIGENCE
i. IN MOTOR VEHICLE MISHAPS
(1) Liability of the owner
Art. 2184. In motor vehicle mishaps, the owner
is solidarily liable with his driver, if the former,
who was in the vehicle, could have, by the use
of the due diligence, prevented the misfortune.
xxx
If the owner was not in the motor vehicle, the
provisions of article 2180 are applicable.
Art. 2186. Every owner of a motor vehicle
shall file with the proper government office a
bond executed by a government-controlled
corporation or office, to answer for damages
to third persons. The amount of the bond and
other terms shall be fixed by the competent
public official.
“Owner” shall mean the actual legal owner of
the motor vehicle, in whose name such vehicle
is duly registered with the LTO. Registration of
motor vehicles is required not because it is the
operative act which transfers ownership in
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vehicles, but because it is the means by which
the owner can be identified so that if any
accident occurs, or damage or injury is caused
in the operation of the vehicle, responsibility
can be fixed.
The owner is solidarily liable with the driver for
motor vehicle mishaps when:
(a) The owner was IN the vehicle at the time,
AND
(b) The owner could have, by the use of due
diligence, prevented the misfortune.
Note: If the owner was NOT inside the vehicle,
Art. 2180 applies.
The presumption is against the owner of the
motor vehicle. He has the burden of proving
due diligence. Thus, once a driver is proven
negligent in causing damage, the law
presumes the vehicle owner equally negligent
and imposes upon the latter the burden of
proving proper selection and supervision of
employee as a defense.
As held in Vargas v. Langcay (1962), “the
registered owner/operator of a passenger
vehicle is jointly and severally liable with the
driver for damages incurred by passengers or
third persons as a consequence of injuries or
death sustained in the operation of said
vehicles. Regardless of who the actual owner
of a vehicle is, the operator of record continues
to be the operator of the vehicle as regards the
public and third persons and as such is directly
and primarily responsible for the consequences
incident to its operation, so that in
contemplation of law, such owner/operator of
record is the employer of the driver, the actual
operator and employer being considered
merely as his agent.”
Tamayo v. Aquino (1959): The registered owner
of a motor vehicle is primarily liable for the
damage or injury caused to another, but he has
TORTS CIVIL LAW
a right to be indemnified by the real owner of
the amount he was required to pay. This rule
applies both to private and to common carriers
with respect to their passengers.
Caedo v. Yu Khe Tai (1968): The law does not
require that a person must possess a certain
measure of skill or proficiency either in the
mechanics of driving or in the observance of
traffic rules before he may own a motor
vehicle. The test of his negligence, within the
meaning of Article 2184, is his omission to do
that which the evidence of his own senses tells
him he should do in order to avoid the
accident. And as far as perception is
concerned, absent a minimum level imposed
by law, a maneuver that appears to be fraught
with danger to one passenger may appear to
be entirely safe and commonplace to another.
Were the law to require a uniform standard of
perceptiveness, employment of professional
drivers by car owners who, by their very
inadequacies, have real need of drivers'
services, would be effectively proscribed.
Duavit v. CA (1989): An owner of a vehicle
cannot be held liable for an accident involving
the said vehicle if the same was driven without
his consent or knowledge and by a person not
employed by him.
Chapman v. Underwood (1914): The owner of
the motor vehicle is not liable for the
misfortune unless the negligent acts of the
driver are continued for such a length of time
as to give the owner a reasonable opportunity
to observe them and to direct his driver to
desist therefrom. The act complained of must
be continued in the presence of the owner for
such a length of time that the owner, by his
acquiescence, makes his driver’s act his own.
(2) Liability of the driver
Art. 2184. xxx It is disputably presumed that a
driver was negligent, if he had been found
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guilty of reckless driving or violating traffic
regulations at least twice within the next
preceding two months.
Art. 2185. Unless there is proof to the
contrary, it is presumed that a person driving
a motor vehicle has been negligent if at the
time of the mishap, he was violating any
traffic regulation.
Article 2184 establishes a presumption of
negligence on the part of the driver based on
previous violations of traffic regulations. Article
2185 establishes a presumption of negligence
on the basis of simultaneous violations.
Sanitary Steam v. CA (1998): Despite the
presumption of negligence arising from the
traffic regulation violation, the claimant must
still prove that such negligence was the
proximate cause in order to successfully claim
for damages.
Añonuevo v. CA (2004): Article 2185 was not
formulated to compel or ensure obeisance by
all to traffic rules and regulations. It does not
apply to non-motorized vehicles, in recognition
of the unequal footing of standards applicable
to motor vehicles as opposed to other types of
vehicles.
ii. POSSESSION OF DANGEROUS
WEAPONS OR SUBSTANCES
Art. 2188. There is prima facie presumption of
negligence if the death or injury results from
his possession of dangerous weapons or
substances, such as firearms and poison,
except when the use or possession thereof is
indispensable in his occupation or business.
iii. COMMON CARRIERS
Art. 1735. In all cases other than those
mentioned in Nos. 1, 2, 3, 4, and 5 of the
preceding article (calamity, act of public enemy
TORTS CIVIL LAW
in war, act of owner of the goods, character of
the goods, order of competent public
authority), if the goods are lost destroyed or
deteriorated, common carriers are presumed
to have been at fault or to have acted
negligently, unless they prove that they
observed extraordinary diligence as required
under Art. 1733.
Art. 1752. Even when there is an agreement
limiting the liability of the common carrier in
the vigilance over the goods, the common
carrier is disputably presumed to have been
negligent in case of their loss, destruction or
deterioration.
iv. RES IPSA LOQUITUR
The doctrine of res ipsa loquitur (“the thing or
the transaction speaks for itself”) is a rule of
evidence (not of substantive law) peculiar to
the law of negligence. The doctrine treats the
injury itself as proof of negligence.
Elements: [Ramos v. CA (1999)]
(a) The accident is of a kind which ordinarily
does not occur in the absence of someone’s
negligence;
(b) It is caused by an instrumentality within
the exclusive control of the defendant or
defendants; and
(c) The possibility of contributing conduct,
which would make the plaintiff
responsible, is eliminated.
Basis
DM Consunji v. CA (2001): The res ipsa loquitur
doctrine is based in part upon the theory that
the defendant in charge of the instrumentality
which causes the injury either knows the cause
of the accident or has the best opportunity of
ascertaining it and that the plaintiff has no
such knowledge, and therefore is compelled to
allege negligence in general terms and to rely
upon the proof of the happening of the
accident in order to establish negligence.
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Effect xxx
Ramos v. CA, supra: The fact of the occurrence
of an injury, taken with the surrounding The responsibility treated of in this article
circumstances, raise a presumption of shall cease when the persons herein
mentioned prove that they observed all the
negligence, or make out a plaintiff’s prima diligence of a good father of a family to
facie case, and present a question of fact for prevent the damage.
defendant to meet with an explanation.
Also referred to as the “doctrine of imputed
In medical malpractice cases, when the negligence”. The rationale is to extend liability
doctrine of res ipsa loquitur is availed by the by legal fiction to those in a position to exercise
plaintiff, the need for expert medical testimony absolute or limited control over the direct
is dispensed with because the injury itself tortfeasor. The doctrine does not apply where
provides the proof of negligence. The reason is moral culpability can be imputed directly, as
that the general rule on the necessity of expert when there is actual intent to cause harm to
testimony applies only to such matters clearly others.
within the domain of medical science, and not
to matters that are within the common The liability of the vicarious obligor is primary
knowledge of mankind which may be testified and direct (solidarily liable with the tortfesor),
to by anyone familiar with the facts. not subsidiary. His responsibility is not
conditioned upon the insolvency of or prior
Note: For the res ipsa loquitur doctrine to recourse against the negligent tortfeasor.
apply, it must appear that the injured party
had no knowledge as to the cause of the
accident, or that the party to be charged with Under Article 2180
negligence has superior knowledge or
opportunity for explanation of the accident. Persons Vicariously Actor
Liable
A.4. PERSONS LIABLE Father and, in case Minor children who live in
(1) The direct tortfeasor of his death or their company
incapacity, the
Art. 2176. Whoever by act or omission causes mother
damage to another, there being fault or
negligence, is obliged to pay for the damage Guardians Minors or incapacitated
done. xxx persons who are under
their authority and live in
The tortfeasor may be a natural or juridical their company
person. For natural persons, apply requisites of
Owners and Employees in the service of
Art. 2176 and for juridical persons, apply
managers of an the branches in which the
vicarious liability provisions.
establishment or latter are employed or on
enterprise the occasion of their
(2) Persons vicariously liable
functions
Art. 2180. The obligation imposed by Article Employers Employees and household
2176 is demandable not only for one’s own helpers acting within the
acts or omissions, but also for those of scope of their assigned
persons for whom one is responsible.

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tasks, even though the
former are not engaged in
any business or industry
State Special agent
Teachers or heads Pupils and students or
of establishments apprentices, so long as
of arts and trades they remain in their
custody
(a) Persons exercising parental authority
Art. 2180 (2). The father and, in case of his
death or incapacity, the mother, are
responsible for the damages caused by the
minor children who live in their company.
FC, Art. 221. Parents and other persons
exercising parental authority shall be civilly
liable for the injuries and damages caused by
the acts or omissions of their unemancipated
children living in their company and under
their parental authority subject to the
appropriate defenses provided by law.
FC, Art. 216. In default of parents or a
judicially appointed guardian, the following
person shall exercise substitute parental
authority over the child in the order
indicated:
(1) The surviving grandparent, as provided in
Art. 214;
(2) The oldest brother or sister, over twenty-
one years of age, unless unfit or
disqualified; and
(3) The child's actual custodian, over twenty-
one years of age, unless unfit or
disqualified.
Whenever the appointment or a judicial
guardian over the property of the child
becomes necessary, the same order of
preference shall be observed.
FC, Art. 217. In case of foundlings,
abandoned neglected or abused children
and other children similarly situated,
parental authority shall be entrusted in
summary judicial proceedings to heads of
TORTS CIVIL LAW
children's homes, orphanages and similar
institutions duly accredited by the proper
government agency.
Art 2180, par 2 of the Civil Code which holds
the father liable for damages has been
modified by the Family Code and PD 603. Art.
211 of the FC declares joint parental authority
of the mother and father over common
children. The parent(s) exercising parental
authority are liable for the torts of their
children.
Who are liable for minors?
(1) Parents/Adoptive parents
(2) Court-appointed guardians
(3) Substitute Parental Authorities
(a) Grandparents
(b) Oldest qualified sibling over 21 years
old
(c) Child’s actual custodian, provided he is
qualified and over 21 years old.
(4) Special Parental Authorities
(a) School
(b) Administrators
(c) Teachers
(d) Individual, entity, or institution
engaged in child care
Illegitimate children
Responsibility is with the mother whom the
law vests with parental authority.
Basis of liability of parents and adopters
Parental liability is anchored upon parental
authority coupled with presumed parental
dereliction in the discharge of the duties
accompanying such authority. The parental
dereliction is, of course, only presumed and the
presumption can be overturned under Article
2180 of the Civil Code by proof that the parents
had exercised all the diligence of a good father
of a family to prevent the damage [Tamargo v.
CA (1992)].
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Meaning of “Minority”
Par. 2 and 3 of Art. 2180 speak of minors.
Minors here refer to those who are below 21
years of age, not below 18 years. The law
reducing the majority age from 21 to 18 years
old did not amend these paragraphs. Basis is
FC, Art. 236 (3), as amended by RA 6809,
provides, “Nothing in this Code shall be
construed to derogate from the duty or
responsibility of parents and guardians for
children and wards below 21 years of age
mentioned in the second and third paragraphs
of 2180 of the Civil Code.”
Art. 2180 (3). Guardians are liable for damages
caused by the minors or incapacitated persons
who are under their authority and live in their
company.
The liability of guardians with respect to their
wards is governed by the same rule as in the
liability of parents with respect to their children
below 21 years and who live with them
“Incompetent” includes (Rule 92, ROC):
(1) Those suffering the penalty of civil
interdiction,
(2) Prodigals,
(3) Deaf and dumb who are unable to read
and write
(4) Unsound mind, even though they have
lucid intervals
(5) Being of sound mind, but by reason of age,
disease, weak mind, and other similar
causes, cannot take care of themselves or
manage their property
Liability of minor or insane tortfeasor without a
parent or guardian
He shall be answerable with his own property
in an action against him where a guardian ad
litem shall be appointed. [Art. 2182]
TORTS CIVIL LAW
(b) Teachers and schools
Art. 2180 (7). Lastly, teachers or heads of
establishments of arts and trades shall be
liable for damages caused by their pupils and
students or apprentices, so long as they remain
in their custody.
FC, Art. 218. The school, its administrators
and teachers, or the individual, entity or
institution engaged in child are shall have
special parental authority and responsibility
over the minor child while under their
supervision, instruction or custody.
Authority and responsibility shall apply to all
authorized activities whether inside or
outside the premises of the school, entity or
institution.
FC, Art. 219. Those given the authority and
responsibility under the preceding Article
shall be principally and solidarily liable for
damages caused by the acts or omissions of
the unemancipated minor. The parents,
judicial guardians or the persons exercising
substitute parental authority over said minor
shall be subsidiarily liable.
The respective liabilities of those referred to
in the preceding paragraph shall not apply if
it is proved that they exercised the proper
diligence required under the particular
circumstances.
All other cases not covered by this and the
preceding articles shall be governed by the
provisions of the Civil Code on quasi-delicts.
Under Article 2180, the teacher is liable for the
acts or omissions of the pupils and students,
and so is the head of establishment of arts and
trades for the apprentices, so long as they
remain in custody, regardless of age. Under
the Family Code, liability attaches to the
school, its administrators and teachers, or the
individual or entity engaged in child care, so
long as the child is under their supervision,
instruction, or custody, and the child is below
18 years old.
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Basis of liability of teachers and heads of
establishments of arts and trades
They stand, to a certain extent, in loco parentis
and are called upon to exercise reasonable
supervision over the conduct of the child
[Palisoc v. Brillantes (1971)].
Palisoc v. Brillante (1971): “Custody” means the
protective and supervisory custody that the
school, its head and teachers exercise over the
pupils, for as long as they are in attendance in
school, which includes recess time.
Amadora v. CA (1988): As long as it is shown
that the student is in the school premises
pursuant to a legitimate student objective, in
the exercise of a legitimate right, or the
enjoyment of a legitimate student privilege,
the responsibility of the school authorities over
the student continues.
(c) Owners/managers of
establishments/employers
Art. 2180 (4). The owners and managers of an
establishment or enterprise are likewise
responsible for damages caused by their
employees in the service of the branches in
which the latter are employed or on the
occasion of their functions.
Art. 2180 (5). Employers shall be liable for
the damages caused by their employees and
household helpers acting within the scope of
their assigned tasks, even though the former
are not engaged in any business or industry.
Philippine Rabbit v. Philam Forwarders (1975):
“Owners and managers of an establishment or
enterprise” does not include a manager of a
corporation. (Spanish term “directores”
connotes “employer.” But manager of a
corporation is not an employer, but rather
merely an employee of the owner.)
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The liability imposed upon employers with
respect to damages occasioned by the
negligence of their employees to whom they
are not bound by contract is based on the
employer’s own negligence, such as when he
places a powerful automobile in the hands of a
servant whom he knows to be ignorant of the
method of managing such vehicle [Cangco v.
Manila Railroad (1918)].
Professional Services v. CA and Agana (2010):
This Court still employs the "control test" to
determine the existence of an employer-
employee relationship between hospital and
doctor. Under the "control test", an
employment relationship exists between a
physician and a hospital if the hospital controls
both the means and the details of the process
by which the physician is to accomplish his
task. The Court earlier ruled that there was
employer-employee relationship between the
doctor and employee but reversed itself upon
motion for reconsideration. They still held the
hospital liable on the basis of agency and
corporate responsibility.
Filamer v. IAC (1992): “Within the scope of their
assigned task” in Art. 2180 includes any act
done by an employee in furtherance of the
interests, or for the account of the employer at
the time of the infliction of the injury or
damage.
Basis of liability
Employer’s negligence in
(1) The selection of their employees (culpa in
eligiendo)
(2) The supervision over their employees
(culpa in vigilando)
Presumption of Negligence
The presentation of proof of the negligence of
its employee gives rise to the presumption that
the defendant employer did not exercise the
diligence of a good father of a family in the
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selection and supervision of its employees
[Lampesa v. De Vera (2008)].
DISTINCTION BETWEEN THE 4TH AND 5TH
PARAGRAPHS OF ART. 2180
Castilex Industrial Corp. v. Vasquez (1999): A
distinction must be made between the two
provisions to determine what is applicable.
Both provisions apply to employers: the fourth
paragraph, to owners and managers of an
establishment or enterprise; and the fifth
paragraph, to employers in general, whether or
not engaged in any business or industry. The
fourth paragraph covers negligent acts of
employees committed either in the service of
the branches or on the occasion of their
functions, while the fifth paragraph
encompasses negligent acts of employees
acting within the scope of their assigned task.
The latter is an expansion of the former in both
employer coverage and acts included.
Negligent acts of employees, whether or not
the employer is engaged in a business or
industry, are covered so long as they were
acting within the scope of their assigned task,
even though committed neither in the service
of the branches nor on the occasion of their
functions. For, admittedly, employees
oftentimes wear different hats. They perform
functions which are beyond their office, title or
designation but which, nevertheless, are still
within the call of duty.
DEFENSE OF DILIGENCE IN SELECTION AND
SUPERVISION
Metro Manila Transit v. CA (1993): Due
diligence in the supervision of employees
includes the formulation of suitable rules and
regulations for the guidance of employees and
the issuance of proper instructions intended for
the protection of the public and persons with
whom the employer has relations through his
or her employees and the imposition of
TORTS CIVIL LAW
necessary disciplinary measures upon
employees in case of breach or as may be
warranted to ensure performance of acts as
indispensable to the business of and beneficial
to their employee.
Due diligence in the selection of employees
require that the employer carefully examined
the applicant for employment as to his
qualifications, his experience and record of
service.
Criminal Negligence
Fernando v. Franco (1971): The vicarious
liability of the employer for criminal negligence
of his employee is governed by RPC 103.
Conviction of the employee conclusively binds
the employer. Defense of due diligence in the
selection and supervision of the employee is
not available. The employer cannot appeal the
conviction.
Note: The liability of the employer under Art.
103 RPC is subsidiary.
Registered Owner Rule
The registered owner of the vehicle is primarily
responsible to the public for whatever damage
or injury the vehicle may have caused, even if
he had already sold the same to someone else.
The policy is the easy identification of the
owner who can be held responsible so as not to
inconvenience or prejudice the third party
injured [Cadiente v. Macas (2008)]. The
registered owner, however, has the right to be
indemnified by the real or actual owner of the
amount that he may be required to pay as
damages for the injury caused to the plaintiff
[Orix Metro Leasing v. Mangalinan (2012)].
This rule applies even if the vehicle is leased to
third persons. The liability of the registered
owner is subject to his right of recourse against
the transferee or buyer.
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(d) The State answerable for damages [Fontanilla v.

Maliaman (1991)].
1987 Constitution, Art. XVI, Sec. 3. The State
may not be sued without its consent. (3) Joint tortfeasors

Art. 2180 (3). The State is responsible in like Art. 2194. The responsibility of two or more
manner when it acts through a special agent; persons who are liable for quasi-delict is
but not when the damage has been caused solidary.
by the official to whom the task done
properly pertains, in which case what is Definition of “Joint Tortfeasors”
provided in Article 2176 shall be applicable. Filipinas Broadcasting Network v. AMEC-
BCCM (2005): They are all persons who
Instances where the State gives its consent to
command, instigate, promote, encourage,
be sued
advise, countenance, cooperate in, aid or abet
(1) Art. 2180 (6) is an example of an express
in the commission of a tort, or who approve of
legislative consent. Here, the State
it after it is done, if done for their benefit.
assumes a limited liability for the acts of its
special agents.
Applicability of the provision
(2) Art. 2189 provides for state liability for
The provision applies when there are 2 or more
damages caused by defective condition of
persons who have participated in the
public works.
commission of a single quasi-delict. The injury
(3) Local Government Code provides for the
must be indivisible.
liability of local government units for
wrongful exercise of its proprietary (as
B. CAUSE
opposed to its governmental) functions.
The latter is the same as that of a private Concept of Proximate Cause
corporation or individual. [Mendoza v. De In order that civil liability for negligence may
Leon, (1916)] arise, there must be a direct causal connection
between the damage suffered by the plaintiff
Merritt v. Government of the Philippine Islands
and the act or omission of the defendant.
(1960): A special agent is one who receives a
definite and fixed order or commission, foreign
Where the particular harm sustained was
to the exercise of the duties of his office if he is
reasonably foreseeable at the time of the
a special official. This concept does not apply
defendant’s misconduct, his act or omission is
to any executive agent who is an employee of
the legal cause thereof. Foreseeability is the
the active administration and who on his own
fundamental basis of the law of negligence. To
responsibility performs the functions which are
be negligent, the defendant must have acted
inherent in and naturally pertain to his office.
or failed to act in such a way that an ordinary
reasonable man would have realized that
A corporate body performing non-
certain interests of certain persons were
governmental functions becomes liable for the
reasonably subjected to a general but definite
damage caused by the accident resulting from
class of risks. [Jarencio]
the tortious act of its driver-employee. Such
corporate body assumes the responsibility of
an ordinary employer and as such, becomes

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There are 2 types of proximate cause:
(1) Proximate cause immediately resulting in
injury: defined as “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”
[Bataclan v. Medina (1957)].
(2) Proximate cause not immediately resulting
in injury but sets in motion a chain of
events, also known as Proximate Legal
Cause: that acting first and producing the
injury, either immediately or by setting
other events in motion, all constituting a
natural and continuous chain of events,
each having a close causal connection with
its immediate predecessor, the final event
in the chain immediately effecting the
injury as a natural and probable result of
the cause which first acted, under such
circumstances that the person responsible
for the first event should, as an ordinary
prudent and intelligent person, have
reasonable ground to expect at the
moment of his act or default that an injury
to some person might probably result
therefrom.
Mercury Drug v. Baking (2007). Respondent
was mistakenly given Dormicum, a potent
sleeping tablet, instead of medication for his
blood sugar. He took a pill for 3 consecutive
days and on the third day, he fell asleep on the
wheel and figured in a vehicular accident. The
Court found that the proximate cause of the
accident was the Mercury Drug employee’s
mistake in reading the prescription.
Note: Here, 3 days have elapsed from the time
of the negligent act determined by the Court as
the proximate cause; thus, the Court did not
consider the time element in determining
proximate cause but the nature and gravity of
the injury.
TORTS CIVIL LAW
Differentiated from:
(1) Concurrent Cause – Several causes
producing the injury, and each is an
efficient cause without which the injury
would not have happened. The injury is
attributed to any or all the causes, and
recovery may be had against any or all of
those responsible.
Far Eastern Shipping v. CA (1998): As a
general rule, that negligence in order to
render a person liable need not be the sole
cause of an injury. It is sufficient that his
negligence, concurring with one or more
efficient causes other than the plaintiff’s, is
the proximate cause of the injury. Where
the concurrent or successive negligent acts
or omissions of two or more persons,
although acting independently, are in
combination the direct and proximate
cause of a single injury to a third person, it
is impossible to determine in what
proportion each contributed to the injury
and either of them is responsible for the
whole injury. Where their concurring
negligence resulted in injury or damage to
a third party, they become joint tortfeasors
and are solidarily liable for the resulting
damage.
(2) Remote Cause – a cause which would have
been a proximate cause, had there been no
efficient intervening cause after it and prior
to the injury.
Manila Electric v. Remonquillo (1956): A
prior and remote cause cannot be made
the basis of an action if such remote cause
did nothing more than furnish the
condition or give rise to the occasion by
which the injury was made possible, if
there intervened between such prior or
remote cause and the injury a distinct,
successive, unrelated, and efficient cause
of the injury, even though such injury
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would not have happened but for such
condition or occasion.
(3) Intervening Cause
The test of determining whether or not the
intervening cause is sufficient to absolve a
prior cause of the injury is as follows:
whether the intervention of a later cause is
a significant part of the risk involved in the
defendant’s conduct, or is so reasonable
connected with it that the responsibility
should not be terminated. In the
affirmative, such foreseeable intervening
forces are within the scope of the original
risk, and hence of the defendant’s
negligence. In the negative, there exists an
efficient intervening cause that relieves the
defendant of liability.
Phoenix Construction v. IAC (1987): If the
intervening cause is one which in ordinary
human experience is reasonably to be
anticipated, or one which the defendant
has reason to anticipate under the
particular circumstances, the defendant
may be negligent, among other reasons,
because of failure to guard against it.
There is an intervening cause combining
with the defendant’s conduct to produce
the result, and the defendant’s negligence
consists in failure to protect the plaintiff
against that very risk.
Tests to Determine Proximate Cause
(1) But for / Sine qua non rule
Whether such negligent conduct is a cause
without which the injury would not have
occurred or is the efficient cause which set
in motion the chain of circumstances
leading to the injury. [Bataclan v. Medina,
supra]
(2) Sufficient link
The Supreme Court has adopted a
relaxation of the “but for” test in Dy Teban
TORTS CIVIL LAW
v. Jose Ching (2008). Plaintiff, however,
must establish a sufficient link between the
act or omission and the damage or injury.
That link must not be remote or far-
fetched; otherwise, no liability will attach.
The damage or injury must be a natural
and probable result of the act or omission.
(3) Substantial factor
If the actor’s conduct is a substantial factor
in bringing about harm to another, the fact
that the actor neither foresees nor should
have foreseen the harm or the manner in
which it occurred, does not prevent him
from being liable. [Philippine Rabit v. IAC
(1990)]
(4) Mixed considerations
There is no exact formula to determine
probable cause. It is based upon mixed
considerations of logic, common sense,
policy and precedent [Dy Teban v. Jose
Ching, supra].
(5) Cause v. condition
Phoenix Construction v. IAC (1987): The
distinction between cause and condition
has already been almost entirely
discredited. So far as it has any validity at
all, it must refer to the type of case where
the forces set in operation by the
defendant have come to rest in a position
of apparent safety, and some new force
intervense. But even in such cases, it is not
the distinction between “cause” and
“condition” which is important, but the
nature of the risk and the character of the
intervening cause.
(6) Last clear chance
The Doctrine of Last Clear Chance
Also known as: "doctrine of discovered
peril” or “doctrine of supervening
negligence” or “humanitarian doctrine”.
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The antecedent negligence of the plaintiff
does not preclude him from recovering
damages caused by the supervening
negligence of the defendant, who had the
last fair chance to prevent the impending
harm by the exercise of due diligence [PNR
v. Brunty (2006)].
Picart v. Smith (1918): If both parties are
found to be negligent; but, their
negligence are not contemporaneous, the
person who has the last fair chance to
avoid the impending harm and fails to do
so is chargeable with the consequences,
without reference to the prior negligence of
the other party.
Simply stated, it covers successive acts of
negligence:
Primary negligence of the
defendant
Contributory negligence of the
plaintiff
Subsequent negligence of the
defendant in failing to avoid the
injury to the plaintiff
Note:
 If plaintiff is the proximate cause: no recovery
can be made.
 If plaintiff is not the proximate cause:
Recovery can be made but such will be
mitigated.
 If negligence of parties is equal in degree,
then each bears his own loss.
PNR v. Brunty (2006): The doctrine of last
clear chance finds no application in a case
TORTS CIVIL LAW
where the proximate cause of the injury has
been established.
The doctrine is not applicable in the following
cases:
Consolidated Bank v. CA (2003): The doctrine
of last clear chance does not apply in a case of
culpa contractual, where neither the
contributory negligence of the plaintiff nor his
last clear chance to avoid the loss, would
exonerate the defendant from liability. Such
contributory negligence or last clear chance by
the plaintiff merely serves to reduce the
recovery of damages by the plaintiff but does
not exculpate the defendant from his breach of
contract.
Pantranco v. Baesa (1989): Last clear chance
applies only if the person who allegedly had
the last opportunity to avert the accident was
aware of the existence of peril or should, with
exercise of due care, have been aware of it. The
doctrine can never apply where the party
charged is required to act instantaneously, and
if the injury cannot be avoided by application of
all means at hand after the peril is or should
have been discovered.
Bustamante v. CA (1991): The doctrine of last
clear chance, as enunciated in Anuran v. Buno,
applies in a suit between the owners and
drivers of colliding vehicles. It does not arise
where a passenger demands responsibility
from the carrier to enforce its contractual
obligations. It will be inequitable to exempt the
negligent driver of the jeepney and its owners
on the ground that the other driver was
likewise guilty of negligence.
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C. DEFENSES
C.1. DUE DILIGENCE TO PREVENT THE
DAMAGE UNDER ARTICLE 2180
Art. 2180. The obligation imposed by Article
2176 is demandable not only for one’s own acts
or omissions, but also for those of persons for
whom one is responsible.
xxx
(8) The responsibility treated of in this article
shall cease when the persons herein
mentioned prove that they observed all the
diligence of a good father of a family to prevent
damage.
Ramos v. PEPSI (1967): The presumption of
negligence on the part of the master or
employer, either in the selection of
servant/employee or in the supervision, when
an injury is caused by the negligence of a
servant/employee may be rebutted if the
employer shows to the satisfaction of the court
that in the selection and supervision, he has
exercised the care and diligence of a good
father of a family
C.2. ACTS OF PUBLIC OFFICERS
Vinzons-Chato v. Fortune (2008): When what
is involved is a duty owing to the public in
general, an individual cannot have a cause of
action the public officer although he may have
been injured by the action or inaction of the
officer, except when the individual suffers a
particular or special injury.
C.3. AUTHORITY OF LAW
Art. 5. Acts executed against the provisions
of mandatory or prohibitory laws shall be
void, except when the law itself authorizes
their validity.
TORTS CIVIL LAW
RPC, Art. 11. The following do not incur any
criminal liability:
(5) Any person who acts in the fulfillment of a
duty or in the lawful exercise of a right or
office
(8) Any person who acts in obedience to an
order issued by a superior for some lawful
purpose
C.4. DAMNUM ABSQUE INJURIA
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.
Custodio v. CA (1996): Right to recover
damages does not arise from the mere fact
that the plaintiff suffered losses. To warrant
the recovery of damages, there must be both a
right of action for a legal wrong inflicted by the
defendant, and damage resulting to the
plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a
cause of action, since damages are merely part
of the remedy allowed for the injury caused by
a breach or wrong.
Injury Damage Damages
Illegal invasion Loss, hurt, Recompense
of a legal right harm resulting or
from the injury compensation
awarded
Amonoy v. Gutierrez (2001): “One who made
use of his own legal right does no injury, thus,
whatever damages are caused to another
should be borne solely by him under the
principle of damnum absque injuria. This
principle, however, does not apply when there
is an abuse in the exercise of a person’s right.”
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C.5. PLAINTIFF’S NEGLIGENCE IS THE
PROXIMATE CAUSE
Art. 2179. When the plaintiff’s own
negligence was the proximate cause of his
injury, he cannot recover damages. xxx
This defense of plaintiff’s negligence as
proximate cause is absolute, for it bars
recovery on the part of the plaintiff. In Manila
Electric v. Remoquillo (1956), the Court did not
allow recovery by Magno, ruling that his death
was primarily caused by his own negligence
and in some measure by the too close
proximity of the “media agua” to the electric
wire.
Bernardo v. Legaspi (1914): If the plaintiff in a
negligence action, by his own carelessness
contributed to the principal occurrence, that is,
to the accident, as one of the determining
causes thereof, he cannot recover.
C.6. CONTRIBUTORY NEGLIGENCE OF
THE PLAINTIFF
Art. 2179. xxx But if his negligence was only
contributory, the immediate and proximate
cause of the injury being the defendant's lack
of due care, the plaintiff may recover
damages, but the courts shall mitigate the
damages to be awarded.
Art. 2214. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the
damages that he may recover.
Contributory negligence is defined as conduct
on the part of the injured party, which
contributed as a legal cause to the harm he
has suffered, which falls below the standard to
which he is required to conform for his own
protection [Valenzuela v. CA (1996)].
TORTS CIVIL LAW
MH Rakes v. Atlantic (1907): Contributory
negligence does not defeat an action if it can
be shown that the defendant might, by the
exercise of reasonable care and prudence, have
avoided the consequences of the injured
party's negligence. Where the plaintiff
contributes to the principal occurrence as one
of its determining factors, he cannot recover.
Where, in conjunction with the occurrence, he
contributes only to his own injury, he may
recover the amount that the defendant
responsible for the event should pay for such
injury, less a sum deemed a suitable equivalent
for his own imprudence.
Genobiagon v. CA (1989): The defense of
contributory negligence does not apply in
criminal cases committed through reckless
imprudence, since one cannot allege the
negligence of another to evade the effects of
his own negligence.
C.7. FORTUITOUS EVENT
Art. 1174. Except in cases expressly specified
by the law, or when it is otherwise declared
by stipulation, or when the nature of the
obligation requires the assumption of risk, no
person shall be responsible for those events
which, could not be foreseen, or which,
though foreseen, were inevitable.
Elements of caso fortuito [Juntilla v. Fontanar
(1985)]:
(a) The cause of the unforeseen and
unexpected occurrence, or of the failure of
the debtor to comply with his obligation,
must be independent of the human will;
(b) It must be impossible to foresee the event
or if it can be foreseen, it must be
impossible to avoid;
(c) The occurrence must be such as to render
it impossible for the debtor to fulfill his
obligation in a normal manner; and
(d) The obligor must be free from any
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participation in the aggravation of the
injury resulting to the creditor.
Hernandez v. COA (1984): The robbery that
happened to him cannot be said to be the
result of his imprudence and negligence,
having occurred in a public utility. This was
undoubtedly a fortuitous event covered by the
said provisions, something that could not have
been reasonably foreseen although it could
have happened.
C.8. PLAINTIFF’S ASSUMPTION OF RISK
/ VOLENTI NON FIT INJURIA
The doctrine of volenti non fit injuria (that to
which a person assents is not presumed in law
as injury) refers to self-inflicted injury or to the
consent to injury which precludes the recovery
of damages by one who has knowingly and
voluntarily exposed himself to danger, even if
he is not negligent in doing so. This is so
because, in theory, the plaintiff’s acceptance of
the risk has wiped out the defendant’s duty,
and as to the plaintiff the defendant’s
negligence is not a legal wrong.
Requisites:
(a) That the plaintiff had actual knowledge of
the danger;
(b) That he understood and appreciated the
risk from the danger; and
(c) That he voluntarily exposed himself to
such risk
The defense is not applicable in the following
cases:
Ilocos Norte v. CA (1989): A person is excused
from the force of the rule (volenti non fit
injuria), that when he voluntarily assents to a
known danger he must abide by the
consequences, if an emergency is found to
exist or if the life or property of another is in
peril or when he seeks to rescue his
endangered property.
TORTS CIVIL LAW
Nikko Hotel v. Roberto Reyes (2005): The
doctrine does not find application to the case
because even if respondent Reyes assumed the
risk of being asked to leave the pary,
petitioners, under Articles 19 and 21 of the Civil
Code, were still under the obligation to treat
him fairly in order not to expose him to
unnecessary ridicule and shame.
C.9. PRESCRIPTION
Art. 1146. The following actions must be
instituted within four years:
(1) Upon an injury to the rights of the
plaintiff;
(2) Upon a quasi-delict;
However, when the action arises from or out
of any act, activity, or conduct of any public
officer involving the exercise of powers or
authority arising from Martial Law including
the arrest, detention and/or trial of the
plaintiff, the same must be brought within
one (1) year.
Art. 1150. The time for prescription for all
kinds of actions, when there is no special
provision which ordains otherwise, shall be
counted from the day they may be brought.
Prescription periods:
 4 years for QD
 1 year for defamation
Kramer v. CA (1989): It is clear that the
prescriptive period must be counted when the
last element occurs or takes place, the time of
the commission of an act or omission violative
of the right of the plaintiff, which is the time
when the cause of action arises. Thus, the
prescription period begins from the day the
quasi-delict is committed.
C.10. WAIVER
Art. 6. Rights may be waived, unless the
waiver is contrary to law, public order, public
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policy, morals, or good customs or prejudicial
to a third person with a right recognized by
law.
Art. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of
an action for future fraud is void.
C.11. EMERGENCY RULE OR SUDDEN
PERIL DOCTRINE
Valenzuela v. CA (1996): An individual, who
suddenly finds himself in a situation of danger
and is required to act without much time to
consider the best means that may be adopted
to avoid the impending danger, is not guilty of
negligence if he fails to undertake what
subsequently and upon reflection may appear
to be a better solution, unless the emergency
was brought by his own negligence.
III. INTENTIONAL
TORTS
Manresa: “Liability for personal acts or
omission is founded on that indisputable
principle of justice recognized by all legislators
that when a person by his act or omission
causes damage or prejudice to another, a
juridical relation is created by virtue of which
the injured person acquires a right to be
indemnified and the person causing the
damage is charged with the corresponding
duty of repairing the damage. The reason for
Case Legal Right and Injury
Velayo v. Shell (1959) Right to transfer credit.
The transfer of credit from Shell implemented by NCC 21.
Philippines to Shell USA was deemed a
violation of NCC 21 as it allowed Shell to
attach properties of their creditor CALI to
the prejudice of its other creditors.
Globe v. CA (1989) Right to dismiss an employee.
The dismissal itself was not illegal but it manner which does not conform
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CIVIL LAW
this is found in the obvious truth that man
should subordinate his acts to the precepts of
prudence and if he fails to observe them and
cause damage to another, he must repair the
damage.”
A. HUMAN RELATIONS TORTS
A.1. ABUSE OF RIGHT
Art. 19. Every person must, in the exercise of
his rights and in the performance of his
duties, act with justice, give everyone his due,
and observe honesty and good faith.
Generally, the exercise of any right must be in
accordance with the purpose for which it was
established. It must not be excessive or unduly
harsh; there must be no intention to injure
another.
There is abuse of right when:
(1) The right is exercised for the only purpose
of prejudicing or injuring another
(2) The objective of the act is illegitimate
(3) There is an absence of good faith
Elements [Albenson v. CA (1993)]:
(a) There is a legal right or duty;
(b) Which is exercised in bad faith;
(c) For the sole intent of prejudicing or injuring
another.
Doctrine
The standards in NCC 19 are
When a right is exercised in a
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was the manner of dismissal which was
deemed in violation of Article 19, as such
was based on unfounded accusations of
dishonesty.
University of the East Academic freedom.
v. Jader (2000) The conscious indifference of the school in
not informing its student that he could not
graduate formed the basis for the award of
damages.
with the norms in NCC 19, and
results in damage to another, a
legal wrong is thereby committed.
The law, therefore, recognizes a
primordial limitation on all rights.
The conscious indifference of a
person to the rights or welfare of the
others who may be affected by his
act or omission can support a claim
for damages.

Amonoy v. Gutierrez Right to demolish another’s house on his The principle of damnum absque
(2001) own property. injuria does not apply when the
Amonoy obtained a judgment in his favor exercise of the legal right is
for Gutierrez to vacate. A demolition order suspended or extinguished pursuant
was issued but the court suspended it with to a court order. The exercise of a
a TRO. Amonoy proceeded with the right ends when the right
demolition. In a complaint for damages, disappears, and it disappears when
he claims the principle of damnum absque it is abused, especially to the
injuria. prejudice of others.

Nikko Hotel Manila Right to forbid uninvited guests from Article 19, known to contain what is
Garden v. Reyes entering the party. commonly referred to as the
(2005) Ruby Lim’s throwing out of complainant principle of abuse of rights, is not a
Reyes, as a gatecrasher in a private party, panacea for all human hurts and
was merely in exercise of her duties as social grievances. The object of this
Executive Secretary of the hotel where the article is to set certain standards
party was held, and did not constitute a which must be observed not only in
violation of Article 19. the exercise of one’s rights but also
in the performance of one’s duties.
NCC 20 does not distinguish, and the act may
be done willfully or negligently.
A.2. ACTS CONTRARY TO LAW
Requisites
(a) The act must be willful or negligent;
Art. 20. Every person who, contrary to law,
willfully or negligently causes damage to (b) It must be contrary to law; and
another, shall indemnify the latter for the (c) Damages must be suffered by the injured
same. party.

The provision is intended to provide a remedy
in cases where the law declares an act illegal
but fails to provide for a relief to the party
injured. [Jarencio]
Garcia v. Salvador (2007). Salvador was
misdiagnosed with Hepatitis, as a result of
which she lost her job. During trial, it was
proven that the clinic was operating under
substandard conditions, in violation of the
Clinical Laboratory Law, DOH Administrative

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Order No. 49-B, and the Philippine Medical
Technology Act of 1969. The Court held that
violation of a statutory duty is negligence, and
that Article 20 provides the legal basis for
award of damages to a party who suffers
damage whenever one commits an act in
violation of some legal provision.
A.3. ACTS CONTRARY TO MORALS
Art. 21. Any person who willfully causes loss
or injury to another in a manner that is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.
This article is designed “to expand the concept
of torts and quasi-delict in this jurisdiction by
granting adequate legal remedy for the untold
number of moral wrongs which is impossible
for human foresight to specifically enumerate
and punish in statute books”. [Baksh v. CA
(1993)]
Elements: [Albenson v. CA (1993)]
(a) There is an act which is legal;
(b) But which is contrary to morals, good
customs, and public policy; and
(c) It is done with intent to injure.
Examples of acts contrary to morals:
(1) Breach of Promise to Marry and Moral
Seduction
Wassmer v. Velez (1964): Mere breach of
promise to marry is not an actionable
wrong. But to formally set a wedding and
go through all the above-described
preparation and publicity, only to walk out
of it when the matrimony is about to be
solemnized, is quite different. This is
palpably and unjustifiably contrary to good
customs xxx.
TORTS CIVIL LAW
Baksh v. CA (1993): Where a man's promise
to marry is in fact the proximate cause of
the acceptance of his love by a woman and
his representation to fulfill that promise
thereafter becomes the proximate cause of
the giving of herself unto him in a sexual
congress, proof that he had, in reality, no
intention of marrying her and that the
promise was only a subtle scheme or
deceptive device to entice or inveigle her to
accept him and to obtain her consent to
the sexual act, could justify the award of
damages pursuant to Article 21 not
because of such promise to marry but
because of the fraud and deceit behind it
and the willful injury to her honor and
reputation. It is essential, however, that
such injury should have been committed in
a manner contrary to morals, good
customs or public policy.
Tanjanco v. CA (1966): However, when for
one whole year, the plaintiff, a woman of
legal age, maintained sexual relations with
the defendant, with repeated acts of
intercourse, there is here voluntariness. No
case under Article 21 is made.
(2) Malicious Prosecution
Malicious prosecution is the institution of
any action or proceeding, either civil or
criminal, maliciously and without probable
cause.
Elements: [Magbanua v. Junsay (2007)]
(a) The fact of the prosecution or that the
prosecution did occur and that the
defendant was himself the prosecutor
or that he instigated its
commencement;
(b) That the action finally terminated with
an acquittal;
(c) That in bringing the action, the
prosecutor acted without probable
cause
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(d) That the prosecutor was actuated or
impelled by legal malice, that is, by
improper or sinister motive.
Que v. IAC (1989): The mere dismissal of
the criminal complaint by the fiscal’s office
did not create a cause of action for
malicious prosecution, because the
proceedings therein did not involve an
exhaustive examination of the elements of
malicious prosecution. To constitute such,
there must be proof that the prosecution
was prompted by a sinister design to vex
and humiliate a person and that it was
initiated deliberately by the defendant
knowing that his charges were false and
groundless.
Magbanua v. Junsay (2007): Malicious
prosecution involves not only criminal but
civil and administrative suits as well.
(3) Public Humiliation
Pe v. Pe (1962): Lolita’s family filed a case
against Alfonse Pe, a married man, for
allegedly seducing Lolita and causing
great damage to the name of her parents,
brothers, and sisters. The Court sustained
the claim, finding an injury to Lolita’s
family in a manner contrary to morals,
good customs and public policy as
contemplated in Article 21 of the new Civil
Code.
Grand Union v. Espino (1979): It is against
morals, good customs and public policy to
humiliate, embarrass and degrade the
dignity of a person. Everyone must respect
the dignity, personality, privacy and peace
of mind of his neighbors and other persons
(Article 26, Civil Code).
(4) Oppressive Dismissal
Quisaba v. Sta. Ines (1974): The right of an
employer to dismiss an employee is not to
TORTS CIVIL LAW
be confused with the manner in which this
right is to be exercised and the effects
flowing therefrom. If the dismissal was
done antisocially or oppressively, then
there is a violation of Article 1701, which
prohibits acts of oppression by either
capital or labor against the other, and
Article 21, which makes a person liable for
damages if he willfully causes loss or injury
to another in a manner that is contrary to
morals, good customs, or public policy.
When the manner in which the company
exercised its right to dismiss was abusive,
oppressive and malicious, it is liable for
damages.
A.4. UNJUST ENRICHMENT
Art. 22. Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of
something at the expense of the latter
without just or legal ground, shall return the
same to him.
Art. 23. Even when an act or event causing
damage to another’s property was not due to
the fault or negligence of the defendant, the
latter shall be liable for indemnity if through
the act or event he was benefited.
Art. 2142. Certain lawful, voluntary and
unilateral acts give rise to the juridical
relation of quasi-contract to the end that no
one shall be unjustly enriched or benefited at
the expense of another.
Art. 2143. The provisions for quasi contracts
in this Chapter do not exclude other quasi-
contracts which may come within the purview
of the preceding article.
One person should not be permitted to
unjustly enrich himself at the expense of
another, but should be required to make
restitution of, or for property or benefits
received, retained, or appropriated where it is
just and equitable that such restitution be
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made, and where such action involves no
violation or frustration of law or opposition to
public policy, either directly or indirectly.
Enrichment at the expense of another is not
per se forbidden. It is such enrichment without
just or legal cause that is contemplated here.
Just and legal cause is always presumed, and
the plaintiff has the burden of proving its
absence.
The restitution must cover the loss suffered by
the plaintiff but it can never exceed the
amount of unjust enrichment of the defendant
if it is less than the loss of the plaintiff.
Requisites:
(a) That the defendant has been enriched;
(b) That the plaintiff has suffered a loss;
(c) That the enrichment of the defendant is
without just or legal ground; and
(d) That the plaintiff has no other action based
on contract, crime or quasi-delict.
A.5. VIOLATION OF HUMAN DIGNITY
Art. 26. Every person shall respect the
dignity, personality, privacy and peace of
mind of his neighbors and other persons.
The following and similar acts, though they
may not constitute a criminal offense, shall
produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of another’s
residence;
(2) Meddling with or disturbing the private
life or family relations of another;
(3) Intriguing to cause another to be
alienated from his friends;
(4) Vexing or humiliating another on account
of his religious beliefs, lowly station in
life, place of birth, physical defect, or
other personal condition.
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MVRS Publications v. Islamic Da'wah Council
(2003): Article 26 specifically applies to
intentional acts which fall short of being
criminal offenses. It itself expressly refers to
tortious conduct which "may not constitute
criminal offenses." The purpose is precisely to
fill a gap or lacuna in the law where a person
who suffers injury because of a wrongful act
not constituting a crime is left without any
redress. Under Article 26, the person
responsible for such act becomes liable for
"damages, prevention and other relief." In
short, to preserve peace and harmony in the
family and in the community, Article 26 seeks
to eliminate cases of damnum absque injuria
in human relations.
The principal rights protected under this
provision are the following:
(1) The right to personal dignity
(2) The right to personal security
(3) The right to family relations
(4) The right to social intercourse
(5) The right to privacy
(6) The right to peace of mind
Note: Coverage of Art. 26 is not limited to
those enumerated therein, the enumeration
being merely examples of acts violative of a
person’s rights to dignity, personality, privacy
and peace of mind. Other “similar acts” are
also covered within the scope of the article.
VIOLATION OF PERSONAL DIGNITY
In order to be actionable it is not necessary
that the act constitutes a criminal offense. The
remedy afforded by the law is not only the
recovery of damages. “Prevention and other
relief” is also available. In other words,
injunction and other appropriate reliefs may
also be obtained by the aggrieved party.
VIOLATION OF PRIVACY
Privacy is the right to be let alone, or to be free
from unwarranted publicity, or to live without
unwarranted interference by the public in
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matters in which the public is not necessarily
concerned. This right is purely personal in
nature, such that it can be invoked only by the
person actually injured, it is subject to a proper
waiver, and it ceases upon death. However, the
privilege may be given to heirs of a deceased to
protect his memory, to protect the feelings of
the living heirs.
Reasonableness of Expectation of Privacy Test:
[Ople v. Torres (1998)]
(1) Whether by one’s conduct, the individual
has exhibited an expectation of privacy
(2) Whether this expectation is one that
society recognizes and accepts as
reasonable
The general rule is that the right to privacy may
only be invoked by natural persons. Juridical
persons cannot invoke this because the basis
to this right is an injury to the feelings and
sensibilities of the injured party, and a
corporation has none of those. The exception is
where the right to privacy is invoked along with
the right against unreasonable searches and
seizures. “An individual’s right to privacy under
Article 26(1) of the Civil Code should not be
confined to his house or residence as it may
extend to places where he has the right to
exclude the public or deny them access” [Sps.
Hing v. Choachuy (2013)].
Types of invasion of privacy
(1) Publication of embarrassing private facts –
The interest here is the right to be free
from unwarranted publicity, wrongful
publicizing of private affairs and activities,
as these are outside the ambit of
legitimate public concern.
Ayer v. Capulong (1988): Public figures
enjoy a limited right to privacy as
compared to ordinary individuals.
(2) Intrusion upon plaintiff’s private affairs
TORTS CIVIL LAW
 This is not limited to situations where the
wrongdoer physically trespasses into
one’s property.
 Generally, there is no invasion of privacy
when journalists report something that
occurs in the public realm, except when
the acts of the journalist are to an extent
that it constitutes harassment.
 RA 4200: It is illegal for any person not
authorized by both parties to any private
communication to secretly record such
communication.
(3) Publicity which puts one in a false light in
the public eye – The interest here is in not
being made or forced to appear before the
public in an objectionable false light or
position.
Tort of putting in false
Defamation
light
The embarrassment of Concerns the
a person being reputational harm to a
portrayed as person
something he is not
Statement should be Publication is satisfied
actually made in even if communicated
public to only one specific
third person
(4) Commercial appropriation of likeness of
image – It consists of appropriation, for the
defendant’s benefit or advantage (ex. used
in defendant’s advertisement), of the
plaintiff’s name or likeness (picture or
portrait).
DISTURBANCE OF PEACE OF MIND
The disturbance of the mental and emotional
tranquility of the plaintiff by the defendant is a
legal injury in itself and, therefore, a sufficient
cause of action for damages, injunction, and
other relief. A person, however, cannot be held
liable for damages for the mental or emotional
disturbance of the plaintiff which was due to
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the latter’s susceptibility to such disturbance,
where the defendant had no knowledge of
such peculiar susceptibility. The tendency of
the law is to secure an interest in mental
comfort only to the extent of the ordinary
sensibilities of men.
Interference with Relations
An interference with the continuance of
unimpaired interests founded upon the
relation in which the plaintiff stands toward
one or more third persons [Prosser and
Keeton].
KINDS:
(1) Family relations
(2) Social relations
(3) Economic relations
(4) Political relations
Family Relations
ALIENATION OF AFFECTION
This is a cause of action in favor of a
husband against one who wrongfully
alienates the affection of his wife,
depriving him of his conjugal rights to her
consortium, that is, her society, affection,
and assistance.
Elements:
(a) Wrongful conduct of the defendant:
intentional and malicious enticing of a
spouse away from the other spouse
(b) Loss of affection or consortium
Note: Complete absence of affection
between the spouses is not a defense.
(c) Causal connection between such
conduct and loss
Tenchavez v. Escaño (1965): There is no
evidence that the parents of Vicenta, out of
improper motives, aided and abetted her
original suit for annulment, or her
subsequent divorce; she appears to have
acted independently, and being of age, she
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was entitled to judge what was best for her
and ask that her decisions be respected.
Her parents, in so doing, certainly cannot
be charged with alienation of affections in
the absence of malice or unworthy motives,
which have not been shown, good faith
being always presumed until the contrary
is proved.
Liability of Parents, Guardians or Kin
The law distinguishes between the right of
a parent to interest himself in the marital
affairs of his child and the absence of
rights in a stranger to intermeddle in such
affairs. However, such distinction between
the liability of parents and that of
strangers is only in regard to what will
justify interference. A parent is liable for
alienation of affections resulting from his
own malicious conduct, as where he
wrongfully entices his son or daughter to
leave his or her spouse, but he is not liable
unless he acts maliciously, without
justification and from unworthy motives.
He is not liable where he acts and advises
his child in good faith with respect to his
child's marital relations in the interest of
his child as he sees it, the marriage of his
child not terminating his right and liberty
to interest himself in, and be extremely
solicitous for, his child's welfare and
happiness even where his conduct and
advice suggest or result in the separation
of the spouses or the obtaining of a divorce
or annulment, or where he acts under
mistake or misinformation, or where his
advice or interference are indiscreet or
unfortunate, although it has been held that
the parent is liable for consequences
resulting from recklessness. He may in
good faith take his child into his home and
afford him or her protection and support,
so long as he has not maliciously enticed
his child away, or does not maliciously
entice or cause him or her to stay away,
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from his or her spouse. This rule has more
frequently been applied in the case of
advice given to a married daughter, but it
is equally applicable in the case of advice
given to a son.
LOSS OF CONSORTIUM
Lilius v. Manila Railroad Company (1934):
The plaintiff Aleko E. Lilius also seeks to
recover the sum of P2,500 for the loss of
what is called Anglo-Saxon common law
"consortium" of his wife, that is, "her
services, society and conjugal
companionship", as a result of personal
injuries which she had received from the
accident now under consideration.
Inasmuch as a wife's domestic assistance
and conjugal companionship are purely
personal and voluntary acts which neither
of the spouses may be compelled to
render, it is necessary for the party
claiming indemnity for the loss of such
services to prove that the person obliged to
render them had done so before he was
injured and that he would be willing to
continue rendering them had he not been
prevented from so doing.
CRIMINAL CONVERSATION (ADULTERY)
Interference with the marital relations by
committing adultery with one of the
spouses. This is obvious enough in the case
of rape but also applies where the
adulterous spouse consented to or initiated
the intercourse. [Prosser and Keeton, p. 917]
Social Relations
(1) Meddling with or disturbing family relations
Art. 26. Every person shall respect the
dignity, personality, privacy and peace of
mind of his neighbors and other persons.
The following and similar acts, though they
may not constitute a criminal offense, shall
produce a cause of action for damages,
prevention and other relief;
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xxx
2) Meddling with or disturbing the private life
or family relations of another;
Developed as an offshoot of the action for
enticing away a servant and depriving the
master of the proprietary interest in [the
servant’s] services until there has been a
gradual shift of emphasis away from
“services” and toward a recognition of
more intangible elements in the domestic
relations, such as companionship and
affection. [Prosser and Keeton, p. 916]
INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED
FROM HIS FRIENDS
A person who committed affirmative acts
intended to alienate the existing friendship
of one with his friends is liable for
damages. A man is a social being and for
being so, he needs friends to socialize with
and to depend upon in case of need. To
alienate him wrongfully or with malice
from his friends is to cause him suffering
for which he is entitled to damages.
Economic Relations
Art. 1314. Any person who induces another to
violate his contract with another person shall
be liable for damages to the other
contracting party.
Prosser and Keeton: Tort liability may be
imposed upon a defendant who intentionally
and improperly interferes with the plaintiff’s
rights under a contract with another person if
the interference causes the plaintiff to lose a
right under the contract or makes the contract
rights more costly or less valuable. This law of
interference of contract is part of a larger body
of tort law aimed at protection of relationships.
Elements of tort interference: [So Ping Bun v.
CA (1999)]
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(a) Existence of a valid contract
(b) Knowledge on the part of the third person
of the existence of contract; and
(c) Interference of the third person is without
legal justification or excuse.
Gilchrist v. Cuddy (1915): Everyone has a right
to enjoy the fruits and advantages of his own
enterprise, industry, skill and credit. He has no
right to be protected against competition; but
he has a right to be free from malicious and
wanton interference, disturbance or
annoyance. If disturbance or loss comes as a
result of competition, or the exercise of like
rights by others, it is damnum absque injuria,
unless some superior right by contract or
otherwise is interfered with. Thus, a plaintiff
loses his cause of action if the defendant
provides a sufficient justification for such
interference, which must be an equal or
superior right in themselves. The defendant
may not legally excuse himself on the ground
that he acted on a wrong understanding of his
own rights, or without malice, or bona fide, or
in the best interests of himself.
So Ping Bun v. CA (1999): Bad faith/Malice is
required to make the defendant liable for
damages in cases of tortuous interference.
A.6 DERELICTION OF DUTY
Art. 27. Any person suffering material or
moral loss because a public servant or
employee refuses or neglects, without just
cause, to perform his official duty may file an
action for damages and other relief against
the latter, without prejudice to any
disciplinary administrative action that may
be taken.
This applies only to acts of nonfeasance or the
nonperformance of some acts which a person
is obliged or has responsibility to perform. The
duty of the public servant must be ministerial
in character. If the duty is discretionary, he is
TORTS CIVIL LAW
not liable unless he acted in a notoriously
arbitrary manner.
The defense of good faith is not available
because an officer is under constant obligation
to discharge the duties of his office, and it is
not necessary to show that his failure to act
was due to malice or willfulness.
Requisites: [Amaro v. Sumanguit (1962)]
(a) Defendant is a public officer charged with
a performance of a duty in favor of the
plaintiff;
(b) He refused or neglected without just cause
to perform the duty;
(c) Plaintiff sustained material or moral loss
as a consequence of such non-
performance;
(d) The amount of such damages, if material.
A.7. UNFAIR COMPETITION
Art. 28. Unfair competition in agricultural,
commercial or industrial enterprises or in
labor through the use of force, intimidation,
deceit, machination or any other unjust,
oppressive or highhanded method shall give
rise to a right of action by the person who
thereby suffers damage.
B. INDEPENDENT CIVIL ACTIONS
Rule 111, Sec. 3, ROC. In the cases provided
for in Articles 32, 33, 34 and 2176 of the Civil
Code of the Philippines, the independent civil
action may be brought by the offended party.
It shall proceed independently of the criminal
action and shall require only a
preponderance of evidence. In no case,
however, may the offended party recover
damages twice for the same act or omission
charged in the criminal action.
B.1. VIOLATION OF CIVIL AND POLITICAL
RIGHTS
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Art. 32. Any public officer or employee, or any
private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
impedes or impairs any of the following
rights and liberties of another person shall
be liable to the latter for damages:
(1) Freedom of religion
(2) Freedom of speech
(3) Freedom to write for the press or to
maintain a periodical publication
(4) Freedom from arbitrary or illegal
detention
(5) Freedom of suffrage
(6) The right against deprivation of property
without due process of law
(7) The right to just compensation when
property is taken for public use
(8) The right to equal protection of the laws
(9) The right to be secure in one’s person,
house, papers and effects against
unreasonable searches and seizures
(10) The liberty of abode and of changing the
same
(11) The right to privacy of communication
and correspondence
(12) The right to become a member of
associations and societies for purposes
not contrary to law
(13) The right to take part in a peaceable
assembly and petition the government
for redress of grievances
(14) The right to be free from involuntary
servitude in any form
(15) The right of the accused against
excessive bail
(16) The right of the accused to be heard by
himself and counsel, to be informed of
the nature and the cause of the
accusation against him, to have a speedy
and public trial, to meet the witnesses
face to face, to have compulsory process
to secure the attendance of witnesses on
is behalf;
(17) Freedom from being compelled to be a
witness against one’s self, or from being
TORTS CIVIL LAW
forced to confess his guilt, or from being
induced by a promise of immunity or
reward to make such confession, except
when the person confessing becomes a
State witness.
(18) Freedom from excessive fines, or cruel
and unusual punishment, unless the
same is imposed or inflicted in
accordance with a statute which has not
been judicially declared unconstitutional;
(19) Freedom of access to the courts
In any of the cases referred to in this article,
whether or not the defendant’s act or
omission constitutes a criminal offense, the
aggrieved party has a right to commence an
entirely separate and distinct civil action for
damages, and for other relief. Such civil
action shall proceed independently of any
criminal prosecution (if the latter be
instituted) and may be proved by a
preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be
adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the Penal
code or any other penal statute.
Article 32 speaks of a particular specie of an
“act” that may give rise to an action for
damages against a public officer, and that is, a
tort for impairment of rights and liberties.
[Vinzons-Chato v. Fortune (2007)]
Article 32 is clear that not only public officers
but also private individuals can incur civil
liability for violation of rights enumerated
therein. Because the provision speaks of an
officer, employee or person “directly or
indirectly” responsible for the violation of the
constitutional rights and liberties of another, it
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is not the actor alone who must answer for
damages under Article 32. It is not even
necessary that the defendant should have
acted with malice or bad faith, otherwise, it
would defeat its main purpose, which is the
effective protection of individual rights. [Silahis
v. Soluta (2006)]
Aberca, et al. v. Ver, et al. (1988): It is obvious
that the purpose of the above codal provision
(Art. 32) is to provide a sanction to the deeply
cherished rights and freedoms enshrined in the
Constitution. Its message is clear; no man may
seek to violate those sacred rights with
impunity. In times of great upheaval or of
social and political stress, when the temptation
is strongest to yield — borrowing the words of
Chief Justice Claudio Teehankee — to the law
of force rather than the force of law, it is
necessary to remind ourselves that certain
basic rights and liberties are immutable and
cannot be sacrificed to the transient needs or
imperious demands of the ruling power. The
rule of law must prevail, or else liberty will
perish.
B.2. DEFAMATION, FRAUD, PHYSICAL
INJURIES
Art. 33. In cases of defamation, fraud, and
physical injuries, a civil action for damages,
entirely separate and distinct from the
criminal action, may be brought by the
injured party. Such civil action shall proceed
independently of the criminal prosecution,
and shall require only a preponderance of
evidence.
Madeja v. Caro (1983): The civil action for
damages that Article 33 allows to be instituted
is ex-delicto. This is manifest from the
provision which uses the expressions “criminal
action” and “criminal prosecution”. Quoting
Tolentino, the Court ruled that this provision is
an exception to the general rule that the civil
TORTS CIVIL LAW
action for recovery of civil liability arising from
the offense charged is impliedly instituted with
the criminal action. Where the offense is
defamation, fraud, or physical injuries, a civil
action may be filed independently of the
criminal action, even though no reservation is
made.
(1) Defamation – the offense of injuring a
person’s character, fame or reputation
through false or malicious statements.
Defamation is an invasion of a relational
interest since it involves the opinion which
others in the community may have, or tend
to have, of the plaintiff.
Elements of libel pursuant to RPC, Art. 353:
[Daez v. CA (1990)]
(a) An allegation or imputation of a
discreditable act or condition
concerning another
(b) Publication of the imputation
(c) Identity of the person defamed
(d) Existence of malice
MVRS Publications, Inc. v. Islamic (2003):
Where the defamation is alleged to have
been directed at a group or class, it is
essential that the statement must be so
sweeping or all-embracing as to apply to
every individual in that group or class, or
sufficiently specific so that each individual
in the class or group can prove that the
defamatory statement was specifically
pointed to him.
Yuchengco v. Manila Chronicle (2009): In
determining whether certain utterances
are defamatory, the words used are to be
construed in their entirety and taken in
their plain, natural and ordinary meaning,
as they would naturally be understood by
persons hearing or reading them, unless it
appears that they were used and
understood in another sense. When malice
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in fact is proven, assertions and proofs that evident that the term “physical injuries”
the libelous articles are qualifiedly could not have been used in its specific
privileged communications are futile, since sense as a crime defined in the Revised
being qualifiedly privileged Penal Code, for it is difficult to believe that
communications merely prevents the the Code Commission would have used
presumption of malice from attaching in a terms in same article—some in this general
defamatory imputation. and others in its technical sense. In other
words, the term “physical injuries” should
(2) Fraud – Estafa under RPC, 315; Article 33 be understood to mean bodily injury, not
does not cover violations of B.P. 22. the crime of physical injuries, because the
terms used with the latter are general
(3) Physical Injuries (Assault and Battery) terms.
Corpus v. Paje (1969): Paje was acquitted
Battery
of the charge of homicide and double
Battery is the actual infliction of any
serious physical injuries through reckless
unlawful or unauthorized violence on the
imprudence on the ground that the
person of another, irrespective of its
collision was a pure accident and the
degree. The law protects the interest of the negligence charged against him did not
individual in freedom from bodily harm or
exist. In a separate civil action to enforce
any impairment of the physical integrity of civil liability filed by the heirs of the
the body.
deceased, the Court ruled that criminal
negligence is not one of the three crimes
Assault
mentioned in Article 33, which authorizes
Assault is an intentional, unlawful offer of
the institution of an independent civil
physical injury to another by force
action. Although in the case of Dyogi v.
unlawfully directed toward the person of
Yatco, the Court held that the term
another, under such circumstances as to
“physical injuries” includes homicide, it is
create a well-founded fear of imminent
borne in mind that the charge against Paje
peril, coupled with the apparent present
was for reckless imprudence resulting in
ability to effectuate the attempt if not
homicide, and the law penalizes the
prevented. The law seeks to protect the
negligent or careless act, not the result
interest of the individual in freedom from
thereof.
offensive bodily touching although no
actual harm is done.
B.3. NEGLECT OF DUTY
Carandang v. Santiago and Valenton
Art. 34. When a member of a city or
(1955): Defamation and fraud (in Art. 33)
municipal police force refuses or fails to
are used in their ordinary sense because
render aid or protection to any person in case
there are no specific provisions in the
of danger to life or property, such peace
Revised Penal Code using these terms as
officer shall be primarily liable for damages,
names of offenses defined therein, so that
and the city or municipality shall be
these two terms defamation and fraud
subsidiarily responsible therefor. The civil
must have been used not to impart to them
action herein recognized shall be
any technical meaning in the laws of the
independent of any criminal proceedings,
Philippines, but in their generic sense. With
and a preponderance of evidence shall
these apparent circumstances in mind, it is

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suffice to support such action.
Art. 34 covers a situation where:
(1) There is danger to the life or property of a
person;
(2) A member of a city or municipal police
force who is present in the scene refused or
failed to render aid or protection to the
person; and
(3) Damages are caused whether to the
person and/or property of the victim.
Nature of liability
(1) Of the police officer – Primary
(2) City or municipality – Subsidiary
The defense of having observed the diligence
of a good father of a family to prevent the
damage is not available to the
city/municipality.
B.4. CATCH-ALL INDEPENDENT CIVIL
ACTION
Art. 35. When a person, claiming to be
injured by a criminal offense, charges
another with the same, for which no
independent civil action is granted in this
Code or any special law, but the justice of the
peace finds no reasonable grounds to believe
that a crime has been committed, or the
prosecuting attorney refuses or fails to
institute criminal proceedings, the complaint
may bring a civil action for damages against
the alleged offender. Such civil action may
be supported by a preponderance of
evidence. Upon the defendant's motion, the
court may require the plaintiff to file a bond
to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the
prosecuting attorney, the civil action shall be
suspended until the termination of the
criminal proceedings.
TORTS CIVIL LAW
IV. LIABILITY
ATTACHED TO
SPECIFIC PERSONS
A. STRICT LIABILITY
A.1. POSSESSOR OR USER OF ANIMALS
Art. 2183. The possessor of an animal or
whoever may make use of the same is
responsible for the damage which it may
cause, although it may escape or be lost. This
responsibility shall cease only in case the
damage should come from force majeure or
from the fault of the person who has suffered
damage.
Since the law makes no distinction, this is
applicable to both wild (in case the wild animal
is kept) and domestic animals. It is enough
that defendant is the possessor, owner, or user
of the animal at the time it caused the damage
complained of, to hold him liable therefor.
Vestil v. IAC (1989): Possession of the animal,
not ownership, is determinative of liability
under Art. 2183. The obligation imposed by
said article is not based on the negligence or
on the presumed lack of vigilance of the
possessor or user of the animal causing
damage. It is based on natural equity and on
the principle of social interest that he who
possesses animals for his utility, pleasure, or
service, must answer for any damage which
such animal may cause. The contention that
the defendant could not be expected to
exercise remote control of the animal is not
acceptable. In fact, Art. 2183 holds the
possessor liable even if the animal should
“escape or be lost” and so be removed from his
control. It is likewise immaterial that the
animal was tame and was merely provoked by
the victim. The law does not speak only of
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vicious animals but covers even tame ones as
long as they cause injury.
Possible defenses against this liability
(1) Force Majeure
(2) Fault of person suffering damage
(3) Act of third persons
A.2. PROVINCES, CITIES, AND
MUNICIPALITIES
Art. 2189. Provinces, cities and municipalities
shall be liable for damages for the death of,
or injuries suffered by, any person by reason
of the defective condition of roads, streets,
bridges, public buildings, and other public
works under their control or supervision.
Guilatco v. Dagupan (1989): It is not even
necessary that the defective roads or streets
belong to the province, city or municipality for
liability to attach. The article only requires that
either control or supervision be exercised over
said street or road.
A.3. PROPRIETOR OF BUILDING OR
STRUCTURE
Art. 2190. The proprietor of a building or
structure is responsible for the damages
resulting from its total or partial collapse, if it
should be due to the lack of necessary
repairs.
Art. 2191. Proprietors shall also be
responsible for damages caused:
(1) By the explosion of machinery which has
not been taken care of with due
diligence, and the inflammation of
explosive substances which have not
been kept in a safe and adequate place;
(2) By excessive smoke, which may be
harmful to persons or property;
(3) By the falling of trees situated at or near
highways or lanes, if not caused by force
majeure;
(4) By emanations from tubes, canals,
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sewers or deposits of infectious matter,
constructed without precautions suitable
to the place.
Art. 2192. If damage referred to in the two
preceding articles should be the result of any
defect in the construction mentioned in
article 1723, the third person suffering
damages may proceed only against the
engineer or architect or contractor in
accordance with said article, within the
period therein fixed.
Ownership of a building imposes on the
proprietor thereof the duty to maintain it in
good condition at all times to the end that it
may not collapse either totally or partially as to
cause damage or injury to another’s person or
property. This duty obtains whether the
building is leased or held in usufruct.
Considering, however, that the lessee or
usufructuary has direct and immediate control
of the building, the law imposes on him the
duty to notify the proprietor of such urgent or
extraordinary repairs. And where the
proprietor’s failure to make the necessary
repairs was due to the failure of the lessee or
usufructuary to notify him, the proprietor is
entitled to indemnification for damages he
may have been required to pay to the parties.
Liability does not attach to the proprietor if the
damage was caused by any defect in the
construction mentioned in Article 1723, in
which case the action should be against the
engineer or architect.
Under Article 2190, the plaintiff is required to
prove:
(a) The total or partial collapse of a building or
structure
(b) That the defendant is the proprietor
(c) That the collapse was due to the lack of
necessary repairs
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Note: There is no requirement to prove
negligence.
Under Article 2191, with the exception of No. 1,
negligence is also not an issue.
Gotesco Investment Corp. v. Chatto (1992): The
owner or proprietor of a place of public
amusement impliedly warrants that the
premises, appliances and amusement devices
are safe for the purpose for which they are
designed, the doctrine being subject to no
other exception or qualification than that he
does not contract against unknown defects not
discoverable by ordinary or reasonable means.
A.4. ENGINEER OR ARCHITECT OF
COLLAPSED BUILDING
Art. 1723. The engineer or architect who drew
up the plans and specifications for a building
is liable for damages if within fifteen years
from the completion of the structure, the
same should collapse by reason of a defect in
those plans and specifications, or due to the
defects in the ground. The contractor is
likewise responsible for the damages if the
edifice falls, within the same period, on
account of defects in the construction or the
use of materials of inferior quality furnished
by him, or due to any violation of the terms of
the contract. If the engineer or architect
supervises the construction, he shall be
solidarily liable with the contractor.
Acceptance of the building, after completion,
does not imply waiver of any of the cause of
action by reason of any defect mentioned in
the preceding paragraph.
The action must be brought within ten years
following the collapse of the building.
Engineer or architect who drew up the plans
and specifications is liable if the building
collapses within 15 years due to:
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(1) A defect in those plans and specifications;
or
(2) Due to the defects in the ground.
Contractor is liable if the edifice falls within 15
years due to:
(1) Defects in the construction;
(2) The use of materials of inferior quality
furnished by the contractor; or
(3) Due to any violation of the terms of the
contract.
Here, the plaintiff need only prove that such
conditions (defects) exist, and need not prove
that negligence of the defendant be the cause
of the conditions.
A.5. OWNERS OF ENTERPRISES OR
OTHER EMPLOYERS
Art. 1711. Owners of enterprises and other
employers are obliged to pay compensation
for the death of or injuries to their laborers,
workmen, mechanics or other employees,
even though the event may have been purely
accidental or entirely due to a fortuitous
cause, if the death or personal injury arose
out of and in the course of the employment.
The employer is also liable for compensation
if the employee contracts any illness or
disease caused by such employment or as
the result of the nature of the employment. If
the mishap was due to the employee's own
notorious negligence, or voluntary act, or
drunkenness, the employer shall not be
liable for compensation. When the
employee's lack of due care contributed to
his death or injury, the compensation shall
be equitably reduced.
Art. 1712. If the death or injury is due to the
negligence of a fellow worker, the latter and
the employer shall be solidarily liable for
compensation. If a fellow worker's intentional
malicious act is the only cause of the death or
injury, the employer shall not be answerable,
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unless it should be shown that the latter did
not exercise due diligence in the selection or
supervision of the plaintiff's fellow worker.
Alarcon v. Alarcon (1961): Alarcon, a teacher,
hired Urzino and Azaña to dig a well on his
land; in the course of which Urzino died of
asphyxia. The Court found that under the
principle of ejusdem generis, said “other
employers” mentioned in Article 1711 must be
construed to refer to persons who belong to a
class analogous to “owners of enterprises”,
such as those operating a business or engaged
in a particular industry or trade, requiring its
managers to contract the services of laborers,
workers and/or employees. Alarcon, not
owning any enterprise, did not fall under the
category of “other employers”.
Situations covered:
(1) Death or injury arising out of or in the
course of employment – here, the
employer is liable even if the event which
caused the death or injury was purely
accidental or due to a fortuitous event
(2) Illness or disease caused by their
employment or as the result of the nature
of the employment
Defenses available to the employer:
(1) When death or injury is not caused by a
fellow worker
 The mishap due to the employee’s own
notorious negligence or voluntary act, or
drunkenness
(2) When death or injury is caused by a fellow
worker
 General rule: The employer is solidarily
liable with the fellow worker causing the
death or injury
 Exception: If the only cause of the death
or injury was the fellow worker’s
intentional or malicious act
 Exception to the exception: If it is shown
that the employer did not exercise due
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diligence in the selection and supervision
of the fellow worker causing the death or
injury
A.6. HEAD OF A FAMILY FOR THINGS
THROWN OR FALLING
Art 2193. The head of a family that lives in a
building or a part thereof, is responsible for
damages caused by things thrown or falling
from the same.
The purpose of the law is to relieve the injured
party of the difficulty of determining and
proving who threw the thing or what caused it
to fall, or that either was due to the fault or
negligence of any particular individual.
Dingcong v. Kanaan (1941): Lessee is
considered as the head of the family. It is
enough that he lives in and has control over it.
A.7. PRODUCTS LIABILITY
i. MANUFACTURERS / PROCESSORS OF
FOODSTUFFS
Art. 2187. Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar
goods shall be liable for death or injuries
caused by any noxious or harmful substances
used, although no contractual relation exists
between them and the consumers.
Under the foregoing provision, liability is not
made to depend upon fault or negligence of
the manufacturer or processor. The provision
likewise dispensed with any contractual
relation between the manufacturer and the
consumer, thereby clearly implying that
liability is imposed by law as a matter of public
policy.
Proof of negligence under this provision is not
necessary; as such, traditional contract and
warranty defenses as (1) lack of privity; (2) lack
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of reliance on a warranty; (3) lack of notice to
the defendant of the breach of warranty; and
(4) disclaimer of implied warranties are
inapplicable.
Requisites of liability
(a) Defendant is a manufacturer or possessor
of foodstuff, drinks, toilet articles and
similar goods;
(b) He used noxious or harmful substances in
the manufacture or processing of the
foodstuff, drinks or toilet articles
consumed or used by the plaintiff;
(c) Plaintiff’s death or injury was caused by the
product so consumed or used; and
(d) The damages sustained and claimed by
the plaintiff and the amount thereof.
Burden of proof
The burden of proof that the product was in a
defective condition at the time it left the hands
of the manufacturer and particular seller is
upon the injured plaintiff.
Who may recover
Although the article used the term
“consumer”, such term includes a “user” and
“purchaser” of the injuriously defective food
product or toilet article. The person who may
recover need not be the purchaser of the
foodstuff or toilet article.
ii. CONSUMER ACT – RA 7394, SECS. 92-
107 (CH. 1)
Consumer Act Provisions
Article 4. Definition of Terms.
(n) "Consumer" means a natural person who
is a purchaser, lessee, recipient or
prospective purchaser, lessor or recipient of
consumer products, services or credit.
(as) "Manufacturer" means any person who
manufactures, assembles or processes
consumer products, except that if the goods
are manufactured, assembled or processed
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for another person who attaches his own
brand name to the consumer products, the
latter shall be deemed the manufacturer. In
case of imported products, the
manufacturer's representatives or, in his
absence, the importer, shall be deemed the
manufacturer.
Article 92. Exemptions. – If the concerned
department finds that for good or sufficient
reasons, full compliance with the labeling
requirements otherwise applicable under this
Act is impracticable or is not necessary for
the adequate protection of public health and
safety, it shall promulgate regulations
exempting such substances from these
requirements to the extent it deems
consistent with the objective of adequately
safeguarding public health and safety, and
any hazardous substance which does not
bear a label in accordance with such
regulations shall be deemed mislabeled
hazardous substance.
Article 97. Liability for the Defective Products.
– Any Filipino or foreign manufacturer,
producer, and any importer, shall be liable
for redress, independently of fault, for
damages caused to consumers by defects
resulting from design, manufacture,
construction, assembly and erection,
formulas and handling and making up,
presentation or packing of their products, as
well as for the insufficient or inadequate
information on the use and hazards thereof.
A product is defective when it does not offer
the safety rightfully expected of it, taking
relevant circumstances into consideration,
including but not limited to:
(a) presentation of product
(b) use and hazards reasonably expected of
it;
(c) the time it was put into circulation.
A product is not considered defective
because another better quality product has
been placed in the market. The
manufacturer, builder, producer or importer
shall not be held liable when it evidences:
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(a) that it did not place the product on the
market;
(b) that although it did place the product on
the market such product has no defect;
(c) that the consumer or a third party is
solely at fault.
Article 98. Liability of Tradesman or Seller. –
The tradesman/seller is likewise liable,
pursuant to the preceding article when:
(a) it is not possible to identify the
manufacturer, builder, producer or
importer;
(b) the product is supplied, without clear
identification of the manufacturer,
producer, builder or importer;
(c) he does not adequately preserve
perishable goods. The party making
payment to the damaged party may
exercise the right to recover a part of the
whole of the payment made against the
other responsible parties, in accordance
with their part or responsibility in the cause
of the damage effected.
Article 99. Liability for Defective Services. –
The service supplier is liable for redress,
independently of fault, for damages caused
to consumers by defects relating to the
rendering of the services, as well as for
insufficient or inadequate information on the
fruition and hazards thereof.
The service is defective when it does not
provide the safety the consumer may
rightfully expect of it, taking the relevant
circumstances into consideration, including
but not limited to:
(a) the manner in which it is provided;
(b) the result of hazards which may
reasonably be expected of it;
(c) the time when it was provided.
A service is not considered defective because
of the use or introduction of new techniques.
The supplier of the services shall not be held
liable when it is proven:
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(a) that there is no defect in the service
rendered;
(b) that the consumer or third party is solely
at fault.
Article 100. Liability for Product and Service
Imperfection. – The suppliers of durable or
nondurable consumer products are jointly
liable for imperfections in quality that render
the products unfit or inadequate for
consumption for which they are designed or
decrease their value, and for those resulting
from inconsistency with the information
provided on the container, packaging, labels
or publicity messages/advertisement, with
due regard to the variations resulting from
their nature, the consumer being able to
demand replacement to the imperfect parts.
If the imperfection is not corrected within
thirty (30) days, the consumer may
alternatively demand at his option:
(a) the replacement of the product by
another of the same kind, in a perfect
state of use;
(b) the immediate reimbursement of the
amount paid, with monetary updating,
without prejudice to any losses and
damages;
(c) a proportionate price reduction.
The parties may agree to reduce or increase
the term specified in the immediately
preceding paragraph; but such shall not be
less than seven (7) nor more than one
hundred and eighty (180) days.
The consumer may make immediate use of
the alternatives under the second paragraph
of this Article when by virtue of the extent of
the imperfection, the replacement of the
imperfect parts may jeopardize the product
quality or characteristics, thus decreasing its
value.
If the consumer opts for the alternative under
sub-paragraph (a) of the second paragraph
of this Article, and replacement of the
product is not possible, it may be replaced by
another of a different kind, mark or model:
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Provided, That any difference in price may
result thereof shall be supplemented or
reimbursed by the party which caused the
damage, without prejudice to the provisions
of the second, third and fourth paragraphs of
this Article.
Article 101. Liability for Product Quantity
Imperfection. – Suppliers are jointly liable for
imperfections in the quantity of the product
when, in due regard for variations inherent
thereto, their net content is less than that
indicated on the container, packaging,
labeling or advertisement, the consumer
having powers to demand, alternatively, at
his own option:
(a) the proportionate price
(b) the supplementing of weight or measure
differential;
(c) the replacement of the product by
another of the same kind, mark or model,
without said imperfections;
(d) the immediate reimbursement of the
amount paid, with monetary updating
without prejudice to losses and damages
if any.
The provisions of the fifth paragraph of
Article 99 shall apply to this Article.
The immediate supplier shall be liable if the
instrument used for weighing or measuring is
not gauged in accordance with official
standards.
Article 102. Liability for Service Quality
Imperfection. – The service supplier is liable
for any quality imperfections that render the
services improper for consumption or
decrease their value, and for those resulting
from inconsistency with the information
contained in the offer or advertisement, the
consumer being entitled to demand
alternatively at his option:
(a) the performance of the services, without
any additional cost and when applicable;
(b) the immediate reimbursement of the
amount paid, with monetary updating
without prejudice to losses and damages,
TORTS CIVIL LAW
if any;
(c) a proportionate price reduction.
Reperformance of services may be entrusted
to duly qualified third parties, at the
supplier's risk and cost.
Improper services are those which prove to
be inadequate for purposes reasonably
expected of them and those that fail to meet
the provisions of this Act regulating service
rendering.
Article 103. Repair Service Obligation. –
When services are provided for the repair of
any product, the supplier shall be considered
implicitly bound to use adequate, new,
original replacement parts, or those that
maintain the manufacturer's technical
specifications unless, otherwise authorized,
as regards to the latter by the consumer.
Article 104. Ignorance of Quality
Imperfection. – The supplier's ignorance of
the quality imperfections due to inadequacy
of the products and services does not exempt
him from any liability.
Article 105. Legal Guarantee of Adequacy. –
The legal guarantee of product or service
adequacy does not require an express
instrument or contractual exoneration of the
supplier being forbidden.
Article 106. Prohibition in Contractual
Stipulation. – The stipulation in a contract of
a clause preventing, exonerating or reducing
the obligation to indemnify for damages
effected, as provided for in this and in the
preceding Articles, is hereby prohibited, if
there is more than one person responsible for
the cause of the damage, they shall be jointly
liable for the redress established in the
pertinent provisions of this Act. However, if
the damage is caused by a component or
part incorporated in the product or service,
its manufacturer, builder or importer and the
person who incorporated the component or
part are jointly liable.
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A.8. NUISANCE of proper care skill exercised to

and diligence avoid the injury
Art. 694. A nuisance is any act, omission, Condition Act complained There is continuing
establishment, business, condition of
property, or anything else which: of the act of is already harm being
(1) Injures or endangers the health or safety done which suffered by the
of others; or caused injury to aggrieved party
(2) Annoys or offends the senses; or the plaintiff because of the
(3) Shocks, defies or disregards decency or maintenance of
morality; or the act or thing
(4) Obstructs or interferes with the free which constitutes
passage of any public highway or street, the nuisance
or any body of water; or Remedy Action for Abatement
(5) Hinders or impairs the use of property. damages

Art. 696. Every successive owner or Easement against Nuisance

possessor of property who fails or refuses to
abate a nuisance in that property started by a
former owner or possessor is liable therefor
in the same manner as the one who created
it.
Art. 697. The abatement of a nuisance does
not preclude the right of any person injured
to recover damages for its past existence.
Art. 698. Lapse of time cannot legalize any
nuisance, whether public or private.
Nuisance is a condition and not an act or
failure to act, so that if a wrongful condition
exists, the person responsible for its existence
is responsible for the resulting damages to
others.
Sangco: A person who creates or maintains a
nuisance is liable for the resulting injury to
others regardless of the degree of care or skill
exercised to avoid the injury. The creation or
maintenance of a nuisance is a violation of an
absolute duty.
Liability for Negligence v. Liability for Nuisance
Negligence Nuisance
Basis Liability is Liability attaches
based on lack regardless of the
Art. 682. Every building or piece of land is
subject to the easement which prohibits the
proprietor or possessor from committing
nuisance through noise, jarring, offensive
odor, smoke, heat, dust, water, glare and
other causes.
Art. 683. Subject to zoning, health, police
and other laws and regulations, factories and
shops may be maintained provided the least
possible annoyance is caused to the
neighborhood.
The provisions impose a prohibition upon
owners of buildings of land from committing
therein a nuisance or using such buildings or
lands in a manner as will constitute a
nuisance. It is based on the maxim sic utere tuo
ut alienum non laedas (so use your own as not
to injure another’s property).
Velasco v. Manila Electric Co. (1971): The
general rule is that everyone is bound to bear
the habitual or customary inconveniences that
result from the proximity of others, and so long
as this level is not surpassed, he may not
complain against them. But if the prejudice
exceeds the inconveniences that such
proximity habitually brings, the neighbor who
causes such disturbances is held responsible

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for the resulting damage, being guilty of
causing nuisance. There can be no doubt that
commercial and industrial activities which are
lawful in themselves may become nuisances if
they are so offensive to the senses that they
render the enjoyment of life and property
uncomfortable. It is no defense that skill and
care have been exercised and the most
improved methods and appliances employed
to prevent such result. In this case, the Court
ruled that causing or maintaining disturbing
noises or sounds may constitute an actionable
nuisance.
Types of Nuisance:
(1) Nuisance per se
It is recognized as a nuisance under any
and all circumstances because it
constitutes a direct menace to public
health and safety and, for that reason, may
be abated summarily under the undefined
law of necessity.
To become a nuisance per se, the thing
must, of itself, because of its inherent
qualities, without complement, be
productive of injury, or, by reason of the
matter of its use or exposure, threaten or
be dangerous to life or property.
(2) Nuisance per accidens
It becomes a nuisance depending upon
certain conditions and circumstances, and
its existence being a question of fact, it
cannot be abated without due hearing
thereon in a tribunal authorized to decide
whether such a thing does in law constitute
a nuisance.
Iloilo Ice and Cold Storage Co. v. Municipal
Council (1913): A nuisance is, according to
Blackstone, "Any thing that works3 hurt,
inconvenience, or damages." They arise
from pursuing particular trades or
industries in populous neighborhoods;
TORTS CIVIL LAW
from acts of public indecency, keeping
disorderly houses, and houses of ill fame,
gambling houses, etc. Nuisances have
been divided into two classes: Nuisances
per se, and nuisances per accidens. To the
first belong those which are
unquestionably and under all
circumstances nuisances, such as
gambling houses, houses of ill fame, etc.
The number of such nuisances is
necessarily limited, and by far the greater
number of nuisances are such because of
particular facts and circumstances
surrounding the otherwise harmless cause
of the nuisance. For this reason, it will
readily be seen that whether a particular
thing is a nuisance is generally a question
of fact, to be determined in the first
instance before the term nuisance can be
applied to it.
(3) Public nuisance
Art. 695. Nuisance is either public or private.
A public nuisance affects a community or
neighborhood or any considerable number of
persons, although the extent of the
annoyance, danger or damage upon
individuals may be unequal. A private
nuisance is one that is not included in the
foregoing definition.
A public nuisance is the doing of or the failure
to do something that injuriously affects safety,
health, or morals of the public, or works some
substantial annoyance, inconvenience or injury
to the public. It causes hurt, inconvenience, or
damage to the public generally, or such part of
the public as necessarily comes in contact with
it in the exercise of a public or common right.
Art. 699. The remedies against a public
nuisance are:
(1) A prosecution under the Penal Code or
any local ordinance: or
(2) A civil action; or
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(3) Abatement, without judicial proceedings.
Art. 700. The district health officer shall take
care that one or all of the remedies against a
public nuisance are availed of.
Art. 701. If a civil action is brought by reason
of the maintenance of a public nuisance,
such action shall be commenced by the city
or municipal mayor.
Art. 702. The district health officer shall
determine whether or not abatement,
without judicial proceedings, is the best
remedy against a public nuisance.
Art. 703. A private person may file an action
on account of a public nuisance, if it is
specially injurious to himself.
Art. 704. Any private person may abate a
public nuisance which is specially injurious to
him by removing, or if necessary, by
destroying the thing which constitutes the
same, without committing a breach of the
peace, or doing unnecessary injury. But it is
necessary:
(1) That demand be first made upon the
owner or possessor of the property to
abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the
district health officer and executed with
the assistance of the local police; and
(4) That the value of the destruction does
not exceed three thousand pesos.
(4) Private nuisance
It is one which violates only private rights
and produces damage to but one or a few
persons, and cannot be said to be public.
Art. 705. The remedies against a private
nuisance are:
(1) A civil action; or
(2) Abatement, without judicial proceedings.
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Art. 706. Any person injured by a private
nuisance may abate it by removing, or if
necessary, by destroying the thing which
constitutes the nuisance, without committing
a breach of the peace or doing unnecessary
injury. However, it is indispensable that the
procedure for extrajudicial abatement of a
public nuisance by a private person be
followed.
Art. 707. A private person or a public official
extrajudicially abating a nuisance shall be
liable for damages:
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by
the courts to be not a real nuisance.
(5) Attractive Nuisance
General Rule: When people come to the
lands or premises of others for their own
purposes, without right or invitation, they
must take the lands as they see them.
Exception: Attractive Nuisance doctrine.
Hidalgo Enterprises v. Balandan (1952):
One who maintains on his premises
dangerous instrumentalities or appliances
of a character likely to attract children at
play, and who fails to exercise ordinary
care to prevent children from playing
therewith or resorting thereto, is liable to a
child of tender years who is injured
thereby, even if the child is technically a
trespasser in the premises. The principle
reason for the doctrine is that the condition
or appliance in question although its
danger is apparent to those of age, is so
enticing or alluring to children of tender
years as to induce them to approach, get
on or use it, and this attractiveness is an
implied invitation to such children.
Del Rosario v. Manila Electric Co. (1932): It is
doubtful whether contributory negligence can
properly be imputed to the deceased, owing to
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his immature years and the natural curiosity  The danger to the child must be caused by
which a child would feel to do something out of the attraction itself, or by something with
the ordinary, and the mere fact that the which the attraction brings the child in
deceased ignored the caution of a companion contact.
of the age of 8 years does not, in our opinion,  Protects a meddling child, but not a danger
alter the case. Contributory negligence of a which was created by the child himself.
minor does not bar recovery, where his  Limited to latent dangers, and is no basis for
immaturity and natural curiosity impelled him recovery where peril is obvious or patent.
to act to his injury; but discretion shown by the  Does not apply to natural dangers.
child is the decisive factor.
 The age and maturity of the injured child and
the reason for the child’s presence are
When Applicable/Not Applicable: [De Leon on
important considerations in the application
Torts and Damages] of the doctrine.
Summary of Strict Liability
Person Strictly Liable For What Defenses or Exceptions
Possessor of an animal or For the damage the animal may cause  Force majeure
whoever makes use of them  Fault of the person who
even if the animal is lost or suffered damage
escaped
Owner of Motor Vehicle Motor vehicle mishaps  Solidary liability only if the
owner was in the vehicle and if
he could have prevented it
thru due diligence
 If not in vehicle, apply Art.
2180 for his liability as
employer
Manufacturers and Death and injuries caused by any Absence of contractual relation
processors of foodstuffs, noxious or harmful substances used not a defense
drinks, toilet articles and
similar goods
Defendant in possession of Death or injury results from such Possession or use thereof is
dangerous weapons/ possession indispensable in his occupation
substances such as firearms or business
and poison
Provinces, Cities and The death or injuries suffered by any The defective public work is not
Municipalities person by reason of the defective under the LGU’s control or
condition of roads, streets, bridges, supervision
public buildings, and other public
works
Proprietor of building/ (a) Total or partial collapse of Responsibility for collapse
structure building or structure if due to lack should be due to the lack of
of necessary repairs necessary repairs

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(b) Explosion of machinery which has

not been taken cared of with due
diligence, and the inflammation of
explosive substances which have
not been kept in a safe and
adequate place
(c) By excessive smoke, which may be
harmful to persons or property
(d) By falling of trees situated at or
near highways or lanes, if not
caused by force majeure
(e) By emanations from tubes, canals,
sewers or deposits of infectious
matter, constructed without
precautions suitable to the place
Engineer or Architect If within 15 years from completion of Action not brought within 10
the structure, the same should years from collapse
collapse by reason of:
(a) Defects in the plans or
specifications; or
(b) Defects in the ground.

If within the same period, the edifice

falls on account of:
(a) Defects in the construction;
(b) Used of materials of inferior
quality furnished by him; or
(c) Violation of the terms of the
contract and he supervised the
construction.
Contractor If within 15 years from the completion Action not brought within 10
of the structure, the edifice falls on years from collapse
account of:
(a) Defects in the construction;
(b) Used of materials of inferior
quality furnished by him; or
(c) Violation of the terms of the
contract
Head of the Family that Liable for damages caused by things
lives in a building or any thrown or falling from the same
part thereof

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CIVIL LAW
DAMAGES

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I. Definition (3) Damage resulting to the plaintiff

People vs. Ballesteros (1998): Damages may be

defined as the pecuniary compensation, CLASSIFICATION
recompense, or satisfaction for an injury
Art. 2197. Damages may be:
sustained, or as otherwise expressed, the (1) Actual or compensatory;
pecuniary consequences, which the law
(2) Moral;
imposes for the breach of some duty or the
(3) Nominal;
violation of some right.
(4) Temperate or moderate;
(5) Liquidated; or
INJURY VS. DAMAGE VS. DAMAGES
(6) Exemplary or corrective.
Custodio v. CA (1996): Injury is the illegal
invasion of a legal right. Damage is the loss,
hurt, or harm, which results from the injury. ACCORDING TO PURPOSE
Damages are the recompense or compensation (1) For adequate reparation of the injury
awarded for the damage suffered. (a) Compensatory (reparation of
pecuniary losses)
Ocena vs. Icamina (1990): The obligation to (b) Moral (reparation for non-pecuniary
repair the damages exists whether done losses: injury to feelings; physical
intentionally or negligently and whether or not suffering, etc.)
punishable by law. (2) For vindication of the right violated:
Nominal
Heirs of Borlado v Vda. De Bulan (2001). (3) For less than adequate reparation:
Damages must be in Philippine legal tender Moderate
currency. (4) For deterring future violations: Exemplary
or corrective
WHEN DAMAGES MAY BE
RECOVERED ACCORDING TO MANNER OF
Custodio v CA (1996). The mere fact that the DETERMINATION
plaintiff suffered losses does not give rise to a (1) Conventional (or liquidated)
right to recover damages. To warrant the (2) Non-conventional, which may either be:
recovery of damages, there must be both a (a) Statutory (fixed by law, as in
right of action for a legal wrong inflicted by the moratory interest)
defendant, and damage resulting to the (b) Judicial (determined by the courts)
plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a SPECIAL AND ORDINARY
cause of action, since damages are merely part GENERAL DAMAGES
of the remedy allowed for the injury caused by Those which are the natural and necessary
a breach or wrong. result of the wrongful act or omission asserted
as the foundation of liability, and include those
ELEMENTS FOR RECOVERY OF which follow as a conclusion of law from the
DAMAGES statement of the facts of the injury.
(1) Right of action
(2) For a wrong inflicted by the defendant SPECIAL DAMAGES

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Damages that arise from the special
circumstance of the case, which, if properly
pleaded, may be added to the general
damages which the law presumes or implies
from the mere invasion of the plaintiff’s rights.
Special damages are the natural, but NOT the
necessary result of an injury. These are not
implied by law.
II. Actual &
Compensatory Damages
Compensatory damages are damages in
satisfaction of, or in recompense for, loss or
injury sustained. The phrase “actual damages”
is sometimes used as synonymous with
compensatory damages.
REQUISITES
Asilio, Jr. v. People and Sps. Bombasi (2011): To
seek recovery of actual damages, it is
necessary to prove the actual amount of loss
with a reasonable degree of certainty,
premised upon competent proof and on the
best evidence obtainable.
WHEN IS A PERSON ENTITLED?
(1) When there is a pecuniary loss suffered by
him;
(2) When he has alleged and prayed for such
relief (Manchester Dev’t Corp vs. CA (1987));
(3) When he has duly proved it;
(4) When provided by law or by stipulation.
No proof of pecuniary loss is necessary for:
moral, nominal, temperate, liquidated or
exemplary damages. The assessment of such
damages is discretionary upon the court,
except liquidated ones. (Art. 2216)
ALLEGED AND PROVED WITH
CERTAINTY
Art. 2199. Except as provided by law or by
DAMAGES CIVIL LAW
stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
compensation is referred to as actual or
compensatory damages.
The damages must be proven by competent
evidence (admissible or probative)
Oceaneering Contractors v Baretto (2011). There
must be pleading and proof of actual damages
suffered for the same to be recovered. In
addition to the fact that the amount of loss
must be capable of proof, it must also be
actually proven with a reasonable degree of
certainty, premised upon competent proof or
the best evidence obtainable. The burden of
proof of the damage suffered is, consequently,
imposed on the party claiming the same, who
should adduce the best evidence available in
support thereof… In the absence
of corroborative evidence, it has been held that
self-serving statements of account are not
sufficient basis for an award of actual
damages.
MCC Industrial Sales Corp. v Ssangyong Corp.
(2007). Actual or compensatory damages
cannot be presumed, but must be proven with
a reasonable degree of certainty.
Valencia vs. Tantoco (1956): Damages must be
proved with reasonable accuracy, even when
not denied.
DEGREE OF CERTAINTY REQUIRED AS
TO: FACT, CAUSE AND AMOUNT OF
DAMAGES
Damages are not rendered uncertain just
because they cannot be calculated with
absolute exactness or because the
consequences of the wrong are not precisely
definite in pecuniary amount.
The principle, which will disallow recovery of
damages when their existence rests solely on
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speculation, applies both to the fact and cause earning capacity is concerned with the
of damages. determination of losses or damages sustained
(1) The requirement of certainty does not by the [plaintiffs], as dependents and intestate
prevent the drawing of reasonable heirs of the deceased, and that said damages
inferences from the fact and circumstance consist, not of the full amount of his earnings,
in evidence. but of the support they received or would have
(2) Events which occur after the wrong received from him had he not died in
complained of may serve to render the consequence of negligence of [defendant’s]
damage sufficiently certain. agent… Only net earnings, and not gross
(3) The damages must be susceptible of earnings are to be considered. That is, the total
ascertainment in some manner other than of the earnings less expenses necessary in the
by mere speculation, conjecture or surmise creation of such earnings or income and less
and by reference to some fairly definite living and other incidental expenses.
standard, such as market value,
established experience or direct inference EXTENT OR SCOPE OF ACTUAL
from known circumstances. DAMAGES
Source Extent of Liability
Talisay-Silay vs. Associacion (1995): Where, -If the obligor acted in GOOD
however, it is reasonably certain that injury FAITH, he shall be liable for
consisting of failure to realize otherwise natural and probable
reasonably expected profits had been incurred, consequences of the breach,
uncertainty as to the precise amount of such which the parties have
unrealized profits will not prevent recovery or foreseen or could have
the award of damages. reasonably foreseen at the
Contracts time the obligation was
Art.
and Quasi- constituted.
COMPONENTS 2201
contracts
Actual damage covers the following: -If the obligor acted with
(1) Value of loss; unrealized profit FRAUD, BAD FAITH, MALICE
(2) Attorney’s fees and expenses of litigation or WANTON ATTITUDE, he
(3) Interest shall be responsible for all
damages which may be
LOSS COVERED; reasonably attributed to the
breach.
In General
Liability extends to all
Art. 2200. Indemnification for damages shall damages which are the
comprehend not only the value of the loss
natural and probable
suffered, but also that of the profits which
consequence of the act or
the obligee failed to obtain. Crimes and
Art. omission complained of
Quasi-
2202
In other words, indemnification for damages is delicts
WON the damage was
not limited to damnum emergens (actual loss) foreseen or could have been
but extends to lucrum cessans (a cession of reasonably foreseen by the
gain or amount of profit lost). defendant is irrelevant

Candano Shipping Lines, Inc. v Sugata-on IN CONTRACTS AND QUASI-

(2007). The award of damages for loss of
CONTRACTS

536
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Art. 2201. In contracts and quasi-contracts,
the damages for which the obligor who acted
in good faith is liable shall be those that are
the natural and probable consequences of
the breach of the obligation, and which the
parties have foreseen or could have
reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton
attitude, the obligor shall be responsible for
all damages which may be reasonably
attributed to the non-performance of the
obligation.
Art. 2214. In quasi delicts, the contributory
negligence of the plaintiff shall reduce the
damages that he may recover.
Art. 2215. In contracts, quasi-contracts, and
quasi-delicts, the court may equitably
mitigate the damages under circumstances
other than the case referred to in the
preceding article, as in the following
instances:
(1) That the plaintiff himself has
contravened the terms of the contract;
(2) That the plaintiff has derived some
benefit as a result of the contract;
(3) In cases where exemplary damages are
to be awarded, that the defendant acted
upon the advice of counsel;
(4) That the loss would have resulted in any
event;
(5) That since the filing of the action, the
defendant has done his best to lessen
the plaintiff's loss or injury.
Daywalt vs. Recoletos et al. (1919): The damages
recoverable upon breach of contract are,
primarily, the ordinary, natural and in a sense
the necessary damages resulting from the
breach. Other damages, known as special
damages, are recoverable where it appears
that the particular conditions which made such
damages a probable consequence of the
breach were known to the delinquent party at
the time the contract was made.
DAMAGES CIVIL LAW
BPI Family Bank v Franco (2007). Bad faith
does not simply connote bad judgment or
negligence; it imports a dishonest purpose or
some moral obliquity and conscious doing of
wrong; it partakes of the nature of fraud…BPI-
FB acted out of the impetus of self-protection
and not out of malevolence or ill will. BPI-FB
was not in the corrupt state of mind
contemplated in Article 2201 and should not
be held liable for all damages now being
imputed to it for its breach of obligation.
Spouses Zalamea v CA (1993). That there was
fraud or bad faith on the part of respondent
airline when it did not allow petitioners to
board their flight in spite of confirmed tickets
cannot be disputed. Overbooking amounts to
bad faith, entitling the passengers concerned
to an award of moral damages.
IN CRIMES AND QUASI-DELICTS
Art. 2202. In crimes and quasi delicts, the
defendant shall be liable for all damages
which are the natural and probable
consequences of the act or omission
complained of. It is not necessary that such
damages have been foreseen or could have
reasonably been foreseen by the defendant.
In case of crimes, damages are to be increased
or decreased according to aggravating or
mitigating circumstances present.
Interest, as part of damages, may be
adjudicated in a proper case, in the Court’s
discretion.
Contributory negligence of the plaintiff, in case
of quasi-delicts, shall reduce the damages to
which he may be entitled. However, in case of
crimes, there is no mitigation for contributory
negligence of the plaintiff.
People v Sarcia (2009). The
indemnity authorized by our criminal law as
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civil liability ex delicto for the offended party, in
the amount authorized by the prevailing
judicial policy and aside from other proven
actual damages, is itself equivalent to actual
or compensatory damages in civil law. The
principal consideration for the award of
damages is the penalty provided by law or
imposable for the offense because of its
heinousness, not the public penalty actually
imposed on the offender… Hence,
notwithstanding the fact that the imposable
public penalty against the offender should be
lowered due to his minority, there is no
justifiable ground to depart from the
jurisprudential trend in the award of damages
in the case of qualified rape, considering the
compensatory nature of the award of civil
indemnity and moral damages.
EARNING CAPACITY, BUSINESS
STANDING
Art. 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity
in cases of temporary or permanent
personal injury;
(2) For injury to the plaintiff's business
standing or commercial credit.
LOSS OR IMPAIRMENT OF EARNING
CAPACITY
Gatchalian vs. Delim (1991): The Court did not
award actual damages because it was found
that plaintiff’s employment was lost even
before the injury upon which she was suing.
The Court equated loss of employment with
loss of earning capacity.
Mercury Drug v Huang (2007). The plaintiff
need not be actually engaged in gainful
employment to recover damages due to loss or
impairment of earning capacity. In determining
the amount of damages to be awarded, the
Supreme Court considered the plaintiff’s age,
probable life expectancy, the state of his
DAMAGES CIVIL LAW
health, and his mental and physical condition
before the accident… Taking into account [the
plaintiff’s] outstanding abilities, he would have
enjoyed a successful professional career in
banking.
INJURY TO BUSINESS STANDING OR
COMMERCIAL CREDIT
Tanay Recreation Center vs. Fausto (2005): Loss
of goodwill should be proven with the same
standard of proof as other compensatory
damages.
FORMULA FOR THE NET EARNING
CAPACITY
People vs. Aringue (1997):
Net earning capacity = Life expectancy * (Gross
annual income – Reasonable living expenses)
Where:
Life expectancy = 2/3 * (80 – age of victim at
the time of death)
Tan, et al. vs. OMC Carriers, Inc. (2011): As a
rule, documentary evidence should be
presented to substantiate the claim for loss of
earning capacity.
By way of exception, damages for loss of
earning capacity may be awarded despite the
absence of documentary evidence when: (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; or
(2) the deceased is employed as a daily wage
worker earning less than the minimum wage
under current labor laws.
DEATH BY CRIME OR QUASI-DELICT
Art. 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at
least three thousand pesos, even though
there may have been mitigating
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circumstances.
In addition:
(1) The defendant shall be liable for the loss
of the earning capacity of the deceased,
and the indemnity shall be paid to the
heirs of the latter; such indemnity shall in
every case be assessed and awarded by
the court, unless the deceased on
account of permanent physical disability
not caused by the defendant, had no
earning capacity at the time of his death;
(2) If the deceased was obliged to give
support according to the provisions of
article 291, the recipient who is not an
heir called to the decedent's inheritance
by the law of testate or intestate
succession, may demand support from
the person causing the death, for a
period not exceeding five years, the exact
duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the
deceased may demand moral damages
for mental anguish by reason of the
death of the deceased.
CIVIL / DEATH INDEMNITY
Prof. Casis Book on Damages:
Mere commission of the crime shall entitle the
heirs of the deceased to such damages.
But there has been inconsistency as to whether
indemnity is 50,000 or 75,000.
AS TO THE LOSS OF EARNING CAPACITY
General Rule:
shall be awarded in every case, and that
claimant shall present documentary evidence
to substantiate claim for damages.
Exceptions:
(1) If the deceased was self-employed and
earning less than the minimum wage; or
(2) The deceased was a daily wage worker
earning less than the minimum wage.
DAMAGES CIVIL LAW
Additional exception found in Pleyto vs. Lomboy
(2004):
“Testimonial evidence suffices to establish a
basis for which the court can make a fair and
reasonable estimate of the loss of earning
capacity.”
Note: Such an exception to documentary proof
requirement only exists as to the loss of
earning capacity.
IN RAPE CASES
No statutory basis but in several cases the
court awards compensatory damages to
victims of rape.
People vs. Astrologo (2007): “Civil indemnity, in
the nature of actual and compensatory
damages, is mandatory upon the finding of the
fact of rape.” Awarded Php. 50,000 for simple
rape.
People vs. Apattad (2011): When imposable
penalty is death, then the civil indemnity must
be Php. 75,000.
People vs. Bartolini (2010): The SC held that it
could not be proven that the age of the victim
was such that it would support a penalty of
death. Thus, it imposed reclusion perpetua
instead. But SC said that this should not affect
the civil liability to be imposed, and
maintained the same at Php. 75,000.
People vs. Pascual (2009): In cases of rape with
homicide, civil indemnity in the amount of Php.
100,000 should be awarded to the heirs of the
victim.
ATTORNEY’S FEES AND EXPENSES OF
LITIGATION
Art. 2208. In the absence of stipulation,
attorney's fees and expenses of litigation,
other than judicial costs, cannot be
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recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission
has compelled the plaintiff to litigate
with third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious
prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action
or proceeding against the plaintiff;
(5) Where the defendant acted in gross and
evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and
demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of
household helpers, laborers and skilled
workers;
(8) In actions for indemnity under workmen's
compensation and employer's liability
laws;
(9) In a separate civil action to recover civil
liability arising from a crime;
(10) When at least double judicial costs are
awarded;
(11) In any other case where the court deems
it just and equitable that attorney's fees
and expenses of litigation should be
recovered.
In all cases, the attorney's fees and expenses
of litigation must be reasonable.
General Rule
Attorney’s fees and costs of litigation are
recoverable IF stipulated.
Exceptions
If there is no stipulation, they are recoverable
only in the following cases:
(1) By reason of malice or bad faith
(a) When exemplary damages are
awarded
(b) In case of a clearly unfounded civil
action
DAMAGES CIVIL LAW
(c) Where defendant acted in gross and
evident bad faith
(d) When at least double judicial costs are
awarded
(1) By reason of plaintiff’s indigence in
(a) Actions for legal support
(b) Actions for recovery of wages of
laborers, etc.
(c) Actions for workmen’s compensation
(2) By reason of crimes in
(a) Criminal cases of malicious
prosecution
(b) Separate actions to recover civil
liability arising from crime
(3) By reason of equity
(a) Where the defendant’s act
compelled plaintiff to litigate with
third persons
(b) Where the Court deems it just and
equitable
Note: In all cases, attorney’s fees and costs of
litigation must be reasonable.
Even if expressly stipulated, attorney’s fees are
subject to control by the Courts.
Quirante v IAC (1989). Attorney’s fees in CC
2208 is an award made in favor of the litigant,
not of his counsel, and the litigant, not his
counsel, is the judgment creditor who may
enforce the judgment for attorney's fees by
execution.
MERALCO v Ramoy (2008). Attorney's fees
cannot be recovered except in cases provided
for in CC 2208.
Briones v Macabagdal (2010). Attorney’s fees
and expenses of litigation are recoverable only
in the concept of actual damages, not as moral
damages nor judicial costs. Hence, such must
be specifically prayed for…and may not be
deemed incorporated within a general prayer
for "such other relief and remedy as this court
may deem just and equitable."
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No interest may be recovered on unliquidated

Bank of America v Philippine Racing Club (not fixed in amount) claims or damages,
(2009). For CC 2208 (2), an adverse decision except when the demand can be established
does not ipso facto justify an award of with reasonable certainty at the Court’s
attorney’s fees to the winning party. Even when discretion.
a claimant is compelled to litigate with third
persons or to incur expenses to protect his Compounding of interest
rights, still attorney’s fees may not be awarded Interest due shall earn legal interest from the
where no sufficient showing of bad faith could time it is judicially demanded, although the
be reflected in a party’s persistence in a case obligation may be silent on the point.
other than an erroneous conviction of the
righteousness of his cause. Note that interest due can earn only at 6%,
whether the rate of interest of the principal is
INTEREST greater than 6%.
Art. 2209. If the obligation consists in the
payment of a sum of money, and the debtor Determination of legal interest
incurs in delay, the indemnity for damages, (1) When an obligation, regardless of its
there being no stipulation to the contrary, source (i.e., law, contracts, quasi-
shall be the payment of the interest agreed contracts, delicts or quasi-delicts) is
upon, and in the absence of stipulation, the
breached, the contravenor can be held
legal interest, which is six per cent per
annum. liable for damages.
(2) With regard particularly to an AWARD OF
Art. 2210. Interest may, in the discretion of INTEREST in the concept of actual and
the court, be allowed upon damages compensatory damages, the RATE of
awarded for breach of contract. interest, as well as the ACCRUAL thereof,
is imposed, as follows (Eastern Shipping
Art. 2211. In crimes and quasi-delicts, interest Lines vs. CA, (1994) as modified by Nakar v.
as a part of the damages may, in a proper Gallery Frames, G.R. No. 189871 (2013)):
case, be adjudicated in the discretion of the
court.
BASE RATE ACCRUAL
(a) When the (a)That To be
Art. 2212. Interest due shall earn legal which computed
interest from the time it is judicially obligation is
breached, and it may have from default,
demanded, although the obligation may be
consists in the been i.e., from
silent upon this point.
stipulate JUDICIAL or
PAYMENT OF A
d in EXTRAJUDICI
Art. 2213. Interest cannot be recovered upon SUM OF MONEY,
writing. AL demand
unliquidated claims or damages, except i.e., a loan or (b) In the under and
when the demand can be established with forbearance of absence subject to the
reasonable certainty. money, the of provisions of
interest due stipulatio Article 1169 of
Interest accrues when:
should be- n, the the Civil Code.
(1) The obligation consists in the payment of a rate of
sum of money interest
(2) Debtor incurs in delay shall be
(3) There being no stipulation to the contrary 6% per
annum

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BASE RATE ACCRUAL BASE RATE ACCRUAL

(legal court awarding a UNTIL ITS
interest) sum of money SATISFACTIO
becomes final and N, this period
executory, being deemed
(b) Furthermor Legal From the time to be an
whether or not the
e, the INTEREST interest it is equivalent to a
case consists in forbearance of
DUE shall itself JUDICIALLY
the payment of a credit.
earn demanded.
sum of money
(c) When an 6% per If claim or
obligation, NOT annum. damages are
Note:
constituting a LIQUIDATED,
The new rate of legal interest (6%) in Nacar
loan or from default,
i.e., from does not apply to judgments that have become
forbearance of final and executory prior to July 1, 2013.
judicial or
money, is extrajudicial
breached, an demand. (Art. Start of Delay
interest on the 1169, Civil (1) Extrajudicial: Demand letter
AMOUNT OF Code) (2) Judicial: Filing of complaint
DAMAGES (3) Award
awarded may be If
imposed at the UNLIQUIDATE
Duty to Minimize
discretion of the D, from the
time the
Art. 2203. The party suffering loss or injury
court. must exercise the diligence of a good father
demand can
of a family to minimize the damages
be established
The actual base for resulting from the act or omission in
with
the computation of question.
reasonable
legal interest shall
certainty.
be on the amount Lim and Gunnaban vs. CA (2002): Article 2203
Hence, the
finally adjudged. of the Civil Code exhorts parties suffering from
interest shall
begin to run loss or injury to exercise the diligence of a good
only FROM father of a family to minimize the damages
THE DATE resulting from the act or omission in question.
THE One who is injured then by the wrongful or
JUDGMENT negligent act of another should exercise
OF THE reasonable care and diligence to minimize the
COURT IS resulting damage. Anyway, he can recover
MADE (at
from the wrongdoer money lost in reasonable
which time the
efforts to preserve the property injured and for
quantification
of damages
injuries incurred in attempting to prevent
may be damage to it.
deemed to
have been Burden of Proof
reasonably The DEFENDANT has the burden of proof to
ascertained). establish that the victim, by the exercise of the
(d) When the 6% per From diligence of a good father of a family, could
JUDGMENT of the annum FINALITY have mitigated the damages. In the absence of

542
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such proof, the amount of damages cannot be (2) Besmirched reputation

reduced. (3) Mental anguish
(4) Fright
Note: (5) Moral shock
The victim is required only to take such steps (6) Wounded feelings
as an ordinary prudent man would reasonably (7) Social humiliation
adopt for his own interest. (8) Serious anxiety
(9) Similar injury

III. Moral Damages Though incapable of pecuniary computation

Art. 2217. Moral damages include physical
suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary
computation, moral damages may be
recovered if they are the proximate result of
the defendant's wrongful act or omission.
Art. 2218. In the adjudication of moral
damages, the sentimental value of property,
real or personal, may be considered.
Visayan Sawmill vs. CA (1993): Moral damages
are emphatically not intended to enrich a
complainant at the expense of the defendant.
Its award is aimed at the restoration, within the
limits of the possible, of the spiritual status
quo ante, and it must be proportional to the
suffering inflicted.
If such is the proximate result of defendant’s
act or omission.
REQUISITES FOR AWARDING MORAL
DAMAGES
Sulpicio Lines v Curso (2010). The conditions for
awarding moral damages are:
(a) There must be an injury, whether physical,
mental, or psychological, clearly
substantiated by the claimant;
(b) There must be a culpable act or omission
factually established;
(c) The wrongful act or omission of the
defendant must be the proximate cause of
the injury sustained by the claimant; and
(d) The award of damages is predicated on
any of the cases stated in Article 2219 of
the Civil Code.

Bagumbayan Corp. vs. IAC (1984): Mental GENERAL PRINCIPLES OF RECOVERY:

suffering means distress or serious pain as
distinguished from annoyance, regret or
vexation.
Mental anguish is intense mental suffering.
Generally, damages for mental anguish are
limited to cases in which there has been a
personal physical injury or where the
defendant willfully, wantonly, recklessly, or
intentionally caused the mental anguish.
WHEN AWARDED
Awarded when injury consists of:
(1) Physical suffering
(1) Moral damages must somehow be
proportional to the suffering inflicted.
(2) In culpa contractual or breach of contract,
moral damages may be recovered when
the defendant acted in bad faith or was
guilty of gross negligence (amounting to
bad faith) or in wanton disregard of his
contractual obligation and, exceptionally,
when the act of breach of contract itself is
constitutive of tort resulting in physical
injuries.
(3) By special rule in Article 1764, in relation
to Article 2206, moral damages may also
be awarded in case the death of a

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passenger results from a breach of
carriage.
(4) In culpa aquiliana or quasi-delict,
(a) when an act or omission causes
physical injuries, or
(b) where the defendant is guilty of
intentional tort, moral damages may
aptly be recovered. This rule also
applies to contracts when breached
by tort.
(5) In culpa criminal, moral damages could be
lawfully due when the accused is found
guilty of physical injuries, lascivious acts,
adultery or concubinage, illegal or
arbitrary detention, illegal arrest, illegal
search, or defamation.
(6) Malicious prosecution can also give rise to
a claim for moral damages. The term
"analogous cases," referred to in Article
2219, following the ejusdem generis rule,
must be held similar to those expressly
enumerated by the law.
(7) Although the institution of a clearly
unfounded civil suit can at times be a legal
justification for an award of attorney's
fees, such filing, however, has almost
invariably been held not to be a ground for
an award of moral damages. (Expertravel&
Tours vs. CA (1999))
(8) The burden rests on the person claiming
moral damages to show convincing
evidence for good faith is presumed. In a
case involving simple negligence, moral
damages cannot be recovered. (Villanueva
vs. Salvador (2006))
(9) Failure to use the precise legal terms or
"sacramental phrases" of "mental
anguish, fright, serious anxiety, wounded
feelings or moral shock" does not justify
the denial of the claim for damages. It is
sufficient that these exact terms have been
pleaded in the complaint and evidence has
been adduced (Miranda-Ribaya vs.
Bautista (1980))
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(10) Even if the allegations regarding the
amount of damages in the complaint are
not specifically denied in the answer, such
damages are not deemed admitted.
(Raagas, et al. vs. Traya et al (1968)).
(11) An appeal in a criminal case opens the
whole case for review and this 'includes
the review of the penalty, indemnity and
damages’. Even if the offended party had
not appealed from said award, and the
only party who sought a review of the
decision of said court was the accused, the
court can increase damages awarded.
(Sumalpong vs. CA (1997))
(12) It can only be awarded to natural persons.
ABS-CBN vs. CA (1999): The award of moral
damages cannot be granted in favor of a
corporation because, being an artificial person
and having existence only in legal
contemplation, it has no feelings, no emotions,
no senses, It cannot, therefore, experience
physical suffering and mental anguish, which
can be experienced only by one having a
nervous system. The statement in People vs.
Manero and Mambulao Lumber Co. vs. PNB
that a corporation may recover moral damages
if it "has a good reputation that is debased,
resulting in social humiliation" is an obiter
dictum.
NAPOCOR vs. Philipp Brothers (2001): While it
is true that besmirched reputation is included
in moral damages, it cannot cause mental
anguish to a corporation, unlike in the case of a
natural person, for a corporation has no
reputation in the sense that an individual has,
and besides, it is inherently impossible for a
corporation to suffer mental anguish.
QUESTION
Ortillo contracts Fabricato, Inc. to supply and
install tile materials in a building he is
donating to his province. Ortillo pays 50% of
the contract price as per agreement. It is
also agreed that the balance would be
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payable periodically after every 10%
performance until completed. After
performing about 93% of the contract, for
which it has been paid an additional 40% as
per agreement, Fabricato, Inc. did not
complete the project due to its sudden
cessation of operations. Instead, Fabricato,
Inc. demands payment of the last 10% of the
contract despite its non-completion of the
project. Ortillo refuses to pay, invoking the
stipulation that payment of the last amount
of 10% shall be upon completion. Fabricato,
Inc. brings suit for the entire 10% plus
damages. Ortillo counters with claims for (a)
moral damages for Fabricato, Inc.’s
unfounded suit which has damaged his
reputation as a philanthropist and respected
businessman in his community, and (b)
attorney’s fees.
Does Ortillo have a legal basis for his claim
for moral damages?
How about his claim for attorney’s fees,
having hired a lawyer to defend him?
Suggested Answer:
(a) There is no legal basis to Ortillo’s claim
for moral damages. It does not fall
under the coverage of Article 2219 of the
New Civil Code.
(b) Ortillo is entitled to attorney’s fees
because Fabricato’s complaint is a case
of malicious prosecution or a clearly
unfounded civil action (Art. 2208 [4] and
[11], NCC).
WHEN RECOVERABLE
Art. 2219. Moral damages may be recovered
in the following and analogous cases:
(1) A criminal offense resulting in physical
injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other
lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
DAMAGES CIVIL LAW
(6) Illegal search;
(7) Libel, slander or any other form of
defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21,
26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced,
abducted, raped, or abused, referred to in
No. 3 of this article, may also recover moral
damages.
The spouse, descendants, ascendants, and
brothers and sisters may bring the action
mentioned in No. 9 of t his article, in the
order named.
IN CRIMINAL OFFENSE RESULTING IN
PHYSICAL INJURIES
People v Villaver (2001). Under paragraph (1),
Article 2219 of the Civil Code, moral damages
may be recovered in a criminal offense
resulting in physical injuries. In its generic
sense, "physical injuries" includes death.
Arcona v CA (2002). In a case where the father
of a family was stabbed to death, the SC said
that “a violent death invariably and necessarily
brings about emotional pain and anguish on
the part of the victim’s family… For this reason,
moral damages must be awarded even in the
absence of any allegation and proof of the
heirs’ emotional suffering.”
IN QUASI-DELICTS CAUSING PHYSICAL
INJURIES
B.F. Metal v Lomotan (2008). In culpa
aquiliana, or quasi-delict, moral damages may
be recovered (a) when an act or omission
causes physical injuries, or (b) where the
defendant is guilty of intentional tort. The SC
held that an employer that is vicariously liable
with its employee-driver may also be held
liable for moral damages to the injured
plaintiff,
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IN SEDUCTION, ABDUCTION, RAPE AND
OTHER LASCIVIOUS ACTS
People vs. Calongui (2006): Anent the award of
damages, civil indemnity ex delicto is
mandatory upon finding of the fact of rape
while moral damages is awarded upon such
finding without need of further proof because it
is assumed that a rape victim has actually
suffered moral injuries entitling the victim to
such award. If without factual and legal bases,
no award of exemplary damages should be
allowed.
People v Bartolini (2010). In a case where the
offender-father was convicted of simple rape
instead of qualified rape due to the
prosecution’s failure to specifically allege the
age and minority of the victim-daughter, but
such was nonetheless established during the
trial, the award of civil indemnity and moral
damages in a conviction for simple rape should
equal the award of civil indemnity and moral
damages in convictions for qualified rape.
Truly, [the victim’s] moral suffering is just as
great as when her father who raped her is
convicted for qualified rape as when he is
convicted only for simple rape due to a
technicality.
People v Abadies (2002). Where there are
multiple counts of rape and other lascivious
acts, the SC awarded moral damages for each
count of lascivious acts and each count of rape.
Note: Recovery may be had by the offended
party and also by her parents.
IN ILLEGAL OR ARBITRARY DETENTION
OR ARREST
People v Bernardo (2002). Since the crime
committed in this case is kidnapping and
failure to return a minor under Article 270 of
the Revised Penal Code, the same is clearly
analogous to illegal and arbitrary detention or
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CIVIL LAW
arrest, thereby justifying the award of moral
damages.
IN CASE OF MALICIOUS PROSECUTION
Industrial Insurance v Bondad (2000). As a rule,
no moral damages is imposed for litigation,
because the law could not have meant to
impose a penalty on the right to litigate. A
person's right to litigate, as a rule, should not
be penalized. This right, however, must be
exercised in good faith. Absence of good faith
in the present case is shown by the fact that
petitioner clearly has no cause of action
against respondents but it recklessly filed suit
anyway and wantonly pursued pointless
appeals, thereby causing the latter to spend
valuable time, money and effort in
unnecessarily defending themselves, incurring
damages in the process.
Mijares vs. CA (1997): Moral damages cannot be
recovered from a person who has filed a
complaint against another in good faith, or
without malice or bad faith. If damage results
from the filing of the complaint, it is damnum
absque injuria.
Barreto vs. Arevalo (1956): The adverse result of
an action does not per se make the act
wrongful and subject the actor to the payment
of moral damages. The law could not have
meant to impose a penalty on the right to
litigate; such right is so precious that moral
damages may not be charged on those who
may exercise it erroneously.
IN ACTS REFERRED TO IN ARTS. 21, 26,
27, 28, 29, 32, 34 &35, NCC
Art. 21. Any person who wilfully causes loss or
injury to another in a manner that is contrary
to morals, good customs or public policy
shall compensate the latter for the damage.
Art. 26. Every person shall respect the
dignity, personality, privacy and peace of
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mind of his neighbors and other persons. The
following and similar acts, though they may
not constitute a criminal offense, shall
produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of another's
residence:
(2) Meddling with or disturbing the private
life or family relations of another;
(3) Intriguing to cause another to be
alienated from his friends;
(4) Vexing or humiliating another on
account of his religious beliefs, lowly
station in life, place of birth, physical
defect, or other personal condition.
VIOLATION OF HUMAN DIGNITY
Concepcion v CA (1998).The law seeks to
protect a person from being unjustly
humiliated. Using this provision, the SC
awarded moral damages to the plaintiff, a
married man, against the defendant, who
confronted the plaintiff face-to-face, invading
the latter’s privacy, to hurl defamatory words
at him in the presence of his wife and children,
neighbors and friends, accusing him of having
an adulterous relationship with another
woman.
Art. 27. Any person suffering material or
moral loss because a public servant or
employee refuses or neglects, without just
cause, to perform his official duty may file an
action for damages and other relief against
the latter, without prejudice to any
disciplinary administrative action that may
be taken.
REFUSAL OR NEGLECT OF DUTY
Vital-Gozon v CA (1998). Under CC 27, in
relation to CC 2219 and 2217, a public officer
may be liable for moral damages for as long as
the moral damages suffered by [the plaintiff]
were the proximate result of [defendant’s]
refusal to perform an official duty or neglect in
the performance thereof. In fact, under
Articles 19 and 27 of the Civil Code, a public
official may be made to pay damages for
DAMAGES CIVIL LAW
performing a perfectly legal act, albeit with
bad faith or in violation of the "abuse of right"
doctrine.
Art. 28. Unfair competition in agricultural,
commercial or industrial enterprises or in
labor through the use of force, intimidation,
deceit, machination or any other unjust,
oppressive or highhanded method shall give
rise to a right of action by the person who
thereby suffers damage.
Art. 29. When the accused in a criminal
prosecution is acquitted on the ground that
his guilt has not been proved beyond
reasonable doubt, a civil action for damages
for the same act or omission may be
instituted. Such action requires only a
preponderance of evidence. Upon motion of
the defendant, the court may require the
plaintiff to file a bond to answer for damages
in case the complaint should be found to be
malicious.
If in a criminal case the judgment of acquittal
is based upon reasonable doubt, the court
shall so declare. In the absence of any
declaration to that effect, it may be inferred
from the text of the decision whether or not
the acquittal is due to that ground.
Art. 32. Any public officer or employee, or any
private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
impedes or impairs any of the following
rights and liberties of another person shall
be liable to the latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to
maintain a periodical publication;
(4) Freedom from arbitrary or illegal
detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property
without due process of law;
(7) The right to a just compensation when
private property is taken for public use;
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(8) The right to the equal protection of the
laws;
(9) The right to be secure in one's person,
house, papers, and effects against
unreasonable searches and seizures;
(2) The liberty of abode and of changing the
same;
(3) The privacy of communication and
correspondence;
(4) The right to become a member of
associations or societies for purposes
not contrary to law;
(5) The right to take part in a peaceable
assembly to petition the government for
redress of grievances;
(6) The right to be free from involuntary
servitude in any form;
(7) The right of the accused against
excessive bail;
(8) The right of the accused to be heard by
himself and counsel, to be informed of
the nature and cause of the accusation
against him, to have a speedy and public
trial, to meet the witnesses face to face,
and to have compulsory process to
secure the attendance of witness in his
behalf;
(9) Freedom from being compelled to be a
witness against one's self, or from being
forced to confess guilt, or from being
induced by a promise of immunity or
reward to make such confession, except
when the person confessing becomes a
State witness;
(10) Freedom from excessive fines, or cruel
and unusual punishment, unless the
same is imposed or inflicted in
accordance with a statute which has not
been judicially declared
unconstitutional; and
(11) Freedom of access to the courts.
In any of the cases referred to in this article,
whether or not the defendant's act or
omission constitutes a criminal offense, the
aggrieved party has a right to commence an
DAMAGES CIVIL LAW
entirely separate and distinct civil action for
damages, and for other relief. Such civil
action shall proceed independently of any
criminal prosecution (if the latter be
instituted), and mat be proved by a
preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be
adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the Penal
Code or other penal statute.
VIOLATION OF CIVIL AND POLITICAL
RIGHTS
Conjuangco v CA (1999). The purpose of [CC 32]
is to provide a sanction to the deeply cherished
rights and freedoms enshrined in the
Constitution. Under [CC 32], it is not necessary
that the public officer acted with malice or bad
faith. To be liable, it is enough that there was a
violation of the constitutional rights of
petitioner, even on the pretext of justifiable
motives or good faith in the performance of
one's duties.
Meralco v Spouses Chua (2010). Article 32 of
the Civil Code provides that moral damages
are proper when the rights of individuals,
including the right against deprivation of
property without due process of law, are
violated.
Art. 34. When a member of a city or
municipal police force refuses or fails to
render aid or protection to any person in case
of danger to life or property, such peace
officer shall be primarily liable for damages,
and the city or municipality shall be
subsidiarily responsible therefor. The civil
action herein recognized shall be
independent of any criminal proceedings,
and a preponderance of evidence shall
suffice to support such action.
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Art. 35. When a person, claiming to be
injured by a criminal offense, charges
another with the same, for which no
independent civil action is granted in this
Code or any special law, but the justice of the
peace finds no reasonable grounds to believe
that a crime has been committed, or the
prosecuting attorney refuses or fails to
institute criminal proceedings, the complaint
may bring a civil action for damages against
the alleged offender. Such civil action may
be supported by a preponderance of
evidence. Upon the defendant's motion, the
court may require the plaintiff to file a bond
to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the
prosecuting attorney, the civil action shall be
suspended until the termination of the
criminal proceedings.
Please refer to previous discussions on the
provisions.
Art. 2220. Willful injury to property may be a
legal ground for awarding moral damages if
the court should find that, under the
circumstances, such damages are justly due.
The same rule applies to breaches of
contract where the defendant acted
fraudulently or in bad faith.
IN WILLFUL INJURY TO PROPERTY
Regala v Carin (2011). To sustain an award of
damages, the damage inflicted upon
[plaintiff’s] property must be malicious or
willful, an element crucial to merit an award of
moral damages under Article 2220 of the Civil
Code
IN BREACH OF CONTRACT IN BAD FAITH
Bankard, Inc. v Feliciano (2006). Moral
damages may be recovered in culpa
contractual where the defendant acted in bad
DAMAGES CIVIL LAW
faith or with malice in the breach of the
contract. However, a conscious or intentional
design need not always be present since
negligence may occasionally be so gross as to
amount to malice or bad faith. Bad faith, in the
context of Art. 2220 of the Civil Code,
includes gross negligence. Thus, we have held
in a number of cases that moral damages may
be awarded in culpa contractual or breach of
contract when the defendant acted
fraudulently or in bad faith, or is guilty of gross
negligence amounting to bad faith, or in
wanton disregard of his contractual
obligations.
Sulpicio Lines v Curso (2010). As an exception
[to the requirement of bad faith], moral
damages may be awarded in case of breach of
contract of carriage that results in the death of
a passenger.
WHO MAY RECOVER MORAL
DAMAGES
Art. 2219. Moral damages may be recovered
in the following and analogous cases:
(1) A criminal offense resulting in physical
injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other
lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of
defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21,
26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced,
abducted, raped, or abused, referred to in
No. 3 of this article, may also recover moral
damages.
The spouse, descendants, ascendants, and
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brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order
named.
RELATIVES OF INJURED PERSONS
Sulpicio Lines v Curso (2010). Article 2219
circumscribes the instances in which moral
damages may be awarded. The provision does
not include succession in the collateral line as
a source of the right to recover moral damages.
The usage of the phrase analogous cases in
the provision means simply that the situation
must be held similar to those expressly
enumerated in the law in question
JURIDICAL PERSONS
ABS-CBN vs. CA (1999): The award of moral
damages cannot be granted in favor of a
corporation because, being an artificial person
and having existence only in legal
contemplation, it has no feelings, no emotions,
no senses, It cannot, therefore, experience
physical suffering and mental anguish, which
can be experienced only by one having a
nervous system. The statement in People vs.
Manero and Mambulao Lumber Co. vs. PNB
that a corporation may recover moral damages
if it "has a good reputation that is debased,
resulting in social humiliation" is an obiter
dictum.
FACTORS CONSIDERED IN
DETERMINING AMOUNT
Lopez v Pan American (1966). The amount of
damages awarded in this appeal has been
determined by adequately considering the
official, political, social, and financial standing
of the offended parties on one hand, and the
business and financial position of the offender
on the other. The SC further considered the
present rate of exchange and the terms at
which the amount of damages awarded would
approximately be in U.S. dollars, the
defendant being an international airline.
Senate President Lopez, for his social standing
DAMAGES CIVIL LAW
and prestige, received P100,000; his wife
Maria Lopez received P50,000 for her
discomfort, and the fact that she was already
sick and suffering a flu when she left the
Philippines via defendant’s plane; and the
Montelibanos received P25,000 each, for
being immediate family members of Senator
Lopez, and as such they likewise shared his
prestige and humiliation.
IV. Nominal Damages
Nominal damages consist in damages
awarded, not for purposes of indemnifying the
plaintiff for any loss suffered, but for the
vindication or recognition of a right violated by
the defendant.
REQUISITES AND CHARACTERISTICS
(1) Invasion or violation of any legal or
property right.
(2) No proof of loss is required.
(3) The award is to vindicate the right
violated.
WHEN AWARDED
Art. 2221. Nominal damages are adjudicated
in order that a right of the plaintiff, which has
been violated or invaded by the defendant,
may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for
any loss suffered by him.
Art. 2222. The court may award nominal
damages in every obligation arising from any
source enumerated in article 1157, or in every
case where any property right has been
invaded.
Art. 2223. The adjudication of nominal
damages shall preclude further contest upon
the right involved and all accessory
questions, as between the parties to the suit,
or their respective heirs and assigns.
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One does not ask for nominal damages, and it
is in lieu of the actual, moral, temperate, or
liquidated damages.
Nominal damages are incompatible with
actual, temperate and exemplary damages.
Armovit vs. CA (1990): Nominal damages
cannot co-exist with actual or compensatory
damages.
Francisco vs. Ferrer (2001): No moral or
exemplary damages was awarded.
Nevertheless, when confronted with their
failure to deliver on the wedding day the
wedding cake ordered and paid for, petitioners
gave the lame excuse that delivery was
probably delayed because of the traffic, when
in truth, no cake could be delivered because
the order slip got lost. For such prevarication,
petitioners must be held liable for nominal
damages for insensitivity, inadvertence or
inattention to their customer's anxiety and
need of the hour.
Gonzales v PCIB (2011). Nominal damages "are
recoverable where a legal right is technically
violated and must be vindicated against an
invasion that has produced no actual present
loss of any kind.” Its award is thus not for the
purpose of indemnification for a loss but for
the recognition and vindication of a
right. When granted by the courts, they are not
treated as an equivalent of a wrong inflicted
but simply a recognition of the existence of a
technical injury. A violation of the plaintiff’s
right, even if only technical, is sufficient to
support an award of nominal damages.
Conversely, so long as there is a showing of a
violation of the right of the plaintiff, an award
of nominal damages is proper.
Spouses Guanio v Makati Shangri-la (2011). The
plaintiffs sought to recover damages from the
hotel due to its breach of contract as regards
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food service for the plaintiff’s guests. The SC
did not award actual and moral damages
because it found that the plaintiff’s failure to
inform the hotel regarding the increase of
guests (from 350 expected guests, at
maximum capacity of 380, the number of
guests reached 470) was the proximate cause
of the plaintiff’s injury. Nevertheless, the SC
awarded nominal damages under
considerations of equity, for the discomfiture
that the plaintiffs were subjected to during the
event, averring that the hotel could have
managed the "situation" better, it being held
in high esteem in the hotel and service
industry. Given respondent’s vast experience, it
is safe to presume that this is not its first
encounter with booked events exceeding the
guaranteed cover.
NATURE AND DETERMINATION OF
AMOUNT
Gonzales v People (2007). The assessment of
nominal damages is left to the discretion of the
trial court according to the circumstances of
the case. Generally, nominal damages by their
nature are small sums fixed by the court
without regard to the extent of the harm done
to the injured party. However, it is generally
held that a nominal damage is a substantial
claim, if based upon the violation of a legal
right; in such a case, the law presumes
damage although actual or compensatory
damages are not proven.
V. Temperate Damages
Art. 2224. Temperate or moderate damages,
which are more than nominal but less than
compensatory damages, may be recovered
when the court finds that some pecuniary
loss has been suffered but its amount
cannot, from the nature of the case, be
provided with certainty.
Art. 2225. Temperate damages must be
reasonable under the circumstances.
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These damages are awarded for pecuniary
loss, in an amount that, from the nature of the
case, cannot be proved with certainty.
REQUISITES
(1) Actual existence of pecuniary loss
(2) The nature and circumstances of the loss
prevents proof of the exact amount
(3) They are more than nominal and less than
compensatory.
(4) Causal connection between the loss and
the defendant’s act or omission.
(5) Amount must be reasonable.
Ramos vs. CA (2002): In cases where the
resulting injury might be continuing and
possible future complications directly arising
from the injury, while certain to occur are
difficult to predict, temperate damages can
and should be awarded on top of actual or
compensatory damages; in such cases there is
no incompatibility between actual and
temperate damages as they cover two distinct
phases.
Citytrust Bank vs. IAC(1994): Temperate
damages are incompatible with nominal
damages hence, cannot be granted
concurrently.
Pleno vs. CA(1988): Temperate damages are
included within the context of compensatory
damages.Tan v OMC Carriers (2011). The SC
awarded temperate damages in lieu of actual
damages for loss of earning capacity where
earning capacity is plainly established but no
evidence was presented to support the
allegation of the injured party’s actual income.
Republic v Tuvera (2007). Courts are authorized
to award temperate damages even in cases
where the amount of pecuniary loss could have
been proven with certainty, if no such
DAMAGES CIVIL LAW
adequate proof was presented. The allowance
of temperate damages when actual damages
were not adequately proven is ultimately a rule
drawn from equity, the principle affording
relief to those definitely injured who are unable
to prove how definite the injury.
There are cases where from the nature of the
case, definite proof of pecuniary loss cannot be
offered, although the court is convinced that
there has been such loss. For instance, injury to
one's commercial credit or to the goodwill of a
business firm is often hard to show certainty in
terms of money. (NOTE: In this case actual and
temperate damages were awarded. It is
postulated that the actual damages is for the
car while the temperate damages is for the lost
actual income not sufficiently proved.)
FACTORS IN DETERMINING
AMOUNT
De Guzman v Tumolva (2011). The SC awarded
temperate damages where from the nature of
the case, definite proof of pecuniary loss
cannot be adduced, although the court is
convinced that the plaintiff suffered some
pecuniary loss. The SC also increased the
award of temperate damages from P100,000
to P150,000, taking into account the cost of
rebuilding the damaged portions of the
perimeter fence.
WHERE THERE ARE RECEIPTS
PROVIDED AMOUNTING TO LESS THAN
P25,000
People v Lucero (2010). Anent the actual
damages, we note that the CA
awarded P3,000.00 representing the amount
spent for the embalming as shown by the
receipt. However, the prosecution also
presented a list of expenses such as those
spent for the coffin, etc., which were not duly
covered by receipt. If the actual damages,
proven by receipts during the trial, amount to
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less than P25,000.00, the victim shall be
entitled to temperate damages in the amount
of P25,000.00, in lieu of actual damages. In
this case, the victim is entitled to the award
ofP25,000.00 as temperate damages
considering that the amount of actual
damages is only P3,858.50. The amount of
actual damages shall be deleted.
WHERE NO RECEIPTS WERE PROVIDED
People v Gidoc (2009). The award
of P25,000.00 as temperate damages in
homicide or murder cases is proper when no
evidence of burial and funeral expenses is
presented in the trial court.
People v Surongon (2007). Where the amount
of actual damages cannot be determined
because no receipts were presented to prove
the same but it is shown that the heirs are
entitled thereto, temperate damages may be
awarded, fixed atP25,000.00. Considering
that funeral expenses were obviously incurred
by the victim’s heirs, an award ofP25,000.00
as temperate damages is proper.
VI.Liquidated Damages
Art. 2226. Liquidated damages are those
agreed upon by the parties to a contract, to
be paid in case of breach thereof.
Art. 2227. Liquidated damages, whether
intended as an indemnity or a penalty, shall
be equitably reduced if they are iniquitous or
unconscionable.
Liquidated damages are those damages
agreed upon by the parties to a contract to be
paid in case of breach thereof.
It differs from a penal clause in that in the
latter case the amount agreed to be paid may
bear no relation to the probable damages
resulting from the breach. Basically, a penalty
DAMAGES CIVIL LAW
is “ad terrorem,” while liquidated damages are
“ad reparationem.”
REQUISITES AND CHARACTERISTICS
(1) Liquidated damages must be validly
stipulated.
(2) There is no need to prove the amount of
actual damages.
(3) Breach of the principal contract must be
proved.
RULES GOVERNING BREACH OF
CONTRACT
Art. 2228. When the breach of the contract
committed by the defendant is not the one
contemplated by the parties in agreeing
upon the liquidated damages, the law shall
determine the measure of damages, and not
the stipulation.
Suatengco v Reyes (2008). Liquidated damages
are those agreed upon by the parties to a
contract to be paid in case of breach thereof.
The stipulation on attorney’s fees contained in
the said Promissory Note constitutes what is
known as a penal clause. A penalty clause,
expressly recognized by law, is an accessory
undertaking to assume greater liability on the
part of the obligor in case of breach of an
obligation. It functions to strengthen the
coercive force of obligation and to provide, in
effect, for what could be the liquidated
damages resulting from such a breach. The
obligor would then be bound to pay the
stipulated indemnity without the necessity of
proof on the existence and on the measure of
damages caused by the breach.
General Rule: The penalty shall substitute the
indemnity for damages and the payment of the
interests in case of breach.
Exceptions
(1) When there is a stipulation to the contrary.
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(2) When the obligor is sued for refusal to pay
the agreed penalty.
(3) When the obligor is guilty of fraud.
The amount can be reduced if:
(1) it is unconscionable as determined by the
court
(2) there is partial or irregular performance.
VII. Exemplary or
Corrective Damages
Art. 2229. Exemplary or corrective damages
are imposed, by way of example or correction
for the public good, in addition to the moral,
temperate, liquidated or compensatory
damages.
In common law, these damages were termed
“punitive.”
Canada v All Commodities Marketing (2008).
The grant of temperate damages paves the
way for the award of exemplary damages.
Under Article 2234 of the Civil Code, a showing
that the plaintiff is entitled to temperate
damages allows the award of exemplary
damages.
PNB vs. CA (1996): However, the award of
P1,000,000 exemplary damages is also far too
excessive and should likewise be reduced to an
equitable level. Exemplary damages are
imposed not to enrich one party or impoverish
another but to serve as a deterrent against or
as a negative incentive to curb socially
deleterious actions.
WHEN RECOVERABLE
IN CRIMINAL OFFENSES; NCC ART. 2230
Art. 2230. In criminal offenses, exemplary
damages as a part of the civil liability may be
imposed when the crime was committed with
DAMAGES CIVIL LAW
one or more aggravating circumstances.
Such damages are separate and distinct
from fines and shall be paid to the offended
party.
Award of exemplary damages is part of the
civil liability, not of the penalty.
Damages are paid to the offended party
separately from the fines.
People v Dadulla (2011). Although an
aggravating circumstance not specifically
alleged in the information, albeit established
at trial, cannot be appreciated to increase the
criminal liability of the accused, the
established presence of one or two
aggravating circumstances of any kind or
nature entitles the offended party to exemplary
damages under Article 2230 of the Civil Code
because the requirement of specificity in the
information affected only the criminal liability
of the accused, not his civil liability.
People v Alfredo (2010). Being corrective in
nature, exemplary damages, therefore, can be
awarded, not only in the presence of an
aggravating circumstance, but also where the
circumstances of the case show the highly
reprehensible or outrageous conduct of the
offender. As in this case, where the offender
sexually assaulted a pregnant married woman,
the offender has shown moral corruption,
perversity, and wickedness. He has grievously
wronged the institution of marriage. The
imposition then of exemplary damages by way
of example to deter others from committing
similar acts or for correction for the public
good is warranted in quasi-delicts; NCC Art.
2231
Art. 2231. In quasi-delicts, exemplary
damages may be granted if the defendant
acted with gross negligence.
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Globe Mackay v CA (1989). In this case, the before the court may consider the question of
defendant, the previous employer of the granting exemplary in addition to the
plaintiff, wrote a letter to the company where liquidated damages, the plaintiff must show
the plaintiff subsequently applied for that he would be entitled to moral,
temperate or compensatory damages were it
employment, stating that the plaintiff was not for the stipulation for liquidated
dismissed by the defendant from work due to damages.
dishonesty, accusing plaintiff of malversation
of defendant’s funds. Previous police
investigations revealed that the defendant’s Art. 2235. A stipulation whereby exemplary
accusations against the plaintiff were damages are renounced in advance shall be
unfounded, and cleared the plaintiff of such null and void.
‘anomalies’. Here, the lower court awarded
exemplary damages to the plaintiff, which the
defendant questioned, averring that CC 2231 REQUISITES TO RECOVER EXEMPLARY
may be awarded only for grossly negligent DAMAGES AND LIQUIDATED DAMAGES
acts, not for willful or intentional acts. The SC AGREED UPON
upheld the grant of exemplary damages, The plaintiff must show that he/she is entitled
stating that while CC 2231 provides that for to moral, temperate or compensatory
quasi-delicts, exemplary damages may be damages:
granted if the defendant acted with gross
negligence, with more reason is its imposition If arising When exemplary damages
justified when the act performed is deliberate, from are granted
malicious and tainted with bad faith. The crime was committed
Art.
Crimes with an aggravating
2230
circumstance/s
IN CONTRACTS AND QUASI-
Art. Defendant acted with
CONTRACTS; NCC ART. 2232 Quasi-delicts
2231 gross negligence
Art. 2232. In contracts and quasi-contracts, Defendant acted in a
the court may award exemplary damages if Contracts
Art. wanton, fraudulent,
the defendant acted in a wanton, fraudulent, and Quasi-
2232 reckless, oppressive, or
reckless, oppressive, or malevolent manner. contracts
malevolent manner

REQUISITES General Principles

Art. 2233. Exemplary damages cannot be
recovered as a matter of right; the court will
decide whether or not they should be
adjudicated.
Art. 2234. While the amount of the
exemplary damages need not be proved, the
plaintiff must show that he is entitled to
moral, temperate or compensatory damages
before the court may consider the question of
whether or not exemplary damages should
be awarded. In case liquidated damages
have been agreed upon, although no proof of
loss is necessary in order that such liquidated
damages may be recovered, nevertheless,
(1) Exemplary damages cannot be awarded
alone: they must be awarded IN ADDITION
to moral, temperate, liquidated or
compensatory damages.
(2) The purpose of the award is to deter the
defendant (and others in a similar
condition) from a repetition of the acts for
which exemplary damages were awarded;
hence, they are not recoverable as a matter
of right.
(3) The defendant must be guilty of other
malice or else negligence above the
ordinary.

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(4) Plaintiff is not required to prove the
amount of exemplary damages.
(a) But plaintiff must show that he is
entitled to moral, temperate, or
compensatory damage; that is,
substantial damages, not purely
nominal ones. This requirement
applies even if the contract stipulates
liquidated damages.
(b) The amount of exemplary damage
need not be pleaded in the
complaint because the same cannot
be proved. It is merely incidental or
dependent upon what the court may
award as compensatory damages.
DAMAGES IN CASE OF DEATH
RE. CRIMES AND QUASI-DELICTS
Art. 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at
least three thousand pesos, even though
there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss
of the earning capacity of the deceased,
and the indemnity shall be paid to the
heirs of the latter; such indemnity shall
in every case be assessed and awarded
by the court, unless the deceased on
account of permanent physical disability
not caused by the defendant, had no
earning capacity at the time of his death;
(2) If the deceased was obliged to give
support according to the provisions of
article 291, the recipient who is not an
heir called to the decedent's inheritance
by the law of testate or intestate
succession, may demand support from
the person causing the death, for a
period not exceeding five years, the exact
duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the
deceased may demand moral damages
for mental anguish by reason of the
DAMAGES CIVIL LAW
death of the deceased.
IN DEATH CAUSED BY BREACH OF
CONDUCT BY A COMMON CRIME
Heirs of Raymundo Castro vs. Bustos (1969):
when death occurs as a result of a crime, the
heirs of the deceased are entitled to the
following items of damages:
(1) As indemnity for the death of the victim of
the offense — P12,000.00, without the
need of any evidence or proof of damages,
and even though there may have been
mitigating circumstances attending the
commission of the offense.
(2) As indemnity for loss of earning capacity of
the deceased — an amount to be fixed by
the Court according to the circumstances
of the deceased related to his actual
income at the time of death and his
probable life expectancy, the said
indemnity to be assessed and awarded by
the court as a matter of duty, unless the
deceased had no earning capacity at said
time on account of permanent disability
not caused by the accused. If the deceased
was obliged to give support, under Art.
291, Civil Code, the recipient who is not an
heir, may demand support from the
accused for not more than five years, the
exact duration to be fixed by the court.
(3) As moral damages for mental anguish, —
an amount to be fixed by the court. This
may be recovered even by the illegitimate
descendants and ascendants of the
deceased.
(4) As exemplary damages, when the crime is
attended by one or more aggravating
circumstances, — an amount to be fixed in
the discretion of the court, the same to be
considered separate from fines.
(5) As attorney's fees and expresses of
litigation, — the actual amount thereof,
(but only when a separate civil action to
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recover civil liability has been filed or when
exemplary damages are awarded).
(6) Interests in the proper cases.
(7) It must be emphasized that the
indemnities for loss of earning capacity of
the deceased and for moral damages are
recoverable separately from and in
addition to the fixed sum of P12,000.00
corresponding to the indemnity for the
sole fact of death, and that these damages
may, however, be respectively increased or
lessened according to the mitigating or
aggravating circumstances, except items 1
and 4 above, for obvious reasons.
At present, the SC allows civil indemnity of
Php. 50,000 in cases of homicide (De Villa vs.
People (2012)) and Php. 75,000 in cases of
murder (People v. Camat (2012)).
Sulpicio Lines v Curso (2010). The omission
from Article 2206 (3) of the brothers and
sisters of the deceased passenger reveals the
legislative intent to exclude them from the
recovery of moral damages for mental anguish
by reason of the death of the
deceased. Inclusio unius est exclusio alterius.
VIII. Graduation of
Damages
RULES
IN CRIMES
Art. 2204. In crimes, the damages to be
adjudicated may be respectively increased or
lessened according to the aggravating or
mitigating circumstances.
IN QUASI-DELICTS
Art. 2214. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the
damages that he may recover.
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CIVIL LAW
CONTRIBUTORY NEGLIGENCE
Genobiagon vs. CA (1989): The alleged
contributory negligence of the victim, if any,
does not exonerate the accused in criminal
cases committed through reckless imprudence,
since one cannot allege the negligence of
another to evade the effects of his own
negligence.
Rakes vs. Atlantic (1907):If so, the disobedience
of the plaintiff in placing himself in danger
contributed in some degree to the injury as a
proximate, although not as its primary cause.
(Supreme Court in this case cited numerous
foreign precedents, mostly leaning towards the
doctrine that contributory negligence on the
part of the plaintiff did not exonerate
defendant from liability, but it led to the
reduction of damages awarded to the plaintiff.)
Cangco vs. Manila Railroad Co. (1918): In
determining the question of contributory
negligence in performing such act — that is to
say, whether the passenger acted prudently or
recklessly — the age, sex, and physical
condition of the passenger are circumstances
necessarily affecting the safety of the
passenger, and should be considered.
PLAINTIFF’S NEGLIGENCE
Manila Electric vs. Remonquillo (1956): Even if
Manila Electric is negligent, in order that it
may be held liable, its negligence must be the
proximate and direct cause of the accident.
Bernardo vs. Legaspi (1914): Both of the parties
contributed to the proximate cause; hence,
they cannot recover from one another.
IN CONTRACTS, QUASI-CONTRACTS
AND QUASI-DELICTS
Art. 2215 In contracts, quasi-contracts, and
quasi-delicts, the court may equitably
mitigate the damages under circumstances
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other than the case referred to in the
preceding article, as in the following
instances:
(1) That the plaintiff himself has
contravened the terms of the contract;
(2) That the plaintiff has derived some
benefit as a result of the contract;
(3) In cases where exemplary damages are
to be awarded, that the defendant acted
upon the advice of counsel;
(4) That the loss would have resulted in any
event;
(5) That since the filing of the action, the
defendant has done his best to lessen
the plaintiff's loss or injury.
GROUNDS FOR MITIGATION OF
DAMAGES
FOR CONTRACTS:
(1) Violation of terms of the contract by the
plaintiff himself;
(2) Obtention or enjoyment of benefit under
the contract by the plaintiff himself;
(3) Defendant acted upon advice of counsel in
cases where exemplary damages are to be
awarded such as under Articles 2230,
2231, and 2232;
(4) Defendant has done his best to lessen the
plaintiff’s injury or loss.
FOR QUASI-CONTRACTS:
(1) In cases where exemplary damages are to
be awarded such as in Art. 2232;
(2) Defendant has done his best to lessen the
plaintiff’s injury or loss.
FOR QUASI-DELICTS:
(1) That the loss would have resulted in any
event because of the negligence or
omission of another, and where such
negligence or omission is the immediate
and proximate cause of the damage or
injury;
DAMAGES CIVIL LAW
(2) Defendant has done his best to lessen the
plaintiff’s injury or loss.
Sweet Lines v CA (1983). The SC deemed CC
2215(2) inapplicable where the harm done to
private respondents outweighs any benefits
the plaintiffs may have derived from being
transported to Tacloban instead of being taken
to Catbalogan, their destination and the
vessel's first port of call, pursuant to its normal
schedule.
RULE WHEN CONTRACTING PARTIES
ARE IN PARI DELICTO
Generally, parties to a void agreement cannot
expect the aid of the law; the courts leave them
as they are, because they are deemed in pari
delicto or "in equal fault." In pari delicto is "a
universal doctrine which holds that no action
arises, in equity or at law, from an illegal
contract; no suit can be maintained for its
specific performance, or to recover the property
agreed to be sold or delivered, or the money
agreed to be paid, or damages for its violation;
and where the parties are in pari delicto, no
affirmative relief of any kind will be given to
one against the other."
This rule, however, is subject to exceptions that
permit the return of that which may have been
given under a void contract to:
(a) the innocent party (Arts. 1411-1412, Civil
Code);
(b) the debtor who pays usurious interest (Art.
1413, Civil Code);
(c) the party repudiating the void contract
before the illegal purpose is accomplished
or before damage is caused to a third
person and if public interest is subserved
by allowing recovery (Art. 1414, Civil
Code);
(d) the incapacitated party if the interest of
justice so demands (Art. 1415, Civil Code);
(e) the party for whose protection the
prohibition by law is intended if the
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agreement is not illegal per se but merely
prohibited and if public policy would be
enhanced by permitting recovery (Art.
1416, Civil Code); and
(f) the party for whose benefit the law has
been intended such as in price ceiling laws
(Art. 1417, Civil Code) and labor laws (Arts.
1418-1419, Civil Code).
LIQUIDATED DAMAGES
Art. 2227. Liquidated damages, whether
intended as an indemnity or a penalty, shall
be equitably reduced if they are iniquitous or
unconscionable.
COMPROMISE
Art. 2031. The courts may mitigate the
damages to be paid by the losing party who
has shown a sincere desire for a compromise.
IX.Miscellaneous Rules
DAMAGES THAT CANNOT CO-EXIST
NOMINAL WITH OTHER DAMAGES
Art. 2223. The adjudication of nominal
damages shall preclude further contest upon
the right involved and all accessory
questions, as between the parties to the suit,
or their respective heirs and assigns.
Vda. De Medina vs. Cresencia (1956): The
propriety of the damages awarded has not
been questioned, Nevertheless, it is patent
upon the record that the award of P10,000 by
way of nominal damages is untenable as a
matter of law, since nominal damages cannot
co-exist with compensatory damages.
The purpose of nominal damages is to
vindicate or recognize a right that has been
violated, in order to preclude further contest
thereon; “and not for the purpose of
indemnifying the Plaintiff for any loss suffered
by him” (Articles 2221, 2223, new Civil Code.)
DAMAGES CIVIL LAW
Since the court below has already awarded
compensatory and exemplary damages that
are in themselves a judicial recognition that
Plaintiff’s right was violated, the award of
nominal damages is unnecessary and
improper. Anyway, ten thousand pesos cannot,
in common sense, be deemed “nominal”.
ACTUAL AND LIQUIDATED
Art. 2226. Liquidated damages are those
agreed upon by the parties to a contract, to
be paid in case of breach thereof.
DAMAGES THAT MUST CO-EXIST
EXEMPLARY WITH MORAL, TEMPERATE,
LIQUIDATED OR COMPENSATORY
Francisco vs. GSIS (1963): There is no basis for
awarding exemplary damages either, because
this species of damages is only allowed in
addition to moral, temperate, liquidated, or
compensatory damages, none of which have
been allowed in this case, for reasons herein
before discussed.
Scott Consultants & Resource Development
Corp. vs. CA (1995): There was, therefore, no
legal basis for the award of exemplary
damages since the private respondent was not
entitled to moral, temperate, or compensatory
damages and there was no agreement on
stipulated damages.
DAMAGES THAT MUST STAND
ALONE
NOMINAL DAMAGES
Art. 2223. The adjudication of nominal
damages shall preclude further contest upon
the right involved and all accessory
questions, as between the parties to the suit,
or their respective heirs and assigns.
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CIVIL LAW
PRIVATE
INTERNATIONAL
LAW

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I. Introduction
A.SCOPE OF CONFLICTS OF LAWS:
NATURE, DEFINITION AND
IMPORTANCE
A.2. DIVERSITY OF LAWS, CUSTOMS
AND PRACTICES
No law has any effect, of its own force, beyond
the limits of the sovereignty from which its
authority is derived. The extent to which the
law of one nation, as put in force within its
territory, whether by executive order, by
legislative act, or by judicial decree, shall be
allowed to operate within the dominion of
another nation, depends upon what our
greatest jurists have been content to call “the
comity of nations.”
“Comity,” in the legal sense, is neither a matter
of absolute obligation, on the one hand, nor of
mere courtesy and good will, upon the other.
But it is the recognition which one nation
allows within its territory to the legislative,
executive or judicial acts of another nation,
having due regard both to international duty
and convenience, and to the rights of its own
citizens or of other persons who are under the
protection of its laws... [Hilton v Guyot, 159 US
113, 1895]
A.2. DEFINITION
Private international law
 That part of municipal law which governs
cases involving a foreign element.
 Those universal principles of right and
justice which govern the operation and
effect of laws of another state or country.
 That part of law which comes into play
when the issue before the court affects
some fact or event, or transaction that is so
closely connected with a foreign system of
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CIVIL LAW
law as to necessitate recourse to that
system.
 That part of the law of each state or nation
which determines whether, in dealing with
a legal situation, the law of some other
state or nation will be recognized, given
effect, or applied.
 The law concerning the rights of persons
within the territory and dominion of one
nation by reason of acts, private or public,
done within the dominion of another
nation.
A.3. OBJECT, FUNCTION AND SCOPE
The object and function of conflict of laws is to
provide rational and valid rules or guidelines in
deciding cases where either the parties, events
or transactions are linked to more than one
jurisdiction.
i. Scope
 Adjudicatory jurisdiction
o Determines the circumstances
that allow for a legal order to
impose upon its judiciary the
task of deciding multi-state and
multinational disputes
 Choice-of-law
o Refers to the probable sources
from which the applicable law
of the controversy may be
derived.
 Recognition and enforcement of
foreign judgments
o Deals with the study of
situations which justify
recognition by the forum court
of a judgment rendered by a
foreign court or the enforcement
of such within the forum.
UP LAW BOC PRIVATE INTERNATIONAL LAW CIVIL LAW

II. Jurisdiction and [International Shoe Co. v. Washington, 326

US 310, 1945]
Choice of Law o Minimum Contacts – this includes
“its presence in the state through
acts of authorized agents.
A. JURISDICTION [International Shoe Co. v.
 Judicial Jurisdiction – power or authority of Washington]
a court to try a case, render judgment and  Under International
execute it in accordance with law Shoe, minimum contacts
 Legislative Jurisdiction – the ability of the must exist between the
state to promulgate laws and enforce them forum and the
on all persons and property within its defendant.
territory.  Under the case of
Shaffer v Heitner (433
A.1. BASIS OF EXERCISE OF JUDICIAL US 186, 1977), the
JURISDICTION minimum contacts must
exist among the forum,
i. Jurisdiction over the Person
defendant and the cause
 Jurisdiction over the person is acquired
of action.
by the voluntary appearance of a party
and his submission to authority. ii. Jurisdiction over the Property
 Over the person of the PLAINTIFF – the  Results either from the seizure of the
moment he invokes the aid of the court property under a legal process or from
by filing a suit. the institution of legal proceedings
 Over the person of the defendant – wherein the court’s power over the
when he enters his appearance OR is property is recognized and made
served with the legal process within the effective.
state (either through personal or
substituted service of summons). iii. Jurisdiction over the Subject Matter
o Exception: if he appears for the  Subject matter jurisdiction or competence
purpose of protesting the is “more than the general power conferred
jurisdiction of the court. by law to take cognizance of cases of a
 Non-resident plaintiff – deemed to general class to which the case belongs.
consent to the court’s exercise of  It is necessary that said power be properly
jurisdiction over subsequent invoked... by filing a petition.
proceedings arising out of his original  Subject matter jurisdiction cannot be
cause of action including counterclaims conferred by consent of the parties and a
filed by the defendant. decision is void and may be set aside either
directly or collaterally, where the court
 Traditional Approach – Presence in the
exceeds its jurisdiction and power in
state rendering it.
 Modern Approach – Minimum contacts
and fundamental fairness test

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A.2. WAYS OF DEALING WITH A to be the same as Philippine
CONFLICTS PROBLEM
i. Dismiss the Case
Doctrine of Forum Non Conveniens
 Definition: Even if the court
assumes jurisdiction over the
parties and the subject matter, it
may decline to try the case on the
ground that the controversy may
be more suitably tried elsewhere.
ii. Assume Jurisdiction
Assumption of jurisdiction DOES NOT mean
that the court will apply forum law.
However, the presence of any one of the
following factors would justify the application
of internal law:
(1) A specific law of the forum decrees
that internal law should apply
Examples:
(a) Article 16 of the Civil Code real
and personal property are
subject to the law of the country
where they are situated.
(b) Article 829 – revocation of a will
done outside the Philippines
maybe valid if done according to
the law of the place where the
will was made or lex domicile
(c) Article 819 – prohibits Filipinos
from making joint wills even
when done abroad.
(2) The proper foreign law was not
properly pleaded and proved
(a) Foreign law must be proved as a
fact through Rules of evidence
(e.g. official publication or copy,
which has been consularized)
(b) Doctrine of Processual
Presumption – absent contrary
proof, foreign law is presumed
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CIVIL LAW
law.
(3) The case under any of the exceptions to
the application of foreign law.
(a) When the foreign law is contrary
to an important public policy
(b) When the foreign law is penal in
nature
(c) When the foreign law is
procedural in nature
(d) When the foreign law is purely
fiscal or administrative in nature
(e) When the application of the
foreign law will work undeniable
injustice to the citizens of the
forum
(f) When the case involves real or
personal property situated in
the forum
(g) When the application of the
foreign law might endanger the
vital interest of the state.
(h) When the foreign law is contrary
to good morals
B. CHOICE OF LAW
B.1. APPROACHES TO CHOICE OF LAW
i. Traditional Approaches
Vested-Rights Theory
 An act done in a foreign jurisdiction
gives rise to the existence of a right if
the laws of that state provides so.
 This right vests in the plaintiff and he
carries it with him to be enforced in any
forum he chooses to bring suit.
 The forum refers to the law of the place
of occurrence of the “last act”
necessary to complete the cause of
action.
UP LAW BOC PRIVATE INTERNATIONAL LAW
ii. Modern Approaches
Place of Most Significant Relationship
 Identifies a plurality of factors
o The needs of the interstate and
international system
o Relevant policies of the
concerned states
o The relevant policies of other
interested states and the
relative interests of those in the
determination of the particular
issue
o The protection of justified
expectations of the parties
o The basic policies underlying
the particular field of law
o Certainty, predictability and
uniformity of result
o Ease in the determination and
the application of the law to be
applied
 In torts
o The place where the injury
occurred
o The place where the negligent
conduct occurred
o The domicile, resident or
nationality of the parties
o The place where the
relationship between the parties
is entered.
 In contracts
o The law chosen by the parties
o In the absence thereof;
 the place of contracting
 the place of negotiation
 the place of performance
 the domicile, residence,
nationality, place of
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incorporation and place
of business of the parties
Interest Analysis
 Looks at the policy behind the laws
of the involved state and the
interest each state had in applying
its own law.
Comparative Impairment
 Weighs conflicting interests and
apply the law of the state whose
interest would be more impaired if
its laws were not followed.
Functional Analysis
 This approach looked into the
general policies of the state beyond
those reflected in its substantive
law and to policies and values
“relating to effective and
harmonious intercourse between
states.”
C. THE PROBLEM OF
CHARACTERIZATION
C.1 CHARACTERIZATION AND THE
SINGLE-ASPECT METHOD
 Traditional approach - Single-aspect
method (concentrates on one element
of a situation in order to connect the
case to a particular legal community)
 Modern approach – Multi-aspect
method (all important factors of the
case are analyzed and the applicable
law is arrived at by “rationally
elaborating and applying the policies
and purposes underlying the particular
legal rules that come in question as
well as the needs of interstate or
international intercourse.”)
 The Philippines follows the single
aspect method.
UP LAW BOC PRIVATE INTERNATIONAL LAW
 Characterization - The process by
which a court at the beginning of the
choice-of-law process assigns a
disputed question to an area in
substantive law.
i. Subject-Matter Characterization
 Classification by a court of a factual
situation into a legal category.
ii. Substance-Procedure Dichotomy
 Directs the court to the extent it will
apply foreign law.
 If the issue is substantive, the court
MAY apply foreign law. But if it
procedural, it is suppose to follow the
law of the forum.
Statute of Frauds
 The Statute of Frauds is considered as
substantive if the words of the law
relate to forbidding the CREATION of
obligation.
 In contrast, one that forbids
ENFORCEMENT of the obligation is
categorized as procedural.
Statutes of Limitation and Borrowing Statute
General Rule: Statutes of limitations were
classified as procedural because they barred
only the legal remedy without impairing the
substantive right involved.
 Exception: If the statute provides a shorter
period for certain types of claims that fall
within a wider classification covered by a
general statute of limitations. (Specificity
Test)
Borrowing statutes
 Bars the filing of a suit in the forum if it
is already barred by the statute of
limitations in the place where the cause
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of action arose. (Philippines has passed
a borrowing statute)
C.2 DECEPAGE
Phenomenon where “different aspects of a
case involving a foreign element may be
governed by different systems of laws.”
 A case may be dissected into different
issues, each analyzed as to which law
shall apply.
 When such issue by issue analysis
results in the application of different
laws to different issues, then decepage
occurs.
 Decepage is the effect of issue by issue
analysis.
D. THE PROBLEM OF RENVOI
D.1. DEFINITION
Procedure whereby a jural matter presented is
referred by the conflict of laws rules of the
forum to a foreign state, the conflict of laws
rule of which, in turn, refers the matter to the
law of the forum or a third state.
 Remission – reference is made back to the
law of the forum
 Transmission – reference is made to a third
state
D.2. VARIOUS WAYS OF DEALING WITH
THE PROBLEM OF RENVOI
(1) Reject the renvoi - Forum conflict rules is
deemed to refer only to the internal law of
that state (i.e. that which would apply to a
domestic case with no conflict-of-laws
complications)
(2) Accept the renvoi – looks into not just the
internal law of the foreign state, but also
the choice-of-law rules applicable in multi-
state cases.
(3) Desistance or mutual disclaimer of
jurisdiction (e.g. Forum court looks at
UP LAW BOC PRIVATE INTERNATIONAL LAW
foreign law; foreign law does not apply to
non-residents; therefore, no one has
applicable laws; Forum court then applies
forum law)
(4) Foreign Court Theory – the forum court
would assume the same position that the
foreign court would take were the case
litigated in the foreign court.
E. NOTICE AND PROOF OF FOREIGN
LAW
E.1. EXTENT OF JUDICIAL NOTICE
 The party whose cause of action or defense
depended upon the foreign law has the
burden of proving the foreign law.
 Such foreign law is treated as a question of
fact to be properly pleaded and proved in
conformity with the law of evidence of the
state where it is presented.
 A judge is not authorized to take judicial
notice of a foreign law and is presumed to
know only domestic law.
E.2. PROOF OF FOREIGN LAW
Methods to prove foreign law
 Official publication of the law (and
consularized)
 Copy of the law attested by the
officer having the legal custody of
the record or by his deputy. (and
consularized)
 Expert witness
Effect of Failure to Plead and Prove Foreign
Law
 Dismiss the case for inability to
establish a cause of action
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 Assume that the foreign law is the
same as the law of the forum (doctrine
of processual presumption)
 Apply the law of the forum
E.3. EXCEPTIONS TO THE APPLICATION
OF FOREIGN LAW
 The foreign law is contrary to an
important public policy of the forum
 The foreign law is procedural in nature
 Issues are related to property (Lex
Situs)
 The issue involved in the enforcement
of foreign claim is fiscal or
administrative
 The foreign law or judgment is contrary
to good morals (Contra Bonos Mores)
 The application of foreign law will work
undeniable injustice to the citizens of
the forum
 The foreign law is penal in character
 The application of the foreign law
might endanger the vital interests of
the state
III. Personal Law
A. NATIONALITY
A.1. IMPORTANCE OF A PERSONAL LAW
An individual’s personal law follows him
wherever he is and governs those transactions
which affect him most closely.
Importance of Nationality in the Philippines
Regulates
 Civil status
 Capacity
 Condition
UP LAW BOC PRIVATE INTERNATIONAL LAW
 Family rights and duties
 Laws on succession
 Capacity to succeed
A.2. DETERMINATION OF NATIONALITY
Who are Filipino Citizens
 Those who are citizens of the
Philippines at the time of the adoption
of the Constitution (1987)
 Those whose fathers or mothers are
citizens of the Philippines
 Those born before January 17, 1973 of
Filipino mothers, who elect Philippine
citizenship upon reaching the age of
majority
 Those who are naturalized in
accordance with law
i. Natural-Born Citizens
 Natural-born citizens are those who are
citizens of the Philippines without
having to perform any act to acquire or
perfect citizenship.
 The Philippines follows the jus sanguinis
principle which means the rule of descent
or blood.
ii. Citizens by Naturalization
B. DOMICILE
B.1. DEFINITION
Domicile is defined by municipal law
(Philippine Law) and private international law.
Under municipal law
 Art. 50 of the Civil Code provides: “For
the exercise of civil rights and the
fulfillment of civil obligations, the
domicile of natural persons is the place
of their habitual residence.”
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CIVIL LAW
 For juridical persons: domicile is
determined by the law creating or
recognizing it. In the absence thereof it
shall be understood to be the place
where their legal representation or
place of business is.
Under private international law
 The place with which a person has a
settled connection for certain legal
purposes, either because his home is
there or because that place is assigned
to him by law.
 The place of his true, fixed permanent
home and principal establishment, and
to which, whenever he is absent, he has
the intention of returning.
 To acquire a domicile, there must be
concurrence of intention to make it
one’s domicile and physical presence.
B.2. GENERAL RULES ON DOMICILE
Rules on Domicile
(1) No person shall be without a domicile
(2) A person cannot have two
simultaneous domicile.
(a) However, domicile may vary
depending on the purpose (e.g.
domicile for divorce will be different
from domicile for the purpose of
running for public office.)
(3) It establishes a connection between a
person and a particular territorial unit
(4) The burden of proving a change of
domicile is upon whoever alleges that a
change has been secured.
(a) Without overwhelming evidence to
show a change of domicile, the
court will decide in favor of the
continuance of an existing domicile.
UP LAW BOC PRIVATE INTERNATIONAL LAW CIVIL LAW

B.3. KINDS OF DOMICILE (7) Succession (both testate and

 Domicile of origin intestate)
o Refers to a person’s domicile at
birth (domicile of parents) Capacity
 Domicile of choice  Juridical capacity – the fitness of a man to
be the subject of legal relations.
o Voluntary domicile
o The place freely chosen by a  Capacity to act – the power to do acts with
person sui juris juridical effects.
 Constructive domicile  The union of both produces complete
o By operation of law, a domicile civil capacity.
is assigned to a person legally
incapable of choosing their own C.2. LEGISLATIVE JURISDICTION
domicile. (e.g. minors and DISTINGUISHED FROM JUDICIAL
mentally disabled) JURISDICTION
Status, once established by the personal law of
the party, is given UNIVERSAL RECOGNITION.
C. PRINCIPLES ON PERSONAL
STATUS AND CAPACITY C.3. BEGINNING AND END OF
PERSONALITY
C.1. DEFINITION  The determination of the exact
Personal status
moment personality begins is referred
 Includes both condition and capacity to the individual’s personal law.
 Embraces such matters as:  A declaration of death issued by a
(1) The beginning and end of human competent court is considered valid for
personality all purposes. Upon the death of a
(2) Capacity to have rights in general person, some of his rights and
(3) Capacity to engage in legal obligations are totally extinguished
transactions while others are passed on to his
(4) Protection of personal interests successors.
(5) Family relations, particularly the
relations between: C.4. ABSENCE
(a) Husband and wife Three ways of addressing conflict of laws
(b) Parent and child problem regarding absence:
(c) Guardian and ward (1) There is a rebuttable presumption that a
(6) Transactions of family law, person is dead when he has been absent
especially for a number of years
(a) Marriage (2) A person’s unexplained absence is
(b) Divorce judicially investigated and established
(c) Separation which results in legal effects similar to
those of death
(d) Adoption
(3) A judicial decree shall have to be issued
(e) Legitimation
declaring the person dead before the legal
(f) Emancipation effects of death take place.

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The Philippines follows the first.

Marriage is a special contract of permanent

C.5. NAME
union between a man and a woman entered
Philippine law provides that: “no person can
into in accordance with law for the
change his name or surname without judicial
establishment of conjugal and family life. It
authority.”
is the foundation of the family and an
inviolable social institution whose nature,
Exceptions (according to Jurisprudence):
consequences, and incidents are governed
(1) That the name is ridiculous or tainted with
by law and not subject to stipulation, except
dishonor or extremely difficult to
that marriage settlements may fix the
pronounce.
property relations during the marriage
(2) When the change is necessary to avoid
within limits provided by this Code. [Art. 1,
confusion
Family Code]
(3) When the right to a new name is a
consequence of a change in status
(4) A sincere desire to adopt a Filipino name to
erase signs of a former alien nationality Laws relating to family rights and duties, or
which unduly hamper social and business to the status, condition and legal capacity
life. of persons are binding upon citizens of the
Whether an alien’s change of name is valid Philippines, even though living abroad. [Art.
DEPENDS SOLELY ON HIS PERSONAL LAW. 15, Civil Code]

C.6. AGE OF MAJORITY This follows the principle of LEX NATIONALII.

Age of majority is determined by the
individual’s personal law. i. Philippine Policy on Marriage and the Family

C.7. CAPACITY In case of doubt, courts will apply FORUM law

 Capacity to act is governed by his personal
law.
 The incapacities attached to his legal
status go with him wherever he is.
because of marriage is greatly influenced by
the values of society. (Prof. Elizabeth
Pangalangan)
This policy is expressed in various laws, e.g.:

IV. Choice of Law Marriage, as an inviolable social institution,

is the foundation of the family and shall be
Problems protected by the State. [Sec. 2, Art. XV of the
1987 Constitution]

A. CHOICE-OF-LAW IN FAMILY
RELATIONS

A.1. MARRIAGE

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In case of doubt, all presumptions favour
the solidarity of the family. Thus, every
intendment of law or facts leans toward the
validity of marriage, the indissolubility of
the marriage bonds, the legitimacy of
children, the community of property during
the marriage, the authority of parents over
their children, and the validity of defense for
any member of the family in case of
unlawful aggression. [Art. 220, Civil Code]
ii. Extrinsic Validity of Marriage
Extrinsic validity covers questions relating to
formalities or “external conduct required of the
parties or of third persons especially of public
officers, necessary to the formation of a legally
valid marriage.”
In the Philippines, these are enumerated in Art
3 of the Family Code:
(1) Authority of the solemnizing officer
(2) A valid marriage license except in cases
provided in Chapter 2 of this Title; and
(3) A marriage ceremony which takes
place with the appearance of the
contracting parties before the
solemnizing officer and their personal
declaration that they take each other as
husband and wife in the presence of
not less than two witnesses of legal
age.
All marriages solemnized outside the
Philippines in accordance with the laws in
force in the country where they were
solemnized, and valid there as such, shall
also be valid in this country... [Art. 26, par. 1,
Family Code]
This follows the principle of lex loci
celebrationis.
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CIVIL LAW
Exceptions to the rule of lex loci celebrationis
(these involve the question capacity to marry,
which is a substantive requirement for
marriage):
(1) Either/both parties are below 18 years
old
(2) Bigamous or polygamous marriages
(3) Subsequent marriage without
recording:
(a) The judgment of nullity of the first
marriage
(b) Partition and distribution of the
properties of the spouses
(c) Delivery of the children’s
presumptive legitimes
(4) Mistake as to identity of the contracting
party
(5) One of the parties was psychologically
incapacitated to comply with the
essential marital obligations
(6) Incestuous
(7) Void by reason of public policy
iii. Intrinsic Validity of Marriage
 Intrinsic validity refers to the general
ability of a person to marry (e.g. age
requirement and parental consent).
 This is controlled by the parties’
personal laws.
 Marriages celebrated by a Consular
Official - Formal and intrinsic
requirements under Philippine law
shall be followed.
iv. Effects of Marriage
Personal Relations Between the Spouses
 Includes mutual fidelity, respect,
cohabitation, support and the right of
the wife to use the husband’s family
name.
UP LAW BOC PRIVATE INTERNATIONAL LAW
 Governed by the national law of the
parties.
Property Relations of Spouses
According to the Hague Convention:
 Internal law designated by the spouses
before the marriage
 In absence thereof, the internal law of
the state in which both spouses fix their
habitual residence.
At least one Filipino spouse;
 Property relations governed
Philippine law
A.2. DIVORCE AND SEPARATION
 Absolute – termination of legal
relationship between spouses by an act
of law
 Limited – separation from bed and
board
 Grounds for divorce and dictated by the
LEX FORI.
i. Divorce Decrees Obtained by Filipinos
 Decrees of absolute divorce are not
valid if obtained by Filipinos abroad
 If decree is obtained by alien spouse
capacitating him to marry, Filipino
spouse shall have capacity to marry.
(Art. 26, Family Code)
ii. Validity of Foreign Divorce Between
Foreigners
 This will be recognized in the
Philippines under the principle of
international comity, provided it does
not violate a strongly held policy of the
Philippines.
CIVIL LAW
A.3. ANNULMENT AND DECLARATION
OF NULLITY
 Grounds are based on the defects at
the time of the celebration of the
marriage
 Traditional approach: Grounds follow
LEX LOCI CELEBRATIONIS
 Modern Approach: Grounds follow
LAW OF THE MARITAL DOMICILE.
A.4. PARENTAL RELATIONS
 Legitimacy of the child is submitted to
the personal law of the parents (in the
by
Philippines, national law of the
parents).
i. Determination of Legitimacy of a Child
Kinds of filiations
(1) Natural
(a) Legitimate – governed by the
personal law of the father
(b) Illegitimate – governed by the
personal law of the mother
(2) Adopted
ii. Parental Authority over the Child
 Most countries follow the personal law
of the father.
 In the Philippines, joint exercise of
parental authority by the father and
mother (Art. 211 of the Family Code).
A.5. ADOPTION
 Process of adoption - governed by LEX
DOMICILII
B. CHOICE OF LAW IN PROPERTY
B.1. THE CONTROLLING LAW
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 In the Philippines, both movables and
immovables are governed by LEX
SITAE
 Conflict arises when property is located
in a foreign country and the foreign
country has a law that distinguishes
between real and personal property.
B.2. CAPACITY TO TRANSFER OR
ACQUIRE PROPERTY
 Real property – law of the place where
the property is located
B.3. EXTRINSIC AND INTRINSIC
VALIDITY OF CONVEYANCES
 Formalities and effects of conveyance –
Governed by lex situs
B.4. EXCEPTION TO LEX SITUS RULE
 The transaction does not affect transfer
of title to/ownership of the land (lex
intentionis/lex voluntatis)
 Contracts where real property is offered
by way of a security for the
performance of an obligation such as a
loan. (loan is covered by rules on
ordinary contracts though mortgage is
governed by lex situs)
 Testate or intestate succession and
capacity to succeed (lex nationalii)
B.5. SITUS OF CERTAIN PROPERTIES
i. Situs of Personal Property for Tax Purposes
 Mobilia sequuntur personam
 However, it yields to established facts
of legal ownership, actual presence
and control elsewhere and cannot be
applied if it would result in inescapable
and patent injustice.
ii. Situs of Debts
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CIVIL LAW
 Unsettled in Philippine jurisdiction,
however, Prof. Pangalangan suggests
that the law which governs the contract
from which the debt arises shall also
govern the transfer of the debt.
C. CHOICE OF LAW IN CONTRACTS
C.1. EXTRINSIC VALIDITY OF CONTRACTS
 LEX LOCI CELEBRATIONIS (Art. 17 of
the Civil Code)
C.2. INTRINSIC VALIDITY OF CONTRACTS
i. Lex Loci Contractus
 Looks into where “the last act is done
which is necessary to bring the binding
agreement into being so far as the acts
of the parties are concerned.”
ii. Lex Loci Solutionis
All matters relating to the:
(1) Time
(2) Place and manner of performance
(3) Sufficiency of performance
(4) Valid excuses for non performance
iii. Lex Loci Intentionis
 Philippine basis
The contracting parties may establish such
stipulations, clauses, terms and conditions
as they may deem convenient, provided
they are not contrary to law, morals, good
customs, public order, or public policy. [Art.
1306, Civil Code]
 Hence, LEX LOCI INTENTIONIS applies
unless it is contrary to law, morals, good
customs, public order or public policy of
the Philippines.
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C.3. CAPACITY TO ENTER INTO D.2. INTRINSIC VALIDITY OF WILLS

CONTRACTS  Governed by the national law of the
 Governed by the personal law of the decedent (Art. 16 of the Civil Code)
parties (either LEX NATIONALII or LEX
DOMICILII) D.3. INTERPRETATION OF WILLS
 Governed by the national law of the
C.4. CHOICE OF LAW ISSUES IN decedent (Art. 16 of the Civil Code)
CONFLICTS CONTRACTS CASES
D.4. REVOCATION
i. Choice of Forum Clause i. Done outside the Philippines, by a person not
 Questions of venue, not jurisdiction have domicile in the Philippines
 Includes arbitration, not only choice of  Lex loci celebrationis
court.  Lex domicilii

ii. Contracts with Arbitration Clause ii. Done outside the Philippines, by a person
 Arbitration clause – a provision in a domiciled in the Philippines
contract stipulating that any dispute  Lex domicilii
arising from the contract shall be
 Lex loci actus
submitted to a particular body for
arbitration
D.5. PROBATE
C.5. ADHESION CONTRACTS  Disallowance is essentially procedural
Adhesion contracts in character – governed by the law of
 Not negotiated by the parties the forum
 Drafted by only one dominant party  However, the court will look into the
law of the foreign state where the will
 The only participation of the other party
was made as to whether the extrinsic
would be to affix his signature
requirements in the execution of the
will have been complied with.
D. CHOICE OF LAW IN WILLS,
SUCCESSION AND ADMINISTRATION D.6. ADMINISTRATION OF ESTATES
OF ESTATES  Nationality and domicile does not
affect administration
D.1. EXTRINSIC VALIDITY OF WILLS
 Authority of the administrator or
Filipino nationals
executor is limited to the authority of
 Lex nationalii
the court that appointed such.
 Lex loci celebrationis
Aliens
E. CHOICE OF LAW IN TORTS AND
 Lex nationalii
CRIMES
 Lex domicilii
 Lex loci celebrationis
E.1. LEX LOCI DELICTI COMMISSI

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 Law of the place where the alleged tort
was committed
 Choice-of-Law
o Common Law – vested rights
theory (place of injury)
o Civil Law – Tortious conduct
 Traditional View on Jurisdiction – an
actor liable by LEX LOCI DELICTI is
liable everywhere
E.2. MODERN THEORIES ON FOREIGN
TORT LIABILITY
i. The Most Significant Relationship
 Considers the state’s contacts with the
occurrence and the parties.
ii. Interest Analysis
 Considers the relevant concerns the
state may have in the case and its
interest in having its law applied on
that issue.
iii. Cavers’ Principle of Preference
 Considers justice and social expediency
E.3. FOREIGN TORT CLAIMS
 Tortious liability is transitory - the liability
resulting from the conduct is “deemed
personal to the perpetrator of the wrong,
following him whithersoever he may go, so
that compensations may be exacted from
him in any proper tribunal which may
obtain jurisdiction of the defendant’s
person, the right to sue not being confined
to the place where the cause of action
arises.”
E.4. DISTINGUISHING BETWEEN TORTS
AND CRIMES
 Crime is territorial
 Crime is an injury to the state
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CIVIL LAW
 Since the crime is an “affront against
the sovereignty and good order of the
state within whose jurisdiction it
occurs, each state must attend to the
vindication of its own sovereignty.”
E.5. LEX LOCI DELICTI
Law of the place where the crime was
committed
 An act is punishable if it has been
made punishable as a crime by law.
 Developments in public international
law now includes acts considered as a
crime under international law.
Exceptions to lex loci delicti:
(1) Crimes committed by state officials,
diplomatic representatives and officials
of recognized international
organizations
(2) Crimes committed on board foreign
vessels even if it is within the territorial
waters of the coastal state, except: (Art.
27 of UNCLOS)
(a) Consequences extends to the
coastal state
(b) Disturbs the peace or good order of
the country
(c) Requested by the master of the ship
or diplomatic agent or consular
officer of the flag state
(d) If such measures are necessary for
the suppression of illicit traffic in
narcotic drugs or psychotropic
substances.
(3) Crimes committed by Philippine
nationals abroad under Art. 2 of the
RPC.
(a) On a Philippine ship or airship
(b) Forgery or counterfeit any coin or
currency note of the Philippine
UP LAW BOC PRIVATE INTERNATIONAL LAW
Islands or obligations and securities
issued by the Government of the
Philippine Islands
(c) Introduction of those mentioned
above into the Philippines
(d) Public officers or employees
committing an offense in the
exercise of their functions
(e) Crimes against national security
and the law of nations, defined in
Title One of Book Two of the RPC.
F. CHOICE OF LAW AFFECTING
CORPORATIONS AND OTHER
JURIDICAL ENTITIES
F.1. CORPORATIONS
i. Personal law of a Corporation
 Law of the state where it is
incorporated
ii. Exceptions to the Rule of Incorporation Test
Constitutional and Statutory Restrictions
 A state may exclude a foreign
corporation from doing business within
its territory, or prescribe any conditions
as a prerequisite.
Control Test During War
 Courts may pierce the veil of corporate
identity and look into the nationality of
the controlling stockholders to
determine the “citizenship” of the
corporation
iii. Domicile or Residence of Foreign
Corporations
Art. 51 of the Civil Code states:
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CIVIL LAW
When the law creating or recognizing them, or
any other provision does not fix the domicile of
juridical persons
 the place where their legal
representation is established or
 where they exercise their principal
functions
A foreign corporation is granted a license to
operate in the Philippines, it acquires domicile
here.
iv. Jurisdiction over Foreign Corporations
 A foreign corporation shall be
recognized and allowed to transact
business in any state which gives its
consent.
 Foreign corporations doing business in
the Philippines are bound by Philippine
law. (Sec. 129 of the Corporation Code),
except for
(1) Provisions for creation, formation,
organization or dissolution
(2) Provisions which fix the relations
liabilities, responsibilities or duties
of stockholders, members, or
officers of the corporation
(3) Service upon foreign corporations
doing business in the Philippines
may be made on
(a) Resident agent
(b) If none:
(i) Government official
designated by law
(ii) Any of its officers or
(iii) Agent within the Philippines
(iv) Through diplomatic
channels
v. Right of Foreign Corporation to Bring Suit
 Prerequisite for filing a suit before
Philippine courts:
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o License to transact business in (3) Participating in the management,

the Philippines (Sec. 133 of the supervision, or control of any domestic
Corporation Code) business, firm, entity, or corporation in
the Philippines
vi. Exceptions to the License Requirement (4) Any other act that implies a continuity
of commercial dealings or
Isolated Transactions arrangements
(1) One which is occasional, incidental and (5) The exercise of some functions
casual normally incident to, and in progressive
(2) Not of a character or business to prosecution of, commercial gain or of
indicate a purpose to engage in the purpose and object of the business
business organization
(3) Does not constitute “doing business”
as contemplated by law F.2. PARTNERSHIPS
(4) Isolated if there is no:
 To determine the entitlements and
(a) Continuity of conduct
limitations applicable to the
(b) Intention to establish a continuous
partnership – law of the domicile
business within the state
applies
Action to Protect Trademark, Trade Name,
 To determine the legal capacity of
Goodwill, Patent or for Unfair Competition foreign corporations to contract –
 Based on equity considerations personal law applies
o But Philippine law remains
Agreements Fully Transacted Outside the applicable to:
Philippines  The creation of their
 Based on the policy of stabilizing establishments in the
commercial transactions. Philippines
 The mercantile
Petition Filed is Merely a Corollary Defense in a operations
Suit Against It  The jurisdiction of the
courts of the Philippines
vii. Definition and Scope of “Transacting  To determine the existence of the
Business”
partnership – personal law applies
Under the Foreign Business Registration Act
and Foreign Investments Act, acts that
 To determine the grounds for
constitute doing business includes: dissolution and termination of the
(1) Soliciting orders, service contracts, partnership – personal law applies
opening offices
Extraterritorial enforcement of in personam
(2) Appointing representatives or
judgments against partnership
distributors either
 There is jurisdiction over the
(a) Domiciled in the Philippines
partnership or unincorporated
(b) Stay in the country for 180 days or
more

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association if under the circumstances,
there is jurisdiction over an individual
 A judgment against a partnership or
association is enforceable against its
assets in every state.
V. Foreign Judgments
A. RECOGNITION AND
ENFORCEMENT OF FOREIGN
JUDGMENTS
A.1. DISTINCTION BETWEEN
RECOGNITION AND ENFORCEMENT
Foreign Judgment
 All decisions rendered outside the
forum
 Encompasses judgments, decrees, and
orders of (1) foreign governments
(2)sister states in a federal government
Enforcement
 Occurs when the successful plaintiff
fails to obtain satisfaction of a
judgment in the court which granted it
 The plaintiff may try to enforce the
judgment in another state where the
defendant can be located
Recognition
 Occurs when the defendant wins, and
asserts that decision in order to
preclude the plaintiff from filing a suit
on the same claim in another forum
A.2. BASES OF RECOGNITION AND
ENFORCEMENT OF FOREIGN
JUDGMENTS
Comity
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CIVIL LAW
 In order to obtain a reciprocal
treatment from the courts of other
countries, we are compelled to take
foreign judgments as they stand and to
give them Full Faith and Credit
Obligation of foreign judgment
 Derived from the vested rights theory
A.3. POLICIES UNDERLYING
RECOGNITION AND ENFORCEMENT
Res judicata
 Those who have contested an issue
shall be bound by the result of the
contest
 Prevents parties from litigating issues
that have been determined by a valid
local judgment
 Applies in the Philippines to foreign
judgments through sec. 40, Rule 39
A.4. REQUISITES FOR RECOGNITION OR
ENFORCEMENT
i. The Foreign Judgment was Rendered by a
Judicial or Quasi-Judicial Tribunal which had
Jurisdiction Over the Parties and the Case in the
Proper Judicial Proceedings
Bases of jurisdiction
(1) Proceedings in personam
(a) Consent of the parties
(b) Relation of the parties or events
to the forum
(2) Proceeding in rem
(a) State power over the property
found within the territory
ii. The Judgment Must Be Valid Under the Laws
of the Court that Rendered It
iii. The Judgment Must be Final and Executory
to Constitute Res Judicata in Another Action
UP LAW BOC PRIVATE INTERNATIONAL LAW CIVIL LAW

 The foreign judgment creates no

obligation on the forum court to
recognize or enforce it if it is merely
interlocutory or provisional,
contemplating a fuller investigation
leading to a later final decision.

iv. The State Where the Foreign Judgment was

Obtained Allows Recognition or Enforcement of
Philippine Judgments
 Reiteration of international comity

v. The Judgment Must be for a Fixed Sum of

Money
 Unless the foreign judgment specifies
performance or delivery, there is
nothing for the forum court to enforce.

vi. The Foreign Judgment Must Not be Contrary

to the Public Policy or Good Morals of the
Country Where it is to be Enforced

vii. The Judgment Must Not Have Been

Obtained by Fraud, Collusion, Mistake of Fact
or Mistake of Law

A.5. PROCEDURE FOR ENFORCEMENT

When a foreign judgment is recognized, it is
not instantaneously executed as a judgment.

A petition should be filed in the proper court

attaching an authenticated copy of the foreign
judgment to be enforced.
 Authentication calls for the
Philippine consul assigned to the
country where the foreign judgment
was decreed to certify that had
been rendered by a court of
competent jurisdiction.

578