CIVIL LAW REVIEWER

I. Effect and Application of Laws New Civil Code

A. When law takes effect

GENERAL RULE:

Laws take effect 15 days following the completion of its publication in the Official
Gazette, or in a newspaper of general circulation.

EXCEPTION:

Unless it is otherwise provided.1

B. Ignorance of the Law

Ignorance of the law excuses no one from compliance therewith2.

C. Retroactivity of Laws

Laws shall have no retroactive effect, unless the contrary is provided.3

1
Art. 2
This refers to the 15 day period and NOT to the requirement of publication. (Tanada vs. Tuvera)
Administrative rules and regulations must also be published if their purpose is to enforce or implement
existing laws pursuant to a valid delegation. The publication must be in full since its purpose is to inform
the public of the contents of the law. (Phil. Intl Trading Corp. vs. Angeles)
Publication must be in full or it is no publication at all since its purpose is to inform the public of the
contents of the laws.
2
Art. 3
Considered a conclusive presumption and applies only to mandatory and prohibitory laws. (Consunji vs.
CA)
What Laws Covered.--Philippine laws are covered. There is no conclusive presumption of knowledge of
foreign laws. Even our courts cannot take judicial notice of them. Ignorance of a foreign law will not be
a mistake of law but a mistake of fact.
Mistake of Fact.--Ignorance may either be of law or of fact. Ignorance of fact (ignorantiafacti) may
excuse a party from the legal consequences of his conduct; but not ignorance of law, for
ignorantiajurisneminemexcusat.
Difficult Question 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, e.g., Art. 526, par. 3 which provides: "Mistake upon a
doubtful or difficult question of law may be the basis of good faith."
3
Art. 4
Exceptions:
1.Unless the law otherwise provides

1
 D. Mandatory or Prohibitory Laws

GENERAL RULE:

Acts which are contrary to mandatory or prohibitory laws are void.4

EXCEPTIONS:

1. When the law itself authorized its validity5

2. When the law makes the act only voidable and not void6
3. When the law makes the act valid but punishes the violator7

E. Waiver of Rights

GENERAL RULE:

Rights may be waived.

EXCEPTIONS:

1. If the waiver is contrary to law, public order, public policy, morals, or good customs, or
2. prejudicial to a third person with a right recognized by law.

F. Repeal of Laws

Laws are repealed only by subsequent ones, either expressly or impliedly.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

2. Curative statutes
3. Interpretative statutes
4. Procedural/remedial
5. Emergency laws
6. Laws creating new rights
7. Tax laws
Exceptions to the exceptions:
1. Ex post facto laws
2. Laws that impair obligation of contracts
4
Art. 5
5
ex. lotto, sweepstakes
6
ex. voidable contracts where consent is vitiated)
7
ex. marriage solemnized by a person without legal authority)

2
 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.8

G. Judicial Decisions

Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines.9

H. Duty to Render Judgment

No judge or court shall decline to render judgment by reason of the silence,

obscurity or insufficiency of laws.10

8
Art. 7
General v. special law:
If the general law was enacted prior to the special law, the latter is considered the exception to the
general law.
If the general law was enacted after the special law, the latter remains unless:
There is an express declaration to the contrary.
There is a clear, necessary and irreconcilable conflict.
The subsequent general law covers the whole subject and is clearly intended to replace the special law
on the matter.
If the general law treats a particular matter in specific, while the special law treats such matter in
general, the former will prevail.
Lapse of laws: there are laws which, without any repeal, cease to have effect because they lapse by
their own terms. A law may expressly provide that it shall be effective only for a fixed period.
Repeal of repealing law: The law first repealed shall not be revived unless so expressly provided.
But if the prior law was repealed, not expressly but by implication, the repeal of the repealing law will
revive the prior law, unless the language of the last law provides otherwise.
Implied repeals: not favored.
Requisites: the laws cover the same subject matter and the latter is repugnant to the earlier.
9
Art. 8
Only Supreme Court decisions establish jurisprudence; decisions of other judicial or quasi-judicial
bodies are merely persuasive.
This principle, however, does not mean blind adherence. The duty of the Court is to abandon any
doctrine found to be in violation of the law in force.
10
Art. 9
This article does not apply to criminal prosecutions, bec. when there is no law punishing an act, the
case must be dismissed, however, reprehensible the act may seem to the judge (Tolentino).
If the law is vague or obscure, the court should clarify it in the light of the rules of statutory
construction; it is silent or insufficient, the court should fill the deficiency by resorting to customs or
general principles of law.

3
 I. Presumption and Applicability of Custom11

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

lawmaking body intended right and justice to prevail.12

Customs which are contrary to law, public order or public policy shall not be
countenanced.13

A custom must be proved as a fact, according to the rules of evidence.14

J. Legal Periods

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 included15

11
the juridical rule w/c results from a constant and continued uniform practice by the members of a social
community, w/ respect to a particular state of facts, and observed w/ a conviction that it is juridically
obligatory
12
Art. 10
13
Art. 11
14
Art. 12
Custom is defined as "a rule of conduct formed by repetition of acts, uniformly observed (practiced) as a
social rule, legally binding and obligatory." The law requires that "a custom must be proved as a fact,
according to the rules of evidence." On this score the Court had occasion to state that "a local custom as a
source of right can not be considered by a court of justice unless such custom is properly established by
competent evidence like any other fact." The same evidence, if not one of a higher degree, should be
required of a foreign custom
15
Art. 13
superseded by Sec. 31, Book I of EO 292 (Administrative Code of 1987) w/c provides that
Sec. 31.Legal Periods.-- "Year" shall be understood to be twelve (12) calendar months; "months" of
thirty (30) 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 (24) hours; and
"nights," from sunset to sunrise.
This article applies only to legal provisions and not to contracts, where the parties may stipulate on the
manner of computing years, months and days (Baviera).

4
 K. Applicability of Penal Laws

Penal laws and those of public security and safety shall be obligatory upon all who
live or sojourn in Philippine territory, subject to the principles of public international law
and to treaty stipulations.16

L. Conflict of Laws

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.17

Real property as well as personal property is subject to the law of the country
where it is situated.18

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.19

The forms and solemnities of contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are executed.20

16
Art. 14
17
Art. 15
Theories on Personal Law.--
Domiciliary theory, followed in the US, according to w/c the personal laws of a person are determined
by his domicile.
Nationality theory w/c makes nationality or citizenship as the basis for determining the personal laws
of an individual. (Tolentino)
The question of how a citizen may strip himself of the status as such citizen is governed by his
national law.
18
Art. 16, 1st par.
The lexsitusor lexreisitae governs real or personal property
19
Ibid., 2nd par.
The second par. of this article can be invoked only when the deceased was vested w/ a descendible
interest in prop. w/in the jurisdiction of the Phils.
The intrinsic validity of the provisions of the will of a foreigner who dies in the Phils.is to be determined
by the laws of his own state or country, and not by those of the Phils. Thus, a condition in a will of a
foreigner that his legatee respect his order that his prop.be distributed according to the laws of the Phils.
instead of the laws of his own country, was held illegal and considered as not written.
The law governing succession may be considered from the point of view of (a) the execution of wills,
and (b) the distribution of property. The formalities of execution of will are generally governed by the
law of the place of execution (Art. 17, par. 1.) But the distribution of the estate is governed by the law of
the nation of the deceased.
20
Art. 17, 1st par.,known as the lex loci celebrationis

5
 When the acts referred to are executed before the diplomatic or consular officials
of the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution.21

Prohibitive laws concerning persons, their acts or property, and those which have
for their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions agreed
upon in a foreign country.22

In matters which are governed by the Code of Commerce and special laws, their
deficiency shall be supplied by the provisions of this Code.23

Relative to Divorce

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 likewise have capacity to remarry under Philippine
law.24

II. Human Relations New Civil Code

A. Relative to breach of promise to marry25

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.26

21
Ibid, 2nd par.
22
Ibid, 3rd par.
23
Art. 18
24
Art. 26 (2nd par.), FC
25
General rule: Breach of promise to marry by itself is not actionable.
Exception: In cases where there is another act independent of the breach of promise to marry which
gives rise to liability:
1. Cases where there was financial damage.
2. Social humiliation caused to one of the parties.
3. Where there was moral seduction.
Sexual intercourse is not by itself a basis for recovery; damages could only be awarded if the sexual
intercourse is not a product of voluntariness or mutual desire.
While a breach of promise to marry is not actionable, it has been held that to formally set a wedding
and go through and spend for all the wedding preparation and publicity, only to walk out of it when the
matrimony was about to be solemnized is a different matter. This palpably and unjustifiably contrary to
good customs for which the defendant must be held answerable for damages in accordance with Art. 21
of the Civil Code. (Wassmer vs. Velez)

6
 Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.27

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.28

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.29

PERSONS

I. Persons and Personality New Civil Code

A. Capacity to Act30

1. Civil Personality31

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.32

2. Restrictions on Capacity to Act

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.33

26
Art. 19
Principle of abuse of rights
27
Art. 20
28
Art. 21
29
Art. 22
30
Power to do act with legal effects
31
aptitude of being the subject, active or passive, of rights and obligations
32
Art. 37
Capacity may be (1) juridical capacity, and (2) capacity to act. The union of these 2 forms the full
civil capacity. Juridical capacity is synonymous to legal capacity and to personality. They all refer to the
aptitude for the holding and enjoyment of rights. On the other hand, capacity to act refers to the aptitude
for the exercise of rights, and is often referred to merely as "capacity."
33
Art. 38

7
 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 by 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, eighteen years of age or over, is qualified for all acts of civil life,
except in cases specified by law.34

3. Birth

Birth determines personality; but the conceived child shall be considered born for
all purposes that are favorable to it, provided it be born later with the conditions specified
in the following article.35

For civil purposes, the foetus is considered born if it is alive at the time it is
completely delivered from the mother's womb. However, if the foetus had an intrauterine
life of less than seven months, it is not deemed born if it dies within twenty-four hours
after its complete delivery from the maternal womb.36
4. Death

Civil personality is extinguished by death. The effect of death upon the rights and
obligations of the deceased is determined by law, by contract and by will.37

34
Art. 39
35
Art. 40
Personality from Birth.-- Birth means the removal of the foetus from the mother's womb.
Conceived Child.-- The personality of the conceived child has 2 characteristics: (1) it is essentially
limited, bec. it is only for purposes favorable to the child, and (2) it is provisional or conditional, bec. it
depends upon the child being born alive later, such that if it is not born alive, its personality disappears as
if it had never existed.
For civil personality to be acquired, one must be born.-- A foetus is born after it is completely
separated from the mother's womb w/c is produced by the cutting of the umbilical cord; after the
separation, the child now survives by itself.
36
Art. 41
Once birth occurs, personality for favorable purposes retroacts from the moment of conception.-- The
retroactivity rule is qualified-- only for purposes favorable to the child.
37
Art. 42.
Physical death and legal death are the same. (Balane)

8
 a. Compare Art. 43 with Rule 131, Sec. 3 (jj) presumption
of Survivorship

Under Art. 43:38

If there is a doubt, as between two or more persons who are called to succeed each
other, as to which of them died first, whoever alleges the death of one prior to the other,
shall prove the same; in the absence of proof, it is presumed that they died at the same time
and there shall be no transmission of rights from one to the other.
Under Rule 131, Sec. 3 (jj):39
Except for purposes of succession, when two persons perish in the same calamity,
such as wreck, battle, or conflagration, and it is not shown who died first, and there are no
particular circumstances from which it can be inferred, the survivorship is determined from
the probabilities resulting from the strength and the age of the sexes, according to the
following rules:

1. If both were under the age of fifteen years, the older is deemed to have survived;
2. If both were above the age sixty, the younger is deemed to have survived;
3. If one is under fifteen and the other above sixty, the former is deemed to have survived;
4. If both be over fifteen and under sixty, and the sex be different, the male is deemed to
have survived, if the sex be the same, the older;
5. If one be under fifteen or over sixty, and the other between those ages, the latter is
deemed to have survived.40

B. Domicile41 and residence42 of person

For the exercise of civil rights and the fulfillment of civil obligations, the domicile
of natural persons is the place of their habitual residence.43

38
Civil Code
39
Rules of Court
40
Sec. 3 (jj), Rule 131.
41
denotes a fixed permanent residence, which when absent, one has the intention of returning
There can only be one place of domicile
42
used to indicate a place of abode, whether permanent or temporary
There can be several places of residence
43
Art. 50.
Requisites of Domicile:
(1) physical presence;
(2) animusmanendi (intent to remain) (Gallego v. Vera, 73 P 453.)
Three kinds of Domicile:
(1) Domicile of Origin.-- Domicile of the parents of a person at the time he was born

9
 When the law creating or recognizing them, or any other provision does not fix the
domicile of juridical persons, the same shall be understood to be the place where their legal
representation is established or where they exercise their principal functions.44
II. Marriage Family Code45

A. Requisites

1. Nature of Marriage

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 Code46

2. Kinds of Requisites

Essential requisites:

(1) Legal capacity of the contracting parties who must be a male and a female; and
(2) Consent freely given in the presence of the solemnizing officer.47

Formal requisites:

(1) Authority of the solemnizing officer;

(2) A valid marriage license except in the cases provided for in Chapter 248 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.49

(2) Domicile of Choice.-- Domicile chosen by a person to change his original domicile. Aside from the
2 requisites mentioned above, a third requisite must be present in domincile of choice, animus non
revertendi (intention not to return to one's old domicile as his permanent place.)
(3) Domicile by Operation of Law.-- E.g., Art. 69, FC.
Domicile and Residence. Domicile is not the same as residence. Domicile is residence plus habituality.

Importance of Understanding Domicile.-- In case of revocation of wills (Art. 829), place of

performance of obligation (Art. 1251, par. 3), renvoi (Aznar v. Garcia.)
44
Art. 51.
45
Aug. 3, 1988
46
Art. 1
47
Art. 2
48
Marriages Exempted from License Requirement, see Reference
49
Art. 3

10
 3. Effect of absence of requisites

The absence of any of the essential or formal requisites shall render the marriage
void ab initio, except as stated in Article 35 (2).50

A defect in any of the essential requisites shall not affect the validity of the marriage
but the party or parties responsible for the irregularity shall be civilly, criminally and
administratively liable.51

4. Essential

a. Age52

Any male or female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 3853, may contract marriage.

5. Ceremony

No prescribed form or religious rite for the solemnization of the marriage is

required. It shall be necessary, however, for the contracting parties to appear personally
before the solemnizing officer and declare in the presence of not less than two witnesses of
legal age that they take each other as husband and wife. This declaration shall be contained
in the marriage certificate which shall be signed by the contracting parties and their
witnesses and attested by the solemnizing officer.54

In case of a marriage in articulo mortis, when the party at the point of death is unable
to sign the marriage certificate, it shall be sufficient for one of the witnesses to the marriage
to write the name of said party, which fact shall be attested by the solemnizing officer55

6. Formal

Marriage may be solemnized by:56

(1) Any incumbent member of the judiciary within the court's jurisdiction;
(2) Any priest, rabbi, imam, or minister of any church or religious sect duly authorized by
his church or religious sect and registered with the civil registrar general, acting within the
50
infra
51
Art. 4
52
Art. 5
53
See Reference
54
Art. 6
55
Art. 6
56
Art. 7

11
limits of the written authority granted by his church or religious sect and provided that at
least one of the contracting parties belongs to the solemnizing officer's church or religious
sect;
(3) Any ship captain or airplane chief only in the case mentioned in Article 31;57
(4) Any military commander of a unit to which a chaplain is assigned, in the absence of the
latter, during a military operation, likewise only in the cases mentioned in Article 32;58
(5) Any consul-general, consul or vice-consul in the case provided in Article 10.59
7. Solemnizing authority

The marriage shall be solemnized publicly in the chambers of the judge or in open
court, in the church, chapel or temple, or in the office the consul-general, consul or vice-
consul, as the case may be, and not elsewhere, except in cases of marriages contracted on
the point of death or in remote places in accordance with Article 2960 of this Code, or
where both of the parties request the solemnizing officer in writing in which case the
marriage may be solemnized at a house or place designated by them in a sworn statement
to that effect.61
Marriages between Filipino citizens abroad may be solemnized by a consul-general,
consul or vice-consul of the Republic of the Philippines. The issuance of the marriage
license and the duties of the local civil registrar and of the solemnizing officer with regard
to the celebration of marriage shall be performed by said consular official.62
a. Exceptions

Those solemnized by any person not legally authorized to perform marriages unless
such marriages were contracted with either or both parties believing in good faith that the
solemnizing officer had the legal authority to do so.63

8. License Required

A valid marriage license except in the cases provided for in Chapter 2 of this Title64

57
infra
58
ibid
59
ibid
60
See reference
61
Art. 8; for Art. 7, supra
62
Art. 10
63
Art. 35 (2)
64
Art. 3 (2)

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 A marriage license shall be issued by the local civil registrar of the city or
municipality where either contracting party habitually resides, except in marriages where no
license is required in accordance with Chapter 2 of this Title65

Where a marriage license is required, each of the contracting parties shall file
separately a sworn application for such license with the proper local civil registrar which
shall specify the following:

(1) Full name of the contracting party;

(2) Place of birth;
(3) Age and date of birth;
(4) Civil status;
(5) If previously married, how, when and where the previous marriage was dissolved or
annulled;
(6) Present residence and citizenship;
(7) Degree of relationship of the contracting parties;
(8) Full name, residence and citizenship of the father;
(9) Full name, residence and citizenship of the mother; and
(10) Full name, residence and citizenship of the guardian or person having charge, in case
the contracting party has neither father nor mother and is under the age of twenty-one
years.

The applicants, their parents or guardians shall not be required to exhibit their
residence certificates in any formality in connection with the securing of the marriage
license.66

The license shall be valid in any part of the Philippines for a period of one hundred
twenty days from the date of issue, and shall be deemed automatically cancelled at the
expiration of the said period if the contracting parties have not made use of it. The expiry
date shall be stamped in bold characters on the face of every license issued.67

a. Foreign National

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

65
Art. 9.
66
Art. 11
67
Art. 20

13
 Stateless persons or refugees from other countries shall, in lieu of the certificate of
legal capacity herein required, submit an affidavit stating the circumstances showing such
capacity to contract marriage.68

b. Exceptions

In case either or both of the contracting parties are at the point of death, the
marriage may be solemnized without necessity of a marriage license and shall remain valid
even if the ailing party subsequently survives.69
A marriage in articulo mortis between passengers or crew members may also be
solemnized by a ship captain or by an airplane pilot not only while the ship is at sea or the
plane is in flight, but also during stopovers at ports of call.70
A military commander of a unit, who is a commissioned officer, shall likewise have
authority to solemnize marriages in articulo mortis between persons within the zone of
military operation, whether members of the armed forces or civilians.71
No license shall be necessary for the marriage of a man and a woman who have
lived together as husband and wife for at least five years and without any legal impediment
to marry each other. The contracting parties shall state the foregoing facts in an affidavit
before any person authorized by law to administer oaths. The solemnizing officer shall also
state under oath that he ascertained the qualifications of the contracting parties are found
no legal impediment to the marriage72
9. Marriage Certificate

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

(1) The full name, sex and age of each contracting party;
(2) Their citizenship, religion and habitual residence;
(3) The date and precise time of the celebration of the marriage;
(4) That the proper marriage license has been issued according to law, except in marriage
provided for in Chapter 2 of this Title;
(5) That either or both of the contracting parties have secured the parental consent in
appropriate cases;
(6) That either or both of the contracting parties have complied with the legal requirement
regarding parental advice in appropriate cases; and

68
Art. 21
69
Art. 27
70
Art. 31
71
Art. 32
72
Art. 34

14
(7) That the parties have entered into marriage settlement, if any, attaching a copy thereof73

B. Effect of Marriage celebrated abroad and foreign divorce74

All marriages solemnized outside the Philippines, in accordance with the laws in
force in the country where they were solemnized, and valid there as such, shall also be valid
in this country, except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and
3875.

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.

C. Void and Voidable marriages

1. Void Marriages

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.76

Either of the former spouses may marry again after compliance with the
requirements of the immediately preceding Article; otherwise, the subsequent marriage
shall be null and void.77

a. Absence of Requisites

The following marriages shall be void from the beginning:

(1) Contracted by any party below eighteen years of age even with the consent of parents
or guardians;
(2) Solemnized by any person not legally authorized to perform marriages unless such
marriages were contracted with either or both parties believing in good faith that the
solemnizing officer had the legal authority to do so;
(3) Solemnized without license, except those covered by the preceding Chapter;78

73
Art. 22
74
Art. 26
75
infra
76
Art. 52
77
Art. 53
78
Marriages exempted from License Requirement

15
(4) Bigamous or polygamous marriages not failing under Article 41;79
(5) Contracted through mistake of one contracting party as to the identity of the other; and
(6) Subsequent marriages that are void under Article 53.80

b. Psychological incapacity

A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of marriage,
shall likewise be void even if such incapacity becomes manifest only after its
solemnization.81

c. Incestous marriages

Marriages between the following are incestuous and void from the beginning,
whether relationship between the parties be legitimate or illegitimate:

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

(2) Between brothers and sisters, whether of the full or half blood.82

The following marriages shall be void from the beginning for reasons of public
policy:

(1) Between collateral blood relatives whether legitimate or illegitimate, up to the fourth
civil degree;
(2) Between step-parents and step-children;
(3) Between parents-in-law and children-in-law;
(4) Between the adopting parent and the adopted child;
(5) Between the surviving spouse of the adopting parent and the adopted child;
(6) Between the surviving spouse of the adopted child and the adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other, killed that other
person's spouse, or his or her own spouse.83

2. Prescription

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

79
infra
80
Art. 35; Art. 53, infra
81
Art. 36
82
Art. 37
83
Art. 38

16
under Article 36, such action or defense shall prescribe in ten years after this Code shall
take effect.84

3. Subsequent marriages

The absolute nullity of a previous marriage may be invoked for purposes of

remarriage on the basis solely of a final judgment declaring such previous marriage void.85

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.86

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

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.87

The termination of the subsequent marriage referred to in the preceding Article

shall produce the following effects:

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

(2) The absolute community of property or the conjugal partnership, as the case may be,
shall be dissolved and liquidated, but if either spouse contracted said marriage in bad faith,
his or her share of the net profits of the community property or conjugal partnership

84
Art. 39
85
Art. 40
86
Art. 41
87
Art. 42

17
property shall be forfeited in favor of the common children or, if there are none, the
children of the guilty spouse by a previous marriage or in default of children, the innocent
spouse;

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

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

(5) The spouse who contracted the subsequent marriage in bad faith shall be disqualified to
inherit from the innocent spouse by testate and intestate succession88

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.89

4. Annullable marriages

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, they shall, 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. Such consent shall be 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 is executed instead, shall
be attached to said applications.90

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

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

88
Art. 43
89
Art. 44
90
Art. 14

18
(2) That either party was of unsound mind, unless such party after coming to reason, freely
cohabited with the other as husband and wife;

(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;

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

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

(6) That either party was afflicted with a sexually-transmissible disease found to be serious
and appears to be incurable.91
Any of the following circumstances shall constitute fraud referred to in Number 3
of the preceding Article:

(1) Non-disclosure of a previous conviction by final judgment of the other party of a crime
involving moral turpitude;
(2) Concealment by the wife of the fact that at the time of the marriage, she was pregnant
by a man other than her husband;
(3) Concealment of sexually transmissible disease, regardless of its nature, existing at the
time of the marriage; or
(4) Concealment of drug addiction, habitual alcoholism or homosexuality or lesbianism
existing at the time of the marriage.
No other misrepresentation or deceit as to character, health, rank, fortune or
chastity shall constitute such fraud as will give grounds for action for the annulment of
marriage92

5. Voidable marriages93

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

91
Art. 45
92
Art. 46
93
Arts. 45 & 46, see (4) Annullable marriages, supra

19
(1) For causes mentioned in number 1 of Article 45, by the party whose parent or guardian
did not give his or her consent, within five years after attaining the age of twenty-one, or by
the parent or guardian or person having legal charge of the minor, at any time before such
party has reached the age of twenty-one;
(2) For causes mentioned in number 2 of Article 45, by the same spouse, who had no
knowledge of the other's insanity; or by any relative or guardian or person having legal
charge of the insane, at any time before the death of either party, or by the insane spouse
during a lucid interval or after regaining sanity;
(3) For causes mentioned in number 3 of Articles 45, by the injured party, within five years
after the discovery of the fraud;
(4) For causes mentioned in number 4 of Article 45, by the injured party, within five years
from the time the force, intimidation or undue influence disappeared or ceased;
(5) For causes mentioned in number 5 and 6 of Article 45, by the injured party, within five
years after the marriage.94
6. Presence of prosecutor

In all cases of annulment or declaration of absolute nullity of marriage, the Court

shall order the prosecuting attorney or fiscal assigned to it to appear on behalf of the State
to take steps to prevent collusion between the parties and to take care that evidence is not
fabricated or suppressed.

In the cases referred to in the preceding paragraph, no judgment shall be based

upon a stipulation of facts or confession of judgment.95

7. Pendency of action

During the pendency of the action and in the absence of adequate provisions in a
written agreement between the spouses, the Court shall provide for the support of the
spouses and the custody and support of their common children. The Court shall give
paramount consideration to the moral and material welfare of said children and their
choice of the parent with whom they wish to remain as provided to in Title IX. It shall also
provide for appropriate visitation rights of the other parent96

94
Art. 47
95
Art. 48
96
Art. 49

20
 8. Effects of nullity

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by
Article 4497 shall also apply in the proper cases to marriages which are declared ab initio or
annulled by final judgment under Articles 40 and 45.98

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

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

In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.99

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

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

The delivery of the presumptive legitimes herein prescribed shall in no way

prejudice the ultimate successional rights of the children accruing upon the death of either
of both of the parents; but the value of the properties already received under the decree of
annulment or absolute nullity shall be considered as advances on their legitime100

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.101

97
supra
98
ibid
99
Art. 50; for Arts. 102 & 109, see Reference
100
Art. 51
101
Art. 52

21
 Either of the former spouses may marry again after compliance with the
requirements of the immediately preceding Article; otherwise, the subsequent marriage
shall be null and void.102

Children conceived or born before the judgment of annulment or absolute nullity

of the marriage under Article 36103 has become final and executory shall be considered
legitimate.

Children conceived or born of the subsequent marriage under Article 53 shall

likewise be legitimate.104

III. Legal Separation

A. Grounds

(1) Repeated physical violence or grossly abusive conduct directed against the petitioner, a
common child, or a child of the petitioner;
(2) Physical violence or moral pressure to compel the petitioner to change religious or
political affiliation;
(3) Attempt of respondent to corrupt or induce the petitioner, a common child, or a child
of the petitioner, to engage in prostitution, or connivance in such corruption or
inducement;
(4) Final judgment sentencing the respondent to imprisonment of more than six years,
even if pardoned;
(5) Drug addiction or habitual alcoholism of the respondent;
(6) Lesbianism or homosexuality of the respondent;
(7) Contracting by the respondent of a subsequent bigamous marriage, whether in the
Philippines or abroad;
(8) Sexual infidelity or perversion;
(9) Attempt by the respondent against the life of the petitioner; or
(10) Abandonment of petitioner by respondent without justifiable cause for more than one
year.

102
Art. 53
103
supra
104
Art. 54

22
 For purposes of this Article, the term "child" shall include a child by nature or by
adoption.105

B. Defenses

(1) Where the aggrieved party has condoned the offense or act complained of;
(2) Where the aggrieved party has consented to the commission of the offense or act
complained of;
(3) Where there is connivance between the parties in the commission of the offense or act
constituting the ground for legal separation;
(4) Where both parties have given ground for legal separation;
(5) Where there is collusion between the parties to obtain decree of legal separation; or
(6) Where the action is barred by prescription106

An action for legal separation shall be filed within five years from the time of the
occurrence of the cause.107

C. Cooling-off Period

An action for legal separation shall in no case be tried before six months shall have
elapsed since the filing of the petition108

D. Reconciliation efforts

No legal separation may be decreed unless the Court has taken steps toward the
reconciliation of the spouses and is fully satisfied, despite such efforts, that reconciliation is
highly improbable109

E. Confession of Judgment

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

confession of judgment.

105
Art. 55; see also R. A. 9262, Anti-Violence Against Women and Children
106
Art. 56
107
Art. 57
108
Art. 58
109
Art. 59

23
 In any case, the Court shall order the prosecuting attorney or fiscal assigned to it to
take steps to prevent collusion between the parties and to take care that the evidence is not
fabricated or suppressed.110

F. Effects of Filing Petition

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

The court, in the absence of a written agreement between the spouses, shall
designate either of them or a third person to administer the absolute community or
conjugal partnership property. The administrator appointed by the court shall have the
same powers and duties as those of a guardian under the Rules of Court.111

G. Effects of pendency

During the pendency of the action for legal separation, the provisions of Article 49
shall likewise apply to the support of the spouses and the custody and support of the
common children.112

H. Effects of legal separation

The decree of legal separation shall have the following effects:

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

(2) The absolute community or the conjugal partnership shall be dissolved and liquidated
but the offending spouse shall have no right to any share of the net profits earned by the
absolute community or the conjugal partnership, which shall be forfeited in accordance
with the provisions of Article 43(2);113

(3) The custody of the minor children shall be awarded to the innocent spouse, subject to
the provisions of Article 213114 of this Code; and

(4) The offending spouse shall be disqualified from inheriting from the innocent spouse by
intestate succession. Moreover, provisions in favor of the offending spouse made in the
will of the innocent spouse shall be revoked by operation of law.

110
Art. 60
111
Art. 61
112
Art. 62
113
supra
114
See Reference

24
 After the finality of the decree of legal separation, the innocent spouse may revoke
the donations made by him or by her in favor of the offending spouse, as well as the
designation of the latter as beneficiary in any insurance policy, even if such designation be
stipulated as irrevocable. The revocation of the donations shall be recorded in the registries
of property in the places where the properties are located. Alienations, liens and
encumbrances registered in good faith before the recording of the complaint for
revocation in the registries of property shall be respected. The revocation of or change in
the designation of the insurance beneficiary shall take effect upon written notification
thereof to the insured

The action to revoke the donation under this Article must be brought within five
years from the time the decree of legal separation become final.115

I. Reconciliation

If the spouses should reconcile, a corresponding joint manifestation under oath

duly signed by them shall be filed with the court in the same proceeding for legal
separation.116

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

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

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

The court's order containing the foregoing shall be recorded in the proper civil
registries.117

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

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

(2) Those to be retained as separated properties of each spouse; and
(3) The names of all their known creditors, their addresses and the amounts owing to each.

115
Art. 64
116
Art. 65
117
Art. 66

25
 The agreement of revival and the motion for its approval shall be filed with the
court in the same proceeding for legal separation, with copies of both furnished to the
creditors named therein. After due hearing, the court shall, in its order, take measure to
protect the interest of creditors and such order shall be recorded in the proper registries of
properties.

The recording of the ordering in the registries of property shall not prejudice any
creditor not listed or not notified, unless the debtor-spouse has sufficient separate
properties to satisfy the creditor's claim.118

IV. Rights and Obligations Between Husband and Wife

A. Essential Obligations

The husband and wife are obliged to live together, observe mutual love, respect
and fidelity, and render mutual help and support.119

B. Family domicile

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

The court may exempt one spouse from living with the other if the latter should
live abroad or there are other valid and compelling reasons for the exemption. However,
such exemption shall not apply if the same is not compatible with the solidarity of the
family120

C. Support

The spouses are jointly responsible for the support of the family. The expenses for
such support and other conjugal obligations shall be paid from the community property
and, in the absence thereof, from the income or fruits of their separate properties. In case
of insufficiency or absence of said income or fruits, such obligations shall be satisfied from
the separate properties121

118
Art. 67
119
Art. 68
120
Art. 69
121
Art. 70

26
 D. Management of household

The management of the household shall be the right and the duty of both spouses.
The expenses for such management shall be paid in accordance with the provisions of
Article 70.122

E. Effect of neglect of duty

When one of the spouses neglects his or her duties to the conjugal union or
commits acts which tend to bring danger, dishonor or injury to the other or to the family,
the aggrieved party may apply to the court for relief123

F. Exercise of profession

Either spouse may exercise any legitimate profession, occupation, business or

activity without the consent of the other. The latter may object only on valid, serious, and
moral grounds.

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

(1) The objection is proper, and

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

The foregoing provisions shall not prejudice the rights of creditors who acted in
good faith.124

V. Property Relations of the Spouses

A. Marriage Settlements

In order that any modification in the marriage settlements may be valid, it must be
made before the celebration of the marriage, subject to the provisions of Articles 66, 67,125
128, 135 and 136.126

The marriage settlements and any modification thereof shall be in writing, signed
by the parties and executed before the celebration of the marriage. They shall not prejudice

122
Art. 71
123
Art. 72
124
Art. 73
125
supra
126
Art. 76; see Reference for Arts. 128, 135-6

27
third persons unless they are registered in the local civil registry where the marriage
contract is recorded as well as in the proper registries of properties.127

A minor who according to law may contract marriage may also execute his or her
marriage settlements, but they shall be valid only if the persons designated in Article 14128
to give consent to the marriage are made parties to the agreement, subject to the provisions
of Title IX of this Code.129

For the validity of any marriage settlement executed by a person upon whom a
sentence of civil interdiction has been pronounced or who is subject to any other disability,
it shall be indispensable for the guardian appointed by a competent court to be made a
party thereto130

In the absence of a contrary stipulation in a marriage settlement, the property

relations of the spouses shall be governed by Philippine laws, regardless of the place of the
celebration of the marriage and their residence.131

This rule shall not apply:

(1) Where both spouses are aliens;

(2) With respect to the extrinsic validity of contracts affecting property not situated in the
Philippines and executed in the country where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in the Philippines but
affecting property situated in a foreign country whose laws require different formalities for
its extrinsic validity.

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

articles in consideration of a future marriage, including donations between the prospective
spouses made therein, shall be rendered void if the marriage does not take place. However,
stipulations that do not depend upon the celebration of the marriages shall be valid.132

127
Art. 77
128
The father, mother, surviving parent or guardian, or persons having legal charge of them, in the order
mentioned.
129
Art. 78
130
Art. 79
131
Art. 80
132
Art. 81

28
 B. Donations by Reason of Marriage

Donations by reason of marriage are those which are made before its celebration,
in consideration of the same, and in favor of one or both of the future spouses.133

These donations are governed by the rules on ordinary donations established in

Title III of Book III of the Civil Code, insofar as they are not modified by the following
articles134

A donation by reason of marriage may be revoked by the donor in the following

cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except donations
made in the marriage settlements, which shall be governed by Article 81;
(2) When the marriage takes place without the consent of the parents or guardian, as
required by law;
(3) When the marriage is annulled, and the donee acted in bad faith;
(4) Upon legal separation, the donee being the guilty spouse;
(5) If it is with a resolutory condition and the condition is complied with;
(6) When the donee has committed an act of ingratitude as specified by the provisions of
the Civil Code on donations in general135

Donations by reason of marriage shall remain valid, except that if the donee
contracted the marriage in bad faith, such donations made to said donee are revoked by
operation of law;136

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43137 and by
Article 44 shall also apply in the proper cases to marriages which are declared ab initio or
annulled by final judgment under Articles 40138 and 45139.

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

133
Art. 82
134
Art. 83
135
Art. 86
136
Art. 43 (3)
137
See (3) Subsequent marriages, supra
138
ibid
139
See (4) Annullable marriages, supra

29
 All creditors of the spouses as well as of the absolute community or the conjugal
partnership shall be notified of the proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.140

C. Void donations by the spouses

Every donation or grant of gratuitous advantage, direct or indirect, between the

spouses during the marriage shall be void, except moderate gifts which the spouses may
give each other on the occasion of any family rejoicing. The prohibition shall also apply to
persons living together as husband and wife without a valid marriage.141

D. Absolute Community of property

1. General Provisions

The future spouses may, in the marriage settlements, agree upon the regime of
absolute community, conjugal partnership of gains, complete separation of property, or any
other regime. In the absence of a marriage settlement, or when the regime agreed upon is
void, the system of absolute community of property as established in this Code shall
govern142

If the future spouses agree upon a regime other than the absolute community of
property, they cannot donate to each other in their marriage settlements more than one-
fifth of their present property. Any excess shall be considered void.143

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

succession and the formalities of wills.

Donations by reason of marriage of property subject to encumbrances shall be

valid. In case of foreclosure of the encumbrance and the property is sold for less than the
total amount of the obligation secured, the donee shall not be liable for the deficiency. If
the property is sold for more than the total amount of said obligation, the donee shall be
entitled to the excess.144

140
Art. 50; see Reference for Arts. 102 & 129
141
Art. 87
142
Art. 75
143
Art. 84
144
Art. 85

30
 The absolute community of property between spouses shall commence at the
precise moment that the marriage is celebrated. Any stipulation, express or implied, for the
commencement of the community regime at any other time shall be void.145
No waiver of rights, shares and effects of the absolute community of property
during the marriage can be made except in case of judicial separation of property.146

When the waiver takes place upon a judicial separation of property, or after the
marriage has been dissolved or annulled, the same shall appear in a public instrument and
shall be recorded as provided in Article 77147. The creditors of the spouse who made such
waiver may petition the court to rescind the waiver to the extent of the amount sufficient
to cover the amount of their credits.

The provisions on co-ownership shall apply to the absolute community of property

between the spouses in all matters not provided for in this Chapter.148

2. What constitutes Community Property

Unless otherwise provided in this Chapter or in the marriage settlements, the

community property shall consist of all the property owned by the spouses at the time of
the celebration of the marriage or acquired thereafter.149

The following shall be excluded from the community property:

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

(2) Property for personal and exclusive use of either spouse. However, jewelry shall form
part of the community property;

(3) Property acquired before the marriage by either spouse who has legitimate descendants
by a former marriage, and the fruits as well as the income, if any, of such property.150

Property acquired during the marriage is presumed to belong to the community,

unless it is proved that it is one of those excluded therefrom.151

145
Art. 88
146
Art. 89
147
See Reference
148
Art. 90
149
Art. 91
150
Art. 92
151
Art. 93

31
 3. Charges Upon and Obligations of the Community Property

The absolute community of property shall be liable for:

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

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

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

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

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

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

vocational course, or other activity for self-improvement;

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

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

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

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

32
 If the community property is insufficient to cover the foregoing liabilities, except
those falling under paragraph (9), the spouses shall be solidarily liable for the unpaid
balance with their separate properties.152

Whatever may be lost during the marriage in any game of chance, betting,
sweepstakes, or any other kind of gambling, whether permitted or prohibited by law, shall
be borne by the loser and shall not be charged to the community but any winnings
therefrom shall form part of the community property.153

4. Ownership, Administration, Enjoyment and Disposition of the

Community Property

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

In the event that one spouse is incapacitated or otherwise unable to participate in

the administration of the common properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.154

Either spouse may dispose by will of his or her interest in the community
property.155

Neither spouse may donate any community property without the consent of the
other. However, either spouse may, without the consent of the other, make moderate
donations from the community property for charity or on occasions of family rejoicing or
family distress.156

152
Art. 94
153
Art. 95
154
Art. 96
155
Art. 97
156
Art. 98

33
 5. Dissolution of Community Regime

The absolute community terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Article 134 to
138.157

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

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

(2) When the consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be obtained in a summary proceeding;
(3) In the absence of sufficient community property, the separate property of both spouses
shall be solidarily liable for the support of the family. The spouse present shall, upon
proper petition in a summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use the fruits or proceeds
thereof to satisfy the latter's share.158

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

The obligations to the family mentioned in the preceding paragraph refer to

marital, parental or property relations.

A spouse is deemed to have abandoned the other when her or she has left the
conjugal dwelling without intention of returning. The spouse who has left the conjugal
dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling.159

157
Art. 99; see Reference for Arts. 134-138
158
Art. 100
159
Art. 101

34
 6. Liquidation of the Absolute Community Assets and Liabilities

Upon dissolution of the absolute community regime, the following procedure shall
apply:

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

(2) The debts and obligations of the absolute community shall be paid out of its assets. In
case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid
balance with their separate properties in accordance with the provisions of the second
paragraph of Article 94.160

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

(4) The net remainder of the properties of the absolute community shall constitute its net
assets, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements, or unless there has
been a voluntary waiver of such share provided in this Code. For purpose of computing
the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No.
(2),161 the said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market value at
the time of its dissolution.

(5) The presumptive legitimes of the common children shall be delivered upon partition, in
accordance with Article 51.162

(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the
conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse with
whom the majority of the common children choose to remain. Children below the age of
seven years are deemed to have chosen the mother, unless the court has decided otherwise.
In case there in no such majority, the court shall decide, taking into consideration the best
interests of said children.163

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

160
supra
161
ibid
162
ibid
163
Art. 102

35
 If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate
the community property either judicially or extra-judicially within six months from the
death of the deceased spouse. If upon the lapse of the six months period, no liquidation is
made, any disposition or encumbrance involving the community property of the
terminated marriage shall be void.

Should the surviving spouse contract a subsequent marriage without compliance

with the foregoing requirements, a mandatory regime of complete separation of property
shall govern the property relations of the subsequent marriage.164

Whenever the liquidation of the community properties of two or more marriages

contracted by the same person before the effectivity of this Code is carried out
simultaneously, the respective capital, fruits and income of each community shall be
determined upon such proof as may be considered according to the rules of evidence. In
case of doubt as to which community the existing properties belong, the same shall be
divided between the different communities in proportion to the capital and duration of
each.165

E. Conjugal Partnership of Gains

1. General Provision

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

The provisions of this Chapter shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of this Code, without prejudice
to vested rights already acquired in accordance with the Civil Code or other laws, as
provided in Article 256.166

Under the regime of conjugal partnership of gains, the husband and wife place in a
common fund the proceeds, products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts or by chance, and, upon
dissolution of the marriage or of the partnership, the net gains or benefits obtained by
either or both spouses shall be divided equally between them, unless otherwise agreed in
the marriage settlements.167

164
Art. 103
165
Art. 104
166
Art. 105; see Reference for Art. 256
167
Art. 106

36
 The rules provided in Articles 88 and 89168 shall also apply to conjugal partnership
of gains.169

The conjugal partnership shall be governed by the rules on the contract of

partnership in all that is not in conflict with what is expressly determined in this Chapter or
by the spouses in their marriage settlements.170

2. Exclusive Property of Each Spouse

The following shall be the exclusive property of each spouse:

(1) That which is brought to the marriage as his or her own;

(2) That which each acquires during the marriage by gratuitous title;

(3) That which is acquired by right of redemption, by barter or by exchange with property
belonging to only one of the spouses; and

(4) That which is purchased with exclusive money of the wife or of the husband171

The spouses retain the ownership, possession, administration and enjoyment of

their exclusive properties.

Either spouse may, during the marriage, transfer the administration of his or her
exclusive property to the other by means of a public instrument, which shall be recorded in
the registry of property of the place the property is located.172

A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or

her exclusive property, without the consent of the other spouse, and appear alone in court
to litigate with regard to the same.173

The alienation of any exclusive property of a spouse administered by the other

automatically terminates the administration over such property and the proceeds of the
alienation shall be turned over to the owner-spouse.174

168
supra
169
Art. 107
170
Art. 108
171
Art. 109
172
Art. 110
173
Art. 111
174
Art. 112

37
 Property donated or left by will to the spouses, jointly and with designation of
determinate shares, shall pertain to the donee-spouses as his or her own exclusive property,
and in the absence of designation, share and share alike, without prejudice to the right of
accretion when proper.175

If the donations are onerous, the amount of the charges shall be borne by the
exclusive property of the donee spouse, whenever they have been advanced by the conjugal
partnership of gains.176

Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits

shall be governed by the rules on gratuitous or onerous acquisitions as may be proper in
each case.177

3. Conjugal Partnership Property

All property acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved.178

The following are conjugal partnership properties:

(1) Those acquired by onerous title during the marriage at the expense of the common
fund, whether the acquisition be for the partnership, or for only one of the spouses;

(2) Those obtained from the labor, industry, work or profession of either or both of the
spouses;

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

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

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

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

175
Art. 113
176
Art. 114
177
Art. 115
178
Art. 116

38
(7) Those which are acquired by chance, such as winnings from gambling or betting.
However, losses therefrom shall be borne exclusively by the loser-spouse.179

Property bought on installments paid partly from exclusive funds of either or both
spouses and partly from conjugal funds belongs to the buyer or buyers if full ownership
was vested before the marriage and to the conjugal partnership if such ownership was
vested during the marriage. In either case, any amount advanced by the partnership or by
either or both spouses shall be reimbursed by the owner or owners upon liquidation of the
partnership.180

Whenever an amount or credit payable within a period of time belongs to one of

the spouses, the sums which may be collected during the marriage in partial payments or by
installments on the principal shall be the exclusive property of the spouse. However,
interests falling due during the marriage on the principal shall belong to the conjugal
partnership.181

The ownership of improvements, whether for utility or adornment, made on the

separate property of the spouses at the expense of the partnership or through the acts or
efforts of either or both spouses shall pertain to the conjugal partnership, or to the original
owner-spouse, subject to the following rules:

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

In either case, the ownership of the entire property shall be vested upon the
reimbursement, which shall be made at the time of the liquidation of the conjugal
partnership.

4. Charges upon and obligations of the CPG

The conjugal partnership shall be liable for:

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

179
Art. 117
180
Art. 118
181
Art. 119

39
(2) All debts and obligations contracted during the marriage by the designated
administrator-spouse for the benefit of the conjugal partnership of gains, or by both
spouses or by one of them with the consent of the other;

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

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

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

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

or other activity for self-improvement;

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

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

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

If the conjugal partnership is insufficient to cover the foregoing liabilities, the

spouses shall be solidarily liable for the unpaid balance with their separate properties.182

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

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

However, the payment of personal debts contracted by either spouse before the
marriage, that of fines and indemnities imposed upon them, as well as the support of
illegitimate children of either spouse, may be enforced against the partnership assets after
the responsibilities enumerated in the preceding Article have been covered, if the spouse
who is bound should have no exclusive property or if it should be insufficient; but at the

182
Art. 121

40
time of the liquidation of the partnership, such spouse shall be charged for what has been
paid for the purpose above-mentioned.183

Whatever may be lost during the marriage in any game of chance or in betting,
sweepstakes, or any other kind of gambling whether permitted or prohibited by law, shall
be borne by the loser and shall not be charged to the conjugal partnership but any winnings
therefrom shall form part of the conjugal partnership property.184

5. Administration of the CPG

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

In the event that one spouse is incapacitated or otherwise unable to participate in

the administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.185

Neither spouse may donate any conjugal partnership property without the consent
of the other. However, either spouse may, without the consent of the other, make
moderate donations from the conjugal partnership property for charity or on occasions of
family rejoicing or family distress.186

6. Dissolution of CPG Regime

The conjugal partnership terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134 to
138.187

183
Art. 122
184
Art. 123
185
Art. 124
186
Art. 125
187
Art. 126

41
 The separation in fact between husband and wife shall not affect the regime of
conjugal partnership, except that:

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

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

(3) In the absence of sufficient conjugal partnership property, the separate property of both
spouses shall be solidarily liable for the support of the family. The spouse present shall,
upon petition in a summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use the fruits or proceeds
thereof to satisfy the latter's share.188

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

The obligations to the family mentioned in the preceding paragraph refer to

marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or she has left the
conjugal dwelling without intention of returning. The spouse who has left the conjugal
dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling.189

7. Liquidation of the Conjugal Partnership Assets and Liabilities

Upon the dissolution of the conjugal partnership regime, the following procedure
shall apply:

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

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

188
Art. 127
189
Art. 128

42
(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the
acquisition of property or for the value of his or her exclusive property, the ownership of
which has been vested by law in the conjugal partnership.

(4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.190

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

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

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

(8) The presumptive legitimes of the common children shall be delivered upon the
partition in accordance with Article 51.191

(9) In the partition of the properties, the conjugal dwelling and the lot on which it is
situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse
with whom the majority of the common children choose to remain. Children below the age
of seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide, taking into
consideration the best interests of said children.192

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

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate

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

190
supra
191
ibid
192
Art. 129

43
 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.193

Whenever the liquidation of the conjugal partnership properties of two or more

marriages contracted by the same person before the effectivity of this Code is carried out
simultaneously, the respective capital, fruits and income of each partnership shall be
determined upon such proof as may be considered according to the rules of evidence. In
case of doubt as to which partnership the existing properties belong, the same shall be
divided between the different partnerships in proportion to the capital and duration of
each.194

The Rules of Court on the administration of estates of deceased persons shall be

observed in the appraisal and sale of property of the conjugal partnership, and other
matters which are not expressly determined in this Chapter.195

From the common mass of property support shall be given to the surviving spouse
and to the children during the liquidation of the inventoried property and until what
belongs to them is delivered; but from this shall be deducted that amount received for
support which exceeds the fruits or rents pertaining to them.196

F. Separation of Property of the Spouses and Administration of

Common Property by One Spouse During the Marriage

In the absence of an express declaration in the marriage settlements, the separation

of property between spouses during the marriage shall not take place except by judicial
order. Such judicial separation of property may either be voluntary or for sufficient
cause.197

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

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

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

193
Art. 130.
194
Art. 131
195
Art. 132
196
Art. 133
197
Art. 134

44
(3) That loss of parental authority of the spouse of petitioner has been decreed by the
court;

(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his
or her obligations to the family as provided for in Article 101;198

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

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

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final
judgment against the guilty or absent spouse shall be enough basis for the grant of the
decree of judicial separation of property.199

The spouses may jointly file a verified petition with the court for the voluntary
dissolution of the absolute community or the conjugal partnership of gains, and for the
separation of their common properties.

All creditors of the absolute community or of the conjugal partnership of gains, as

well as the personal creditors of the spouse, shall be listed in the petition and notified of
the filing thereof. The court shall take measures to protect the creditors and other persons
with pecuniary interest.200

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

During the pendency of the proceedings for separation of property, the absolute
community or the conjugal partnership shall pay for the support of the spouses and their
children.201

After dissolution of the absolute community or of the conjugal partnership, the

provisions on complete separation of property shall apply.202

The petition for separation of property and the final judgment granting the same
shall be recorded in the proper local civil registries and registries of property.203

198
supra
199
Art. 135
200
Art. 136
201
Art. 137
202
Art. 138
203
Art. 139

45
 The separation of property shall not prejudice the rights previously acquired by
creditors.204

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

(1) When the civil interdiction terminates;

(2) When the absentee spouse reappears;

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

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

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

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

(7) When after voluntary dissolution of the absolute community of property or conjugal
partnership has been judicially decreed upon the joint petition of the spouses, they agree to
the revival of the former property regime. No voluntary separation of property may
thereafter be granted.

The revival of the former property regime shall be governed by Article 67.205

The administration of all classes of exclusive property of either spouse may be

transferred by the court to the other spouse:

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

(2) When one spouse is judicially declared an absentee;
(3) When one spouse is sentenced to a penalty which carries with it civil interdiction; or
(4) When one spouse becomes a fugitive from justice or is in hiding as an accused in a
criminal case.

If the other spouse is not qualified by reason of incompetence, conflict of interest,

or any other just cause, the court shall appoint a suitable person to be the administrator.206
204
Art. 140
205
Art. 141.

46
 G. Regime of Separation of Property

Should the future spouses agree in the marriage settlements that their property
relations during marriage shall be governed by the regime of separation of property, the
provisions of this Chapter shall be suppletory.207

Separation of property may refer to present or future property or both. It may be

total or partial. In the latter case, the property not agreed upon as separate shall pertain to
the absolute community.208

Each spouse shall own, dispose of, possess, administer and enjoy his or her own
separate estate, without need of the consent of the other. To each spouse shall belong all
earnings from his or her profession, business or industry and all fruits, natural, industrial or
civil, due or received during the marriage from his or her separate property.209

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

The liabilities of the spouses to creditors for family expenses shall, however, be
solidary.210

H. Property Regime of Unions Without Marriage

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

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

206
Art. 142.
207
Art. 143
208
Art. 144
209
Art. 145
210
Art. 146

47
 Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent of the
other, until after the termination of their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common children.
In case of default of or waiver by any or all of the common children or their descendants,
each vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall
take place upon termination of the cohabitation.211

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.212

VI. The Family

A. The Family as an Institution

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.213

Family relations include those:

(1) Between husband and wife;

(2) Between parents and children;

211
Art. 147
212
Art. 148
213
Art. 149.

48
(3) Among brothers and sisters, whether of the full or half-blood.214

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

This rules shall not apply to cases which may not be the subject of compromise
under the Civil Code.215

B. The Family Home

The family home, constituted jointly by the husband and the wife or by an
unmarried head of a family, is the dwelling house where they and their family reside, and
the land on which it is situated.216

The family home is deemed constituted on a house and lot from the time it is
occupied as a family residence. From the time of its constitution and so long as any of its
beneficiaries actually resides therein, the family home continues to be such and is exempt
from execution, forced sale or attachment except as hereinafter provided and to the extent
of the value allowed by law.217

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, whether the relationship be
legitimate or illegitimate, who are living in the family home and who depend upon the head
of the family for legal support.218

214
Art. 150
215
Art. 151
No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime (Art. 2035)
216
Art. 152
217
Art. 153
218
Art. 154.

49
 The family home shall be exempt from execution, forced sale or attachment except:

(1) For nonpayment of taxes;

(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after such constitution; and
(4) For debts due to laborers, mechanics, architects, builders, materialmen and others who
have rendered service or furnished material for the construction of the building.219

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

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

where ownership is reserved by the vendor only to guarantee payment of the purchase
price may be constituted as a family home.220

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

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

For purposes of this Article, urban areas are deemed to include chartered cities and
municipalities whose annual income at least equals that legally required for chartered cities.
All others are deemed to be rural areas.221

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.222

The family home shall continue despite the death of one or both spouses or of the
unmarried head of the family for a period of ten years or for as long as there is a minor
beneficiary, and the heirs cannot partition the same unless the court finds compelling

219
Art. 155
220
Art. 156
221
Art. 157
222
Art. 158

50
reasons therefor. This rule shall apply regardless of whoever owns the property or
constituted the family home.223

When a creditor whose claims is not among those mentioned in Article 155 224
obtains a judgment in his favor, and he has reasonable grounds to believe that the family
home is actually worth more than the maximum amount fixed in Article 157225, he may
apply to the court which rendered the judgment for an order directing the sale of the
property under execution. The court shall so order if it finds that the actual value of the
family home exceeds the maximum amount allowed by law as of the time of its
constitution. If the increased actual value exceeds the maximum allowed in Article 157 and
results from subsequent voluntary improvements introduced by the person or persons
constituting the family home, by the owner or owners of the property, or by any of the
beneficiaries, the same rule and procedure shall apply.

At the execution sale, no bid below the value allowed for a family home shall be
considered. The proceeds shall be applied first to the amount mentioned in Article 157,
and then to the liabilities under the judgment and the costs. The excess, if any, shall be
delivered to the judgment debtor.226

For 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 family home.227

The provisions in this Chapter shall also govern existing family residences insofar
as said provisions are applicable.228

VII. Paternity and Filiation

A. Legitimate Children

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

legitimate or illegitimate.229

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

223
Art. 159
224
supra
225
ibid
226
Art. 160
227
Art. 161
228
Art. 162
229
Art. 163

51
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.230

Children conceived and born outside a valid marriage are illegitimate, unless
otherwise provided in this Code.231

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

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

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

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

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

(2) That it is proved that for biological or other scientific reasons, the child could not have
been that of the husband, except in the instance provided in the second paragraph of
Article 164;232 or

(3) That in case of children conceived through artificial insemination, the written
authorization or ratification of either parent was obtained through mistake, fraud, violence,
intimidation, or undue influence.233

The child shall be considered legitimate although the mother may have declared
against its legitimacy or may have been sentenced as an adulteress.234

If the marriage is terminated and the mother contracted another marriage within
three hundred days after such termination of the former marriage, these rules shall govern
in the absence of proof to the contrary:
(1) A child born before one hundred eighty days after the solemnization of the subsequent
marriage is considered to have been conceived during the former marriage, provided it be

230
Art. 164
231
Art. 165
232
supra
233
Art. 166
234
Art. 167

52
born within three hundred days after the termination of the former marriage;

(2) A child born after one hundred eighty days following the celebration of the subsequent
marriage is considered to have been conceived during such marriage, even though it be
born within the three hundred days after the termination of the former marriage.235

The legitimacy or illegitimacy of a child born after three hundred days following the
termination of the marriage shall be proved by whoever alleges such legitimacy or
illegitimacy.236

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

If the husband or, in his default, all of his heirs do not reside at the place of birth as
defined in the first paragraph or where it was recorded, the period shall be two years if they
should reside in the Philippines; and three years if abroad. If the birth of the child has been
concealed from or was unknown to the husband or his heirs, the period shall be counted
from the discovery or knowledge of the birth of the child or of the fact of registration of
said birth, whichever is earlier.237

The heirs of the husband may impugn the filiation of the child within the period
prescribed in the preceding article only in the following cases:

(1) If the husband should died before the expiration of the period fixed for bringing his
action;
(2) If he should die after the filing of the complaint without having desisted therefrom; or
(3) If the child was born after the death of the husband.238

B. Proof of Filiation

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.

235
Art. 168
236
Art. 169.
237
Art. 170
238
Art. 171.

53
 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
(2) Any other means allowed by the Rules of Court and special laws.239

The action to claim legitimacy may be brought by the child during his or her
lifetime and shall be transmitted to the heirs should the child die during minority or in a
state of insanity. In these cases, the heirs shall have a period of five years within which to
institute the action.240

Legitimate children shall have the right:

(1) To bear the surnames of the father and the mother, in conformity with the provisions
of the Civil Code on Surnames;
(2) To receive support from their parents, their ascendants, and in proper cases, their
brothers and sisters, in conformity with the provisions of this Code on Support; and
(3) To be entitled to the legitimate and other successional rights granted to them by the
Civil Code.241

C. Illegitimate Children

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.242

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. However,
illegitimate children may use the surname of their father if their filiation has been expressly
recognized by the father through the record of birth appearing in the civil register, or when
an admission in a public document or private handwritten instrument is made by the
father. Provided, the father has the right to institute an action before the regular courts to
prove non-filiation during his lifetime. The legitime of each illegitimate child shall consist
of one-half of the legitime of a legitimate child.243

239
Art. 172
240
Art. 173
241
Art. 174
242
Art. 175
243
Art. 176, as amended by R.A. 9255

54
 D. Legitimated Children

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.244

Legitimation shall take place by a subsequent valid marriage between parents. The
annulment of a voidable marriage shall not affect the legitimation.245

Legitimated children shall enjoy the same rights as legitimate children.246

The effects of legitimation shall retroact to the time of the child's birth.247

The legitimation of children who died before the celebration of the marriage shall
benefit their descendants.248

Legitimation may be impugned only by those who are prejudiced in their rights,
within five years from the time their cause of action accrues.249

VIII. Adoption

A. Domestic Adoption Law250

1. Who can adopt

(a) Any Filipino citizen of legal age, in possession of full civil capacity and legal rights, of
good moral character, has not been convicted of any crime involving moral turpitude,
emotionally and psychologically capable of caring for children, at least sixteen (16) years
older than the adoptee, and who is in a position to support and care for his/her children in
keeping with the means of the family. The requirement of sixteen (16) year difference
between the age of the adopter and adoptee may be waived when the adopter is the
biological parent of the adoptee, or is the spouse of the adoptee's parent;

b) Any alien possessing the same qualifications as above stated for Filipino nationals:
Provided, That his/her country has diplomatic relations with the Republic of the
Philippines, that he/she has been living in the Philippines for at least three (3) continuous

244
Art. 177
245
Art. 178
246
Art. 179
247
Art. 180
248
Art. 181
249
Art. 182
250
RA 8552

55
years prior to the filing of the application for adoption and maintains such residence until
the adoption decree is entered, that he/she has been certified by his/her diplomatic or
consular office or any appropriate government agency that he/she has the legal capacity to
adopt in his/her country, and that his/her government allows the adoptee to enter his/her
country as his/her adopted son/daughter: Provided, Further, That the requirements on
residency and certification of the alien's qualification to adopt in his/her country may be
waived for the following:

(i) a former Filipino citizen who seeks to adopt a relative within the fourth (4th)
degree of consanguinity or affinity; or

(ii) one who seeks to adopt the legitimate son/daughter of his/her Filipino spouse;
or

(iii) one who is married to a Filipino citizen and seeks to adopt jointly with his/her
spouse a relative within the fourth (4th) degree of consanguinity or affinity of the
Filipino spouse; or

(c) The guardian with respect to the ward after the termination of the guardianship and
clearance of his/her financial accountabilities.

Husband and wife shall jointly adopt, except in the following cases:

(i) if one spouse seeks to adopt the legitimate son/daughter of the other; or

(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided,
However, that the other spouse has signified his/her consent thereto; or

(iii) if the spouses are legally separated from each other.

In case husband and wife jointly adopt, or one spouse adopts the illegitimate
son/daughter of the other, joint parental authority shall be exercised by the spouses.251

2. Who can be adopted

(a) Any person below eighteen (18) years of age who has been administratively or judicially
declared available for adoption;

(b) The legitimate son/daughter of one spouse by the other spouse;

251
Sec. 7

56
(c) An illegitimate son/daughter by a qualified adopter to improve his/her status to that of
legitimacy;

(d) A person of legal age if, prior to the adoption, said person has been consistently
considered and treated by the adopter(s) as his/her own child since minority;

(e) A child whose adoption has been previously rescinded; or

(f) A child whose biological or adoptive parent(s) has died: Provided, That no proceedings
shall be initiated within six (6) months from the time of death of said parent(s).

3. Rights of an adopted child

Except in cases where the biological parent is the spouse of the adopter, all legal
ties between the biological parent(s) and the adoptee shall be severed and the same shall
then be vested on the adopter(s).252

The adoptee shall be considered the legitimate son/daughter of the adopter(s) for
all intents and purposes and as such is entitled to all the rights and obligations provided by
law to legitimate sons/daughters born to them without discrimination of any kind. To this
end, the adoptee is entitled to love, guidance, and support in keeping with the means of the
family.253

In legal and intestate succession, the adopter(s) and the adoptee shall have
reciprocal rights of succession without distinction from legitimate filiation. However, if the
adoptee and his/her biological parent(s) had left a will, the law on testamentary succession
shall govern.

Adoption shall have the following effects:

(1) For civil purposes, the adopted shall be deemed to be a legitimate child of the
adopters and both shall acquire the reciprocal rights and obligations arising from the
relationship of parent and child, including the right of the adopted to use the surname of
the adopters;

(2) The parental authority of the parents by nature over the adopted shall terminate
and be vested in the adopters, except that if the adopter is the spouse of the parent by
nature of the adopted, parental authority over the adopted shall be exercised jointly by both
spouses; and

252
Sec. 16
253
Sec. 17

57
 (3) The adopted shall remain an intestate heir of his parents and other blood
relatives.254

Legal or intestate succession to the estate of the adopted shall be governed by the
following rules:

(1) Legitimate and illegitimate children and descendants and the surviving spouse
of the adopted shall inherit from the adopted, in accordance with the ordinary rules of legal
or intestate succession;

(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the
adopted concur with the adopter, they shall divide the entire estate, one-half to be inherited
by the parents or ascendants and the other half, by the adopters;

(3) When the surviving spouse or the illegitimate children of the adopted concur
with the adopters, they shall divide the entire estate in equal shares, one-half to be inherited
by the spouse or the illegitimate children of the adopted and the other half, by the
adopters.

(4) When the adopters concur with the illegitimate children and the surviving
spouse of the adopted, they shall divide the entire estate in equal shares, one-third to be
inherited by the illegitimate children, one-third by the surviving spouse, and one-third by
the adopters;

(5) When only the adopters survive, they shall inherit the entire estate; and

(6) When only collateral blood relatives of the adopted survive, then the ordinary
rules of legal or intestate succession shall apply.255

4. Rescission of adoption

Upon petition of the adoptee, with the assistance of the Department if a minor or
if over eighteen (18) years of age but is incapacitated, as guardian/counsel, the adoption
may be rescinded on any of the following grounds committed by the adopter(s): (a)
repeated physical and verbal maltreatment by the adopter(s) despite having undergone
counseling; (b) attempt on the life of the adoptee; (c) sexual assault or violence; or (d)
abandonment and failure to comply with parental obligations.
Adoption, being in the best interest of the child, shall not be subject to rescission
by the adopter(s). However, the adopter(s) may disinherit the adoptee for causes provided
in Article 919256 of the Civil Code.257

254
Art. 189, FC
255
Art. 190, ibid.

58
 If the petition is granted, the parental authority of the adoptee's biological parent(s),
if known, or the legal custody of the Department shall be restored if the adoptee is still a
minor or incapacitated. The reciprocal rights and obligations of the adopter(s) and the
adoptee to each other shall be extinguished.

The court shall order the Civil Registrar to cancel the amended certificate of birth
of the adoptee and restore his/her original birth certificate.

Succession rights shall revert to its status prior to adoption, but only as of the date
of judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be
respected.

All the foregoing effects of rescission of adoption shall be without prejudice to the
penalties imposable under the Penal Code if the criminal acts are properly proven.258

C. The Law on Inter- Country Adoption259

1. Who can Adopt

An alien or a Filipino citizen permanently residing abroad may file an application

for inter-country adoption of a Filipino child if he/she:

(a) is at least twenty-seven (27) years of age and at least sixteen (16) years older than the
child to be adopted, at the time of application unless the adopter is the parent by nature of
the child to be adopted or the spouse of such parent:

(b) if married, his/her spouse must jointly file for the adoption;

(c) has the capacity to act and assume all rights and responsibilities of parental authority
under his national laws, and has undergone the appropriate counseling from an accredited
counselor in his/her country;

(d) has not been convicted of a crime involving moral turpitude;

(e) is eligible to adopt under his/her national law;

(f) is in a position to provide the proper care and support and to give the necessary
moral values and example to all his children, including the child to be adopted;

256
See Reference
257
Sec. 19, R.A. 8552
258
Sec. 20, ibid.
259
RA 8043

59
 (g) agrees to uphold the basic rights of the child as embodied under Philippine laws, the
U.N. Convention on the Rights of the Child, and to abide by the rules and regulations
issued to implement the provisions of this Act;

(h) comes from a country with whom the Philippines has diplomatic relations and whose
government maintains a similarly authorized and accredited agency and that adoption is
allowed under his/her national laws; and

(i) possesses all the qualifications and none of the disqualifications provided herein and
in other applicable Philippine laws.260

2. Who can be adopted

Only a legally free child may be the subject of inter-country adoption. In order that
such child may be considered for placement, the following documents must be submitted
to the Board:

(a) Child study;

(b) Birth certificate/foundling certificate;
(c) Deed of voluntary commitment/decree of abandonment/death certificate of
parents;
(d) Medical evaluation /history;
(e) Psychological evaluation, as necessary; and
(f) Recent photo of the child.261

IX. Support

A. What it Compromises

Support compromises everything indispensable for sustenance, dwelling, clothing,

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

The education of the person entitled to be supported referred to in the preceding

paragraph shall include his schooling or training for some profession, trade or vocation,
even beyond the age of majority. Transportation shall include expenses in going to and
from school, or to and from place of work.262

260
Sec. 9
261
Sec. 8
262
Art. 194

60
 B. Who are Obliged

Subject to the provisions of the succeeding articles, the following are obliged to
support each other to the whole extent set forth in the preceding article:
(1) The spouses;
(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and illegitimate children
of the latter;
(4) Parents and their illegitimate children and the legitimate and illegitimate children
of the latter; and
(5) Legitimate brothers and sisters, whether of full or half-blood263

Brothers and sisters not legitimately related, whether of the full or half-blood, are
likewise bound to support each other to the full extent set forth in Article 194264, except
only when the need for support of the brother or sister, being of age, is due to a cause
imputable to the claimant's fault or negligence.265

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

brothers and sisters, whether legitimately or illegitimately related, only the separate property
of the person obliged to give support shall be answerable provided that in case the obligor
has no separate property, the absolute community or the conjugal partnership, if financially
capable, shall advance the support, which shall be deducted from the share of the spouse
obliged upon the liquidation of the absolute community or of the conjugal partnership.266
Whenever two or more persons are obliged to give support, the liability shall
devolve upon the following persons in the order herein provided:
(1) The spouse;
(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters.267

When the obligation to give support falls upon two or more persons, the payment
of the same shall be divided between them in proportion to the resources of each.
However, in case of urgent need and by special circumstances, the judge may order
only one of them to furnish the support provisionally, without prejudice to his right to
claim from the other obligors the share due from them.

263
Art. 195
264
supra
265
Art. 196
266
Art. 197
267
Art. 199

61
 When two or more recipients at the same time claim support from one and the
same person legally obliged to give it, should the latter not have sufficient means to satisfy
all claims, the order established in the preceding article shall be followed, unless the
concurrent obligees should be the spouse and a child subject to parental authority, in which
case the child shall be preferred.268
When, without the knowledge of the person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the same from the former, unless it appears
that he gave it without intention of being reimbursed.269
When the person obliged to support another unjustly refuses or fails to give
support when urgently needed by the latter, any third person may furnish support to the
needy individual, with right of reimbursement from the person obliged to give support.
This Article shall particularly apply when the father or mother of a child under the age of
majority unjustly refuses to support or fails to give support to the child when urgently
needed.270
In case of contractual support or that given by will, the excess in amount beyond
that required for legal support shall be subject to levy on attachment or execution.
Furthermore, contractual support shall be subject to adjustment whenever
modification is necessary due to changes of circumstances manifestly beyond the
contemplation of the parties.271

C. Support during marriage litigation

During the proceedings for legal separation or for annulment of marriage, and for
declaration of nullity of marriage, the spouses and their children shall be supported from
the properties of the absolute community or the conjugal partnership. After the final
judgment granting the petition, the obligation of mutual support between the spouses
ceases. However, in case of legal separation, the court may order that the guilty spouse
shall give support to the innocent one, specifying the terms of such order.272

268
Art. 200
269
Art. 206
270
Art. 207
271
Art. 208
272
Art. 198

62
 D. Amount

The amount of support, in the cases referred to in Articles 195 and 196273, shall be
in proportion to the resources or means of the giver and to the necessities of the
recipient.274

Support in the cases referred to in the preceding article shall be reduced or

increased proportionately, according to the reduction or increase of the necessities of the
recipient and the resources or means of the person obliged to furnish the same.275

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 except
from the date of judicial or extrajudicial demand.

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

Payment shall be made within the first five days of each corresponding month or
when the recipient dies, his heirs shall not be obliged to return what he has received in
advance.276

F. Options

The person obliged to give support shall have the option to fulfill the obligation
either by paying the allowance fixed, or by receiving and maintaining in the family dwelling
the person who has a right to receive support. The latter alternative cannot be availed of in
case there is a moral or legal obstacle thereto.277

G. Attachment

The right to receive support under this Title as well as any money or property
obtained as such support shall not be levied upon on attachment or execution.278

273
supra
274
Art. 201.
275
Art. 202
276
Art. 203
277
Art. 204
278
Art. 205

63
X. Parental Authority

A. General Provisions

Pursuant to the natural right and duty of parents over the person and property of
their unemancipated children, parental authority and responsibility shall include the caring
for and rearing them for civic consciousness and efficiency and the development of their
moral, mental and physical character and well-being.279

Parental authority and responsibility may not be renounced or transferred except in

the cases authorized by law.280

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

Children shall always observe respect and reverence towards their parents and are
obliged to obey them as long as the children are under parental authority.281

In case of absence or death of either parent, the parent present shall continue
exercising parental authority. The remarriage of the surviving parent shall not affect the
parental authority over the children, unless the court appoints another person to be the
guardian of the person or property of the children.282

In case of separation of the parents, parental authority shall be exercised by the

parent designated by the Court. The Court shall take into account all relevant
considerations, especially the choice of the child over seven years of age, unless the parent
chosen is unfit.283

In case of death, absence or unsuitability of the parents, substitute parental

authority shall be exercised by the surviving grandparent. In case several survive, the one
designated by the court, taking into account the same consideration mentioned in the
preceding article, shall exercise the authority.284

279
Art. 209
280
Art. 210
281
Art. 211
282
Art. 212
283
Art. 213.
284
Art. 214

64
 No descendant shall be compelled, in a criminal case, to testify against his parents
and grandparents, except when such testimony is indispensable in a crime against the
descendant or by one parent against the other.285

B. Substitute and Special Parental Authority

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;286

(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.287

In case of foundlings, abandoned neglected or abused children and other children

similarly situated, parental authority shall be entrusted in summary judicial proceedings to
heads of children's homes, orphanages and similar institutions duly accredited by the
proper government agency.288

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.289

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.

285
Art. 215
286
supra
287
Art. 216
288
Art. 217
289
Art. 218

65
 All other cases not covered by this and the preceding articles shall be governed by
the provisions of the Civil Code on quasi-delicts.290

C. Effect of Parental Authority upon the Persons of the Children

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

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

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

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

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

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

(6) To demand from them respect and obedience;

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

(8) To perform such other duties as are imposed by law upon parents and
guardians.291

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.292

290
Art. 219
291
Art. 220
292
Art. 221

66
 The courts may appoint a guardian of the child's property or a guardian ad litem
when the best interests of the child so requires.293

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

However, if in the same proceeding the court finds the petitioner at fault,
irrespective of the merits of the petition, or when the circumstances so warrant, the court
may also order the deprivation or suspension of parental authority or adopt such other
measures as it may deem just and proper.294

The measures referred to in the preceding article may include the commitment of
the child for not more than thirty days in entities or institutions engaged in child care or in
children's homes duly accredited by the proper government agency.
The parent exercising parental authority shall not interfere with the care of the
child whenever committed but shall provide for his support. Upon proper petition or at its
own instance, the court may terminate the commitment of the child whenever just and
proper.295

D. Effects of Parental Authority upon the Property of the Children

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

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

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

293
Art. 222
294
Art. 223
295
Art. 224

67
 The petition shall be docketed as a summary special proceeding in which all
incidents and issues regarding the performance of the obligations referred to in the second
paragraph of this Article shall be heard and resolved.

The ordinary rules on guardianship shall be merely suppletory except when the
child is under substitute parental authority, or the guardian is a stranger, or a parent has
remarried, in which case the ordinary rules on guardianship shall apply.296

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

The right of the parents over the fruits and income of the child's property shall be
limited primarily to the child's support and secondarily to the collective daily needs of the
family.297

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

to an unemancipated child, the net proceeds of such property shall belong to the owner.
The child shall be given a reasonable monthly allowance in an amount not less than that
which the owner would have paid if the administrator were a stranger, unless the owner,
grants the entire proceeds to the child. In any case, the proceeds thus give in whole or in
part shall not be charged to the child's legitime.298

E. Suspension or Termination of Parental Authority

Parental authority terminates permanently:

(1) Upon the death of the parents;

(2) Upon the death of the child; or
(3) Upon emancipation of the child.299

Unless subsequently revived by a final judgment, parental authority also terminates:

(1) Upon adoption of the child;

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

296
Art. 225
297
Art. 226
298
Art. 227
299
Art. 228

68
 (4) Upon final judgment of a competent court divesting the party concerned of
parental authority; or
(5) Upon judicial declaration of absence or incapacity of the person exercising
parental authority.300

Parental authority is suspended upon conviction of the parent or the person

exercising the same of a crime which carries with it the penalty of civil interdiction. The
authority is automatically reinstated upon service of the penalty or upon pardon or amnesty
of the offender.301

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

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

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

The grounds enumerated above are deemed to include cases which have resulted
from culpable negligence of the parent or the person exercising parental authority.
lawphi1.net

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

The suspension or deprivation may be revoked and the parental authority revived
in a case filed for the purpose or in the same proceeding if the court finds that the cause
therefor has ceased and will not be repeated.302

If the person exercising parental authority has subjected the child or allowed him to
be subjected to sexual abuse, such person shall be permanently deprived by the court of
such authority.303

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

In no case shall the school administrator, teacher of individual engaged in child care
exercising special parental authority inflict corporal punishment upon the child.304

300
Art. 229
301
Art. 230
302
Art. 231
303
Art. 232

69
XI. Emancipation

Emancipation takes place by the attainment of majority. Unless otherwise

provided, majority commences at the age of twenty-one years.

Emancipation also takes place:

(1) By the marriage of the minor; or

(2) By the recording in the Civil Register of an agreement in a public instrument

executed by the parent exercising parental authority and the minor at least eighteen years of
age. Such emancipation shall be irrevocable.305

Emancipation for any cause shall terminate parental authority over the person and
property of the child who shall then be qualified and responsible for all acts of civil life.306

XII. Summary Judicial Proceedings in the Family Law

Until modified by the Supreme Court, the procedural rules provided for in this
Title shall apply as regards separation in fact between husband and wife, abandonment by
one of the other, and incidents involving parental authority.307

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.308

Claims for damages by either spouse, except costs of the proceedings, may be
litigated only in a separate action.309

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

304
Art. 233
305
Art. 234, as amended by RA 6809
306
Art. 236
307
Art. 238
308
Art. 239
309
Art. 240

70
regional trial court or its equivalent sitting in the place where either of the spouses
resides.310

Upon the filing of the petition, the court shall notify the other spouse, whose
consent to the transaction is required, of said petition, ordering said spouse to show cause
why the petition should not be granted, on or before the date set in said notice for the
initial conference. The notice shall be accompanied by a copy of the petition and shall be
served at the last known address of the spouse concerned.311

A preliminary conference shall be conducted by the judge personally without the

parties being assisted by counsel. After the initial conference, if the court deems it useful,
the parties may be assisted by counsel at the succeeding conferences and hearings.312

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.313

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.314

If the petition is not resolved at the initial conference, said petition shall be decided
in a summary hearing on the basis of affidavits, documentary evidence or oral testimonies
at the sound discretion of the court. If testimony is needed, the court shall specify the
witnesses to be heard and the subject-matter of their testimonies, directing the parties to
present said witnesses.315

The judgment of the court shall be immediately final and executor.316

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.317

310
Art. 241
311
Art. 242
312
Art. 243.
313
Art. 244
314
Art. 245
315
Art. 246
316
Art. 247
317
Art. 248

71
 Petitions filed under Articles 223, 225 and 235318 of this Code involving parental
authority shall be verified.319

Such petitions shall be verified and filed in the proper court of the place where the
child resides.320

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.321

The rules in Chapter 2 hereof shall also govern summary proceedings under this
Chapter insofar as they are applicable.322

XIII. Final Provisions

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.323
XIV. Funeral

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 294.324 In case of
descendants of the same degree, or of brothers and sisters, the oldest shall be preferred. In
case of ascendants, the paternal shall have a better right.325

Every funeral shall be in keeping with the social position of the deceased.326

The funeral shall be in accordance with the expressed wishes of the deceased. In
the absence of such expression, his religious beliefs or affiliation shall determine the funeral
rites. In case of doubt, the form of the funeral shall be decided upon by the person obliged
to make arrangements for the same, after consulting the other members of the family.327

318
supra
319
Art. 249
320
Art. 250
321
Art. 251
322
Art. 252
323
Art. 255
324
See Reference
325
Art. 305
326
Art. 306
327
Art. 307

72
 No human remains shall be retained, interred, disposed of or exhumed without the
consent of the persons mentioned in articles 294 and 305.328

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.329

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.330

XV. Use of surnames331

Legitimate and legitimated children shall principally use the surname of the
father.332

An adopted child shall bear the surname of the adopter.333

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.334

Natural children by legal fiction shall principally employ the surname of the
335
father.

Illegitimate children referred to in article 287 shall bear the surname of the
mother.336

Children conceived before the decree annulling a voidable marriage shall principally
use the surname of the father.337

A married woman may use:

(1) Her maiden first name and surname and add her husband's surname, or
(2) Her maiden first name and her husband's surname or

328
Art. 308; Art. 305, supra
329
Art. 309
330
Art. 310
331
other articles repealed by Family Code
332
Art. 364
333
Art. 365
334
Art. 366
335
Art. 367
336
Art. 368
337
Art. 369

73
(3) Her husband's full name, but prefixing a word indicating that she is his wife, such as
"Mrs."338

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

(1) The court decrees otherwise, or

(2) She or the former husband is married again to another person.339

When legal separation has been granted, the wife shall continue using her name and
surname employed before the legal separation.340

A widow may use the deceased husband's surname as though he were still living, in
accordance with article 370.341

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.342

In case of identity of names and surnames between ascendants and descendants,

the word "Junior" can be used only by a son. Grandsons and other direct male descendants
shall either:

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

(2) Add the Roman numerals II, III, and so on.343

No person can change his name or surname without judicial authority.344

Usurpation of a name and surname may be the subject of an action for damages
and other relief.345

The unauthorized or unlawful use of another person's surname gives a right of

action to the latter.346

338
Art. 370
339
Art. 371
340
Art. 372
341
Art. 373
342
Art. 374
343
Art. 375
344
Art. 376, amended by R.A. 9048, infra
345
Art. 377
346
Art. 378

74
 The employment of pen names or stage names is permitted, provided it is done in
good faith and there is no injury to third persons. Pen names and stage names cannot be
usurped.347

Except as provided in the preceding article, no person shall use different names
and surnames.348

XVI. Absence

If there is a doubt, as between two or more persons who are called to succeed each
other, as to which of them died first, whoever alleges the death of one prior to the other,
shall prove the same; in the absence of proof, it is presumed that they died at the same time
and there shall be no transmission of rights from one to the other.349

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.350

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

A. Provisional measures in Case of Absence

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.351

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

347
Art. 379
348
Art. 380
349
Art. 43, NCC
350
Art. 41, FC
351
Art. 381

75
shall specify the powers, obligations and remuneration of his representative, regulating
them, according to the circumstances, by the rules concerning guardians.352

In the appointment of a representative, the spouse present shall be preferred when

there is no legal separation.353

If the absentee left no spouse, or if the spouse present is a minor, any competent
person may be appointed by the court.

B. Declaration of Absence

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.354

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.355

The judicial declaration of absence shall not take effect until six months after its
publication in a newspaper of general circulation.356
An administrator of the absentee's property shall be appointed in accordance with
article 383.357

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.358

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;

352
Art. 382
353
Art. 383
354
Art. 384
355
Art. 385
356
Art. 386
357
Art. 387
358
Art. 388

76
(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.359

C. Administration of the Property of the Absentee

An administrator of the absentee's property shall be appointed in accordance with

article 383.360
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.361
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.362

D. Presumption of Death

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.363

The following shall be presumed dead for all purposes, including the division of the
estate among the heirs:

359
Art. 389
360
Art. 387
361
Art. 388
362
Art. 389
363
Art. 390

77
(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.364

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.365

XVII. Civil Registrar

Acts, events and judicial decrees concerning the civil status of persons shall be
recorded in the civil register.366

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.367

364
Art. 391
365
Art. 392
366
Art. 407
367
Art. 408

78
 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.368

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.369

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.370

No entry in a civil register shall be changed or corrected, without a judicial order.371

All other matters pertaining to the registration of civil status shall be governed by
special laws.372

A. RA 9048-clerical errors373

B. Rule 108, Rules of Court374

PROPERTY375

I. Characteristics

1. Utility for the satisfaction of moral and economic wants

2. Susceptibility of appropriation
3. Individuality or substantivity376

368
Art. 409
369
Art. 410
370
Art. 411
371
Art. 412
372
Art. 413
373
See Reference
374
ibid
375
All things which are, or may be the object of appropriation
376
that is, it can exist by itself, and not merely as a part of the whole; hence, the human hair becomes
property only when it is detached from the hair

79
II. Classification377

(1) Immovables or real378

a) By nature those which cannot be carried from place to place.379

i. Lands, buildings, roads and constructions (adhered to the soil).380

ii. Mines, quarries and slag dumps, while the matter thereof forms part of the bed, and
waters either running or stagnant.

b) By incorporation essentially movables but are attached to an immovable in a

fixed manner to be an integral part thereof.381

i. Trees, plants and growing fruits while they are attached to the land or form an
integral part of an immovable.
ii. 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.382
iii. Fertilizers actually used on a piece of land.

c) By destination essentially movables but are placed in an immovable as an added

utility.

i. Statutes, reliefs painting or other objects for use or ornamentation, placed in a

building or on lands, by the owner of the immovable in such a manner that it
reveals the intention to attach them permanently to the tenements.383
ii. Machinery, instruments or implements intended by the owner of the tenement for
an industry or works which may be carried on in a building or land, and which tend
directly to meet the needs of such industry or works.384

377
Tests:
a. Immovable - cannot be transferred from place to place.
b. Movable excluded from the enumeration of immovable and can be moved from place to place
without damage thereto.
c. Mixed/semi-movable - those which move by themselves (both immovable and movable in nature).
378
Art. 415
379
Pars. 1 & 8
380
The materials constituting a building which is the subject of demolition are movable.
A structure which is merely superimposed, not adhered, to the soil may be considered movable.
381
Pars. 2, 3 & 7
382
Rex vinta
383
Indirect utility
384
Direct utility

80
 iii. Animal houses or breeding places, in case the owner has placed or preserved them
with the intention to attach them permanently to the land, and the animals in these
places.
iv. Docks and structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, lake or coast.

d) By analogy - classified by express provision of law because it is regarded as united

to the immovable property.385

i. Contracts for public works.

ii. Servitudes.
iii. Real rights over immovable property.

(2) Movables386

i. General Rule: all things which can be transported from place to place without
impairment of the real property to which they are fixed.

ii. Exclusions: those movables susceptible of appropriation which are not included in
the enumeration of immovables.

iii. Special: real property which by any special provisions of law is considered as
personalty.

iv. In parts: forces of nature which are brought under control by science.

v. Obligations387and actions388which have for their object movables389or demandable

sums.390

vi. Shares of stocks or interests in juridical entities.

385
Par. 10
386
Art. 416 to 417
387
credits
388
replevin
389
corporeal or intangible
390
These are really personal rights because they have a definite passive subject (e.g. intellectual
property).

81
 A. Hidden Treasure391

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

When the discovery is made on the property of another, or of the State or any of its
subdivisions, and by chance, one-half thereof shall be allowed to the finder. If the finder is
a trespasser, he shall not be entitled to any share of the treasure.

If the things found be of interest to science or the arts, the State may acquire them
at their just price, which shall be divided in conformity with the rule stated.392
By treasure is understood, for legal purposes, any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful ownership of which does not
appear.393

B. Right of Accession

The ownership of property gives the right by accession to everything which is

produced thereby, or which is incorporated or attached thereto, either naturally or
artificially.394

1. Fruits

To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;
(3) The civil fruits.395

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

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

Civil fruits are the rents of buildings, the price of leases of lands and other property
and the amount of perpetual or life annuities or other similar income.396

391
Treasure consists of money, jewels, or other precious objects which are hidden and unknown, such
that their finding is a real discovery.
392
Art. 438
393
Art. 439
394
Art. 440
395
Art. 441

82
 He who receives the fruits has the obligation to pay the expenses made by a third
person in their production, gathering, and preservation.397
Only such as are manifest or born are considered as natural or industrial fruits.

With respect to animals, it is sufficient that they are in the womb of the mother,
although unborn.398

2. With respect to Immovable Property

a. Builder, planter, sower on land of another in concept of

owner

(1) Builder, planter, sower in good faith

The owner of the land on which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548399, or to oblige the one who
built or planted to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.400

In the cases of the two preceding articles401, the landowner is entitled to damages
from the builder, planter or sower.402

The builder, planter or sower in bad faith is entitled to reimbursement for the
necessary expenses of preservation of the land.403

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

396
Art. 442
397
Art. 443
398
Art. 444
399
See reference
400
Art. 448
401
Refers to Arts. 449 and 450, infra
402
Art. 451
403
Art. 452

83
 It is understood that there is bad faith on the part of the landowner whenever the
act was done with his knowledge and without opposition on his part.404

When the landowner acted in bad faith and the builder, planter or sower proceeded
in good faith, the provisions of article 447405 shall apply.406

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

This provision shall not apply if the owner makes use of the right granted by article
450. If the owner of the materials, plants or seeds has been paid by the builder, planter or
sower, the latter may demand from the landowner the value of the materials and labor.407

In the cases regulated in the preceding articles, good faith does not necessarily
exclude negligence, which gives right to damages under article 2176.408

(2) Builder, planter, sower in bad faith

He who builds, plants or sows in bad faith on the land of another, loses what is
built, planted or sown without right to indemnity.409
The owner of the land on which anything has been built, planted or sown in bad
faith may demand the demolition of the work, or that the planting or sowing be removed,
in order to replace things in their former condition at the expense of the person who built,
planted or sowed; or he may compel the builder or planter to pay the price of the land, and
the sower the proper rent.410
b. Usufructuary

The usufructuary may make on the property held in usufruct such useful
improvements or expenses for mere pleasure as he may deem proper, provided he does not
alter its form or substance; but he shall have no right to be indemnified therefor. He may,
however, remove such improvements, should it be possible to do so without damage to the
property.411

404
Art. 453
405
supra
406
Art. 454
407
Art. 455
408
Art. 456; see Reference for Art. 2176
409
Art. 449
410
Art. 450
411
Art. 579

84
 3. Lands adjoining river banks

a. Alluvion

To the owners of lands adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the waters.412

b. Change of course of river413

River beds which are abandoned through the natural change in the course of the
waters ipso facto belong to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands adjoining the old bed shall
have the right to acquire the same by paying the value thereof, which value shall not exceed
the value of the area occupied by the new bed.414
Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, this bed shall become of public dominion415
c. Avulsion

Whenever the current of a river, creek or torrent segregates from an estate on its
bank a known portion of land and transfers it to another estate, the owner of the land to
which the segregated portion belonged retains the ownership of it, provided that he
removes the same within two years416

Trees uprooted and carried away by the current of the waters belong to the owner
of the land upon which they may be cast, if the owners do not claim them within six
months. If such owners claim them, they shall pay the expenses incurred in gathering them
or putting them in a safe place.417

River beds which are abandoned through the natural change in the course of the
waters ipso facto belong to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands adjoining the old bed shall
have the right to acquire the same by paying the value thereof, which value shall not exceed
the value of the area occupied by the new bed.418

412
Art. 457
413
see also Water Code (PD 1067) in Reference
414
Art. 461
415
Art. 462
416
Art. 459
417
Art. 460
418
Art. 461

85
 Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, this bed shall become of public dominion.419

Whenever the current of a river divides itself into branches, leaving a piece of land
or part thereof isolated, the owner of the land retains his ownership. He also retains it if a
portion of land is separated from the estate by the current.420

4. Islands

Islands which may be formed on the seas within the jurisdiction of the Philippines,
on lakes, and on navigable or floatable rivers belong to the State.421

Islands which through successive accumulation of alluvial deposits are formed in

non-navigable and non-floatable rivers, belong to the owners of the margins or banks
nearest to each of them, or to the owners of both margins if the island is in the middle of
the river, in which case it shall be divided longitudinally in halves. If a single island thus
formed be more distant from one margin than from the other, the owner of the nearer
margin shall be the sole owner thereof.422

C. By Object

1. Real or immovable423

The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to the soil;

(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral
part of an immovable;

(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings
or on lands by the owner of the immovable in such a manner that it reveals the intention to
attach them permanently to the tenements;

419
Art. 462
420
Art. 463
421
Art. 464
422
Art. 465
423
See Classification

86
(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.

2. Personal or Movable424

The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation which are not included in the preceding
article;
(2) Real property which by any special provision of law is considered as personalty;
(3) Forces of nature which are brought under control by science; and
(4) In general, all things which can be transported from place to place without impairment
of the real property to which they are fixed.

The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and industrial entities, although they may
have real estate.

Movable property is either consumable or nonconsumable. To the first class belong

those movables which cannot be used in a manner appropriate to their nature without their
being consumed; to the second class belong all the others.

424
ibid

87
 D. By Owner

1. Of public dominion

It is not owned by the state but pertains to the state, which, as territorial sovereign
exercises certain juridical prerogatives over such property. The ownership of such
properties is in the social group, whether national, provincial or municipal.

a. For public use425

b. For public service426
c. For the development of the national wealth.

2. Of private ownership

a. Patrimonial property distinction between private

property of individual persons, and of State entities

Patrimonial property427

Property of the State owned by it in its private or proprietary capacity.

The state has the same rights over this kind of property as a private individual in
relation to his own private property

Property of private ownership

This refers to all property belonging to private persons either individually or

collectively and those belonging to the State and any of its political subdivisions which are
patrimonial in nature.

425
e.g. roads, canals, rivers
426
e.g. public buildings
427
Used by the political subdivision as a juridical person in its private capacity (e.g. property acquired
through escheat proceedings, tax sales). It is the property which the unit has the same rights, and of
which it may dispose, to the same extent as private individuals according to laws and regulations on the
procedure of exercising such rights. Hence, it is subject to the principles on private properties (e.g.
subject to prescription

88
 E. By Nature

1. Consumable/non-consumable vs. Fungible/non-fungible

Consumable428 cannot be used in a manner appropriate to their nature without

being consumed.

Non-consumable - not consumed by use.

Fungibles - belong to a common genus permitting substitution of the same kind,

quantity and quality;429

Non-fungibles specifically determined and cannot be substituted (e.g. 10 bottles

of wine which I have in my room).

III. Ownership

A. Rights in general430

1. Bundle of rights

a. Jus
utendi,431fruendi,432abutendi,433vindicandi,434disponendi435(possidendi)

(1) Actions to recover ownership and possession of

real property

(a) Distinctions between

accionreivindicatoria, accionpubliciana,
accioninterdictal

Accionreinvindicatoria436 - an action to recover real property based on ownership.

Here, the object is the recovery of the dominion over the property as owner.

428
Consumable goods cannot be the subject matter of a contract of commodatum unless the purpose of
the contract is not the consumption of the object as when it is merely for exhibition.
429
e.g. 10 bottles of wine
430
The right to enjoy, dispose, and recover a thing without further limitations than those established by
law or the will of the owner.
431
the right to use
432
the right to enjoy the fruits
433
the right to destroy (but cannot harm others)
434
The right of action available to the owner to recover the property against the holder or possessor
435
The right to dispose, or the right to alienate, encumber, transform

89
 Accionpubliciana437 - ordinary civil proceeding to recover the better right of
possession, except in cases of forcible entry and unlawful detainer. The involved is not
possession de facto but possession de jure.

Accioninterdictal438 - summary action to recover physical or material possession only.

It consists of the summary actions of:

1. Forcible entry - Action for recovery of material possession of real property when a
person originally in possession was deprived thereof by force, intimidation, strategy, threat
or stealth

2. Unlawful Detainer -Action for recovery of possession of any land or building by

landlord, vendor, vendee, or other person against whom the possession of the same was
unlawfully withheld after the expiration or termination of the right to hold possession, by
virtue of any contract.

436
This action should be filed in case of refusal of a party to deliver possession of property due to an
adverse claim of ownership.
Requisites:
1.Identity of the Property
2.Plaintiffs title to the property
437
plenary action
Whenever the owner is dispossessed by any other means (e.g. possession is due to tolerance of the owner)
other than FISTS, he may maintain this action to recover possession without waiting for the expiration of
1 year before commencing this suit. It may also be brought after the expiration of 1 year if no action had
been instituted for forcible entry or unlawful detainer
438
Period to file action: Within 1 year after such unlawful deprivation or withholding of possession,
commencing from the time of last demand (oral or written; direct or indirect) to vacate. No demand is
necessary for a lessee to vacate when it is specifically provided for in the agreement.
Prayer: for the restitution of possession, with damages and costs. However, the only damages that can
be recovered in an Ejectment suit are the fair rental value or the reasonable compensation for the use and
occupation of the real property. Other damages must be claimed in an ordinary action.
The defendant, however, may set up a counterclaim for moral damages and recover it if it is within the
jurisdiction of the court.
Jurisdiction: MTC (summary proceedings). Whatever the amount of plaintiffs damages will not affect
the courts jurisdiction.
Issue: Physical possession. The decision in such action is res judicata in the question of possession.
Sublessees are bound by the judgment rendered against the lessee in an ejectment case even if they were
not made parties thereto.

90
 (b) Distinction between forcible entry and
unlawful detainer439

Forcible Entry Unlawful

Detainer
As to when possession became unlawful
Possession of the Possession is
defendant is inceptively lawful
unlawful from the but becomes illegal
beginning as he from the time
acquires defendant
possession by unlawfully
Force, withholds
intimidation, possession after
strategy, threat the expiration or
or stealth termination of his
right thereto.
As to the necessity of demand
No previous Demand is
demand for the jurisdictional if the
defendant to ground is non-
vacate is payment of rentals
necessary or failure to
comply with the
lease contract

As to necessity of proof of prior

physical possession
Plaintiff must Plaintiff need not
prove that he was have been in prior
in prior physical physical possession
possession of the
premises until he
was deprived
thereof by the
defendant

439
See AccionInterdictal, supra
Ejectment suit:
a. Can be brought by anyone of the coowners.
A co-owner may bring such an action without the necessity of joining all the other co-owners as co-
plaintiffs because the suit is deemed to be instituted for the benefit of all.
However, if the action is for the benefit of the plaintiff alone, such that he claims the possession for
himself and not for the co-ownership, the action will NOT prosper.
b. Action may be brought not only against strangers but even against a coowner.
The effect of the action will be to obtain recognition of the co-ownership. The defendant cannot be
excluded because he has a right to possess as a co-owner, and the plaintiff cannot recover any material or
determinate part of the property.
c. An adverse decision in the action is not necessarily res judicata with respect to the other coowners
not being parties to the action, but they are bound where it appears that the action was instituted in their
behalf with their express or implied consent.

91
 As to when the 1 year period is counted
from
1 year period is 1 year period is
generally counted counted from the
from the date of date of last
actual entry on demand or last
the land letter of demand

(2) Actions for recovery of possession of movable

Property

Replevin - remedy when the complaint prays for the recovery of the possession of
personal property.

(3) Requisites for recovery of property proof of

right; identity; reliance on strength of own
evidence not weakness of defendants claim

1. Identity of the property.

2. Strength of plaintiffs title.440

Evidence to prove ownership: ownership may be proved by any evidence

admissible in law.

a. Torrens title.
b. Title from the Spanish Government.
c. Patent duly registered in the Registry of Property by the grantee.
d. Deed of sale.
e. Long possession.

2. Distinction between real and personal rights

Real Rights

1. no passive subject claim against whole world

2. object is corporeal thing441
3. creates juridical relations through mode & title
4. extinguished through loss or destruction of thing

440
proof of ownership
Tax declarations are not conclusive proof of ownership. However, when coupled with possession for a
period sufficient for prescription, they become strong evidence of ownership. Also, the failure of a person
to declare land for taxation may be admitted to show that he is not the owner thereof.
441
obligation

92
 Personal Rights

1. Passive and active subject

2. Object is an intangible thing442
3. Creates juridical relations through title
4. Not extinguished through loss or destruction of thing

Personal Real
1.jus ad rem, a 1.jus in re, a right
right enforceable enforceable
only against a against the whole
definite person or world
group of persons
2.right pertaining 2. right pertaining
to the person to to a person over a
demand from specific thing,
another, as a without a passive
definite passive subject individually
subject, the determined against
fulfillment of a whom such right
prestation to give, may be personally
to do or not to do. enforced

B. Modes of acquiring ownership

1. original, derivative

Modes of Titles of
acquiring acquiring
ownership ownership
A. Original Modes
1. Occupation 1. Condition of
being without
known owner
2. Work which 2. Creation,
includes discovery or
Intellectual invention
creation
B. Derivative modes
3. Law 3. Existence of
required
conditions
4. Tradition 4. Contract of the
parties
5. Donation 5. Contract of the
parties

442
specific thing

93
 6. Prescription 6. Possession in
the concept of
owner
7. Succession 7. Death

C. Limitations

1. General limitations443

Taxation:
The inherent power of the sovereign, exercised through the legislature, to impose
burdens upon the subjects and objects within its jurisdiction, for the purpose of raising
revenues to carry out the legitimate objects of the government.
Eminent domain:
No person shall be deprived of his property except by competent authority and
from public use and always upon payment of just compensation.
Should this requirement be not complied with, the courts shall protect and, in
proper cases, restore the owner in his possession.
Police power:
When any property is condemned or seized by competent authority in the interest
of health, safety or security, the owner thereof shall not be entitled to compensation, unless
he can show that such condemnation or seizure is unjustified.444
2. Specific Limitations

i. Those imposed by law such as legal easements and the requirement of legitime in
succession.

ii. The owner of a thing cannot make use thereof in such a manner as to injure the rights of
a 3rd person.445

443
For the benefit of the state
444
Requisites:
1 .The interest of the public in general, as distinguished from those of a particular class, requires such
interference.
2. The means employed are reasonably necessary for the accomplishment of a purpose, and not unduly
oppressive upon individuals.
445
sic uteretuo
This is based on the police power of the State.

94
iii. Nuisance446

iv. State of necessity law permits injury or destruction of things owned by another
provided this is necessary to avert a greater danger447

v. Easements voluntarily imposed by owner: servitudes, mortgages imposed by contract

IV. Accession448

A. Right to hidden treasure449

General rule:

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

Exceptions:

The finder is entitled to provided:

1. Discovery was made on the property of another, or of the state or any of its
political subdivisions;
2. The finding was made by chance;
3. The finder is not a co-owner of the property where it is found;
4. The finder is not a trespasser;
5. The finder is not an agent of the landowner;

It does not apply where the owner of a thing makes use of it in a lawful manner for then it cannot be
said that the manner of the use is such as to injure the rights of a third person.
446
infra
447
with right to indemnity vs. principle of unjust enrichment
Requisites:
1. The interference is necessary.
2. The damage to another is much greater than the damage to the property.
The seriousness or gravity of the danger must be much greater than the damage to the property affected
or destroyed by the protective act.
Danger to life is always greater than damage to property.
If through an error, one believed himself to be in a state of necessity, or used excessive means, his act
would be illicit, and the owner of the property can use the principle of self-help.
The law does not require that the person acting in a state of necessity be free from negligence in the
creation of the threatened danger
448
The right by virtue of which the owner of a thing becomes the owner of everything that it may produce
or which may be inseparably united or incorporated thereto, either naturally or artificially.
449
Hidden treasure - any hidden or unknown deposit of money, jewelry or other precious objects, the
lawful ownership of which does not appear.

95
6. The finder is not married under the absolute community or the conjugal
partnership system (otherwise his share belongs to the community).

B. General Rules:

1. Forimmovables:

a. Accession discretaand continua450

Accession Discreta -the right pertaining to the owner of a thing over everything
produced thereby

GENERAL RULE:

To the owner belongs the natural,451 industrial,452 and civil fruits.453

EXCEPTIONS:

If the thing is:

a) in possession of a possessor in good faith;

b) subject to a usufruct;
c) leased or pledged; or
d) in possession of an antichretic creditor

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.

Artificial/industrial

Building, planting or sowing

GENERAL RULE

Whatever is built, planted or sown on the land of another and the improvements or
repairs made thereon belong to the owner of the land.454

450
artificial/industrial and natural
451
spontaneous products of the soil and the young and other products of animals
452
those produced by lands of any kind through cultivation or labor
453
rents of buildings, price of leases or lands and the amount of perpetual or life annuities or other similar
income

96
 EXCEPTION: contrary is proven

Natural

Alluvion or alluvium increment which lands abutting rivers gradually receive as a

result of the current of the waters. It is the gradual deposit of sediment by the natural
action of a current of fresh water (not sea water, the original identity of the deposit being
lost.455

Avulsion - the accretion which takes place when the current of the river, creek or
torrent segregates from an estate on its bank a known portion and transfers it to another
estate, in which case, the owner of the estate to which the segregated portion belonged,
retains the ownership thereof.456

Estates adjoining ponds or lagoons

RULE:

The owners of estates adjoining ponds or lagoons do not acquire the land left dry
by the natural decrease of the waters, or loss that inundated by them in extraordinary
floods

Trees uprooted/by force of river

RULE:

Trees uprooted and carried away by the current of the waters belong to the owner
of the land upon which they may be case, if the owners do not claim them within 6
months. If such owners claim them, they shall pay the expenses incurred in gathering or
putting them in a safe place.457

Abandoned river bed/change in the course of river

454
The owner of the land must be known, otherwise no decision can be rendered on the ownership of the
thing planted, built or sown until a hearing shall have been accorded to whosoever is entitled thereto.
455
To the owners of the lands adjoining the banks of rivers belong the accretions which they gradually
receive from the effects of the current of the waters.
456
The owner of the estate to which the segregated portion belongs preserves his ownership of the
segregated portion provided he removes (not merely claims) the same within the period of 2 years.
Failure to do so would have the effect of automatically transferring ownership over it to the owner of the
other estate.
457
This rule refers to uprooted trees only. If a known portion of land with trees standing thereon is carried
away by the current to another land, the rule on avulsion governs.

97
 RULE:

River beds which are abandoned through the natural change in the course of waters
ipso facto belong to the owners whose lands are occupied by the new course in proportion
to the area lost.458

New river bed without abandonment

RULE:

Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, this bed shall become of public dominion.459

Branching of course of river

RULE:

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

RULES:

1. If formed on the seas within the jurisdiction of the Philippines, on lakes, or on

navigable or floatable rivers:460 the island belongs to the State as part of its patrimonial
property.

2. If formed in non navigable and non floatable rivers:

458
However, the owners of land adjoining the old bed are given preferential right to acquire the same by
paying the value thereof to promote the interest of agriculture because the riparian owners of the old
course/bed can better cultivate the same. The indemnification to be paid shall not exceed the value of the
area occupied by the new bed.
River beds are part of public domain. In this case, there is abandonment by the government of its right
over the old bed. The owner of the invaded land automatically acquires ownership of the same without
the necessity of any formal act on his part.
In proportion to the area lost implies that there are two or more owners whose lands are occupied by
the new bed. Therefore, if only one owner lost a portion of his land, the entire old bed should belong to
him.
459
The bed of a public river or stream is of public ownership. If the river changes its course and opens a
new bed, this bed becomes of public dominion even if it is on private property.
The law does not make any distinction whether the river is navigable or not.
460
one which in its natural state affords a channel for useful commerce and not such as is only sufficient
to float a banca or a canoe.

98
a. It belongs to the nearest riparian owner, or owner of the margin or bank nearest to it as
he is considered on the best position to cultivate and develop the island.

b. If the island is in the middle of the river, the island is divided longitudinally in halves. If
the island formed is longer than the property of the riparian owner, the latter is deemed
ipso jure to be the owner of that portion which corresponds to the length of that portion
of his property along the margin of the river.

c. If a single island be more distant from one margin than from the other, the owner of the
nearer margin shall be the sole owner thereof.

b. Accession industrial

Building, planting or sowing461

Avulsion462
Rivers463
Islands464

c. Accession natural465

Accretion - the act or the process by which a riparian land generally and
imperceptively receives addition made by the water to which the land is contiguous.

Avulsion466
Rivers467
Islands468

461
infra
462
ibid
463
ibid
464
ibid
465
accretion, avulsion, rivers, islands
466
ibid
467
ibid
468
ibid

99
 2. For movables:

a. Accession continua

Adjunction or conjunction469

It is the union of 2 movable things belonging to different owners in such a way that
they form a single object, but each one of the component things preserves its value.

Commixtion or confusion470

469
Rules:
1. Adjunction in good faith:
If the union took place without bad faith, the owner of the principal thing acquires the accessory, with
the obligation to indemnify the owner of the accessory for its value.
2. Adjunction in bad faith:
If the union took place in bad faith, the following rules shall apply:
a. Bad faith on the part of owner of accessory:
i. He shall lose the thing incorporated, and
ii. He shall be liable for damages to the owner of the principal thing, or the payment of the price,
including its sentimental value as appraised by experts.
iii. The principal may demand for the delivery of a thing equal in kind and value and in all other
respects to that of the principal thing, or the payment of the price, including its sentimental value as
appraised by experts.
b. Bad faith on the part of the owner of the principal:
The owner of the accessory thing is given the option either:
i. To require the owner of the principal thing to pay the value of the accessory thing, plus damages.
ii. To have the accessory thing separated even if it be necessary to destroy the principal thing, plus
damages.
iii. The accessory may demand for the delivery of a thing equal in kind and value and in all other
respects to that of the accessory thing, or the payment of the price, including its sentimental value as
appraised by experts.
c. Both parties in bad faith:
Their respective rights are to be determined as though both acted in good faith.
Sentimental value shall be duly appreciated
470
Rules:
1. Mixture by will of both the owners or by chance:
a. Their rights shall first be governed by their stipulations.
b. If the things mixed are of the same kind and quality, there is no conflict of rights, and the mixture
can easily be divided between the 2 owners.
c. If the things mixed are of different kind and quality, in the absence of a stipulation, each owner
acquires a right or interest in the mixture in proportion to the value of his material as in co-ownership.
2. Mixture caused by an owner in good faith or by chance:
a. Their rights shall first be governed by their stipulations.
b. If the things mixed are of the same kind and quality, there is no conflict of rights, and the mixture
can easily be divided between the 2 owners.
c. If the things mixed are of different kind and quality, in the absence of a stipulation, each owner
acquires a right or interest in the mixture in proportion to the value of his material as in co-ownership.
3. Mixture caused by an owner in bad faith:

100
 Takes place when two or more things belonging to different owners are mixed or
combined with the respective identities of the component parts destroyed or lost.

Specification471

Takes place whenever the work of a person is done on the material of another, and
such material, as a consequence of the work itself, undergoes a transformation

Adjunction Mixture Specification

1. Involves Involves at May involve
at least 2 least 2 one thing (or
things things more) but
form is
changed
2. Co- Accessory
Accessory ownership follows the
follows the results principal
principal

The owner in bad faith not only forfeits the thing belonging to him but also becomes liable to pay
indemnity for the damages caused to the other owner.
4. Mixture by both owners in bad faith:
There is bad faith when the mixture is made with the knowledge and without the objection of the other
owner. Accordingly, their respective rights shall be determined as though both acted in good faith.
471
Rules:
1. Worker and owner of the materials in good faith:
The worker becomes the owner of the work/transformed thing but he must indemnify the owner of the
material for its value.
Exception:
If the material is more precious or of more value than the work/transformed thing, the owner of the
material may choose:
a. To appropriate the new thing to himself but must pay for the value of the work or labor, or
b. To demand indemnity for the material.
2. Worker in bad faith but the owner of the material in good faith:
The owner of the material has the option either:
a. To appropriate the work to himself without paying the maker, OR
b. To demand the value of the material plus damages.
3. Owner of the materials in bad faith but the worker is in good faith:
The owner of the material is in bad faith when he does not object to the employment of his materials.
Accordingly, he shall lose his materials and shall have the obligation to indemnify the worker for the
damages he may have suffered
4. Both owners are in bad faith:
Their rights shall be determined as though both acted in good faith.

101
 3. Things Things The new
joined retain mixed or object retains
their nature confused or preserves
may either the nature of
retain or the original
lose their object.
respective
natures

b. Rules for determining the principal and accessory

Tests to determine the principal:472

Adjunction:

In the order of application, the principal is that:

a. To which the accessory has been united as an ornament or for its use or
perfection473.
b. Of greater value, if they are of unequal values.
c. Of greater volume, if they are of an equal value.
d. Of greater merits taking into consideration all the pertinent legal provisions
applicable as well as the comparative merits, utility and volume of their
respective things.

Mixture:

Strictly speaking, there is no accession in mixture since there is neither a principal

nor an accessory

Specification:

Labor is the principal.

472
In paintings and sculpture, writings, printed matter, engraving and lithographs, the board, metal stone,
canvas, paper or parchment shall be deemed the accessory thing.
473
rule of importance and purpose

102
V. Quieting of title474 to/interest in and removal/prevention of cloud over title
to/interest in real property

A. Requirements:

1. plaintiff must have a legal or equitable title to, or interest in the real property which is
the subject matter of the action;

2. there must be a cloud in such title;

3. such cloud must be due to some instrument, record, claim, encumbrance or proceeding
which is apparently valid but is in truth invalid, ineffective, voidable or unenforceable,
and is prejudicial to the plaintiffs title; and

4. plaintiff must return to the defendant all benefits he may have received from the latter,
or reimburse him for expenses that may have redounded to his benefit.

B. Distinction between quieting of title and removing/preventing a

cloud475

Action to quiet title, strictly considered, is substantially an action to put an end to

vexatious litigation in respect to the property involved.

An action to remove a cloud is intended to procure the cancellation, delivery of,

release of an instrument, encumbrance, or claim constituting a claim on plaintiffs title, and
which may be used to injure or vex him in the enjoyment of his title.

474
It is an equitable action in rem to determine the condition of the ownership or the rights to immovable
property, and remove doubts thereon.
The action to quiet title does not apply:
a) to questions involving interpretation of documents
b) to mere written or oral assertions of claims; EXCEPT:
i) if made in a legal proceeding
ii) if it is being asserted that the instrument or entry in plaintiffs favor is not what it purports to
be
c) to boundary disputes
d) to deeds by strangers to the title UNLESS purporting to convey the property of the plaintiff
e) to instruments invalid on their face
f) where the validity of the instrument involves pure questions of law
475
What is a cloud on title?
It is a semblance of title, either legal or equitable, or a claim or a right in real property, appearing in
some legal form which is, in fact, invalid or which would be inequitable to enforce

103
 In an action to quiet title, the plaintiff asserts his own estate and declares generally
that the defendant claims some estate in the land, without defining it, and avers that the
claim is without foundation.

In a suit to remove a cloud, plaintiff not only declares his own title, but also avers
the source and nature of defendants claim, points out its defect, and prays that it be
declared void.

In an action to prevent a cloud, relief is granted if the threatened or

anticipatedcloud is one which if it existed, would beremoved by suit to quiet title.

C. Prescription/non-prescription of action

1. plaintiff in possession imprescriptible

2. plaintiff not in possession 10 years476or 30 years477

VI. Co-ownership478

A. Characteristics of co-ownership

1. In general

a. Plurality of subjects.
b. Unity of object or material indivision.
c. Recognition of ideal or intellectual shares of co-owners which determine their rights
and obligations.

2. Special rules:

a. Concept of condominium

(1) Condominium corporation

An interest in real property consisting of a 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.

476
ordinary
477
extraordinary
478
the right of common dominion which two or more persons have in a spiritual part of a thing which is
not physically divided.
Co-ownership exists where the ownership of a thing physically undivided pertains to more than one
person.

104
 Any transfer or conveyance of a unit or an apartment, office or store or other space
therein, shall include transfer or conveyance of the undivided interest in the common areas
or, in a proper case, the membership or shareholdings in the condominium corporation:
provided, however, that where the common areas in the condominium project are held by
the owners of separate units as co-owners thereof, no condominium unit therein shall be
conveyed or transferred to persons other than Filipino citizens or corporations at least
60% of the capital stock of which belong to Filipino citizens, except in cases of hereditary
succession.

(2) Interest in real property479

(3) Concept of common areas, amendment

GENERAL RULE:

Common areas shall remain undivided, and there shall be no judicial partition thereof:

EXCEPTIONS:

1. When the project has not been rebuilt or repaired substantially to its state prior to its
damage or destruction 3 years after damage or destruction which rendered a material
part thereof unfit for use;
2. When damage or destruction has rendered or more of the units untenantable and
that the condominium owners holding more than 30% interest in the common areas
are opposed to restoration of the projects;
3. When the project has been in existence for more than 50 years, that it is obsolete and
uneconomic, and the condominium owners holding in aggregate more than 50%
interest in the common areas are opposed to restoration, remodeling or modernizing;
4. When the project or a material part thereof has been condemned or expropriated and
the project is no longer viable, or that the condominium owners holding in aggregate
more than 70% interest in the common areas are opposed to the continuation of the
condominium regime;
5. When conditions for partition by sale set forth in the declaration of restrictions duly
registered have been met.

479
See (1) Condominium Corporation, supra

105
 (4) Documents to consider

Master deed

An enabling or master deed shall contain, among others, the following:

(a) Description of the land on which the building or buildings and improvements are or are
to be located;

(b) Description of the building or buildings, stating the number of stories and basements,
the number of units and their accessories, if any;

(c) Description of the common areas and facilities;

(d) A statement of the exact nature of the interest acquired or to be acquired by the
purchaser in the separate units and in the common areas of the condominium project.
Where title to or the appurtenant interests in the common areas is or is to be held by a
condominium corporation, a statement to this effect shall be included;

(e) Statement of the purposes for which the building or buildings and each of the units are
intended or restricted as to use;

(f) A certificate of the registered owner of the property, if he is other than those executing
the master deed, as well as of all registered holders of any lien or encumbrance on the
property, that they consent to the registration of the deed;

(g) The following plans shall be appended to the deed as integral parts thereof:

(1) A survey plan of the land included in the project, unless a survey plan of the same
property had previously been filed in said office;

(2) A diagrammatic floor plan of the building or buildings in the project, in sufficient detail
to identify each unit, its relative location and approximate dimensions;

(h) Any reasonable restriction not contrary to law, morals or public policy regarding the
right of any condominium owner to alienate or dispose of his condominium.

The enabling or master deed may be amended or revoked upon registration of an

instrument executed by the registered owner or owners of the property and consented to
by all registered holders of any lien or encumbrance on the land or building or portion
thereof.480

480
Sec. 4, R.A. 4726

106
 Declaration of restrictions

The owner of a project shall, prior to the conveyance of any condominium therein,
register a declaration of restrictions relating to such project, which restrictions shall
constitute a lien upon each condominium in the project, and shall insure to and bind all
condominium owners in the project. Such liens, unless otherwise provided, may be
enforced by any condominium owner in the project or by the management body of such
project. The Register of Deeds shall enter and annotate the declaration of restrictions upon
the certificate of title covering the land included within the project, if the land is patented
or registered under the Land Registration or Cadastral Acts.

The declaration of restrictions shall provide for the management of the project by
anyone of the following management bodies: a condominium corporation, an association
of the condominium owners, a board of governors elected by condominium owners, or a
management agent elected by the owners or by the board named in the declaration. It shall
also provide for voting majorities quorums, notices, meeting date, and other rules
governing such body or bodies.481

Articles and by-laws

Any provision of the Corporation Law to the contrary notwithstanding, the by-laws
of a condominium corporation shall provide that a stockholder or member shall not be
entitled to demand payment of his shares or interest in those cases where such right is
granted under the Corporation Law unless he consents to sell his separate interest in the
project to the corporation or to any purchaser of the corporation's choice who shall also
buy from the corporation the dissenting member or stockholder's interest. In case of
disagreement as to price, the procedure set forth in the appropriate provision of the
Corporation Law for valuation of shares shall be followed. The corporation shall have two
years within which to pay for the shares or furnish a purchaser of its choice from the time
of award. All expenses incurred in the liquidation of the interest of the dissenting member
or stockholder shall be borne by him.482

b. Rights and obligations of condominium owner

(1) Contributions/Dues

For reasonable assessments to meet authorized expenditures, each condominium

unit to be assessed separately for its share of such expenses in proportion (unless otherwise
provided) to its owners fractional interest in any common areas.483

481
Sec. 9, ibid
482
Sec. 17, ibid
483
Sec. 9 (d), ibid

107
 (2) PD 957 and RA 6552

Under P.D. 957

A. Obligations and Rights of the Owner/ Developer

1) Mortgage of Subdivision Lot or Condominium Unit

a) Requirements:

Owner or developer must:

i. secure prior written approval from the Authority (HLURB);

ii. show that the proceeds of the mortgage loan inures to the development
of the condominium or subdivision project
iii. cause the determination of the loan value of each lot or unit covered by
the mortgage; and
iv. notify the buyer, if any.

b) Buyers Option: To pay the mortgage loan of his lot or unit to acquire title
thereof from the mortgage.484

2) Advertisementof the Subdivision or Condominium

a) Contents: The owner must advertise only:

i) real facts, and

ii) in a manner that does not mislead or deceive the public.485

b) Improvements, facilities, etc. stated in the advertisement

i) Nature: Constitutes sales warranties486

ii) Time of Completion:

(a) Sales On the Effectivity of this Decree:

Within one year from the issuance of the license of subdivision or condominium
project, or other period fixed by the Authority (HLURB).487

484
Sec. 18
485
Sec. 19
486
ibid
487
Sec. 20

108
 (b) Sales Prior to this Decree: Within two years from the effectivity of this
Decree, except:

(i) if extended by the Authority (HLURB),

(ii) if adequate performance bond in accordance with Sec. 6 of
this Decree is filed.488

3) Alteration of the Approved Subdivision Plan and/or of Representations in

Advertisement:

Requirements: The owner or developer must:

(a) secure approval of the Authority (HLURB), and

(b) written conformity or consent of the duly organized homeowners
association, or in its absence, by the majority of the lot buyers in the
subdivision.489

4) Non-Forfeiture of Payments by the Owner or Developer

a) If the failure of the subdivision or condominium buyer to pay installment is

caused by the failure of the owner or developer to develop the subdivision or
condominium according to the approved plan and within time limit, the buyer
shall be reimbursed with legal interest and amortization interest, but excluding
delinquency interest.490
b) If such failure is due to other causes, Republic Act No. 6552 which took effect
on August 26, 1976, but prior to such date, the buyer is entitled to refund based
on installments paid after the effectivity of the law in the absence of contrary
stipulation. 491

5) Issuance of Title to the Buyer by the Owner or Developer

a) Time: Upon the full payment of the lot or unit.

b) Chargeable Fee: The owner or developer can only charge from the buyer fee
for the registration of the Deed of Sale to the Register of Deeds.
c) If the lot or unit is mortgaged, the owner or developer should redeem the lot or
unit within six months from the issuance of the title.

488
Sec. 21
489
Sec. 22
490
Sec. 23
491
Sec. 24

109
 6) Payment of Realty Tax and Other Charges on the Subdivision or Condominium:

Rules on:

a) Real Taxes:

1) Paid by owner or developer unless title is passed to the buyer.

2) Buyer who actually occupied and possessed a lot or unit is liable for
taxes to the owner or developer from the year following such
occupation or possession.492

b) Other Charges:

1) It cannot be collected by the owner or developer.

2) It can be collected only by a properly organized homeowners
association with the consent of majority of lot or unit buyers actually
residing in the subdivision or condominium project.493

7) Access to Public Offices in the Subdivisions:

No owner or developer shall deny any person free access to
any government office or public establishment located
within the subdivision or which may be reached only by
passing through the subdivision.494

8) Right of Way to Public Road

It should be secured by the owner and developer of a
subdivision without access to any public road or street. Such
way must be developed and maintained in accordance with
the requirement set forth by the government.495

9) Organization of Homeowner Association

a) Formation: Initiated by the owner or developer.

b) Members: buyers and residents of the project
c) Purpose: for the promotion and protection of mutual interest of the buyers and
residents, and for the community development496

492
Sec. 26
493
Sec. 27
494
Sec. 28
495
Sec. 29
496
Sec. 30

110
 10) Mandatory Donations of Roads and Open Spaces to Local Government497

Under R.A. 6552

Where the buyer has paid at least two years of installments, the buyer is entitled to
the following rights in case he defaults in the payment of succeeding installments:

(a) To pay, without additional interest, the unpaid installments due within the total grace
period earned by him which is hereby fixed at the rate of one month grace period for every
one year of installment payments made: Provided, That this right shall be exercised by the
buyer only once in every five years of the life of the contract and its extensions, if any.

(b) If the contract is canceled, the seller shall refund to the buyer the cash surrender value
of the payments on the property equivalent to fifty per cent of the total payments made,
and, after five years of installments, an additional five per cent every year but not to exceed
ninety per cent of the total payments made: Provided, That the actual cancellation of the
contract shall take place after thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act and upon full
payment of the cash surrender value to the buyer. Down payments, deposits or options on
the contract shall be included in the computation of the total number of installment
payments made.498

In case where less than two years of installments were paid, the seller shall give the
buyer a grace period of not less than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the grace period, the seller
may cancel the contract after thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act.499

Under Section 3 and 4, the buyer shall have the right to sell his rights or assign the
same to another person or to reinstate the contract by updating the account during the
grace period and before actual cancellation of the contract. The deed of sale or assignment
shall be done by notarial act.500

The buyer shall have the right to pay in advance any installment or the full unpaid
balance of the purchase price any time without interest and to have such full payment of
the purchase price annotated in the certificate of title covering the property.501

497
P. D. No. 1216, amending Sec. 31 of this Decree
498
Sec. 3
499
Sec. 4
500
Sec. 5
501
Sec. 6

111
 Any stipulation in any contract hereafter entered into contrary to the provisions of
Sections 3, 4, 5 and 6, shall be null and void.502

c. Grounds for partition of common areas, or dissolution of

the condominium

1. Voluntary Dissolution503

Grounds:

i. Three (3) years after damage or destruction to the projects 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;

ii. Damage or destruction to the project has rendered one-half or more of its units
thereof untenantable and the owners holding in aggregate more than 30% interest
in common areas are opposed to repair or restoration of the project;

iii. The project has been in existence in excess of 50 years, that it is obsolete and
uneconomic, and that owners holding in aggregate more than 30% interest in
common areas are opposed to repair or restoration of the projects;

iv. The project or material part thereof has been condemned or expropriated and that
the project is no longer viable, or that the owners holding in aggregate more than
70% interest in common areas are opposed to the continuation of the
condominium regime;

v. Conditions for partition under the declaration of restrictions have been met.504

2. Involuntary Dissolution

Grounds: those provided for by law on corporations.505

B. Sources of co-ownership

a. The Law as in party walls, fences and in the legal conjugal partnership.

b. Contracts.

502
Sec. 7
503
Action for dissolution under Rule 104 of the Rules of Court.
504
Sec. 8, P.D. 4726
505
Sec. 12, ibid

112
c. Succession when a person dies intestate, leaving his properties undivided to several
heirs, who become co-owners of the inheritance.

d. Fortuitous event or chance as in cases of commixtion and confusion caused by

accident or chance, and of hidden treasure accidentally discovered by a stranger on the land
of another.

e. Occupancy when 2 persons catch a wild beast or gather forest products.

C. Rights of co-owners

1. Distinction between right to property owned in common and full

ownership over his/her ideal share

Rights of each co-owner as to the thing owned in common:

a) To use the thing owned in common506

b) To share in the benefits and charges in proportion to the interest of each.507
c) To the benefits of prescription: prescription by one co-owner benefits all.
d) Repairs and taxes: to compel the others to share in the expenses of preservation even if
incurred without prior notice.508
e) Alterations: to oppose alterations made without the consent of all, even if beneficial.509
f) To protest against seriously prejudicial decisions of the majority
g) Legal redemption: to be exercised within 30 days from written notice of sale of an
undivided share of another co-owner to a stranger
h) To defend the co-ownerships interest in court
i) To demand partition at any time

Rights as to the ideal share of each co-owner:

a) Each has full ownership of his part and of his share of the fruits and benefits
b) Right to substitute another person its enjoyment, except when personal rights are
involved

506
Limitations:
i. use according to the purpose for which it was intended
ii. interest of the co-ownership must not be prejudiced
iii. other co-owners must not be prevented from using it according to their own rights
507
Any stipulation to the contrary is void.
508
The co-owner being compelled may exempt himself from the payment of taxes and expenses by
renouncing his share equivalent to such taxes and expenses. The value of the property at the time of the
renunciation will be the basis of the portion to be renounced.
509
Alteration is an act by virtue of which a co-owner changes the thing from the state in which the others
believe it should remain, or withdraws it from the use to which they desire it to be intended.
Expenses to improve or embellish are decided by the majority

113
 c) Right to alienate, dispose or encumber
d) Right to renounce part of his interest to reimburse necessary expenses incurred by
another co-owner
e) Transactions entered into by each co-owner only affect his ideal share.

2. Right to oppose acts of alteration510

To oppose alterations made without the consent of all, even if beneficial.

3. Right to partition511

GENERAL RULE:

Partition is demandable by any of the co-owners as a matter of right at any time.

EXCEPTIONS:

i. When there is a stipulation against it; but not to exceed 10 years.

ii. When the condition of indivision is imposed by the donor or testator; but not to exceed
20 years.
iii. When the legal nature of the community prevents partition.
iv. When partition would render the thing unserviceable.
v. When partition is prohibited by law
vi. When another co-owner has possessed the property as exclusive owner for a period
sufficient to acquire it by prescription.

4. Right to contributions for expenses512

Each co-owner shall have a right to compel the other co-owners to contribute to
the expenses of preservation of the thing or right owned in common and to the taxes in
proportion to their interest therein.
510
Alteration is an act by virtue of which a co-owner changes the thing from the state in which the others
believe it should remain, or withdraws it from the use to which they desire it to be intended.
Expenses to improve or embellish are decided by the majority
511
The division between 2 or more persons of real or personal property which they own in common so
that each may enjoy and possess his sole estate to the exclusion of and without interference from others
512
necessary expenses, taxes
Expenses of preservation (necessary expenses) include all those which, if not made, would endanger
the existence of the thing or reduce its value or productivity. They do not imply an improvement or
increase.
There is no other remedy available against the co-owner who refuses to pay his share in the expenses of
preservation except an action to compel him to contribute such share.
Failure to contribute does not amount to a renunciation of any portion of share in the co-ownership.
The co-owner in default cannot be compelled to renounce his share therein. Renunciation is a voluntary
and free act.

114
 5. Waiver513

Any one of the co-owners may exempt himself from this obligation by renouncing
so much of his undivided interest as may be equivalent to his share of the expenses and
taxes.

6. Right to redemption of co-owners share

Legal redemption: to be exercised within 30 days from written notice of sale of an

undivided share of another co-owner to a stranger

D. Termination/extinguishment514

It has for its purpose the separation, division and assignment of the thing held in
common among those to whom it may belong; the thing itself may be divided, or its value.

After partition, the portion belonging to each co-owner has been identified and
localized, so that co-ownership, in its real sense, no longer exists.

1. Effects of partition

Partition shall not prejudice third persons who do not intervene in the partition

After partition, there should be mutual accounting of benefits, reimbursements,

payment of damages due to negligence or fraud, liability for defects of title and quality of
portion assigned to each.515

Part allotted to a co-owner at partition will be deemed to be possessed by such co-

owner from the time the co- ownership commenced.

513
No such waiver shall be made if it is prejudicial to the co-ownership
Rules on renunciation:
a.Total or partial.
b.Expressly made a tacit renunciation cannot produce any effect.
c.The renunciation is in reality a case of dacion en pago; the debt of the co-owner consisting of his share
in the expenses of preservation and taxes, is paid, not in money, but in an interest in property.
d.Since the renunciation refers to a portion equivalent in value to the share of the renouncing co-owner in
an existing debt, it is only logical that the other co-owners, who must should the debt of the renouncer in
exchange for the portion being renounced, should consent thereto.
e.Renunciation refers to existing debts and NOT to future expenses.
f.Renunciation is a free act; a co-owner may not be compelled to renounce.
g.However, waiver is not allowed if it is prejudicial to the coownership.
514
No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time
the partition of the thing owned in common.
515
See Art. 500

115
 Heir is exclusive owner of property adjudicated to him.

Co-owners reciprocally bound to each other for warranty of title and quality of part
given to each (hidden defect) after partition.

Obligation of warranty is proportionate to respective hereditary shares; insolvency

of one makes the others liable subject to reimbursement (joint liability).516

Each former co-owner is deemed to have had exclusive possession of the part
allotted to him for the entire period during which the co-possession lasted;

Partition confers upon each the exclusive title over his respective share.

2. Rights against individual co-owners in case of partition517

3. Partition in case co-owners cannot agree

If the co-owners cannot agree, the thing shall be sold and its proceeds distributed
to the co-owners.518

VII. Possession519

A. Characteristics

Possession is characterized by two (2) relations:

1. The possessors relation to the property itself; and

2. the possessors relation to the world.

516
Under Art. 1093
517
See Effects of 1. partition, supra
518
Art. 498
The sale of the property held in common referred to in the above article is resorted to when (1) the
right to partition the property among the co-owners is invoked by any of them but because of the nature
of the property, it cannot be subdivided or its subdivision [See Article 495 of the New Civil Code] would
prejudice the interests of the co-owners (See Section 5 of Rule 69 of the Revised Rules of Court) and (2)
the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property
upon reimbursement of the shares of the other co-owners (Marina Reyes, et al. vs. Hon. Alfredo
Concepcion, et al., G.R. No. 56550, Oct. 1, 1990
The sale may be public or private, and the purchaser may be a co-owner or a third person.
519
The holding of a thing or enjoyment of a right

116
 B. Acquisition of Possession

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

right, or by the fact that it is subject to the action of our will, or by the proper acts and legal
formalities established for acquiring such right.520

C. Effects of Possession

1. Possessor in Good Faith

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

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

Civil fruits are deemed to accrue daily and belong to the possessor in good faith in
that proportion.521

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

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

Mistake upon a doubtful or difficult question of law may be the basis of good
faith.522

Good faith is always presumed, and upon him who alleges bad faith on the part of
a possessor rests the burden of proof.523

a. Right to pending fruits

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

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

520
Art. 531
521
Art. 544
522
Art. 526
523
Art. 527

117
 The owner of the thing may, should he so desire, give the possessor in good faith
the right to finish the cultivation and gathering of the growing fruits, as an indemnity for
his part of the expenses of cultivation and the net proceeds; the possessor in good faith
who for any reason whatever should refuse to accept this concession, shall lose the right to
be indemnified in any other manner.524

b. Right to be reimbursed

(1) Necessary and useful expenses

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

Useful expenses shall be refunded only to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession having the
option of refunding the amount of the expenses or of paying the increase in value which
the thing may have acquired by reason thereof.525

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

(2) Expenses for pure luxury

Expenses for pure luxury or mere pleasure shall not be refunded to the possessor
in good faith; but he may remove the ornaments with which he has embellished the
principal thing if it suffers no injury thereby, and if his successor in the possession does not
prefer to refund the amount expended.526

2. Possessor in Bad Faith

He who builds, plants or sows in bad faith on the land of another, loses what is
built, planted or sown without right to indemnity.527

The possessor in bad faith shall reimburse the fruits received and those which the
legitimate possessor could have received, and shall have a right only to the expenses
mentioned in paragraph 1 of article 546528 and in article 443.529 The expenses incurred in

524
Art. 545
525
Art. 546
526
Art. 548
527
Art. 449
528
supra

118
improvements for pure luxury or mere pleasure shall not be refunded to the possessor in
bad faith, but he may remove the objects for which such expenses have been incurred,
provided that the thing suffers no injury thereby, and that the lawful possessor does not
prefer to retain them by paying the value they may have at the time he enters into
possession.530

A possessor in good faith shall not be liable for the deterioration or loss of the
thing possessed, except in cases in which it is proved that he has acted with fraudulent
intent or negligence, after the judicial summons.531

A possessor in bad faith shall be liable for deterioration or loss in every case, even
if caused by a fortuitous event.

D. Loss or Unlawful Deprivation of a Movable

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

Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.532

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

Subject to the provisions of this Title, where goods are sold by a person who is not
the owner thereof, and who does not sell them under authority or with the consent of the
owner, the buyer acquires no better title to the goods than the seller had, unless the owner
of the goods is by his conduct precluded from denying the seller's authority to sell.

Nothing in this Title, however, shall affect:

xxx
(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with
the Code of Commerce and special laws533

1. Period to Recover

The ownership of movables prescribes through uninterrupted possession for four

years in good faith.

529
See Reference
530
Art. 549
531
Art. 552
532
Art. 559
533
Art. 1505 (3)

119
 The ownership of personal property also prescribes through uninterrupted
possession for eight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which
he has been illegally deprived, as well as with respect to movables acquired in a public sale,
fair, or market, or from a merchant's store the provisions of articles 559 and 1505 of this
Code shall be observed.534

Movables possessed through a crime can never be acquired through prescription by

the offender.535

Ownership and other real rights over immovable property are acquired by ordinary
prescription through possession of ten years.536

Actions to recover movables shall prescribe eight years from the time the
possession thereof is lost, unless the possessor has acquired the ownership by prescription
for a less period, according to articles 1132, and without prejudice to the provisions of
articles 559, 1505, and 1133.537
2. Finder of Lost Movable

Whoever finds a movable, which is not treasure, must return it to its previous
possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor
of the city or municipality where the finding has taken place.

The finding shall be publicly announced by the mayor for two consecutive weeks in
the way he deems best.

If the movable cannot be kept without deterioration, or without expenses which

considerably diminish its value, it shall be sold at public auction eight days after the
publication.

Six months from the publication having elapsed without the owner having
appeared, the thing found, or its value, shall be awarded to the finder. The finder and the
owner shall be obliged, as the case may be, to reimburse the expenses.538

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.539

534
Art. 1132
535
Art. 1133
536
Art. 1134
537
Art. 1140
538
Art. 719

120
 3. Distinguished from voidable title

Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, provided he
buys them in good faith, for value, and without notice of the seller's defect of title.540

E. In concept of owner, holder, in ones own name, in name of

another541

a) In the concept of owner possessor of the thing or right , by his actions, is considered
or is believed by other people as the owner, regardless of the good or bad faith of the
possessor

b) In the concept of holder possessor holds it merely to keep or enjoy it, the ownership
pertaining to another person; possessor acknowledges in another a superior right which
he believes to be ownership.

c) In ones own name where possessor claims the thing for himself

d) In the name of another for whom the thing is held by the possessor

F. Rights of the possessor

1. Right to be respected in his possession; if disturbed protected by means

established by law; spoliation

2. Possession acquired and enjoyed in concept of owner can serve as title for
acquisitive prescription

a. Possession has to be in concept of owner, public, peaceful and

uninterrupted
b. Title short of ownership

3. Person in concept of owner has in his favor the legal presumption of just title542

4. Possession of real property presumes that movables are included

539
Art. 720
540
Art. 1506
541
None of these holders assert a claim of ownership in himself over the thing but they may be
considered as possessors in the concept of owner, or under claim of ownership, with respect to the right
they respectively exercise over the thing.
542
prima facie

121
 5. Co-possessors deemed to have exclusively possessed part which may be allotted to
him; interruption in whole or in part shall be to the prejudice of all

6. Possessor in good faith entitled to fruits received before possession is legally

interrupted543

7. Possessor in good faith entitled to part of net harvest and part of expenses of
cultivation if there are natural or industrial fruits544; owner has option to require
possessor to finish cultivation and gathering of fruits and give net proceeds as
indemnity for his part of expenses; if possessor in good faith refuses barred from
indemnification in other manner

8. Possessor has right to be indemnified for necessary expenses whether in good faith
or in bad faith; Possessor in good faith has right of retention over thing unless
necessary expenses paid by owner

9. Possessor in good faith has right to be reimbursed for useful expenses with right of
retention; owner has option of paying expenses or paying the increase in value of
property which thing acquired by reason of useful expenses
10. Possessor in good faith may remove improvements if can be done w/o damage to
principal thing- unless owner exercises option of paying; possessor in bad faith not
entitled.

11. Possessor in good faith and bad faith may not be entitled to payment for luxurious
expense but may remove them provided principal is not injured provided owner
does not refund the amount expended

12. Improvements caused by nature or time to inure to the benefit of person who has
succeeded in recovering possession

13. Wild animals possessed while in ones control; domesticated possessed if they
retain habit of returning back home

14. One who recovers, according to law, possession unjustly lost is deemed to have
enjoyed it w/o interruption

543
natural and industrial gathered or severed; civil accrue daily
544
proportionate to time of possession

122
 G. Loss/termination

A possessor may lose his possession:

(1) By the abandonment of the thing;545

(2) By an assignment546 made to another either by onerous or gratuitous title;

(3) By the destruction or total loss of the thing547, or because it goes out of commerce;

(4) By the possession of another, subject to the provisions of article 537548, if the new
possession has lasted longer than one year549. But the real right of possession is not lost till
after the lapse of ten years.550
(5) by recovery by lawful owner or possessor551

VIII. Usufruct

A. Characteristics

1. it is a real right;
2. it is of temporary duration;
3. it is transmissible;
4. it may be constituted on real or personal property, consummable or non
consummable, tangible or intangible, the ownership of which is vested on another

B. Classification

1. As to whether or not impairment of object is allowed:

- normal;

545
the voluntary renunciation of all rights which a person has over a thing thereby allowing a third
person to acquire ownership or possession thereof by means of occupancy;
By voluntary abandonment, thing becomes without an owner or possessor and is converted into res
nullius and may thus be acquired by a third person by occupation;
Abandonment which converts the thing into res nullius, ownership of which may be acquired by
occupation can hardly apply to land, as to which said mode of acquisition is not available
546
the complete transmission of the thing or right to another by any lawful manner;
-the effect is that he who was the owner or possessor is no longer so
547
a thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence
is unknown, or cannot be recovered
548
see Reference
549
this refers to possession de facto and not de jure
550
Art. 555
551
recovered in an reivindicatory action or in an action to recover the better right of possession

123
 - abnormal

2. As to origin:

- legal;
- voluntary;
- mixed

3. As to number of usufructuaries:

- simple;
- multiple which may either be :
-simultaneous;
-successive

4. As to terms or conditions:

- pure;
- with a term or period;
- conditional

5. As to quality or kind of object:

- of things;
- of rights
6. As to quantity or extent of object

- total;
- partial

7. as to extent of owners patrimony;

- universal;
- particular

C. Rights and obligations of usufructuary

Rights of usufructuary:

1. Right to civil, natural & industrial fruits of property

2. Right to hidden treasure as stranger

3. Right to transfer usufructuary rights gratuitous or onerous; but is co-terminus with
term of usufruct; fruits proportionate at duration of usufruct; but cant do acts of
ownership such as alienation or conveyance except when property is:

124
a. consumable
b. intended for sale
c. appraised when delivered; if not appraised & consumable return same quality552

4. Right not exempt from execution and can be sold at public auction by owner

5. Naked owner still have rights but w/o prejudice to usufructuary; may still exercise act
of ownership bring action to preserve

6. Right to fruits growing at time usufruct begins; growing fruits at termination of usufruct
belongs to owner

7. Right to necessary expenses from cultivation at end of usufruct

8. Right to enjoy accessions & servitudes in its favor & all benefits inherent therein

9. Right to make use of dead trunks of fruit bearing trees & shrubs or those uprooted/cut
by accident but obliged to plant anew

10. Right of usufructuary of woodland ordinary cutting as owner does habitually or

custom of place; cannot cut down trees unless it is for the restoration of improvement of
things in usufruct must notify owner first

11. Right to leave dead, uprooted trees at the disposal of owner with right to demand that
owner should clear & remove them if caused by calamity or extraordinary event
impossible to replace them

12. Right to oblige owner to give authority & furnish him proofs if usufruct is extended to
recover real property or real right

13. Right to necessary expenses

14. Right to introduce useful & luxurious expenses but with no obligation of
reimbursement on part of owner; may remove improvement if can be done w/o damage

15. Right to set-off improvements against damages he made against the property

16. Right to administer when property is co-owned; if co-ownership cease usufruct of

part allotted to co-owner belongs to usufructuary not affected

552
mutuum

125
17. Right to demand the increase in value of property if owner did not spend for
extraordinary repairs when urgent & necessary for preservation of thing

Obligations of usufructuary553

1. Pay expenses to 3rd persons for cultivation & production at beginning of usufruct;
whose who have right to fruits should reimburse expenses incurred

2. Generally, usufructuary has no liability when due to wear & tear, thing deteriorates,
obliged to return in that state; except when there is fraud or negligence, then he shall be
liable

3. Before entering into usufructuary:

a) Notice of inventory of property (appraisal of movables & description)

b) Posting of security554

4. Take care of property as a good father of family

5. Obliged to make ordinary repairs wear & tear due to natural use of thing and are
indispensable for preservation; owner may make them at expense of usufructuary during
existence of usufruct

6. Obliged to make expenses due to his fault; cannot escape by renouncing usufruct

7. Pay legal interest from extraordinary expenses made by owner

8. Payment of expenses, charges & taxes affecting fruits

9. Payment of interest on amount paid by owner charges on capital

10. Obliged to notify owner of act of 3rd person prejudicial to rights of ownership he is
liable if he does not do so for damages as if it was caused through his own fault
11. Expenses, cost & liabilities in suits brought with regard to usufructuary borne by
usufructuary

553
Arts. 583-602
554
1. not applicable to parents who are usufructuary of children except when 2nd marriage contracted
2. excused allowed by owner, not required by law or no one will be injured

126
 D. Rights of the owner

1. Alienate thing
2. Cant alter form or substance
3. Cant do anything prejudicial to usufructuary
4. Construct any works Y make any improvement provided it does not diminish value or
usufruct or prejudice right of usufructuary

E. Extinction/termination

1. Death of the usufructuary;

2. Expiration of period or fulfillment of condition;
3. Merger;
4. Renunciation;
5. Loss of the thing;
6. Termination of right of owner;
7. Prescription;
8. Other causes such as emancipation of the child555

IX. Easements

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

benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the

dominant estate; that which is subject thereto, the servient estate.556

Easements may be continuous or discontinuous, apparent or nonapparent.

Continuous easements are those the use of which is or may be incessant, without
the intervention of any act of man.

Discontinuous easements are those which are used at intervals and depend upon
the acts of man.

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

Nonapparent easements are those which show no external indication of their

existence.557

555
Art. 603
A usufruct is not extinguished by bad use of the thing in usufruct
556
Art. 613

127
 Easements are also positive or negative.

A positive easement is one which imposes upon the owner of the servient estate
the obligation of allowing something to be done or of doing it himself, and a negative
easement, that which prohibits the owner of the servient estate from doing something
which he could lawfully do if the easement did not exist.558

A. Characteristics

a) It is a real right but will affect third persons only when duly registered
b) It is enjoyed over another immovable, never on ones own property
c) It involves two neighboring estates (in case of real easements)
d) It is inseparable from the estate to which it is attached, and, therefore, cannot be
alienated independently of the estate
e) It is indivisible for it is not affected by the division of the estate between two or more
persons
f) It is a right limited by the needs of the dominant owner or estate, without possession
g) It cannot consist in the doing of an act unless the act is accessory in relation to a real
easement
h) It is a limitation on the servient owners rights of ownership for the benefit of the
dominant owner; and, therefore, it is not presumed.

B. Classification

1. Legal easements559

a. Right of way560

557
Art. 615
558
Art. 616
559
they are easements imposed by law and which have for their object either public use or the interest of
private persons
560
Requisites:
1. Claimant must be an owner of enclosed immovable or one with real right
2. There must be no adequate outlet to a public highway
3. Right of way must be absolutely necessary
4. Isolation must not be due to the claimants own act
5. Easement must be established at the point least prejudicial to the servient estate
6. Payment of proper indemnity
Special cause of extinction: the opening of a public road, or joining the dominant tenement to another
with exit on a public road.
The extinction in NOT automatic. There must be a demand for extinction coupled with tender of
indemnity by the servient owner.

128
 The right granted to the owner of an estate which is surrounded by other estates
belonging to other persons and without an adequate outlet to a public highway to demand
that he be allowed a passageway throughout such neighboring estates after payment of
proper indemnity.

2. Voluntary easements561

Constituted by the will of the parties or of a testator.

The owner possessing capacity to encumber property may constitute voluntary

servitude. If there are various owners, all must consent; but consent once given is not
revocable.

a. Effect of Zoning ordinance

The existence of a zoning ordinance is immaterial. The ordinance might be

repealed at any time; and if so repealed, this prohibition would not be enforceable against
new purchasers of the land, who may be ignorant thereof.562

C. Modes of Acquiring Easements

1. Compulsory easements

Continuous and apparent easements are acquired either by virtue of a title or by

prescription of ten years.563

In order to acquire by prescription the easements referred to in the preceding

article, the time of possession shall be computed thus: in positive easements, from the day
on which the owner of the dominant estate, or the person who may have made use of the
easement, commenced to exercise it upon the servient estate; and in negative easements,
from the day on which the owner of the dominant estate forbade, by an instrument
acknowledged before a notary public, the owner of the servient estate, from executing an
act which would be lawful without the easement.564

Continuous nonapparent easements, and discontinuous ones, whether apparent or

not, may be acquired only by virtue of a title.565

561
Art. 688; see Reference
562
see In re: Petition for cancellation of condition annotated on Transfer certificate of title no. 54417,
Quezon city, Dra. Rafaela v. Trias, vs. Gregorio Araneta, Inc., G.R. No. L-20786, October 30, 1965
563
Art. 620
564
Art. 621
565
Art. 622

129
 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.566

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

maintained by the owner of both, shall be considered, should either of them be alienated,
as a title in order that the easement may continue actively and passively, unless, at the time
the ownership of the two estates is divided, the contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid should be removed before the
execution of the deed. This provision shall also apply in case of the division of a thing
owned in common by two or more persons.567

2. Easement of light and view

When the distances in article 670568 are not observed, the owner of a wall which is
not party wall, adjoining a tenement or piece of land belonging to another, can make in it
openings to admit light at the height of the ceiling joints or immediately under the ceiling,
and of the size of thirty centimeters square, and, in every case, with an iron grating
imbedded in the wall and with a wire screen.
Nevertheless, the owner of the tenement or property adjoining the wall in which
the openings are made can close them should he acquire part-ownership thereof, if there
be no stipulation to the contrary.

He can also obstruct them by constructing a building on his land or by raising a

wall thereon contiguous to that having such openings, unless an easement of light has been
acquired.569

No windows, apertures, balconies, or other similar projections which afford a

direct view upon or towards an adjoining land or tenement can be made, without leaving a
distance of two meters between the wall in which they are made and such contiguous
property.

Neither can side or oblique views upon or towards such conterminous property be
had, unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.570

566
Art. 623
567
Art. 624
568
See Reference
569
Art. 669
570
Art. 670

130
 The distance referred to in the preceding article shall be measured in cases of direct
views from the outer line of the wall when the openings do not project, from the outer line
of the latter when they do, and in cases of oblique view from the dividing line between the
two properties.571

The provisions of article 670572 are not applicable to buildings separated by a public
way or alley, which is not less than three meters wide, subject to special regulations and
local ordinances.573

Whenever by any title a right has been acquired to have direct views, balconies or
belvederes overlooking an adjoining property, the owner of the servient estate cannot build
thereon at less than a distance of three meters to be measured in the manner provided in
article 671.574 Any stipulation permitting distances less than those prescribed in article 670
is void.575

X. Nuisance

A nuisance is any act, omission, establishment, business, condition of property, or

anything else which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any
body of water; or
(5) Hinders or impairs the use of property.576

XI. Action to Quiet Title

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

An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.577

571
Art. 671
572
supra
573
Art. 672
574
supra
575
Art. 673
576
Art. 694

131
 The plaintiff must have legal or equitable title to, or interest in the real property
which is the subject matter of the action. He need not be in possession of said property.578

There may also be an action to quiet title or remove a cloud therefrom when the
contract, instrument or other obligation has been extinguished or has terminated, or has
been barred by extinctive prescription.579

The plaintiff must return to the defendant all benefits he may have received from
the latter, or reimburse him for expenses that may have redounded to the plaintiff's
benefit.580

The principles of the general law on the quieting of title are hereby adopted insofar
as they are not in conflict with this Code.581

XII. Modes of Acquiring Ownership

Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and transmitted by law,
by donation, by testate and intestate succession, and in consequence of certain contracts,
by tradition.

They may also be acquired by means of prescription.582

A. Occupation

Things appropriable by nature which are without an owner, such as animals that are
the object of hunting and fishing, hidden treasure and abandoned movables, are acquired
by occupation.583

B. Donation

1. Definition

Donation is an act of liberality whereby a person disposes gratuitously of a thing or

right in favor of another, who accepts it.584

577
Art. 476
578
Art. 477
579
Art. 478
580
Art. 479
581
Art. 480
582
Art. 712
583
Art. 713

132
 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, or when the gift imposes upon the donee a burden which is less than the
value of the thing given, there is also a donation585

Acceptance must be made during the lifetime of the donor and of the donee.586

2. Characteristics

a. Extent to which donor may donate property587

A person may not donate more than he can give by will and a person may not
receive by way of donation more than what the donor is allowed by law to give by will;
otherwise the donation shall be inofficious and shall be reduced with regard to the
excess.588

b. Reservations and reversions589

The donation 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,

584
Art. 725
585
Art. 726
586
Art. 746
587
What may be given:
All or part of donors present property provided he reserves sufficient means for the support of the ff:
a) himself
b) relatives who by law are entitled to his support
c) legitimes shall not be impaired
when w/o reservation or if inofficious, may be reduced on petition of persons affected
Except: conditional donation & donation mortis causa
Except: future property
588
See Art. 752
589
1. Future property cannot be donated.
2. Present property that can be donated:
a) if the donor has forced heirs: he cannot give or receive by donation more than he can give of
receive by will
b) if the donor has no forced heirs: donation may include all present property provided he reserves
in full ownership or in usufruct:
1) the amount necessary to support him, and
2) those relatives entitled to support from him
3) property sufficient to pay the donors debt contracted prior to the donation.
3. Donation should not prejudice creditors
4. Donee must reserve sufficient means for his support and for his relatives which are entitled to be
supported by him.

133
are by law entitled to be supported by the donor. Without such reservation, the donation
shall be reduced in petition of any person affected.590

The donor may provide for reversion, whereby the property donated shall go
back to the donor or some other person.591
3. Kinds

a. Donation Inter Vivos592

When the donor intends that the donation shall take effect during the lifetime of
the donor, though the property shall not be delivered till after the donor's death, this shall
be a donation inter vivos. The fruits of the property from the time of the acceptance of the
donation, shall pertain to the donee, unless the donor provides otherwise.593

b. Donation By Reason of Marriage

Donations by reason of marriage are those which are made before its celebration,
in consideration of the same, and in favor of one or both of the future spouses.594

These donations are governed by the rules on ordinary donations established in

Title III of Book III of the Civil Code, insofar as they are not modified by the following
articles595

A donation by reason of marriage may be revoked by the donor in the following

cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except donations
made in the marriage settlements, which shall be governed by Article 81;596
(2) When the marriage takes place without the consent of the parents or guardian, as
required by law;
(3) When the marriage is annulled, and the donee acted in bad faith;
590
A donor may donate all his present property or part thereof provided he reserves sufficient property in
ownership or in usufruct for the support of himself and of all relatives who are entitled to be supported by
him at the time of the perfection of the donation
591
See Art. 757
A reversion in favor of the donor may be validly established for any case and circumstances;
If the revision is in favor of other persons, such other persons must be living at the time of the
donation
592
In case of doubt with regard to nature of donation: inter vivos
593
Art. 729
594
Art. 82, FC
595
Art. 83, ibid
596
supra

134
(4) Upon legal separation, the donee being the guilty spouse;
(5) If it is with a resolutory condition and the condition is complied with;
(6) When the donee has committed an act of ingratitude as specified by the provisions of
the Civil Code on donations in general597

c. Donation Mortis Causa

Donations which are to take effect upon the death of the donor partake of the
nature of testamentary provisions, and shall be governed by the rules established in the
Title on Succession.598
d. Onerous Donation

Donations with an onerous cause shall be governed by the rules on contracts and
remuneratory donations by the provisions of the present Title as regards that portion
which exceeds the value of the burden imposed.599

e. Simple, modal, conditional

a. simple - gratuitous
b. conditional - valuable consideration is imposed but value is less than value of
thing donated
c. modal imposes upon the donee a burden which is less than the value of the
thing donated

4. Formalities required

a. How made and accepted

Donations of movable property:

a. With simultaneous delivery of property donated:

597
Art. 86, ibid
598
Art. 728
Title conveyed upon donors death
Void if donor survives done
Always revocable
Must comply with the formalities required by law for the execution of wills
599
Art. 733

135
 i. it may be oral/written P5,000 or less;
ii. if value exceeds P5,000 written in public or private document

b.Without simultaneous delivery:

The donation and acceptance must be written in a public or private instrument,

regardless of value

Donation of immovable property:

a. must be in a public instrument specifying the property donated and the burdens
assumed by donee, regardless of value
b. acceptance must be either:

i. in the same instrument; or

ii. in another public instrument, notified to the donor in authentic form, and
noted in both deeds

b. Perfection600

c. Differences between formalities for donation of real,

personal properties

(1) Movables

The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the

document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos, the
donation and the acceptance shall be made in writing. Otherwise, the donation shall be
void.601

(2) Immovables

In order that the donation of an immovable may be valid, it must be made in a

public document, specifying therein the property donated and the value of the charges
which the donee must satisfy.

600
See (a) How made and accepted, supra
601
Art. 748

136
 The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments.602

5. Qualifications of donor, donee

Donor:

- All persons who may contract and dispose of their property

Donee:

1. natural & juridical persons w/c are not especially disqualified by law

2. minors & other incapacitated

a) by themselves

- if pure & simple donation

- if it does not require written acceptance

b) by guardian, legal representatives if needs written acceptance

1. natural guardian not more than P50,000

2. court appointed - more than P50,000
3. conceived& unborn child, represented by person who would have been
guardian if already born

6. Effects of donation/limitations

a. In general

Effects of donation:

1. donee may demand the delivery of the thing donated

2. donee is subrogated to the rights of the donor in the property

3. in donations propter nuptias, the donor must release the property from encumbrances,

602
Art. 749

137
 except servitudes

4. donors warranty exists if

a. expressed
b. donation is propter nuptias
c. donation is onerous
d. donor is in bad faith

5. when the donation is made to several donees jointly, they are entitled to equal portions,
without accretion, unless the contrary is stipulated.

Limitations on donation of property:

1. Future property cannot be donated.

2. Present property that can be donated:

a) if the donor has forced heirs: he cannot give or receive by donation more than he
can give of receive by will
b) if the donor has no forced heirs: donation may include all present property
provided he reserves in full ownership or in usufruct:

1) the amount necessary to support him, and

2) those relatives entitled to support from him
3) property sufficient to pay the donors debt contracted prior to the donation.

3. Donation should not prejudice creditors

4. Donee must reserve sufficient means for his support and for his relatives which are
entitled to be supported by him.

b. Double donations

RULE: Priority in time, priority in right

1. If movable one who first take possession in good faith

2. If immovable one who recorded in registry of property in good faith

- no inscription, one who first took possession in good faith

- in absence thereof, one who can present oldest title

138
 c. Excessive/inofficious

1. shall be reduced with regards to the excess

2. action to reduce to be filed by heirs who have right to legitimate at time of
donation
3. donees/creditors of deceased donor cannot ask for reduction of donation
4. if there are 2 or more donation: recent ones shall be suppressed
5. if 2 or more donation at same time treated equally & reduction is pro rata but
donor may impose preference which must be expressly stated in donation

d. Scope of amount

The donation 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. Without such reservation, the donation
shall be reduced in petition of any person affected.603

Donations cannot comprehend future property.

By future property is understood anything which the donor cannot dispose of at

the time of the donation.604

The provisions of article 750605 notwithstanding, no person may give or receive, by

way of donation, more than he may give or receive by will.

The donation shall be inofficious in all that it may exceed this limitation.606

e. In fraud of creditors

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.607

603
Art. 750
604
Art. 751
605
See Reference
606
Art. 752
607
Art. 759

139
 7. Void Donations

(1) Those made between persons who were guilty of adultery or concubinage at the time
of the donation;
(2) Those made between persons found guilty of the same criminal offense, in
consideration thereof;
(3) Those made to a public officer or his wife, descendants and ascendants, by reason of
his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilt of the donor and donee may be proved
by preponderance of evidence in the same action.608

Incapacity to succeed by will shall be applicable to donations inter vivos.609

The following are incapable of succeeding:

(1) The priest who heard the confession of the testator during his last illness, or the
minister of the gospel who extended spiritual aid to him during the same period;

(2) The relatives of such priest or minister of the gospel within the fourth degree, the
church, order, chapter, community, organization, or institution to which such priest or
minister may belong;

(3) A guardian with respect to testamentary dispositions given by a ward in his favor before
the final accounts of the guardianship have been approved, even if the testator should die
after the approval thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be
valid;

(4) Any attesting witness to the execution of a will, the spouse, parents, or children, or any
one claiming under such witness, spouse, parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took care of the testator
during his last illness;

(6) Individuals, associations and corporations not permitted by law to inherit.610

608
Art. 739
609
Art. 740
610
Art. 1027

140
 8. Revocation611 or reduction612

a. Grounds for revocation613

i. birth, appearance, or adoption of a child;

ii.. non fulfillment of a resolutory condition imposed by the donor;
iii. ingratitude of the donee614
Grounds for reduction615

i. failure of the donor to reserve sufficient means for support of himself or

dependent relatives;
ii. failure of the donor to reserve sufficient property to pay off his existing debts;
iii. inofficiousness, that is, the donation exceeds that which the donor can give by will;

b. How done

Birth of child Non-fulfillment of condition Ingratitude

Ipso jure revocation, no need needs court action needs court action
for action., court
decision is merely
declaratory
Extent: portion which may Extent: whole portion but court Extent: Whole portion returned
impair legitime of heirs may rule partial revocation only
Property must be returned Property in excess Property to be returned

Alienation/mortgages done
prior to recording in Register of
Deeds:
If already sold or cannot be Alienations/mortgages imposed Prior ones are void; demand
returned the value must be are void unless registered with value of property when
returned Register of Deeds alienated and cant be recovered
If mortgaged donor may or redeemed from 3rd persons

611
affects the whole donation and is allowed during the lifetime of the donor
applies only to donation inter vivos
not applicable to onerous donations
612
generally affects a portion only of the donation and is allowed during the lifetime of the donor or after
his death
613
Art. 760
614
Donee commits offense against person, honor, property of donor, spouse, children under his parental
authority
Donee imputes to donor any criminal offense or any cat involving moral turpitude even if he should prove
it unless act/crime has been committed against donee himself, spouse or children under his parental
authority
Donee unduly refuses to give support to donor when legally or morally bound to give support to donor
615
ibid

141
redeem the mortgage with right
to recover from donee

Fruits to be returned at filing of

Fruits to be returned at filing of
action for revocation complainant
Prescription of action is 4 years
Prescription is 4 years from Prescription is 1 year from
from birth, etc. non-fulfilment knowledge of fact and it was
possible for him to bring action
Action cannot be renounced Action cannot be renounced in
advance
Right of action transmitted to Right of action at instance of Heirs cant file action
heirs donor but may be transmitted
to heirs
Action extends to donees heirs Action does not extend to
donees heirs

c. Effects

Upon the revocation or reduction of the donation by the birth, appearance or

adoption of a child, the property affected shall be returned or its value if the donee has sold
the same.616

In this case, the property donated shall be returned to the donor, the alienations
made by the donee and the mortgages imposed thereon by him being void, with the
limitations established, with regard to third persons, by the Mortgage Law and the Land
Registration laws.617

Although the donation is revoked on account of ingratitude, nevertheless, the

alienations and mortgages effected before the notation of the complaint for revocation in
the Registry of Property shall subsist. Later ones shall be void.618

In the case referred to in the first paragraph of the preceding article, the donor shall
have a right to demand from the donee the value of property alienated which he cannot
recover from third persons, or the sum for which the same has been mortgaged.

The value of said property shall be fixed as of the time of the donation.619

When the donation is revoked for any of the causes stated in article 760, 620 or by
reason of ingratitude, or when it is reduced because it is inofficious, the donee shall not
return the fruits except from the filing of the complaint.

616
Art. 762
617
Art. 764, par. 2
618
Art. 766
619
Art. 767

142
 If the revocation is based upon noncompliance with any of the conditions imposed
in the donation, the donee shall return not only the property but also the fruits thereof
which he may have received after having failed to fulfill the condition.621

Donations which in accordance with the provisions of article 752,622 are inofficious,
bearing in mind the estimated net value of the donor's property at the time of his death,
shall be reduced with regard to the excess; but this reduction shall not prevent the
donations from taking effect during the life of the donor, nor shall it bar the donee from
appropriating the fruits.

For the reduction of donations the provisions of this Chapter and of articles 911
and 912623 of this Code shall govern.

d. Prescription

The donation is revoked ipso jure by operation of law, by the happening of any
of the events mentioned in article 760624;

The period to bring an action is four years, and the day from which the period shall
begin to run depends upon the cause for the revocation or reduction;

If the donor dies within the period of prescription, the action is transmitted to his
legitimate and illegitimate children and descendants;

The surviving spouse and the ascendants of the donor are not included.

c. Innofficious Donations

Every donation inter vivos, made by a person having no children or descendants,

legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or
reduced as provided in the next article, by the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or legitimated or illegitimate
children, even though they be posthumous;

(2) If the child of the donor, whom the latter believed to be dead when he made the
donation, should turn out to be living;

620
see reference
621
Art. 768
622
supra
623
See Reference
624
ibid

143
(3) If the donor subsequently adopt a minor child.625

In the cases referred to in the preceding article, 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.626

Donations which in accordance with the provisions of article 752, are inofficious,
bearing in mind the estimated net value of the donor's property at the time of his death,
shall be reduced with regard to the excess; but this reduction shall not prevent the
donations from taking effect during the life of the donor, nor shall it bar the donee from
appropriating the fruits.

For the reduction of donations the provisions of this Chapter and of articles 911
and 912 of this Code shall govern.627

Only those who at the time of the donor's death have a right to the legitime and
their heirs and successors in interest may ask for the reduction or inofficious donations.

Those referred to in the preceding paragraph cannot renounce their right during
the lifetime of the donor, either by express declaration, or by consenting to the donation.

The donees, devisees and legatees, who are not entitled to the legitime and the
creditors of the deceased can neither ask for the reduction nor avail themselves thereof.628

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.629

Succession is a mode of acquisition by virtue of which the property, rights and

obligations to the extent of the value of the inheritance, of a person are transmitted
through his death to another or others either by his will or by operation of law.630

"Decedent" is the general term applied to the person whose property is transmitted
through succession, whether or not he left a will. If he left a will, he is also called the
testator.631

625
Art. 760
626
Art. 761
627
Art. 771
628
Art. 772
629
Art. 773
630
Art. 774
631
Art. 775

144
 d. Ingratitude

The donation may also be revoked at the instance of the donor, by reason of
ingratitude in the following cases:

(1) If the donee should commit some offense against the person, the honor or the property
of the donor, or of his wife or children under his parental authority;

(2) If the donee imputes to the donor any criminal offense, or any act involving moral
turpitude, even though he should prove it, unless the crime or the act has been committed
against the donee himself, his wife or children under his authority;
(3) If he unduly refuses him support when the donee is legally or morally bound to give
support to the donor.632

The action granted to the donor by reason of ingratitude cannot be renounced in

advance. This action prescribes within one year, to be counted from the time the donor
had knowledge of the fact and it was possible for him to bring the action.633

PRESCRIPTION

I. Definition

By prescription, one acquires ownership and other real rights through the lapse of
time in the manner and under the conditions laid down by law.634

A. Acquisitive635

Acquisitive prescription of dominion and other real rights may be ordinary or

extraordinary.

Ordinary acquisitive prescription requires possession of things in good faith and

with just title for the time fixed by law.636
1. Characteristics

632
Art. 765
633
Art. 769
634
Art. 1106
635
one acquires ownership and other real rights through the lapse of time in the manner and under the
conditions laid down by law.
636
Art. 1117

145
1. Relationship between the occupant and the land in terms of possession is capable of
producing legal consequences; it is the possessor who is the actor
2. Requires possession by a claimant who is not the owner
3. Applicable to ownership and other real rights
4. Vests ownership or other real rights in the occupant
5. Results in the acquisition of ownership or other real rights in a person as well as the loss
of said ownership or real rights in another
6. Can be proven under the general issue without its being affirmatively pleaded

2. Ordinary637

a. Good Faith

The good faith of the possessor consists in the reasonable belief that the person
from whom he received the thing was the owner thereof, and could transmit his
ownership.638

b. Just title

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.639
The title for prescription must be true and valid.640
3. Extraordinary

The ownership of personal property also prescribes through uninterrupted

possession for eight years, without need of any other condition.641

Ownership and other real rights over immovables also prescribe through
uninterrupted adverse possession thereof for thirty years, without need of title or of good
faith.642

4. Requisites

637
requires possession of things in good faith and with just title for the time fixed by law
638
Art. 1127
639
Art. 1129
640
Art. 1130
641
Art. 1132, 2nd par.
642
Art. 1137

146
 Possession has to be in the concept of an owner, public, peaceful and
uninterrupted.643

Acts of possessory character executed in virtue of license or by mere tolerance of

the owner shall not be available for the purposes of possession.644

Possession is interrupted for the purposes of prescription, naturally or civilly.645

Possession is naturally interrupted when through any cause it should cease for more
than one year.

The old possession is not revived if a new possession should be exercised by the
same adverse claimant.646

If the natural interruption is for only one year or less, the time elapsed shall be
counted in favor of the prescription.647

Civil interruption is produced by judicial summons to the possessor.648

Judicial summons shall be deemed not to have been issued and shall not give rise to
interruption:

(1) If it should be void for lack of legal solemnities;

(2) If the plaintiff should desist from the complaint or should allow the proceedings to
lapse;

(3) If the possessor should be absolved from the complaint.

In all these cases, the period of the interruption shall be counted for the
prescription.649

Any express or tacit recognition which the possessor may make of the owner's right
also interrupts possession.650

5. Period

643
Art. 1118
644
Art. 1119
645
Art. 1120
646
Art. 1121
647
Art. 1122
648
Art. 1123
649
Art. 1124
650
Art. 1125

147
 The ownership of movables prescribes through uninterrupted possession for four
years in good faith.

The ownership of personal property also prescribes through uninterrupted

possession for eight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which
he has been illegally deprived, as well as with respect to movables acquired in a public sale,
fair, or market, or from a merchant's store the provisions of articles 559 and 1505 651 of this
Code shall be observed.652

Ownership and other real rights over immovable property are acquired by ordinary
prescription through possession of ten years.653

In the computation of time necessary for prescription the following rules shall be
observed:

(1) The present possessor may complete the period necessary for prescription by tacking
his possession to that of his grantor or predecessor in interest;

(2) It is presumed that the present possessor who was also the possessor at a previous time,
has continued to be in possession during the intervening time, unless there is proof to the
contrary;

(3) The first day shall be excluded and the last day included.654

6. What cannot be acquired by acquisitive prescription

Movables possesses through a crime can never be acquired through prescription by

the offender655 but his successors-in-interest may claim prescription, although for purposes
of computing the period of prescription, the possession by the offender may not be tacked
to the successors possession656

Lands registered under the Torrens system cannot be acquired by prescription657but

this rule can be invoked only by one under whose name658 it was registered.659

651
See Reference
652
Art. 1132
653
Art. 1134
654
Art. 1138
655
Art. 1133
656
See Arts. 533-534
657
Alfonso vs.Jaime, L-12754, Jan. 30, 1960

148
 B. Extinctive660

1. Characteristics

1. One does not look to the act of the possessor but to the neglect of the owner
2. Requires inaction of the owner or neglect of one with a right to bring his action
3. Applies to all kinds of rights, whether real or personal
4. Produces the extinction of rights or bars a right of action
5. Results in the loss of a real or personal right, or bars the cause of action to enforce said
right
6. Should be affirmatively pleaded and proved to bar the action or claim of the adverse
party

2. Requisites

1. capacity to acquire by prescription

2. a thing capable of acquisition by prescription
3. possession of thing under certain conditions
4. lapse of time provided by law

3. Periods

Movables Immovables
1. Good Faith
4 years 10 years
2. Bad Faith
8 years661 30 years

II. No Prescription Applicable

A. By Offender

658
or under whose predecessors name
659
Jocson, et al. vs. Silos,L-12998, July 25, 1960
660
rights and actions are lost through the lapse of time in the manner and under the conditions laid down
by law.
661
except where the loss was due to a crime in which case, the offender can not acquire the movable by
prescription, and an action to recover it from him is imprescriptible.

149
 Movables possessed through a crime can never be acquired through prescription by
the offender.662

B. Registered Lands PD 1529663

C. The following rights, among others, are not extinguished by

prescription:

1. Action legal to demand a right of way

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

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the damage
caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the
estate surrounded by others and for the gathering of its crops through the servient estate
without a permanent way, the indemnity shall consist in the payment of the damage caused
by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the
proprietor's own acts.664

2. To abate a nuisance665

D. Action to quiet title if plaintiff in possession

If the plaintiff is in possession of the property, the action does not prescribe.666

662
Art. 1133
663
See reference
664
Art. 649
665
Art. 1143
666
Reason: While the owner continues to be liable to an action, proceeding or suit upon the adverse
claim, he has a continuing right to be given aid by the court to ascertain and determine the nature of such
claim and its effect on his title, or to assert any superior equity in his favor. He may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right.

150
 E. Void contracts

The action or defense for the declaration of the inexistence of a contract does
not prescribe.667

F. Action to demand partition

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may

demand at any time the partition of the thing owned in common, insofar as his share is
concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of

time, not exceeding ten years, shall be valid. This term may be extended by a new
agreement.

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

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

No prescription shall run in favor of a co-owner or co-heir against his co-owners

or co-heirs so long as he expressly or impliedly recognizes the co-ownership.668

1. Distinguished from laches

Laches or Stale demands

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 omission to assert a right within reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it.

LACHES PRESCRIPTION

667
Art. 1410
668
Art. 494

151
 1. concerned with 1. concerned with
effect of delay fact of delay

2. question of 2. question or
inequity of matter of time
permitting the claim
to be enforced

3. not statutory 3. statutory

4. applies in equity 4. applies at law

5. not based on a 5. based on a fixed

fixed time time

G. Property of public dominion

a. For public use669

b. For public service670
c. For the development of the national wealth.

III. Prescription or Limitation of Actions

A. To recover movables

Actions to recover movables shall prescribe eight years from the time the
possession thereof is lost, unless the possessor has acquired the ownership by prescription
for a less period, according to articles 1132, and without prejudice to the provisions of
articles 559, 1505, and 1133.671

B. To recover immovables

Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of
ownership and other real rights by prescription.672

C. Other actions

669
e.g. roads, canals, rivers
670
e.g. public buildings
671
Art. 1140; see Reference for the Articles mentioned
672
Art. 1141

152
 A mortgage action prescribes after ten years.673

The following rights, among others specified elsewhere in this Code, are not
extinguished by prescription:

(1) To demand a right of way, regulated in article 649;674

(2) To bring an action to abate a public or private nuisance.675

The following actions must be brought within ten years from the time the right of
action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment.676

The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract.677

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.678

The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.679

673
Art. 1142
674
See reference
675
Art. 1143
676
Art. 1144
677
Art. 1145
678
Art. 1146
679
Art. 1147

153
 The limitations of action mentioned in articles 1140 to 1142, and 1144 to 1147 680
are without prejudice to those specified in other parts of this Code, in the Code of
Commerce, and in special laws.681

All other actions whose periods are not fixed in this Code or in other laws must be
brought within five years from the time the right of action accrues.682

IV. Interruption

The prescription of actions is interrupted when they are filed before the court,
when there is a written extrajudicial demand by the creditors, and when there is any written
acknowledgment of the debt by the debtor.683

V. Nuisance684

A. Definition685

B. Classification

1. Public nuisance - 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;

2. Private nuisance - one which violates only private rights and produces damage to but
one or few persons, and cannot be said to be public

3. Mixed nuisances: a thing may be a private nuisance without being a public one or a
public nuisance without being a private one

C. Remedies

Remedies against a public nuisance686

1. prosecution under the Penal Code or any other local ordinance;

2. civil action;
3. abatement, without judicial proceedings687

680
see Reference
681
Art. 1148
682
Art. 1149
683
Art. 1155
684
may be both public and private in character
685
See X. Nuisance, supra
686
Art. 699

154
 Remedies against a private nuisance

(1) A civil action; or

(2) Abatement, without judicial proceedings.688

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.689

OBLIGATIONS

I. Definition

A juridical necessity to give, to do or not to do690, one impressed with the character
of enforceability.

II. Elements of an Obligation

1) an active subject:691 the possessor of a right; he in whose favor the obligation is

constituted;
2) a passive subject:692 he who has the duty of giving, doing or not doing;
3) the object or prestation:693 it may consist of giving a thing, or doing or not doing a
certain act694and

687
The remedies are not exclusive but cumulative;
All of the may be availed of by public officers, and the last two by private persons, if the nuisance is
especially injurious to the latter
Role of district health officer and others with respect to public nuisance:
The district health officer is charged with the duty to see to it that one or all of the remedies against a
public nuisance are availed of;
He shall determine whether the third remedy, a is the best remedy against a public nuisance;
the remedy must be availed of only with the intervention of the district health officer;
It does not necessarily follow that the failure to observe art. 702 is in itself a ground for the award for
damages;
Art. 702 does not empower the district officer to abate a public nuisance to the exclusion of all other
authorities;
The action must be commenced by the city or municipal mayor; but a private person may also file an
action if the public nuisance is especially injurious to him
688
Art. 705
689
Art. 706
690
Art. 1156
691
obligee or creditor
692
obligor or debtor
693
the subject matter of the obligation
694
Requisites:

155
4) the efficient cause:695 the reason why the obligation exists

III. Different Kinds of Prestations

1. To give - consists in the delivery of a movable or an immovable thing, in order to create

areal right or for the use of the recipient or for its simple possession or in order to return
to itsowner

2. To do - all kinds of work or services, whether mental or physical

3. Not to do - consists in abstaining from some act, includes not to give, both
beingnegative obligations

IV. Classification of Obligations

1. According to criteria of demandability:

a. Pure - one w/c is not subject to a condition or a term.

b. Conditional - the acquisition of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the happening of the event which constitutes the
condition.696
c. W/ a term697 -

2. According to plurality of objects:

a. Single
b. Alternative - where the debtor must perform any of the prestations698
c. Facultative - where only one thing is due but the debtor has reserved the right to
substitute it w/ another699

i. it must be licit
ii. it must be possible, physically &juridically
iii. it must be determinate or determinable
iv. it must have a possible equivalent in money
695
vinculum or juridical tie
696
Art. 1181
A past thing can never be a condition. A condition is always future and uncertain.
Past event unknown to the parties.-- It is really the knowledge of the event w/c constitutes the future. It
is the knowledge w/c is future and uncertain.
Effect of Impossible Condition.-- It annuls the obligation w/c depends upon them. The entire
juridical tie is tainted by the impossible condition.
697
see Reference
698
The characteristic of alternative obligations is that, several objects being due, the fulfillment of one is
sufficient (Tolentino)
699
Art. 1206

156
3. According to Plurality of subjects:

a. Joint - one in w/c each of the debtors is liable only for a proportionate part of
the debt or each creditor is entitled only to a proportionate part of the credit.700
b. Solidary - one in w/c the debtor is liable for the entire obligation or each
creditor is entitled to demand the whole obligation. There is only one obligation is a
solidary obligation.

4. According to Performance:

a. Divisible - one susceptible of partial performance.

b. Indivisible - one that must be performed in one act.701

5. According to Sanctions for Breach:

a. Simple
b. W/ a penal clause - an accessory undertaking to assume greater liability in case
of breach.702

700
there are as many obligations as there are debtors multiplied by the number of creditors.
Effects of Joint Liability:
1. The demand by one creditor upon one debtor, produces the effects of default only w/ respect to the
creditor who demanded and the debtor on whom the demand was made, but not w/ respect to the others;
2. The interruption of prescription by the judicial demand of one creditor upon a debtor, does not benefit
the other creditors nor interrupt the prescription as to other debtors. On the same principle, a partial
payment or acknowledgement made by one of several joint debtors does not stop the running of the
statute of limitations as to the others;
3. The vices of each obligation arising from the personal defect of a particular debtor or creditor does not
affect the obligation or rights of the others;
4. The 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-creditors;
5. In the joint divisible obligation, the defense of res judicata is not extended from one debtor to another.
(Manresa.)
701
General rule: Obligation is indivisible w/c means that it has to be performed in one act singly. Why?
Bec.the law provides so: 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. xxx (Art. 1248, par. 1.)
Three Exceptions to the Rule on Indivisibility:
1. When the parties so provide. (Art. 1248, par. 1.)
2. When the nature of the obligation necessarily entails performance in parts.
3. Where the law provides otherwise.
702
The purpose is to strengthen the coercive force of the obligation. When a penal clause is present,
damages do not have to be proved.

157
V. Sources of Obligations703

A. A single act or omission can give rise to different causes of action

It is a source of obligation because of the provision in Article 100 of the Revised

code that every person criminally liable is also civilly liable.704

B. Natural Obligations705

They are real obligations to which the law denies an action, but which the debtor
may perform voluntarily.

Examples of natural obligations enumerated under the Civil Code:

1. Performance after the civil obligation has prescribed;

2. Reimbursement of a third person for a debt that has prescribed;
3. Restitution by minor after annulment of contract;
4. Delivery by minor of money or fungible thing in fulfillment of obligation;
5. Performance after action to enforce civil obligation has failed;
6. Payment by heir of debt exceeding value of property inherited; and
7. Payment of legacy after will have been declared void.

C. Extra-contractual Obligations706

1. Quasi-contract707 - 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

703
Obligations arise from:
(1) Law
(2) Contracts
(3) Quasi-contracts
(4) Acts or omissions punished by law and
(5) Quasi-delicts.
704
Nolledo, Jose N., The Philippine Law on Obligations and Contracts Explained, 1980 Ed., p. 2
705
a. Based not on positive law but on equity and natural law
b. Do not grant such right of action to enforce their performance
706
Arts. 2142 to 2194
707
obligation ex quasi-contractu

158
 2 kinds:

a. Negotiorumgestio - unauthorized management708

b. Solutioindebiti - undue payment 709

2. Quasi-delict/torts710 - It is a fault or act of negligence ( or omission of care ) which

causes damage to another, there being no pre-existing contractual relations between the
parties.711

VI. Nature and Effect of obligations

A. Obligation to give712

1. A determinate or specific thing

When what is to be delivered is a determinate thing, the creditor, in addition to the

right granted him by Article 1170,713 may compel the debtor to make the delivery.714

The obligation to give a determinate thing includes that of delivering all its
accessions and accessories, even though they may not have been mentioned.715

2. An indeterminate or generic thing

If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.716

708
This takes place when a person voluntarily takes charge of anothers abandoned business or property
without the owners authority
709
This takes place when something is received when there is no right to demand it, and it was unduly
delivered thru mistake
710
obligation ex quasi-delicto or ex quasi maleficio
711
Elements:
a) There must be fault or negligence attributable to the person charged
b) There must be damage or injury
c) There must be a direct relation of cause and effect between the fault or negligence on the one hand and
the damage or injury on the other hand ( proximate cause )
712
Three Accessory Obligations:
1. To take care of the thing w/ the diligence of a good father of a family until actual delivery.(Art. 1163)
2. To deliver the fruits to the creditor (fruits produced after obligation to deliver arises).(Art. 1164)
3. To deliver accessions and accessories(Art. 1166)
713
See reference
714
Art. 1165, 1st par.
715
Art. 1166
716
Art. 1165 , 2nd par.

159
 B. Obligation to do or not to do

In Obligations to do

If a person is obliged to do something, it must be done as promised, and it cannot

be substituted by another act or forbearance against the obligees will717. If the obligor fails
to do it, the same shall be executed at his cost718albeit he may not be compelled to do so
personally or by himself.

This same rule shall be observed if he does it in contravention of the tenor of the
obligation. Furthermore, it may be decreed that what has been poorly done be undone.719

In Obligations not to do

When the obligation consists in not doing, and the obligor does what has been
forbidden him, it shall also be undone at his expense.720

C. Breaches of obligations

1. Complete failure to perform

Debtor is unable to comply with his obligation because of fortuitous event.721

2. Default, delay or mora722 no default unless creditors makes a demand

GENERAL RULE:

There must be a demand (judicial or extra-judicial) before delay may be incurred.

EXCEPTIONS:

1. obligation or law expressly so declares

2. time is of the essence of the contract
3. demand is useless as when obligor has rendered beyond his power to perform
4. there is acknowledgment of default

717
see Art. 1244
718
see Chavez vs. Gonzales, 32 SCRA 547
719
Art. 1167
720
see Art. 1168; Cui vs. Chan, 41 Phil. 523
721
debtor is not liable for damages
722
Non-fulfillment of the obligation with respect to time

160
 In reciprocal obligations, one party incurs in delay from the moment the other party
fulfills his obligation, while he himself does not comply or is not ready to comply in a
proper manner with what is incumbent upon him.723

a. Mora solvendi

Delay of the debtor to perform his obligation. It may be:

a. Ex re obligation is to give
b. Ex persona obligation is to do724

b. Mora accipiendi

Delay of the creditor to accept the delivery of the thing w/c is the object of the
obligation

c. Compesatiomorae

Delay of the parties or obligors in reciprocal obligation

3. Fraud in the performance of obligation725

a. Waiver of future fraud is void

Responsibility arising from fraud is demandable in all obligations. Any waiver of an

action for future fraud is void.726

723
see Art. 1169
The general rule is that fulfillment by both parties should be simultaneous except when different dates for
the performance of obligation is fixed by the parties.
Demand is still necessary if their respective obligations are to be performed on separate dates.
724
There can be delay only in positive obligations (to give/to do). There can be no delay in negative
obligations (not to give/not to do).
725
Deliberate and intentional evasion of the fulfillment of an obligation
726
Art. 1171
Future fraud cannot be waived because it would result to illusory obligation.

161
 4. Negligence (culpa)727 in the performance of obligation

a. Diligence normally required is ordinary diligence or

diligence of a good father of a family; exceptions: common
carriers requiring extraordinary diligence

The deposit of effects made by travellers in hotels or inns shall also be regarded as
necessary. The keepers of hotels or inns shall be responsible for them as depositaries,
provided that notice was given to them, or to their employees, of the effects brought by the
guests and that, on the part of the latter, they take the precautions which said hotel-keepers
or their substitutes advised relative to the care and vigilance of their effects.728

The hotel-keeper is liable for the vehicles, animals and articles which have been
introduced or placed in the annexes of the hotel.729

The responsibility referred to in the two preceding articles shall include the loss of,
or injury to the personal property of the guests caused by the servants or employees of the
keepers of hotels or inns as well as strangers; but not that which may proceed from any
force majeure. The fact that travellers are constrained to rely on the vigilance of the keeper
of the hotels or inns shall be considered in determining the degree of care required of
him.730

The act of a thief or robber, who has entered the hotel is not deemed force
majeure, unless it is done with the use of arms or through an irresistible force.731

The hotel-keeper is not liable for compensation if the loss is due to the acts of the
guest, his family, servants or visitors, or if the loss arises from the character of the things
brought into the hotel.732

5. Contravention of the tenor of obligation

The faithful observance of an obligation according to its tenor is mandated by law;

an unexcused failure thereof renders the obligor liable for losses and damages caused
thereby.733

727
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
Negligence can be waived unless the nature of the obligation or public policy requires extraordinary
diligence as in common carrier.
728
Art. 1998
729
Art. 1999
730
Art. 2000
731
Art. 2001
732
Art. 2002
733
see Art. 1170

162
 6. Legal excuse for breach of obligation fortuitous event;
requisites

Fortuitous event734

An event which could not be foreseen or which though foreseen was inevitable.

Requisites:

1. cause is independent of the will of the debtor735

2. the event must be unforeseeable or unavoidable
3. occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner
4. debtor must be free from any participation in
the aggravation of the injury resulting to the creditor736

D. Remedies available to creditor in cases of breach

1. Specific Performance737

When what is to be delivered is a determinate thing, the creditor, in addition to

theright granted him by Art 1170 (indemnification for damages), may compel the debtor to
make thedelivery.738

a. Substituted performance by a third person on obligation

to deliver generic thing and in obligation to do, unless a
purely personal act

734
General Rule: No liability in case of fortuitous event.
Exceptions:
1. When expressly declared by law (e.g. Article 552(2), 1165(3), 1268, 1942, 2147, 2148 and 2159 of the
Civil Code.)
2. When expressly declared by stipulation or contract
3. When the nature of the obligation requires the assumption of risk
4 When the obligor is in default or has promised to deliver the same thing to 2 or more persons who do
not have the same interest [Article 1165(3)].
735
It must not only be the proximate cause but it must be the ONLY and SOLE CAUSE.
736
Lasam vs. Smith, 45 Phil. 657
737
in obligation to give specific thing
738
Art. 1165, par 1; see also ROC Rule 39, Sec 10

163
 In obligation to give generic thing

If the thing is indeterminate or generic, he may ask that the obligation be

complied with at the expense of the debtor.739

In obligation to do

If a person obliged to do something fails to do it, the same shall be executed at his
cost. This same rule shall be observed if he does it in contravention of the tenor of the
obligation.Furthermore, it may be decreed that what has been done poorly be undone.740

2. Rescission741

The power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.742

The injured party may choose between the fulfillment and the rescission of the
obligation,743 with the payment of damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become impossible.

739
Art 1165, Par 2
Delivery of anything belonging to the species stipulated will be sufficient.
Debtor cannot avoid obligation by paying damages if the creditor insists on the performance.
740
Art. 1167
The court has no discretion to merely award damages to the creditor when the act can be done in spite
of the refusal or failure of debtor to do so.
EXCEPTION: Imposition of personal force or coercion upon the debtor to comply with his obligation -
tantamount to involuntary servitude and imprisonment for debt
741
resolution in reciprocal obligations
Only applies to reciprocal obligations, where there is reciprocity between the parties i.e. creditor
debtor relations arise from the same cause or identity of cause.
Reciprocal obligations have a TACIT RESOLUTORY CONDITION
742
Power to rescind:
Pertains to the injured party, party who did not perform not entitled to insist upon the performance of
the contract by the defendant or recover damages by reason of his own breach
Rights of injured party subordinated to the rights of a 3 rd person to whom bad faith is not imputable
Not absolute, not permitted in casual/slight breach, may only be claimed in substantial breach
(Song Fo v. Hawaiian Philippines)
Rescission requires judicial approval to produce legal effect
EXCEPTION: object is not yet delivered AND obligation has not yet been performed
If the obligation has not yet been performed: extrajudicial declaration of party willing to perform
would suffice; can refuse to perform if the other party is not yet ready to comply
If the injured party has already performed: cannot extrajudicially rescind IF the other party opposes
the rescission (otherwise, rescission produces legal effect). In the case the other party impugns rescission,
the court comes in either to: a. Declare the rescission as properly made b. Give a period to the debtor in
which to perform

164
 The court shall decree the rescission claimed, unless there be just cause authorizing
the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385744 and 1388745 and the Mortgage Law.746

In case both parties have committed a breach of the obligation, the liability of the
first infractor shall be equitably tempered by the courts. If it cannot be determined which
of the parties first violated the contract, the same shall be deemed extinguished, and each
shall bear his own damages.747

3. Damages, in any event

In case of breach of the obligation,748 exclusive or in addition to specific

performance.

4. Subsidiary remedies of creditors

a. Accionsubrogatoria749

Action which the creditor may exercise in place of the negligent debtor in order to
preserve orrecover for the patrimony of the debtor the product of such action, and then
obtain therefrom thesatisfaction of his own credit.750

743
The remedy is alternative. Party seeking rescission can only elect one between fulfillment and
rescission. There can be no partial performance and partial rescission.
744
See Reference
745
ibid
746
Art. 1191
747
Art. 1192
748
Art. 1170; See Reference
Recoverable damages include any and all damages that a human being may suffer. Responsibility for
damages is indivisible
749
An action against the debtors debtor
750
subrogatory action; See Art. 1177
Previous approval of court is not necessary
Plaintiff entitled only to so much as is needed to satisfy his credit, any balance shall pertain to the
debtor
Patrimony of the debtor (includes both present and future property) is liable for the obligations he may
contract by being a legal guaranty in favor of his creditors. Hence, he cannot maliciously reduce such
guaranty

165
 b. Accionpauliana751

Creditors have the right to set aside or revoke acts which the debtor may have done
todefraud them. All acts of the debtor which reduce his patrimony in fraud of his creditors,
whether bygratuitous or onerous title, can be revoked by this action.

c. Acciondirecta752

Right of the lessor to go directly to sublessee for unpaid rents of the lessee.753

Right of the laborers or persons who furnish materials for a piece of work
undertaken by a contractor to go directly to the owner for any unpaid claims due to the
contractor.754

VII. Kinds of civil obligations

A. Pure

Every obligation whose performance does not depend upon a future or uncertain
event, or upon a past event unknown to the parties, is demandable at once.755

Every obligation which contains a resolutory condition shall also be demandable,

without prejudice to the effects of the happening of the event.

When the debtor binds himself to pay when his means permit him to do so, the
obligation shall be deemed to be one with a period, subject to the provisions of article
1197.756

B. Conditional

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.757

751
rescissory action
An action to rescind contracts entered into by the debtor in fraud of creditors ( Arts. 1177, last sentence
and 1381, par. 3, See Reference
Payments of pre-existing obligations already due, whether natural or civil, cannot be impugned by an
accionpauliana
752
Arts. 1652, 1608, 1729 & 1893; see reference
753
See Art. 1652
754
See Art. 1729
755
Art. 1179
756
Art. 1180
757
Art. 1181

166
 1. Suspensive condition758 - wherein the happening of the event
gives birth to an obligation

2. Resolutory condition759 - wherein the happening of the event

will extinguish the obligation

3. Potestative, casual or mixed

Potestative Condition - one w/c depends solely on the will of either one party.760

Casual Condition - one where the condition is made to depend upon a third person
or upon chance.761

Mixed Condition - one w/c depends partly upon the will of one of the parties and
partly on either chance or the will of a third person

a. Obligations subject to potestativesuspensive conditions

are void

When the fulfillment of the condition depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends upon chance or upon the will of a third
person, the obligation shall take effect in conformity with the provisions of this Code.762

4. Effect of the happening of suspensive condition

The effects of a conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the constitution of the obligation. When the obligation
imposes reciprocal prestations upon the parties, the fruits and interests during the
pendency of the condition shall be deemed to have been mutually compensated. If the
obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless
from the nature and circumstances of the obligation it should be inferred that the intention
of the person constituting the same was different.

In obligations to do and not to do, the courts shall determine, in each case, the
retroactive effect of the condition that has been complied with.763

758
condition precedent
759
condition subsequent
760
e.g., "I will give you my plantation in Davao provided you reside in Davao permanently."
761
e.g., "I will give you my land in Pampanga if you will pass the bar exams this year."
762
Art. 1182
763
Art. 1187

167
 Resolutory condition no retroactivity

Every obligation which contains a resolutory condition shall also be demandable,

without prejudice to the effects of the happening of the event.764

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.765

5. Effect of loss of specific thing or deterioration or improvement

of specific thing before suspensive condition; if this occurs in
resolutory condition in obligation to do or not to do

When the conditions have been imposed with the intention of suspending the
efficacy of an obligation to give, the following rules shall be observed in case of the
improvement, loss or deterioration of the thing during the pendency of the condition:
(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it
is understood that the thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault of the debtor, the impairment is to be
borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the creditor may choose between the
rescission of the obligation and its fulfillment, with indemnity for damages in either case;
(5) If the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right than that
granted to the usufructuary.766
As for the obligations to do and not to do, the provisions of the second paragraph
of article 1187767 shall be observed as regards the effect of the extinguishment of the
obligation.768

764
Article 1179, par. 2
765
Art. 1181
766
Art. 1189
767
supra
768
Art. 1190, par. 3

168
 C. Obligation with a period or a term769

Obligations for whose fulfillment a day certain has been fixed, shall be demandable
only when that day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival
of the day certain.

A day certain is understood to be that which must necessarily come, although it

may not be known when.

If the uncertainty consists in whether the day will come or not, the obligation is
conditional, and it shall be regulated by the rules of the preceding Section.770

1. Suspensive period; effect if suspensive period is for the benefit of

both debtor and of creditor, unless given in favor of one of them; if
given to debtor alone, debtor losses benefit of period in any of the
five cases in Art. 1198 obligation retroact to the day of its
constitution

Suspensive period

- the obligation has already arisen except that it is not yet demandable

If the term is for the benefit of the creditor -

The creditor can demand performance anytime; but the debtor cannot
insist on payment before the period.

If the term is for the benefit of the debtor -

The creditor cannot demand performance anytime; but the debtor can
insist on performance anytime.771

769
General rule:
If a period is attached in an obligation, the presumption is that it is for the benefit of both parties. The
consequence is that the creditor cannot compel the performance before the arrival of the term; the debtor
cannot compel acceptance before the arrival of the term.
770
Art. 1193
771
Illustrations: "I promise to pay within 60 days." This is a term for the benefit of the debtor.
"I promise to pay Clara the sum of P100,000 on or before Oct. 31, 1996." This is a term for the benefit of
the debtor.

169
 The debtor shall lose every right to make use of the period:

(1) After the obligation has been contracted, he becomes insolvent, unless he gives a
guaranty or security for the debt;

(2) He does not furnish to the creditor the guaranties or securities which he has promised;

(3) By his own acts he has impaired said guaranties or securities after their establishment,
and when through a fortuitous event they disappear, unless he immediately gives new ones
equally satisfactory;

(4) Debtor violates any undertaking, in consideration of which the creditor agreed to the
period;

(5) Debtor attempts to abscond772

2. Resolutory period

Obligations with a resolutory period take effect at once,but terminate upon arrival
of the day certain.773

3. Definite or indefinite period

a. Instances when courts may fix the period

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.774

b. Creditor must ask court to set the period, before he can

demand payment

772
Art. 1198
773
in diem, or resolutory
774
Art. 1197

170
 D. Alternative or Facultative775

1. Difference between alternative and facultative obligations776

As to contents of the obligation: In the alternative, there are various prestations all of
w/c constitute parts of the obligation; while in facultative, only the principal prestation
constitutes the obligation, the accessory being only a means to facilitate payment.

As to nullity: In alternative obligations, the nullity of one prestation does not

invalidate the obligation, w/c is still in force w/ respect to those w/c have no vice; while in
facultative, the nullity of the principal prestation invalidates the obligation and the creditor
cannot demand the substitute even when this is valid.

As to choice: In alternative, the right to choose may be given to the creditor; while in
facultative, only the debtor can choose the substitute prestation.

As to effect of loss: In alternative, only the impossibility of all the prestations due w/o
fault of the debtor extinguishes the obligation; while in facultative, the impossibility of the
principal prestation is sufficient to extinguish the obligation, even if the substitute is
possible.777
2. Effect of loss of specific things or impossibility of performance
of alternative, through fault of debtor/creditor or through
fortuitous events

If the choice is debtor's

a. When only one prestation is left (whether or not the the rest of the prestations
have been lost through fortuitous event or through the fault of the debtor), the debtor may
perform the one that is left.778

b. If the choice is limited through the creditor's own acts, the debtor can ask for
resolution plus damages.779

c. If everything is lost through the debtor's fault, the latter is liable to indemnify
the creditor for damages.780

775
Art. 1199. A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
776
Facultative obligations always involve choice by the debtor.
In theory, it is easy to distinguish a facultative obligation from an alternative one. But in practice, it is
difficult to distinguish the two. You just have to find out what the parties really intended (Balane)
777
IV Tolentino
778
Art. 1202
779
Art. 1203
780
Art. 1204

171
 d. If some things are lost through the debtor's fault, the debtor can still choose
from those remaining.

e. If all are lost through fortuitous event, the obligation is extinguished.

f. If all prestations but one are lost through fortuitous event, and the remaining
prestation was lost through the debtor's fault, the latter is liable to indemnify the creditor
for damages.

g. If all but one are lost through the fault of the debor and the last one was lost
through through fortuitous event, the obligation is extinguished.

Choice is the creditor's

a. If one or some are lost through fortuitous event, the creditor may choose from
those remaining.781

b. If one or some are lost through the debtor's fault, the creditor has choice from
the remainder or the value of the things lost plus damages.782

c. If all are lost through the debtor's fault, the choice of the creditor shall fall upon
the price of any of them, w/ indemnity for damages.783

d. If some are lost through the creditor's fault, the creditor may choose from the
remainder.

e. If all are lost through fortuitous event, the obligation is extinguished.

f. If all are lost through the creditor's fault, the obligation is extinguished.

VIII. Joint and Solidary obligation

A. Joint (divisible) obligation

1. Concurrence of two or more creditors and or two or more

debtors

a. Joint obligation is presumed, unless otherwise indicated

by the law or nature of obligation

781
Art. 1205 (1)
782
Art. 1205 (2)
783
Art. 1205 (3)

172
 The concurrence of two or more creditors or of two or more debtors in one and
the same obligation does not imply that each one of the former has a right to demand, or
that each one of the latter is bound to render, entire compliance with the prestation. There
is a solidary liability only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.784

b. Obligation presumed to be divided into as many equal

shares as there are creditors or debtors

The credit or debt or deemed divided into as many shares as there are creditors or
debtors to each other, each resulting credit or debt being considered distinct from one
another.785

c. Each credit is distinct from one another, therefore a

joint debtor cannot be required to pay for the share of
another with debtor, although he may pay if he wants to

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.786
d. Insolvency of a joint debtor, others not liable for his
share787

B. Joint Indivisible Obligation

1. Obligation cannot be performed in parts but debtors are bound

jointly

Generally, obligations are indivisible since the integrity of the obligations requires
their payment or performance completely.788

2. In case of failure of one joint debtor to perform his part (share),

there is default but only debtor guilty shall be liable for damages

A joint indivisible obligation gives rise to indemnity for damages from the time
anyone of the debtors does not comply with his undertaking. The debtors who may have

784
Art. 1207
785
see Art. 1208
786
Art. 1209
787
ibid
788
Arts.1233 and 1248.

173
been ready to fulfill their promises shall not contribute to the indemnity beyond the
corresponding portion of the price of the thing or of the value of the service in which the
obligation consists.789

C. Solidary obligation

1. Anyone of the solidary creditors may collect or demand

payment of whole obligation; there is mutual agency among
solidary debtors

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.790

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.791

2. Any of the solidary debtor may be required to pay the whole

obligation; there is mutual guaranty among solidary debtors

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.792
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.

789
Art. 1224
790
Art. 1214
791
Art. 1215
792
Art. 1216

174
 When one of the solidary debtors cannot, because of his insolvency, reimburse his
share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in
proportion to the debt of each.793
A solidary debtor may, in actions filed by the creditor, avail himself of all defenses
which are derived from the nature of the obligation and of those which are personal to
him, or pertain to his own share. With respect to those which personally belong to the
others, he may avail himself thereof only as regards that part of the debt for which the
latter are responsible.794

3. Each one of solidary creditors may do whatever maybe useful to

the others, but not anything prejudicial to them; however, any
novation, compensation, confusion or remission of debt
executed by any solidary creditor shall extinguish the obligation
without prejudice to his liability for the shares of the other
solidary creditors

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.795

D. Divisible and Indivisible

For the purposes of the preceding articles, obligations to give definite things and
those which are not susceptible of partial performance shall be deemed to be indivisible.

When the obligation has for its object the execution of a certain number of days of
work, the accomplishment of work by metrical units, or analogous things which by their
nature are susceptible of partial performance, it shall be divisible.

However, even though the object or service may be physically divisible, an

obligation is indivisible if so provided by law or intended by the parties.

In obligations not to do, divisibility or indivisibility shall be determined by the

character of the prestation in each particular case.796

E. Obligations with a Penal Clause

In obligations with a penal clause, the penalty shall substitute the indemnity for
damages and the payment of interests in case of noncompliance, if there is no stipulation

793
Art. 1217
794
Art. 1222
795
Art. 1222
796
Art. 1225

175
to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the
penalty or is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in accordance with the
provisions of this Code.797

Proof of actual damages suffered by the creditor is not necessary in order that the
penalty may be demanded. 798

The judge shall equitably reduce the penalty when the principal obligation has been
partly or irregularly complied with by the debtor. Even if there has been no performance,
the penalty may also be reduced by the courts if it is iniquitous or unconscionable.799

The nullity of the penal clause does not carry with it that of the principal obligation.

The nullity of the principal obligation carries with it that of the penal clause.800

IX. Extinguishment of Obligations

A. Payment

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. 801

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.802

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 it803

797
Art. 1226
798
Art. 1228
799
Art. 1229
800
Art. 1230
801
Art. 1236
802
Art. 1237
803
Art. 1238

176
 1. Dation in payment

Dation in payment, whereby property is alienated to the creditor in satisfaction of a

debt in money, shall be governed by the law of sales.804
2. Form of payment

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.805
3. Extraordinary inflation or deflation

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 obligation shall
be the basis of payment, unless there is an agreement to the contrary.806

4. Application of payment807

He who has various debts of the same kind in favor of one and the same creditor,
may declare at the time of making the payment, to which of them the same must be
applied. Unless the parties so stipulate, or when the application of payment is made by the
party for whose benefit the term has been constituted, application shall not be made as to
debts which are not yet due.

If the debtor accepts from the creditor a receipt in which an application of the
payment is made, the former cannot complain of the same, unless there is a cause for
invalidating the contract.808

804
Art. 1245
Dation in payment is governed by the law on sales because it is as if the creditor is now the vendee,and
the debtor becomes now the vendor.
805
Art. 1249
806
Art. 1250
807
the designation of a debt which is being paid by the debtor who has several obligations of the same
kind in favor of the creditor to whom the payment is made (quoting Tolentino.)
808
Art. 1252

177
 If the debt produces interest, payment of the principal shall not be deemed to have
been made until the interests have been covered.809

When the payment cannot be applied in accordance with the preceding rules, or if
application cannot be inferred from other circumstances, the debt which is most onerous
to the debtor, among those due, shall be deemed to have been satisfied.

If the debts due are of the same nature and burden, the payment shall be applied to
all of them proportionately.810

5. Tender of Payment and Consignation

If the creditor to whom tender of payment has been made refuses without just
cause to accept it, the debtor shall be released from responsibility by the consignation of
the thing or sum due.

Consignation alone shall produce the same effect in the following cases:

(1) When the creditor is absent or unknown, or does not appear at the place of payment;
(2) When he is incapacitated to receive the payment at the time it is due;
(3) When, without just cause, he refuses to give a receipt;
(4) When two or more persons claim the same right to collect;
(5) When the title of the obligation has been lost.811

In order that the consignation of the thing due may release the obligor, it must first
be announced to the persons interested in the fulfillment of the obligation.

The consignation shall be ineffectual if it is not made strictly in consonance with

the provisions which regulate payment.812

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.813

809
Art. 1253
810
Art. 1254
811
Art.1256
812
Art. 1257
813
Art. 1258

178
 The expenses of consignation, when properly made, shall be charged against the
creditor.814

Once the consignation has been duly made, the debtor may ask the judge to order
the cancellation of the obligation.

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.815

If, the consignation having been made, the creditor should authorize the debtor to
withdraw the same, he shall lose every preference which he may have over the thing. The
co-debtors, guarantors and sureties shall be released.816

B. Loss of Determinate Thing Due or Impossibility or difficulty of

performance

An obligation which consists in the delivery of a determinate thing shall be

extinguished if it should be lost or destroyed without the fault of the debtor, and before he
has incurred in delay.

When by law or stipulation, the obligor is liable even for fortuitous events, the loss
of the thing does not extinguish the obligation, and he shall be responsible for damages.
The same rule applies when the nature of the obligation requires the assumption of risk.817

The debtor in obligations to do shall also be released when the prestation becomes
legally or physically impossible without the fault of the obligor.818

When the service has become so difficult as to be manifestly beyond the

contemplation of the parties, the obligor may also be released therefrom, in whole or in
part.819

814
Art. 1259
815
Art. 1260
816
Art. 1261
817
Art. 1262
818
Art. 1266
819
Art. 1267

179
 C. Condonation or Remission of Debt820

1. Express Formality of Donation

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.821

2. Implied

The delivery of a private document evidencing a credit, made voluntarily by the

creditor to the debtor, implies the renunciation of the action which the former had against
the latter.
If in order to nullify this waiver it should be claimed to be inofficious, the debtor
and his heirs may uphold it by proving that the delivery of the document was made in
virtue of payment of the debt.822
Whenever the private document in which the debt appears is found in the
possession of the debtor, it shall be presumed that the creditor delivered it voluntarily,
unless the contrary is proved.823
It is presumed that the accessory obligation of pledge has been remitted when the
thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or
of a third person who owns the thing.824

D. Confusion

820
an act of liberality by virtue of w/c, w/o receiving any equivalent, the creditor renounces enforcement
of an obligation w/c is extinguished in whole or in part.
Four (4) requisites:
1. Debt that is existing. You can remit a debt even before it is due.
2. Renunciation must be gratuitous. If renunciation is for a consideration, the mode of
extinguishment may be something else. It may be novation, compromise of dacion en pago.
3. Acceptance by the debtor
4. Capacity of the parties.
The form of donation must be observed. If the condonation involves movables, apply Art. 748. If it
involves immovables, apply Art. 749. But note that the creditor may just refuse to collect (w/o observing
any form.) In this case, the obligation will be extinguished not by virtue of condonation but by waiver
under Art. 6.
821
Art. 1270
822
Art. 1271
823
Art. 1272
824
Art. 1274

180
 The obligation is extinguished from the time the characters of creditor and debtor
are merged in the same person.825

E. Compensation

1. Kinds

Compensation shall take place when two persons, in their own right, are creditors
and debtors of each other.826

In order that compensation may be proper, it is necessary:

(1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due are consumable, they be
of the same kind, and also of the same quality if the latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor.827

a. Legal compensation

Compensation takes place by operation of law, even though the debts may be
payable at different places, but there shall be an indemnity for expenses of exchange or
transportation to the place of payment.828

Compensation shall not be proper when one of the debts arises from a depositum
or from the obligations of a depositary or of a bailee in commodatum.

Neither can compensation be set up against a creditor who has a claim for support
due by gratuitous title, without prejudice to the provisions of paragraph 2 of article 301.829
Neither shall there be compensation if one of the debts consists in civil liability
arising from a penal offense.830

825
Art. 1275
826
Art. 1278
827
Art. 1279
828
Art. 1286
829
Art. 1287

181
 If a person should have against him several debts which are susceptible of
compensation, the rules on the application of payments shall apply to the order of the
compensation.831

When all the requisites mentioned in article 1279 are present, compensation takes
effect by operation of law, and extinguishes both debts to the concurrent amount, even
though the creditors and debtors are not aware of the compensation.832

b. Agreement

The parties may agree upon the compensation of debts which are not yet due.833

c. Voluntary834

d. Judicial

If one of the parties to a suit over an obligation has a claim for damages against the
other, the former may set it off by proving his right to said damages and the amount
thereof.835
e. Facultative

Takes place when compensation is claimable by only one of the parties but not of
the other.836

2. Obligations not compensable

Compensation shall not be proper when one of the debts arises from a depositumor
from the obligations of a depositary or of a bailee in commodatum.

Neither can compensation be set up against a creditor who has a claim for support
due by gratuitous title, without prejudice to the provisions of paragraph 2 of article 301.837

Neither shall there be compensation if one of the debts consists in civil liability
arising from a penal offense.838

830
Art. 1288
831
Art. 1289
832
Art. 1290
833
Art. 1282
834
See (b) Agreement
835
Art. 1283
836
e.g., Arts. 1287, 1288
837
Art. 1287
838
Art. 1288

182
 F. Novation

Obligations may be modified by:

(1) Changing their object or principal conditions;

(2) Substituting the person of the debtor;

(3) Subrogating a third person in the rights of the creditor.839

In order that an obligation may be extinguished by another which substitute the

same, it is imperative that it be so declared in unequivocal terms, or that the old and the
new obligations be on every point incompatible with each other.840

Novation which consists in substituting a new debtor in the place of the original
one, may be made even without the knowledge or against the will of the latter, but not
without the consent of the creditor. Payment by the new debtor gives him the rights
mentioned in articles 1236 and 1237.841

If the substitution is without the knowledge or against the will of the debtor, the
new debtor's insolvency or non-fulfillment of the obligations shall not give rise to any
liability on the part of the original debtor.842

The insolvency of the new debtor, who has been proposed by the original debtor
and accepted by the creditor, shall not revive the action of the latter against the original
obligor, except when said insolvency was already existing and of public knowledge, or
known to the debtor, when the delegated his debt.843

When the principal obligation is extinguished in consequence of a novation,

accessory obligations may subsist only insofar as they may benefit third persons who did
not give their consent.844

If the new obligation is void, the original one shall subsist, unless the parties
intended that the former relation should be extinguished in any event.845

839
Art. 1291
840
Art. 1292
841
Art. 1293
842
Art. 1294
843
Art. 1295
844
Art. 1296
845
Art. 1297

183
 The novation is void if the original obligation was void, except when annulment
may be claimed only by the debtor or when ratification validates acts which are voidable.846

If the original obligation was subject to a suspensive or resolutory condition, the

new obligation shall be under the same condition, unless it is otherwise stipulated.847

Subrogation of a third person in the rights of the creditor is either legal or

conventional. The former is not presumed, except in cases expressly mentioned in this
Code; the latter must be clearly established in order that it may take effect.848

Conventional subrogation of a third person requires the consent of the original

parties and of the third person.849

It is presumed that there is legal subrogation:

(1) When a creditor pays another creditor who is preferred, even without the debtor's
knowledge;

(2) When a third person, not interested in the obligation, pays with the express or tacit
approval of the debtor;

(3) When, even without the knowledge of the debtor, a person interested in the fulfillment
of the obligation pays, without prejudice to the effects of confusion as to the latter's
share.850

Subrogation transfers to the persons subrogated the credit with all the rights
thereto appertaining, either against the debtor or against third person, be they guarantors or
possessors of mortgages, subject to stipulation in a conventional subrogation.851

A creditor, to whom partial payment has been made, may exercise his right for the
remainder, and he shall be preferred to the person who has been subrogated in his place in
virtue of the partial payment of the same credit.852

846
Art. 1298
847
Art. 1299
848
Art. 1300
849
Art. 1301
850
Art. 1302
851
Art. 1303
852
Art. 1304

184
 CONTRACTS

I. 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.853

II. Kinds of Contracts

A. Consensual - perfected by mere consent and from that moment, the

parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all consequences which, according to their nature
may be in keeping with good faith, usage and law.

B. Real - like deposit, pledge and commodatum requires delivery of object for
perfection.

C. Formal or Solemn

Requires compliance with certain formalities prescribed by law, such prescribed

form being an essential element

1. Donations

The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the

document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos, the
donation and the acceptance shall be made in writing. Otherwise, the donation shall be
void.854

In order that the donation of an immovable may be valid, it must be made in a

public document, specifying therein the property donated and the value of the charges
which the donee must satisfy.

853
Art. 1381
854
Art. 748

185
 The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified

thereof in an authentic form, and this step shall be noted in both instruments.855

2. Partnership where real property contributed

A partnership may be constituted in any form, except where immovable property

or real rights are contributed thereto, in which case a public instrument shall be
necessary.856

A contract of partnership is void, whenever immovable property is contributed

thereto, if an inventory of said property is not made, signed by the parties, and attached to
the public instrument.857

3. Antichresis

The amount of the principal and of the interest shall be specified in writing;
otherwise, the contract of antichresis shall be void.858

4. Agency to sell real property or an interest therein

When a sale of a piece of land or any interest therein is through an agent, the
authority of the latter shall be in writing; otherwise, the sale shall be void.859

5. Stipulation to charge interest

No interest shall be due unless it has been expressly stipulated in writing.860

6. Stipulation limiting common carriers duty of extraordinary

diligence to ordinary diligence

A stipulation between the common carrier and the shipper or owner limiting the
liability of the former for the loss, destruction, or deterioration of the goods to a degree
less than extraordinary diligence shall be valid, provided it be:

855
Art. 749
856
Art. 1771
857
Art. 1773
858
Art. 2134
859
Art. 1874
860
Art. 1956

186
 (1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the
common carrier; and
(3) Reasonable, just and not contrary to public policy.861

7. Chattel mortgage

By a chattel mortgage, personal property is recorded in the Chattel Mortgage

Register as a security for the performance of an obligation. If the movable, instead of being
recorded, is delivered to the creditor or a third person, the contract is a pledge and not a
chattel mortgage.862

8. Sale of large cattle

The sale of large cattle is governed by special law863 which requires that the same be
in a public instrument.

No person, partnership, association, corporation or entity shall engage in the

business of buy and sell of large cattle without first securing a permit for the said purpose
from the Provincial Commander of the province where it shall conduct such business and
the city/municipal treasurer of the place of residence of such person, partnership,
association, corporation or entity. The permit shall only be valid in such province.864

III. Formality

Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. However, when the law
requires that a contract be in some form in order that it may be valid or enforceable, or
that a contract be proved in a certain way, that requirement is absolute and indispensable.
In such cases, the right of the parties stated in the following article cannot be exercised.865

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.866

861
Art. 1744
862
Art. 2140
863
Act No. 1147
864
Sec. 5, P.D. 533
865
Art. 1356
866
Art. 1357

187
 The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification
or extinguishment of real rights over immovable property; sales of real property or of an
interest therein are governed by articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal
partnership of gains;

(3) The power to administer property, or any other power which has for its object an act
appearing or which should appear in a public document, or should prejudice a third
person;

(4) The cession of actions or rights proceeding from an act appearing in a public
document.

All other contracts where the amount involved exceeds five hundred pesos 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 1405.867

IV. Defective Contracts

A. Rescissible Contracts868

The following contracts are rescissible:

(1) Those which are entered into by guardians whenever the wards whom they represent
suffer lesion by more than one-fourth of the value of the things which are the object
thereof;

(2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in
the preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them;

(4) Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial
authority;

867
Art. 1358
868
Contracts validly agreed upon but, by reason of lesion or economic prejudice may be rescinded in
cases established by law.

188
(5) All other contracts specially declared by law to be subject to rescission.869

(6) Payments made in a state of insolvency on account of obligations not yet enforceable

1. Difference with Rescission (resolution)

The power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing
the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law.870

Rescission in Rescission Proper

Article 1191 in Article 1381
1. It is a principal 1. It is a subsidiary
action retaliatory in remedy.
character.
2. The only ground is 2. There are 5
non-performance of grounds to rescind.
ones obligation/s or Non-performance by
what is incumbent the other party is not
upon him. important.
3. It applies only to 3. It applies to both
reciprocal obligation unilateral and
reciprocal
obligations.
4. Only a party to the 4. Even a 3rd person
contract may demand who is prejudiced by
fulfillment or seek the contract may
the rescission of the demand the
contract. rescission of the
contract.
5. Court may fix a 5. Court cannot grant
period or grant extension of time for
extension of time for fulfillment of the
the fulfillment of the obligation.
obligation.
6. Its purpose is to 6. Its purpose is to
cancel the contract. seek reparation for

869
Art. 1381
870
Art. 1191

189
 the damage or injury
caused, thus allowing
partial rescission of
the contract.

B. Voidable Contracts871

Contracts entered into during a lucid interval are valid. Contracts agreed to in a
state of drunkenness or during a hypnotic spell are voidable.872

The incapacity declared in article 1327 is subject to the modifications determined

by law, and is understood to be without prejudice to special disqualifications established in
the laws.873

A contract where consent is given through mistake, violence, intimidation, undue

influence, or fraud is voidable.874

In order that mistake may invalidate consent, it should refer to the substance of the
thing which is the object of the contract, or to those conditions which have principally
moved one or both parties to enter into the contract.

Mistake as to the identity or qualifications of one of the parties will vitiate consent
only when such identity or qualifications have been the principal cause of the contract.

A simple mistake of account shall give rise to its correction.875

871
Art. 1409
Those in which all of the essential elements for validity are present, although the element of consent is
vitiated either by lack of capacity of one of the contracting parties or by VIMFU.
What contracts are voidable:
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
3. By loss of the thing which is the object of the contract through fraud or fault of the person who is
entitled to annul the contract.
Ratification
Requisites:
a. there must be knowledge of the reason which renders the contract voidable
b. such reason must have ceased and
c. the injured party must have executed an act which expressly or impliedly conveys an intention to waive
his right
If the object is lost through fortuitous event, the contract can still be annulled, but the person obliged to
return the same can be held liable only for the value of the thing at the time of
Art. 1409
872
Art. 1328
873
Art. 1329
874
Art. 1330

190
 When one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the contract must
show that the terms thereof have been fully explained to the former.876

There is no mistake if the party alleging it knew the doubt, contingency or risk
affecting the object of the contract.877

Mutual error as to the legal effect of an agreement when the real purpose of the
parties is frustrated, may vitiate consent.878

There is violence when in order to wrest consent, serious or irresistible force is

employed.

There is intimidation when one of the contracting parties is compelled by a

reasonable and well-grounded fear of an imminent and grave evil upon his person or
property, or upon the person or property of his spouse, descendants or ascendants, to give
his consent.

To determine the degree of intimidation, the age, sex and condition of the person
shall be borne in mind.

A threat to enforce one's claim through competent authority, if the claim is just or
legal, does not vitiate consent.879

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.880

There is undue influence when a person takes improper advantage of his power
over the will of another, depriving the latter of a reasonable freedom of choice. The
following circumstances shall be considered: the confidential, family, spiritual and other
relations between the parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in financial distress.881

875
Art. 1331
876
Art. 1332
877
Art. 1333
878
Art. 1334
879
Art. 1335
880
Art. 1336
881
Art. 1337

191
 There is fraud when, through insidious words or machinations of one of the
contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to.882

Failure to disclose facts, when there is a duty to reveal them, as when the parties are
bound by confidential relations, constitutes fraud.883

The usual exaggerations in trade, when the other party had an opportunity to know
the facts, are not in themselves fraudulent.884

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.885

Misrepresentation by a third person does not vitiate consent, unless such

misrepresentation has created substantial mistake and the same is mutual.886

Misrepresentation made in good faith is not fraudulent but may constitute error.887

In order that fraud may make a contract voidable, it should be serious and should
not have been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.888

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.889

The action for annulment shall be brought within four years.

882
Art. 1338
883
Art. 1339
884
Art. 1340
885
Art. 1341
886
Art. 1342
887
Art. 1343
888
Art. 1344
889
Art. 1390

192
 This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of the
consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other
incapacitated persons, from the time the guardianship ceases.890

Ratification extinguishes the action to annul a voidable contract.891

Ratification may be effected expressly or tacitly. It is understood that there is a tacit

ratification if, with knowledge of the reason which renders the contract voidable and such
reason having ceased, the person who has a right to invoke it should execute an act which
necessarily implies an intention to waive his right.892

Ratification may be effected by the guardian of the incapacitated person.893

Ratification does not require the conformity of the contracting party who has no
right to bring the action for annulment.894

Ratification cleanses the contract from all its defects from the moment it was
constituted.895

The action for the annulment of contracts may be instituted by all who are thereby
obliged principally or subsidiarily. However, persons who are capable cannot allege the
incapacity of those with whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake base their action upon
these flaws of the contract.896

An obligation having been annulled, the contracting parties shall restore to each
other the things which have been the subject matter of the contract, with their fruits, and
the price with its interest, except in cases provided by law.

890
Art. 1391
891
Art. 1392
892
Art. 1393
893
Art. 1394
894
Art. 1395
895
Art. 1396
896
Art. 1397

193
 In obligations to render service, the value thereof shall be the basis for damages.897

When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has been
benefited by the thing or price received by him.898

Whenever the person obliged by the decree of annulment to return the thing can
not do so because it has been lost through his fault, he shall return the fruits received and
the value of the thing at the time of the loss, with interest from the same date.899

The action for annulment of contracts shall be extinguished when the thing which
is the object thereof is lost through the fraud or fault of the person who has a right to
institute the proceedings.

If the right of action is based upon the incapacity of any one of the contracting
parties, the loss of the thing shall not be an obstacle to the success of the action, unless said
loss took place through the fraud or fault of the plaintiff.900

As long as one of the contracting parties does not restore what in virtue of the
decree of annulment he is bound to return, the other cannot be compelled to comply with
what is incumbent upon him.901

897
Art. 1398
898
Art. 1399
899
Art. 1400
900
Art. 1401
901
Art. 1402

194
 C. Unenforceable Contracts902

The following contracts are unenforceable, unless they are ratified:

(1) Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot be received without
the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the
making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;

(c) An agreement made in consideration of marriage, other than a mutual promise

to marry;

(d) An agreement for the sale of goods, chattels or things in action, at a price not
less than five hundred pesos, unless the buyer accept and receive part of such
goods and chattels, or the evidences, or some of them, of such things in action or

902
Those which cannot be enforced by proper action in court unless they are ratified
What contracts are unenforceable
1. those entered into in the name of another by one without or acting in excess of authority;
2. those where both parties are incapable of giving consent; and
3. those which do not comply with the Statute of Frauds
Agreements within the scope of the Statute of Frauds (exclusive list):
1. Agreements not to be performed within one year from the making thereof;
2. Special promise to answer for the debt, default or miscarriage of another;
This does not refer to the original or independent promise of the debtor to his own creditor. It refers
rather to a collateral promise.
3. Agreement in consideration of marriage other than a mutual promise to marry;
4. Agreement for the sale of goods, etc. at a price not less than P500.00;
5. Contracts of lease for a period longer than one year;
6. Agreements for the sale of real property or interest therein; and
7. Representation as to the credit of a third person.
The contracts/agreements under the Statute of Frauds require that the same be evidenced by some note,
memorandum or writing, subscribed by the party charged or by his agent, otherwise, the said contracts
shall be unenforceable.
The statute of frauds applies only to executory contracts, not to those that are partially or completely
fulfilled.
Ratification of contracts in violation of the Statute of Frauds
1. Failure to object to the presentation of oral evidence to prove such contracts
2. Acceptance of benefits under these contracts

195
 pay at the time some part of the purchase money; but when a sale is made by
auction and entry is made by the auctioneer in his sales book, at the time of the
sale, of the amount and kind of property sold, terms of sale, price, names of the
purchasers and person on whose account the sale is made, it is a sufficient
memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of
real property or of an interest therein;

( f ) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a contract.903
Unauthorized contracts are governed by article 1317 and the principles of agency in
Title X of this Book.904
Contracts infringing the Statute of Frauds, referred to in No. 2 of article 1403, are
ratified by the failure to object to the presentation of oral evidence to prove the same, or
by the acceptance of benefit under them.905
When a contract is enforceable under the Statute of Frauds, and a public document
is necessary for its registration in the Registry of Deeds, the parties may avail themselves of
the right under Article 1357.906
In a contract where both parties are incapable of giving consent, express or
implied, ratification by the parent, or guardian, as the case may be, of one of the
contracting parties shall give the contract the same effect as if only one of them were
incapacitated.
If ratification is made by the parents or guardians, as the case may be, of both
contracting parties, the contract shall be validated from the inception.
No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him.
A contract entered into in the name of another by one who has no authority or
legal representation, or who has acted beyond his powers, shall be unenforceable, unless it
is ratified, expressly or impliedly, by the person on whose behalf it has been executed,
before it is revoked by the other contracting party.907

903
Art. 1403
904
Art. 1404
905
Art. 1405
906
Art. 1406
907
Art. 1407

196
 D. Void Contracts908

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 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.909

An absolutely simulated or fictitious contract is void. A relative simulation, when it

does not prejudice a third person and is not intended for any purpose contrary to law,
morals, good customs, public order or public policy binds the parties to their real
agreement.910

1. Pactumcommissorium

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.911

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.912

908
Those where all of the requisites of a contract are present but the cause, object or purpose is contrary
to law, morals, good customs, public order or public policy, or contract itself is prohibited or declared
void by law.
909
Art. 1409
910
Art. 1346
911
Art. 1390

197
 2. Pactum de non alienando

A stipulation forbidding the owner from alienating the immovable mortgaged shall
be void.913

3. Pactumleonina

A stipulation which excludes one or more partners from any share in the profits or
losses is void.914

Comparative table of defective contracts

VOID VOIDABLE RESCISSIBLE UNENFORCEABLE

1. Defect is caused Defect is caused by vice Defect is caused by Defect is caused by

by lack of essential of consent injury/ damage either lack of form,
elements or illegality to one of the parties of authority, or capacity
to a 3rd person of both parties not
cured by prescription

2. Do not, as a Valid and enforceable Valid and enforceable Cannot be enforced

general rule produce until they are annulled until they are rescinded by a proper action in
any legal effect by a competent court by a competent court court

3. Action for the Action for annulment or Action for rescission Corresponding action
declaration or nullity defense of annulability may prescribe for recovery, if there
or inexistence or may prescribe was total or partial
defense of nullity or performance of the
inexistence does not unenforceable
prescribe contract under No. 1
or 3 of Article 1403
may prescribe

4. Not cured by Cured by prescription Cured by prescription Not cured by

prescription prescription

5. Cannot be ratified Can be ratified Need not be ratified Can be ratified

6. Assailed not only Assailed only by a Assailed not only by a Assailed only by a
by a contracting contracting party contracting party but contracting party
party but even by a even by a third person
third person whose who is prejudiced or
interest is directly damaged by the
affected contract

7. Assailed directly Assailed directly or Assailed directly only Assailed directly or

912
Art. 2088
913
Art. 2130
914
Art. 1799

198
or collaterally collaterally collaterally

199
V. Effect of Contracts

Contracts take effect only between the parties, their assigns and heirs, except in case
where the rights and obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the
property he received from the decedent.

If a contract should contain some stipulation in favor of a third person, he may

demand its fulfillment provided he communicated his acceptance to the obligor before its
revocation. A mere incidental benefit or interest of a person is not sufficient. The
contracting parties must have clearly and deliberately conferred a favor upon a third
person.915

SALES916

I. Introduction

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.917

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.918

B. Essential Requisites of a Contract of Sale

Subject to the provisions of this Title, where goods are sold by a person who is not
the owner thereof, and who does not sell them under authority or with the consent of the
owner, the buyer acquires no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's authority to sell.

915
Art. 1311
916
A nominate contract whereby one of the contracting parties obligates himself to transfer the ownership
of and to deliver a determinate thing and the other to pay therefor a price certain in money or its equivalent.
Delivery and payment in a contract of sale are so interrelated and intertwined with each other that
without delivery of the goods there is no corresponding obligation to pay. The two complement each other.
It is clear that the two elements cannot be dissociated, for the contract of purchase and sale is essentially a
bilateral contract, as it gives rise to reciprocal obligations. (PioBarretto Sons, Inc. vs. CompaniaMaritima,
62 SCRA 167).
Neither is the delivery of the thing bought nor the payment of the price necessary for the perfection of
the contract of sale. Being consensual, it is perfected by mere consent.
917
Art. 1458
918
Art. 1470

200
 Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision of law enabling
the apparent owner of goods to dispose of them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale or under the order of a
court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the
Code of Commerce and special laws.919

C. Stages of Contract of Sale

1. negotiation
2. perfection by mere consent; performance may be demanded (specific performance)
3. consummation

D. Obligations Created

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.920

E. Characteristics of a Contract of Sale

1. Principal - can stand on its own; unlike accessory contract

2. Consensual - meeting of minds makes a perfect contract of sale but needs delivery to
consummate.
3. Bilateral - imposes obligation on both parties921
4. Nominate - law gave it a name
5. Commutative - with valuable consideration922

919
Art. 1505
920
Art. 1165
921
obligation of seller transfer ownership & deliver
obligation of buyer pay price
Consequence: power to rescind is implied in bilateral contracts
922
Test: subjective as long as parties believe in all honesty that he is receiving equal value then it
complies with the test & would not be deemed a donation; but must not be absurd.
Inadequacy of price or aleatory character not sufficient ground to cancel contract of sale;
inadequacy can show vitiation of consent & sale may be annulled based on vice but not on inadequacy

201
6. Onerous - with valuable consideration
7. Title & not a mode title gives rise to an obligation to transfer; it is a mode w/c
actually transfers ownership

F. Sale is Title and Not Mode

The contract of sale by itself is not a mode of acquiring ownership. The contact
transfers no real rights; it merely causes certain obligations to arise.

G. Sale Distinguished From Other Contracts

Donation

Donation is gratuitous; sale is onerous

Donation is formal contract; sale is consensual
Donation is governed by law on donation; sale is governed by law on sales

Barter923

In barter, the consideration is the giving of a thing; in sale, it is giving of money as payment
Both are governed by law on sales; both are species of the genus sales
If consideration consists party in money & partly by thing look at manifest intention;

if intention is not clear924:

a. value of thing is equal or less than amount of money sale

b. value of thing is more than amount of money barter

Contract for piece of work925

Test:

a. contract for delivery of an article which the vendor in the ordinary course of
business manufactures or procures for general market (whether on hand or not)
sale
b. goods are to be manufactured specially for a customer and upon special order
and not for the general market contract for piece of work.

Agency to sell

923
The only point difference between contract of sale and barter is in the element which is present in sale
but not in barter, namely: price certain in money or its equivalent
924
Art. 1468
925
Art. 1467
main factor in decision of the SC: essence of why parties enter into it:
a. essence is object contract of sale
b. essence is service contract for piece of work

202
In sale, buyer pays for price of object; in agency to sell, agent not obliged to pay for price,
merely obliged to deliver price received from buyer.

In sale, buyer becomes owner of thing; in agency; principal remains owner even if object
delivered to agent

In sale, seller warrants; in agency, agent assumes no risk/liability as long as within the authority
given

In sale, not unilaterally revocable; in agency, may be revoked unilaterally because fiduciary &
even if revoked w/o ground

In sale, seller receives profit; in agency, agent not allowed to profit

Agency is a personal contract; sale is a real contract (to give) rescission is not available in
agency

Dacion en pago

Dacion: contract where property is alienated to satisfy/extinguish obligation to pay debt

In dacion:novates creditor-debtor relationship into seller-buyer

In dacion: delivery is required (real contract)

Lease

In sale: obligation to absolutely transfer ownership of thing; in lease: use of thing is for a
specified period only with an obligation to return

In sale: consideration is price; in lease: consideration is rent

In sale: seller needs to be owner of thing to transfer ownership;

in lease: lessor need not be owner

Lease with option to buy: really a contract of sale but designated as lease in name only; it is a
sale by installments

Contract for
Sale
Piece of Work

203
1. The thing transferred is 1. The thing transferred
one not in existence and is one which would have Sale Dation in Payment
which never would have existed and would have 1. No pre-existing 1. Pre-existing credit
existed but for the order been the subject of sale credit
of the party desiring to to some other person, 2. Obligations are 2. Obligations are
acquire it even if the order had not created extinguished
been given 3. Consideration on the 3. Consideration of the
part of the seller is the debtor is the
price; on the part of extinguishment of the
2. The services dominate 2. The primary objective the buyer is the debt; on the part of
the contract even though of the contract is a sale acquisition of the the creditor, it is the
object acquisition of the
there is a sale of goods of the manufactured
object offered in lieu
involved item; it is a sale of goods of the original credit
even though the item is 1. Greater freedom 1. Less Freedom in
manufactured by labor in determining the determining the
furnished by the seller price price
and upon previous order
of the customer 2. Buyer still has to 2. The payment is
pay the price received by the
debtor before the
3. Not within the Statute 3. Within the Statute of contract is
of Frauds Frauds perfected.

Conditional Sale Contract to

Sale
1. Buyer receives
the goods as owner
2. Buyer pays the
price
3. Buyer, as a
general rule, cannot
return the object
sold
4. Seller warrants
the thing sold
5. Buyer can deal
with the thing sold
as he pleases being
the owner
Sell
As to reservation of title to the subject
property
Agency to sell In both cases the seller may reserve the
title to the subject property until
1. Agent receives
fulfillment of the suspensive condition i.e.
the goods as goods
full payment of the price
of the principal who
retains his As to effect of fulfillment of suspensive
ownership over condition
them 1. Upon fulfillment of 1. Upon
2. Agent delivers the suspensive fulfillment of the
the price which in condition, the suspensive
turn he got from his contract of sale is condition, which
buyer thereby perfected, is the full
3. Agent can return such that if there had payment of the
the goods in case he been previous delivery purchase price,
is unable to sell the of the subject ownership will
same to a third property to the buyer, not
person ownership thereto automatically
4. Agent makes no automatically transfer to the
warranty for which transfers to the buyer although
he assumes personal buyer by operation the property may
liability as long as of law without any have been
he acts within his further act by the previously
authority and in the seller. delivered to him.
name of the seller The prospective
5. Agent in dealing seller still has
with the thing to convey title
received, must act to the
and is bound prospective
according to the buyer by
instructions of the entering into a
principal contract of
absolute sale.

204
 As to effect of sale of the subject
property to 3rd persons
1. Constructive 1. Third person
/actual knowledge on buying the
the part of the 2nd property despite
buyer of the defect in fulfilment of the
the sellers title suspensive
renders him not a condition cannot
registrant in good be deemed a
faith. Such second buyer in bad
buyer cannot defeat faith and
the first buyers title. prospective
Ratio: Fulfilment of buyer cannot
the suspensive seek the relief of
conditions affects the reconveyance of
sellers title to the property.
property and previous Exception: If
delivery of the There was no
property previous sale of
automatically the property.
transfers
ownership/title to the
buyer.

H. Contract of Sale/Contract to Sell

Contract to sell926

A bilateral contract whereby the prospective seller, while expressly reserving the
ownership of the subject property despite delivery thereof to the prospective buyer binds
himself to sell the said property exclusively to the prospective buyer upon fulfilment of the
condition agreed upon, that is, full payment of the purchase price.

Contract of Sale927

Contract of Contract to
Sale Sell
1. Title passes to the 1. Ownership is
buyer upon delivery reserved in the
of the thing sold seller and is not to
pass until full
payment of the
purchase price
2. Non-payment of 2. Full payment is a
the price is a positive suspensive
negative resolutory condition,

926
Absent a proviso in the contract that the title to the property is reserved in the vendor until full payment
of the purchase price or a stipulation giving the vendor the right to unilaterally rescind the contract the
moment the vendee fails to pay within the fixed period, the transaction is an absolute contract of sale and
not a contract to sell. (Dignos vs. CA [1988])
927
See I.A. Definition of Sales, supra

205
 condition and the thefailure of which
remedy of the seller is not a breach
is to exact fulfilment casual or serious
or to rescind the but simply
contract prevents the
obligation of the
vendor to convey
title from having
binding force
3. Vendor loses and 3. Title remains in
cannot recover the vendor if the
ownership of the vendee does not
thing sold and comply with the
delivered until the condition
contract of sale is precedent of
resolved and set making payment
aside at the time
specified in the
contract

II. Parties to a Contract of Sale

A. Capacity of parties

All persons who are authorized in this Code to obligate themselves, may enter into a
contract of sale, saving the modifications contained in the following articles.

Where necessaries are those sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. Necessaries are those referred to in
article 290.928

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 191.929

The following persons cannot acquire by purchase, even at a public or judicial

auction, either in person or through the mediation of another:

(1) The guardian, the property of the person or persons who may be under his guardianship;

(2) Agents, the property whose administration or sale may have been intrusted to them,
unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;

928
Art. 1489
929
Art. 1490

206
(4) Public officers and employees, the property of the State or of any subdivision thereof, or
of any government-owned or controlled corporation, or institution, the administration of
which has been intrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other
officers and employees connected with the administration of justice, the property and rights
in litigation or levied upon an execution before the court within whose jurisdiction or
territory they exercise their respective functions; this prohibition includes the act of acquiring
by assignment and shall apply to lawyers, with respect to the property and rights which may
be the object of any litigation in which they may take part by virtue of their profession;

(6) Any others specially disqualified by law.

The prohibitions in the two preceding articles are applicable to sales in legal
redemption, compromises and renunciations.930

B. Absolute incapacity

The following cannot give consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and deaf-mutes who do not know how to write931

The action for the annulment of contracts may be instituted by all who are thereby
obliged principally or subsidiarily. However, persons who are capable cannot allege the
incapacity of those with whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake base their action upon
these flaws of the contract.932

When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has been
benefited by the thing or price received by him.933

C. Relative incapacity: Married Persons

The husband and the wife cannot cannot sell property to each other, except:

(1) When separation of property was agreed upon in the marriage settlements: or
(2) When there has been a judicial separation of property between the spouses.934

930
Art. 1491
931
Art. 1327
932
Art. 1397
933
Art. 1399
934
Art. 1490

207
 D. Special disqualifications

The prohibitions in the two preceding articles are applicable to sales in legal
redemption, compromises and renunciations.935

III. Subject Matter

A. Requisites of a valid subject matter

The thing must be licit and the vendor must have a right to transfer the ownership
thereof at the time it is delivered.936

A thing is determinate when it is particularly designated or physical segregated from

all others of the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is
entered into, the thing is capable of being made determinate without the necessity of a new
or further agreement between the parties.937

Things having a potential existence may be the object of the contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence.

The sale of a vain hope or expectancy is void.938

The goods which form the subject of a contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.939

The sole owner of a thing may sell an undivided interest therein.940

In the case of fungible goods, there may be a sale of an undivided share of a specific
mass, though the seller purports to sell and the buyer to buy a definite number, weight or
measure of the goods in the mass, and though the number, weight or measure of the goods
in the mass, and though the number, weight or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes owner in common of such a share of the

935
Art. 1492
936
Art. 1459
937
Art. 1460
938
Art. 1461
939
Art. 1462
940
Art. 1463

208
mass as the number, weight or measure bought bears to the number, weight or measure of
the mass. If the mass contains less than the number, weight or measure bought, the buyer
becomes the owner of the whole mass and the seller is bound to make good the deficiency
from goods of the same kind and quality, unless a contrary intent appears.941

Things subject to a resolutory condition may be the object of the contract of sale.942

B. Particular kinds

1. Generic things943
2. Future Goods944
3. Sale of undivided interest or share945
4. Sale of things in litigation946
5. Things subject to a resolutory condition947

IV. Obligations of the Seller to Transfer Ownership

A. Sale by a person not the owner at time of delivery

The goods which form the subject of a contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.948

Subject to the provisions of this Title, where goods are sold by a person who is not
the owner thereof, and who does not sell them under authority or with the consent of the
owner, the buyer acquires no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's authority to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision of law enabling
the apparent owner of goods to dispose of them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale or under the order of a
court of competent jurisdiction;

941
Art. 1464
942
Art. 1465
943
see Arts. 1246 & 1409
944
Art. 1462
945
Arts. 1463 & 1464
946
Arts. 1381 & 1385
947
Art. 1465
948
Art. 1462

209
(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the
Code of Commerce and special laws.949

The thing must be licit and the vendor must have a right to transfer the ownership
thereof at the time it is delivered.950

1. Exceptions

B. Sale by a person having a voidable title

Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys
them in good faith, for value, and without notice of the seller's defect of title.951

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

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

If the possessor of a movable lost or which the owner has been unlawfully deprived,
has acquired it in good faith at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefor.952

V. Price953

A. Meaning of price

In order that the price may be considered certain, it shall be sufficient that it be so
with reference to another thing certain, or that the determination thereof be left to the
judgment of a special person or persons.

Should such person or persons be unable or unwilling to fix it, the contract shall be
inefficacious, unless the parties subsequently agree upon the price.

If the third person or persons acted in bad faith or by mistake, the courts may fix the
price.

Where such third person or persons are prevented from fixing the price or terms by
fault of the seller or the buyer, the party not in fault may have such remedies against the
party in fault as are allowed the seller or the buyer, as the case may be.954

949
Art. 1505
950
Art. 1459
951
Art. 1506
952
Art. 559
953
The sum stipulated as the equivalent of the thing sold and also every incident taken into consideration
for the fixing of the price, put to the debit of the vendee and agreed to by him.
954
Art. 1469

210
 Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.955

If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract.956

The price of securities, grain, liquids, and other things shall also be considered
certain, when the price fixed is that which the thing sold would have on a definite day, or in
a particular exchange or market, or when an amount is fixed above or below the price on
such day, or in such exchange or market, provided said amount be certain.957

The fixing of the price can never be left to the discretion of one of the contracting
parties. However, if the price fixed by one of the parties is accepted by the other, the sale is
perfected.958

Where the price cannot be determined in accordance with the preceding articles, or
in any other manner, the contract is inefficacious. However, if the thing or any part thereof
has been delivered to and appropriated by the buyer he must pay a reasonable price therefor.
What is a reasonable price is a question of fact dependent on the circumstances of each
particular case.959

B. Requisites for a valid price

1. Must be real960
2. Must be in money or its equivalent

955
Art. 1470
956
Art. 1471
957
Art. 1472
958
Art. 1473
959
Art. 1474
960
Real
1. When price stated is one intended by parties
If fictitious: no intention with respect to price - VOID
If False/simulated: what appears in contract is not the true price
a. Valid if there is true consideration
b. Void but if none (because it is fictitious)
2. Valuable
When not valuable Void
When contract is onerous, presumed to have valuable consideration
Nominal consideration w/c is common law concept does not apply (P1.00)
Gross inadequacy of price in ordinary sale does not render contract void unless it is shocking to
conscience of man.
Except:
a. Judicial sale
Shocking to conscience of man
Higher price can be obtained at re-sale
b. Rescissible contracts due to lesion
c. Sales with right to repurchase (raises presumption of equitable mortgage) Remedy is reformation

211
 3. Must be certain or ascertainable961 at the time of the perfection of the contract
4. Manner of payment provided for

C. How price is determined962

It is not necessary that the certainty of the price be actual or determined at the time of
the execution of the contract. The price is certain in the following cases:

1. If the parties have fixed or agreed upon a definite amount;963

2. If it be certain with reference to another thing certain
3. If the determination of the price is left to the judgment of a specified person or persons
even before such determination
4. In the cases provided under Art. 1472 NCC964

D. Inadequacy of price965

961
1.Sufficient that it is fixed with reference to another thing certain
That thing will have on a definite day, or in a particular exchange or market, or when an amount is
fixed above or below the price on such day, or in such exchange or market provided said amount be certain
2. Determination be left to judgment of specified person/s
If contract states that price is to be determined by 3rd party, contract is already perfected (there is just a
suspensive condition actual fixing of price)
3rd party fixes price in bad faith or mistake court remedy can be made
3rd party is unable or unwilling to fix price parties have no cause of action
Reason:
a. suspensive condition does not happen yet courts have no jurisdiction
b. enforceable contract have not yet arisen court with no jurisdiction to create contract between parties
Result: inefficacious
When price can not be determined in accordance with any of the preceding rules, contract of sale is
inefficacious
However, when SM delivered, buyer must pay reasonable rice therefore court can fix price
962
Effect of Failure to determine price:
1. Where contract executory
The contract is inefficacious
2. Where the thing has been delivered to and appropriated by the buyer
The buyer must pay a reasonable price therefore
963
The fixing of the price can never be left to the discretion of one of the contracting parties. However if
the price fixed by one of the parties is accepted by the other, the sale is perfected.
964
Article 1472. The price of securities, grain, liquids, and other things shall also be considered certain,
when the price fixed is that which the thing sold would have on a definite day, or in a particular exchange
or market, or when an amount is fixed above or below the price on such day, or in such exchange or
market, provided said amount be certain.

212
 Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a
contract, unless there has been fraud, mistake or undue influence.966

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.967

E. When no price agreed

Where the price cannot be determined in accordance with the preceding articles, or
in any other manner, the contract is inefficacious. However, if the thing or any part thereof
has been delivered to and appropriated by the buyer he must pay a reasonable price therefor.
What is a reasonable price is a question of fact dependent on the circumstances of each
particular case.968
F. Manner of payment must be agreed upon

Deemed to be an essential requisite because it is part of the presentation of the

contract.
Integral part of concept of price
If there is failure to meet minds as regards term of payment: cash basis
Must be certain or at least ascertainable
Effect if absent: no contract situation

965
Effect of Gross Inadequacy of Price:
1. Voluntary sales
General rule: Mere inadequacy of the price does not affect validity of the sale.
A valuable consideration, however small or nominal, if given or stipulated in good faith is, in the absence
of fraud, sufficient.(Rodriguez vs. CA, 207 SCRA 553)
Future inheritance cannot be sold.
Exceptions:
a. Where low price indicates vice of consent, sale may be annulled; or contract is presumed to be an
equitable mortgage
b. Where the price is so low as to be shocking to conscience, sale may be set aside.
2. Involuntary or Forced sales
General rule: Mere inadequacy of the price is not a sufficient ground for the cancellation of the sale if
property is real.
Exceptions:
a. Where the price is so low as to be shocking to the moral conscience, judicial sale of personal property
will be set aside
b. In the event of a resale, a better price can be obtained
The validity of the sale is not necessarily affected where the law gives to the owner the right to redeem,
upon the theory that the lesser the price, the easier it is for the owner to effect redemption.
966
Art. 1355
967
Art. 1470
968
Art. 1474

213
 G. Earnest money969 vs. option money

Whenever earnest money is given in a contract of sale, it shall be considered as part

of the price and as proof of the perfection of the contract.970

Earnest money Option money

1. Title passes to 1. Ownership is
the buyer upon reserved to the
delivery of the seller and is not to
thing sold pass until full
payment
2. In case of 2. In case of
non-payment, an non-payment, there
action for specific can be action for
performance or specific
for rescission can performance
be filed by the
injured party
3. Part of the 3. Money given as a
purchase price distinct
consideration for an
option contract
4. When given, 4. The would-be
the buyer is bound buyer is not required
to pay the balance to buy
5. Given when 5. Applies to a sale
there is already a not yet perfected
sale

VI. Formation of Contract of Sale971

A. Preparatory

A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

969
or Arras is something of value to show that the buyer was really in earnest, and given to the seller to
bind the bargain. It is considered as:
a) part of the purchase price
b) proof of perfection of the contract
It shall be deducted from the total price.
Old concept: subject to forfeiture when BUYER backs out
New concept: can not be forfeited part of purchase price; must be restored
Qualification: if old concept is stipulated valid
Presumption of perfection of contract of sale and such earnest money as part of purchase price is
disputable
970
Art. 1482
971
3 Stages in life of a contract of sale
1. Policitacion/negotiation Stage offer is floated, acceptance is floated but they do not meet; time
parties indicate their interest but no concurrence of offer & acceptance
2. Perfection concurrence of all requisites; meeting of the minds
3. Consummation parties perform their respective undertakings

214
 An accepted unilateral promise to buy or to sell a determinate thing for a price
certain is binding upon the promisor if the promise is supported by a consideration distinct
from the price.972

1. Offer

The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.973

2. Option Contract974

When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when
the option is founded upon a consideration, as something paid or promised.975

A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price

certain is binding upon the promisor if the promise is supported by a consideration distinct
from the price.976

3. Right of First Refusal

It is a right of first priority all things and conditions being equal; there should be
identity of the terms and conditions to be offered to the optionee and all other prospective
buyers, with optionee to enjoy the right of first priority. A deed of sale executed in favor of
a third party who cannot be deemed a purchaser in good faith, and which is in violation of
the of the right of first refusal granted to the optionee is NOT voidable under the Statute of

972
Art. 1479
973
Art. 1475
974
A contract granting a privilege in one person, for which he has paid a consideration, which gives him the
right to buy certain merchandise, at anytime within the agreed period, at a fixed price.
An option without consideration is void and the effect is the same as if there was no option
However, in Sanchez vs. Rigos (1972), even though the option was not supported by a consideration, the
moment it was accepted, a perfected contract of sale resulted, applying Art. 1324 of the NCC. In view of
the ruling of the Supreme Court, the only importance of the consideration for an option is that the option
cannot be withdrawn by the grantor after acceptance.
In an option to buy, the party who has an option may validly and effectively exercise his right by merely
notifying the owner of the formers decision to buy and expressing his readiness to pay the stipulated price.
975
Art. 1324
976
Art. 1479

215
Frauds, such contract is valid BUT rescissible under Article 1380 to 1381(3) of the New Civil
Code.977

The basis of the right of first refusal must be the current offer to sell of the seller or
offer to purchase of any prospective buyer. Only after the optionee fails to exercise its right
of first priority under the same terms and within the period contemplated could the owner
validly offer to sell the property to a third person, again, under the same terms as offered to
the optionee.978

OPTION CONTRACT & RIGHT OF FIRST REFUSAL DISTINGUISHED

OPTION CONTRACT RIGHT OF FIRST REFUSAL

Principal contract; stands on its own
Needs separate consideration
Subject matter & price must be valid
Not conditional
Not subject to specific performance
Accessory; can not stand on its own
Does not need separate consideration
There must be subject matter but price not
important
Conditional
Subject to specific performance

4. Mutual Promise to Buy and Sell979

One party accepts the others promise to buy and the latter, the formers promise to
sell a determinate thing for a price certain

It is reciprocally demandable

It requires no consideration distinct from the selling price

B. Perfection980

Consent is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer.981

977
Guzman Bocaling& Co. vs. Bonnavie; Riviera Filipina, Inc vs. CA et.al. GR No. 117355, April 5, 2002
978
Paranaque Kings Enterprises, Inc. vs. CA GR No. 111538, February 26, 1997
979
This is as good as a perfected sale. No title of dominion is transferred as yet, the parties being given
only the right to demand fulfillment or damages
980
Sale is a consensual contract, hence, delivery and payment are not essential for its perfection
GENERAL RULE: It is perfected at the moment there is meeting of the minds upon a determinate thing
(object), and a certain price (consideration), even if neither is delivered. A choice between rescission and
fulfilment, with damages in either case)
EXCEPTION: When the sale is subject to a suspensive condition by virtue of law or stipulation.
The terms and conditions of payment are merely accidental, not essential elements of the contract of sale
except where the parties themselves stipulate that in addition to the subject-matter and the price, they are
essential or material to the contract.
981
Meeting of Minds:
1. Offer certain
2. Acceptance absolute

216
 Acceptance made by letter or telegram does not bind the offerer 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.982

Unless it appears otherwise, business advertisements of things for sale are not
definite offers, but mere invitations to make an offer.983

Advertisements for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.984

The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.985

C. Formalities of the Contract

The following contracts are unenforceable, unless they are ratified:

(1) Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers;

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum, thereof, be in writing, and subscribed by the party

Qualified acceptance merely a counter-offer which needs to be absolutely accepted to give rise to
perfected contract of sale
Business ads are mere invitations to make an offer except when it appears to be otherwise
Acceptance by letter/telegram binds only at time it came to knowledge of SELLER; prior thereto
offer may still be withdrawn
Must be exact terms to be considered absolute
When deviations allowed:
a. anything that refers to price is material
b. small items are insignificant, does not make acceptable unconditional
When sale is subject to suspensive condition, no perfected contract of sale yet; becomes perfected only
upon happening of condition
In sales at auction, perfected when auctioneer announces its perfection by the fall of the hammer or in
other customary manner may impose terms under bidder may retract his bid; owner of property sold at
auction may impose terms under w/c the auction will proceed & it shall be binding w/n the bidders are
aware
Place of perfection: where the meeting of minds happen; when acceptance sent by mail, perfection is
deemed where the offer is made
Performance has nothing to do with perfection stage
982
Art. 1319
983
Art. 1325
984
Art. 1326
985
Art. 1475

217
charged, or by his agent; evidence, therefore, of the agreement cannot be received without
the writing, or a secondary evidence of its contents:

(a) An agreement that by its terms is not to be performed within a year from the making
thereof;

(b) A special promise to answer for the debt, default, or miscarriage of another;

(c) An agreement made in consideration of marriage, other than a mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in action, at a price not less than
five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or
the evidences, or some of them, of such things in action or pay at the time some part of the
purchase money; but when a sale is made by auction and entry is made by the auctioneer in
his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale,
price, names of the purchasers and person on whose account the sale is made, it is a
sufficient memorandum;

(e) An agreement for the leasing for a longer period than one year, or for the sale of real
property or of an interest therein;986

VII. Transfer of Ownership

A. Manner of Transfer

The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof.987

The ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from the vendor to the vendee.988

The thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee.989

When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed
the contrary does not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the
keys of the place or depository where it is stored or kept.990

986
Art. 1403
987
Art. 1477
988
Art. 1496
989
Art. 1497
990
Art. 1498

218
 The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale, or if the latter already had it in his
possession for any other reason.991

There may also be tradition constitutumpossessorium.992

With respect to incorporeal property, the provisions of the first paragraph of article
1498 shall govern. In any other case wherein said provisions are not applicable, the placing
of the titles of ownership in the possession of the vendee or the use by the vendee of his
rights, with the vendor's consent, shall be understood as a delivery.993

B. When delivery does not transfer title

Instances where Seller is still the Owner despite Delivery:

1. Sale on trial, approval or satisfaction

2. Contrary intention appears by the term of the contract;
3. Implied reservation of ownership994

a. If under the bill of lading, the goods are deliverable to seller or agent or their
order;
b. If the bill of lading, although stating that the goods are to be delivered to the
buyer or his agent, is kept by the seller or his agent;
c. When the buyer, although the goods are deliverable to order of buyer, and
although the bill of lading is given to him, does not honor the bill of exchange sent along
with it.

C. Kinds of delivery

1. Actual or real placing the thing under the control and possession of the buyer.
2. Legal or constructive995 delivery is represented by other signs or acts indicative thereof

a. delivery by the execution of a public instrument.996

b. traditio symbolica - to effect delivery, the parties make use of a token or symbol to
represent the thing delivered

991
Art. 1499
992
Art. 1500
993
Art. 1501
994
Article 1503
995
Three things before ownership may be transferred:
1 The seller must have control over the thing
2. The buyer must be put under control
3. There must be the intention to deliver the thing for purposes of ownership
996
Gives rise only to a prima facie presumption of delivery which is destroyed when actual delivery is not
effected because of a legal impediment (Ten Forty Realty vs. Cruz, 10 Sept. 2003)

219
 c. traditio longa manu seller pointing out to the buyer the things which are transferred,
which at the time must be in sight.
d. traditio brevi manu buyer simply continues in possession of the thing but under title
of ownership.
e. traditio constitutum possessorium seller continues in possession but under a different
title other than ownership.

3. Quasi-tradition delivery of rights, credits or incorporeal property, made by:

a. placing titles of ownership in the hands of buyer
b. allowing buyer to make use of rights

4. Tradition by operation of law

D. Double Sales997

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
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 faith998.

E. Property Registration Decree

1. Requisites for registration of deed of sale in good faith

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,

997
Requisites: VOCS
1. two or more transactions must constitute valid sales;
2. they must pertain exactly to the same object or subject matter;
3. they must be bought from the same or immediate seller; AND
4. two or more buyers who are at odds over the rightful ownership of the subject matter must represent
conflicting interests.
Rules of preference:
1. Personal Property
a. first possessor in good faith
2. Real Property
a. first registrant in good faith
b. first possessor in good faith
c. person with oldest title in good faith
998
Art. 1544
To be entitled to priority, the second buyer must not only show prior recording of his deed but must have
acted in good faith, without knowledge of the existence of another alienation by the vendor to another

220
unless such instrument shall have been recorded in the manner herein prescribed in the
office of the Register of Deeds for the province or city where the land lies.

(a) The Register of Deeds for each province or city shall keep a Primary Entry Book and a
Registration Book. The Primary Entry Book shall contain, among other particulars, the entry
number, the names of the parties, the nature of the document, the date, hour and minute it
was presented and received. The recording of the deed and other instruments relating to
unregistered lands shall be effected by any of annotation on the space provided therefor in
the Registration Book, after the same shall have been entered in the Primary Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register of
Deeds shall forthwith record the instrument in the manner provided herein. In case the
Register of Deeds refuses its administration to record, said official shall advise the party in
interest in writing of the ground or grounds for his refusal, and the latter may appeal the
matter to the Commissioner of Land Registration in accordance with the provisions of
Section 117 of this Decree. It shall be understood that any recording made under this section
shall be without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse among other
things, upon the original of the recorded instruments, the file number and the date as well as
the hour and minute when the document was received for recording as shown in the
Primary Entry Book, returning to the registrant or person in interest the duplicate of the
instrument, with appropriate annotation, certifying that he has recorded the instrument after
reserving one copy thereof to be furnished the provincial or city assessor as required by
existing law.
(d) Tax sale, attachment and levy, notice of lispendens, adverse claim and other instruments in
the nature of involuntary dealings with respect to unregistered lands, if made in the form
sufficient in law, shall likewise be admissible to record under this section.999

2. Accompanied by vendors duplicate certificate of title, payment of

capital gains tax, and documentary tax registration fees

(e) For the services to be rendered by the Register of Deeds under this section, he shall
collect the same amount of fees prescribed for similar services for the registration of deeds
or instruments concerning registered lands.1000

VIII. Risk of Loss

A. General rule

When the conditions have been imposed with the intention of suspending the
efficacy of an obligation to give, the following rules shall be observed in case of the
improvement, loss or deterioration of the thing during the pendency of the condition:

999
Sec. 113, P.D. 1529
1000
ibid

221
(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it
is understood that the thing is lost when it perishes, or goes out of commerce, or disappears
in such a way that its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the impairment is to be
borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may choose between the
rescission of the obligation and its fulfillment, with indemnity for damages in either case;

(5) If the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no other right than that
granted to the usufructuary.1001

In an obligation to deliver a generic thing, the loss or destruction of anything of the

same kind does not extinguish the obligation.1002

B. When loss occurred before perfection

Seller bears the loss.

C. When loss occurred at time of perfection1003

If at the time the contract of sale is perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be without any effect.
But if the thing should have been lost in part only, the vendee may choose between
withdrawing from the contract and demanding the remaining part, paying its price in
proportion to the total sum agreed upon.1004
Where the parties purport a sale of specific goods, and the goods without the
knowledge of the seller have perished in part or have wholly or in a material part so
deteriorated in quality as to be substantially changed in character, the buyer may at his option
treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not
deteriorated, and as binding the buyer to pay the agreed price for the goods in which
the ownership will pass, if the sale was divisible.1005

1001
Art. 1189
1002
Art. 1263
1003
Contract is void or inexistent.
1004
Art. 1493

222
 D. When loss occurred after perfection but before delivery1006

General rule:

Who bears the risk of loss is governed by the stipulations in the contract

Exceptions:

1. when object sold consists of fungible goods for a price fixed according to weight,
number or measure
2. seller is guilty of fraud, negligence, default or violation of contractual terms
3. object sold is generic1007

E. When ownership is transferred1008

Unless otherwise agreed, the goods remain at the seller's risk until the ownership
therein is transferred to the buyer, but when the ownership therein is transferred to the
buyer the goods are at the buyer's risk whether actual delivery has been made or not, except
that:

1005
Art. 1494
1006
In the absence of any stipulation:
First view:
Buyer bears the loss as an exception to the rule of res perit domino.
Contrary view:
Where the ownership is transferred by delivery, as in our code, the application of the axiom res perit
domino, imposes the risk of loss upon the vendor; hence, if the thing is lost by fortuitous event before
delivery, the vendor suffers the loss and cannot recover the price from the vendee (Commentaries and
Jurisprudence on the Civil Code of the Philippines, Tolentino)
1007
Civil Code of the Philippines, Paras.This view conforms with Manresas view. Buyer would have been the
one to profit from the thing had it not been lost or destroyed.
1008
Transfer of ownership
General rule:
While a contract of sale is consensual, ownership of the thing sold is acquired only upon its delivery,
actual or constructive, to the buyer. (Daus vs. Sps. De Leon, 16 June 2003)
This is true even if the purchase has been made on credit. Payment of the purchase price is not
essential to the transfer of ownership, as long as the property sold has been delivered. (Sampaguita
Pictures, Inc vs. Jalwindor Manufacturers, Inc. 93 SCRA 420)
Nonpayment only creates a right to demand payment or to rescind the contract, or to criminal
prosecution in the case of bouncing checks. (EDCA Publishing and Distributing Corp. vs. Santos, 184
SCRA 614)
Exceptions:
1. Contrary stipulation or Pactumreservatidominii (contractual reservation of title) a stipulation,
usually in sales by installment, whereby, despite delivery of the property sold, ownership remains with the
seller until full payment of the price is made.
2. Contract to sell
3. Contract of insurance a perfected contract of sale, even without delivery, vests in the vendee an
equitable title, an existing interest over the goods sufficient to be the subject of insurance

223
 (1) Where delivery of the goods has been made to the buyer or to a bailee for the
buyer, in pursuance of the contract and the ownership in the goods has been
retained by the seller merely to secure performance by the buyer of his obligations
under the contract, the goods are at the buyer's risk from the time of such delivery;

(2) Where actual delivery has been delayed through the fault of either the buyer or
seller the goods are at the risk of the party in fault.1009

IX. Documents of Title

A. Definition

"Document of title to goods" includes any bill of lading, dock warrant, "quedan," or
warehouse receipt or order for the delivery of goods, or any other document used in the
ordinary course of business in the sale or transfer of goods, as proof of the possession or
control of the goods, or authorizing or purporting to authorize the possessor of the
document to transfer or receive, either by indorsement or by delivery, goods represented by
such document.1010

B. Purpose of documents of title

1. evidence of existence & possession of goods described therein

2. medium by which seller is able to transfer possession of goods

C. Negotiable documents of title1011

Those by the terms of which the bailee undertakes to deliver the goods to thebearer
and those by the terms of which the bailee undertakes to deliver the goods to the order of a
specified person.

May be negotiated by delivery or indorsement.

D. Non-negotiable documents of title

Those by the terms of which the goods covered are deliverable to a specifiedperson

E. Warranties of seller of documents of title

A person who for value negotiates or transfers a document of title by indorsement or

delivery, including one who assigns for value a claim secured by a document of title unless a
contrary intention appears, warrants:

1009
Art. 1504
1010
Art. 1636
1011
A document of title in which it is stated that the goods referred to therein will be delivered to the bearer,
or to the order of any person named in such document ( Art. 1507)

224
(1) That the document is genuine;
(2) That he has a legal right to negotiate or transfer it;
(3) That he has knowledge of no fact which would impair the validity or worth of the
document; and
(4) That he has a right to transfer the title to the goods and that the goods are merchantable
or fit for a particular purpose, whenever such warranties would have been implied if the
contract of the parties had been to transfer without a document of title the goods
represented thereby.1012

F. Rules on levy/garnishment of goods

A person to whom a document of title has been transferred, but not negotiated,
acquires thereby, as against the transferor, the title to the goods, subject to the terms of any
agreement with the transferor.

If the document is non-negotiable, such person also acquires the right to notify the
bailee who issued the document of the transfer thereof, and thereby to acquire the direct
obligation of such bailee to hold possession of the goods for him according to the terms of
the document.

Prior to the notification to such bailee by the transferor or transferee of a non-

negotiable document of title, the title of the transferee to the goods and the right to acquire
the obligation of such bailee may be defeated by the levy of an attachment of execution
upon the goods by a creditor of the transferor, or 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.1013

If goods are delivered to a bailee by the owner or by a person whose act in conveying
the title to them to a purchaser in good faith for value would bind the owner and a
negotiable document of title is issued for them they cannot thereafter, while in possession of
such bailee, be attached by garnishment or otherwise or be levied under an execution unless
the document be first surrendered to the bailee or its negotiation enjoined. The bailee shall
in no case be compelled to deliver up the actual possession of the goods until the document
is surrendered to him or impounded by the court.1014

A creditor whose debtor is the owner of a negotiable document of title shall be

entitled to such aid from courts of appropriate jurisdiction by injunction and otherwise in
attaching such document or in satisfying the claim by means thereof as is allowed at law or in
equity in regard to property which cannot readily be attached or levied upon by ordinary
legal process.1015

1012
Art. 1516
1013
Art. 1514
1014
Art. 1519
1015
Art. 1520

225
 X. Remedies of an Unpaid Seller

A. Definition of unpaid seller

The seller of goods is deemed to be an unpaid seller within the meaning of this Title:

(1) When the whole of the price has not been paid or tendered;

(2) 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.

In articles 1525 to 1535 the term "seller" includes an agent of the seller to whom the
bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly
responsible for the price, or any other person who is in the position of a seller.1016

B. Remedies of unpaid seller

In case of movables

1. Ordinary Remedies

a. Movables in General Failure of the vendee to appear to receive delivery or, having
appeared, failure to tender the price at the same time, unless, a longer period for its
payment has been stipulated

- action to rescind the sale1017

b. Sale of Goods

- action for the price1018

- action for damages1019

2. Unpaid Seller1020

1016
Art. 1525
1017
Art. 1593
1018
Art. 1595
1019
Art. 1596
1020
Types:
a. The seller of the goods who has not been paid or to whom the price has not been tendered
b. The seller of the goods, in case 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, insolvency of the buyer or otherwise.

226
 Remedies:

1. Possessory lien over the goods

2. Right of stoppage in transituafter he has parted with the possession of the goods and
the buyer becomes insolvent
3. Special Right of resale
4. Special Right to rescind the sale
5. Action for the price
6. Action for damages

3. Remedies of vendor in sale of personal property by installments1021

Remedies:

1. Specific performance upon vendees failure to pay1022

2. Rescission of the sale if vendee shall have failed to pay two or more installments1023
3. Foreclosure of the chattel mortgage on the thing sold if vendee shall have failed to
pay two or more installments. In this case, there shall be no further action against the
purchaser to recover unpaid balance of the price.1024

1021
Article 1484 or Recto Law
Apply likewise to contracts purporting to be leases of personal property with option to buy
Does not apply to a sale:
1. Payable on straight terms (partly in cash and partly in one term)
2. Of Real property
Requisites:
1. Contract of sale
2. Personal property
3. Payable in installments
4. In the case of the second and third remedies, that there has been a failure to pay two or more installments
1022
Does not bar full recovery for judgment secured may be executed on all personal and real properties of
the buyer which are not exempt from execution (Palma v. CA.)
1023
Nature of the remedy which requires mutual restitution bars further action on the purchase price
(Nonato vs. IAC.)
General rule:
Cancellation of sale requires mutual restitution, that is all partial payments of price or rents must be
returned
Exceptions:
A stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be
valid insofar as the same may not be unconscionable under the circumstan-ces (Article 1486).
1024
Further recovery barred only from the time of actual sale at public auction conducted pursuant to
foreclosure (Macondray vs. Tan.)
Other chattels given as security cannot be foreclosed if they are not subject of the installment sale
(Ridad vs. Filipinas investment and Finance Corp. GR 39806, Jan. 28, 1983)
If the vendor assigns his right to a financing company, the latter may be regarded as a collecting agency
of the vendor and cannot therefore recover any deficiency from the vendee (Zayas vs. Luneta Motors Co.)
When the vendor assigns his credit to another person, the latter is likewise bound by the same law.
Accordingly, when the assignee forecloses on the mortgage, there can be no further recovery of the
deficiency and the vendor-mortgagee is deemed to have renounced any right thereto (Borbon II vs.
Servicewide Specialist, Inc. 258SCRA658)

227
 In case of immovable:

1. Ordinary Remedies

a. In case of anticipatory breach

- rescission1025

b. Failure to pay the purchase price

- rescission upon judicial or notarial demand for rescission1026

- the vendee may pay, even after the expiration of the period, as long as no
demand for rescission has been made upon him

XI. Performance of Contract

A. Delivery of thing sold

1. Sale of Movables

Where the seller delivers to the buyer a quantity of goods less than he contracted to
sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered,
knowing that the seller is not going to perform the contract in full, he must pay for them at
the contract rate. If, however, the buyer has used or disposed of the goods delivered before
he knows that the seller is not going to perform his contract in full, the buyer shall not be
liable for more than the fair value to him of the goods so received.

Where the seller delivers to the buyer a quantity of goods larger than he contracted
to sell, the buyer may accept the goods included in the contract and reject the rest. If the
buyer accepts the whole of the goods so delivered he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell mixed with
goods of a different description not included in the contract, the buyer may accept the goods
which are in accordance with the contract and reject the rest.

However, Article 1484(3) does not bar one to whom the vendor has assigned on with a recourse basis
his credit against the vendee from recovering from the vendor the assigned credit in full although the
vendor may have no right of recovery against the vendee for the deficiency (Filipinas Invest. & Finance
Corp. vs. Vitug, Jr. 28SCRA658)
Remedies are alternative and exclusive
1025
Article 1591
1026
Article 1592
Does not apply to:
1) Sale on installment of real estate
2) Contract to sell
3) Conditional sale
4) Cases covered by RA 6552: Realty Installment buyer protection act

228
 In the preceding two paragraphs, if the subject matter is indivisible, the buyer may
reject the whole of the goods.

The provisions of this article are subject to any usage of trade, special agreement, or
course of dealing between the parties.1027

The vendor is bound to deliver the thing sold and its accessions and accessories in
the condition in which they were upon the perfection of the contract.

All the fruits shall pertain to the vendee from the day on which the contract was
perfected.1028

Any injury to or benefit from the thing sold, after the contract has been perfected,
from the moment of the perfection of the contract to the time of delivery, shall be governed
by articles 1163 to 1165, and 1262.

This rule shall apply to the sale of fungible things, made independently and for a
single price, or without consideration of their weight, number, or measure.

Should fungible things be sold for a price fixed according to weight, number, or
measure, the risk shall not be imputed to the vendee until they have been weighed, counted,
or measured and delivered, unless the latter has incurred in delay.1029

2. Sale of Immovables

The obligation to deliver the thing sold includes that of placing in the control of the
vendee all that is mentioned in the contract, in conformity with the following rules:

If the sale of real estate should be made with a statement of its area, at the rate of a
certain price for a unit of measure or number, the vendor shall be obliged to deliver to the
vendee, if the latter should demand it, all that may have been stated in the contract; but,
should this be not possible, the vendee may choose between a proportional reduction of the
price and the rescission of the contract, provided that, in the latter case, the lack in the area
be not less than one-tenth of that stated.

The same shall be done, even when the area is the same, if any part of the
immovable is not of the quality specified in the contract.

The rescission, in this case, shall only take place at the will of the vendee, when the
inferior value of the thing sold exceeds one-tenth of the price agreed upon.

1027
Art. 1522
1028
Art. 1537
1029
Art. 1480

229
 Nevertheless, if the vendee would not have bought the immovable had he known of
its smaller area of inferior quality, he may rescind the sale.1030
The actions arising from articles 1539 and 1542 shall prescribe in six months,
counted from the day of delivery.1031

3. Inspections and Acceptance

A. Right of inspection

The buyer is entitled to examine the goods to decide whether he will become the
owner, and until the examination is completed or waived, he is under NO obligation to
accept them. He may however waive this right by simply refusing to inspect the goods,
taking them as they are or by any other similar act.1032

B. Manifestation of Acceptance

The buyer is deemed to have accepted thegoods when:

1. he intimates to the seller that the has accepted them

2. the goods have been delivered to him and he does any act in relation to them which is
inconsistent with the ownership of the seller

3. after the lapse of a reasonable time, he retains the goods without intimating to the
seller that he has rejected them.

Exercise of acts of ownership over the goods is a manifestation of acceptance, such

as making useof them as owner, making alterations in the goods or subjecting it to the
process ofmanufacture.

EXCEPTION:

Buyers right to make atest of goods, but only if necessary, to enable him to
determine whether to accept or reject the goods

C. Breach of warranty

1030
Art. 1539
1031
Art. 1543
1032
See Art. 1584

230
 The purpose of the notice of breach of warranty is to PROTECT the seller against
belated damage claims which would prevent the seller from making an adequate and proper
investigation of his alleged liability.1033

Acceptance of delivery means an assent to become owner of the goods on the part
of the buyer, but not an assent that the goods fulfill the description and terms of the
contract.

D. Refusal to accept

Unless otherwise agreed, when the goods are delivered to the buyer and he has a
right to refuse toaccept them, he need not return them. It issufficient that the buyer notifies
the seller that
he refuses to accept the goods, and thereafter, the former becomes the depository of the
rejected goods.1034

However, where title already passed to thebuyer and there was a breach of warranty,
the buyer may rescind the contract by returning oroffering to return the goods to the seller
and recover the price which had been paid.

B. Payment of price

When may be exercised:

1. Where the ownership has passed to the buyer and he wrongfully neglects or refuses
to pay for the price
2. Where the price is payable on a day certain and he wrongfully neglects or refuses to
pay for the price, irrespective of the delivery or transfer of title
3. Where the goods cannot readily be resold for a reasonable price and the buyer
wrongfully refuses to accept them even before the ownership of the goods has
passed, if Article 1596 is inapplicable.

XII. Warranties

A. Express warranties

Where one party expressly promised thatthe contingency or some act fixed by the
contract shall be performed, like a promise that the goods are of a certain kind and character
or that certain state of facts would exist, thepromise constitutes a warranty, and failure of
which gives rise to an action for its breach.

1. it must be an affirmation of fact or any promise by seller relating to the subject

matter of sale

1033
See Art. 1586
1034
See Arts. 1587 to 89

231
 2. natural tendency of affirmation or promise is to induce buyer to purchase subject
matter
3. buyer purchases the subject matter relying thereon1035

B. Implied warranties

In a contract of sale, unless a contrary intention appears, there is:

(1) An implied warranty on the part of the seller that he has a right to sell the thing at
the time when the ownership is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any hidden faults or defects,
or any charge or encumbrance not declared or known to the buyer.
This article shall not, however, be held to render liable a sheriff, auctioneer,
mortgagee, pledgee, or other person professing to sell by virtue of authority in fact or law,
for the sale of a thing in which a third person has a legal or equitable interest.1036

C. Effects of warranties

Where there is a breach of warranty by the seller, the buyer may, at his election:

(1) Accept or keep the goods and set up against the seller, the breach of warranty by way of
recoupment in diminution or extinction of the price;

(2) Accept or keep the goods and maintain an action against the seller for damages for the
breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the seller for damages for the
breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if the goods have already
been received, return them or offer to return them to the seller and recover the price or any
part thereof which has been paid.

When the buyer has claimed and been granted a remedy in anyone of these ways, no
other remedy can thereafter be granted, without prejudice to the provisions of the second
paragraph of article 1191.

Where the goods have been delivered to the buyer, he cannot rescind the sale if he
knew of the breach of warranty when he accepted the goods without protest, or if he fails to
notify the seller within a reasonable time of the election to rescind, or if he fails to return or

1035
when breached, seller is liable for damages
1036
Art. 1547

232
to offer to return the goods to the seller in substantially as good condition as they were in at
the time the ownership was transferred to the buyer. But if deterioration or injury of the
goods is due to the breach or warranty, such deterioration or injury shall not prevent the
buyer from returning or offering to return the goods to the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to
be liable for the price upon returning or offering to return the goods. If the price or any part
thereof has already been paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after an offer to return the
goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses
to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to
hold the goods as bailee for the seller, but subject to a lien to secure the payment of any
portion of the price which has been paid, and with the remedies for the enforcement of such
lien allowed to an unpaid seller by article 1526.

(5) In the case of breach of warranty of quality, such loss, in the absence of special
circumstances showing proximate damage of a greater amount, is the difference between the
value of the goods at the time of delivery to the buyer and the value they would have had if
they had answered to the warranty.1037

D. Effects of waivers

Parties may increase or diminish implied warranty against eviction; but effect
depends on good faith or bad faith on the part of the seller.

1. seller in bad faith & there is waiver against eviction null & void
2. buyer without knowledge of a particular risk made general renunciation of
warranty not waiver but merely limits liability of seller in case of eviction (pay
value of subject matter at time of eviction)
3. buyer with knowledge of risk of eviction assumed its consequences & made a
waiver vendor not liable1038

E. Buyers options in case of breach of warranty

Where there is a breach of warranty by the seller, the buyer may, at his election:

1037
Art. 1599
1038
applicable only to waiver of warranty against eviction
When goods delivered to buyer he cannot rescind sale if he knew of the breach of warranty when he
accepted goods without protest if he fails to return or offer to return goods to seller in substantially as good
condition as they were at time ownership was transferred
When goods deteriorated, buyer can still return them in that condition if such is due to breach or
warranty

233
 (1) Accept or keep the goods and set up against the seller, the breach of warranty by
way of recoupment in diminution or extinction of the price;

(2) Accept or keep the goods and maintain an action against the seller for damages
for the breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the seller for damages
for the breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if the goods have
already been received, return them or offer to return them to the seller and recover the price
or any part thereof which has been paid.

When the buyer has claimed and been granted a remedy in anyone of these ways, no
other remedy can thereafter be granted, without prejudice to the provisions of the second
paragraph of article 1191.

Where the goods have been delivered to the buyer, he cannot rescind the sale if he
knew of the breach of warranty when he accepted the goods without protest, or if he fails to
notify the seller within a reasonable time of the election to rescind, or if he fails to return or
to offer to return the goods to the seller in substantially as good condition as they were in at
the time the ownership was transferred to the buyer. But if deterioration or injury of the
goods is due to the breach or warranty, such deterioration or injury shall not prevent the
buyer from returning or offering to return the goods to the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to
be liable for the price upon returning or offering to return the goods. If the price or any part
thereof has already been paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after an offer to return the
goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses
to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to
hold the goods as bailee for the seller, but subject to a lien to secure the payment of any
portion of the price which has been paid, and with the remedies for the enforcement of such
lien allowed to an unpaid seller by article 1526.

(5) In the case of breach of warranty of quality, such loss, in the absence of special
circumstances showing proximate damage of a greater amount, is the difference between the
value of the goods at the time of delivery to the buyer and the value they would have had if
they had answered to the warranty.1039
XIII. Breach of Contract

A. Remedies of the Seller

1039
Art. 1599

234
 Actions for breach of the contract of sale of goods shall be governed particularly by
the provisions of this Chapter, and as to matters not specifically provided for herein, by
other applicable provisions of this Title.1040

In the preceding articles in this Title governing the sale of goods, unless the context
or subject matter otherwise requires:

(1) "Document of title to goods" includes any bill of lading, dock warrant, "quedan," or
warehouse receipt or order for the delivery of goods, or any other document used in the
ordinary course of business in the sale or transfer of goods, as proof of the possession or
control of the goods, or authorizing or purporting to authorize the possessor of the
document to transfer or receive, either by indorsement or by delivery, goods represented by
such document.

"Goods" includes all chattels personal but not things in action or money of legal tender in
the Philippines. The term includes growing fruits or crops.

"Order" relating to documents of title means an order by indorsement on the documents.

"Quality of goods" includes their state or condition.

"Specific goods" means goods identified and agreed upon at the time a contract of sale is
made.

An antecedent or pre-existing claim, whether for money or not, constitutes "value" where
goods or documents of title are taken either in satisfaction thereof or as security therefor.

(2) A person is insolvent within the meaning of this Title who either has ceased to pay his
debts in the ordinary course of business or cannot pay his debts as they become due,
whether insolvency proceedings have been commenced or not.

(3) Goods are in a "deliverable state" within the meaning of this Title when they are in such
a state that the buyer would, under the contract, be bound to take delivery of them.1041

1. Sale of Movables

B. Recto Law: Sale of Movables on Installment

1040
Art. 1594
1041
Art. 1636

235
 The Recto law1042provides for remedies of a seller in contracts of sale of personal
property by installment, as follows:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the
vendee's failure to pay cover two or more installments. In this case, he shall have no further
action against the purchaser to recover any unpaid balance of the price. Any agreement to
the contrary shall be void.1043

The preceding article shall be applied to contracts purporting to be leases of personal

property with option to buy, when the lessor has deprived the lessee of the possession or
enjoyment of the thing.1044

In the case referred to in the two preceding articles, a stipulation that the installments
or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same
may not be unconscionable under the circumstances.1045

1. Sale of Immovables

a. PD 957

Non-Forfeiture of Payments. No installment payment made by a buyer in a

subdivision or condominium project for the lot or unit he contracted to buy shall be
forfeited in favor of the owner or developer when the buyer, after due notice to the owner
or developer, desists from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the approved plans and within
the time limit for complying with the same. Such buyer may, at his option, be reimbursed the
total amount paid including amortization interests but excluding delinquency interests, with
interest thereon at the legal rate.1046

Failure to pay installments. The rights of the buyer in the event of this failure to pay
the installments due for reasons other than the failure of the owner or developer to develop
the project shall be governed by Republic Act No. 6552.

Where the transaction or contract was entered into prior to the effectivity of
Republic Act No. 6552 on August 26, 1972, the defaulting buyer shall be entitled to the

1042
Installment Sales Law
1043
Art. 1484
1044
Art. 1485
1045
Art. 1486
1046
Sec. 23

236
corresponding refund based on the installments paid after the effectivity of the law in the
absence of any provision in the contract to the contrary.1047

b. Maceda Law1048

It covers sales on installments of residential real estate and financing of such

acquisitions.

Where the buyer has paid at least two (2) years of installment, the buyer is entitled to
the following rights in case he defaults in payments of succeeding installments:

1) To pay, without additional interest, the unpaid installments due within the total
grace period earned by him which is fixed at the rate of one month grace period
for every one year of installments.
2) If the contract is cancelled, the seller shall refund to the buyer the cash surrender
value of the payments on the property equivalent to the 50% of the total
payment made every year but not to exceed 90% of the total payments made.

Where the buyer has paid less than two years, he shall be entitled to a grace period of
60 days from the date the installment became due. If he fails to pay the installments due
at the expiration of the grace period, the seller may cancel the contract after 30 days
from receipt by the buyer of the notice of cancellation, or the demand for rescission of
the contract by a notarial act.

C. Remedies of the Buyer

1. Sale of Movable

When seller fails to deliver, buyer may seek specific performance without giving
seller option to retain goods on payment of damages.

2. Sale of Immovables

If disturbed in possession or with reasonable grounds to fear disturbance

i. Suspend payment

In case of subdivision or condo projects: If real estate developer fails to comply with
obligations according to approved plan:

i. Rescind
ii. Suspend payment until seller complies

1047
Sec. 24
1048
Sale of Immovables on Installment

237
XIV. Extinguishment of the Sale

A. Causes

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.1049

Sales are extinguished by the same causes as all other obligations, by those stated in
the preceding articles of this Title, and by conventional or legal redemption.1050

B. Conventional redemption

Conventional redemption shall take place when the vendor reserves the right to
repurchase the thing sold, with the obligation to comply with the provisions of article 1616
and other stipulations which may have been agreed upon.1051

C. Equitable mortgage

The contract shall be presumed to be an equitable mortgage, in any of the following

cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the performance of any other
obligation.

1049
Art. 1231
1050
Art. 1600
1051
Art. 1601

238
 In any of the foregoing cases, any money, fruits, or other benefit to be received by
the vendee as rent or otherwise shall be considered as interest which shall be subject to the
usury laws.1052

In case of doubt, a contract purporting to be a sale with right to repurchase shall be

construed as an equitable mortgage.1053

The provisions of article 1602 shall also apply to a contract purporting to be an

absolute sale.1054

D. Distinguish from option to buy

The contract shall be presumed to be an equitable mortgage, in any of the following

cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the performance of any other
obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received by
the vendee as rent or otherwise shall be considered as interest which shall be subject to the
usury laws.1055

E. Period of redemption

The right referred to in article 1601,1056 in the absence of an express agreement, shall
last four years from the date of the contract.

Should there be an agreement, the period cannot exceed ten years.

1052
Art. 1602
1053
Art. 1603
1054
Art. 1604
1055
Art. 1602
1056
supra

239
 However, the 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.1057

F. Exercise of the right to redeem

The vendor cannot avail himself of the right of repurchase without returning to the vendee
the price of the sale, and in addition:

(1) The expenses of the contract, and any other legitimate payments made by reason of the
sale;
(2) The necessary and useful expenses made on the thing sold.1058

G. Legal redemption

Legal redemption is the right to be subrogated, upon the same terms and conditions
stipulated in the contract, 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.1059

H. Age redemption1060

XV. The Law on Sale of Subdivision and Condominium1061

XVI. The Condominium Act1062

SUCCESSION

I. General Provisions

Succession is a mode of acquisition by virtue of which the property, rights and

obligations to the extent of the value of the inheritance, of a person are transmitted through
his death to another or others either by his will or by operation of law.1063

In this Title, "decedent" is the general term applied to the person whose property is
transmitted through succession, whether or not he left a will. If he left a will, he is also called
the testator.1064

1057
Art. 1606
1058
Art. 1616
1059
Art. 1619
1060
ibid
1061
PD 957, see Reference
1062
RA 4726, ibid
1063
Art. 774
1064
Art. 775

240
 The inheritance includes all the property, rights and obligations of a person which
are not extinguished by his death.1065

The rights to the succession are transmitted from the moment of the death of the
decedent.1066

Succession may be:

(1) Testamentary;
(2) Legal or intestate; or
(3) Mixed.1067

Testamentary succession is that which results from the designation of an heir, made
in a will executed in the form prescribed by law.1068

Mixed succession is that effected partly by will and partly by operation of law.1069

A. Definition/What is transmitted

The inheritance of a person includes not only the property and the transmissible
rights and obligations existing at the time of his death, but also those which have accrued
thereto since the opening of the succession.1070

B. Succession occurs at the moment of death1071

C. Kinds of Successors Heirs, Devisees, Legatees

An heir is a person called to the succession either by the provision of a will or by

operation of law.

Devisees and legatees are persons to whom gifts of real and personal property are
respectively given by virtue of a will.1072

II. Testamentary Succession

1065
Art. 776
1066
Art. 777
1067
Art. 778
1068
Art. 779
1069
Art. 780
1070
Art. 781; see also Arts. 774 & 776, General Provisions, supra
1071
Art. 777, supra
1072
Art. 782

241
 A. Wills

1. In General

a. Definition and characteristics

A will is an act whereby a person is permitted, with the formalities prescribed by law,
to control to a certain degree the disposition of this estate, to take effect after his death.1073
The testator may not make a testamentary disposition in such manner that another person
has to determine whether or not it is to be operative.1074

(1) Personal Act; Non-delegability of will-making;

exception

The making of a will is a strictly personal act; it cannot be left in whole or in part to
the discretion of a third person, or accomplished through the instrumentality of an agent or
attorney.1075

The duration or efficacy of the designation of heirs, devisees or legatees, or the

determination of the portions which they are to take, when referred to by name, cannot be
left to the discretion of a third person.1076

The testator may entrust to a third person the distribution of specific property or
sums of money that he may leave in general to specified classes or causes, and also the
designation of the persons, institutions or establishments to which such property or sums
are to be given or applied.1077

(2) Rules of Construction and Interpretation/Law

Governing Formal Validity

If a testamentary disposition admits of different interpretations, in case of doubt,

that interpretation by which the disposition is to be operative shall be preferred.1078
When there is an imperfect description, or when no person or property exactly
answers the description, mistakes and omissions must be corrected, if the error appears from
the context of the will or from extrinsic evidence, excluding the oral declarations of the
testator as to his intention; and when an uncertainty arises upon the face of the will, as to the
application of any of its provisions, the testator's intention is to be ascertained from the

1073
Art. 783
1074
Art. 787
1075
Art. 784
1076
Art. 785
1077
Art. 786
1078
Art. 788

242
words of the will, taking into consideration the circumstances under which it was made,
excluding such oral declarations.1079
The words of a will are to be taken in their ordinary and grammatical sense, unless a
clear intention to use them in another sense can be gathered, and that other can be
ascertained.
Technical words in a will are to be taken in their technical sense, unless the context
clearly indicates a contrary intention, or unless it satisfactorily appears that the will was
drawn solely by the testator, and that he was unacquainted with such technical sense.1080
The words of a will are to receive an interpretation which will give to every
expression some effect, rather than one which will render any of the expressions inoperative;
and of two modes of interpreting a will, that is to be preferred which will prevent
intestacy.1081
The invalidity of one of several dispositions contained in a will does not result in the
invalidity of the other dispositions, unless it is to be presumed that the testator would not
have made such other dispositions if the first invalid disposition had not been made.1082
Property acquired after the making of a will shall only pass thereby, as if the testator had
possessed it at the time of making the will, should it expressly appear by the will that such
was his intention.1083
Every devise or legacy shall cover all the interest which the testator could device or
bequeath in the property disposed of, unless it clearly appears from the will that he intended
to convey a less interest.1084
The validity of a will as to its form depends upon the observance of the law in force
at the time it is made.1085
2. Testamentary Capacity1086 and Intent

a. Age Requirement

All persons who are not expressly prohibited by law may make a will.1087

1079
Art. 789
1080
Art. 790
1081
Art. 791
1082
Art. 792
1083
Art. 793
1084
Art. 794
1085
Art. 795
1086
Testamentary capacity:
1. All persons who are not expressly prohibited by law
2. 18 years old and above
3. Of sound mind, at the time of its execution
1087
Art. 796

243
 Persons of either sex under eighteen years of age cannot make a will.1088

b. Soundness of Mind; Presumptions

In order to make a will it is essential that the testator be of sound mind at the time of
its execution.1089

To be of sound mind, it is not necessary that the testator be in full possession of all
his reasoning faculties, or that his mind be wholly unbroken, unimpaired, or unshattered by
disease, injury or other cause.

It shall be sufficient if the testator was able at the time of making the will to know
the nature of the estate to be disposed of, the proper objects of his bounty, and the character
of the testamentary act.1090

The law presumes that every person is of sound mind, in the absence of proof to the
contrary.

The burden of proof that the testator was not of sound mind at the time of making
his dispositions is on the person who opposes the probate of the will; but if the testator, one
month, or less, before making his will was publicly known to be insane, the person who
maintains the validity of the will must prove that the testator made it during a lucid
interval.1091

Supervening incapacity does not invalidate an effective will, nor is the will of an
incapable validated by the supervening of capacity.1092

A married woman may make a will without the consent of her husband, and without
the authority of the court.1093

A married woman may dispose by will of all her separate property as well as her
share of the conjugal partnership or absolute community property.1094

3. Form

a. Formal Validity Rules

The forms and solemnities of contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are executed.

1088
Art. 797
1089
Art. 798
1090
Art. 799
1091
Art. 800
1092
Art. 801
1093
Art. 802
1094
Art. 803

244
 When the acts referred to are executed before the diplomatic or consular officials of
the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution.

Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, public policy and good customs shall not be rendered ineffective
by laws or judgments promulgated, or by determinations or conventions agreed upon in a
foreign country.1095

When a Filipino is in a foreign country, he is authorized to make a will in any of the

forms established by the law of the country in which he may be. Such will may be probated
in the Philippines.1096

The will of an alien who is abroad produces effect in the Philippines if made with the
formalities prescribed by the law of the place in which he resides, or according to the
formalities observed in his country, or in conformity with those which this Code
prescribes.1097

A will made in the Philippines by a citizen or subject of another country, which is

executed in accordance with the law of the country of which he is a citizen or subject, and
which might be proved and allowed by the law of his own country, shall have the same
effect as if executed according to the laws of the Philippines.1098

Wills, prohibited by the preceding article, executed by Filipinos in a foreign country

shall not be valid in the Philippines, even though authorized by the laws of the country
where they may have been executed.1099

(1) See Law Governing Substantive Validity

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.1100

Real property as well as personal property is subject to the law of the country where
it is stipulated.1101

Capacity to succeed is governed by the law of the nation of the decedent.1102

1095
Art. 17
1096
Art. 815
1097
Art. 816
1098
Art. 817
1099
Art. 819
1100
Art. 15
1101
Art. 16
1102
Art. 1039

245
 b. Common requirements

(1) In Writing
(2) Language/Dialect Requirement

Every will must be in writing and executed in a language or dialect known to the
testator.1103

c. Notarial Wills

(1) Arts. 805-806

Requisites for valid notarial will:

1. In writing

2. In a language or dialect known to the testator

3. Subscribed at the end by the testator himself or by the testators name written by some
other person in his presence, and by his express direction

4. Attested & subscribed by three or more credible witnesses in the presence of the testator
and of one another

5. Each and every page, except the last, must be signed by the testator or by the person
requested by him to write his name, and by the instrumental witnesses of the will, on the left
margin

6. Each and every page of the will must be numbered correlatively in letters placed on the
upper part of each page

7. It must contain an attestation clause, stating the following:

a. The number of pages used upon which the will is written

b. The fact that the testator signed the will and every page, or caused some other
person to write his name, under his express direction, in the presence of the instrumental
witnesses

c. All the instrumental witnesses witnessed and signed the will and all its pages in the
presence of the testator and of one another

8. It must be acknowledged before a notary public by the testator and the witnesses

1103
Art. 804

246
 (2) Special rules for handicapped testators

If the testator be deaf or a deaf-mute:

1. Testator must personally read the will, if able to do so;

2. Otherwise, he shall designate two persons to read it and communicate to him, in some
practicable manner, its contents.1104

If the testator be blind:

The will shall be read to the testator twice

1. Once by one of the subscribing witnesses

2. Once by the notary public before whom the will is acknowledged.1105

(3) Substantial Compliance

In the absence of bad faith, forgery, or fraud, or undue and improper pressure and
influence, defects and imperfections in the form of attestation or in the language used
therein shall not render the will invalid if it is proved that the will was in fact executed and
attested in substantial compliance with all the requirements of article 805.1106

(4) Requisites

Any person of sound mind and of the age of eighteen years or more, and not blind,
deaf or dumb, and able to read and write, may be a witness to the execution of a will
mentioned in article 805 of this Code.1107

The following are disqualified from being witnesses to a will:

(1) Any person not domiciled in the Philippines;

(2) Those who have been convicted of falsification of a document, perjury or false
testimony.1108

1104
Art. 807
1105
Art. 808
1106
Art. 809
1107
Art. 820
Qualifications of witnesses to a notarial will:
1. Of sound mind
2. Of the age of 18 years or more
3. Not blind, deaf or dumb
4. Able to read and write
5. Domiciled in the Philippines
6. Have not been convicted of falsification of a document, perjury or false testimony
1108
Art. 821

247
 If the witnesses attesting the execution of a will are competent at the time of
attesting, their becoming subsequently incompetent shall not prevent the allowance of the
will.1109

If a person attests the execution of a will, to whom or to whose spouse, or parent, or

child, a devise or legacy is given by such will, such devise or legacy shall, so far only as
concerns such person, or spouse, or parent, or child of such person, or any one claiming
under such person or spouse, or parent, or child, be void, unless there are three other
competent witnesses to such will. However, such person so attesting shall be admitted as a
witness as if such devise or legacy had not been made or given.1110
A mere charge on the estate of the testator for the payment of debts due at the time
of the testator's death does not prevent his creditors from being competent witnesses to his
will.1111
d. Holographic Wills

(1) Requirements

A person may execute a holographic will which must be entirely written, dated, and
signed by the hand of the testator himself. It is subject to no other form, and may be made
in or out of the Philippines, and need not be witnessed.1112

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.1113

When a number of dispositions appearing in a holographic will are signed without

being dated, and the last disposition has a signature and a date, such date validates the
dispositions preceding it, whatever be the time of prior dispositions.1114

(2) Witnesses Required for Probate

In the probate of a holographic will, it shall be necessary that at least one witness
who knows the handwriting and signature of the testator explicitly declare that the will and
the signature are in the handwriting of the testator. If the will is contested, at least three of
such witnesses shall be required.

In the absence of any competent witness referred to in the preceding paragraph, and
if the court deem it necessary, expert testimony may be resorted to.1115

1109
Art. 822
1110
Art. 823
1111
Art. 824
1112
Art. 810
1113
Art. 812
1114
Art. 813
1115
Art. 811

248
 (3) Alterations, Requirements

In case of any insertion, cancellation, erasure or alteration in a holographic will, the

testator must authenticate the same by his full signature.1116

e. Joint Wills

Two or more persons cannot make a will jointly, or in the same instrument, either
for their reciprocal benefit or for the benefit of a third person.1117

Wills, prohibited by the preceding article, executed by Filipinos in a foreign country

shall not be valid in the Philippines, even though authorized by the laws of the country
where they may have been executed.1118

4. Codicils, Definition and Formal Requirements

A codicil is supplement or addition to a will, made after the execution of a will and
annexed to be taken as a part thereof, by which disposition made in the original will is
explained, added to, or altered.1119

In order that a codicil may be effective, it shall be executed as in the case of a will.1120

5. Incorporate by Reference

Requisites:

1. the document or paper referred to in the will must be in existence at the time of the
execution of the will

2. the will must clearly describe and identify the same, stating among other things the
number of pages thereof

3. it must be identified by clear and satisfactory proof as the document or paper

referred to therein

4. it must be signed by the testator and the witnesses on each and every page, except in
case of voluminous books of account or inventories

1116
Art. 814
1117
Art. 818
1118
Art. 819
1119
Art. 825
1120
Art. 826

249
 6. Revocation; kinds

A will may be revoked by the testator at any time before his death. Any waiver or
restriction of this right is void.1121
A revocation done outside the Philippines, by a person who does not have his
domicile in this country, is valid when it is done according to the law of the place where the
will was made, or according to the law of the place in which the testator had his domicile at
the time; and if the revocation takes place in this country, when it is in accordance with the
provisions of this Code.1122
No will shall be revoked except in the following cases:
(1) By implication of law; or

(2) By some will, codicil, or other writing executed as provided in case of wills; or

(3) By burning, tearing, cancelling, or obliterating the will with the intention of
revoking it, by the testator himself, or by some other person in his presence, and by his
express direction. If burned, torn, cancelled, or obliterated by some other person, without
the express direction of the testator, the will may still be established, and the estate
distributed in accordance therewith, if its contents, and due execution, and the fact of its
unauthorized destruction, cancellation, or obliteration are established according to the Rules
of Court.1123

Subsequent wills which do not revoke the previous ones in an express manner, annul
only such dispositions in the prior wills as are inconsistent with or contrary to those
contained in the later wills.1124
A revocation made in a subsequent will shall take effect, even if the new will should
become inoperative by reason of the incapacity of the heirs, devisees or legatees designated
therein, or by their renunciation.1125
A revocation of a will based on a false cause or an illegal cause is null and void1126.
The recognition of an illegitimate child does not lose its legal effect, even though the
will wherein it was made should be revoked.1127

1121
Art. 828
1122
Art. 829
1123
Art. 830
1124
Art. 831
1125
Art. 832
1126
Art. 833
1127
Art. 834

250
 7. Allowance and Disallowance of Wills

a. Probate Requirement

No will shall pass either real or personal property unless it is proved and allowed in
accordance with the Rules of Court.

The testator himself may, during his lifetime, petition the court having jurisdiction
for the allowance of his will. In such case, the pertinent provisions of the Rules of Court for
the allowance of wills after the testator's a death shall govern.

The Supreme Court shall formulate such additional Rules of Court as may be
necessary for the allowance of wills on petition of the testator.

Subject to the right of appeal, the allowance of the will, either during the lifetime of
the testator or after his death, shall be conclusive as to its due execution.1128

(1) Issues to be Resolved in Probate Proceedings

The will shall be disallowed in any of the following cases:

(1) If the formalities required by law have not been complied with;

(2) If the testator was insane, or otherwise mentally incapable of making a will, at the time of
its execution;

(3) If it was executed through force or under duress, or the influence of fear, or threats;

(4) If it was procured by undue and improper pressure and influence, on the part of the
beneficiary or of some other person;

(5) If the signature of the testator was procured by fraud;

(6) If the testator acted by mistake or did not intend that the instrument he signed should be
his will at the time of affixing his signature thereto.1129

(a) Exceptions when practical

considerations demand the intrinsic validity of
the will be resolved

1128
Art. 838
1129
Art. 839

251
 (2) Effect of Final Decree of Probate, Res Judicata on
Formal Validity

A final judgment rendered on a petition for the probate of a will is binding upon the whole
world;1130 and public policy and sound practice demand that at the risk of occasional errors
judgment of courts should become final at some definite date fixed by law.

b. Grounds for Denying Probate1131

B. Institution of Heirs

Institution of heir is an act by virtue of which a testator designates in his will the
person or persons who are to succeed him in his property and transmissible rights and
obligations.1132

A will shall be valid even though it should not contain an institution of an heir, or
such institution should not comprise the entire estate, and even though the person so
instituted should not accept the inheritance or should 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.1133

One who has no compulsory heirs may dispose by will of all his estate or any part of
it in favor of any person having capacity to succeed.

One who has compulsory heirs may dispose of his estate provided he does not
contravene the provisions of this Code with regard to the legitime of said heirs.1134

The testator shall designate the heir by his name and surname, and when there are
two persons having the same names, he shall indicate some circumstance by which the
instituted heir may be known.

Even though the testator may have omitted the name of the heir, should he
designate him in such manner that there can be no doubt as to who has been instituted, the
institution shall be valid.1135

An error in the name, surname, or circumstances of the heir shall not vitiate the
institution when it is possible, in any other manner, to know with certainty the person
instituted.

1130
Manalo vs. Paredes, 47 Phil. 938; In re Estates of Johnson, 39 Phil. 156
1131
See Art. 839, supra
1132
Art. 840
1133
Art. 841
1134
Art. 842
1135
Art. 843

252
 If among persons having the same names and surnames, there is a similarity of
circumstances in such a way that, even with the use of other proof, the person instituted
cannot be identified, none of them shall be an heir.1136

Every disposition in favor of an unknown person shall be void, unless by some event
or circumstance his identity becomes certain. However, a disposition in favor of a definite
class or group of persons shall be valid.1137

Heirs instituted without designation of shares shall inherit in equal parts.1138

When the testator institutes some heirs individually and others collectively as when
he says, "I designate as my heirs A and B, and the children of C," those collectively
designated shall be considered as individually instituted, unless it clearly appears that the
intention of the testator was otherwise.1139

If the testator should institute his brothers and sisters, and he has some of full blood
and others of half blood, the inheritance shall be distributed equally unless a different
intention appears.1140

When the testator calls to the succession a person and his children they are all
deemed to have been instituted simultaneously and not successively.1141

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.1142

If the testator has instituted only one heir, and the institution is limited to an aliquot
part of the inheritance, legal succession takes place with respect to the remainder of the
estate.

The same rule applies if the testator has instituted several heirs, each being limited to
an aliquot part, and all the parts do not cover the whole inheritance.1143

If it was the intention of the testator that the instituted heirs should become sole
heirs to the whole estate, or the whole free portion, as the case may be, and each of them has
been instituted to an aliquot part of the inheritance and their aliquot parts together do not
cover the whole inheritance, or the whole free portion, each part shall be increased
proportionally.1144

1136
Art. 844
1137
Art. 845
1138
Art. 846
1139
Art. 847
1140
Art. 848
1141
Art. 849
1142
Art. 850
1143
Art. 851
1144
Art. 852

253
 If each of the instituted heirs has been given an aliquot part of the inheritance, and
the parts together exceed the whole inheritance, or the whole free portion, as the case may
be, each part shall be reduced proportionally.1145

The share of a child or descendant omitted in a will must first be taken from the part
of the estate not disposed of by the will, if any; if that is not sufficient, so much as may be
necessary must be taken proportionally from the shares of the other compulsory heirs.1146

A voluntary heir who dies before the testator transmits nothing to his heirs.

A compulsory heir who dies before the testator, a person incapacitated to succeed,
and one who renounces the inheritance, shall transmit no right to his own heirs except in
cases expressly provided for in this Code.1147

1. Preterition Definition, Requisites and Effects

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.1148

2. Concept1149

3. Compulsory Heirs in the Direct Line1150

4. Preterition vs. Disposition less than Legitime/Donation Inter

Vivos

Any compulsory heir to whom the testator has left by any title less than the legitime
belonging to him may demand that the same be fully satisfied.1151
Testamentary dispositions that impair or diminish the legitime of the compulsory
heirs shall be reduced on petition of the same, insofar as they may be inofficious or
excessive.1152

1145
Art. 853
1146
Art. 855
1147
Art. 856
1148
Art. 854
1149
ibid
1150
see E. Legitime, infra
1151
Art. 906
1152
Art. 907

254
 To determine the legitime, the value of the property left at the death of the testator
shall be considered, deducting all debts and charges, which shall not include those imposed
in the will.
To the net value of the hereditary estate, shall be added the value of all donations by
the testator that are subject to collation, at the time he made them.1153
Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of which the
testator could have disposed by his last will.
Insofar as they may be inofficious or may exceed the disposable portion, they shall
be reduced according to the rules established by this Code.1154
Donations which an illegitimate child may have received during the lifetime of his
father or mother, shall be charged to his legitime.
Should they exceed the portion that can be freely disposed of, they shall be reduced
in the manner prescribed by this Code.1155
After the legitime has been determined in accordance with the three preceding
articles, the reduction shall be made as follows:
(1) Donations shall be respected as long as the legitime can be covered, reducing or
annulling, if necessary, the devises or legacies made in the will;
(2) The reduction of the devises or legacies shall be pro rata, without any distinction
whatever.
If the testator has directed that a certain devise or legacy be paid in preference to
others, it shall not suffer any reduction until the latter have been applied in full to the
payment of the legitime.
(3) If the devise or legacy consists of a usufruct or life annuity, whose value may be
considered greater than that of the disposable portion, the compulsory heirs may choose
between complying with the testamentary provision and delivering to the devisee or legatee
the part of the inheritance of which the testator could freely dispose.1156
If the devise subject to reduction should consist of real property, which cannot be
conveniently divided, it shall go to the devisee if the reduction does not absorb one-half of
its value; and in a contrary case, to the compulsory heirs; but the former and the latter shall
reimburse each other in cash for what respectively belongs to them.

1153
Art. 908
1154
Art. 909
1155
Art. 910
1156
Art. 911

255
 The devisee who is entitled to a legitime may retain the entire property, provided its
value does not exceed that of the disposable portion and of the share pertaining to him as
legitime.1157
If the heirs or devisees do not choose to avail themselves of the right granted by the
preceding article, any heir or devisee who did not have such right may exercise it; should the
latter not make use of it, the property shall be sold at public auction at the instance of any
one of the interested parties.1158
The testator may devise and bequeath the free portion as he may deem fit.1159
A compulsory heir may, in consequence of disinheritance, be deprived of his
legitime, for causes expressly stated by law.1160
Disinheritance can be effected only through a will wherein the legal cause therefor
shall be specified.1161
The burden of proving the truth of the cause for disinheritance shall rest upon the
other heirs of the testator, if the disinherited heir should deny it.1162
Disinheritance without a specification of the cause, or for a cause the truth of which,
if contradicted, is not proved, or which is not one of those set forth in this Code, shall annul
the institution of heirs insofar as it may prejudice the person disinherited; but the devises
and legacies and other testamentary dispositions shall be valid to such extent as will not
impair the legitime.1163
5. Effects of Preterition, devisees only entitled to completion of
legitime1164

C. Substitution of Heirs

If 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 are more than one
substitute, they shall have the same share in the substitution as in the institution.1165

The substitute shall be subject to the same charges and conditions imposed upon the
instituted heir, unless and testator has expressly provided the contrary, or the charges or
conditions are personally applicable only to the heir instituted.1166

1157
Art. 912
1158
Art. 913
1159
Art. 914
1160
Art. 915
1161
Art. 916
1162
Art. 917
1163
Art. 918
1164
See 1. Preterition, etc., supra
1165
Art. 861
1166
Art. 862

256
 The following shall not take effect:

(1) Fideicommissary substitutions which are not made in an express manner, either by giving
them this name, or imposing upon the fiduciary the absolute obligation to deliver the
property to a second heir;

(2) Provisions which contain a perpetual prohibition to alienate, and even a temporary one,
beyond the limit fixed in article 863;

(3) Those which impose upon the heir the charge of paying to various persons successively,
beyond the limit prescribed in article 863, a certain income or pension;

(4) Those which leave to a person the whole or part of the hereditary property in order that
he may apply or invest the same according to secret instructions communicated to him by
the testator.1167

The nullity of the fideicommissary substitution does not prejudice the validity of the
institution of the heirs first designated; the fideicommissary clause shall simply be considered
as not written.1168

The dispositions of the testator declaring all or part of the estate inalienable for more
than twenty years are void.1169

1. Definition

Substitution is the appointment of another heir so that he may enter into the
inheritance in default of the heir originally instituted.1170

2. Kinds

Substitution of heirs may be:

(1) Simple or common;

(2) Brief or compendious;
(3) Reciprocal; or
(4) Fideicommissary.1171

The testator may designate one or more persons to substitute the heir or heirs
instituted in case such heir or heirs should die before him, or should not wish, or should be
incapacitated to accept the inheritance.

1167
Art. 867
1168
Art. 868
1169
Art. 870
1170
Art. 857
1171
Art. 858

257
 A simple substitution, without a statement of the cases to which it refers, shall
comprise the three mentioned in the preceding paragraph, unless the testator has otherwise
provided.1172

Two or more persons may be substituted for one; and one person for two or more
heirs.1173

3. Simple Substitution1174

4. Fideicommissary Substitution1175

A fideicommissary substitution by virtue of which the fiduciary or first heir instituted

is entrusted with the obligation to preserve and to transmit to a second heir the whole or
part of the inheritance, shall be valid and shall take effect, provided such substitution does
not go beyond one degree from the heir originally instituted, and provided further, that the
fiduciary or first heir and the second heir are living at the time of the death of the testator.1176
A fideicommissary substitution can never burden the legitime.1177
Every fideicommissary substitution must be expressly made in order that it may be
valid.
The fiduciary shall be obliged to deliver the inheritance to the second heir, without
other deductions than those which arise from legitimate expenses, credits and
improvements, save in the case where the testator has provided otherwise.1178
The second heir shall acquire a right to the succession from the time of the testator's
death, even though he should die before the fiduciary. The right of the second heir shall pass
to his heirs.1179
A provision whereby the testator leaves to a person the whole or part of the
inheritance, and to another the usufruct, shall be valid. If he gives the usufruct to various
persons, not simultaneously, but successively, the provisions of article 863 shall apply.1180

1172
Art. 859
1173
Art. 860
1174
See Art. 859, supra
1175
Requisites for a fideicommissary substitution:
1. A fiduciary or first heir instituted entrusted with the obligation to preserve and to transmit to a
fideicommissary substitute or second heir the whole or part of the inheritance
2. Such substitution must not go beyond one degree from the heir originally instituted
3. The fiduciary or first heir and the second heir are living at the time of the death of the testator
4. The fideicommissary substitution must be expressly made
5. The fideicommissary substitution is imposed on the free portion of the estate and never on the legitime
1176
Art. 863
1177
Art. 864
1178
Art. 865
1179
Art. 866

258
 D. Conditional Testamentary Dispositions and Testamentary Dispositions
with a Term

The institution of an heir may be made conditionally, or for a certain purpose or

1181
cause.

The testator cannot impose any charge, condition, or substitution whatsoever upon
the legitimes prescribed in this Code. Should he do so, the same shall be considered as not
imposed.1182

Impossible conditions and those contrary to law or good customs shall be

considered as not imposed and shall in no manner prejudice the heir, even if the testator
should otherwise provide.1183

An absolute condition not to contract a first or subsequent marriage shall be

considered as not written unless such condition has been imposed on the widow or widower
by the deceased spouse, or by the latter's ascendants or descendants.

Nevertheless, the right of usufruct, or an allowance or some personal prestation may

be devised or bequeathed to any person for the time during which he or she should remain
unmarried or in widowhood.1184

Any disposition made upon the condition that the heir shall make some provision in
his will in favor of the testator or of any other person shall be void.1185

Any purely potestative condition imposed upon an heir must be fulfilled by him as
soon as he learns of the testator's death.

This rule shall not apply when the condition, already complied with, cannot be
fulfilled again.1186

If the condition is casual or mixed, it shall be sufficient if it happen or be fulfilled at

any time before or after the death of the testator, unless he has provided otherwise.

Should it have existed or should it have been fulfilled at the time the will was
executed and the testator was unaware thereof, it shall be deemed as complied with.

If he had knowledge thereof, the condition shall be considered fulfilled only when it
is of such a nature that it can no longer exist or be complied with again.1187

1180
Art. 869
1181
Art. 871
1182
Art. 872
1183
Art. 873
1184
Art. 874
1185
Art. 875
1186
Art. 876
1187
Art. 877

259
 A disposition with a suspensive term does not prevent the instituted heir from
acquiring his rights and transmitting them to his heirs even before the arrival of the term.1188

If the potestative condition imposed upon the heir is negative, or consists in not
doing or not giving something, he shall comply by giving a security that he will not do or
give that which has been prohibited by the testator, and that in case of contravention he will
return whatever he may have received, together with its fruits and interests.1189

If the heir be instituted under a suspensive condition or term, the estate shall be
placed under administration until the condition is fulfilled, or until it becomes certain that it
cannot be fulfilled, or until the arrival of the term.

The same shall be done if the heir does not give the security required in the
preceding article.1190

The appointment of the administrator of the estate mentioned in the preceding

article, as well as the manner of the administration and the rights and obligations of the
administrator shall be governed by the Rules of Court.1191

The statement of the object of the institution, or the application of the property left
by the testator, or the charge imposed by him, shall not be considered as a condition unless
it appears that such was his intention.

That which has been left in this manner may be claimed at once provided that the
instituted heir or his heirs give security for compliance with the wishes of the testator and
for the return of anything he or they may receive, together with its fruits and interests, if he
or they should disregard this obligation.1192

When without the fault of the heir, an institution referred to in the preceding article
cannot take effect in the exact manner stated by the testator, it shall be complied with in a
manner most analogous to and in conformity with his wishes.

If the person interested in the condition should prevent its fulfillment, without the
fault of the heir, the condition shall be deemed to have been complied with.1193

Conditions imposed by the testator upon the heirs shall be governed by the rules
established for conditional obligations in all matters not provided for by this Section.1194

1188
Art. 878
1189
Art. 879
1190
Art. 880
1191
Art. 881
1192
Art. 882
1193
Art. 883
1194
Art. 884

260
 The designation of the day or time when the effects of the institution of an heir shall
commence or cease shall be valid.

In both cases, the legal heir shall be considered as called to the succession until the
arrival of the period or its expiration. But in the first case he shall not enter into possession
of the property until after having given sufficient security, with the intervention of the
instituted heir.1195
E. Legitime

1. Definition

Legitime is that part of the testator's property which he cannot dispose of because
the law has reserved it for certain heirs who are, therefore, called compulsory heirs.1196

2. Compulsory Heirs1197 and Various Combinations

The following are compulsory heirs:

(1) Legitimate children and descendants, with respect to their legitimate parents and
ascendants;

(2) In default of the foregoing, legitimate parents and ascendants, with respect to their
legitimate children and descendants;

(3) The widow or widower;

(4) Acknowledged natural children, and natural children by legal fiction;

(5) Other illegitimate children referred to in article 287.

Compulsory heirs mentioned in Nos. 3, 4, and 5 are not excluded by those in Nos. 1
and 2; neither do they exclude one another.

In all cases of illegitimate children, their filiation must be duly proved.

1195
Art. 885
1196
Art. 886
1197
Classes of compulsory heirs:
1.Primary those who have precedence over and exclude other compulsory heirs
a. Legitimate children and descendants (legitimate), with respect to their legitimate parents and
ascendants
2.Secondary those who succeed only in the absence of the primary heirs
a. Legitimate parents and ascendants (legitimate), with respect to their legitimate children and
descendants
3.Concurring those who succeed together with the primary or the secondary compulsory heirs
a. Widow or widower (legitimate)
b. Illegitimate children and descendants (legitimate or illegitimate)

261
 The father or mother of illegitimate children of the three classes mentioned, shall
inherit from them in the manner and to the extent established by this Code.1198

The legitime of legitimate children and descendants consists of one-half of the

hereditary estate of the father and of the mother.

The latter may freely dispose of the remaining half, subject to the rights of
illegitimate children and of the surviving spouse as hereinafter provided.1199

The legitime of legitimate parents or ascendants consists of one-half of the

hereditary estates of their children and descendants.

The children or descendants may freely dispose of the other half, subject to the rights of
illegitimate children and of the surviving spouse as hereinafter provided.1200

The legitime reserved for the legitimate parents shall be divided between them
equally; if one of the parents should have died, the whole shall pass to the survivor.

If the testator leaves neither father nor mother, but is survived by ascendants of
equal degree of the paternal and maternal lines, the legitime shall be divided equally between
both lines. If the ascendants should be of different degrees, it shall pertain entirely to the
ones nearest in degree of either line.1201

If only one legitimate child or descendant of the deceased survives, the widow or
widower shall be entitled to one-fourth of the hereditary estate. In case of a legal separation,
the surviving spouse may inherit if it was the deceased who had given cause for the same.

If there are two or more legitimate children or descendants, the surviving spouse
shall be entitled to a portion equal to the legitime of each of the legitimate children or
descendants.

In both cases, the legitime of the surviving spouse shall be taken from the portion
that can be freely disposed of by the testator.1202

If the testator leaves no legitimate descendants, but leaves legitimate ascendants, the
surviving spouse shall have a right to one-fourth of the hereditary estate.

This fourth shall be taken from the free portion of the estate.1203

1198
Art. 887
1199
Art. 888
1200
Art. 889
1201
Art. 890
1202
Art. 892
1203
Art. 893

262
 If the testator leaves illegitimate children, the surviving spouse shall be entitled to
one-third of the hereditary estate of the deceased and the illegitimate children to another
third. The remaining third shall be at the free disposal of the testator.1204

The legitime of each of the acknowledged natural children and each of the natural
children by legal fiction shall consist of one-half of the legitime of each of the legitimate
children or descendants.

The legitime of an illegitimate child who is neither an acknowledged natural, nor a

natural child by legal fiction, shall be equal in every case to four-fifths of the legitime of an
acknowledged natural child.

The legitime of the illegitimate children shall be taken from the portion of the estate
at the free disposal of the testator, provided that in no case shall the total legitime of such
illegitimate children exceed that free portion, and that the legitime of the surviving spouse
must first be fully satisfied.1205

Illegitimate children who may survive with legitimate parents or ascendants of the
deceased shall be entitled to one-fourth of the hereditary estate to be taken from the portion
at the free disposal of the testator.1206

When the widow or widower survives with legitimate children or descendants, and
acknowledged natural children, or natural children by legal fiction, such surviving spouse
shall be entitled to a portion equal to the legitime of each of the legitimate children which
must be taken from that part of the estate which the testator can freely dispose of.1207

If the widow or widower survives with legitimate children or descendants, and with
illegitimate children other than acknowledged natural, or natural children by legal fiction, the
share of the surviving spouse shall be the same as that provided in the preceding article.1208

When the widow or widower survives with legitimate parents or ascendants and with
illegitimate children, such surviving spouse shall be entitled to one-eighth of the hereditary
estate of the deceased which must be taken from the free portion, and the illegitimate
children shall be entitled to one-fourth of the estate which shall be taken also from the
disposable portion. The testator may freely dispose of the remaining one-eighth of the
estate.1209

If the only survivor is the widow or widower, she or he shall be entitled to one-half
of the hereditary estate of the deceased spouse, and the testator may freely dispose of the
other half.

1204
Art. 894
1205
Art. 895
1206
Art. 896
1207
Art. 897
1208
Art. 898
1209
Art. 899

263
 If the marriage between the surviving spouse and the testator was solemnized in
articulo mortis, and the testator died within three months from the time of the marriage, the
legitime of the surviving spouse as the sole heir shall be one-third of the hereditary estate,
except when they have been living as husband and wife for more than five years. In the latter
case, the legitime of the surviving spouse shall be that specified in the preceding
paragraph.1210

When the testator dies leaving illegitimate children and no other compulsory heirs,
such illegitimate children shall have a right to one-half of the hereditary estate of the
deceased.

The other half shall be at the free disposal of the testator.1211

The rights of illegitimate children set forth in the preceding articles are transmitted
upon their death to their descendants, whether legitimate or illegitimate.1212

The legitime of the parents who have an illegitimate child, when such child leaves
neither legitimate descendants, nor a surviving spouse, nor illegitimate children, is one-half
of the hereditary estate of such illegitimate child. If only legitimate or illegitimate children are
left, the parents are not entitled to any legitime whatsoever. If only the widow or widower
survives with parents of the illegitimate child, the legitime of the parents is one-fourth of the
hereditary estate of the child, and that of the surviving spouse also one-fourth of the
estate.1213

SUMMARY OF LEGITIMES OF COMPULSORY HEIRS:

Surviving Legitimate Surviving Illegitimate Legitimate Illegitimate

relatives children & spouse children parents & parents
descendants ascendants
Legitimate children (divided by
alone the # of
children)
1 legitimate child
surviving spouse

Legitimate children (divided by Same as the

Surviving spouse no. of share @ legit
children) child
Legitimate children of the share
Illegitimate of @ legit
children child

1210
Art. 900
1211
Art. 901
1212
Art. 902
1213
Art. 903

264
1 legitimate child of the share
surviving spouse (preferred) of @ legit
illegitimate children child

2 or more (divided by Same as the of the share

legitimate children no. of share of @ of @ legit
surviving spouse children) legit child child
Illegitimate
children

Legitimate parents
alone
Legitimate parents
Illegitimate
children
Legitimate parents
and
Surviving spouse

Legitimate parents 1/8

Surviving spouse
Illegitimate
children
Illegitimate (divided by
children alone no. of
children)
Illegitimate 1/3 1/3 (divided
children by no. of
Surviving spouse children)
Surviving spouse or 1/3 if
alone marriage in
articulo mortis
Illegitimate parents
alone
Illegitimate parents
Surviving spouse

The testator cannot deprive his compulsory heirs of their legitime, except in cases
expressly specified by law.

Neither can he impose upon the same any burden, encumbrance, condition, or
substitution of any kind whatsoever.1214

Every renunciation or compromise as regards a future legitime between the person

owing it and his compulsory heirs is void, and the latter may claim the same upon the death

1214
Art. 904

265
of the former; but they must bring to collation whatever they may have received by virtue of
the renunciation or compromise.1215

Any compulsory heir to whom the testator has left by any title less than the legitime
belonging to him may demand that the same be fully satisfied.1216

Testamentary dispositions that impair or diminish the legitime of the compulsory

heirs shall be reduced on petition of the same, insofar as they may be inofficious or
excessive.1217

To determine the legitime, the value of the property left at the death of the testator
shall be considered, deducting all debts and charges, which shall not include those imposed
in the will.

To the net value of the hereditary estate, shall be added the value of all donations by
the testator that are subject to collation, at the time he made them.1218

Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of which the
testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable portion, they shall
be reduced according to the rules established by this Code.1219

Donations which an illegitimate child may have received during the lifetime of his
father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of, they shall be reduced
in the manner prescribed by this Code.1220

After the legitime has been determined in accordance with the three preceding
articles, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be covered, reducing or
annulling, if necessary, the devises or legacies made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without any distinction
whatever.

1215
Art. 905
1216
Art. 906
1217
Art. 907
1218
Art. 908
1219
Art. 909
1220
Art. 910

266
 If the testator has directed that a certain devise or legacy be paid in preference to
others, it shall not suffer any reduction until the latter have been applied in full to the
payment of the legitime.

(3) If the devise or legacy consists of a usufruct or life annuity, whose value may be
considered greater than that of the disposable portion, the compulsory heirs may choose
between complying with the testamentary provision and delivering to the devisee or legatee
the part of the inheritance of which the testator could freely dispose.1221

If the devise subject to reduction should consist of real property, which cannot be
conveniently divided, it shall go to the devisee if the reduction does not absorb one-half of
its value; and in a contrary case, to the compulsory heirs; but the former and the latter shall
reimburse each other in cash for what respectively belongs to them.

The devisee who is entitled to a legitime may retain the entire property, provided its
value does not exceed that of the disposable portion and of the share pertaining to him as
legitime.1222

If the heirs or devisees do not choose to avail themselves of the right granted by the
preceding article, any heir or devisee who did not have such right may exercise it; should the
latter not make use of it, the property shall be sold at public auction at the instance of any
one of the interested parties.1223

The testator may devise and bequeath the free portion as he may deem fit.1224

3. ReservaTroncal1225

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.

1221
Art. 911
1222
Art. 912
1223
Art. 913
1224
Art. 914
1225
Requisites
1) that the property was acquired by a descendant from an ascendant or from a brother or sister by
gratuitous title
2) that said descendant died without an issue
3) that the property is inherited by another ascendant by operation of law
4) that there are relatives within the 3rd degree belonging to the line from which said property came

267
 4. Disinheritance1226

a. Disinheritance for cause

The following shall be sufficient causes for the disinheritance of children and
descendants, legitimate as well as illegitimate:

(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;

(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.1227

Summary of causes of disinheritance:

GROUNDS FOR CHILDREN/ PARENTS/ SPOUSE UNWORTHINESS

DISINHERITANCE DESCENDANTS ASCENDANTS
1 Guilty/convicted of * * * *
attempt against life of
testator/spouse/

1226
It is the act by which the testator, for just cause, deprives a compulsory heir of his right to the legitime.
Requisites for a valid disinheritance:
1. Heir disinherited must be designated by name or in such a manner as to leave no room for doubt as to
who is intended
2. It must be for a cause designated by law
3. It must be made in valid will
4. It must be made expressly, stating the cause in the will itself
5. The cause must be certain and true, and must be proved by the interested heir if the person disinherited
should deny it
6 .It must unconditional
7. It must be total
1227
Art. 919

268
 ascendant/descendant

2 Accused * * * *
testator/decedent of
crime punishable by
imprisonment of more
than 6 years, found
groundless, false

3 Causes * * * *
testator/decedent to
make will or change
one by fraud, violence,
intimidation, or undue
influence

4 Unjustified refusal to * * *
support testator

5 Convicted of adultery * * *
or concubinage with
spouse of
testator/decedent

6 Maltreatment of *
testator by word and
deed

7 Leading a *
dishonorable or
disgraceful life

8 Conviction of crime *
which carries penalty
of civil interdiction

9 Abandonment of * *
children or inducing
children to live
corrupt and immoral
life or attempted
against virtue

10 Loss of parental * *
authority

11 Attempt by one parent *

against life of the
other UNLESS there
is reconciliation

269
 between parents

12 Spouses given cause *

for legal separation

13 Failure to report *
violent death of
decedent within one
month, unless
authorities have
already taken action

14 Force, violence, *
intimidation or undue
influence to prevent
another from making
a will or revoking one
already made or who
supplants or alters the
latters will

15 Falsifies or forges a *
supposed will of the
decedent

(1) Reconciliation

A subsequent reconciliation between the offender and the offended person deprives
the latter of the right to disinherit, and renders ineffectual any disinheritance that may have
been made.1228

(2) Rights of descendants of person disinherited

The children and descendants of the person disinherited shall take his or her place
and shall preserve the rights of compulsory heirs with respect to the legitime; but the
disinherited parent shall not have the usufruct or administration of the property which
constitutes the legitime.1229

b. Disinheritance without cause

Disinheritance without a specification of the cause, or for a cause the truth of which,
if contradicted, is not proved, or which is not one of those set forth in this Code, shall annul
the institution of heirs insofar as it may prejudice the person disinherited; but the devises

1228
Art. 922
1229
Art. 923

270
and legacies and other testamentary dispositions shall be valid to such extent as will not
impair the legitime.1230

1. Legacies and Devisees

All things and rights which are within the commerce of man be bequeathed or
devised.1231

A testator may charge with legacies and devises not only his compulsory heirs but
also the legatees and devisees.

The latter shall be liable for the charge only to the extent of the value of the legacy or
the devise received by them. The compulsory heirs shall not be liable for the charge beyond
the amount of the free portion given them.1232

When the testator charges one of the heirs with a legacy or devise, he alone shall be
bound.

Should he not charge anyone in particular, all shall be liable in the same proportion
in which they may inherit.1233

If two or more heirs take possession of the estate, they shall be solidarily liable for
the loss or destruction of a thing devised or bequeathed, even though only one of them
should have been negligent.1234

The heir who is bound to deliver the legacy or devise shall be liable in case of
eviction, if the thing is indeterminate and is indicated only by its kind.1235

If the testator, heir, or legatee owns only a part of, or an interest in the thing
bequeathed, the legacy or devise shall be understood limited to such part or interest, unless
the testator expressly declares that he gives the thing in its entirety.1236

The legacy or devise of a thing belonging to another person is void, if the testator
erroneously believed that the thing pertained to him. But if the thing bequeathed, though not
belonging to the testator when he made the will, afterwards becomes his, by whatever title,
the disposition shall take effect.1237

If the testator orders that a thing belonging to another be acquired in order that it be
given to a legatee or devisee, the heir upon whom the obligation is imposed or the estate

1230
Art. 918
1231
Art. 924
1232
Art. 925
1233
Art. 926
1234
Art. 927
1235
Art. 928
1236
Art. 929
1237
Art. 930

271
must acquire it and give the same to the legatee or devisee; but if the owner of the thing
refuses to alienate the same, or demands an excessive price therefor, the heir or the estate
shall only be obliged to give the just value of the thing.1238

The legacy or devise of a thing which at the time of the execution of the will already
belonged to the legatee or devisee shall be ineffective, even though another person may have
some interest therein.

If the testator expressly orders that the thing be freed from such interest or
encumbrance, the legacy or devise shall be valid to that extent.1239

If the thing bequeathed belonged to the legatee or devisee at the time of the
execution of the will, the legacy or devise shall be without effect, even though it may have
subsequently alienated by him.

If the legatee or devisee acquires it gratuitously after such time, he can claim nothing
by virtue of the legacy or devise; but if it has been acquired by onerous title he can demand
reimbursement from the heir or the estate.1240

If the testator should bequeath or devise something pledged or mortgaged to secure

a recoverable debt before the execution of the will, the estate is obliged to pay the debt,
unless the contrary intention appears.

The same rule applies when the thing is pledged or mortgaged after the execution of
the will.

Any other charge, perpetual or temporary, with which the thing bequeathed is
burdened, passes with it to the legatee or devisee.1241

The legacy of a credit against a third person or of the remission or release of a debt
of the legatee shall be effective only as regards that part of the credit or debt existing at the
time of the death of the testator.

In the first case, the estate shall comply with the legacy by assigning to the legatee all
rights of action it may have against the debtor. In the second case, by giving the legatee an
acquittance, should he request one.

In both cases, the legacy shall comprise all interests on the credit or debt which may
be due the testator at the time of his death.1242

1238
Art. 931
1239
Art. 932
1240
Art. 933
1241
Art. 934
1242
Art. 935

272
 The legacy referred to in the preceding article shall lapse if the testator, after having
made it, should bring an action against the debtor for the payment of his debt, even if such
payment should not have been effected at the time of his death.

The legacy to the debtor of the thing pledged by him is understood to discharge only
the right of pledge.1243

A generic legacy of release or remission of debts comprises those existing at the time
of the execution of the will, but not subsequent ones.1244

A legacy or devise made to a creditor shall not be applied to his credit, unless the
testator so expressly declares.

In the latter case, the creditor shall have the right to collect the excess, if any, of the
credit or of the legacy or devise.1245

If the testator orders the payment of what he believes he owes but does not in fact
owe, the disposition shall be considered as not written. If as regards a specified debt more
than the amount thereof is ordered paid, the excess is not due, unless a contrary intention
appears.

The foregoing provisions are without prejudice to the fulfillment of natural

obligations.1246

In alternative legacies or devises, the choice is presumed to be left to the heir upon
whom the obligation to give the legacy or devise may be imposed, or the executor or
administrator of the estate if no particular heir is so obliged.

If the heir, legatee or devisee, who may have been given the choice, dies before
making it, this right shall pass to the respective heirs.

Once made, the choice is irrevocable.

In the alternative legacies or devises, except as herein provided, the provisions of this
Code regulating obligations of the same kind shall be observed, save such modifications as
may appear from the intention expressed by the testator.1247

A legacy of generic personal property shall be valid even if there be no things of the
same kind in the estate.

1243
Art. 936
1244
Art. 937
1245
Art. 938
1246
Art. 939
1247
Art. 940

273
 A devise of indeterminate real property shall be valid only if there be immovable
property of its kind in the estate.

The right of choice shall belong to the executor or administrator who shall comply
with the legacy by the delivery of a thing which is neither of inferior nor of superior
quality.1248

Whenever the testator expressly leaves the right of choice to the heir, or to the
legatee or devisee, the former may give or the latter may choose whichever he may prefer.1249

If the heir, legatee or devisee cannot make the choice, in case it has been granted
him, his right shall pass to his heirs; but a choice once made shall be irrevocable. 1250

A legacy for education lasts until the legatee is of age, or beyond the age of majority
in order that the legatee may finish some professional, vocational or general course, provided
he pursues his course diligently.

A legacy for support lasts during the lifetime of the legatee, if the testator has not
otherwise provided.

If the testator has not fixed the amount of such legacies, it shall be fixed in
accordance with the social standing and the circumstances of the legatee and the value of the
estate.

If the testator or during his lifetime used to give the legatee a certain sum of money
or other things by way of support, the same amount shall be deemed bequeathed, unless it
be markedly disproportionate to the value of the estate.1251

If a periodical pension, or a certain annual, monthly, or weekly amount is

bequeathed, the legatee may petition the court for the first installment upon the death of the
testator, and for the following ones which shall be due at the beginning of each period; such
payment shall not be returned, even though the legatee should die before the expiration of
the period which has commenced.1252

If the thing bequeathed should be subject to a usufruct, the legatee or devisee shall
respect such right until it is legally extinguished.1253

The legatee or devisee acquires a right to the pure and simple legacies or devises
from the death of the testator, and transmits it to his heirs.1254

1248
Art. 941
1249
Art. 942
1250
Art. 943
1251
Art. 944
1252
Art. 945
1253
Art. 946
1254
Art. 947

274
 If the legacy or devise is of a specific and determinate thing pertaining to the testator,
the legatee or devisee acquires the ownership thereof upon the death of the testator, as well
as any growing fruits, or unborn offspring of animals, or uncollected income; but not the
income which was due and unpaid before the latter's death.

From the moment of the testator's death, the thing bequeathed shall be at the risk of
the legatee or devisee, who shall, therefore, bear its loss or deterioration, and shall be
benefited by its increase or improvement, without prejudice to the responsibility of the
executor or administrator.1255

If the bequest should not be of a specific and determinate thing, but is generic or of
quantity, its fruits and interests from the time of the death of the testator shall pertain to the
legatee or devisee if the testator has expressly so ordered.1256

If the estate should not be sufficient to cover all the legacies or devises, their
payment shall be made in the following order:

(1) Remuneratory legacies or devises;

(2) Legacies or devises declared by the testator to be preferential;
(3) Legacies for support;
(4) Legacies for education;
(5) Legacies or devises of a specific, determinate thing which forms a part of the estate;
(6) All others pro rata.1257

The thing bequeathed shall be delivered with all its accessories and accessories and in
the condition in which it may be upon the death of the testator.1258

The heir, charged with a legacy or devise, or the executor or administrator of the
estate, must deliver the very thing bequeathed if he is able to do so and cannot discharge this
obligation by paying its value.

Legacies of money must be paid in cash, even though the heir or the estate may not
have any.

The expenses necessary for the delivery of the thing bequeathed shall be for the
account of the heir or the estate, but without prejudice to the legitime.1259

The legatee or devisee cannot take possession of the thing bequeathed upon his own
authority, but shall request its delivery and possession of the heir charged with the legacy or

1255
Art. 948
1256
Art. 949
1257
Art. 950
1258
Art. 951
1259
Art. 952

275
devise, or of the executor or administrator of the estate should he be authorized by the court
to deliver it.1260

The legatee or devisee cannot accept a part of the legacy or devise and repudiate the
other, if the latter be onerous.

Should he die before having accepted the legacy or devise, leaving several heirs, some
of the latter may accept and the others may repudiate the share respectively belonging to
them in the legacy or devise.1261

The legatee or devisee of two legacies or devises, one of which is onerous, cannot
renounce the onerous one and accept the other. If both are onerous or gratuitous, he shall
be free to accept or renounce both, or to renounce either. But if the testator intended that
the two legacies or devises should be inseparable from each other, the legatee or devisee
must either accept or renounce both.

Any compulsory heir who is at the same time a legatee or devisee may waive the
inheritance and accept the legacy or devise, or renounce the latter and accept the former, or
waive or accept both.1262

If the legatee or devisee cannot or is unwilling to accept the legacy or devise, or if the
legacy or devise for any reason should become ineffective, it shall be merged into the mass
of the estate, except in cases of substitution and of the right of accretion.1263

The legacy or devise shall be without effect:

(1) If the testator transforms the thing bequeathed in such a manner that it does not retain
either the form or the denomination it had;

(2) If the testator by any title or for any cause alienates the thing bequeathed or any part
thereof, it being understood that in the latter case the legacy or devise shall be without effect
only with respect to the part thus alienated. If after the alienation the thing should again
belong to the testator, even if it be by reason of nullity of the contract, the legacy or devise
shall not thereafter be valid, unless the reacquisition shall have been effected by virtue of the
exercise of the right of repurchase;

(3) If the thing bequeathed is totally lost during the lifetime of the testator, or after his death
without the heir's fault. Nevertheless, the person obliged to pay the legacy or devise shall be
liable for eviction if the thing bequeathed should not have been determinate as to its kind, in
accordance with the provisions of article 928.1264

1260
Art. 953
1261
Art. 954
1262
Art. 955
1263
Art. 956
1264
Art. 957

276
 A mistake as to the name of the thing bequeathed or devised, is of no consequence,
if it is possible to identify the thing which the testator intended to bequeath or devise.1265

A disposition made in general terms in favor of the testator's relatives shall be

understood to be in favor of those nearest in degree.1266

III. Legal or Intestate Succession

A. General Provisions

Legal or intestate succession takes place:1267

(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 to, or dispose of all the property belonging to the
testator. In such case, legal succession shall take place only with respect to the property of
which the testator has not disposed;

(3) If the suspensive condition attached to the institution of heir does not happen or is not
fulfilled, or if the heir dies before the testator, or repudiates the inheritance, there being no
substitution, and no right of accretion takes place;

(4) When the heir instituted is incapable of succeeding, except in cases provided in this
Code.1268

In default of testamentary heirs, the law vests the inheritance, in accordance with the
rules hereinafter set forth, in the legitimate and illegitimate relatives of the deceased, in the
surviving spouse, and in the State.1269

1265
Art. 958
1266
Art. 959
1267
Causes for legal or intestate succession:
1. If a person dies without a will
2 .If a person dies with a void will
3. If a person dies with a will which has subsequently lost its validity
4. When the will does not institute an heir to, or dispose of all the property belonging to the testator (legal
succession shall take place only with respect to the property of which the testator has not disposed)
5. If the suspensive condition attached to the institution of the heir does not happen or is not fulfilled
6. If the heir dies before the testator,
7. If the heir repudiates the inheritance, there being no substitution, and no right of accretion takes place
8. When the heir instituted is incapable of succeeding, except in cases provided in the Code
Fundamental underlying principles in legal or intestate succession:
1. Rule of Proximity the relative nearest in degree excludes the farther one
2. Rule of Equal Division the relatives who are in the same degree shall inherit in equal shares
1268
Art. 960
1269
Art. 961

277
 In every inheritance, the relative nearest in degree excludes the more distant ones,
saving the right of representation when it properly takes place.

Relatives in the same degree shall inherit in equal shares, subject to the provisions of
article 1006 with respect to relatives of the full and half blood, and of article 987, paragraph
2, concerning division between the paternal and maternal lines.1270

1. Relationship

Proximity of relationship is determined by the number of generations. Each

generation forms a degree.1271

A series of degrees forms a line, which may be either direct or collateral.

A direct line is that constituted by the series of degrees among ascendants and
descendants.

A collateral line is that constituted by the series of degrees among persons who are
not ascendants and descendants, but who come from a common ancestor.1272

The direct line is either descending or ascending.

The former unites the head of the family with those who descend from him.

The latter binds a person with those from whom he descends.1273

In the line, as many degrees are counted as there are generations or persons,
excluding the progenitor.

In the direct line, ascent is made to the common ancestor. Thus, the child is one
degree removed from the parent, two from the grandfather, and three from the great-
grandparent.

In the collateral line, ascent is made to the common ancestor and then descent is
made to the person with whom the computation is to be made. Thus, a person is two
degrees removed from his brother, three from his uncle, who is the brother of his father,
four from his first cousin, and so forth.1274

Full blood relationship is that existing between persons who have the same father
and the same mother.

1270
Art. 962
1271
Art. 963
1272
Art. 964
1273
Art. 965
1274
Art. 966

278
 Half-blood relationship is that existing between persons who have the same father,
but not the same mother, or the same mother, but not the same father.1275

If there are several relatives of the same degree, and one or some of them are
unwilling or incapacitated to succeed, his portion shall accrue to the others of the same
degree, save the right of representation when it should take place.1276

If the inheritance should be repudiated by the nearest relative, should there be one
only, or by all the nearest relatives called by law to succeed, should there be several, those of
the following degree shall inherit in their own right and cannot represent the person or
persons repudiating the inheritance.1277

2. Right of Representation

Representation is a right created by fiction of law, by virtue of which the

representative is raised to the place and the degree of the person represented, and acquires
the rights which the latter would have if he were living or if he could have inherited.1278

The representative is called to the succession by the law and not by the person
represented. The representative does not succeed the person represented but the one whom
the person represented would have succeeded.1279

The right of representation takes place in the direct descending line, but never in the
ascending.

In the collateral line, it takes place only in favor of the children of brothers or sisters,
whether they be of the full or half blood.1280

In order that representation may take place, it is necessary that the representative
himself be capable of succeeding the decedent.1281

Whenever there is succession by representation, the division of the estate shall be

made per stirpes, in such manner that the representative or representatives shall not inherit
more than what the person they represent would inherit, if he were living or could inherit.1282

When children of one or more brothers or sisters of the deceased survive, they shall
inherit from the latter by representation, if they survive with their uncles or aunts. But if they
alone survive, they shall inherit in equal portions.1283

1275
Art. 967
1276
Art. 968
1277
Art. 969
1278
Art. 970
1279
Art. 971
1280
Art. 972
1281
Art. 973
1282
Art. 974
1283
Art. 975

279
 A person may represent him whose inheritance he has renounced.1284

Heirs who repudiate their share may not be represented.1285

B. Order of Intestate Succession

Succession pertains, in the first place, to the descending direct line.1286

Legitimate children and their descendants succeed the parents and other ascendants,
without distinction as to sex or age, and even if they should come from different marriages.

An adopted child succeeds to the property of the adopting parents in the same
manner as a legitimate child.1287

The children of the deceased shall always inherit from him in their own right,
dividing the inheritance in equal shares.1288

Should children of the deceased and descendants of other children who are dead,
survive, the former shall inherit in their own right, and the latter by right of
representation.1289

The grandchildren and other descendants shall inherit by right of representation, and
if any one of them should have died, leaving several heirs, the portion pertaining to him shall
be divided among the latter in equal portions.1290

If illegitimate children survive with legitimate children, the shares of the former shall
be in the proportions prescribed by article 895.1291

In case of the death of an adopted child, leaving no children or descendants, his

parents and relatives by consanguinity and not by adoption, shall be his legal heirs.1292

In default of legitimate children and descendants of the deceased, his parents and
ascendants shall inherit from him, to the exclusion of collateral relatives.1293

The father and mother, if living, shall inherit in equal shares.

1284
Art. 976
1285
Art. 977
1286
Art. 978
1287
Art. 979
1288
Art. 980
1289
Art. 981
1290
Art. 982
1291
Art. 983
1292
Art. 984
1293
Art. 985

280
 Should one only of them survive, he or she shall succeed to the entire estate of the
child.1294

In default of the father and mother, the ascendants nearest in degree shall inherit.

Should there be more than one of equal degree belonging to the same line they shall
divide the inheritance per capita; should they be of different lines but of equal degree, one-
half shall go to the paternal and the other half to the maternal ascendants. In each line the
division shall be made per capita.1295

In the absence of legitimate descendants or ascendants, the illegitimate children shall

succeed to the entire estate of the deceased.1296

If, together with illegitimate children, there should survive descendants of another
illegitimate child who is dead, the former shall succeed in their own right and the latter by
right of representation.1297

The hereditary rights granted by the two preceding articles to illegitimate children
shall be transmitted upon their death to their descendants, who shall inherit by right of
representation from their deceased grandparent.1298

If legitimate ascendants are left, the illegitimate children shall divide the inheritance
with them, taking one-half of the estate, whatever be the number of the ascendants or of the
illegitimate children.1299

An illegitimate child has no right to inherit abintestato from the legitimate children
and relatives of his father or mother; nor shall such children or relatives inherit in the same
manner from the illegitimate child.1300

If an illegitimate child should die without issue, either legitimate or illegitimate, his
father or mother shall succeed to his entire estate; and if the child's filiation is duly proved as
to both parents, who are both living, they shall inherit from him share and share alike.1301

In default of the father or mother, an illegitimate child shall be succeeded by his or

her surviving spouse who shall be entitled to the entire estate.

If the widow or widower should survive with brothers and sisters, nephews and
nieces, she or he shall inherit one-half of the estate, and the latter the other half.1302

1294
Art. 986
1295
Art. 987
1296
Art. 988
1297
Art. 989
1298
Art. 990
1299
Art. 991
1300
Art. 992
1301
Art. 993
1302
Art. 994

281
 In the absence of legitimate descendants and ascendants, and illegitimate children
and their descendants, whether legitimate or illegitimate, the surviving spouse shall inherit
the entire estate, without prejudice to the rights of brothers and sisters, nephews and nieces,
should there be any, under article 1001.1303

If a widow or widower and legitimate children or descendants are left, the surviving
spouse has in the succession the same share as that of each of the children.1304

When the widow or widower survives with legitimate parents or ascendants, the
surviving spouse shall be entitled to one-half of the estate, and the legitimate parents or
ascendants to the other half.1305

If a widow or widower survives with illegitimate children, such widow or widower

shall be entitled to one-half of the inheritance, and the illegitimate children or their
descendants, whether legitimate or illegitimate, to the other half.1306

When the widow or widower survives with legitimate children or their descendants
and illegitimate children or their descendants, whether legitimate or illegitimate, such widow
or widower shall be entitled to the same share as that of a legitimate child.1307

If legitimate ascendants, the surviving spouse, and illegitimate children are left, the
ascendants shall be entitled to one-half of the inheritance, and the other half shall be divided
between the surviving spouse and the illegitimate children so that such widow or widower
shall have one-fourth of the estate, and the illegitimate children the other fourth.1308

Should brothers and sisters or their children survive with the widow or widower, the
latter shall be entitled to one-half of the inheritance and the brothers and sisters or their
children to the other half.1309

In case of a legal separation, if the surviving spouse gave cause for the separation, he
or she shall not have any of the rights granted in the preceding articles.1310

If there are no descendants, ascendants, illegitimate children, or a surviving spouse,

the collateral relatives shall succeed to the entire estate of the deceased in accordance with
the following articles.1311

1303
Art. 995
1304
Art. 996
1305
Art. 997
1306
Art. 998
1307
Art. 999
1308
Art. 1000
1309
Art. 1001
1310
Art. 1002
1311
Art. 1003

282
 Should the only survivors be brothers and sisters of the full blood, they shall inherit
in equal shares.1312

Should brothers and sisters survive together with nephews and nieces, who are the
children of the descendant's brothers and sisters of the full blood, the former shall inherit
per capita, and the latter per stirpes.1313

Should brother and sisters of the full blood survive together with brothers and sisters
of the half blood, the former shall be entitled to a share double that of the latter.1314

In case brothers and sisters of the half blood, some on the father's andsome on the
mother's side, are the only survivors, all shall inherit in equal shares without distinction as to
the origin of the property.1315

Children of brothers and sisters of the half-blood shall succeed per capita or per
stirpes, in accordance with the rules laid down for brothers and sisters of the full blood.1316

Should there be neither brothers nor sisters nor children of brothers or sisters, the
other collateral relatives shall succeed to the estate.

The latter shall succeed without distinction of lines or preference among them by
reason of relationship by the whole blood.1317

The right to inherit abintestato shall not extend beyond the fifth degree of relationship
in the collateral line.1318

In default of persons entitled to succeed in accordance with the provisions of the

preceding Sections, the State shall inherit the whole estate.1319

ORDER OF LEGAL OR INTESTATE SUCCESSION:

LEGITIMATE CHILD ILLEGITIMATE CHILD ADOPTED CHILD

1 Legitimate child and legitimate child and legitimate legitimate child and legitimate
legitimate descendants descendants descendants

2 Legitimate parents and illegitimate children and illegitimate children and

legitimate ascendants legitimate or illegitimate legitimate or illegitimate
descendants descendants

1312
Art. 1004
1313
Art. 1005
1314
Art. 1006
1315
Art. 1007
1316
Art. 1008
1317
Art. 1009
1318
Art. 1010
1319
Art. 1011

283
3 Illegitimate children and illegitimate parents legitimate or illegitimate
legitimate or illegitimate parents and legitimate
descendants ascendants, adoptive parents
4 Surviving spouse surviving spouse surviving spouse

5 Legitimate siblings, nephews, illegitimate siblings, nephews, siblings, nephews, nieces

nieces nieces

6 Legitimate collateral relatives State State

7 State

CONCURRENCE IN LEGAL OR INTESTATE SUCCESSION

INTESTATE HEIR EXCLUDES EXCLUDED BY CONCURS WITH

Legitimate children and Ascendants, collaterals No one Surviving spouse
Legitimate descendants and state Illegitimate children

Illegitimate children Illegitimate parents, No one Surviving spouse

and Descendants collaterals and state Legitimate children and
legitimate parents
Legitimate parents and Collaterals and state Legitimate children Illegitimate children
legitimate ascendants and surviving spouse

Illegitimate parents Collaterals and state Legitimate children and Surviving spouse
illegitimate children
Surviving spouse Collaterals other than No one Legitimate children
siblings, nephews and Illegitimate children
nieces Legitimate parents and
Illegitimate parents

Siblings, nephews All other collaterals and Legitimate children, Surviving spouse
nieces state illegitimate children,
Legitimate parents and
illegitimate parents

Other collaterals within Collateral remoter in Legitimate children Collaterals in the same
5th degree degree and state Illegitimate children degree
Legitimate parents
Illegitimate parents and
Surviving spouse

State No one Everyone No one

284
 A MORE DETAILED SUMMARY OF INTESTATE SHARES:

1. Legitimate children and legitimate descendants alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate children 1

TOTAL 1

2. One legitimate child and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate child

Surviving spouse

TOTAL 1

3. Legitimate children and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate children Remaining portion of Whole estate divided
estate after paying equally between total
legitimes number of children plus
the surviving spouse

Surviving spouse Same as share of @ Legitimes to be divided No. of children plus the
legitimate child equally between total surviving spouse (see
no. of children plus the above)
surviving spouse

TOTAL Varies on no. of Varies on no. of 1

children children

4. Legitimate children and illegitimate children

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE

Legitimate children Remaining portion of Whole estate divided

estate after paying by the ratio of 2:1 for
legitimes each legitimate child as
compared to the
illegitimate child

Illegitimate children share of @ Legitimes to be divided 1 for @ illegitimate

285
 legitimate child by the ratio of 2 for @ child provided that
legitimate child, 1 for legitimes wouldnt be
@ illegitimate child impaired

TOTAL Varies on no. of Varies on no. of

children children

5. One legitimate child, illegitimate child, and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate child Remaining portion of Whole estate divided by
estate after paying the ratio of 2 @
legitimes to be divided legitimate child
by the ratio of 2:1 for
@ legitimate child and
@ illegitimate child,
respectively

Illegitimate child share of @ 1 for @ illegitimate 1 for @ illegitimate

legitimate child child (see above) child

Surviving spouse Same share as a Legitimes wouldnt be

legitimate child impaired

TOTAL Varies depending on Varies depending on 1

no. of illegitimate no. of illegitimate
children children

6. Legitimate children, illegitimate children and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate children Remaining portion of Whole estate divided
estate, if any after by the ratio of 2:1 for
paying legitimes to be @ legitimate child and
divided by the ratio of illegitimate child
2 for @ legitimate child respectively

Illegitimate children share of @ legit 1 for @ illegitimate 1 for @ illegitimate

child child (see above) child (see above)

Surviving spouse Same share as a Same share as a

legitimate child, legitimate child,
provided legitimes are provided legitimes are
not impaired not impaired

TOTAL Varies depending on Varies depending on 1

no. of illegitimate no. of illegitimate
children children

286
 7. Legitimate parents alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate parents 1
TOTAL 1

8. Legitimate parents and illegitimate children

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate parents
Illegitimate children

TOTAL 1

9. Legitimate parents and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate parents

Surviving spouse

TOTAL 1

10. Legitimate parents, surviving spouse and illegitimate children

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Legitimate parents

Surviving spouse 1/8 1/8

Illegitimate children

TOTAL 7/8 1/8 1

11. Illegitimate children alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Illegitimate children 1
alone
TOTAL 1

287
 12. Illegitimate children and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Illegitimate children 1/3 1/6

Surviving spouse 1/3 1/6

TOTAL 2/3 1/3 1

13. Surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Surviving spouse or 1/3 or 1/3 1

TOTAL or 1/3 or 1/3 1

14. Illegitimate parents alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Illegitimate parents 1

TOTAL 1

15. Illegitimate parents and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Illegitimate parents

Surviving spouse

TOTAL 1

16. Siblings, nephews and nieces alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Siblings, nephews, 1
nieces
TOTAL 1

288
 17. Surviving spouse, siblings, nephews and nieces

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE

DISPOSAL SHARE
Surviving spouse

Siblings, nephews,
nieces

TOTAL 1

In order that the State may take possession of the property mentioned in the
preceding article, the pertinent provisions of the Rules of Court must be observed.1320

After the payment of debts and charges, the personal property shall be assigned to
the municipality or city where the deceased last resided in the Philippines, and the real estate
to the municipalities or cities, respectively, in which the same is situated.

If the deceased never resided in the Philippines, the whole estate shall be assigned to
the respective municipalities or cities where the same is located.

Such estate shall be for the benefit of public schools, and public charitable
institutions and centers, in such municipalities or cities. The court shall distribute the estate
as the respective needs of each beneficiary may warrant.

The court, at the instance of an interested party, or on its own motion, may order the
establishment of a permanent trust, so that only the income from the property shall be
used.1321

If a person legally entitled to the estate of the deceased appears and files a claim
hereto with the court within five years from the date the property was delivered to the State,
such person shall be entitled to the possession of the same, or if sold, the municipality or city
shall be accountable to him for such part of the proceeds as may not have been lawfully
spent.1322

IV. Provisions Common to Testate and Intestate Succession

Property left by will is not deemed subject to collation, if the testator has not
otherwise provided, but the legitime shall in any case remain unimpaired.1323

When the grandchildren, who survive with their uncles, aunts, or cousins, inherit
from their grandparents in representation of their father or mother, they shall bring to

1320
Art. 1012
1321
Art. 1013
1322
Art. 1014
1323
Art. 1063

289
collation all that their parents, if alive, would have been obliged to bring, even though such
grandchildren have not inherited the property.

They shall also bring to collation all that they may have received from the decedent
during his lifetime, unless the testator has provided otherwise, in which case his wishes must
be respected, if the legitime of the co-heirs is not prejudiced.1324

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.1325

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.1326

Expenses for support, education, medical attendance, even in extraordinary illness,

apprenticeship, ordinary equipment, or customary gifts are not subject to collation.1327

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.1328

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.1329

Wedding gifts by parents and ascendants consisting of jewelry, clothing, and outfit,
shall not be reduced as inofficious except insofar as they may exceed one-tenth of the sum
which is disposable by will.1330

The same things donated are not to be brought to collation and partition, but only
their value at the time of the donation, even though their just value may not then have been
assessed.

Their subsequent increase or deterioration and even their total loss or destruction, be
it accidental or culpable, shall be for the benefit or account and risk of the donee.1331

1324
Art. 1064
1325
Art. 1065
1326
Art. 1066
1327
Art. 1067
1328
Art. 1068
1329
Art. 1069
1330
Art. 1070
1331
Art. 1071

290
 In the collation of a donation made by both parents, one-half shall be brought to the
inheritance of the father, and the other half, to that of the mother. That given by one alone
shall be brought to collation in his or her inheritance.1332

The donee's share of the estate shall be reduced by an amount equal to that already
received by him; and his co-heirs shall receive an equivalent, as much as possible, in property
of the same nature, class and quality.1333

Should the provisions of the preceding article be impracticable, if the property

donated was immovable, the co-heirs shall be entitled to receive its equivalent in cash or
securities, at the rate of quotation; and should there be neither cash or marketable securities
in the estate, so much of the other property as may be necessary shall be sold at public
auction.

If the property donated was movable, the co-heirs shall only have a right to select an
equivalent of other personal property of the inheritance at its just price.1334

The fruits and interest of the property subject to collation shall not pertain to the
estate except from the day on which the succession is opened.

For the purpose of ascertaining their amount, the fruits and interest of the property
of the estate of the same kind and quality as that subject to collation shall be made the
standard of assessment.1335

The co-heirs are bound to reimburse to the donee the necessary expenses which he
has incurred for the preservation of the property donated to him, though they may not have
augmented its value.

The donee who collates in kind an immovable which has been given to him must be
reimbursed by his co-heirs for the improvements which have increased the value of the
property, and which exist at the time the partition if effected.

As to works made on the estate for the mere pleasure of the donee, no
reimbursement is due him for them; he has, however, the right to remove them, if he can do
so without injuring the estate.1336

Should any question arise among the co-heirs upon the obligation to bring to
collation or as to the things which are subject to collation, the distribution of the estate shall
not be interrupted for this reason, provided adequate security is given.1337

1332
Art. 1072
1333
Art. 1073
1334
Art. 1074
1335
Art. 1075
1336
Art. 1076
1337
Art. 1077

291
 A. Right of Accretion

1. Definition and Requisites

Accretion is a right by virtue of which, when two or more persons are called to the
same inheritance, devise or legacy, the part assigned to the one who renounces or cannot
receive his share, or who died before the testator, is added or incorporated to that of his co-
heirs, co-devisees, or co-legatees.1338

In order that the right of accretion may take place in a testamentary succession, it
shall be necessary:

(1) That two or more persons be called to the same inheritance, or to the same portion
thereof, pro indiviso; and

(2) That one of the persons thus called die before the testator, or renounce the inheritance,
or be incapacitated to receive it.1339

The words "one-half for each" or "in equal shares" or any others which, though
designating an aliquot part, do not identify it by such description as shall make each heir the
exclusive owner of determinate property, shall not exclude the right of accretion.

In case of money or fungible goods, if the share of each heir is not earmarked, there
shall be a right of accretion.1340

In legal succession the share of the person who repudiates the inheritance shall
always accrue to his co-heirs.1341

The heirs to whom the portion goes by the right of accretion take it in the same
proportion that they inherit.1342

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.1343

Among the compulsory heirs the right of accretion shall take place only when the
free portion is left to two or more of them, or to any one of them and to a stranger.

Should the part repudiated be the legitime, the other co-heirs shall succeed to it in
their own right, and not by the right of accretion.1344

1338
Art. 1015
1339
Art. 1016
1340
Art. 1017
1341
Art. 1018
1342
Art. 1019
1343
Art. 1020
1344
Art. 1021

292
 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.1345

Accretion shall also take place among devisees, legatees and usufructuaries under the
same conditions established for heirs.1346

B. Capacity to Succeed by Will or Intestacy

Persons not incapacitated by law may succeed by will or abintestato.

The provisions relating to incapacity by will are equally applicable to intestate

succession.1347

In order to be capacitated to inherit, the heir, devisee or legatee must be living at the
moment the succession opens, except in case of representation, when it is proper.

A child already conceived at the time of the death of the decedent is capable of
succeeding provided it be born later under the conditions prescribed in article 41.1348

A testamentary disposition may be made to the State, provinces, municipal

corporations, private corporations, organizations, or associations for religious, scientific,
cultural, educational, or charitable purposes.

All other corporations or entities may succeed under a will, unless there is a
provision to the contrary in their charter or the laws of their creation, and always subject to
the same.1349

The prohibitions mentioned in article 739, concerning donations inter vivos shall
apply to testamentary provisions.1350

Should the testator dispose of the whole or part of his property for prayers and pious
works for the benefit of his soul, in general terms and without specifying its application, the
executor, with the court's approval shall deliver one-half thereof or its proceeds to the
church or denomination to which the testator may belong, to be used for such prayers and
pious works, and the other half to the State, for the purposes mentioned in article 1013. 1351

Testamentary provisions in favor of the poor in general, without designation of

particular persons or of any community, shall be deemed limited to the poor living in the

1345
Art. 1022
1346
Art. 1023
1347
Art. 1024
1348
Art. 1025
1349
Art. 1026
1350
Art 1028
1351
Art. 1029

293
domicile of the testator at the time of his death, unless it should clearly appear that his
intention was otherwise.

The designation of the persons who are to be considered as poor and the
distribution of the property shall be made by the person appointed by the testator for the
purpose; in default of such person, by the executor, and should there be no executor, by the
justice of the peace, the mayor, and the municipal treasurer, who shall decide by a majority
of votes all questions that may arise. In all these cases, the approval of the Court of First
Instance shall be necessary.

The preceding paragraph shall apply when the testator has disposed of his property
in favor of the poor of a definite locality.1352

A testamentary provision in favor of a disqualified person, even though made under

the guise of an onerous contract, or made through an intermediary, shall be void.1353

The cause of unworthiness shall be without effect if the testator had knowledge
thereof at the time he made the will, or if, having known of them subsequently, he should
condone them in writing.1354

In order to judge the capacity of the heir, devisee or legatee, his qualification at the
time of the death of the decedent shall be the criterion.

In cases falling under Nos. 2, 3, or 5 of article 1032, it shall be necessary to wait until
final judgment is rendered, and in the case falling under No. 4, the expiration of the month
allowed for the report.

If the institution, devise or legacy should be conditional, the time of the compliance
with the condition shall also be considered.1355

If the person excluded from the inheritance by reason of incapacity should be a child
or descendant of the decedent and should have children or descendants, the latter shall
acquire his right to the legitime.

The person so excluded shall not enjoy the usufruct and administration of the
property thus inherited by his children.1356

Alienations of hereditary property, and acts of administration performed by the

excluded heir, before the judicial order of exclusion, are valid as to the third persons who

1352
Art. 1030
1353
Art. 1031
1354
Art. 1033
1355
Art. 1034
1356
Art. 1035

294
acted in good faith; but the co-heirs shall have a right to recover damages from the
disqualified heir.1357

The unworthy heir who is excluded from the succession has a right to demand
indemnity or any expenses incurred in the preservation of the hereditary property, and to
enforce such credits as he may have against the estate.1358

Any person incapable of succession, who, disregarding the prohibition stated in the
preceding articles, entered into the possession of the hereditary property, shall be obliged to
return it together it its accessions.

He shall be liable for all the fruits and rents he may have received, or could have
received through the exercise of due diligence.1359

Capacity to succeed is governed by the law of the nation of the decedent.1360

The action for a declaration of incapacity and for the recovery of the inheritance,
devise or legacy shall be brought within five years from the time the disqualified person took
possession thereof. It may be brought by any one who may have an interest in the
succession.1361

1. Persons Incapable of Succeeding

The following are incapable of succeeding:

(1) The priest who heard the confession of the testator during his last illness, or the minister
of the gospel who extended spiritual aid to him during the same period;

(2) The relatives of such priest or minister of the gospel within the fourth degree, the
church, order, chapter, community, organization, or institution to which such priest or
minister may belong;

(3) A guardian with respect to testamentary dispositions given by a ward in his favor before
the final accounts of the guardianship have been approved, even if the testator should die
after the approval thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be
valid;

(4) Any attesting witness to the execution of a will, the spouse, parents, or children, or any
one claiming under such witness, spouse, parents, or children;

1357
Art. 1036
1358
Art. 1037
1359
Art. 1038
1360
Art. 1039
1361
Art. 1040

295
(5) Any physician, surgeon, nurse, health officer or druggist who took care of the testator
during his last illness;

(6) Individuals, associations and corporations not permitted by law to inherit.1362

The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of
the donation;

(2) Those made between persons found guilty of the same criminal offense, in consideration
thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his
office.

In the case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilt of the donor and donee may be proved
by preponderance of evidence in the same action.1363

The following are incapable of succeeding by reason of unworthiness:

(1) Parents who have abandoned their children or induced their daughters to lead a corrupt
or immoral life, or attempted against their virtue;

(2) Any person who has been convicted of an attempt against the life of the testator, his or
her spouse, descendants, or ascendants;

(3) Any person who has accused the testator of a crime for which the law prescribes
imprisonment for six years or more, if the accusation has been found groundless;

(4) Any heir of full age who, having knowledge of the violent death of the testator, should
fail to report it to an officer of the law within a month, unless the authorities have already
taken action; this prohibition shall not apply to cases wherein, according to law, there is no
obligation to make an accusation;

(5) Any person convicted of adultery or concubinage with the spouse of the testator;

(6) Any person who by fraud, violence, intimidation, or undue influence should cause the
testator to make a will or to change one already made;

(7) Any person who by the same means prevents another from making a will, or from
revoking one already made, or who supplants, conceals, or alters the latter's will;

1362
Art. 1027
1363
Art. 739

296
(8) Any person who falsifies or forges a supposed will of the decedent.1364

2. Unworthiness vs. Disinheritance

Unworthiness

A person cannot succeed for reasons provided for by law.1365

Disinheritance

A testamentary disposition by which a person is deprived of, or excluded from, the

inheritance to which he has a right.

C. Acceptance and Repudiation of the Inheritance

The acceptance or repudiation of the inheritance is an act which is purely voluntary

and free.1366

The effects of the acceptance or repudiation shall always retroact to the moment of
the death of the decedent.1367

No person may accept or repudiate an inheritance unless he is certain of the death of

the person from whom he is to inherit, and of his right to the inheritance.1368

Any person having the free disposal of his property may accept or repudiate an
inheritance.

Any inheritance left to minors or incapacitated persons may be accepted by their

parents or guardians. Parents or guardians may repudiate the inheritance left to their wards
only by judicial authorization.

The right to accept an inheritance left to the poor shall belong to the persons
designated by the testator to determine the beneficiaries and distribute the property, or in
their default, to those mentioned in article 1030.1369

The lawful representatives of corporations, associations, institutions and entities

qualified to acquire property may accept any inheritance left to the latter, but in order to
repudiate it, the approval of the court shall be necessary.1370

1364
Art. 1032
1365
supra
1366
Art. 1041
1367
Art. 1042
1368
Art. 1043
1369
Art. 1044
1370
Art. 1045

297
 Public official establishments can neither accept nor repudiate an inheritance without
the approval of the government.1371

A married woman of age may repudiate an inheritance without the consent of her
husband.1372

Deaf-mutes who can read and write may accept or repudiate the inheritance
personally or through an agent. Should they not be able to read and write, the inheritance
shall be accepted by their guardians. These guardians may repudiate the same with judicial
approval.1373

Acceptance may be express or tacit.

An express acceptance must be made in a public or private document.

A tacit acceptance is one resulting from acts by which the intention to accept is
necessarily implied, or which one would have no right to do except in the capacity of an heir.

Acts of mere preservation or provisional administration do not imply an acceptance

of the inheritance if, through such acts, the title or capacity of an heir has not been
assumed.1374

An inheritance is deemed accepted:

(1) If the heirs sells, donates, or assigns his right to a stranger, or to his co-heirs, or to any of
them;

(2) If the heir renounces the same, even though gratuitously, for the benefit of one or more
of his co-heirs;

(3) If he renounces it for a price in favor of all his co-heirs indiscriminately; but if this
renunciation should be gratuitous, and the co-heirs in whose favor it is made are those upon
whom the portion renounced should devolve by virtue of accretion, the inheritance shall not
be deemed as accepted.1375

The repudiation of an inheritance shall be made in a public or authentic instrument,

or by petition presented to the court having jurisdiction over the testamentary or intestate
proceedings.1376

1371
Art. 1046
1372
Art. 1047
1373
Art. 1048
1374
Art. 1049
1375
Art. 1050
1376
Art. 1051

298
 If the heir repudiates the inheritance to the prejudice of his own creditors, the latter
may petition the court to authorize them to accept it in the name of the heir.1377

The acceptance shall benefit the creditors only to an extent sufficient to cover the
amount of their credits. The excess, should there be any, shall in no case pertain to the
renouncer, but shall be adjudicated to the persons to whom, in accordance with the rules
established in this Code, it may belong.

If the heir should die without having accepted or repudiated the inheritance his right
shall be transmitted to his heirs.1378

Should there be several heirs called to the inheritance, some of them may accept and
the others may repudiate it.1379

If a person, who is called to the same inheritance as an heir by will and abintestato,
repudiates the inheritance in his capacity as a testamentary heir, he is understood to have
repudiated it in both capacities.

Should he repudiate it as an intestate heir, without knowledge of his being a

testamentary heir, he may still accept it in the latter capacity.1380

The acceptance or repudiation of an inheritance, once made, is irrevocable, and

cannot be impugned, except when it was made through any of the causes that vitiate
consent, or when an unknown will appears.1381

Within thirty days after the court has issued an order for the distribution of the estate
in accordance with the Rules of Court, the heirs, devisees and legatees shall signify to the
court having jurisdiction whether they accept or repudiate the inheritance.

If they do not do so within that time, they are deemed to have accepted the
inheritance.1382

D. Collation

To determine the legitime, the value of the property left at the death of the testator
shall be considered, deducting all debts and charges, which shall not include those imposed
in the will.

To the net value of the hereditary estate, shall be added the value of all donations by
the testator that are subject to collation, at the time he made them.1383
1377
Art. 1052
1378
Art. 1053
1379
Art. 1054
1380
Art. 1055
1381
Art. 1056
1382
Art. 1057
1383
Art. 908

299
 Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of which the
testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable portion, they shall
be reduced according to the rules established by this Code.1384

Donations which an illegitimate child may have received during the lifetime of his
father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of, they shall be reduced
in the manner prescribed by this Code.1385

Every compulsory heir, who succeeds with other compulsory heirs, must bring into
the mass of the estate any property or right which he may have received from the decedent,
during the lifetime of the latter, by way of donation, or any other gratuitous title, in order
that it may be computed in the determination of the legitime of each heir, and in the account
of the partition.1386

Collation shall not take place among compulsory heirs if the donor should have so
expressly provided, or if the donee should repudiate the inheritance, unless the donation
should be reduced as inofficious.1387

E. Partition and Distribution of Estate

Where there are two or more heirs, the whole estate of the decedent is, before its
partition, owned in common by such heirs, subject to the payment of debts of the
deceased.1388

A person may, by an act inter vivos or mortis causa, intrust the mere power to make
the partition after his death to any person who is not one of the co-heirs.

The provisions of this and of the preceding article shall be observed even should
there be among the co-heirs a minor or a person subject to guardianship; but the mandatary,
in such case, shall make an inventory of the property of the estate, after notifying the co-
heirs, the creditors, and the legatees or devisees.1389

1384
Art. 909
1385
Art. 910
1386
Art. 1061
1387
Art. 1062
1388
Art. 1078
1389
Art. 1081

300
 Every act which is intended to put an end to indivision among co-heirs and legatees
or devisees is deemed to be a partition, although it should purport to be a sale, and
exchange, a compromise, or any other transaction.1390

Every co-heir has a right to demand the division of the estate unless the testator
should have expressly forbidden its partition, in which case the period of indivision shall not
exceed twenty years as provided in article 494. This power of the testator to prohibit division
applies to the legitime.

Even though forbidden by the testator, the co-ownership terminates when any of the
causes for which partnership is dissolved takes place, or when the court finds for compelling
reasons that division should be ordered, upon petition of one of the co-heirs.1391

Voluntary heirs upon whom some condition has been imposed cannot demand a
partition until the condition has been fulfilled; but the other co-heirs may demand it by
giving sufficient security for the rights which the former may have in case the condition
should be complied with, and until it is known that the condition has not been fulfilled or
can never be complied with, the partition shall be understood to be provisional.1392

In the partition of the estate, equality shall be observed as far as possible, dividing
the property into lots, or assigning to each of the co-heirs things of the same nature, quality
and kind.1393

Should a thing be indivisible, or would be much impaired by its being divided, it may
be adjudicated to one of the heirs, provided he shall pay the others the excess in cash.

Nevertheless, if any of the heirs should demand that the thing be sold at public
auction and that strangers be allowed to bid, this must be done.1394

In the partition the co-heirs shall reimburse one another for the income and fruits
which each one of them may have received from any property of the estate, for any useful
and necessary expenses made upon such property, and for any damage thereto through
malice or neglect.1395

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.1396

1390
Art. 1082
1391
Art. 1083
1392
Art. 1084
1393
Art. 1085
1394
Art. 1086
1395
Art. 1087
1396
Art. 1088

301
 The titles of acquisition or ownership of each property shall be delivered to the co-
heir to whom said property has been adjudicated.1397

When the title comprises two or more pieces of land which have been assigned to
two or more co-heirs, or when it covers one piece of land which has been divided between
two or more co-heirs, the title shall be delivered to the one having the largest interest, and
authentic copies of the title shall be furnished to the other co-heirs at the expense of the
estate. If the interest of each co-heir should be the same, the oldest shall have the title.1398

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.1399

The reciprocal obligation of warranty referred to in the preceding article shall be

proportionate to the respective hereditary shares of the co-heirs, but if any one of them
should be insolvent, the other co-heirs shall be liable for his part in the same proportion,
deducting the part corresponding to the one who should be indemnified.

Those who pay for the insolvent heir shall have a right of action against him for
reimbursement, should his financial condition improve.1400

An action to enforce the warranty among heirs must be brought within ten years
from the date the right of action accrues.1401

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.

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.1402

The obligation of warranty among co-heirs shall cease in the following cases:

(1) When 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;

1397
Art. 1089
1398
Art. 1090
1399
Art. 1092
1400
Art. 1093
1401
Art. 1094
1402
Art. 1095

302
(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.1403

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.1404

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 reasonably be presumed, that the intention of the testator was otherwise.1405

The heir who is sued shall have the option of indemnifying the plaintiff for the loss,
or consenting to a new partition.

Indemnity may be made by payment in cash or by the delivery of a thing of the same
kind and quality as that awarded to the plaintiff.

If a new partition is made, it shall affect neither those who have not been prejudiced
nor those have not received more than their just share.1406

An heir who has alienated the whole or a considerable part of the real property
adjudicated to him cannot maintain an action for rescission on the ground of lesion, but he
shall have a right to be indemnified in cash.1407

The omission of one or more objects or securities of the inheritance shall not cause
the rescission of the partition on the ground of lesion, but the partition shall be completed
by the distribution of the objects or securities which have been omitted.1408

1. Partition

Partition, in general, is the separation, division and assignment of a thing held in

common among those to whom it may belong. The thing itself may be divided, or its
value.1409

1403
Art. 1096
1404
Art. 1098
1405
Art. 1099
1406
Art. 1101
1407
Art. 1102
1408
Art. 1103
1409
Art. 1079

303
 Should a person make partition of his estate by an act inter vivos, or by will, such
partition shall be respected, insofar as it does not prejudice the legitime of the compulsory
heirs.

A parent who, in the interest of his or her family, desires to keep any agricultural,
industrial, or manufacturing enterprise intact, may avail himself of the right granted him in
this article, by ordering that the legitime of the other children to whom the property is not
assigned, be paid in cash.1410

3. Effects of Partition

A partition legally made confers upon each heir the exclusive ownership of the
property adjudicated to him.1411

A partition may be rescinded or annulled for the same causes as contracts.1412

The action for rescission on account of lesion shall prescribe after four years from
the time the partition was made.1413

A partition made with preterition of any of the compulsory heirs shall not be
rescinded, unless it be proved that there was bad faith or fraud on the part of the other
persons interested; but the latter shall be proportionately obliged to pay to the person
omitted the share which belongs to him.1414

A partition which includes a person believed to be an heir, but who is not, shall be
void only with respect to such person.1415

1410
Art. 1080
1411
Art. 1091
1412
Art. 1097
1413
Art. 1100
1414
Art. 1104
1415
Art. 1105

304
 PARTNERSHIP

I. Contract of partnership1416

A. Definition

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.

B. Elements

1. consensual;
2. there must be a contribution of money, property or industry to a common fund;
3. the subject must be a lawful one;
4. there must be an intention of dividing the profit among the partners;
5. there must be a desire to formulate an active union1417 ;
6. a new personality, that of the firm must arise, distinct from the separate personality of
each of the members

C. Rules to determine existence1418

1. General rule:

Persons who are not partners as to each other are not partners as to third persons.

Exception:

partnership by estoppel

2. Co-ownership of a property does not itself establish a partnership, even though the co-
owners share in the profits derived from the incident of joint ownership.

3. Sharing of gross returns alone does not indicate a partnership, whether or not the
persons sharing them have a joint or common right or interest in any property from
which the returns are derived.

1416
A partnership has a juridical personality which is separate and distinct from that of the partners.
A partnership may sue and be sued in its name or by its duly authorized representatives. A managing
partner of the partnership may execute all acts of administration including the right to sue debtors of the
partnership in the case of their failure to pay their obligation when it becomes demandable. (Tai Tong
Chuache& Co. vs. Insurance Commission 158 SCRA 336 [1988])
1417
affectiosocietatis
1418
Art. 1769

305
4. Receipt of share in the profits is a strong presumptive evidence of partnership. However,
no such inference will be drawn if such profits were received in payment:

(a) as a debt by installments or otherwise;

(b) as wages of an employee or rent to a landlord;
(c)as an annuity to a widow or representative of a deceased partner;
(d)as interest on a loan, though the amount of payment vary with the profits of the
business; and
(e)as the consideration for the sale of a goodwill of a business or other property by
installments or otherwise.

D. How partnership is formed

General rule:

No special form is required for the validity or existence of the contract of partnership.

Exceptions:

1. Where immovable property or real rights are contributed, the partnership contract
shall be void unless:

a. It is reduced to writing in a public instrument1419 .

b. An inventory of the property contributed is made, signed by the parties and

attached to the public instrument.1420

2. Where the contract is by its terms not to be performed within a year from the
making thereof, such partnership contract is covered by the statute of frauds and
thus requires a written agreement to be enforceable.

3. Where the contract of partnership has a capital of 3,000 pesos or more, in money or
property, it shall appear in a public instrument and must be recorded in the Office of
the Securities and Exchange Commission. However, a partnership has a juridical
personality even in case of failure to comply with this requirement.

E. Partnership term

Unlimited in the sense that no time limit is fixed by law; may be agreed upon.1421

1419
Art. 1771
1420
Art.1773
A partnership contract which states that the partnership is established to operate a fishpond is not
rendered void because no inventory of the fishpond was made (where it did not clearly appear in the
articles of partnership that the real property had been contributed by anyone of the partners). (Agad vs.
Mabolo and MaboloAgad and Co., 23 SCRA 1223[1968])
1421
expressly or impliedly

306
 F. Universal vs. Particular; General vs. Limited

Universal partnership of all present property1422 - wherein the partners contribute all
the property which actually belong 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.

Universal partnership of profits1423- comprises all that the partners may acquire by
their industry or work during the existence of the partnership and the usufruct of movable
or immovable property which each of the partners may posses at the time of the celebration
of the contract.

Particular partnership - one which has for its object determinate things, their use and
fruits, or a specific undertaking, or the exercise of a profession or vocation.

General partnership - consisting of general partners who are liable pro rata and
subsidiarily and sometimes solidarily with their separate property for partnership debts.

Limited partnership - one formed by two or more persons having as members one
or more general partners and one or more limited partners, the latter not being personally
liable for the obligations of the partnership.

G. Partnership by estoppel1424

Arises when a person, by words spoken or written or by conduct, represents himself

or consents to another representing him to anyone, as partner in an existing partnership, or

1422
In a universal partnership of all present property, the property which belongs 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
the profits which they may acquire therewith.
A stipulation for the common enjoyment of any other profits may also be made; but the properties
which the partners may acquire subsequently by inheritance, legacy or donation cannot be included in such
stipulation, except the fruits thereof.
Where the articles of partnership do not specify the nature of the universal partnership, whether it is one
of present property or of profits only, it will be presumed that the parties intended merely a partnership
of profits.
Future properties cannot be contributed. Thus, property subsequently acquired by (1) inheritance, (2)
legacy or (3) donation cannot be included by stipulation except the fruits thereof
1423
Movable or immovable property which each of the partners may posses at the time of the celebration of
the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership.
Persons who are prohibited from giving each other any donation or advantage cannot enter into a
universal partnership. (Art. 739, Art. 87, Family Code)
Profits acquired by their partners through chance (i.e. lottery) without employment of any physical or
intellectual efforts are not included.
1424
Elements to establish liability as a partner on ground of estoppel:
1.Defendant represented himself as partner/represented by others as such and not denied/refuted by
defendant
2.Plaintiff relied on such representation
3.Statement of defendant not refuted

307
with one or more persons not actual partners; he is liable to any such person to whom such
representation has been made, who has, on the faith of such representation given credit to
the actual or apparent partnership.1425

Liabilities in estoppel

All partners consented to representation Partnership is liable

No existing partnership & all those represented consented; Person who represented
Not all partners of existing partnership consents to himself & all those who made
representation representation liable pro-
rata/jointly
No existing partnership & not all represented consented; Person who represented
None of partners in existing partnership consented himself liable & those who
made/consented to
representation separately liable

H. Partnership v. Joint Venture

Joint Venture1426

It is hardly distinguishable from partnership, since their elements are similar, i.e.
community of interest in the business, sharing of profits and losses, and a mutual right of
control.

The main distinction in common law jurisdiction is that partnership contemplates a

general business with some degree of continuity, while joint venture is formed for the
execution of a single transaction and is thus of temporary nature

I. Professional partnership

Partnerships formed by persons for the sole purpose of exercising their common
profession, no part of the income of which is derived from engaging in any trade or
business.

1425
Art 1825
It does not create a partnership as between the alleged partners. A contract, express or implied is
essential to the creation of partnership. The law considers them partners and the association as a
partnership insofar as it is favorable to third persons. However, partnership liability is created only in
favor of persons who on the faith of such representation given credit to the actual or apparent partnership
1426
In Kilosbayan, Incorporated vs. Guingona, Jr 232 SCRA 110 [1994], the court defined a joint venture
as an association of persons or companies jointly undertaking some commercial enterprise; generally all
contribute assets and share risks. Its requisites are:
a. A community of interest in the performance of the subject matter;
b. A right to direct and govern the policy in connection therewith;
c. Duty to share profits and losses.

308
 J. Management1427

I. When the manner of management has been provided for in the partnership
agreement

A.When a managing partner has been appointed

1) Appointment in the articles of partnership

a. Power is irrevocable without just or lawful cause

i. to remove him for just cause, vote of partners representing

controlling interest is necessary
ii. to remove him without just cause or for an unjust cause, there must
be unanimity including his own vote

b. Extent of power

i. if he acts in good faith, he may do all acts of administration, despite

opposition of his partners

ii. if in bad faith, he cannot.

2) Appointment other than in the articles of partnership

a. Power to act may be revoked at any time, with or without just cause
b. Extent of power: as long as he remains manager, he can perform all acts of
administration, but if others oppose and he persists, he can be removed

B. When two or more managing partners have been entrusted with the management of
partnership

1) Without specification of their respective duties and without stipulation requiring

unanimity of action

GENERAL RULE: Each managing partner may execute all acts of administration

EXCEPTION:If any of the managing partners should oppose,

a) Decision of the majority of the managing partners shall prevail

b) In case of a tie, decision of the partners representing the controlling
interest shall prevail

2) With stipulation requiring unanimity of action

1427
Arts. 1800-1803

309
 GENERAL RULE: Unanimous consent of all the managing partners shall be
necessary for the validity of the acts and absence or inability of any managing partner
cannot be alleged

EXCEPTION:When there is an imminent danger of grave or irreparable injury to

the partnership, partner may act alone without the consent of the partner who is
absent or under disability

II. When manner of management has not been agreed upon

a) All partners shall be considered managers and agents

b) Unanimous consent required for alteration of immovable property

II. Rights and obligations of partnership

The partnership can, in general:

a) enter into contracts

b) acquire and possess property of all kinds
c)incur obligations
d) bring civil and criminal actions
e) be adjudged insolvent even if the individual members be each financially solvent
f) bear risk of loss1428
g) reimburse1429
h) operate under firm name1430
i) bound by partners admission1431

1428
Partnership bears the risk: when what is contributed is a fungible thing, thing which cant be kept
without deteriorating, if the thing was contributed to be sold, and contributions are appraised in the
inventory (Art. 1795, CC)
1429
3 obligations of the partnership:
1. refund disbursements with legal interest
2. answer for obligations contracted in good faith in the partnerships interest
3. answer for risks (Art. 1796, CC)
Partner = agent. Being a mere agent, he isnt personally liable as long as hes not at fault (Art. 1912,
CC) and acted within the scope of his authority. But unlike an ordinary agent, the paying partner doesnt
have the right of retention if he isnt paid.
1430
Required: every partnership shall operate under a firm name (Art. 1815, CC) to distinguish the
partnership from other entities & from the individual partners.
Non-members whose names were used: dont have the rights of a partner but are liable to 3rd persons
without notice as partners (Art. 1815, CC). They become partners by estoppel (PNB v. Lo).
Use of deceased partners name in law firm: permissible as long as its indicated in the firms
communications that the partner is deceased (Rule 3.02, CPR)
Other rules:
1. a person continuing the partnership after a dissolution uses the firm name/name of deceased partner
as part of the name: deceased partners individual property isnt liable for debts contracted (Art. 1840, CC)
2. the limited partners surname shall not appear in the firm name unless
a. its also the surname of a general partner
b. before the limited partner became such, the business had been carried on under a name in which his
surname appeared (Art. 1846, CC)

310
j) bound by notice to partner1432
k) liable for wrongful act of partner1433

III. Rights and obligations of partners among themselves

I. Obligation with respect to contribution of property

a) To contribute what had been promised

b) To answer for eviction in case the partnership is deprived of determinate
property contributed
c) To answer to the partnership for the fruits of the property the contribution
of which is delayed, from the date they should have been contributed to the
time of actual delivery
d) To preserve the property with the diligence of a good father of a family
pending delivery to the partnership
e) To indemnify the partners for any damages caused to it by the retention of
the same or by delay in its contribution.

II. Obligations with respect to contribution of money and money converted to

personal use

a) To contribute on the date due the amount he has undertaken to

contribute to the partnership
b) To reimburse any amount he may have taken from the partnership
coffers and converted to his own personal use
c) To pay the agreed or legal interest, if he fails to pay his contribution
on time or in case he takes any amount from the common fund and
converted to his own personal use

1431
Requisites to be admissible against the partnership:
1. it must be connected with partnership affairs
2. its within the scope of the partners authority (Art. 1820, CC) as may be just and equitable under
the circumstances according to capital contribution.
3. Purely industrial partner not liable for losses
Exception: when a partner makes admissions for himself only without purporting to act for the
partnership
Admission by a former partner not admissible in evidence against the partnership. (Congco vs. Trillana)
1432
Notice to the firm:
1. Notice to a partner while already a partner
2. Knowledge is acquired by a partner whos acting in a particular matter, WON a partner at the time as
long as he still remembers the partnership matter
3. The partner who acquired it has reason to believe that it be the subject of the business, and couldve
communicated it to the acting partner (Art. 1821, CC)
1433
Extent of liability for wrongful acts, omissions of a partner: firm is liable to the same extent as the
partner (Art. 1822, CC).
Misapplication of money/property resulting in losses: if loss is suffered by the 3rd person who
delivered the money/property, the partnership is solidarily liable with the misappropriating partner (Art.
1823, CC).

311
 d) To indemnify the partnership for the damages caused to it by the
delay in the contribution or the conversion of any sum for his
personal benefit.

Obligation Not to Engage in Other Business for Himself

1. Industrial partner- cannot engage in any business for himself unless the partnership
expressly permits him to do so. The other partners have the remedy of either
excluding the erring partner from the firm or of availing themselves of the benefits
which he may have obtained.1434
2. Capitalist partner- The prohibition extends only to any operation which is of the
same kind of business in which the partnership is engaged unless there is a
stipulation to the contrary.

Obligation to Contribute Additional Capital

As a general rule, a capitalist partner is not bound to contribute to the

partnership more than what he agreed to contribute but in case of an imminent loss
of the business, and there is no agreement to the contrary, he is under obligation to
contribute an additional share to save the venture. If he refuses to contribute, he
shall be obliged to sell his interest in the partnership to other partners.

Obligation of Managing Partner who Collects Debt

Where a person is separately indebted to the partnership and to the managing

partner at the same time, any sum received by the managing partner shall be applied
to the two credits in proportion to their amounts, except where he received it
entirely for the account of the partnership, in which case the whole sum shall be
applied to the partnership credit only.

Obligation of Partner Who Receives Share in Partnership Credit

A partner who receives, in whole or in part, his share in the partnership,

when the others have not collected theirs, shall be obliged, if the debtor should
thereafter become insolvent, to bring to the partnership capital what he received
even though he may have given receipt for his share only.1435

Obligation of Partner for Damages to Partnership

1434
The prohibition is absolute and applies whether the industrial partner is to engage in the same business
in which the partnership is engaged or in any kind of business. It is clear that the reason for the prohibition
exists in both cases, which is to prevent any conflict of interest between the industrial partner and the
partnership and to insure faithful compliance by said partner with his prestation (Evangelista & Co. vs.
Abad Santos, 51 SCRA 416, 1973)
1435
Requisites for application of rule:
1) A partner has received, in whole or in part, his share in the partnership credit
2) The other partners have not collected their shares.
3) The partnership debtor has become insolvent.

312
 Every partner is responsible to the partnership for damages suffered by it
through his fault. He cannot compensate them with the profits and benefits which
he may have earned for the partnership by his industry.

Duty to Render Information

Partners shall render on demand true and full information of all things
affecting the partnership to any partner or the legal representative of any deceased
partner of any partner under legal disability.

Obligation to account for any benefit and hold as trustee unauthorized

personal profits

Every partner must account to the partnership for any benefit, and hold as
trustee for it any profits derived by him without the consent of the other partners
from any transaction connected with the formation, conduct, liquidation of the
partnership or form any use by him of its property.

IV. Obligations of partnership/partners to third persons

Liability for contractual obligations1436

1. All partners, including industrial partners, are personally liable with all
their property. Their individual liability is pro rata and subsidiary,
unless otherwise stipulated
2. Liability of partnership for acts of partners

a) Acts for apparently carrying on in the usual

way the business of the partnership

GENERAL RULE: Act binds the partnership.

EXCEPTION: Partnership is not bound if:

i. acting partner has in fact no authority and

ii. the third person knows that the acting partner has no authority

b) Acts of Strict Dominion or Ownership1437

GENERAL RULE: Act does not bind the partnership.

EXCEPTION: Partnership is bound if:

i. the act is authorized by all the partners; or

1436
ART 1816
1437
acts which are not apparently for carrying on in the usual way the business of the partnership

313
 ii. they have abandoned the business
c) Acts in contravention of a restriction on
authority

Partnership is not liable to third persons having actual or presumptive

knowledge of the restrictions

Liability arising from partners tort or Breach of Trust

1. Where, by any wrongful act or omission of any partner acting in the ordinary
course of business of the partnership or with authority of his co-partners,
loss or injury is caused to any person, not being a partner in the
partnership1438

2. Where one partner, acting within the scope of his apparent authority,
receives money or property of a third person and misapplies it1439

3. Where the partnership, in the course of its business, receives money or

property and it is misapplied by any partner while it is in the custody of the
partnership1440

V. Dissolution

Change in the relation of the partners caused by any partner ceasing to be associated
in carrying on the business.1441

It is the point in time when the partners cease to carry on the business together. It
represents the demise of a partnership.

Causes of Dissolution:

1. Extrajudicial dissolution - the parties may agree to expand the grounds provided under
Art 1830 but not to delimit them. The causes enumerated are as follows:

1438
Art. 1822
1439
Art. 1823
1440
Ibid
Criminal liability of partnership:
Partnership liability does not extend to criminal liability where the wrongdoing is regarded as
individual in character. But where the crime is statutory, especially when it involves a fine rather than
imprisonment, criminal liability may be imposed
All partners are solidarily liable with the partnership for any penalty or damage arising from a
partnership tort or breach of trust
1441
Art. 1828

314
 a. Without violation of the agreement between the partners

i. By the termination of the definite term or particular undertaking

specified in the agreement;
ii. By the express will of any partner, who must act in good faith, when
no definite term or particular undertaking is specified;
iii. By the express will of all the partners who have not assigned their
interest or suffered them to be charged for their separate debts, either
before or after the termination of any specified term or particular
undertaking;
iv. By the expulsion of any partner from the business bona fide in
accordance with such power conferred by the agreement between the
partners;

b. In contravention of the agreement between the partners, where the

circumstances do nor permit a dissolution under any other provision of this
article by the express will of any partner at any time.

c. 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.

d. When a specific thing, a partner had promised to contribute, perishes before

its delivery. Or where the partner only contributed the use or enjoyment of
the thing and has reserved ownership thereof, its loss, before or after delivery

e. dissolves the partnership.

f. By the death of any partner;

g. By the insolvency of any partner or the partnership;

h. By the civil interdiction of any partner;

2. Judicial dissolution - when so decreed by the court, the presiding judge may place the
partnership under receivership and direct an accounting to be made towards winding up the
partnership affairs.1442

On application by or for any partner, the court shall decree a dissolution whenever:

i. A partner has been declared insane in any judicial proceeding or is shown to

be of unsound mind;

ii. A partner becomes in any other way incapable of performing his part of the
partnership contract;

1442
Art 1831

315
 iii. A partner has been guilty of such conduct as tend to affect prejudicially the
carrying on of the business;

iv. 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.

v. The business of the partnership can only be carried on in a loss;

vi. Other circumstances render a dissolution equitable.

On application of the purchaser of a partners interest:1443

i. After the termination of the specified term or particular undertaking;

ii. At any time if the partnership was a partnership at will when the interest
was assigned or when the charging order was issued.

VI. Limited partnership1444

A. Definition

One formed by two or more persons having as members one or more general
partners and one or more limited partners, the latter not being personally liable for the
obligations of the partnership.

B. How limited partnership is formed/amended1445

1443
under Art. 1813 or 1814
1444
The Supreme Court, declared a firm to be a general partnership in a case where it appears that the
inclusion of Ltd. (limited) in the firm was only a subterfuge resorted to by the partners in order to evade
liability for possible losses, while assuming their enjoyment of advantages to be derived from the relation.
Jo Chung Cang vs. Pacific Commercial Co. 45 PHIL 142 [1923]). In other words if the parties intended a
general partnership, they are general partners although their purpose is to avoid the creation of such a
relation.
1445
A strict compliance with the legal requirements is not necessary. It is sufficient that there is substantial
compliance in good faith. If there is no substantial compliance, the partnership becomes a general
partnership as far as third persons are concerned, in which all the members are liable as general partners.
(Jo Chung Cang vs. Pacific Commercial Co., 45 PHIL 142 [1923].)
However, a firm which fails to substantially comply with the formal requirements of a limited
partnership is a general partnership only as to its relations to third persons. The firm is a limited
partnership, subject to all rules applicable to such partnership; and as between the partners they are bound
by their agreement; and that all the limited partners relations to his co-partners and their obligations to him
growing out of the relation remain unimpaired.
As to third persons or creditors guilty of estoppel, the firm shall not be treated as a general partnership
despite lack of substantial compliance to the requirements of a limited partnership. If creditors deal with the
firm as a limited partnership, they will be estopped from insisting that there is no such partnership, or that
the terms of the partnership were not sufficiently stated in the notice of its formation. (40 Am. Jur. 476.)

316
 Formation:

1. Certificate of articles of the limited partnership must state the ff. matters:

a. Name of partnership + word "ltd."

b. Character of business
c. Location of principal place of business
d. Name/place of residence of members
e. Term for partnership is to exist
f. Amount of cash/value of property contributed
g. Additional contributions
h. Time agreed upon to return contribution of limited partner
i. Sharing of profits/other compensation
j. Right of limited partner (if given) to substitute an assignee
k. Right to admit additional partners

2. Such certificate must be filed for record in the Office of the Securities and Exchange
Commission.

Amendment:

a. Change in name of partnership, amount/character of contribution of ltd. partner

b. Substitution of limited partner
c. Admission of additional limited partner
d. Admission of general partner
e. Death, insolvency, insanity, civil interdiction of general partner & business is
continued
f. Change in character of business
g. False/erroneous statement in certificate
h. Change in time as stated in the certificate for dissolution of partnership/return of
contribution
i. Time is fixed for dissolution of partnership. Return of contribution if no orig. time
specified
j. Change in other statement in certificate

C. Rights and obligations of a limited partner

Rights of a limited partner

1. To have the partnership books kept at the principal place of business of the
partnership
2. To inspect, at a reasonable hour, partnership books and copy any of them
3. To demand true and full information of the things affecting the partnership
4. To demand a formal account of the 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 in the profits or other compensation by way of income

317
provided: that the partnership assets are in excess of partnership liabilities after such
payment
7. To receive the return of his contribution provided:

a) All the liabilities of the partnership have been paid OR the partnership assets
are sufficient to pay partnership liabilities
b) The consent of all the members (general and limited partners) has been
obtained

EXCEPTION:

When the return of the contribution may be rightfully demanded:

1) On the dissolution of the partnership

2) Upon the arrival of the date specified in the certificate for the
return
3) After he has given 6 months notice in writing to all other partners,
if no time is specified in the certificate there for the return of the
contribution or for the dissolution of the partnership

c) The certificate is cancelled or so amended as to set forth the withdrawal or

reduction

AGENCY1446

I. Definition of agency

A contract whereby a person (agent) binds himself to render some service or to do

something in representation or on behalf of another (principal), with the consent or
authority of the latter.1447

II. Powers

An agency couched in general terms comprises only acts of administration, even if

the principal should state that he withholds no power or that the agent may execute such
acts as he may consider appropriate, or even though the agency should authorize a general
and unlimited management.1448

1446
General rule: There are no formal requirements governing the appointment of an agent. The agents
authority may be oral or written. It may be in a public or private writing.
Exception: When the law requires a specific form
1447
Art. 1868
1448
Art. 1877

318
 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.1449

1449
Art. 1878
SPA to sell does not include the power to mortgage; and vice versa.
SPA to mortgage includes the power to allow the extrajudicial foreclosure of the mortgaged property.
SPA to compromise does not authorize submission to arbitration
SPA for an agent to institute any action in court to eject all persons in the principals lots so that the
principal could take material possession thereof, and for this purpose, to appear at the pre-trial and enter
into any stipulation of facts and/or compromise agreement but only insofar as this is protective of the rights
and interests of the principal in the property, does not grant any power to the agent to sell the subject
property nor a portion thereof. (Cosmic Lumber Corp vs. CA

319
 A. To bind principal1450

The agent who acts as such is not personally liable to the party with whom he
contracts, unless he expressly binds himself or exceeds the limits of his authority without
giving such party sufficient notice of his powers.1451

If the agent contracts in the name of the principal, exceeding the scope of his
authority, and the principal does not ratify the contract, it shall be void if the party with
whom the agent contracted is aware of the limits of the powers granted by the principal. In
this case, however, the agent is liable if he undertook to secure the principal's ratification.1452

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.1453

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.1454

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.1455

A third person with whom the agent wishes to contract on behalf of the principal
may require the presentation of the power of attorney, or the instructions as regards the
agency. Private or secret orders and instructions of the principal do not prejudice third
persons who have relied upon the power of attorney or instructions shown them.1456

B. Exception

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.

1450
General Rule: The principal is not bound by the acts of the agent beyond his limited powers.
Exceptions:
1. Where the principals acts have contributed to deceive the third person in good faith;
2. Where the limitations upon the power created by him could not have been known by the third person;
3. Where the principal has placed in the hands of the agent instruments signed by him in blank (Strong
vs. Gutierrez Repide 6 PHIL 680 [1906])
4. Where the principal has ratified the acts of the agent.
1451
Art. 1897
1452
Art. 1898
1453
Art. 1899
1454
Art. 1900
1455
Art. 1901
1456
Art. 1902

320
 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.1457

III. Express vs. Implied Agency

Express- one where the agent has been actually authorized by the principal, either
orally or in writing;

Implied1458- one which is implied from the

i. 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.
ii. Acts of the agent- when he carries out the agency, or from his silence
or inaction according to the circumstances.

IV. Agency by estoppel

One who clothes another with apparent authority as his agent, and holds him out to
the public as such, cannot be permitted to deny the authority of such person in good faith,
and in the honest belief that he is what he appears to be.1459

Implied Agency by
acceptance estoppel
1. De Jure Agent 1. Not really an
agent
2. Binds the 2. Only the
principal for acts purported agent is
within the scope liable.
of his authority.

V. General vs. Special Agency

General- one which comprises all the business of the principal;

Special- one which comprises one or more specific transactions

1457
Art. 1883
1458
the principal is still bound by the acts of the agent just as in case of express agency
1459
Cuison vs. CA, GR.88531, October 26, 1993

321
 General Special Agent
Agent

1. Scope of Authority
Authorized to
Usually authorized do only acts in
to do all acts pursuance of
connected with the particular
business or instructions or
employment in with
which he is engaged. restrictions
necessarily
implied from
the acts to be
done

2. Continuity

Conducts a series of Usually

transactions involves a
involving a single
continuity of service. transaction or
a series of
transactions
not involving
continuity
3. Extent by which agent may
bind principal
Binds his principal Cannot bind
by an act within the his principal in
scope of his a manner
authority although it beyond or
may be contrary to outside the
his special specific acts
instructions which he is
authorized to
perform on
behalf of the
principal
4. Termination of Authority
Apparent authority Mere
does not terminate revocation is
by the mere effective to
revocation of his terminate the
authority without authority as to
notice to the third third persons
party because the
third person
has a duty to
inquire

322
 5. Construction of Instructions of
Principal
Statement of Authority of agent
principal with must be strictly
respect to the pursued
agents authority
would ordinarily
regarded as
advisory only

VI. Agency couched in general terms

One which is created in general terms and is deemed to comprise only acts of
administration

VII. Agency requiring special power of attorney

The scope of the agents authority is what appears in the written terms of the power
of attorney. While third persons are bound to inquire into the extent or scope of the agents
authority, they are not required to go beyond the terms of the written power of attorney.
Third persons cannot be adversely affected by an understanding between the principal and
his agent as to the limits of the latters authority. In the same way, third persons need not
concern themselves with instructions given by the principal to his agent outside the written
power of attorney.1460

VIII. Agency by operation of law

The concept is essentially one of estoppel and has been explained in this manner:

"The principal is bound by the acts of his agent with the apparent authority which he
knowingly permits the agent to assume, or which he holds the agent out to the public as
possessing. The question in every case is whether the principal has by his voluntary act
placed the agent in such a situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified in presuming that such
agent has authority to perform the particular act in question.1461

1460
Siredy Enterprises, Inc. vs. CA, et al. GR 129039, September 27, 2002
A third person with whom the agent wishes to contract on behalf of the principal may require the
presentation of the power of attorney or the instructions as regards the agency; except private or secret
orders.
1461
Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982), quoting Arthur v. St. Peters
Hospital, 169 N.J. 575, 405 A. 2d 443 (1979)
Agency by estoppel is defined as "one created by operation of law and established by proof of such acts
of the principal as reasonably lead third persons to the conclusion of its existence. Arises where principal
by negligence in failing to supervise agents affairs, allows agent to exercise powers not granted to him,
thus justifying others in believing the agent possesses requisite authority

323
IX. Rights and Obligations of Principal

The principal must comply with all the obligations which the agent may have
contracted within the scope of his authority.

As for any obligation wherein the agent has exceeded his power, the principal is not
bound except when he ratifies it expressly or tacitly.1462

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.1463

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.1464

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.1465

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.1466

If two or more persons have appointed an agent for a common transaction or

undertaking, they shall be solidarily liable to the agent for all the consequences of the
agency.1467

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
1544.1468

1462
Art. 1910
1463
Art. 1911
1464
Art. 1912
1465
Art. 1913
1466
Art. 1914
1467
Art. 1915
1468
Art. 1916

324
 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.1469

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.1470

X. Irrevocable agency

An agency cannot be revoked if a bilateral contract depends upon it, or if it is the

means of fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is
unjustifiable.1471

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. 1472

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.1473

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.1474

1469
1470
Art. 1918
1471
Art. 1927
1472
Art. 1928
1473
Art. 1929
1474
Art. 1930

325
XI. Modes of extinguishment

1. Expiration of the period

2. Death, civil interdiction, insanity or insolvency of the principal or of the agent
3. Withdrawal of the agent1475
4. Accomplishment of the object or the purpose of the agency
5. Revocation
6. Dissolution of the firm or corporation, which entrusted or accepted the agency

COMPROMISE

I. Definition

A compromise is a contract whereby the parties, by making reciprocal concessions,

avoid a litigation or put an end to one already commenced.1476

II. Void Compromise

No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime1477

III. Effect

A compromise has upon the parties the effect and authority of res judicata; but there
shall be no execution except in compliance with a judicial compromise.1478

If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original
demand.1479

1475
Agent may withdraw by giving notice to the principal, but must indemnify the principal for damages
that he may suffer by reason of such withdrawal.
1476
Art. 2028
1477
Art. 2035
1478
Art. 2037
1479
Art. 2041

326
 CREDIT TRANSACTIONS

I. Loan

A. Commodatum1480 vs. Mutuum1481

Commodatum when the bailor (lender) delivers to the bailee (borrower) a non-
consumable thing so that the latter may use it for a certain time and return the identical
thing.

Simple loan or mutuum where the lender delivers to the borrower money or other
consumable thing upon the condition that the latter shall pay the same amount of the same
kind and quality.

Commodatum Mutuum
1. Object
Non-consumable Consumable
2. Cause
Gratuitous May or may not be
gratuitous
3. Purpose
Use or temporary Consumption
possession
4. Subject Matter
Real or personal Only personal
property property
5. Ownership of the thing
Retained by the Passes to the debtor
bailor
6. Thing to be returned
Exact thing loaned Equal amount of
the same kind and
quality

1480
Kinds:
a. Ordinary Commodatum use by the borrower of the thing is for a certain period of time
b. Precarium- one whereby the bailor may demand the thing loaned at will and it exists in the
following cases:
i. neither the duration nor purpose of the contract is stipulated
ii. the use of the thing is merely tolerated by the owner
1481
A contract whereby one party delivers to another, money or other consumable thing with the
understanding that the same amount of the same kind and quality shall be paid. (Art. 1953)
The mere issuance of the checks does not result in the perfection of the contract of loan. The Civil
Code provides that the delivery of bills of exchange and mercantile documents, such as checks, shall
produce the effect of payment only when they have been encashed (Gerales vs. CA 218 SCRA 638). It is
only after the checks have produced the effect of payment that the contract of loan may be deemed
perfected.
The obligation is to pay and not to return because the consumption of the thing loaned is the
distinguishing character of the contract of mutuum from that of commodatum.
No estafa is committed by a person who refuses to pay his debt or denies its existence.

327
 7. Who bears risk of loss
Bailor Debtor
8. When to return
In case of urgent Only after the
need, even before expiration of the
the expiration of term
the term

B. Obligations of Bailor and Bailee

Obligations of the Bailee:

1. To pay for the ordinary expenses for the use and preservation of the thing loaned.1482

2. To be liable for the loss of the thing even if it should be through a fortuitous event in
the following cases:

a. when he keeps it longer than the period stipulated, or after the accomplishment of its
use
b. when he lends or leases it to third persons who are not members of his household
c. when the thing loaned has been delivered with appraisal of its value
d. when, being able to save either of the thing borrowed or his own things, he chose to
save the latter; or
e. when the baileedevoted the thing for any purpose different from that for which it
has been loaned1483

3. To be liable for the deterioration of thing loaned

(a) if expressly stipulated;

(b) if guilty of fault or negligence; or
(c) if he devotes the thing to any purpose different from that for which it has been
loaned

4. To pay for extraordinary expenses arising from the actual use of the thing by the bailee,
which shall be borne equally by both the bailor and the bailee, even though the bailee acted
without fault, unless there is a stipulation to the contrary1484

5. To return the thing loaned1485

1482
Art. 1941
1483
Art. 1942
1484
Art. 1949, par. 2
1485
The bailee has no right to retain the thing loaned as security for claims he has against the bailor even
for extraordinary expenses except for a claim for damages suffered because of the flaws of the thing
loaned.
However, the bailees right extends no further than retention of the thing loaned until he is reimbursed
for the damages suffered by him.
He cannot lawfully sell the thing to satisfy such damages without courts approval.

328
 Obligations of the bailor:1486

1. To respect the duration of the loan

GENERAL RULE:

Allow the bailee the use of the thing loaned for the duration of the period stipulated or
until the accomplishment of the purpose for which the commodatum was instituted.

EXCEPTIONS:

a. In case of urgent needin which case bailee may demand its return or temporary use;

b. The bailor may demand immediate return of the thing if the bailee commits any act of
ingratitude specified in Art. 765.

2. To refund to the bailee extraordinary expenses for the preservation of the thing loaned,
provided the bailee brings the same to the knowledge of the bailor before incurring
them, except when they are so urgent that the reply to the notification cannot be awaited
without danger.

3. To be liable to the bailee for damages for known hidden flaws.1487

C. Interest and the suspension of Usury Law

General rule: Unpaid interest shall not earn interest.

Exceptions:

1. when judicially demanded

2. when there is an express stipulation (must be in writing in view of Art. 1956)

In case there are two or more bailees, their obligation shall be solidary.
1486
Arts. 1946 1952
1487
Requisites:
a. There is flaw or defect in the thing loaned;
b. The flaw or defect is hidden;
c. The bailor is aware thereof;
d. He does not advise the bailee of the same; and
e. The bailee suffers damages by reason of said flaw or defect
If the above requisites concur, the bailee has the right of retention for damages.
The bailor cannot exempt himself from the payment of expenses or damages by abandoning the thing to
the

329
 Guidelines for the application of proper interest rates:

1. If there is stipulation: that rate shall be applied

2. The following are the rules of thumb for the application/imposition of interest rates:

a) When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,

delicts or quasi-delicts is breached, the contravenor can be held liable for damages.

b) With regard particularly to an award of interest in the concept of actual and

compensatory damages, the rate of interest, as well as the accrual thereof, is imposed,
as follows:

i. When the obligation breached consists of payment of a sum of money,1488 the

interest shall be that which is stipulated or agreed upon by the parties. In absence
of an agreement, the rate shall be the legal rate1489computed from default.1490

ii. In other cases, the rate of interest shall be six percent (6%) per annum.1491

iii. 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 i or ii
above, shall be 12% per annum from such finality until its satisfaction, this
interim period being deemed to be by then an equivalent to a forbearance of
credit.1492

Central Bank Circular No. 416 fixing the rate of interest at 12% per annum deals with
loans, forbearance of any money, goods or credits and judgments involving such loans, or
forbearance in the absence of express agreement to such rate

Interest as indemnity for damages is payable only in case of default or non-

performance of the contract. As they are distinct claims, they may be demanded
separately.1493

Validity of unconscionable interest rate in a loan:

The Supreme Court in Sps. Solangon vs. Jose Salazar,1494 said that since the usury law
had been repealed by CB Cir. No. 905 there is no more maximum rate of interest and the
rate will just depend on the mutual agreement of the parties1495. But the Supreme Court said

1488
loan or forbearance of money
1489
i.e. 12% per annum
1490
The interest due shall itself earn legal interest from the time it is judicially demanded
1491
No interest, however, shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. When the demand cannot be established, the interest
shall begin to run only from the date of the judgment of the court is made.
1492
Eastern Shipping Lines vs. CA, July 12, 1994
1493
Sentinel Insurance Co., Inc. vs CA, 182 SCRA 517
1494
G.R. No. 125944, June 29, 2001
1495
citing Lim Law vs. Olympic Sawmill Co., 129 SCRA 439

330
that nothing in said circular grants lenders carta blanche authority to raise interest rates to level
which will either enslave their borrowers or lead to a hemorrhaging of their assets 1496. In
Medel vs. CA,1497, it was ruled that while stipulated interest of 5.5% per month on a loan is
usurious pursuant to CB Circular No. 905, the same must be equitably reduced for being
iniquitous, unconscionable and exorbitant. It is contrary to morals1498. It was reduced to 12%
per annum in consonant with justice and fair play.

II. Deposit1499

A. Voluntary deposit1500

One wherein the delivery is made by the will of the depositor or by two or more
persons each of whom believes himself entitled to the thing deposited.1501

B. Necessary deposit1502

One made in compliance with a legal obligation, or on the occasion of any calamity,
or by travellers in hotels and inns1503, or by travellers with common carriers1504.

C. Judicial deposit1505

When an attachment or seizure of property in litigation is ordered.

Judicial Extra-judicial
1. Creation
Will of the court Will of the parties
or contract
2. Purpose
Security or to insure Custody and
the right of a party safekeeping
to property or to
recover in case of
favorable judgment
3. Subject Matter

1496
citing Almeda vs. CA, 256 SCRA 292)
1497
299 SCRA 481
1498
contra bonos mores
1499
A contract constituted from the moment a person receives a thing belonging to another, with the
obligation of safely keeping it and of returning the same.
The chief difference between a voluntary deposit and a necessary deposit is that in the former, the
depositor has a complete freedom in choosing the depositary, whereas in the latter, there is lack of free
choice in the depositor.
1500
Extra-judicial
1501
Arts. 1968 1995
1502
Extra-judicial
1503
Arts. 1996 - 2004
1504
Arts. 1734 1735
1505
Sequestration

331
 Movables or Movables only
immovables,
but generally
immovables
4. Cause
Always onerous May be compen-
sated or not, but
generally gratuitous

5. When must the thing be returned

Upon order of the Upon demand of
court or when depositor
litigation is ended
6. In whose behalf it is held
Person who has a Depositor or third
right person designated

III. Guaranty and Suretyship

A. Nature and extent of guaranty

A contract whereby a person (guarantor) binds himself to the creditor to fulfill the
obligation of the principal debtor in case the latter fail to do so.

Extent of Guarantors liability1506:

1. Where the guaranty definite: It is limited in whole or in part to the principal debt, to the
exclusion of accessories.
2. Where guaranty indefinite or simple: It shall comprise not only the principal obligation, but
also all its accessories, including the judicial costs, provided with respect to the latter,
that the guarantor shall only be liable for those costs incurred after he has been judicially
required to pay.

Guaranty Suretyship

1. Liability depends 1. Surety assumes

upon an independent liability as regular
agreement to pay the party to the
obligation if primary undertaking
debtor fails to do so

2. Collateral under- 2. Surety is an

taking original promisor

3. Guarantor is 3. Surety is
secondarily liable primarily liable

1506
Art. 2055

332
 1. Guarantor binds 4. Surety undertakes
himself to pay if to pay if the principal
the principal DOES NOT PAY
CANNOT PAY

5. Insurer of 5. Insurer of the

solvency of debtor debt

6. Guarantor can 6. Surety cannot

avail of the benefit avail of the benefit
of excussion and of excussion and
division in case division
creditor proceeds
against him

B. Effects of guaranty

When there are two or more guarantors of the same debtor and for the same debt,
the one among them who has paid may demand of each of the others the share which is
proportionally owing from him.

If any of the guarantors should be insolvent, his share shall be borne by the others,
including the payer, in the same proportion.
The provisions of this article shall not be applicable, unless the payment has been made by
virtue of a judicial demand or unless the principal debtor is insolvent.1507

In the case of the preceding article, the co-guarantors may set up against the one
who paid, the same defenses which would have pertained to the principal debtor against the
creditor, and which are not purely personal to the debtor.1508

A sub-guarantor, in case of the insolvency of the guarantor for whom he bound

himself, is responsible to the co-guarantors in the same terms as the guarantor.1509

C. Extinguishment of guaranty

1. Release in favor of one of the guarantors, without the consent of the others, benefits all
to the extent of the share of the guarantor to whom it has been granted1510;

2. If the creditor voluntarily accepts immovable or other properties in payment of the debt,
even if he should afterwards lose the same through eviction or conveyance of
property1511 ;
3. Whenever by some act of the creditor, the guarantors even though they are solidarily
liable cannot be subrogated to the rights, mortgages and preferences of the former1512;

1507
Art. 2073
1508
Art. 2074
1509
Art. 2075
1510
Art. 2078
1511
Art. 2077

333
4. For the same causes as all other obligations1513;

5. When the principal obligation is extinguished;

6. Extension granted to the debtor by the creditor without the consent of the guarantor1514

D. Legal and judicial bonds1515

Judicial bonds constitute merely a special class of contracts of guaranty by the fact
that they are given in virtue of a judicial order.

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 admitted in lieu thereof1516

IV. Pledge

A. Definition

A contract wherein the debtor delivers to the creditor or to a third person a movable
or document evidencing incorporeal rights for the purpose of securing fulfillment of a
principal obligation with the understanding that when the obligation is fulfilled, the thing
delivered shall be returned with all its fruits and accessions.

B. Kinds

1. Conventional /Voluntary created by contract

2. Legal created by operation of law1517

C. Essential requirements

1. Secures the fulfillment of a principal obligation;

2. Pledgor, mortgagor, antichretic debtor must be the absolute owner of the thing pledged
or mortgaged;1518 and

1512
Art. 2080
1513
Art. 1231
1514
Art. 2079
1515
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. He must have the qualifications required
of a guarantor and in special laws like the Rules of Court.(Art. 2082)
1516
Art 2083
1517
examples: Art. 546, 1731 and 1914 NCC

334
3. Pledgor, mortgagor, antichretic debtor must have free disposal of their property, or be
legally authorized for such purpose.

4. Possession of the thing pledged must be transferred to the creditor or a third person by
agreement1519;

5. It can only cover movable property and incorporeal rights evidenced by documents of
title and the instruments proving the right pledged shall be delivered to the creditor, and if
negotiable must be endorsed;1520 and

6. The description of the thing pledged and the date must appear in a public instrument to bind
third persons, but not for the validity of the contract.1521

D. Obligations of pledge

Obligations of pledgor:

1. To advise the pledgee of the flaws of the thing1522

2. Not to demand the return of the thing until after full payment of the debt, including
interest due thereon and expenses incurred for its preservation1523

Obligations of pledgee:

1. Take care of the thing with the diligence of a good father of a family1524
2. Not to use thing unless authorized or by the owner or its preservation requires its use 1525
3. Not to deposit the thing with a 3rd person unless so stipulated1526
4. Responsibility for acts of agents and employees as regards the thing1527
5. To advise pledgor of danger to the thing1528
6. To advise pledgor of the result of the public auction1529

1518
The reason being that in anticipation of a possible foreclosure sale in case of default which is still a
sale, the rule is that the seller must be the owner of the thing sold (Cavite Development Bank vs. Lim, 324
SCRA 346)
1519
Art. 2093
1520
Art. 2094
1521
Art. 2096
1522
Art. 2101
1523
Art. 2105
1524
Art. 2099
1525
Art. 2104
1526
Art. 2100
1527
ibid
1528
Art. 2107
1529
Art. 2116

335
 E. Rights of pledgor

1. To demand return in case of reasonable grounds to fear destruction or impairment

of the thing without the pledgees fault, subject to the duty of replacement1530
2. To bid and be preferred at the public auction1531
3. To alienate the thing pledged provided the pledgee consents to the sale1532
4. To ask that the thing pledged be deposited1533

F. Perfection

In addition to the requisites prescribed in article 2085, it is necessary, in order to

constitute the contract of pledge, that the thing pledged be placed in the possession of the
creditor, or of a third person by common agreement.1534

A pledge shall not take effect against third persons if a description of the thing
pledged and the date of the pledge do not appear in a public instrument.1535

G. Foreclosure

The creditor to whom the credit has not been satisfied in due time, may proceed
before a Notary Public to the sale of the thing pledged. This sale shall be made at a public
auction, and with notification to the debtor and the owner of the thing pledged in a proper
case, stating the amount for which the public sale is to be held. If at the first auction the
thing is not sold, a second one with the same formalities shall be held; and if at the second
auction there is no sale either, the creditor may appropriate the thing pledged. In this case he
shall be obliged to give an acquittance for his entire claim.1536

The sale of the thing pledged shall extinguish the principal obligation, whether or not
the proceeds of the sale are equal to the amount of the principal obligation, interest and
expenses in a proper case. If the price of the sale is more than said amount, the debtor shall
not be entitled to the excess, unless it is otherwise agreed. If the price of the sale is less,
neither shall the creditor be entitled to recover the deficiency, notwithstanding any
stipulation to the contrary.1537

1530
ibid
1531
Art. 2113
1532
Art. 2097
1533
Arts. 2104 & 2106
1534
Art. 2093
1535
Art. 2096
1536
Art. 2112
1537
Art. 2115

336
 H. Pledge by Operation of Law

Pledges created by operation of law, such as those referred to in articles 546, 1731,
and 19941538, are governed by the foregoing articles on the possession, care and sale of the
thing as well as on the termination of the pledge. However, after payment of the debt and
expenses, the remainder of the price of the sale shall be delivered to the obligor.1539
A thing under a pledge by operation of law may be sold only after demand of the
amount for which the thing is retained. The public auction shall take place within one month
after such demand. If, without just grounds, the creditor does not cause the public sale to be
held within such period, the debtor may require the return of the thing.1540

I. Distinguished from Chattel Mortgage

In a contract of sale of personal property the price of which is payable in

installments, the vendor may exercise any of the following remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the
vendee's failure to pay cover two or more installments. In this case, he shall have no further
action against the purchaser to recover any unpaid balance of the price. Any agreement to
the contrary shall be void.1541

By a chattel mortgage, personal property is recorded in the Chattel Mortgage

Register as a security for the performance of an obligation. If the movable, instead of being
recorded, is delivered to the creditor or a third person, the contract is a pledge and not a
chattel mortgage.1542

V. Real Mortgage

A. Definition and characteristics

A contract whereby the debtor secures to the creditor the fulfilment of a principal
obligation, specially subjecting to such security immovable property or real rights over
immovable property in case the principal obligation is not complied with at the time
stipulated.

1538
See Reference
1539
Art. 2121
1540
Art. 2122
1541
Art. 1484
1542
Art. 2140

337
 Characteristics:

1. Real

2. Accessory - its consideration is that of the principal contract from which it receives life.

3. Subsidiary

4. Unilateral it creates only an obligation on the part of the creditor who must free the
property from the encumbrance once the obligation is fulfilled.

B. Essential requisites

1. It can cover only immovable property and alienable real rights imposed upon
immovables1543;

3. It must appear in a public instrument1544; and

4. Registration in the registry of property is necessary to bind third persons, but not for the
validity of the contract1545.

C. Foreclosure

The remedy available to the mortgagee by which he subjects the mortgaged property to the
satisfaction of the obligation to secure that for which the mortgage was given.

Pledge Real mortgage

1. Constituted on 1. Constituted on
movables immovables
2. Property is 2. Delivery is not
delivered to pledgee necessary
or by common
consent to a third
person
3. Not valid against 3. Not valid against
third persons unless third persons unless
a description of the registered
thing pledged and
date of pledge
appear in a public
instrument

1543
Art. 2124
1544
Art. 2125
1545
Art. 2125

338
VI. Antichresis

A. Definition and characteristics

A contract whereby the creditor acquires the right to receive the fruits of an
immovable of the debtor, with the obligation to apply them to the payment of the interest, if
owing, and thereafter to the principal of his credit (Art 2132)

Characteristics:

1. Accessory contract it secures the performance of a principal obligation

2. Formal contract it must be in a specified form to be valid, i.e., in writing. (Art 2134)

B. Obligations of antichretic creditor

1. To pay taxes and charges on the estate, including necessary expenses1546

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

Antichresis Pledge
1. Refers to real 1. Refers to
property personal property
2. Perfected by 2. Perfected by
mere consent delivery of the thing
pledged
3. Consensual 3. Real Contract
contract

Antichresis Real Mortgage

1. Property is 1. Debtor usually
delivered to creditor retains possession of
the property
2. Creditor acquires 2. Creditor does not
only the right to have any right to
receive the fruits of receive the fruits;
the property, hence, but the mortgage
it does not produce creates a real right
a real right over the property
3. The creditor, 3. The creditor has
unless there is no such obligation
stipulation to the
contrary, is obliged

1546
Creditor may avoid said obligation by:
a. compelling debtor to reacquire enjoyment of the property or
b. by stipulation to the contrary

339
 to pay the taxes and
charges upon the
estate
4. It is expressly 4. There is no such
stipulated that the obligation on part of
creditor given mortgagee
possession of the
property shall apply
all the fruits thereof
to the payment of
interest, if owing,
and thereafter to the
principal
Subject matter of both is real property

VII. Chattel Mortgage

A. Definition and characteristics

A contract by virtue of which personal property is recorded in the Chattel Mortgage

Register as a security for the performance of an obligation1547.

Characteristics

1. Accessory contract it is for the purpose of securing the performance of a principal

obligation
2. Formal contract registration in the Chattel Mortgage Register is indispensable for its
validity
3. Unilateral contract it produces only obligations on the part of the creditor to free the
thing from the encumbrance on fulfillment of the obligation.

B. Registration

The registration of the chattel mortgage is an effective and binding notice to other
creditors of its existence and creates a real right or a lien which, being recorded, follows the
chattel wherever it goes. The registration gives the mortgagee symbolical possession1548.

1547
Art. 2140
1548
Northern Motors, Inc. vs. Coquia, 68 SCRA 374
Effect of failure to register chattel mortgage in the chattel mortgage registry:
Article 2140 makes the recording in the Chattel Mortgage Register an essential requisite but if the
instrument is not recorded, the mortgage is nevertheless binding between the parties. But the person in
whose favor the law establishes a mortgage has no other right than to demand the execution and the
recording of the document.

340
 Chattel Mortgage Pledge
1. Delivery of the 1. Delivery of the
personal property to thing pledged is
the mortgage is not necessary
necessary
2. registration in the 2. registration not
Chattel Mortgage necessary to be valid
Registry is necessary
for its validity
3. If property is 3. Debtor is not
foreclosed, the excess entitled to excess
over the amount unless otherwise
due goes to the agreed or except in
debtor case of legal pledge
4. If there is deficiency 4. If there is
after foreclosure, deficiency, creditor is
creditor is entitled not entitled to
to recover the recover
deficiency from the notwithstanding any
debtor, except under stipulation to the
Art. 1484 contrary
Subject matter of both is movable property

VIII. Quasi-Contracts

A. NegotiorumGestio -

Arises whenever a person voluntarily takes charge of the agency or management of

the business or property of another without any power or authority from the latter.

B. SolutioIndebiti -

Arises whenever a person unduly delivers a thing through mistake to another who
has no right to demand it.

341
IX. Concurrence and Preference of Credits1549

A. Meaning of concurrence and preference

Concurrence of Credits

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

Right held by a creditor to be preferred in the payment of his claim above others out
of the debtors assets

B. Preferred Credits on Specific Movables

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;

1549
The rules on preference of credits apply only when two or more creditors have separate and distinct
claims against the same debtor who has insufficient property.
Preference creates no lien on property, and, therefore, gives no interest in property, specific or general,
to the preferred creditor but a preference in application of the proceeds after the sale. (Molina vs. Somes, 31
Phil. 76)
The preferential right of credit attains significance only after the properties of the debtor have been
inventoried and liquidated, and the claims held by his various creditors have been established. (DBP vs.
NLRC, 183 SCRA 328)

342
(6) Claims for laborers' wages, on the goods manufactured or the work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the contract of tenancy on
shares, on the share of each in the fruits or harvest;

(9) Credits for transportation, upon the goods carried, for the price of the contract and
incidental expenses, until their delivery and for thirty days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers, on the
movables belonging to the guest as long as such movables are in the hotel, but not for
money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest advanced to the debtor, upon
the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the lessee existing on the
immovable leased and on the fruits of the same, but not on money or instruments of credit;

(13) Claims in favor of the depositor if the depositary has wrongfully sold the thing
deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or preference attaches have
been wrongfully taken, the creditor may demand them from any possessor, within thirty days
from the unlawful seizure.

C. Exempt Property

1. Present property those provided under Arts. 155 and 205 of the Family Code,1550
Sec. 13, Rule 39 of the Rules of Court,1551 and Sec. 118 of the PublicLand Act1552

2. Future property a debtor who obtains a discharge from his debts on account of his
insolvency, is not liable for the unsatisfied claims of his creditors with said property
subject to certain exceptions expressly provided by law.1553

3. Property under legal custody and those owned by municipal corporations necessary
for governmental purposes

1550
See Reference
1551
ibid
1552
ibid
1553
Secs. 68, 69, The Insolvency Law [Act No. 1956]

343
 D. Classification of credits

With reference to specific movable property of the debtor, the following claims or
liens shall be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision thereof;

(2) Claims arising from misappropriation, breach of trust, or malfeasance by public officials
committed in the performance of their duties, on the movables, money or securities
obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so long as they are in the
possession of the debtor, up to the value of the same; and if the movable has been resold by
the debtor and the price is still unpaid, the lien may be enforced on the price; this right is not
lost by the immobilization of the thing by destination, provided it has not lost its form,
substance and identity; neither is the right lost by the sale of the thing together with other
property for a lump sum, when the price thereof can be determined proportionally;

(4) Credits guaranteed with a pledge so long as the things pledged are in the hands of the
creditor, or those guaranteed by a chattel mortgage, upon the things pledged or mortgaged,
up to the value thereof;

(5) Credits for the making, repair, safekeeping or preservation of personal property, on the
movable thus made, repaired, kept or possessed;

(6) Claims for laborers' wages, on the goods manufactured or the work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the contract of tenancy on
shares, on the share of each in the fruits or harvest;

(9) Credits for transportation, upon the goods carried, for the price of the contract and
incidental expenses, until their delivery and for thirty days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers, on the
movables belonging to the guest as long as such movables are in the hotel, but not for
money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest advanced to the debtor, upon
the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the lessee existing on the
immovable leased and on the fruits of the same, but not on money or instruments of credit;

(13) Claims in favor of the depositor if the depositary has wrongfully sold the thing
deposited, upon the price of the sale.

344
 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.1554

With reference to specific immovable property and real rights of the debtor, the
following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance
on the immovable or real right:

(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable sold;

(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects,
engineers and contractors, engaged in the construction, reconstruction or repair of buildings,
canals or other works, upon said buildings, canals or other works;

(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of

buildings, canals or other works, upon said buildings, canals or other works;

(5) Mortgage credits recorded in the Registry of Property, upon the real estate mortgaged;

(6) Expenses for the preservation or improvement of real property when the law authorizes
reimbursement, upon the immovable preserved or improved;

(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by attachments
or executions, upon the property affected, and only as to later credits;

(8) Claims of co-heirs for warranty in the partition of an immovable among them, upon the
real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other conditions imposed
upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance premium for two
years.1555

The claims or credits enumerated in the two preceding articles shall be considered as
mortgages or pledges of real or personal property, or liens within the purview of legal
provisions governing insolvency. Taxes mentioned in No. 1, article 2241, and No. 1, article
2242, shall first be satisfied.1556

With reference to other property, real and personal, of the debtor, the following
claims or credits shall be preferred in the order named:

1554
Art. 2241
1555
Art. 2242
1556
Art. 2243

345
(1) Proper funeral expenses for the debtor, or children under his or her parental authority
who have no property of their own, when approved by the court;

(2) Credits for services rendered the insolvent by employees, laborers, or household helpers
for one year preceding the commencement of the proceedings in insolvency;

(3) Expenses during the last illness of the debtor or of his or her spouse and children under
his or her parental authority, if they have no property of their own;

(4) Compensation due the laborers or their dependents under laws providing for indemnity
for damages in cases of labor accident, or illness resulting from the nature of the
employment;

(5) Credits and advancements made to the debtor for support of himself or herself, and
family, during the last year preceding the insolvency;

(6) Support during the insolvency proceedings, and for three months thereafter;

(7) Fines and civil indemnification arising from a criminal offense;

(8) Legal expenses, and expenses incurred in the administration of the insolvent's estate for
the common interest of the creditors, when properly authorized and approved by the court;

(9) Taxes and assessments due the national government, other than those mentioned in
articles 2241, No. 1, and 2242, No. 1;1557

(10) Taxes and assessments due any province, other than those referred to in articles 2241,
No. 1, and 2242, No. 1;1558

(11) Taxes and assessments due any city or municipality, other than those indicated in
articles 2241, No. 1, and 2242, No. 1;1559

(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.1560

1557
supra
1558
ibid
1559
ibid
1560
Art. 2244

346
 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.1561

E. Order of preference of credits

Those credits which enjoy preference with respect to specific movables, exclude all
others to the extent of the value of the personal property to which the preference refers.1562

If there are two or more credits with respect to the same specific movable property,
they shall be satisfied pro rata, after the payment of duties, taxes and fees due the State or
any subdivision thereof.1563

Those credits which enjoy preference in relation to specific real property or real
rights, exclude all others to the extent of the value of the immovable or real right to which
the preference refers.1564

If there are two or more credits with respect to the same specific real property or real
rights, they shall be satisfied pro rata, after the payment of the taxes and assessments upon
the immovable property or real right.1565

The excess, if any, after the payment of the credits which enjoy preference with
respect to specific property, real or personal, shall be added to the free property which the
debtor may have, for the payment of the other credits.1566

Those credits which do not enjoy any preference with respect to specific property,
and those which enjoy preference, as to the amount not paid, shall be satisfied according to
the following rules:

(1) In the order established in article 2244;1567

(2) Common credits referred to in article 22451568 shall be paid pro rata regardless of
dates.1569

1561
Art. 2245
1562
Art. 2246
1563
Art. 2247
1564
Art. 2248
1565
Art. 2249
1566
Art. 2250
1567
supra
1568
ibid
1569
Art. 2251

347
X. Insolvency Law

A. Definition of insolvency

The relative condition of mans assets and liabilities that the former, if all made
immediately available, would not be sufficient to discharge the latter.1570

B. Suspension of payments

Proceedings for suspension of payments seek the postponement of the debts of a

debtor who possesses sufficient property to cover his debts, but foresees the impossibility of
meeting them when they respectively fall due.1571The debtor has sufficient properties in value
to meet his debts but there is not enough cash; thus, he cannot pay his debts as they fall due.
He can ask for the suspension of payments of his debts for a given period within which to
convert some of his properties to cash so that he can pay his debts.

C. Voluntary insolvency

The situation of a debtor who, having debts exceeding P1,000 cannot discharge all of
them with all of his existing assets, and who, as a consequence, voluntarily goes to court to
have himself declared as an insolvent so that his assets may be equitably distributed among
his creditors.

D. Involuntary insolvency

Instituted by three (3) or more resident creditors for an individual debtor whose
credits aggregating not less than P1,000 accrued in the Philippines against a debtor who has
committed any of the acts of insolvency.

LEASE

I. Lease of things

One of the parties binds himself to give to another the enjoyment or use of a thing
for a price certain and for a period which may be definite or indefinite. However, no lease
for more than ninety-nine years shall be valid.1572

II. Lease of work or services

One of the parties binds himself to execute a piece of work or to render to the other
some service for a price certain, but the relations of principal and agent does not exist
between them.1573

1570
Philippine Commercial Law by C. Villanueva, 1998 Ed., p.729
1571
Sec. 2
1572
Art. 1643
1573
Art. 1644

348
III. Lease of rural and urban lands

A. Qualified persons

Those not covered within the scope as provided for under Articles 1490 and 1491 of
the Civil Code.1574

B. Registration

Every lease of real estate may be recorded in the Registry of Property. Unless a lease
is recorded, it shall not be binding upon third persons.1575

C. Prohibitions

The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary.1576

IV. Rights and obligations of lessor and lessee

When in the contract of lease of things there is no express prohibition, the lessee
may sublet the thing leased, in whole or in part, without prejudice to his responsibility for
the performance of the contract toward the lessor.1577

Without prejudice to his obligation toward the sublessor, the sublessee is bound to
the lessor for all acts which refer to the use and preservation of the thing leased in the
manner stipulated between the lessor and the lessee.1578

The sublessee is subsidiarily liable to the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extra-judicial demand by the
lessor.

Payments of rent in advance by the sublessee shall be deemed not to have been
made, so far as the lessor's claim is concerned, unless said payments were effected in virtue
of the custom of the place.1579

1574
See Art. 1646
1575
Art. 1648
1576
Art. 1649
1577
Art. 1650
1578
Art. 1651
1579
Art. 1652

349
 The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a condition as to render it
fit for the use intended;

(2) To make on the same during the lease all the necessary repairs in order to keep it suitable
for the use to which it has been devoted, unless there is a stipulation to the contrary;

(3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire
duration of the contract.1580

If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished.
If the destruction is partial, the lessee may choose between a proportional reduction of the
rent and a rescission of the lease.1581

The lessor of a business or industrial establishment may continue engaging in the

same business or industry to which the lessee devotes the thing leased, unless there is a
stipulation to the contrary.1582

The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;

(2) To use the thing leased as a diligent father of a family, devoting it to the use stipulated;
and in the absence of stipulation, to that which may be inferred from the nature of the thing
leased, according to the custom of the place;

(3) To pay expenses for the deed of lease.1583

The lessee may suspend the payment of the rent in case the lessor fails to make the
necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the
property leased.1584

If the lessor or the lessee should not comply with the obligations set forth in articles
1654 and 1657,1585 the aggrieved party may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the contract to remain in force.1586

If a dwelling place or any other building intended for human habitation is in such a
condition that its use brings imminent and serious danger to life or health, the lessee may

1580
Art. 1654
1581
Art. 1655
1582
Art. 1656
1583
Art. 1657
1584
Art. 1658
1585
supra
1586
Art. 1659

350
terminate the lease at once by notifying the lessor, even if at the time the contract was
perfected the former knew of the dangerous condition or waived the right to rescind the
lease on account of this condition.1587

If during the lease it should become necessary to make some urgent repairs upon the
thing leased, which cannot be deferred until the termination of the lease, the lessee is obliged
to tolerate the work, although it may be very annoying to him, and although during the same,
he may be deprived of a part of the premises.

If the repairs last more than forty days the rent shall be reduced in proportion to the
time - including the first forty days - and the part of the property of which the lessee has
been deprived.

When the work is of such a nature that the portion which the lessee and his family
need for their dwelling becomes uninhabitable, he may rescind the contract if the main
purpose of the lease is to provide a dwelling place for the lessee.1588

The lessee is obliged to bring to the knowledge of the proprietor, within the shortest
possible time, every usurpation or untoward act which any third person may have committed
or may be openly preparing to carry out upon the thing leased.

He is also obliged to advise the owner, with the same urgency, of the need of all
repairs included in No. 2 of article 1654.1589

In both cases the lessee shall be liable for the damages which, through his negligence,
may be suffered by the proprietor.

If the lessor fails to make urgent repairs, the lessee, in order to avoid an imminent
danger, may order the repairs at the lessor's cost.1590

The lessee shall return the thing leased, upon the termination of the lease, as he
received it, save what has been lost or impaired by the lapse of time, or by ordinary wear and
tear, or from an inevitable cause.1591

In the absence of a statement concerning the condition of the thing at the time the
lease was constituted, the law presumes that the lessee received it in good condition, unless
there is proof to the contrary.1592

1587
Art. 1660
1588
Art. 1662
1589
supra
1590
Art. 1663
1591
Art. 1665
1592
Art. 1666

351
 The lessee is responsible for the deterioration or loss of the thing leased, unless he
proves that it took place without his fault. This burden of proof on the lessee does not apply
when the destruction is due to earthquake, flood, storm or other natural calamity.1593

The lessee is liable for any deterioration caused by members of his household and by
guests and visitors.1594

The bailor shall refund the extraordinary expenses during the contract for the
preservation of the thing loaned, provided the bailee brings the same to the knowledge of
the bailor before incurring them, except when they are so urgent that the reply to the
notification cannot be awaited without danger.

If the extraordinary expenses arise on the occasion of the actual use of the thing by
the bailee, even though he acted without fault, they shall be borne equally by both the bailor
and the bailee, unless there is a stipulation to the contrary.1595

V. Special rules for lease of rural/urban lands

The lessee shall have no right to a reduction of the rent on account of the sterility of
the land leased, or by reason of the loss of fruits due to ordinary fortuitous events; but he
shall have such right in case of the loss of more than one-half of the fruits through
extraordinary and unforeseen fortuitous events, save always when there is a specific
stipulation to the contrary.

Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual
flood, locusts, earthquake, or others which are uncommon, and which the contracting parties
could not have reasonably foreseen.1596

Neither does the lessee have any right to a reduction of the rent if the fruits are lost
after they have been separated from their stalk, root or trunk.1597

The lease of a piece of rural land, when its duration has not been fixed, is understood
to have been for all the time necessary for the gathering of the fruits which the whole estate
leased may yield in one year, or which it may yield once, although two or more years have to
elapse for the purpose.1598

The outgoing lessee shall allow the incoming lessee or the lessor the use of the
premises and other means necessary for the preparatory labor for the following year; and,
reciprocally, the incoming lessee or the lessor is under obligation to permit the outgoing

1593
Art. 1667
1594
Art. 1668
1595
Art. 1949
1596
Art. 1680
1597
Art. 1681
1598
Art. 1682

352
lessee to do whatever may be necessary for the gathering or harvesting and utilization of the
fruits, all in accordance with the custom of the place.1599

Land tenancy on shares shall be governed by special laws, the stipulations of the
parties, the provisions on partnership and by the customs of the place.1600

The tenant on shares cannot be ejected except in cases specified by law.1601

VI. Household service

Household service shall always be reasonably compensated. Any stipulation that

household service is without compensation shall be void. Such compensation shall be in
addition to the house helper's lodging, food, and medical attendance.1602

The head of the family shall furnish, free of charge, to the house helper, suitable and
sanitary quarters as well as adequate food and medical attendance.1603

If the house helper is under the age of eighteen years, the head of the family shall
give an opportunity to the house helper for at least elementary education. The cost of such
education shall be a part of the house helper's compensation, unless there is a stipulation to
the contrary.1604

No contract for household service shall last for more than two years. However, such
contract may be renewed from year to year.1605

The house helper's clothes shall be subject to stipulation. However, any contract for
household service shall be void if thereby the house helper cannot afford to acquire suitable
clothing.1606

The head of the family shall treat the house helper in a just and humane manner. In
no case shall physical violence be used upon the house helper.1607

House helpers shall not be required to work more than ten hours a day. Every house
helper shall be allowed four days' vacation each month, with pay.1608

1599
Art. 1683
1600
Art. 1684
1601
Art. 1685
1602
Art. 1689
1603
Art. 1690
1604
Art. 1691
1605
Art. 1692
1606
Art. 1693
1607
Art. 1694
1608
Art. 1695

353
 In case of death of the house helper, the head of the family shall bear the funeral
expenses if the house helper has no relatives in the place where the head of the family lives,
with sufficient means therefor.1609

If the period for household service is fixed neither the head of the family nor the
house helper may terminate the contract before the expiration of the term, except for a just
cause. If the house helper is unjustly dismissed, he shall be paid the compensation already
earned plus that for fifteen days by way of indemnity. If the house helper leaves without
justifiable reason, he shall forfeit any salary due him and unpaid, for not exceeding fifteen
days.1610

If the duration of the household service is not determined either by stipulation or by

the nature of the service, the head of the family or the house helper may give notice to put
an end to the service relation, according to the following rules:

(1) If the compensation is paid by the day, notice may be given on any day that the service
shall end at the close of the following day;

(2) If the compensation is paid by the week, notice may be given, at the latest on the first
business day of the week, that the service shall be terminated at the end of the seventh day
from the beginning of the week;

(3) If the compensation is paid by the month, notice may be given, at the latest, on the fifth
day of the month, that the service shall cease at the end of the month.1611

Upon the extinguishment of the service relation, the house helper may demand from
the head of the family a written statement on the nature and duration of the service and the
efficiency and conduct of the house helper.1612

VII. Contract of labor

A. Obligation in case of death/injury of laborers

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

1609
Art. 1696
1610
Art. 1697
1611
Art. 1698
1612
Art. 1699

354
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. 1613

If the death or injury is due to the negligence of a fellow worker, the latter and the
employer shall be solidarily liable for compensation. If a fellow worker's intentional or
malicious act is the only cause of the death or injury, the employer shall not be answerable,
unless it should be shown that the latter did not exercise due diligence in the selection or
supervision of the plaintiff's fellow worker.1614

VIII. Contract for piece of work

By the contract for a piece of work the contractor binds himself to execute a piece of
work for the employer, in consideration of a certain price or compensation. The contractor
may either employ only his labor or skill, or also furnish the material.1615

If the contractor agrees to produce the work from material furnished by him, he shall
deliver the thing produced to the employer and transfer dominion over the thing. This
contract shall be governed by the following articles as well as by the pertinent provisions on
warranty of title and against hidden defects and the payment of price in a contract of sale.1616

The contract shall execute the work in such a manner that it has the qualities agreed
upon and has no defects which destroy or lessen its value or fitness for its ordinary or
stipulated use. Should the work be not of such quality, the employer may require that the
contractor remove the defect or execute another work. If the contract fails or refuses to
comply with this obligation, the employer may have the defect removed or another work
executed, at the contractor's cost.1617

An agreement waiving or limiting the contractor's liability for any defect in the work
is void if the contractor acted fraudulently.1618

If the contractor bound himself to furnish the material, he shall suffer the loss if the
work should be destroyed before its delivery, save when there has been delay in receiving
it.1619

The contractor who has undertaken to put only his work or skill, cannot claim any
compensation if the work should be destroyed before its delivery, unless there has been
delay in receiving it, or if the destruction was caused by the poor quality of the material,

1613
Art. 1711
1614
Article 1712
1615
Art. 1713
1616
Art. 1714
1617
Art. 1715
1618
Art. 1716
1619
Art. 1717

355
provided this fact was communicated in due time to the owner. If the material is lost
through a fortuitous event, the contract is extinguished.1620

Acceptance of the work by the employer relieves the contractor of liability for any
defect in the work, unless:

(1) The defect is hidden and the employer is not, by his special knowledge, expected to
recognize the same; or

(2) The employer expressly reserves his rights against the contractor by reason of the
defect.1621

The price or compensation shall be paid at the time and place of delivery of the
work, unless there is a stipulation to the contrary. If the work is to be delivered partially, the
price or compensation for each part having been fixed, the sum shall be paid at the time and
place of delivery, in the absence if stipulation.1622

If, in the execution of the work, an act of the employer is required, and he incurs in
delay or fails to perform the act, the contractor is entitled to a reasonable compensation.

The amount of the compensation is computed, on the one hand, by the duration of
the delay and the amount of the compensation stipulated, and on the other hand, by what
the contractor has saved in expenses by reason of the delay or is able to earn by a different
employment of his time and industry.1623

If the work cannot be completed on account of a defect in the material furnished by

the employer, or because of orders from the employer, without any fault on the part of the
contractor, the latter has a right to an equitable part of the compensation proportionally to
the work done, and reimbursement for proper expenses made.1624

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.1625

1620
Art. 1718
1621
Art. 1719
1622
Art. 1720
1623
Art. 1721
1624
Art. 1722
1625
Art. 1723

356
 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.

The contractor who undertakes to build a structure or any other work for a
stipulated price, in conformity with plans and specifications agreed upon with the land-
owner, can neither withdraw from the contract nor demand an increase in the price on
account of the higher cost of labor or materials, save when there has been a change in the
plans and specifications, provided:

(1) Such change has been authorized by the proprietor in writing; and

(2) The additional price to be paid to the contractor has been determined in writing by both
parties.1626

The owner may withdraw at will from the construction of the work, although it may
have been commenced, indemnifying the contractor for all the latter's expenses, work, and
the usefulness which the owner may obtain therefrom, and damages.1627

When a piece of work has been entrusted to a person by reason of his personal
qualifications, the contract is rescinded upon his death.

In this case the proprietor shall pay the heirs of the contractor in proportion to the
price agreed upon, the value of the part of the work done, and of the materials prepared,
provided the latter yield him some benefit.

The same rule shall apply if the contractor cannot finish the work due to
circumstances beyond his control.1628

The contractor is responsible for the work done by persons employed by him.1629

The contractor is liable for all the claims of laborers and others employed by him,
and of third persons for death or physical injuries during the construction.1630

Those who put their labor upon or furnish materials for a piece of work undertaken
by the contractor have an action against the owner up to the amount owing from the latter
to the contractor at the time the claim is made. However, the following shall not prejudice
the laborers, employees and furnishers of materials:

(1) Payments made by the owner to the contractor before they are due;

1626
Art. 1724
1627
Art. 1725
1628
Art. 1726
1629
Art. 1727
1630
Art. 1728

357
(2) Renunciation by the contractor of any amount due him from the owner.

This article is subject to the provisions of special laws.1631

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.1632

He who has executed work upon a movable has a right to retain it by way of pledge
until he is paid.1633

LAND TITLES AND DEEDS

I. Torrens System

A. Concept

A system for registration of land under which, upon the landowners application, the
court may, after appropriate proceedings, direct the issuance of a certificate of title.

The Torrens system does not create or vest title. It only confirms and records title
already existing and vested. It does not protect a usurper from the true owner. It cannot be a
shield for the commission of fraud. It does not permit one to enrich himself at the expense
of another1634

Background

In order to establish a system of registration by which title recorded became

absolute, indefeasible and imprescriptible, Act No. 496, otherwise known as the Land
Registration Act, was passed and took effect on February 1, 1903. Rights acquired under this
system are guaranteed by the government which provides an assurance fund to answer for
damages to be suffered by persons thru the operation of this system.

This method is also known as the Torrens system of land registration. 1635 There are
two (2) laws ancillary to Act No. 496. These are the Cadastral Law of February 11,
19131636and the Public Land Law of December 1, 19361637 which have been subsequently
amended by later legislations.

1631
Art. 1729
1632
Art. 1730
1633
Art. 1731
1634
Angeles vs. Samia, 66 Phil. 444 (1938)
1635
Act 496 has been amended by P.D. 1529 which was enacted on June 11, 1978
1636
Act 2259

358
 Presidential Decree No. 1529 was issued to cope with the growing need of updating
the Land Registration Act, to codify the various other laws relative to registration of real
property and real rights, and to further strengthen the Torrens system. Land Registration Act
No. 496 of February 1, 1903 has not been repealed or abrogated but rather, all laws,
decrees, orders, rules and regulations or parts thereof, in conflict with any provisions of this
decree are hereby repealed or modified accordingly.1638
B. Certificate of Title

This is the true copy of the decree of registration or the transcription thereof and
like the decree shall also be signed by LRA Administrator1639

It takes effect upon the date of entry thereof, and the land covered thereby becomes
registered land on that date.

II. Regalian Doctrine

A. Concept

All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, forests, or timber, wildlife, flora and fauna, and
natural resources belong to the state. With the exception of agricultural lands, all other
natural resources shall not be alienated.1640

B. Effects

Under the Regalian doctrine, all lands of the public domain belong to the State,
which is the source of any asserted right to ownership of land. All lands not otherwise
appearing to be clearly within private ownership are presumed to belong to the State.1641

C. Concept of native title, time immemorial possession

Native Title - refers to pre-conquest rights to lands and domains which, as far back
as memory reaches, have been held under a claim of private ownership by ICCs/IPs, have
never been public lands and are thus indisputably presumed to have been held that way since
before the Spanish Conquest.1642

III. Citizenship Requirement

1637
Com. Act No. 141
1638
Sec. 20, P.D. No. 1529
1639
Sec. 39, ibid
1640
Sec. 2, Art. XII, 1987 Constitution
1641
Spouses Reyes et at. v. CA, 295 SCRA 296, September 10, 1998; Cacho v. CA, 269 SCRA 159, March
3,1997
1642
See R.A. 8371

359
 A. Individuals and corporations

Alienable lands of the public domain:

Only Filipino citizens may acquire not more than 12 hectares by purchase,
homestead or grant, or lease not more than 500 hectares.

Private corporations may lease not more than 1,000 hectares for 25 years renewable
for another 25 years;

IV. Original Registration1643

A. Who may apply

1. Under PD 1529

a. Those who, by themselves or through their predecessors-in-interest, have been in

open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June 12,
1945, or earlier;

b. Those who have acquired ownership of private lands by prescription under the
provisions of existing laws;

c. Those who have acquired ownership of private lands or abandoned river beds by
right of accession or accretion; and

d. Those who have acquired ownership of land in any other manner provided for by
law.

Where the land is owned in common, all the co-owners shall file the application
jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an
application for the original registration of the land, provided, however, that should the
period for redemption expire during the pendency of the registration proceedings and

1643
Takes place when the title to land is made of public record for the first time in the name of its lawful
owner. Under the Torrens system, it refers to the registration procedure from the filing of the application to
the issuance of the original certificate of title in pursuance of the decree of registration.
Kinds of Original Registration
1. Voluntary by filing with the proper court
a) Under P.D. No. 1529 (Property Registration Decree)
b) Under Sec. 48 of CA No. 141, Public Land Act
2. Involuntary cadastral proceedings
Compulsory registration initiated by the government, to adjudicate ownership of land
Involuntary on the part of the claimants but they are compelled to substantiate their claim or interest
through an answer

360
ownership to the property consolidated in the vendee a retro, the latter shall be substituted for
the applicant and may continue the proceedings.

A trustee on behalf of the principal may apply for original registration of any land
held in trust by him, unless prohibited by the instrument creating the trust.1644
2. Under CA 141

(a) Those who prior to the transfer of sovereignty from Spain to the prior United
States have applied for the purchase, composition or other form of grant of lands of the
public domain under the laws and royal decrees then in force and have instituted and
prosecuted the proceedings in connection therewith, but have with or without default upon
their part, or for any other cause, not received title therefor, if such applicants or grantees
and their heirs have occupied and cultivated said lands continuously since the filing of their
applications.

(b) Those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural lands
of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.

(c) Members of the national cultural minorities who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to agriculture, whether disposable or
not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
granted in sub-section (b) hereof.

3. Under RA 8371

Individual and indigenous corporate claimants of ancestral lands which are not
within ancestral domains, may have their claims officially established by filing applications
for the identification and delineation of their claims with the Ancestral Domains Office. An
individual or recognized head of a family or clan may file such application in his behalf or in
behalf of his family or clan, respectively.1645

1644
Sec. 14
All these persons must be natural-born Filipino Citizens. However, by way of exception, juridical
persons may apply for registration of leased agricultural and disposable lands not exceeding 1,000 hectares
in area for a period of 25 years and renewable for not more than 25 years. (Sec. 3, Chapter XII, 1987
Constitution)
Notwithstanding the prohibition in the 1973 and 1987 Constitutions against private corporations
holding lands of the public domain except by lease, still a private corporation may institute confirmation
proceedings under Section 48(b) of Public Land Act if, at the time of institution of the registration
proceedings, the land was already private land. (Dir. of Lands vs. IAC and ACME Plywood, 146 SCRA
509)
1645
Sec. 53 (b)

361
 B. Registration process and requirements

Registration process

1. Survey of the land by the Bureau of Lands or a duly licensed private surveyor;1646

2. Filing of Application for Registration by the applicant;1647

3. Setting of date for initial hearing by the court;

4. Transmittal of Application and date of initial hearing together with all documents or
other evidences attached thereto by the Clerk of Court to the Land Registration
Authority;

5. Publication of Notice of Filing of Application and date and place of hearing once in the
Official Gazette and once in a newspaper of general circulation in the Philippines;1648

6. Service of Notice upon contiguous owners, occupants and those known to have interest
in the property by the sheriff;

7. Filing of Answer or Opposition to Application by any person whether named in the

notice or not;

8. Hearing of the case by the court;1649

9. Promulgation of judgment by the court;

10. Issuance of decree or order by the court declaring the decision final and instructing the
Land Registration Authority to issue a Decree of Confirmation and Registration;1650

11. Entry of Decree in the Land Registration Authority;1651

1646
Must be drawn in a tracing cloth plan
Approved ONLY by the Director of Land Management (authority of LRA to approve such plan was
withdrawn by P.D. 239 dated July 9, 1983)
1647
Always at the RTC of the province, city or municipality where property is situated.
1648
it is at this point that the court acquires jurisdiction over the subject matter
this is done by the Administrator who acts as the clerk of court
1649
Republication or amendment of technical description of land is necessary when there is substantial
increase of the area of the land. If increase is merely minimal, no republication is needed. (Benin vs.
Tuason, 57 SCRA 531)
1650
it is not the court BUT the LRA which issues the decree of confirmation and registration
1 year after issuance of decree, it becomes incontrovertible and amendments of the same will not be
allowed except merely in case of clerical errors.
Decree of registration may be reviewed on the ground of fraud and must be filed within 1 year from
entry of the decree.
1651
This serves as the reckoning date to determine the 1-year period from which one can impugn the
validity of the registration.

362
12. Sending of copy of Decree to the corresponding Register of Deeds; and

13. Transcription of Decree in the registration book and issuance of Owners Duplicate
Original Certificate of Title of the applicant by the Register of Deeds upon payment of
the prescribed fees.

Requisites of an Application for Original Registration:

1) The application must be in writing, signed and sworn to by the applicant or by someone
duly authorized in his behalf; and if there is more than one applicant, the application shall be
signed and sworn to by and in behalf of each. The full name, citizenship, status, residence
and post office address of the applicant must be stated therein.

2) The application must contain the description of the land; the number of parcels and
location threof; the nature of title thereto; encumbrances, if any; occupants thereon; names
and addresses of adjoining owners, if known; assessed value of the property, and the length
of possession.

3) The application must be accompanied with a tracing cloth plan approved by the Bureau of
Lands together with two (2) blue print copies of the same; three (3) copies of the technical
description; three (3) copies of the surveyors certificate; the certificate of the last assessment
of the property in quadruplicate or, if none, the affidavit of its market value; and all
muniments of title in the possession of applicant or applicants.

C. Remedies

1. New Trial1652
2. Relief from Judgment1653
3. Appeal1654
4. Petition for Review1655

1652
Sec.1, Rule 37,Rules of Court
Grounds:
a. fraud, accident, mistake or excusable negligence which ordinary prudence could not have
guarded against
b. newly discovered evidence
c. award of excessive damages, or insufficiency of the evidence to justify the decision
1653
Nature: subsidiary remedy, i.e. may be availed only when the judgment has become final and a new
trial is not available
Grounds: when a judgment is entered against a party through fraud, accident, mistake, or excusable
negligence, such party may file a petition in the court that rendered such judgment praying that the said
judgment be set aside.
1654
Under P.D. 1529, judgments and orders in land registration cases are appealable to the Court of
Appeals or to the Supreme Court in the same manner as ordinary actions
Must be filed within 15 days from receipt of the judgment or final order appealed from.
1655
of a Decree
Any person may file a petition for review to set aside the decree of registration on the ground that he
was deprived of their opportunity to be heard in the original registration case not later than one (1) year
after the entry of the decree.

363
5. Action for Reconveyance1656
6. Recovery of Damages

D. Cadastral registration1657

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

V. Subsequent Registration1658

A. Voluntary dealings.1659

It is a petition for review of judgment when it is filed after rendition of the decision but before the
entry of the decree of registration. And it is a petition for review of the decree when it is filed within the
one year period after such entry.
1656
An action seeking to transfer or reconvey the land from the registered owner to the rightful owner
May be filed even after the lapse of one year from entry of the decree of registration as long as the property
has not been transferred or conveyed to an innocent purchaser for value.
An action for reconveyance does not aim or purport to reopen the registration proceedings and set aside
the decree of registration but only to show that the person who secured the registration of the questioned
property is not the real owner thereof. The action, while respecting the decree as incontrovertible, seeks to
transfer or reconvey the land from the registered owner to the rightful owner. (EscondevsBorlongay, 152
SCRA 603)
1657
Here, 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.
1658
Takes place when any deed affecting the land is made of public record after the date of its original
registration.; where incidental matters after original registration may be brought before the land registration
court by way of motion or petition filed by the registered owner or a party in interest.
1659
In voluntary sale of land, the registration of the instrument is the operative act that transmits or transfers
title.
Where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to explore further than what the
Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently
defeat his right thereto. (Fule vs. Legare. GR No. 17951)
The exception to the above rule is embodied in the case of Dela Merced vs. GSIS (365 SCRA 1) where
the court ruled that when the purchaser or mortgagee is a financing institution, the general rule that a
purchaser or mortgagee of the land is not required to look further than what appears on the face of the title
does not apply.
Well settled is the rule that all persons dealing with property covered by Torrens certificate of title are
not required to go beyond what appears on the face of the title. When there is nothing on the COT
indicating any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is
not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right thereto. [Centenovs CA, 139 SCRA 545, 555
(1985)]
Exceptions for applicability:
1) purchaser in bad faith [Egao vs. CA, 174 SCRA 484, 492 (1989)];
2) sufficiently strong indications to impel closer inquiry into the location, boundaries and condition of the
lot. (Francisco vs. CA 153 SCRA 330, 336, 337);

364
 Refer to deeds, instruments or documents which are results of the free and voluntary
acts of the parties thereto

B. Involuntary dealings1660

Refer to such writ order or process issued by a court of record affecting registered
land which by law should be registered to be effective, and also to such instruments which
are not the willful acts of the registered owner and which may have been executed even
without his knowledge or against his consent.

VI. Non-Registrable Properties

The following lands are not registrable by any private person in his name:

1. Those devoted to public land use such as public roads, plazas, canals, streets, rivers,
banks and shores;
2. Those devoted to public service such as towns, walls and fortresses;
3. Public forests;
4. Mineral lands; and
5. Those reserved by the government for public or quasi-public purposes.

The Constitution provides that all natural resources, except agricultural, commercial
and industrial, residential and resettlement lands are inalienable.1661 Public forests are non-

3) where a person buys land not from the registered owner but from one whose right to the land has been
merely annotated on the COT. (Quiniano vs. CA 39 SCRA 221);
4) purchaser of land the certificate of title contains a notice of lispendens;
5) purchaser with full knowledge of flaws and defects in the title.(Bernales vs. IAC 166 SCRA 519, 524;
Lu vs. Manipon, 381 SCRA 788)
1660
Involuntary dealings affecting registered land which must be registered:
a. attachments
b. sale on execution or for taxes or for any assessment
c. adverse claim
d. notice of lispendens
Claim or interest is adverse when:
a. claimants right or interest in registered land is adverse to the registered owner;
b. such right arose subsequent to date of original registration;
c. no other provision is made in the Decree for the registration of such right or claim
(Sec. 70, 1st par., P.D. 1529)
An adverse claim is a notice to third persons that someone is claiming an interest on the property or has
a better right than the registered owner thereof, and that any transaction regarding the disputed land is
subject to the outcome of the dispute (Sajonasvs CA, [GR No. 102377, July 5, 1996)
Notice of lispendens is intended to constructively advise, or warn all people who deal with the property
that they so deal with it at their own risk, and whatever rights they may acquire in the property in any
voluntary transaction are subject to the results of the action, and may well be inferior and subordinate to
those which may be finally determined and laid down therein. (Heirs of Maria Marasiganvs IAC. 152
SCRA 253).
1661
Art. XIV, Sec. 8, New Constitution

365
alienable public lands. Possession of public forests on the part of the claimant, however
long, cannot convert the same into private property1662

VII. Dealings with Unregistered Lands1663

The system of registration under the Spanish Mortgage Law is hereby discontinued
and all lands recorded under said system which are not yet covered by Torrens title shall be
considered as unregistered lands.

Hereafter, all instruments affecting lands originally registered under the Spanish
Mortgage Law may be recorded under Section 113 of this Decree, until the land shall have
been brought under the operation of the Torrens system.

The books of registration for unregistered lands provided under Section 194 of the
Revised Administrative Code, as amended by Act No. 3344, shall continue to remain in
force; provided, that all instruments dealing with unregistered lands shall henceforth be
registered under Section 113 of this Decree.1664

No deed, conveyance, mortgage, lease, or other voluntary instrument affecting land

not registered under the Torrens system shall be valid, except as between the parties thereto,
unless such instrument shall have been recorded in the manner herein prescribed in the
office of the Register of Deeds for the province or city where the land lies.

(a) The Register of Deeds for each province or city shall keep a Primary Entry Book and a
Registration Book. The Primary Entry Book shall contain, among other particulars, the entry
number, the names of the parties, the nature of the document, the date, hour and minute it
was presented and received. The recording of the deed and other instruments relating to
unregistered lands shall be effected by any of annotation on the space provided therefor in
the Registration Book, after the same shall have been entered in the Primary Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register of
Deeds shall forthwith record the instrument in the manner provided herein. In case the
Register of Deeds refuses its administration to record, said official shall advise the party in
interest in writing of the ground or grounds for his refusal, and the latter may appeal the
matter to the Commissioner of Land Registration in accordance with the provisions of
Section 117 of this Decree. It shall be understood that any recording made under this section
shall be without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse among other
things, upon the original of the recorded instruments, the file number and the date as well as
the hour and minute when the document was received for recording as shown in the
Primary Entry Book, returning to the registrant or person in interest the duplicate of the
instrument, with appropriate annotation, certifying that he has recorded the instrument after

1662
Vano vs. Government of P.I., 41 Phil. 161 (1920)
1663
Sec. 3, P.D. 1529; also Sec. 113
16641664
Section 3, P.D. 1529

366
reserving one copy thereof to be furnished the provincial or city assessor as required by
existing law.

(d) Tax sale, attachment and levy, notice of lispendens, adverse claim and other instruments in
the nature of involuntary dealings with respect to unregistered lands, if made in the form
sufficient in law, shall likewise be admissible to record under this section.

(e) For the services to be rendered by the Register of Deeds under this section, he shall
collect the same amount of fees prescribed for similar services for the registration of deeds
or instruments concerning registered lands.1665

TORTS AND DAMAGES

BOOK I TORTS1666

I. Principles

A. Abuse of Right

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.1667

Elements:

1. There is a legal right or duty

2. Which is exercised in bad faith;
3. For the sole intent of prejudicing or injuring another.

B. Unjust Enrichment1668

1665
Sec. 113, Ibid
1666
An unlawful violation of private right, not created by contract, and which gives rise to an action for
damages.
It is an act or omission producing an injury to another, without any previous existing lawful relation of
which the said act or omission may be said to be a natural outgrowth or incident.
1667
Art. 19
Contains a mere declaration of principles. The declaration is implemented by Art. 20 (Globe Mackay vs.
CA)
Sets certain standards which must be observed not only in the exercised of ones rights but also in the
performance of ones duties. These standards are:
1. To act with justice
2. To give everyone his due; and
3. Observe honesty and good faith
There is no hard and fast rule to determine whether or not the principle may be invoked.

367
 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.1669

If something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises.1670

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.1671

C. Liability without Fault

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.1672

D. Acts Contrary to Law.

Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.1673

E. Acts Contrary to Morals

Any person who wilfully causes loss or injury to another in manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.1674

II. Classification of Torts

1668
Elements of Unjust Enrichment:
1. There must be enrichment on the part of the defendant.
2. There is a concomitant injury to the plaintiff.
3. There is no just cause or legal ground for the enrichment
1669
Art. 22
1670
Art. 2154
1671
Art. 2142
1672
Art.23
1673
Art. 20
Even if the particular provision of law does not expressly provide for indemnification in case of
violation, so long as there is a violation of law and damage resulting therefrom, there is liability for
damages under this article.
1674
Art. 21
There is an act which may be legal but whch may be contrary to morals, good customs, public order or
public policy (Albeson vs. CA)

368
 A. According to manner of commission:

Intentional Torts - Include conduct where the actor desires to cause the
consequences of his act or believes that the consequences are substantially certain to result
from it.1675

Negligent Torts - involve voluntary acts or omissions which result in injury to others
without intending to cause the same or because the actor fails to exercise due care in
performing such acts or omissions.

Strict Liability when the person is made liable independent of fault or negligence
upon submission of proof of certain facts specified by law.1676

B. According to scope: general or specific

III. The Tortfeasor

A. The Direct Tortfeasor

1. Natural Persons

Refer to human beings.

2. Juridical Persons

(i) The State and its political subdivisions;

(ii) Other corporations, institutions and entities for public interest or purpose,
created by law; their personality begins as soon as they have been constituted according to
law;

(iii) Corporations, partnerships and associations for private interest or purpose to

which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member.1677

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.1678

1675
They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human Relations. Although
this chapter covers negligent acts, the torts mentioned herein are mostly intentional in nature or torts
involving malice or bad faith.
1676
Strict liability tort can be committed even if reasonable care was exercised and regardless of the state of
mind of the actor at that time.
1677
Art. 44

369
 B. Persons Made Responsible for Others

1. In General

a. Quasi-delicts under Article 2180, how interpreted

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.

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.1679

Guardians are liable for damages caused by the minors or incapacitated persons who
are under their authority and live in their company.

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.

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.1680

The State is responsible in like manner when it acts through a special agent; but not
when the damage has been caused by the official to whom the task done properly pertains,
in which case what is provided in article 2176 shall be applicable.1681

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.

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.1682

1678
Art. 46
1679
This has already been modified by Art. 221 of the Family Code to the extent that the alternative
qualification of the liability of the father and the mother has been removed.
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.
1680
Liability of the employer can be established by proving the existence of an employer- he injury while
performing
1681
Public officers who are guilty of tortuous conduct are personally liable for their actions.
1682
Statutory basis:
if student is minor Art. 219, FC
if student is no longer a minor Art. 2180, Civil Code
Applies also to teachers of academic institutions.

370
 Family Code

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.1683

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.1684

(1) Elements; definition

Quasi-delict

Liability attaches to the teacher-in-charge.

The school itself is now solidarily liable with the teacher-in-charge.
The liability extends to acts committed even outside the school so long as it is an official activity of the
school.
Whenever the school or teacher is being made liable, the parents and those exercising substitute
parental authority are not free from liability because Art. 219 of the Family Code expressly provides that
they are subsidiarily liable.
Art. 2180 makes teachers and heads liable for acts of students and apprentices whether the latter are
minors or not.
General rule: The teacher-in-charge is liable for the acts of his students. The school and administrators
are not liable.
Exception: It is only the head of the school, not the teacher who is held liable where the injury is caused
in a school of arts and trade.
The liability of the teacher subsists whether the school is academic or non- academic.
Liability is imposed only if the pupil is already in the custody of the teacher or head. The student is in
the custody of the school authorities as longs as he is under the control and influence of the school and
within its premises whether the semester had not yet begun or has already ended.
The victim of negligence is likewise required to exercise due care in avoiding injury to himself.
1683
Art. 218
1684
Art. 219

371
 Whoever by act or omission causes damage to another, there being fault or
negligence is obliged to pay for the damage done.1685

Elements:

(a) fault or negligence of the defendant, or some other person for whose acts he
must respond;
(b) damages suffered by the plaintiff; and
(c) the connection of cause and effect between the fault or negligence of the
defendant and the damages incurred by the plaintiff.1686

(2) Distinguished from culpa contractual and

culpa criminal

Culpa criminal:

1. Crimes affected the public interest.

2. Penal law punishes/ corrects the criminal act.
3. Only acts covered by Penal Law are punished 1687
4. Guilt proven beyond reasonable doubt.
5. Reservation to file separate civil action. No reservation, civil action is impliedly instituted
in the criminal action.
6. Employers liability is subsidiary

Culpa Aquiliana:

1. Only private concern.

2. Repairs the damage by indemnification.
3. Covers all acts that are faulty or negligent.
4. Preponderance of evidence.
5. No reservation its independent from crime.
6. Employers liability is solidary1688

1685
Article 2176
Difference between Articles 218 & 2180
Art 218
School, admin, teachers engaged in child care are made expressly liable
School, admin, teachers is solidary and parents are made subsidiary liable
Students involved must be minor
Art 2180
Teachers, head of establishment in Arts and trades are made expressly liable
No such express solidary nor subsidiary liability is stated
Students involved not necessarily minor
1686
Philippine Bank of Commerce v. CA, 336 Phil. 667, 675 (1997)
1687
Barredovs Garcia, 73 Phil 607; J. Bocobo, 1940
1688
Fabre Jr. vs CA, 259 SCRA 426

372
 Culpa Contractual

(i) Pre-existing obligation between the parties

(ii) Fault or negligence is incidental to the performance of the obligation
(iii) Defense of having exercised diligence of a good father of a family is not available, just
like in criminal action. Applied doctrine of Respondent Superior, or Master and Servant Rule

Culpa Contractual Culpa Aquiliana

The foundation of It is a separate Culpa Aquiliana Crime
the liability of the source of obligation Only involves private Affect the public
defendant independent of concern interest
contract The Civil Code by The Revised Penal
is the contract means of indem- Code punishes or
In breach of contract In quasi-delict the nification merely corrects criminal act
committed through presumptive repairs the damage
the negligence of responsibility for the Includes all acts in Punished only if
employee, the negligence of his which any kind of there is a penal law
employer cannot servants can be fault or negligence clearly covering them
erase his primary and rebutted by proof of intervenes
direct liability by the exercise of due Liability of the
invoking exercise of care in their employer of the
diligence of a good selection and Liability is direct and actor-employee is
father of a family in supervision. primary in quasi- subsidiary in crimes
the selection and delict
supervision of the
employee.

b. Indirect liability for intentional acts

A person who himself is not guilty of negligence is made liable for conduct of
another.1689

c. Presumption of negligence on persons indirectly

responsible

In motor vehicle mishap , the owner is solidarily liable with his driver, if the former,
who was in the vehicle, could have by the use of due diligence, prevented the misfortune. It
is disputably presumed that a driver was negligent, if he had been found guilty of reckless
driving or violating traffic regulations at least twice within the next preceding two
months.

If the owner was not in the motor vehicle, the provisions of Article 2180 are
applicable.1690

1689
Vicarious liability
1690
Art. 2184

373
 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.1691

There is prima facie presumption of negligence on the part of the defendant if the
death or injury results from his possession of dangerous weapons or substances, such as
firearms and poison, except when the possession or use thereof is indispensable in his
occupation or business.1692

In case of death of or injuries to passengers, common carriers are presumed to

have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in 1733 and 1755.1693

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.1694

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.1695

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
causes 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.1696

d. Nature of liability; joint or solidary?

1691
Art. 2185
1692
Art. 2188
1693
Art. 1756; see reference for Arts. 1733 & 1755
1694
Art. 2190
1695
Art. 2193
1696
Art. 1723

374
 The responsibility of two or more persons who are liable for quasi-delict is
solidary.1697

2. In Particular1698

a. Parents1699

For damage caused by:

a) minor children
b) living in their company1700

b. Guardian

For damage caused by

a. minors or incapacitated persons
b. under their authority
c. living in their company

c. Owners and Managers of Establishments and

Enterprises

1697
Art. 2194
1698
Art. 2180
1699
Father and Mother shall jointly exercise parental authority over common children. In case of
disagreement, father's decision shall prevail (Art. 211)
Persons liable for the act of minors other
than parents.
a. Those exercising substitute parental authority
b. Surviving grandparents
c. Oldest sibling, over 21 years old unless unfit
or unqualified
d. Childs actual custodian, over 21 years old
unless unfit or disqualified
1700
The basis of liability for the acts or omissions of their minor children is the parental authority that they
exercise over them, except for children 18 to 21.
The same foreseability test of negligence should apply to parents when they are sought to be held liable
under Art. 2180, NCC
The liability is not limited to parents, the same is also imposed on those exercising substitute and special
parental authority, i.e., guardian.
The liability is present only both under Art 2180 of the NCC and Art 221 of the Family Code if the child
is living in his parents company.
Parental authority is not the sole basis of liability. A teacher in charge is still liable for the acts of their
students even if the minor student reaches the age of majority.
The parents or guardians can still be held liable even if the minor is already emancipated provided that
he is below 21 years of age.
Parents and other persons exercising parental authority can escape liability by proving that they observed
all the diligence of a good father of a family to prevent damages. (Art. 2180)
The burden of proof rests on the parents and persons exercising parental authority.

375
 For damage caused by:

a) their employees
b) in the service of the branches in which they are employed, or
c) on the occasion of their functions

d. Employers1701

For damages caused by:

a) employees and household helpers

b) acting within the scope of their assigned tasks
c) even if the employer is not engaged in any business or industry1702

(1) Meaning of employers

Includes any person acting in the interest of an employer, directly or indirectly, but
shall not include or any labor organization (otherwise , than when acting as an employer) or
any one acting in the capacity of officer or agent of such labor organization.

(2) Requisites

(a) Employee chosen by employer or

through another

Employees are bound to exercise due care in the performance of their functions for
the employers; absence such due care, the employee may be held liable.

(b) Services rendered in accordance

with orders which employer has
authority to give

Person for whomthe services are to beperformed controls not just theresult but
also the means andmanner to achieve such end or result.

(c) Illicit act of employee was on the

occasion or by reason of the functions
entrusted to him

1701
Defenses available to employers:
a. exercise of due diligence ins election and
supervision of employees
b. act/omission was made outside working hours and in violation of company's rules and regulations
1702
unlike in RPC subsidiary liability of employer attaches in case of insolvency of employer for as long
as the employer is engaged in business/industry

376
 The vicarious liability of the employer attaches only when the tortious conduct of the
employee relates to, or is in the course of his employment

(d) Presumption of negligence

Presumption of negligence of theemployer is onlyjuristantum and not juris et de jure.

For the presumption of negligence to operate, the negligence of the employee

must first be established

(3) Employer need not be engaged in business

or industry

As long as their employees and household helpers acted within the scope of their
assigned task

(4) Defense of diligence in selection and

supervision

It is a defense that the employer exercised proper diligence in the selection and
supervision of negligent employee

(5) Nature of employers liability

The employer's liability is direct andprimary.

e. State

For damage caused by:

a) a special agent1703
b) not when the damage has been caused by the official to whom the task done
properly pertains1704

Public officers who are guilty of tortuous conduct are personally liable for their actions.

f. Teachers and heads of establishments of arts and

trades

1703
Two Kinds:
1. Public officials with a particular assigned tasks but is specially commissioned to do such task foreign to
his usual assigned governmental function.
2. Private person not a public official, commissioned to perform non-governmental function. A
government commissioning a special person for a special task is acting thru a special agent within the
meaning of Art. 2180.
1704
in which case Art. 2176 is applicable

377
 For damage caused by:

a) pupils and students or apprentices

b) in their custody

C. Joint Tortfeasors

The responsibility of two or more persons who are liable for quasi-delict is
solidary.1705

IV. Act of Omission and Its Modalities

A. Concept of Act

It is an act or omission producing an injury to another, without any previous existing

lawful relation of which the said act or omission may be said to be a natural outgrowth or
incident.1706

V. Proximate Cause

A. Concept

1. Definition

That cause which in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, without which the result would not have occurred.1707

2. Test1708
1705
Art. 2194
All the persons who command, instigate, promote, encourage, advice, countenance, cooperate in, aid, or
abet the commission of a tort, or who approve of it after it is done, if done for their benefit; they are each
liable as a principal, to the same extent and in the same manner as if they have performed the wrongful act
themselves.
1706
An unborn child is NOT entitled to damages. But the bereaved parents may be entitled to damages, on
damages inflicted directly upon them. (Geluz vs. CA, 2 SCRA 802)
Defendants in tort cases can either be natural or artificial being. Corporations are civilly liable in the
same manner as natural persons.
Any person who has been injured by reason of a tortious conduct can sue the tortfeasor.
The primary purpose of a tort action is to provide compensation to a person who was injured by the
tortious conduct of the defendant.
Preventive remedy is available in some cases.
1707
Primary cause remains the proximate cause even if there is an intervening cause which merely
cooperated with the primary cause and which did not break the chain of causation.
1708
Tests applied in the Philippines:
New Civil Code has a chapter on Damages which specifies the kind of damage for which the defendant
may be held liable and the extent of damage to be awarded to the plaintiff.
Cause-in-fact Tests:
1. But-for test
2. Substantial Factor test

378
 a. Cause-in-fact Test

It is necessary that there be proof thatdefendant's conduct is a factor incausing

plaintiff's damage.

b. Policy Test

In determining the proximate cause of the injury, it is first necessary to determine if

the defendants negligence was the cause-in-fact of the damage to the plaintiff.1709

If the defendants negligence was not the cause-in-fact, the inquiry stops.

If it is, the inquiry shifts to the question of limit of the defendants liability.1710

3. Distinguished from Immediate Cause

An immediate cause is the last event in a chain of events though not necessarily
theproximate cause of what follows.

4. Distinguished from Intervening Cause

An intervening cause is one which comes into active operation in producing the
result after the actors negligent act or omission has occurred.

The defendant ordinarily will not be relieved of liability by an intervening cause

which could reasonably have been foreseen, nor by one which is a normal incident of the
risk created.

One which destroys the causal connection between the negligent act and the injury
and thereby negatives liability.1711

5. Distinguished from Remote and Concurrent

Remote Cause

3. NESS test
Policy test: The directness approach is being applied in this jurisdiction.
The definition of proximate cause which includes the element of foresight is not consistent with the
express provision of the Article 2202 of the New Civil Code; a person may be held liable whether the
damage to the plaintiff may be unforeseen.
1709
Cause-in-fact test
1710
Policy Test
1711
Example: The medical findings, show that the infection of the wound by tetanus was an efficient
intervening cause later or between the time Javier was wounded to the time of his death. (People vs. Rellin
77 Phil 1038)

379
 That cause which some independent force merely took advantage of to accomplish
something not the natural effect thereof.

Concurrent Causes

The actor is liable even if the active and substantially simultaneous operation of the
effects of a third persons innocent, tortious or criminal act is also a substantial factor in
bringing about the harm so long as the actors negligent conduct actively and continuously
operate to bring about harm to another.1712

Where several causes producing the injury are concurrent and each is an efficient
cause without which the injury would not have happened, the injury may be attributed to all
or any of the causes and recovery may be had against any or all of the responsible persons.

B. Cause in Fact

1. But For

The defendants conduct is the cause-in-fact if damage would not have resulted had
there been no negligence on the part of the defendant. Conversely, defendants negligent
conduct is not the cause in fact of the plaintiffs damage if the accident could not have been
avoided in the absence thereof.

2. Substantial Factor Test

The conduct is the cause-in-fact of the damage if it was a substantial factor in

producing the injuries.

In order to be a substantial factor in producing the harm, the causes set in motion by
the defendant must continue until the moment of the damage or at least down the setting in
motion of the final active injurious force which immediately produced or preceded the
damage.1713

3. Concurrent Causes

The actor is liable even if the active and substantially simultaneous operation of the
effects of a third persons innocent, tortious or criminal act is also a substantial factor in
bringing about the harm so long as the actors negligent conduct actively and continuously
operate to bring about harm to another.1714
Where several causes producing the injury are concurrent and each is an efficient
cause without which the injury would not have happened, the injury may be attributed to all
or any of the causes and recovery may be had against any or all of the responsible persons.

1712
Africa vs. Caltex
1713
If the defendants conduct was already determined to be the cause in fact of the plaintiffs damage
under the but for test, it is necessarily the cause in fact of the damage under the substantial factor test.
1714
Africa vs. Caltex

380
 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, and it is impossible to determine what proportion each
contributed to the injury, either of them is responsible for the whole injury, even though his
act alone might not have caused the entire injury; they become joint tort-feasors and are
solidarily liable for the resulting damage under Article 2194 of the Civil Code.

C. Legal Cause

1. Natural and Probable Consequences1715

Involves 2 things:1716

1. Causality
damage would not have resultedwithout the fault or negligence of the
defendant

2. Adequacy
the fault of the defendant wouldnormally result in the damagesuffered by
the obligee

2. Foreseeability

Involves the question of probability, that is, the existence of some real likelihood of
some damage and the likelihood is of such appreciable weight reasonably to induce, action to
avoid it.

Even if a particular injury was not foreseeable, the risk is still foreseeable if
possibility of injury is foreseeable.

D. Efficient Intervening Cause1717

1715
Art. 2202, see Reference
1716
Reyes & Puno
1717
A cause is not an intervening cause if it was already in operation at the time the negligent act is
committed.
Foreseeable intervening causes cannot be considered sufficient intervening causes.
The intervention of unforeseen and unexpected cause is not sufficient to relieve the wrongdoer from
consequences of negligence if such negligence directly and proximately cooperates with the independent
cause in the resulting injury.

381
 One which destroys the causal connection between the negligent act and the injury
and thereby negatives liability.

There is no efficient intervening cause if the force created by the negligent act or
omission have either:

1. Remained active itself, or

2. Created another force which remained active until it directly caused the
result, or
3. Created a new active risk of being acted upon by the active force that
caused the result.1718
.
E. Cause vs. Condition

It is no longer practicable to distinguish between cause and condition.

The defendant may be liable even if only created conditions, if the conditions
resulted in harm to either person or property.1719

F. Last Clear Chance

Doctrine of Last Clear Chance or Discovered Peril1720

1718
Example: The medical findings, show that the infection of the wound by tetanus was an efficient
intervening cause later or between the time Javier was wounded to the time of his death (People vs. Rellin
77 Phil 1038)
1719
Examples of Dangerous Conditions:
1. Those that are inherently dangerous
2. Those where a person places a thing which is not dangerous in itself in a dangerous position.
3. Those involving products and other things which are dangerous because they are defective.
1720
Elements:
a. plaintiff was in a position of danger by his own negligence
b. defendant knew of such position of the plaintiff
c. defendant had the least clear chance to avoid the accident by exercise of ordinary care but failed to
exercise such last clear chance and
d. accident occurred as proximate cause of such failure
Who may invoke: plaintiff
Inapplicable to:
1. joint tortfeasors
2. defendants concurrently negligent
as against 3rd persons
Cases when the doctrine was held inapplicable (PICCA)
1. If the plaintiff was not negligent.
2. The party charged is required to act instantaneously, and if the injury cannot be avoided by the
application of all the means at hand after the peril is or should have been discovered.
3. If defendants negligence is a concurrent cause and which was still in operation up to the time the injury
was inflicted.
4. Where the plaintiff, a passenger, filed an action against a carrier based on contract.

382
 The negligence of the plaintiff does not preclude a recovery for the negligence of the
defendant where it appears that the defendant, by exercising reasonable care and prudence,
might have avoided injurious consequences to the plaintiff notwithstanding the plaintiffs
negligence.

VI. Legal Injury

A. Concept

The violation or invasion of a legal right.1721

An act causing damage, which act must be not only hurtful, but wrongful. There
must be damnum et injuria.

B. Elements of Right

1. a legal wrong inflicted by the defendant, and

2. damage resulting to the plaintiff therefrom

C. Violation of Right or Legal Injury

The loss, hurt or harm which results from the injury.

D. Classes of Injury

1. Injury to persons
2. Injury to property
3. Injury to relations

VII. Intentional Torts

A. General

1. Concept

Include conduct where the actor desires to cause the consequences of his act or
believes that the consequences are substantially certain to result from it.

They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human
Relations. Although this chapter covers negligent acts, the torts mentioned herein are
mostly intentional in nature or torts involving malice or bad faith.

5. If the actor, though negligent, was not aware of the danger or risk brought about by the prior fraud or
negligent act.
1721
Blacks Law Dictionary

383
 2. Classes1722

a. Interference with persons and property

(1) Physical harms

a. Battery
b. Assault

(2) Non-physical harms

a. conversion,
b. defamation,
c. false imprisonment,
d. fraud,
e. malicious prosecution,
f. invasion of privacy,
g. trespass, and
h. intentional infliction of emotional distress.

b. Interference with relations

The gist of the tort is an interference with one spouses mental attitude toward the
other and the conjugal kindness of marital relations resulting in some actual conduct which
materially affects it.

It extends to all cases of wrongful interference in the family affairs of others whereby
one spouse is induced to leave the other spouse or conduct himself or herself that the
comfort of married life is destroyed.

If the interference is by the parents of the spouse, malice must be proven.

B. Interference with rights to persons and property

1. Intentional Physical Harms

a. General

(1) Concept

It is an intentional infliction of a harmful or offensive bodily contactwhich offends a

reasonable persons sense of dignity or places him in apprehension of immediate bodily
harm or offensive act.

(2) Kinds

1722
Not so sure with this one

384
a. Physical Injuries like battery and assault
b. False imprisonment
c. Intentional mental stress

b. Violation of persons security, physical injuries1723

(1) Battery1724

An intentional infliction of a harmful or offensive bodily contact; bodily contact is

offensive if it offends a reasonable persons sense of dignity.

(2) Assault1725

Intentional conduct by one person directed at another which places the latter in
apprehension of immediate bodily harm or offensive act.

c. False Imprisonment1726

It is a restraint of a person in a bounded area without justification or consent.It is

unlawful obstruction or deprivation of freedom from restraint of movement.1727

d. Trespass to Land

(1) Concept

It involves the wrongful interference with one's possessory rights in real property.

(2) Elements

1. intrude without authorization and without privilege under law

2. cause something to enter another's land.

e. Interference with Personal Property

1) Trespass to Chattels

1723
Art. 33, see Reference
Physical injuries which resulted because of negligence or imprudence is not included in this article;
they are already covered by Article 2176.
1724
Physical Injury
1725
Grave Threat
Includes bodily injuries causing death.
1726
Illegal detention
1727
It applies to private as well as governmental detention.

385
 The creditor possesses to himself the mortgaged property with violence and against
the will of the debtor.

2) Conversion

An intentional exercise of dominion andcontrol over a chattel which so seriously

interferes with the right of another to control it that the actor may justly be required to pay
the other the full value of the chattel.1728

2. Intentional Non-Physical Harms

a. General

(1) Concept
(2) Kinds

b. Violation of Personal Dignity

Types:

1. Violation of the right of privacy

2. Interference with Family and other relations
3. Intriguing to Cause Alienation
4. Vexation and Humiliation1729

c. Infliction of emotional distress

An intentional conduct of defendant that results in extreme emotional distress of

plaintiff.1730

d. Violation of Privacy

(1) Appropriation

1728
Elements:
i. the plaintiff has clear legal ownership or right to possession of the property at the time of
the conversion;
ii. the defendant's conversion by a wrongful act or disposition of plaintiff's property rights;
iii. there are damages resulting from the conversion
1729
Sexual Harassment falls under this category.
1730
Elements:
1. Defendant acted intentionally or recklessly; and
2. Defendants conduct was extreme and outrageous; and
3. Defendants act is the cause of the distress; and
4. Plaintiff suffers severe emotional distress as a result of defendants conduct

386
 The unwarranted publication of a persons name or the unauthorized use of his
photograph or likeness for commercial purposes is an invasion of privacy.

With respect to celebrities, however, the right of publicity is often treated as a

separate right that overlaps but is distinct from the right of privacy. They treat their names
and likeness as property and they want to control and profit therefrom.

(2) Intrusion

It is not limited to cases where the defendant physically trespassed into anothers
property. It includes cases when the defendant invades ones privacy by looking from
outside.1731

GENERAL RULE:

There is no invasion of right to privacy when a journalist records photographs or

writes about something that occurs in public places.

EXCEPTION:

When the acts of the journalist should be to such extent that it constitutes
harassment or overzealous shadowing.

The freedom of the press has never been construed to accord newsmen immunity
from tort or crimes committed during the course of the newsgathering.

There is no intrusion when an employer investigates an employee or when the school

investigates its student.

(3) Public disclosure of private facts1732

Requisites:

1. Publicity is given to any private or purely personal information about a

person;

1731
Example: peeping-tom
1732
Public figure - A person, who by his accomplishments, fame or mode of living or by adopting a
profession or calling which gives the public a legitimate interest in his doings, his affairs and his character.
Public figures, most especially those holding responsible positions in government enjoy a more limited
right to privacy compared to ordinary individuals.
The interest sought to be protected is the right to be free from unwarranted publicity, from the wrongful
publicizing of the private affairs and activities of an individual which are outside the realm of legitimate
public concern.
The publication of facts derived from the records of official proceedings which are not otherwise declared
by law as confidential, cannot be considered a tortious conduct.

387
 2. Without the latters consent; and
3. Regardless of whether or not such publicity constitutes a criminal offense,
like libel or defamation, the circumstance that the publication was made with
intent of gain or for commercial and business purposes invariably serves to
aggravate the violation of the right.

(4) False light in the public eye

The interest to be protected in this tort is the interest of the individual in not being
made to appear before the public in an objectionable false light or false position.1733

Tort of Putting Defamation

Another in False
Light
1. As to gravamen of claim
The gravamen of The gravamen of
claim is not the claim is the reputa-
reputational harm tional harm
but rather the
embarrassment of a
person being made
into some-thing he is
not
2. As to publication
The statement should Publication is
be actually made in satisfied if a letter is
public sent to a third person
3. As to the defamatory character of the
statements
Defendant may still What is published
be held liable even if lowers the esteem in
the statements tells which the plaintiff is
something good held
about the plaintiff

e. Disturbance of Peace of Mind

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;

1733
Example: Defendant was held liable for damages when he published an unauthorized biography of a
famous baseball player exaggerating his feats on the baseball field, portraying him as a war hero. (Spahn
vs. Messner)
If the publicity given to the plaintiff is defamatory, hence an action for libel is also warranted; the
action for invasion of privacy will afford an alternative remedy.
May be committed by the media by distorting a news report.

388
(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.1734

f. Malicious Prosecution

An action for damages brought by one against another whom a criminal prosecution,
civil suit, or other legal proceeding has been instituted maliciously and without probable
cause, after the termination of such prosecution, suit or proceeding in favor of the defendant
therein.

The gist of the action is putting legal process in force regularly, for mere purpose of
vexation or injury.1735

g. Defamation1736

1734
Art. 26
1735
Drilon vs. CA (1997)
Elements:
1. The fact of the prosecution and the further fact that the defendant was himself the prosecutor; and that
the action was finally terminated with an acquittal;
2. That in bringing the action, the prosecutor acted without probable cause;
3. The prosecutor was actuated or impelled by legal malice.
Malice is the inexcusable intent to injure, oppress, vex, annoy or humiliate.
1736
Requisites for one to be liable for defamatory imputations:
a. It must be defamatory
b. It must be malicious
c. It must be given publicity
d. The victim must be identifiable
Test in determining the defamatory character of the imputation:
A charge is sufficient if the words are calculated to induce the hearers to suppose and understand that
the person/s against whom they were uttered were guilty of a certain offense, or are sufficient to impeach
their honesty, virtue, or reputation, or to hold the person/s up to public ridicule.
Dissemination to a number of persons is not required, communication to a single individual is sufficient
publication.
General rule: Every defamatory imputation is presumed to be malicious, even if it be true, if no good
intention or justifiable motive for making it is shown.
Exceptions:
1. A private communication made by any person to another in the performance of any legal, moral or
social duty; and
2. A fair and true report, made in good faith, without any comments or remarks, of any judicial,
legislative or other official proceedings which are not of confidential nature, or of any statement,
report, or speech delivered in said proceedings or of any other act performed by public officers in
the exercise of their functions.
It is not sufficient that the offended party recognized himself as the person attacked or defamed, it
must be shown that at least a third person could identify him as the object of the libelous publication.
In order to escape liability, the defendant may claim that the statements made are privileged.

389
 An invasion of the interest in reputation and good name, by communication to
others which tends to diminish the esteem in which the plaintiff is held, or to excite adverse
feelings or opinion against him.1737

(1) Defenses

(a) Absence of elements

Absence of malice1738 signifies good faith on the part of the defendant; good faith may
even be based on mistake of law.

(b) Privilege

Two kinds:

1. Absolutely privilege Those which are not actionable even if the author
acted in bad faith.
2. Qualifiedly privilege not actionable unless found to have been made
without good intention or justifiable motive.

h. Fraud or Misrepresentation1739

Elements of deceit:

1.The defendant must have made false representation to the plaintiff

2. The representation must be one of fact
3. The defendant must know that the representation is false or be reckless about whether it
is false.
4. The defendant must have acted on the false representation
5. The defendant must have intended that the false representation should be acted on
6. The plaintiff must have suffered damage as a result of acting on the false representation

Half-truths are likewise included; it is actionable if the withholding of that which is

not stated makes that which is stated absolutely false.

Misrepresentation upon a mere matter of opinion is not an actionable deceit.

i. Seduction

Seduction, by itself, is an act contrary to morals, good customs and public policy.

1737
Includes the crime of libel and slander.
RPC considers the statement defamatory if it is an imputation of circumstance tending to cause the
dishonor, discredit or contempt of natural or juridical person or to blacken the memory of one who is dead.
1738
Presence of probable cause signifies absence of malice.
1739
formerly deceit

390
 The defendant is liable if he employed deceit, enticement, superior power or
abuse of confidence in successfully having sexual intercourse with another even if he
satisfied his lust without promising to marry the offended party.

It may not even matter that the plaintiff and the defendant are of the same
gender.

j. Unjust Dismissal

The right of the employer to dismiss an employee should not be confused with the
manner in which the right is exercised and the effects flowing therefrom;

If the dismissal was done anti-socially and oppressively, the employer should be
deemed to have violated Article 1701 of the Civil Code1740 and Article 211741 NCC.

An employer may be held liable for damages if the manner of dismissing is contrary
to morals good customs and public policy.1742

C. Interference with relations

1. General

a. Concept
b. Kinds

2. Family Relations

a. Alienation of affection

Consists of depriving one spouse of the affection, society, companionship and

comfort of the other

The gist is an interference with one spouses mental attitude toward the other and
the conjugal kindness of marital relations resulting in some actual conduct which materially
affects it.

b. Loss of consortium

The loss of conjugal fellowship and the impairment or destruction of sexual life.

1740
which prohibits acts of oppression by either capital or labor against the other
1741
supra
1742
Example: False imputation of misdeed to justify dismissal or any similar manner of dismissal which is
done abusively.

391
 c. Criminal conversation (Adultery)

Adultery is committed by the married woman who lies with a man not her husband,
and by him who lies with her knowing that she is married, although the marriage be
afterwards declared void.

3. Social Relations

a. Meddling with or disturbing family relations

Meddling with or disturbing the private life or family relations of another" and
"similar acts", "though they may not constitute a criminal offense, shall produce a cause of
action for damages, prevention and other relief.1743

b. Intriguing to cause another to be alienated from his

friends1744

4. Economic Relations

a. Interference with contractual relations

The existence of a contract is necessary and the breach must occur because of the
alleged act of interference; No action can be maintained if the contract is void.1745

b. Unfair competition

Unfair Competition in agricultural, commercial, or industrial enterprises, or in labor,

through the use of force, intimidation , deceit, machination or any unjust or oppressive or
highhanded method shall give rise to a right of action by a person who thereby suffers
damage.1746

5. Political Relations

1743
See Art. 26
1744
ibid
1745
Malice is not essential.
Rule under Article 2201 and 2202 Civil Code
1) If in bad faith: defendant is liable for all natural and probable consequences of his act or omission,
whether the same is foreseen or unforeseen.
2) If in good faith: defendant is liable only for consequences that can be foreseen
1746
Article 27
For a defendant to be liable, the plaintiff must show that the formers conduct was purely malicious and
served no legitimate purpose, or that any trade or competitive motive was absent.
Cases included:
a. passing off and disparagement of products
b. interference
c. misappropriation
d. monopolies and predatory pricing

392
 a. Violation of right to suffrage1747

b. Violation of other political rights

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;
(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;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not
contrary to law;
(13) The right to take part in a peaceable assembly to 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 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;
(17) 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;
(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; and
(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.
1747
see b.

393
 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

6. Defenses

a. Absence of element

Defendant may not avail of any of the defenses if there is an absence of element.

b. Privilege

1. Consent

Plaintiff gives permission, express or implied, that what would otherwise be tortious
is instead privileged.

2. Self-defense and defense of others

Reasonable force can be used where one reasonably believes that such force is
necessary to
protect oneself or a third party from immediate harm1748.

3. Necessity

Allows the defendant to interfere with the property interestsof an innocent party in
order to avoid a greater injury.

4. Defense of property

An individual is privileged to use reasonable force to prevent a tort against her real
or personal property.
5. Authority of Law

Police, military, prison officials , regulatory inspectors, mental health workers, etc.
engaging inconduct that otherwise would be tortuous.

c. Prescription

The following actions must be instituted within four years:

1748
threatened battery

394
(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.1749

d. Waiver

A waiver, to be valid and effective, must in the first place be couched in clear and
unequivocal terms which leave no doubt as to the intention of a person to give up a right or
benefit which legally pertains to him. A waiver may not casually be attributed to a person
when the terms thereof do not explicitly and clearly evidence an intent to abandon a right
vested in such person.

For a waiver to be valid and effective, it must not be contrary to law, morals, public
policy or good customs.
believe this purported waiver is offensive to public policy because it dilutes the degree of
care required of common
carriers
e. Force majeure

GENERAL RULE:

It is a complete defense and a person is not liable if the cause of the damage is a
fortuitous event.

EXCEPTION:

It is merely a partial defense and the courts may mitigate the damages if the loss
would have resulted in any event.1750

Requisites of a fortuitous event, as a defense, are:

1.The event must beunforeseen , or if foreseen,inevitable ;

2.There must be no concurrent negligence on the part of the offended party.

1749
Art. 1146 (As amended by PD No. 1755, Dec. 24, 1980)
The four-year prescriptive period is reckoned from the date when the tortious act was committed.
But, according to the DISCOVERY RULE: if the injury is discovered after the four-year period, the
reckoning point
is the date of discovery and not the date of commission of the act
1750
Art. 2215(4)
No person shall be responsible for those events which cannot be foreseen, or which through foreseen
were inevitable.
Exception: assumption of risk

395
VIII. Negligence

A. Concept

Involve voluntary acts or omissions which result in injury to others without

intending to cause the same or because the actor fails to exercise due care in performing
such acts or omissions.

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.1751

B. Good Father of a Family or Reasonably Prudent Man

The only standard of conduct used in the Philippines1752

A reasonable man is deemed to have knowledge of the facts that a man should be
expected to know based on ordinary human experience.

C. Standard of Care

1. NCC, Art. 1173

The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the circumstances of
the persons, of the time and of the place. When negligence shows bad faith, the provisions
of articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.

2. Emergency Rule1753

1751
Philippine Bank of Commerce v. CA, 336 Phil. 667, 676 (1997)
1752
Art. 1173
1753
Applicable only to situations that are sudden and unexpected such as to deprive actor of all opportunity
for deliberation
But action must still be judged by the standard of the ordinary prudent man

396
 One who suddenly finds himself in a place of danger, and is required to act without
time to consider the best means that may be adopted to avoid the impending danger, is not
guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to
have been a better method, unless the emergency in which he finds himself is brought about
by his own negligence.

D. Unreasonable risk of Harm

The risk is unreasonable...if the risk is of such magnitudeas to outweigh what the law
regards as the utility of the act...

E. Evidence

The quantum of proof required is preponderance of evidence.1754

F. Presumption of Negligence

1. Legal Provisions

In motor vehicle mishaps, the owner is presumed negligent if he was in the vehicle
and he could have used due diligence to prevent the misfortune.

It is disputably presumed that a driver was negligent if he had been found guilty of
reckless driving or violating traffic regulations at least twice for the next preceding two
months.1755

The driver of a motor vehicle is presumed negligent if at the time of the mishap, he
was violating any traffic regulation.1756

Prima facie presumption of negligence of the defendant arises if death or injury

results from his possession of dangerous weapons or substance except when such
possession or use is indispensable to his occupation or business.1757

Presumption of negligence of the common carrier arises in case of loss, destruction

or deterioration of the goods, or in case of death or injury of passengers except upon proof
of exercise of extraordinary diligence.

Absence of foreseeability
An individual will nevertheless be subject to liability if the emergency was brought about by his own
negligence (Valenzuela v. CA, 253 SCRA 303)
1754
Rule 133 Revised Rules of Court
Exceptions:
When the rules or the law provides for cases when negligence is presumed.
A. Presumptions of Negligence
B. Res Ipsa Loquitur
1755
Art. 2184
1756
Art. 2185
1757
Art. 2188

397
 2. Res ipsa loquitur1758

The thing or transaction speaks for itself.

It is a rule of evidence peculiar to the law of negligence which recognizes that prima
facie negligence may be established in the absence of direct proof, and furnishes a substitute
for specific proof of negligence.

G. Defenses

1. Complete

a. Absence of element

(1) Due diligence

Diligence required by law/contract/depends on circumstances of persons, places,

things

(2) Acts of public officers

In the lawful exercise of their functions

b. Accident or fortuitous event

It is a complete defense and a person is not liable if the cause of the damage is a
fortuitous event.

It is merely a partial defense and the courts may mitigate the damages if the loss
would have resulted in any event1759

c. Damnumabsqueinjuria1760

1758
Requisites:
1. The accident was of a kind which ordinarily does not occur in the absence of someones negligence;
2. The instrumentality which caused the injury was under the exclusive control and management of the
person charged with negligence; and
3. The injury suffered must not have been due to any voluntary action or contribution on the part of the
person injured; absence of explanation by the defendant.
The doctrine is not applicable if there is direct proof of absence or presence of negligence. (S.D.
Martinez, et al vs. William Van Buskirk)
1759
Art. 2215(4)
A person may still be liable for a fortuitous event if such person made an assumption of risk
1760
Literal translation: Damage without injury
Consequences must be borne by the injured alone

398
 A principle that involves damage without injury, therefore no liability is incurred;
there is no legal injury.

d. Authority of law

By specific provision of law.

e. Assumption of risk1761

Volenti non fit injuria:

One is not legally injured if he has consented to the act complained of or was willing
that it should occur.

There is assumption of risk if theplaintiff in advance has expresslywaived his right to

recover damages for the negligent act of the defendant.1762

f. Last clear chance1763

g. Prescription

The following actions must be brought within ten years from the time the right of
action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment1764

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

1761
Doctrine of Assumption of Risk
Intentional exposure to a known danger.
One who voluntarily assumed the risk of an injury from a known danger cannot recover in an action for
negligence or an injury is incurred.
Plaintiffs acceptance of risk (by law/contract/nature of obligation) has erased defendants duty so that
his negligence is not a legal wrong.
Applies to all known danger.
1762
A person cannot contract away his right to recover damages resulting from negligence; the same is
contrary to public policy (Pleasantville Dev't Corp vs CA ,253 SCRA 10)
1763
supra
1764
Art. 1144

399
including the arrest, detention and/or trial of the plaintiff, the same must be brought within
one (1) year.1765

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.1766

h. Waiver

A person cannot contract away his right to recover damages resulting from
negligence. Such waiver is contrary to public policy and cannot be allowed. However, the
waiver contemplated by this prohibition is the waiver of the right to recover before the
negligent act was committed.

If waiver was made after the cause of action accrued, the waiver is valid and may be
construed as a condonation of the obligation.

i. Double recovery

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.1767

IX. Special Liability in Particular Activities

A. General

1. Concept.

B. Products Liability1768

1. Manufacturers or Processors

a. Elements

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

Requisites:

1765
Art. 1146
1766
Art. 1150
1767
Art. 2177
1768
law which governs the liability of manufacturers and sellers for damages resulting from defective
products
Based on fraud, warranty, negligence or strict liability

400
 The plaintiff should allege and prove that:
1) The product was defective;
2) The product was manufactured by the defendant;
3) The defective product was the cause of his injury.

b. Consumer Act1769

Any Filipino or foreign manufacturer, producer, and any importer, shall be liable for
redress, independently of fault, for damages caused to consumers by defects resulting from
design, manufacture, construction, assembly and erection, formulas and handling and
making up, presentation or packing of their products, as well as for the insufficient or
inadequate information on the use and hazards thereof.

A product is defective when it does not offer the safety rightfully expected of it,
taking relevant circumstances into consideration, including but not limited to:

a) presentation of product;
b) use and hazards reasonably expected of it;
c) the time it was put into circulation.

A product is not considered defective because another better quality product has
been placed in the market.

The manufacturer, builder, producer or importer shall not be held liable when it
evidences:
a) that it did not place the product on the market;
b) that although it did place the product on the market such product has no defect;
c) that the consumer or a third party is solely at fault.1770

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.1771

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.

1769
RA 7394
1770
Art. 97
1771
Art. 98

401
 The service is defective when it does not provide the safety the consumer may
rightfully expect of it, taking the relevant circumstances into consideration, including but not
limited to:

a) the manner in which it is provided;

b) the result of hazards which may reasonably be expected of it;
c) the time when it was provided.

A service is not considered defective because of the use or introduction of new

techniques.

The supplier of the services shall not be held liable when it is proven:

a) that there is no defect in the service rendered;

b) that the consumer or third party is solely at fault.1772

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: Provided, That any difference in price may
result thereof shall be supplemented or reimbursed by the party which caused the damage,

1772
Art. 99

402
without prejudice to the provisions of the second, third and fourth paragraphs of this
Article.1773

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.1774

The service supplier is liable for any quality imperfections that render the services
improper for consumption or decrease their value, and for those resulting from
inconsistency with the information contained in the offer or advertisement, the consumer
being entitled to demand alternatively at his option:

a) the performance of the services, without any additional cost and when applicable;
b) the immediate reimbursement of the amount paid, with monetary updating without
prejudice to losses and damages, if any;
c) a proportionate price reduction.

Reperformance of services may be entrusted to duly qualified third parties, at the

supplier's risk and cost.

Improper services are those which prove to be inadequate for purposes reasonably
expected of them and those that fail to meet the provisions of this Act regulating service
rendering.1775

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.1776

1773
Art. 100
1774
Art. 101
1775
Art. 102
1776
Art. 103

403
 The supplier's ignorance of the quality imperfections due to inadequacy of the
products and services does not exempt him from any liability.1777

The legal guarantee of product or service adequacy does not require an express
instrument or contractual exoneration of the supplier being forbidden.1778

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.1779

Any person who shall violate any provision of this Chapter or its implementing rules
and regulations with respect to any consumer product which is not food, cosmetic, or
hazardous substance shall upon conviction, be subject to a fine of not less than Five
thousand pesos (P5,000.00) and by imprisonment of not more than one (1) year or both
upon the discretion of the court.

In case of juridical persons, the penalty shall be imposed upon its president, manager
or head. If the offender is an alien, he shall, after payment of fine and service of sentence, be
deported without further deportation proceedings.1780

C. Nuisance1781

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.1782

The abatement of a nuisance does not preclude the right of any person injured to
recover damages for its past existence.1783

Lapse of time cannot legalize any nuisance, whether public or private.1784

The remedies against a public nuisance are:

(1) A prosecution under the Penal Code or any local ordinance: or

(2) A civil action; or

1777
Art. 104
1778
Art. 105
1779
Art. 106
1780
Art. 107
1781
For definition, see Art. 694, supra
1782
Art. 696
1783
Art. 697
1784
Art. 698

404
(3) Abatement, without judicial proceedings.1785

The district health officer shall take care that one or all of the remedies against a
public nuisance are availed of.1786

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.1787

The district health officer shall determine whether or not abatement, without judicial
proceedings, is the best remedy against a public nuisance.1788

A private person may file an action on account of a public nuisance, if it is specially

injurious to himself. 1789

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.1790

The remedies against a private nuisance are:

(1) A civil action; or

(2) Abatement, without judicial proceedings.1791

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.1792

A private person or a public official extrajudicially abating a nuisance shall be liable

for damages:

1785
Art. 699
1786
Art. 700
1787
Art. 701
1788
Art. 702
1789
Art. 703
1790
Art. 704
1791
Art. 705
1792
Art. 706

405
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the courts to be not a real nuisance.1793

1. Nuisance Per Se and Nuisance Per Accidence

Per se nuisance at all times and under all circumstances regardless of location and
surrounding.

Per accidens nuisance by reason of circumstances, location, or surroundings.

2. Public Nuisance and Private Nuisance

Public affects the community or a considerable number of persons.

Private affects only a person or a small number of persons.

3. Attractive Nuisance

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.

D. Violation of Constitutional Rights1794

1. Violation of Civil Liberties

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.1795

E. Violation of Rights Committed by Public Officers

1793
Art. 707
1794
It is not necessary that the defendant should have acted with malice/bad faith to be liable.
1795
Art. 26

406
 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;
(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;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence;
(12) The right to become a member of associations or societies for purposes not contrary to
law;
(13) The right to take part in a peaceable assembly to petition the Government for redress of
grievances;
(14) The right to be a 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 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;
(17) 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;
(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; and
(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 other penal statute.1796

1796
Art. 32

407
 F. Provinces, Cities and Municipalities

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 and supervision.1797

G. Owner of Motor Vehicle

In motor vehicle mishap, the owner is solidarily liable with his driver, if the former,
who was in the vehicle, could have by the use of due diligence, prevented the misfortune. It
is disputably presumed that a driver was negligent, if he had been found guilty of reckless
driving or violating traffic regulations at least twice within the next preceding two
months.

If the owner was not in the motor vehicle, the provisions of Article 2180 are
applicable.1798

H. Proprietor of Building or Structure or Thing

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.1799

Proprietors shall also be responsible for damages caused:

(1) By the 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;

(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, sewers or deposits of infectious matter,

constructed without precautions suitable to the place.1800

1797
Art. 2189
1798
Art. 2184
1799
Art. 2190
Third persons who suffered damages may proceed only against the engineer or architect or contractor
if the damage referred to in Articles 2190 and 2191should be a result of any defect in construction.
Nevertheless, actions for damages can still be maintained under Article 2176 for damages resulting
from proprietors failure to exercise due care in the maintenance of his building and that he used his
property in such a way that he injured the property of another.
1800
Art. 2191

408
 If damages referred to in Articles 2190 and 2191 1801 should be the result of any
defect in the construction mentioned in Article 1723,1802 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.1803

I. Head of Family

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.1804

X. Strict Liability1805

A. Animals

1. Possessor and User of an Animal

GENERAL RULE: The possessor of an animal or whoever may make use of the
same is responsible for the damages which it may cause although it may escape or be lost.

EXCEPTION: When the damage was caused by force majeure or by the person who
suffered the damage.1806

B. Nuisance

1. Classes<Per se or per accidents; Public or Private1807

2. Easement Against Nuisance

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.1808

1801
supra
1802
See Reference
1803
Art. 2192
1804
Art. 2193
1805
When the person is made liable independent of fault or negligence upon submission of proof of certain
facts specified by law.
Strict liability tort can be committed even if reasonable care was exercised and regardless of the state of
mind of the actor at that time.
1806
Art. 2183
1807
See C. Nuisance, supra
1808
Art. 682

409
 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.1809

C. Products Liability

1. Consumer Act1810

Any Filipino or foreign manufacturer, producer and importer, independently of fault

shall be liable for redress for damages caused to consumers by defects resulting from:

a. design;
b. manufacture;
c. construction;
d. assembly and erection;
e. formulas and handling and making up; or
f. presentation or packing of their products as well as for the insufficient or inadequate
information on the use and hazards thereof.

BOOK II DAMAGES1811

I. General Considerations

A. Classification

1. NCC

Damages may be:

(1) Actual or compensatory;

(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.1812

2. According to purpose

Damages may be recovered:

1809
Art. 683
1810
See B. Products Liability, supra
1811
General Principles of Damages:
1. The amount should be fair and just and commensurate to the damage.
2. Damage and the amount must be proven by competent evidence. Competent means that it
is admissible.
3. Only proximate damages, not remote or speculative, can be recovered.
1812
Art. 2197

410
(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.1813
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.1814
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.1815

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.1816

Liquidated damages are those agreed upon by the parties to a contract, to be paid in
case of breach thereof.1817

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.1818

3. According to manner of determination

No proof of pecuniary loss is necessary in order that moral, nominal, temperate,

liquidated or exemplary damages, may be adjudicated. The assessment of such damages,
except liquidated ones, is left to the discretion of the court, according to the circumstances
of each case.1819

4. Special and ordinary

Special damages - are those which arise directly but not necessarily or by
implication of law, from the act or default complained of. These are super added to
ordinary damages, arising from an act injurious in itself, as when some particular loss
arises from the uttering of slanderous words, actionable in themselves, or such as
arise from an act indifferent and not actionable in itself, but injurious only in its

1813
Art. 2205
1814
Art. 2220
1815
Art. 2221
1816
Art. 2224
1817
Art. 2226
1818
Art. 2229
1819
Art. 2216

411
 consequences as when the words become actionable only by reason of special
damages insuing.1820

Ordinary damages are those which necessarily and by implication of law

result from the act or default complained of.

II. Actual and Compensatory Damages

A. Concept

Comprehends not only the value of the loss suffered but also that of the profits
which the obligee failed to obtain.1821

B. Requisites

1. Alleged and proved with certainty

Actual or compensatory damages cannot be presumed but must be duly proved.1822

Actual damages must be proved and a court cannot rely on speculation, conjecture
or guesswork as to the fact and amount of damages, but must depend on actual proof that
damages had been suffered and on evidence of the actual amount.1823

2. Not speculative

Remote and speculative damages are not recoverable.

C. Component Elements

1. Value of loss; unrealized profit

Loss of earning capacity:

Variables considered are:

1. life expectancy
2. net income/earnings

Loss of profits

1820
Bouviers Dictionary, p. 750
1821
Art. 2200
1822
Malonzo vs. Galang, 109 Phil. 16
1823
Rangas vs. Raya, 22 SCRA 839

412
 May be determined by considering the average profit for the preceding years
multiplied by the number of years during which the business was affected by the wrongful
act or breach.

2. Attorneys fees and expenses of litigation

They are actual damages. It is due to the plaintiff and not to the counsel.

Plaintiff must allege the basis of his claim for attorneys fees in the complaint; the
basis should be one of the 11 cases specified in Article 2208 of the Civil Code.

3. Interest

Award of interest in the concept of actual and compensatory damages actual

damages.

The rate of interest, as well as the accrual thereof is imposed as follows:

1. When the obligation is breached and it consist of payment of sum of money, i.e., a
loan or forbearance of money:

a. 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.
b. In the absence of stipulation, the rate of interest shall be 12% per annum to
be computed from default, i.e., from judicial or extra-judicial demand under
and subject to the provisions of Article 1169 of the Civil Code.

2. When the obligation, not constituting a loan or forbearance or money, is breached:

An interest on the amount of damages to be awarded may be imposed at the discretion

of the court at the rate of 6% per annum.

No interest shall be adjudged on unliquidated claims or damages, except when or until

demand can be established with reasonable certainty.

Where the demand is established with reasonable certainty, the interest shall begin to run
from the time the claim is made judicially or extrajudicially.

3. When the judgment of the court awarding the sum of money becomes final and
executory, the rate of legal interest shall be 12% per annum from such finality until its
satisfaction.

D. Extent or scope of actual damages

1. In contracts and quasi-contracts

413
 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.1824

2. In crimes and quasi-delicts

The defendant shall be liable for all damages which are the natural and probable
consequences of the act and omission complained of. It is not necessary that such damages
have been foreseen or could have reasonably foreseen by the defendant.1825

The amount should be that which would put plaintiff in the same position as he
would have been if he had not sustained the wrong for which he is now getting his
compensation or reparation.

To recover damages, the amount of loss must not only be capable of proof but must
actually be proven.

Uncertainty as to the precise amount is not necessarily fatal.

III. Moral Damages

A. Concept

Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendant's wrongful act for omission.1826

In the adjudication of moral damages, the sentimental value of property, real or

personal, may be considered.1827

B. When recoverable

Moral damages may be recovered in the following and analogous cases:

1824
Art. 2201
In construing and applying this Article, the provisions of Article 2200 must be considered and taken into
account.
1825
Article 2202
1826
Art. 2217
1827
Art. 2218

414
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3
of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.1828

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.1829

1. In seduction, abduction, rape and other lascivious acts

Victim and parents are included.

2. In acts referred to in Arts. 21, 26, 27, 28, 29, 32, 34 & 35,
NCC1830

3. In cases of malicious prosecution1831

IV. Nominal Damages

A. Concept

Small sums fixed by the court without regard to the extent of the harm done to the
injured party.

1828
Art. 2219
1829
Art. 2220
1830
1831
supra

415
 Law presumes damage although actual or compensatory damages are not proven.

They are damages in name only and are allowed simply in recognition of a technical
injury based on a violation of a legal right.

Nominal damages cannot co-exist with actual or compensatory damages.

B. When awarded

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.1832

V. Temperate or Moderate Damages

A. Concept

These are damages, which are more than nominal but less than compensatory, and
may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot be proved with certainty.1833

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 compensatorydamages; in
such cases there is no incompatibility between actual and temperate damages.

VI. Liquidated Damages

A. Concept

Liquidated damages are those agreed upon by the parties to a contract, to be paid in
case of breach thereof.1834

B. Rules governing in case of breach of contract

Interest may, in the discretion of the court, be allowed upon damages awarded for
breach of contract.1835

VII. Exemplary or Corrective Damages

1832
Art. 2221
1833
Article 2224 Civil Code
1834
Art. 2226
1835
Art. 2210

416
 A. Concept

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.1836

B. When recovered

1. In criminal offenses; NCC

In criminal offenses, exemplary damages as a part of the civil liability may be

imposed when the crime was committed with one or more aggravating circumstances. Such
damages are separate and distinct from fines and shall be paid to the offended party.1837

2. In quasi-delicts1838

In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.

3. In contracts and quasi-contracts; NCC Art. 2232

In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

C. Requisites

Exemplary damages cannot be recovered as a matter of right; the court will decide
whether or not they should be adjudicated.1839

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, before the court may consider
the question of granting exemplary in addition to the liquidated damages, the plaintiff must
show that he would be entitled to moral, temperate or compensatory damages were it not
for the stipulation for liquidated damages.1840

VIII. Damages in Case of Death

A. In crimes and quasi-delicts causing death

1836
Art. 2229
1837
Art. 2230
1838
Art. 2231
1839
Art. 2233
1840
Art. 2234

417
 1. In death caused by breach of conduct by a common
crime

The amount of damages for death caused by a crime or quasi-delict shall be at least
three thousand pesos,1841 even though there may have been mitigating circumstances.

In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be
assessed and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the
recipient who is not an heir called to the decedent's inheritance by the law of testate or
intestate succession, may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased.1842

IX. Graduation of Damages

A. Duty of Injured Party

The party suffering loss or injury must exercise the diligence of a good father of a
family to minimize the damages resulting from the act or omission in question.1843

B. Rules

1. In crimes

In crimes, the damages to be adjudicated may be respectively increased or lessened

according to the aggravating or mitigating circumstances.1844

1841
As of 2008, it is P75,000(People vs. Robert Brodett y Pajaro, Ja. 18, 2008)
1842
Art. 2206
Damages recoverable in case of death:
1. Medical & Hospital Bills
2. Damages for death
a. Minimum amount: P50,000
b. Loss of earning capacity unless deceased had permanent physical disability not caused by defendant
so that deceased had no earning capacity at time of death
c. Support, if deceased was obliged to give support (for period not more than 5 years)
d. Moral damages
1843
Art. 2203

418
 2. In quasi-delict

In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages
that he may recover.1845

3. In contracts, quasi-contracts and quasi-delicts;

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.1846

4. Liquidated damages

Liquidated damages, whether intended as an indemnity or a penalty, shall be

equitably reduced if they are iniquitous or unconscionable.1847

5. Compromise

The courts may mitigate the damages to be paid by the losing party who has shown
a sincere desire for a compromise.1848

X. Miscellaneous Rules

A. Damages that cannot co-exists

1. Nominal with other damages

1844
Art. 2204
1845
Art. 2214
1846
Art. 2215
1847
Art. 2227
1848
Art. 2031

419
 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.1849

2. Actual and Liquidated

Liquidated damages are those agreed upon by the parties to a contract, to be paid in
case of breach thereof.1850

B. Damages that must co-exist

1. Exemplary with moral, temperate, liquidated or

compensatory

C. Damages that must stand alone

1. Nominal Damages1851

REFERENCE

Civil Code
1849
Art. 2223
1850
Art. 2226
1851
See X. A. 1, supra

420
Article 21. Any person who wilfully causes loss or injury to another in manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.

Article 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.

Article 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.

Article 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.

Article 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.

Article 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;

421
(7) The right to a just compensation when private property is taken for public use;

(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;

(10) The liberty of abode and of changing the same;

(11) The privacy of communication and correspondence;

(12) The right to become a member of associations or societies for purposes not contrary to law;

(13) The right to take part in a peaceable assembly to petition the Government for redress of
grievances;

(14) The right to be a 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
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;

(17) 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;

(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; and

(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 other penal statute.

Article 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.

422
Article 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.

Article 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.

Article 294. The claim for support, when proper and two or more persons are obliged to give it, shall
be made in the following order:

(1) From the spouse;

(2) From the descendants of the nearest degree;

(3) From the ascendants, also of the nearest degree;

(4) From the brothers and sisters.

Among descendants and ascendants the order in which they are called to the intestate succession of
the person who has a right to claim support shall be observed

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.

Article 443. He who receives the fruits has the obligation to pay the expenses made by a third person
in their production, gathering, and preservation

Article 537. Acts merely tolerated, and those executed clandestinely and without the knowledge of
the possessor of a thing, or by violence, do not affect possession

Article 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good
faith may retain the thing until he has been reimbursed therefor.

423
 Useful expenses shall be refunded only to the possessor in good faith with the same right of
retention, the person who has defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the thing may have acquired by
reason thereof

Article 559. The possession of movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it
from the person in possession of the same.

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

Article 649. The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons and without
adequate outlet to a public highway, is entitled to demand a right of way through the neighboring
estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be continuous for all the needs
of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of
the land occupied and the amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the estate
surrounded by others and for the gathering of its crops through the servient estate without a
permanent way, the indemnity shall consist in the payment of the damage caused by such
encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the proprietor's own
acts.

Article 670. No windows, apertures, balconies, or other similar projections which afford a direct view
upon or towards an adjoining land or tenement can be made, without leaving a distance of two
meters between the wall in which they are made and such contiguous property.

Neither can side or oblique views upon or towards such conterminous property be had, unless there
be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription

Art. 688. Every owner of a tenement or piece of land may establish thereon the easements which he
may deem suitable, and in the manner and form which he may deem best, provided he does not
contravene the laws, public policy or public order.

Article 750. The donation 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. Without such reservation, the donation shall be reduced in petition of any
person affected

424
Article 760. Every donation inter vivos, made by a person having no children or descendants,
legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as
provided in the next article, by the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or legitimated or illegitimate children,
even though they be posthumous;

(2) If the child of the donor, whom the latter believed to be dead when he made the donation, should
turn out to be living;

(3) If the donor subsequently adopt a minor child.

Article 911. After the legitime has been determined in accordance with the three preceding articles,
the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be covered, reducing or annulling, if
necessary, the devises or legacies made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without any distinction whatever.

If the testator has directed that a certain devise or legacy be paid in preference to others, it shall not
suffer any reduction until the latter have been applied in full to the payment of the legitime.

(3) If the devise or legacy consists of a usufruct or life annuity, whose value may be considered
greater than that of the disposable portion, the compulsory heirs may choose between complying
with the testamentary provision and delivering to the devisee or legatee the part of the inheritance of
which the testator could freely dispose. (820a)

Article 912. If the devise subject to reduction should consist of real property, which cannot be
conveniently divided, it shall go to the devisee if the reduction does not absorb one-half of its value;
and in a contrary case, to the compulsory heirs; but the former and the latter shall reimburse each
other in cash for what respectively belongs to them.

The devisee who is entitled to a legitime may retain the entire property, provided its value does not
exceed that of the disposable portion and of the share pertaining to him as legitime.

Article 919. The following shall be sufficient causes for the disinheritance of children and
descendants, legitimate as well as illegitimate:

(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;

425
(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;

(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.

Article 1132. The ownership of movables prescribes through uninterrupted possession for four years
in good faith.

The ownership of personal property also prescribes through uninterrupted possession for eight years,
without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which he has been
illegally deprived, as well as with respect to movables acquired in a public sale, fair, or market, or
from a merchant's store the provisions of articles 559 and 1505 of this Code shall be observed.
(1955a)

Article 1133. Movables possessed through a crime can never be acquired through prescription by the
offender.

Article 1140. Actions to recover movables shall prescribe eight years from the time the possession
thereof is lost, unless the possessor has acquired the ownership by prescription for a less period,
according to articles 1132, and without prejudice to the provisions of articles 559, 1505, and 1133.
(1962a)

Article 1141. Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of ownership and other
real rights by prescription. (1963)

Article 1142. A mortgage action prescribes after ten years

Article 1144. The following actions must be brought within ten years from the time the right of
action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

426
(3) Upon a judgment. (n)

Article 1145. The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract. (n)

Article 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. (As amended by PD No.
1755, Dec. 24, 1980.)

Article 1147. The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.

Article 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

Article 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. (1

Article 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.

Article 1385. Rescission creates the obligation to return the things which were the object of the
contract, together with their fruits, and the price with its interest; consequently, it can be carried out
only when he who demands rescission can return whatever he may be obliged to restore.

Neither shall rescission take place when the things which are the object of the contract are legally in
the possession of third persons who did not act in bad faith.

In this case, indemnity for damages may be demanded from the person causing the loss.

Article 1388. Whoever acquires in bad faith the things alienated in fraud of creditors, shall indemnify
the latter for damages suffered by them on account of the alienation, whenever, due to any cause, it
should be impossible for him to return them.

Article 1505. Subject to the provisions of this Title, where goods are sold by a person who is not the
owner thereof, and who does not sell them under authority or with the consent of the owner, the
buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the seller's authority to sell.

427
Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision of law enabling the
apparent owner of goods to dispose of them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale or under the order of a court of
competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the Code of
Commerce and special laws

Art. 1584. Where goods are delivered to the buyer, which he has not previously examined, he is not
deemed to have accepted them unless and until he has had a reasonable opportunity of examining
them for the purpose of ascertaining whether they are in conformity with the contract if there is no
stipulation to the contrary.

Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on
request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of
ascertaining whether they are in conformity with the contract.

Where goods are delivered to a carrier by the seller, in accordance with an order from or agreement
with the buyer, upon the terms that the goods shall not be delivered by the carrier to the buyer until
he has paid the price, whether such terms are indicated by marking the goods with the words "collect
on delivery," or otherwise, the buyer is not entitled to examine the goods before the payment of the
price, in the absence of agreement or usage of trade permitting such examination.

Article 1608. The vendor may bring his action against every possessor whose right is derived from
the vendee, even if in the second contract no mention should have been made of the right to
repurchase, without prejudice to the provisions of the Mortgage Law and the Land Registration Law
with respect to third persons

Article 1652. The sublessee is subsidiarily liable to the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extra-judicial demand by the lessor.

Payments of rent in advance by the sublessee shall be deemed not to have been made, so far as the
lessor's claim is concerned, unless said payments were effected in virtue of the custom of the place.

Article 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

Article 1729. Those who put their labor upon or furnish materials for a piece of work undertaken by
the contractor have an action against the owner up to the amount owing from the latter to the

428
contractor at the time the claim is made. However, the following shall not prejudice the laborers,
employees and furnishers of materials:

(1) Payments made by the owner to the contractor before they are due;

(2) Renunciation by the contractor of any amount due him from the owner.

This article is subject to the provisions of special laws

Article 1731. He who has executed work upon a movable has a right to retain it by way of pledge
until he is paid.

Article 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. (1721)

Article 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.

Article 1994. The depositary may retain the thing in pledge until the full payment of what may be due
him by reason of the deposit

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.

Family Code

Chapter 2. Marriages Exempted from License Requirement

Art. 27. In case either or both of the contracting parties are at the point of death, the marriage may
be solemnized without necessity of a marriage license and shall remain valid even if the ailing party
subsequently survives.

Art. 28. If the residence of either party is so located that there is no means of transportation to
enable such party to appear personally before the local civil registrar, the marriage may be solemnized
without necessity of a marriage license.

Art. 29. In the cases provided for in the two preceding articles, the solemnizing officer shall state in
an affidavit executed before the local civil registrar or any other person legally authorized to
administer oaths that the marriage was performed in articulo mortis or that the residence of either
party, specifying the barrio or barangay, is so located that there is no means of transportation to
enable such party to appear personally before the local civil registrar and that the officer took the

429
necessary steps to ascertain the ages and relationship of the contracting parties and the absence of
legal impediment to the marriage.

Art. 30. The original of the affidavit required in the last preceding article, together with the legible
copy of the marriage contract, shall be sent by the person solemnizing the marriage to the local civil
registrar of the municipality where it was performed within the period of thirty days after the
performance of the marriage.

Art. 31. A marriage in articulo mortis between passengers or crew members may also be solemnized
by a ship captain or by an airplane pilot not only while the ship is at sea or the plane is in flight, but
also during stopovers at ports of call.

Art. 32. A military commander of a unit, who is a commissioned officer, shall likewise have authority
to solemnize marriages in articulo mortis between persons within the zone of military operation,
whether members of the armed forces or civilians.

Art. 33. Marriages among Muslims or among members of the ethnic cultural communities may be
performed validly without the necessity of marriage license, provided they are solemnized in
accordance with their customs, rites or practices.

Art. 34. No license shall be necessary for the marriage of a man and a woman who have lived
together as husband and wife for at least five years and without any legal impediment to marry each
other. The contracting parties shall state the foregoing facts in an affidavit before any person
authorized by law to administer oaths. The solemnizing officer shall also state under oath that he
ascertained the qualifications of the contracting parties are found no legal impediment to the
marriage. (76a)

------------------------------

Art. 51. In said partition, the value of the presumptive legitimes of all common children, computed
as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound
securities, unless the parties, by mutual agreement judicially approved, had already provided for such
matters.

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

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

Art. 77. The marriage settlements and any modification thereof shall be in writing, signed by the
parties and executed before the celebration of the marriage. They shall not prejudice third persons
unless they are registered in the local civil registry where the marriage contract is recorded as well as
in the proper registries of properties.

430
Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:

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

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

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

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

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

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

+Art. 128. If a spouse without just cause abandons the other or fails to comply with his or her
obligation to the family, the aggrieved spouse may petition the court for receivership, for judicial
separation of property, or for authority to be the sole administrator of the conjugal partnership
property, subject to such precautionary conditions as the court may impose.

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

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

Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall
apply:

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

431
 (2) Amounts advanced by the conjugal partnership in payment of personal debts and
obligations of either spouse shall be credited to the conjugal partnership as an asset thereof.

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

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

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

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

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

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

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

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.

+Art. 135. Any of the following shall be considered sufficient cause for judicial separation of
property:

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

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

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

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

432
 (5) That the spouse granted the power of administration in the marriage settlements has
abused that power; and

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

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final judgment
against the guilty or absent spouse shall be enough basis for the grant of the decree of
judicial separation of property. (191a)

+Art. 136. The spouses may jointly file a verified petition with the court for the voluntary dissolution
of the absolute community or the conjugal partnership of gains, and for the separation of their
common properties.

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

Art. 137. Once the separation of property has been decreed, the absolute community or the conjugal
partnership of gains shall be liquidated in conformity with this Code.

During the pendency of the proceedings for separation of property, the absolute community or the
conjugal partnership shall pay for the support of the spouses and their children. (192a)

Art. 138. After dissolution of the absolute community or of the conjugal partnership, the provisions
on complete separation of property shall apply.

Art. 155. The family home shall be exempt from execution, forced sale or attachment except:
(1) For nonpayment of taxes;
(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after such constitution; and
(4) For debts due to laborers, mechanics, architects, builders, materialmen and others who have
rendered service or furnished material for the construction of the building.

Art. 205. The right to receive support under this Title as well as any money or property obtained as
such support shall not be levied upon on attachment or execution

Article 213. Separation of property may refer to present or future property or both. It may be total or
partial. In the latter case, the property not agreed upon as separate shall pertain to the conjugal
partnership of gains.

Rules of Court

RULE 39

Section 13.Property exempt from execution. Except as otherwise expressly provided by law, the
following property, and no other, shall be exempt from execution:

433
(a) The judgment obligor's family home as provided by law, or the homestead in which he resides,
and land necessarily used in connection therewith;
(b) Ordinary tools and implements personally used by him in his trade, employment, or livelihood;
(c) Three horses, or three cows, or three carabaos, or other beasts of burden, such as the judgment
obligor may select necessarily used by him in his ordinary occupation;
(d) His necessary clothing and articles for ordinary personal use, excluding jewelry;
(e) Household furniture and utensils necessary for housekeeping, and used for that purpose by the
judgment obligor and his family, such as the judgment obligor may select, of a value not exceeding
one hundred thousand pesos;
(f) Provisions for individual or family use sufficient for four months;
(g) The professional libraries and equipment of judges, lawyers, physicians, pharmacists, dentists,
engineers, surveyors, clergymen, teachers, and other professionals, not exceeding three hundred
thousand pesos in value;
(h) One fishing boat and accessories not exceeding the total value of one hundred thousand pesos
owned by a fisherman and by the lawful use of which he earns his livelihood;
(i) So much of the salaries, wages, or earnings of the judgment obligor for his personal services
within the four months preceding the levy as are necessary for the support of his family;
(j) Lettered gravestones;
(k) Monies, benefits, privileges, or annuities accruing or in any manner growing out of any life
insurance;
(l) The right to receive legal support, or money or property obtained as such support, or any pension
or gratuity from the Government;
(m) Properties specially exempted by law.
But no article or species of property mentioned in this section shall be exempt from execution issued
upon a judgment recovered for its price or upon a judgment of foreclosure of a mortgage thereon.

RULE 108

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, 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.chanroblesvirtua law library

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.

434
 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.

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.

REPUBLIC ACT NO. 9048

[March 22, 2001]

Section 1.Authority to Correct Clerical or Typographical Error and Change of First Name or Nickname.

No entry in a civil register shall be changed or corrected without a judicial order; except
for clerical or typographical errors and change of first name or nickname which can be
corrected or changed by concerned city or municipal civil registrar or consul general in
accordance with the provisions of this Act and its implementing rules and regulations.

Sec. 2.Definitions of Terms. As used in this Act, the following terms shall mean:

(1) "City or municipal civil registrar" refers to the head of the local civil registry office of
the city or municipality, as the case may be, who is appointed as such by the city or
municipal mayor in accordance with the provisions of existing laws.

(2) "Petitioner" refers to a natural person filing the petition and who has direct and
personal interest in the correction of a clerical or typographical error in an entry or
change of first name or nickname in the civil register.

(3) "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, such as misspelled name or misspelled place of birth
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: Provided,
however, That no correction must involve the change of nationality, age, status or sex
of the petitioner.

(4) "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 Register General.

435
 (5) "Civil registrar general" refers to the administrator of the National Statistics Office
which is the agency mandated to carry out and administer the provision of laws on
civil registration.

(6) "First name" refers to a name or nickname given to a person which may consist of
one or more names in addition to the middle and last names.

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.

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 correction of 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
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 the first name or nickname in the
community; or

(3) The change will avoid confusion.

Sec. 5.Form and Contents of the Petition. The petition shall be in the form of an affidavit,
subscribed and sworn to before any person authorized by 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.

436
The petition shall be supported with the following documents:

(1) A certified true machine copy of the certificate or of the page or 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.

In case of change of first name or nickname, the petition shall likewise be supported with
the documents mentioned in the immediately preceding paragraph. In addition, the petition
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 the third copy to the petitioner.

Sec. 6.Duties of the City of Municipal Civil Registrar or the Consul General. The city or municipal
civil registrar or the consul general to whom the petition is presented shall examine the
petition and its supporting documents. He shall post the petition in a conspicuous place
provided for the purpose for ten (10) consecutive days after he finds the petition and its
supporting documents sufficient in form and substance.

The city or municipal civil registrar or the consul general shall act on the petition and shall
render a decision not later than five (5) working days after the completion of the posting
and/or publication requirement. He shall transmit a copy of his decision together with the
records of the proceedings to the Office of the Civil Registrar General within five (5)
working days from the date of the decision.

Sec. 7.Duties and Powers of the Civil Registrar General. The civil registrar general shall, within
ten (10) working days from receipt of the decision granting a petition, exercise the power to
impugn such decision by way of an objection based on the following grounds:

(1) The error is not clerical or typographical;

(2) The correction of an entry or entries in the civil register is substantial or

controversial as it effects the civil status of a person; or

(3) The basis used in changing the first name or nickname of a person does not fall
under Section 4.

437
The civil registrar general shall immediately notify the city or municipal civil registrar or the
consul general of the action taken on the decision. Upon receipt of the notice thereof, the
city or municipal civil registrar or the consul general shall notify the petitioner of such action.

The petitioner may seek reconsideration with the civil registrar general or file the appropriate
petition with the proper court.

If the civil registrar general fails to exercise his power to impugn the decision of the city or
municipal registrar or of the consul general within the period prescribed herein, such
decision shall become final and executory.

Where the petition is denied by the city or municipal civil registrar or the consul general, the
petitioner may either appeal the decision to the civil registrar general or file the appropriate
petition with the proper court.

Sec. 8.Payment of Fees. The city or municipal civil registrar or the consul general shall be
authorized to collect reasonable fees as a condition for accepting the petition. An indigent
petitioner shall be exempt from the payment of the said fee.

Sec. 9.Penalty Clause. A person who violates any of the provisions of this Act shall, upon
conviction, be penalized by imprisonment of not less than six (6) years but not more than
twelve (12) years, or a fine of not less than Ten thousand pesos (P10,000.00) but not more
than One hundred thousand pesos (P100,000.00), or both, at the discretion of the court.

In addition, if the offender is a government official or employee, he shall suffer the penalties
provided under civil service laws, rules and regulations.

-------------------------------------------------------------

Public Land Act

Section 118. Conveyance and encumbrance made by persons belonging to the so-called "non-
Christian tribes," when proper, shall not be valid unless duly approved by the Director of the Bureau
of non-Christian tribes.

SYLLABUS
I. Effect and Application of Laws New Civil Code

A. When law takes effect, NCC Art. 2

B. Ignorance of the Law, NCC Art. 3

438
 C. Retroactivity of Laws, NCC Art. 4
D. Mandatory or Prohibitory Laws, NCC Art. 5
E. Waiver of Rights, NCC Art. 6
F. Repeal of Laws, NCC Art. 7
G. Judicial Decisions, NCC Art. 8
H. Duty to Render Judgment, NCC Art. 9
I. Presumption and Applicability of Custom, NCC Arts 10-12
J. Legal Periods, NCC Art. 13
K. Applicability of Penal Laws, NCC Art. 14
L. Conflict of Laws, NCC Arts. 15-18, relative to Divorce, Art. 26 (2)

II. Human Relations New Civil Code

A. NCC Art. 19-22, relative to breach of promise to marry

B. Independent Civil Actions EXCLUDE: to be covered by Remedial Law
C. Prejudicial Questions EXCLUDE: to be covered by Remedial Law

PERSONS

I. Persons and Personality New Civil Code

A. Capacity to Act

1. Civil Personality, NCC Art. 37

2. Restrictions on Capacity to Act, NCC 38-39
3. Birth, NCC 40-41
4. Death, NCC 42-43
a. Compare Art. 43 with Rule 131, Sec. 3 (jj) presumption of
Survivorship
EXCLUDE: NCC 44-47

B. Domicile and residence of person, NCC 50-51

II. Marriage Family Code (Aug. 3, 1988)

EXCLUDE: Muslim Code, (PD 1083)

A. Requisites

1. Nature of Marriage, Art. 1

2. Kinds of Requisites, Arts. 2-3
3. Effect of absence of requisites, Art. 4
4. Essential Art. 5
a. Age, Art. 5
5. Ceremony, Art. 6
6. Formal Arts. 7, 31, 32
7. Solemnizing authority, Art. 7-8, 10
a. Exceptions Art. 35 (2)
8. License Required Arts 3 (2), 9, 11, 20, 26
a. Foreign National Art. 21
b. Exceptions Arts. 27, 31-32, 34
9. Marriage Certificate, Art. 22

439
EXCLUDE: Duties of a Civil Registrar, Arts. 12-19, 23-25

B. Effect of Marriage celebrated abroad and foreign divorce, Art. 26

C. Void and Voidable marriages

1. Void Marriage Arts. 5, 35, 36-8, 52-3

a. Absence of Requisites, Art. 35
b. Psychological incapacity, Art. 36
c. Incestous marriages, Arts. 37-38
2. Prescription, Art. 39
3. Subsequent marriage, Arts. 40-44
4. Annullable marriage, Arts. 14, 45-46
5. Voidable marriages, Art. 45-47
6. Presence of prosecutor, Art. 48
7. Pendency of action, Art. 49
8. Effects of nullity, Arts. 50-54

EXCLUDE: SC Rules on Procedure (Nullity and Provisional Orders), R.A. 6955, An Act to Declare
Unlawful the Practice of Matching Filipino Women for Marriage to Foreign Nationals, RA 9208, Anti-
Trafficking in Persons Act

III. Legal Separation

A. Grounds, Art. 55, Republic Act. 9262, Anti-Violence Against Women and
Children
B. Defenses, Arts. 56-57
C. Cooling-off Period, Art. 58
D. Reconciliation efforts, Art. 59
E. Confession of Judgment, Art. 60
F. Effects of Filing Petition, Art. 61
G. Effects of pendency, Art. 62
H. Effects of legal separation, Arts. 63-64
I. Reconciliation, Arts. 65-67

EXCLUDE: SC Rules on legal separation

IV. Rights and Obligations Between Husband and Wife

A. Essential Obligations, Art. 68

B. Family domicile, Art. 69
C. Support, Art. 70
D. Management of household, Art. 71
E. Effect of neglect of duty, Art. 72
F. Exercise of profession, Art. 73

EXCLUDE: R.A. 7192, An Act Promoting the Integration of Womens as Full and Equal Partners of
Men in Development and Nation Building, RA 8187, An Act Granting Paternity Leave, RA 9710,
Magna Carta for Women

V. Property Relations of the Spouses

440
 A. Marriage Settlements, Arts. 76-81
B. Donations by Reason of Marriage, Arts. 82-83, 86, 43(3), 50
C. Void donations by the spouses, Art. 87
D. Absolute Community of property
1. General Provisions, Arts. 75-85, 88-90
2. What constitutes Community Property, Arts. 91-93
3. Charges Upon and Obligations of the Community Property, Arts. 94-95
4. Ownership, Administration, Enjoyment and Disposition of the
Community Property, Arts. 96-98
5. Dissolution of Community Regime, Arts. 99-101
6. Liquidation of the Absolute Community Assets and Liabilities, Arts. 102-
104
E. Conjugal Partnership of Gains
1. General Provision, Arts. 105-108
2. Exclusive Property of Each Spouse, Arts. 109-115
3. Conjugal Partnership Property, Arts. 116-120
4. Charges upon and obligations of the CPG, Arts. 121-123
5. Administration of the CPG, Arts. 124-125
6. Dissolution of CPG Regime, Arts. 126-128
7. Liquidation of the Conjugal Partnership Assets and Liabilities, Arts. 129-
133
F. Separation of Property of the Spouses and Administration of Common Property
by One Spouse During the Marriage, Arts. 134-142
G. Regime of Separation of Property, Arts. 143-146
H. Property Regime of Unions Without Marriage, Arts. 147-148

VI. The Family

A. The Family as an Institution, Arts. 149-151

B. The Family Home, Arts. 152-165

EXCLUDE: Arts. 157, 161 and 162

VII. Paternity and Filiation

A. Legitimate Children, Arts. 163-171

B. Proof of Filiation, Arts. 172-174
C. Illegitimate Children, Art. 175 and Art. 176 as amended by RA 9255
D. Legitimated Children, Arts. 177-182

EXCLUDE: SC Rule on DNA Evidence

VIII. Adoption

EXCLUDE: Family Code, Arts. 183-188, 191-193

A. RA 8552 Domestic Adoption Law

1. Who can adopt

2. Who can be adopted
3. Rights of an adopted child include FC, Arts. 189 and 190 on
successional rights
4. Rescission of adoption

441
EXCLUDE: AM No. 02-6-02-S.C. (Aug. 22, 2002), RA 9523 requiring certification of the
department of DSWD to declare a "child legally available for adoption"

B. RA 8043, The Law on Inter- Country Adoption

1. Who can Adopt

2. Who can be adopted

IX. Support

A. What it Compromises, Art. 194

B. Who are Obliged, Arts. 195-197, 199-200, 206-208
C. Support during marriage litigation, Art. 198
D. Amount, Arts. 201-202
E. When Demandable, Art. 203
F. Options, Art. 204
G. Attachment, Art. 205

X. Parental Authority

A. General Provisions, Arts. 209-215

B. Substitute and Special Parental Authority, Arts. 216-219
C. Effect of Parental Authority upon the Persons of the Children, Arts. 220-224

EXCLUDE: Rule on Guardianship of Minors, Rule on Custody of Minors, RA 8972 Solo Parents
Act, RA 8980 Policy for Childhood Care

D. Effects of Parental Authority upon the Property of the Children, Arts. 225-227

EXCLUDE: RA 9231 Child Labor Law (to be covered by Labor Law)

E. Suspension or Termination of Parental Authority, Arts. 228-233 RA 7610 Child
Abuse Law

XI. Emancipation Arts. 234 and 236, as amended by RA 6809

XII. Summary Judicial Proceedings in the Family Law

XIII. Final Provisions Retroactive effect, Art. 256

EXCLUDE: Arts. 254-255, 257

XIV. Funeral, NCC Arts. 305-301

EXCLUDE: Care and Education of Children, Arts. 356-363

XV. Use of surnames Arts. 364-369, 369-380 (other articles repealed by Family Code)

XVI. Absence NCC Art. 43; Art. 41 Family Code

A. Provisional measures in Case of Absence, Arts. 381-383

B. Declaration of Absence, Arts. 384-389
C. Administration of the Property of the Absentee, arts. 387-389

442
 D. Presumption of Death, Arts. 390-392

EXCLUDE: Arts. 393-396, contingent assets

XVII. Civil Registrar

A. Arts. 407-413
B. RA 9048-clerical errors
C. Rule 108, Rules of Court

EXCLUDE: Act. No. 375, IRR of RA 9048

PROPERTY

I. Characteristics
II. Classification Arts. 415-418

A. Hidden Treasure Arts. 438-9

B. Right of Accession Art. 440

1. Fruits Arts. 441-4

2. With respect to Immovable Property
a. Builder, planter, sower on land of another in concept of owner
(1) Builder, planter, sower in good faith Arts. 448-456
(2) Builder, planter, sower in bad faith Arts. 449-450
b. Usufructuary, Art. 579
3. Lands adjoining river banks
a. Alluvion Art. 457
b. Change of course of river Arts. 461-246, see Water Code PD
1067
c. Avulsion- Arts. 459-463
4. Islands Arts. 464-465
C. By Object
1. Real or immovable
2. Personal or Movable
D. By Owner
1. Of public dominion
2. Of private ownership
a. Patrimonial property distinction between private property of
individual persons, and of State entities
E. By Nature
1. Consumable/non-consumable vs. Fungible/non-fungible

III. Ownership

A. Right in general
1. Bundle of rights
a. Jus utendi, fruendi, abutendi, vindicandi, disponendi (possidendi)
(1) Actions to recover ownership and possession of real
property
(a) Distinctions between accionreivindicatoria,
accionpubliciana, accioninterdictal

443
 (b) Distinction between forcible entry and
unlawful detainer
(2) Actions for recovery of possession of moveable
property
(3) Requisites for recovery of property proof of right;
identity; reliance on strength of own evidence not
weakness of defendants claim
2. Distinction between real and personal rights

B. Modes of acquiring ownership

1. original, derivative

C. Limitations

1. General limitations taxation, eminent domain, police power

2. Specific Limitations imposed by law, sic uteretuo, nuisance, stat of
necessity, easements voluntarily imposed by owner: servitudes, mortgages
imposed by contract

IV. Accession

A. Right to hidden treasure

B. General Rules:

1. Forimmovables:

a. Accession discreta(natural and industrial civil fruits) and continua

(over immovables: artificial/industrial and natural)
b. Accession industrial (building, avulsion, rivers, islands)
c. Accession natural (accretion, avulsion, rivers, islands)

2. For movables:

a. Accession continua (conjuction, adjunction, commixtion/

confusion, specification)
b. Rules for determining the principal and accessory

V. Quieting of title to/interest in and removal/prevention of cloud over title

to/interest in real property

A. Requirement
B. Distinction between quieting title and removing/preventing a cloud
C. Prescription/non-prescription of action

VI. Co-ownership

A. Characteristics of co-ownership

1. In general
2. Special rules:

444
 a. Concept of condominium
(1) Condominium corporation
(2) Interest in real property
(3) Concept of common areas, amendment
(4) Documents to consider (master deed, declaration of
restrictions, articles and by-laws of the condominium
corporation or the association where applicable
b. Rights and obligations of condominium owner
(1) Contributions/Dues
(2) PD 957 and RA 6552
c. Grounds for partition of common areas, or dissolution of the
condominium

B. Source of co-ownership
C. Rights of co-owners
1. Distinction between right to property owned in common and full
ownership over his/her ideal share
2. Right to oppose acts of alteration
3. Right to partition
4. Right to contributions for expenses (necessary expenses, taxes)
5. Waiver
6. Right to redemption of co-owners share
D. Termination/extinguishment
1. Effect of partition
2. Rights against individual co-owners in case of partition
3. Partition in case co-owners cannot agree

VII. Possession

A. Characteristics
B. Acquisition of Possession Art. 531
C. Effects of Possession
1. Possessor in Good Faith Arts. 544, 526-527
a. Right to pending fruits Art. 545
b. Right to be reimbursed
(1) Necessary and useful expenses Arts. 546-547
(2) Expenses for pure luxury Art. 548
2. Possessor in Bad Faith Arts. 449, 549, 552
D. Loss or Unlawful Deprivation of a Movable Arts. 559, 1505 (3)
1. Period to Recover Arts. 1140, 1134, 1132, 1133
2. Finder of Lost Movable Arts. 719-720
3. Distinguished from voidable title Art. 1506
E. In concept of owner, holder, in ones own name, in name of another
F. Rights of the possessor
G. Loss/termination
VIII. Usufruct

A. Characteristics
B. Classification
C. Rights and obligations of usufructuary
D. Rights of the owner

445
 E. Extinction/termination

IX. Easements Arts. 613, 615-616

A. Characteristics
B. Classification
1. Legal easements
a. Right of way
2. Voluntary easements Art. 688
a. Effect of Zoning ordinance
C. Modes of Acquiring Easements
1. Compulsory easements Arts. 620-624
2. Easement of light and view Arts. 669-673

X. Nuisance Art. 694

XI. Action to Quiet Title Arts. 476-480

XII. Modes of Acquiring Ownership Art. 712

A. Occupation Art. 713

B. Donation

1. Definition Arts. 725-6, 746

2. Characteristics
a. Extent to which donor may donate property
b. Reservations and reversions
3. Kinds
a. Donation Inter Vivos Art. 729
b. Donation By Reason of Marriage Family Code Arts. 82-83, 86
c. Donation Mortis Causa Art. 728
d. Onerous Donation Art. 733
e. Simple, modal, conditional
4. Formalities required
a. How made and accepted
b. Perfection
c. Differences between formalities for donation of real, personal
properties
(1) Movables Art. 748
(2) Immovables Art. 749
5. Qualifications of donor, donee
6. Effects of donation/limitations
a. In general
b. Double donations
c. Excessive/inofficious
d. Scope of amount Arts. 750-752
e. In fraud of creditors Art. 759
7. Void Donations Arts. 739-740, 1027
8. Revocation or reduction
a. Grounds for revocation, grounds for reduction
b. How done
c. Effects

446
 d. Prescription
e. Innofficious Donations Arts. 760-761, 771-775
f. Ingratitude Arts. 765, 769

EXCLUDE: Intellectual Creations to be covered by Mercantile Law

PRESCRIPTION

I. Definition Art. 1106

A. Acquisitive Art. 1117

1. Characteristics
2. Ordinary
a. Good Faith Art. 1127
b. Just title Arts. 1129-1130
3. Extraordinary Arts. 1137, 1132 second par.
4. Requisites Arts. 1118-1125
5. Period Arts. 1132, 1134, 1138
6. What cannot be required by acquisitive prescription
B. Extinctive
1. Characteristics
2. Requisites
3. Periods

II. No Prescription Applicable

A. By Offender Art. 1133

B. Registered Lands PD 1529
C. Art. 1143, NCC
1. Action legal to demand a right of way Art. 649
2. To abate a nuisance
D. Action to quiet title if plaintiff in possession
E. Void contracts Art. 1410
F. Action to demand partition Art. 494
1. Distinguished from laches
G. Property of public dominion

III. Prescription or Limitation of Actions

A. To recover movables Art. 1140

B. To recover immovables Art. 1141
C. Other actions Arts. 1142-1149

IV. Interruption Art. 1155

V. Nuisance
A. Definition
B. Classification
C. Remedies

OBLIGATIONS

447
I. Definition
II. Elements of an Obligation
III. Different Kinds of Prestations
IV. Classification of Obligations
V. Sources of Obligations Arts. 1156-7
A. A single act or omission can give rise to different causes of action
B. Natural Obligations
C. Extra-contractual Obligations
VI. Nature and Effect of obligations
A. Obligation to give
1. A determinate or specific thing
2. An indeterminate or generic thing
B. Obligation to do or not to do
C. Breaches of obligations
1. Complete failure to perform
2. Default, delay or mora no default unless creditors makes a demand;
Exceptions (Art. 1169)
a. Mora solvendi
b. Mora accipiendi
c. Compesatiomorae
3. Fraud in the performance of obligation
a. Waiver of future fraud is void (Art. 1171)
4. Negligence (culpa) in the performance of obligation
a. Diligence normally required is ordinary diligence or diligence of a
good father of a family; exceptions common carriers requiring
extraordinary diligence (Arts. 1998-2002)
5. Contravention of the tenor of obligation
6. Legal excuse for breach of obligation fortuitous event; requisites
D. Remedies available to creditor in cases of breach
1. Specific Performance
a. Substituted performance by a third person on obligation to
deliver generic thing and in obligation to do, unless a purely
personal act
2. Rescission (resolution in reciprocal obligations)
3. Damages, in any event
4. Subsidiary remedies of creditors (Art. 1177)
a. Accionsubrogatoria
b. Accionpauliana
c. Acciondirecta(Arts. 1652, 1608, 1729, 1893)

VII. Kinds of civil obligations

A. Pure Arts. 1179-1180
B. Conditional Art. 1181
1. Suspensive condition
2. Resolutory condition
3. Potestative casual or mixed
a. Obligations subject to potestativesuspensive conditions are void
(Art. 1182)
4. Effect of the happening of suspensive condition (Art. 1187); resolutory
condition no retroactivity

448
 5. Effect of loss of specific thing or deterioration or improvement of
specific thing before suspensive condition (Art. 1189); if this occurs in
resolutory condition in obligation to do or not to do (1190, par. 3)
C. Obligation with a period or a term Art. 1193
1. Suspensive period; effect suspensive period is for the benefit of both
debtor and of creditor, unless given in favor of one of them; if given to
debtor alone, debtor losses benefit of period in any of the five cases in Art.
1198 obligation retroact to the day of its constitution
2. Resolutory period
3. Definite or indefinite period
a. Instances when courts may fix the period (Art. 1197)
b. Creditor must ask court to set the period, before he can demand
payment
D. Alternative or Facultative Art. 1199
1. Difference between alternative and facultative obligations
2. Effect of loss of specific things or impossibility of performance of
alternative, through fault of debtor/creditor or through fortuitous events

VIII. Joint and Solidary obligation

A. Joint (divisible) obligation
1. Concurrence of two or more creditors and or two or more debtors
a. Joint obligation is presumed, unless otherwise indicated by the
law or nature of obligation (Art. 1207)
b. Obligation presumed to be divided into as many equal shares as
there are creditors or debtors
c. Each credit is distinct from one another, therefore a joint debtor
cannot be required to pay for the share of another with debtor,
although he may pay if he wants to (Art. 1209)
d. Insolvency of a joint debtor, others not liable for his share (Art.
1209)
B. Joint Indivisible Obligation
1. Obligation cannot be performed in parts but debtors are bound jointly
2. In case of failure of one joint debtor to perform his part (share), there is
default but only debtor guilty shall be liable for damages
C. Solidary obligation
1. Anyone of the solidary creditors may collect or demand payment of
whole obligation; there is mutual agency among solidary debtors (Arts.
1214, 1215)
2. Any of the solidary debtor may be required to pay the whole obligation;
there is mutual guaranty among solidary debtors (Arts. 1216, 1217, 1222)
3. Each one of solidary creditors may do whatever maybe useful to the
others, but not anything prejudicial to them (Art. 1212); however, any
novation, compensation, confusion or remission of debt executed by any
solidary creditor shall extinguish the obligation without prejudice to his
liability for the shares of the other solidary creditors
D. Divisible and Indivisible Art. 1225
E. Obligations with a Penal Clause Arts. 1226, 1228-1230

IX. Extinguishment of Obligations

A. Payment Arts. 1236-1238

1. Dation in payment Art. 1245

449
 2. Form of payment Art. 1249
3. Extraordinary inflation or deflation Art. 1250
4. Application of payment Art. 1252-1254
5. Tender of Payment and Consignation Arts. 1256-1261
B. Loss of Determinate Thing Due or Impossibility or difficulty of performance
Arts. 1262, 1266-1267
C. Condonation or Remission of Debt Art. 1270
1. Express Formality of Donation art. 1270
2. Implied Arts. 1271, 1272, 1274
D. Confusion Arts. 1275, 1272
E. Compensation
1. Kinds Arts. 1278, 1279
a. Legal compensation Arts. 1286-1290
b. Agreement Art. 1282
c. Voluntary Art. 1282
d. Judicial Art. 1283
e. Facultative
2. Obligations not compensable Art. 1287-1288
F. Novation Arts. 1291-1304

CONTRACTS
I. Essential Requisites Art. 1261

II. Kinds of Contracts

A. Consensual
B. Real
C. Formal or Solemn
1. Donations Arts. 748-749
2. Partnership where real property contributed Arts. 1771, 1773
3. Antichresis Art. 2134
4. Agency to sell real property or an interest therein Art. 1874
5. Stipulation to charge interest Art. 1956
6. Stipulation limiting common carriers duty of extraordinary diligence to ordinary
diligence Art. 1744
7. Chattel mortgage
8. Sale of large cattle

III. Formality Arts. 1356, 1357, 1358

IV. Defective Contracts

A. Rescissible Contracts Art. 1381
1. Difference with Rescission (resolution) under Art. 1191
B. Voidable Contracts Arts. 1328-1344, 1390-1402
C. Unenforceable Contracts Arts. 1403-1407, 1317
D. Void Contracts Arts. 1409, 1346
1. Pactumcommissorium- Arts. 2088, 2130, 1390
2. Pactum de non alienando Art. 2130
3. Pactumleonina Art. 1799
V. Effect of Contracts Art. 1311

SALES

450
I. Introduction

A. Definition of Sales Arts. 1458, 1470

B. Essential Requisites of a Contract of Sale Art. 1505
C. Stages of Contract of Sale
D. Obligations Created Art. 1165
E. Characteristics of a Contract of Sale
F. Sale is Title and Not Mode
G. Sale Distinguished From Other Contracts
H. Contract of Sale/Contract to Sell

II. Parties to a Contract of Sale

A. Capacity of parties Arts. 1489-1492

B. Absolute incapacity Arts. 1327, 1397, 1399
C. Relative incapacity: Married Persons
D. Special disqualifications Arts. 1491-1492

III. Subject Matter

A. Requisites of a valid subject matter Arts. 1459-1465

B. Particular kinds

IV. Obligations of the Seller to Transfer Ownership

A. Sale by a person not the owner at time of delivery Arts. 1462, 1505, 1459
1. Exceptions
B. Sale by a person having a voidable title Arts. 1506, 559
V. Price

A. Meaning of price Arts. 1469-1474

B. Requisites for a valid price
C. How price is determined
D. Inadequacy of price Arts. 1355, 1470
E. When no price agreed Art. 1474
F. Manner of payment must be agreed upon
G. Earnest money vs. option money art. 1482

VI. Formation of Contract of Sale

A. Preparatory Art. 1479

1. Offer Art. 1475
2. Option Contract Arts. 1479, 1324
3. Right of First Refusal
4. Mutual Promise to Buy and Sell Art. 1479
B. Perfection Arts. 1475, 1319, 1325, 1326
C. Formalities of the Contract Art. 1403 (d) (e)

VII. Transfer of Ownership

A. Manner of Transfer Arts. 1477, 1496-1501

B. When delivery does not transfer title

451
 C. Kinds of delivery
D. Double Sales Art. 1544
E. Property Registration Decree
1. Requisites for registration of deed of sale in good faith
2. Accompanied by vendors duplicate certificate of title, payment of capital
gains tax, and documentary tax registration fees

VIII. Risk of Loss

A. General rule Arts. 1263, 1189

B. When loss occurred before perfection
C. When loss occurred at time of perfection Arts. 1493 and 1494
D. When loss occurred after perfection but before delivery
E. When ownership is transferred Art. 1504

IX. Documents of Title

A. Definition Art. 1636

B. Purpose of documents of title
C. Negotiable documents of title
D. Non-negotiable documents of title
E. Warranties of seller of documents of title Art. 1516
F. Rules on levy/garnishment of goods Arts. 1514, 1519, 1520

X. Remedies of an Unpaid Seller

A. Definition of unpaid seller Art. 1525

B. Remedies of unpaid seller

XI. Performance of Contract

A. Delivery of thing sold

1. Sale of Movables Arts. 1522, 1537, 1480
2. Sale of Immovables Arts. 1539, 1543
3. Inspections and Acceptance
B. Payment of price

XII. Warranties

A. Express warranties
B. Implied warranties Art. 1547
C. Effects of warranties
D. Effects of waivers
E. Buyers options in case of breach of warranty Art. 1599

XIII. Breach of Contract

A. Remedies of the Seller Arts. 1636, 1594

1. Sale of Movables
B. Recto Law: Sale of Movables on Installment Arts. 1484-1486
1. Sale of Immovables
a. PD 957, sec. 23, 24

452
 b. Maceda Law: Sale of Immovables on Installment
C. Remedies of the Buyer
1. Sale of Movable
2. Sale of Immovables

XIV. Extinguishment of the Sale

A. Causes Arts. 1600, 1231

B. Conventional redemption Art. 1601
C. Equitable mortgage Arts. 1602-1604
D. Distinguish from option to buy Art. 1602
E. Period of redemption Art. 1606
F. Exercise of the right to redeem Art. 1616
G. Legal redemption Art. 1619
H. Age redemption Art. 1619

XV. The Law on Sale of Subdivision and Condominium (PD 957)

XVI. The Condominium Act (RA 4726)
EXCLUDE: Electronic Commerce Act, Public Land Law, Retail Trade and Liberalization Act, Bulk
Sales Law

SUCCESSION

I. General Provisions (Arts. 774-780)

A. Definition/What is transmitted Arts. 774, 776, 781
B. Succession occurs at the moment of death Art. 777
C. Kinds of Successors Heirs, Devisees, Legatees Art. 782

II. Testamentary Succession

A. Wills
1. In General
a. Definition and characteristics - (Arts. 783-787)
(1) Personal Act; Non-delegability of will-making Arts.
784-785, 787; exception 786
(2) Rules of Construction and Interpretation/Law
Governing Formal Validity Art. 788-795
2. Testamentary Capacity and Intent (Arts. 796-803)
a. Age Requirement Art. 797
b. Soundness of Mind; Presumptions Arts. 798-801
3. Form
a. Formal Validity Rules - Arts. 17, 815-817, 819
(1) See Law Governing Substantive Validity Arts. 15, 16,
1039
b. Common requirements Art. 804
(1) In Writing
(2) Language/Dialect Requirement
c. Notarial Wills
(1) Arts. 805-806
(2) Special rules for handicapped testators Arts. 807-808
(3) Substantial Compliance Art. 809
(4) Requisites Arts. 820-824
d. Holographic Wills

453
 (1) Requirements Arts. 810-814
(2) Witnesses Required for Probate Art. 811 Alterations,
Requirements Art. 814
e. Joint Wills Arts. 818-819
4. Codicils, Definition and Formal Requirements Arts. 825-826
5. Incorporate by Reference
6. Revocation (Arts. 828-834); kinds (Art. 830)
7. Allowance and Disallowance of Wills (Arts. 838-839)
a. Probate Requirement Art. 838
(1) Issues to be Resolved in Probate Proceedings Art.
839
(a) Exceptions when practical considerations
demand the intrinsic validity of the will be
resolved
(2) Effect of Final Decree of Probate, Res Judicata on
Formal Validity
b. Grounds for Denying Probate Art. 839
B. Institution of Heirs (Arts. 840-856)
1. Preterition Definition, Requisites and Effects (Art. 854)
2. Concept Art. 854
3. Compulsory Heirs in the Direct Line
4. Preterition vs. Disposition less than Legitime/Donation Inter Vivos Arts.
855, 906-918
5. Effects of Preterition, devisees only entitled to completion of legitime
C. Substitution of Heirs (Arts. 857-870)
1. Definition Art. 857
2. Kinds Arts. 858-860
3. Simple Substitution Art. 859
4. Fideicommissary Substitution Arts. 863-866, 869
D. Conditional Testamentary Dispositions and Testamentary Dispositions with a
Term Arts. 871-885
E. Legitime (Arts. 886-914)
1. Definition Art. 886
2. Compulsory Heirs and Various Combinations Arts. 887-903
3. ReservaTroncal Art. 891
4. Disinheritance
a. Disinheritance for cause Art. 919
(1) Reconciliation Art. 922
(2) Rights of descendants of person disinherited Art. 923
b. Disinheritance without cause - Art. 918
5. Legacies and Devisees Arts. 924-959

III. Legal or Intestate Succession Arts. 960-1014

A. General Provisions Arts. 960-969
1. Relationship Arts. 963-969
2. Right of Representation Arts. 970-977
B. Order of Intestate Succession Arts. 978-1014, 992

IV. Provisions Common to Testate and Intestate Succession Arts. 1015-1105

A. Right of Accretion Arts. 1015-1023
1. Definition and Requisites Arts. 1015-1016
B. Capacity to Succeed by Will or Intestacy (Arts. 1024-1040)

454
 1. Persons Incapable of Succeeding Arts. 1027, 739, 1032
2. Unworthiness vs. Disinheritance
C. Acceptance and Repudiation of the Inheritance Arts. 1041-1057
D. Collation Arts. 908-910, 1061-1062
E. Partition and Distribution of Estate Arts. 1078-1105
1. Partition Arts. 1079, 1080
2. Partition inter vivos
3. Effects of Partition Arts. 1091, 1097, 1100, 1104-1105

EXCLUDE: Executors and Administrators (Arts. 1058-1060) to be covered by Remedial Law

PARTNERSHIP

I. Contract of partnership
A. Definition
B. Elements
C. Rules to determine existence
D. How partnership is formed
E. Partnership term
F. Universal vs. Particular; General vs. Limited
G. Partnership by estoppel
H. Partnership v. Joint Venture
I. Professional partnership
J. Management Arts. 1800-1803
II. Rights and obligations of partnership
III. Rights and obligations of partners among themselves
IV. Obligations of partnership/partners to third persons
V. Dissolution Art. 1830
VI. Limited partnership
A. Definition
B. How limited partnership is formed/amended
C. Rights and obligations of a limited partner
EXCLUDE: Questions requiring application of SEC opinions or regulations

AGENCY

I. Definition of agency
II. Powers Art. 1877-8
A. To bind principal Arts. 1897-1902
B. Exception Art. 1883
III. Express vs. Implied Agency
IV. Agency by estoppel
V. General vs. Special Agency
VI. Agency couched in general terms
VII. Agency requiring special power of attorney
VIII. Agency by operation of law
IX. Rights and Obligations of Principal
X. Irrevocable agency Arts. 1927-1930
XI. Modes of extinguishment

COMPROMISE
I. Definition Art. 2028

455
II. Void Compromise Art. 2035
III. Effect Arts. 2037, 2041

CREDIT TRANSACTIONS

I. Loan
A. Commodatum vs. Mutuum
B. Obligations of Bailor and Bailee
C. Interest and the suspension of Usury Law
II. Deposit
A. Voluntary deposit
B. Necessary deposit
C. Judicial deposit
III. Guaranty and Suretyship
A. Nature and extent of guaranty
B. Effects of guaranty
C. Extinguishment of guaranty
D. Legal and judicial bonds
IV. Pledge
A. Definition
B. Kinds
C. Essential requirements
D. Obligation of pledge
E. Rights of pledgor
F. Perfection Arts. 2093, 2096
G. Foreclosure Arts. 2112, 2115
H. Pledge by Operation of Law Art. 2121-2122
I. Distinguished from Chattel Mortgage Arts. 2140, 1484
V. Real Mortgage
A. Definition and characteristics
B. Essential requisites
C. Foreclosure
VI. Antichresis
A. Definition and characteristics
B. Obligations of antichretic creditor
VII. Chattel Mortgage
A. Definition and characteristics
B. Registration
VIII. Quasi-Contracts
A. NegotiorumGestio
B. SolutioIndebiti
IX. Concurrence and Preference of Credits
A. Meaning of concurrence and preference
B. Preferred Credits on Specific Movables
C. Exempt Property
D. Classification of credits
E. Order of preference of credits
X. Insolvency Law
A. Definition of insolvency
B. Suspension of payments
C. Voluntary insolvency
D. Involuntary insolvency

456
EXCLUDE: Warehouse Receipts Law, Usury Law

LEASE
I. Lease of things
II. Lease of work or services
III. Lease of rural and urban lands
A. Qualified persons
B. Registration
C. Prohibitions
IV. Rights and obligations of lessor and lessee
V. Special rules for lease of rural/urban lands
VI. Household service
VII. Contract of labor
A. Obligation in case of death/injury of laborers
VIII. Contract for piece of work

LAND TITLES AND DEEDS

I. Torrens System
A. Concept and background
B. Certificate of Title
II. Regalian Doctrine
A. Concept
B. Effects
C. Concept of native title, time immemorial possession
III. Citizenship Requirement
A. Individuals and corporations
IV. Original Registration
A. Who may apply
1. Under PD 1529
2. Under CA 141
3. Under RA 8371
B. Registration process and requirements
C. Remedies
D. Cadastral registration
V. Subsequent Registration
A. Voluntary dealings
B. Involuntary dealings
VI. Non-Registrable Properties
VII. Dealings with Unregistered Lands
EXCLUDE: History of land laws, Remedies sufficiently covered under Remedial Law, Registration of
judgments, Orders and Partitions, Assurance Fund, Registration of Patents, Administrative structure of the
Register of Deeds, Consultas1avvphi1

TORTS AND DAMAGES

BOOK I TORTS
I. Principles
A. Abuse of Right; Elements

457
 B. Unjust Enrichment
C. Liability without Fault
D. Acts Contrary to Law
E. Acts Contrary to Morals
II. Classification of Torts
A. According to manner of commission: intentional, negligent and strict
liability
B. According to scope: general or specific
III. The Tortfeasor
A. The Direct Tortfeasor
1. Natural Persons
2. Juridical Persons
B. Persons Made Responsible for Others
1. In General
a. Quasi-delicts under Article 2180, how interpreted
Family Code, Arts. 218-219, 221
(1) Elements; definition
(2) Distinguished from culpa contractual and
culpa criminal
b. Indirect liability for intentional acts
c. Presumption of negligence on persons indirectly
responsible
d. Nature of liability; joint or solidary?
2. In Particular
a. Parents
b. Guardian
c. Owners and Managers of Establishments and
Enterprises
d. Employers
(1) Meaning of employers
(2) Requisites
(a) Employee chosen by employer or
through another
(b) Services rendered in accordance with
orders which employer has authority to
give
(c) Illicit act of employee was on the
occasion or by reason of the functions
entrusted to him
(d) Presumption of negligence
(3) Employer need not be engaged in business or
industry
(4) Defense of diligence in selection and
supervision
(5) Nature of employers liability
e. State
f. Teachers and heads of establishments of arts and trades
C. Joint Tortfeasors (Art. 2194, Civil Code)
IV. Act of Omission and Its Modalities
A. Concept of Act
V. Proximate Cause
A. Concept

458
 1. Definition
2. Test
3. Distinguished from Immediate Cause
4. Distinguished from Intervening Cause
5. Distinguished from Remote and Concurrent
B. Cause in Fact
1. But For
2. Substantial Factor Test
3. Concurrent Causes
C. Legal Cause
1. Natural and Probable Consequences
2. Foreseeability
D. Efficient Intervening Cause
E. Cause vs. Condition
F. Last Clear Chance
VI. Legal Injury
A. Concept
B. Elements of Right
C. Violation of Right or Legal Injury
D. Classes of Injury
1. Injury to persons
2. Injury to property
3. Injury to relations
VII. Intentional Torts
A. General
1. Concept
2. Classes
a. Interference with persons and property
(1) Physical harms
(2) Non-physical harms
b. Interference with relations
B. Interference with rights to persons and property
1. Intentional Physical Harms
a. General
(1) Concept
(2) Kinds
b. Violation of persons security, physical injuries Art. 33,
Civil Code
(1) Battery (Physical Injury)
(2) Assault (Grave Threat)
c. False Imprisonment (Illegal detention)
d. Trespass to Land
(1) Concept
(2) Elements
e. Interference with Personal Property
1) Trespass to Chattels
2) Conversion
2. Intentional Non-Physical Harms
a. General
(1) Concept
(2) Kinds
b. Violation of Personal Dignity

459
 c. Infliction of emotional distress
d. Violation of Privacy
(1) Appropriation
(2) Intrusion
(3) Public disclosure of private facts
(4) False light in the public eye
e. Disturbance of Peace of Mind
f. Malicious Prosecution
g. Defamation
(1) Defenses
(a) Absence of elements
(b) Privilege
h. Fraud or Misrepresentation (formerly deceit)
i. Seduction
j. Unjust Dismissal
C. Interference with relations
1. General
a. Concept
b. Kinds
2. Family Relations
a. Alienation of affection
b. Loss of consortium
c. Criminal conversation (Adultery)
3. Social Relations
a. Meddling with or disturbing family relations
b. Intriguing to cause another to be alienated from his
friends
4. Economic Relations
a. Interference with contractual relations
b. Unfair competition
5. Political Relations
a. Violation of right to suffrage (NCC, Art. 32)
b. Violation of other political rights (freedom of speech,
press, assembly and petition, etc.)
6. Defenses
a. Absence of element
b. Privilege
1. Consent
2. Self-defense and defense of others
3. Necessity NCC Art. 429
4. Defense of property
5. Authority of Law
c. Prescription
d. Waiver
e. Force majeure
VIII. Negligence
A. Concept
B. Good Father of a Family or Reasonably Prudent Man
C. Standard of Care
1. NCC, Art. 1173
2. Emergency Rule
D. Unreasonable risk of Harm

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 E. Evidence
F. Presumption of Negligence
1. Legal Provisions
2. Res ipsa loquitur
G. Defenses
1. Complete
a. Absence of element
(1) Due diligence
(2) Acts of public officers
b. Accident or fortuitous event
c. Damnumabsqueinjuria
d. Authority of law
e. Assumption of risk
f. Last clear chance
g. Prescription NCC, Art. 1144, 1146, and 1150
h. Waiver
i. Double recovery NCC Art. 2177
IX. Special Liability in Particular Activities
A. General
1. Concept
B. Products Liability
1. Manufacturers or Processors
a. Elements
b. Consumer Act RA 7394, secs. 92-107, (Ch. 1)
C. Nuisance NCC Arts. 694-707
1. Nuisance Per Se and Nuisance Per Accidence
2. Public Nuisance and Private Nuisance
3. Attractive Nuisance
D. Violation of Constitutional Rights
1. Violation of Civil Liberties
E. Violation of Rights Committed by Public Officers
F. Provinces, Cities and Municipalities
G. Owner of Motor Vehicle
H. Proprietor of Building or Structure or Thing
I. Head of Family
X. Strict Liability
A. Animals
1. Possessor and User of an Animal
B. Nuisance (supra)
1. Classes<Per se or per accidents; Public or Private
2. Easement Against Nuisance
C. Products Liability (supra)
1. Consumer Act

BOOK II DAMAGES
I. General Considerations
A. Classification
1. NCC Art. 2197
2. According to purpose
3. According to manner of determination
4. Special and ordinary
II. Actual and Compensatory Damages

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 A. Concept
B. Requisites
1. Alleged and proved with certainty
2. Not speculative
C. Component Elements
1. Value of loss; unrealized profit
2. Attorneys fees and expenses of litigation
3. Interest
D. Extent or scope of actual damages
1. In contracts and quasi-contracts
2. In crimes and quasi-delicts
III. Moral Damages
A. Concept (Arts. 2217-2218)
B. When recoverable (Arts. 2219-2220)
1. In seduction, abduction, rape and other lascivious acts
2. In acts referred to in Arts. 21, 26, 27, 28, 29, 32, 34 & 35, NCC
3. In cases of malicious prosecution
IV. Nominal Damages
A. Concept
B. When awarded
V. Temperate or Moderate Damages
A. Concept
VI. Liquidated Damages
A. Concept; NCC Art. 2226
B. Rules governing in case of breach of contract
VII. Exemplary or Corrective Damages
A. Concept; NCC Art. 2229
B. When recovered
1. In criminal offenses; NCC Art. 2230
2. In quasi-delicts; NCC Art. 2231
3. In contracts and quasi-contracts; NCC Art. 2232
C. Requisites
1. Arts. 2233, 2234
VIII. Damages in Case of Death
A. In crimes and quasi-delicts causing death
1. In death caused by breach of conduct by a common crime
IX. Graduation of Damages
A. Duty of Injured Party
1. Art. 2203
B. Rules
1. In crimes
2. In quasi-delict; NCC Art. 2214
3. In contracts, quasi-contracts and quasi-delicts; NCC Art. 2215
4. Liquidated damages; NCC Art. 2227
5. Compromise
X. Miscellaneous Rules1avvphi1
A. Damages that cannot co-exists
1. Nominal with other damages, Art. 2223
2. Actual and Liquidated Art. 2226
B. Damages that must co-exist
1. Exemplary with moral, temperate, liquidated or compensatory
C. Damages that must stand alone

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 1. Nominal Damages, Art. 2223
EXCLUDE: Distinction between tort and quasi-delict

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