CIVIL LAW

PRE-WEEK

PRE-WEEK

CIVIL LAW
PERSONS AND FAMILY RELATIONS
Q: What are the two kinds of capacity? A: Juridical capacity, or legal capacity, is the fitness of man to be the subject of legal relations. It refers to the aptitude for the holding and enjoyment of rights. It is inherent in every natural person and is lost only through death. This attaches to man by the mere fact of his being a man. Capacity to act refers to the power to do acts with legal effect. It is conditional and variable. It is acquired and may be lost. It requires both intelligence and will. Juridical capacity can exist even without capacity to act; the existence of the latter implies that of the former. The capacity or incapacity of persons depends upon the law. Both juridical capacity and capacity to act are not rights but qualities of persons; hence, they cannot be renounced. Q: How is personality determined? A: Birth determines personality. But a conceived child shall be considered born for all purposes that are favorable to it, provided it be born later (Art 40, CC). The fetus is considered born if it is alive at the time it is completely delivered from the mother's womb. However, if the fetus had an intra-uterine life of less than seven months, it is not deemed born if it dies within twenty-four hours after its complete delivery (Art 41 CC). Q: What happens when there is doubt as to the order of death between persons? A: Article 43 of the Civil Code provides a statutory presumption when there is doubt on the order of death between persons who are called to succeed each other (only). 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. Q: What are the requisites for marriage? A: The essential requisites of marriage are: 1) legal capacity of the contracting parties, who must be a male and a female; and 2) consent (of the parties) freely given in the presence of a solemnizing officer (Art 2 FC). The formal requisites are: 1) authority of solemnizing officer; 2) valid marriage license; and 3) marriage ceremony (Art 3 FC). The absence of any of the essential or formal requisites shall render the marriage void ab initio, except where the marriage was solemnized by a person not legally authorized and one party believed in good faith that the officer had authority to do so (Arts 3 and 35(2) FC). 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. Q: What are void marriages? A: The following are void marriages: Article 35 (Void from the Beginning) 1) Contracted by any party below eighteen years of age even with the consent of parents or guardians 2) Solemnized by any person not legally authorized to perform marriages unless such marriages were contracted with either or both parties believing in good faith that the solemnizing officer had the legal authority to do so. 3) Solemnized without license, except in marriages under exceptional circumstances 4) Bigamous or polygamous marriages not falling under Article 41 (Art. 41: subsequent marriage by present spouse who obtained a declaration of presumptive death for absent spouse prior to the subsequent marriage) 5) There is a mistake as to the identity of the other contracting party 6) Subsequent marriages that are void under Article 53 (Art 53: a subsequent marriage is null and void if prior to its celebration, it has not recorded in the civil registry and registries of property the items in Art. 52) Article 36 (Psychological Incapacity) 1) Contracted by any party who, at the time of the celebration, was psychologically

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incapacitated to comply with the essential marital obligations of marriage, even if such incapacity becomes manifest only after its solemnization Article 37 (Incestuous) 1) Between ascendants and descendants of any degree, legitimate or illegitimate 2) Between brothers and sisters, whether of the full or half blood, legitimate or illegitimate Article 38 (Against Public Policy) 1) Between collateral blood relatives, legitimate or illegitimate, up to the fourth civil degree. 2) Between step-parents and step-children. Note: Stepbrothers and stepsisters can marry because marriages between them are not among those enumerated in article 38. 3) Between parents-in-law and children-in-law. 4) Between adopting parent and adopted child. 5) Between the surviving spouse of the adopting parent and the adopted child. 6) Between the surviving spouse of the adopted child and the adopter. 7) Between an adopted child and a legitimate child of the adopter. 8) Between adopted children of the same adopter. 9) Between parties where one, with the intention to marry the other, killed that other person's spouse, or his or her own spouse. Article 41 (Bigamous Marriages, Absentee Spouse and Presumptive Death) 1) In general, marriage contracted by any person during the subsistence of a previous marriage is void. Article 44 (Present spouse who contracts marriage in bad faith) 1) Both spouses of a subsequent marriage acted in bad faith in case where a previous spouse was an absentee Q: When is the subsequent marriage of a present spouse valid? A: When one spouse is absent, the remarriage of a present spouse is valid when: 1) the prior spouse had been absent for 4 consecutive years; 2) the spouse present had a well-founded belief that absent spouse is dead; and 3) judicial declaration of presumptive death was secured (no prejudice to the effect of the reappearance of the absent spouse). In extraordinary absence, the following must be established: 1) the prior spouse had been missing for 2 consecutive years; 2) there is danger of death attendant to the disappearance;

3) the spouse present had a well-founded belief that the missing person is dead; and 4) judicial declaration of presumptive death was secured (no prejudice to the effect of the reappearance of the absent spouse). Q: What are the requisites for psychological incapacity? A: Republic v. Molina (1997) set forth the following rules in declaring a marriage void due to psychological incapacity: 1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. 2) The root cause of the psychological incapacity must be: (a) medically or clinically identified, (b) alleged in the complaint, (c) sufficiently proven by the experts, (d) clearly explained in the decision. Note: The new Supreme Court Rule on Declaration of absolute nullity of Void Marriages and annulment of Voidable Marriages (A.M. No. 02-11-10-SC, effective March 15, 2003 and Barcelona vs. CA (2003) provide that expert opinion is not a condition sine qua non for proof of psychological incapacity. The root cause may be proven by the totality of evidence in actual trial. 3) The incapacity must be proven to be existing at the time of the celebration of the marriage. 4) Such incapacity must also be shown to be medically or clinically permanent or incurable. 5) Such illness must be grave enough to bring about the disability of the party to assume the essential obligations of marriage. 6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code as regards the husband and wife as well as Articles 220, 221, and 225 of the same Code in regard to parents and their children. 7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines, while not controlling or decisive, should be given great respect by our courts. 8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as counsel for the state. No decision shall be handed down unless the Solicitor General issues a certification. Note: The new Supreme Court Rule on Declaration of absolute nullity of Void Marriages and annulment of Voidable Marriages (A.M. No. 02-11-10-SC, effective March 15, 2003 provide that the appearance

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of the prosecuting attorney or fiscal and the Solicitor-General is no longer mandatory. Q: What are the grounds for annulment? A: Marriage may be annulled on the following grounds existing at time of marriage: 1) One of the parties is 18 or above but below 21, and there is no parental consent. 2) Either party was of unsound mind (insanity). 3) The consent of either party was obtained through fraud (different from mistake in identity): a) through non-disclosure of a previous conviction of a crime involving moral turpitude; b) through concealment by the wife of the fact at the time of the marriage that she was pregnant by another man; c) through concealment of a sexuallytransmitted disease, regardless of its nature, existing at the time of marriage; d) through concealment of drug addiction, habitual alcoholism or homosexuality/lesbianism. 4) The consent of either party was obtained through force, intimidation, or undue influence. 5) Either party is physically incapable of consummating the marriage (impotence; this is different from sterility). 6) Either party has a serious and incurable sexually-transmissible disease, even if not concealed.* Q: What are the grounds for legal separation? A: 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; 10) Abandonment of petitioner by respondent without justifiable cause for more than one year. Q: Is divorce allowed in the Philippines? A: In general, divorce is not allowed in the Philippines and even for Filipinos abroad. However, the law recognizes foreign and Muslim divorces. For a foreign divorce to be valid, there must be a valid marriage between a Filipino citizen and a foreigner, and divorce is validly obtained by the alien spouse, capacitating him or her to remarry. In such case, the Filipino spouse shall likewise have the capacity to remarry under Philippine law. Q: May a Filipino obtain divorce? A: No. Only a Filipino who has renounced his citizenship is allowed to obtain divorce. The time of obtaining foreign citizenship is necessary to determine the validity of divorce obtained by the spouse who applied for foreign citizenship. It must be ascertained that when that spouse obtained the divorce, he/she was no longer bound by Philippine domestic law. Q: How is the property relations of married spouses determined? A: Property relations is determined primarily by the marriage settlement agreed upon by the spouses before their marriage (Art 75 FC). Spouses can agree to whatever regime they want (ACP, CPG, complete separation or any other property). In the absence of a marriage settlement or if the regime agreed upon is void, the property regime of absolute community of property will be followed as provided in the Family Code. Local customs shall be considered as suppletory. Q: What constitute community and conjugal properties? A: Community properties are comprised of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter. Excluded therefrom are properties acquired by a gratuitous title and its fruits, properties for personal use, and properties acquired before the marriage, for those with legitimate descendants with a former marriage. Conjugal properties are comprised of (1) those acquired by onerous title during the marriage at the expense of the common fund,

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(2) those acquired through the labor, industry, work, profession of either or both spouses, (3) fruits from common property and net fruits of exclusive property of each spouse, (4) share of either spouse in hidden treasure, whether as finder or owner of property where treasure is found, (5) those acquired through occupation such as fishing or hunting, (6) livestock existing at dissolution of partnership in excess of what is brought by either spouse to the marriage, and (7) those acquired by chance, such as winnings from gambling or betting. Q: With whom vests the authority to administer community/conjugal properties? A: The authority to administer community/conjugal properties vests with both spouses jointly. If they disagree the husbands decision prevails. However, the wife has five (5) years from the date of the decision to go to court for recourse. Otherwise, it is presumed that she agreed with the husbands decision. Q: Is money received under the Social Security Act conjugal? A: No. Although the employee-spouse contributes to the SSS with his salaries, the proceeds thereof belongs to the designated beneficiary under the Social Security Law. Q: What is the property regime for persons cohabiting without a valid marriage? A: 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 cases of cohabitation of individuals not capacitated to marry each other, 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. Q: Who are legitimate children? A: Children conceived, through natural means or artificial insemination, or born during the marriage of parents.

Q: Who are illegitimate children? A: Those conceived and born outside of a valid marriage, except children of marriages void under Article 36 (psychological capacity) and Article 53 (the second marriage of a widow or widower who has not delivered to his or her children by his or her first marriage the legitime of said children). Q: What are the grounds for impugning the legitimacy of a child? A: The grounds for impugning the legitimacy of a child are: (1) Physical impossibility for sexual intercourse within the first 120 days of the 300 days which immediately preceded the child's birth due to physical incapacity of the husband, physical separation and serious illness; and (2) Other biological or scientific reasons, except artificial insemination. In case of artificial insemination, legitimacy may be impugned if the consent of either parent was vitiated through fraud, violence, mistake, intimidation, or undue influence. Q: How is legitimacy of a child impugned? A: The action for impugning the legitimacy of a child may be brought within one (1), two (2), or three (3) years from the knowledge of the birth, or the knowledge of registration of birth. a. The action should be brought within one (1) year if husband or any heirs reside in the same city or municipality where the child was born or his birth was recorded; b. Within two (2) years if the husband or all heirs live in the Philippines but do not reside in the same city or municipality where the child's birth took place or was recorded; and c. Within three (3) years, if the husband or all heirs live outside the Philippines when the child's birth took place or was recorded in the Philippines. If the birth of the child has been concealed or was unknown to the husband, the above periods shall be counted from the discovery or knowledge of the birth of the child, or from the discovery or knowledge of its registration, whichever is earlier. Q: How may filiation be proven? A: Legitimate or illegitimate children may prove their filiation in the same way and on the same evidence. They may prove their status using only the following means: by their record of birth appearing in the civil registry, by an admission of his filiation (legitimate or illegitimate) by his parent or parents in a public document or a private handwritten instrument and signed by

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said parent or parents, by proof of open and continuous possession of status as legitimate or illegitimate child, and any other means stated by the rules of court or special laws. Q: Who may adopt? A: Filipino Citizens may adopt provided he/she is of legal age; is in possession of full civil capacity and legal rights; of good moral character; has not been convicted of any crime involving moral turpitude; is emotionally and psychologically capable of caring for children; is at least sixteen (16) years older than adoptee, except when adopter is biological parent of the adoptee or is the spouse of the adoptees parent; and is in a position to support and care for his/her children in keeping with the means of the family. Aliens may also adopt Filipino children provided that he/she possesses the same qualifications for Filipinos but is at least twenty seven (27) years old, and that, his/her country has diplomatic relations with the Philippines; he/she has been living continuously for 3 years in the Philippines prior to the filing of application and maintains such residence until the decree is entered; 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; his/her government allows the adoptee to enter his/her country as his/her adoptee; and he/she has submitted all the necessary clearances and such certifications as may be required. Q: What are the effects of adoption? A: In the event of adoption, all legal ties between biological parents and adoptee are severed, and the same shall be vested on the adopter, except if the biological parent is the spouse of the adopter. The adoptee shall be considered legitimate son/daughter of the adopter for all intents and purposes and shall be entitled to all the rights and obligations provided by law to legitimate children born to them without discrimination of any kind. Further, the adopter and adoptee shall have reciprocal rights of succession without distinction from legitimate filiation, in legal and intestate succession. If adoptee and his/her biological parents had left a will, the law on testamentary succession shall govern. Q: May the adopter/s rescind an adoption? A: NO. Adoption, being in the best interest of the child, shall not be subject to rescission by the adopter/s (Sec 19, RA 8552).

Q: Who may rescind and adoption and for what grounds? A: The adopted may request for rescission, with the assistance of DSWD, if a minor, or over 18 but incapacitated, on any of the following grounds: (1) repeated physical and verbal maltreatment despite having undergone counseling, (2) attempt on life of adoptee, (3) sexual assault or violence, and (4) abandonment or failure to comply with parental obligations (Sec 19, RA 8552). Q: Where is application for inter-country legal adoption filed? A: Application shall be filed with the Philippine Regional Trial Court having jurisdiction over the child, or with the Inter-Country Adoption Board, through an intermediate agency, whether governmental or an authorized and accredited agency, in the country of the prospective adoptive parents. Q: What consists of support? A: Support consists of everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family. The right and duty to support, especially the right to education, subsists even beyond the age of majority. Q: How is support given? A: Support is given by payment of the amount or by accepting the recipient in the home of the provider, unless there is a legal or moral obstacle from doing so. Q: What is the tender years presumption? A: Under the tender years presumption, no child under seven (7) years of age shall be separated from the mother, unless the court finds compelling reasons to order otherwise. Examples of compelling reasons include the following instances: when the mother is insane, or with a communicable disease that might endanger the life or health of the child, or is maltreating the child; or has another child by another man who lives with her (Art 363, CC)

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SUCCESSION
Q: When do heirs acquire a definite right to the inheritance? A: Heirs acquire a definite right to the inheritance , whether such right be pure, conditional or with a term at the moment of death of the decedent (Art 777) Q: What is the definition of an heir? What are the kinds of heirs? A: An heir means one who succeeds to all the transmissible property, rights and obligations of the deceased person or to a certain indeterminable or aliquot part thereof, either by the provision of a will or by operation of law. Heirs may be classified into: 1. Compulsory Heirs those who succeed by force of law to some portion of the inheritance, in an amount predetermined by law known as the legitime, of which they cannot be deprived by the testator, except by a valid disinheritance. They succeed regardless of a will. 2. Voluntary or Testamentary Heirs those who are instituted by the testator in his will, to succeed to the portion of the inheritance of which the testator can freely dispose. They succeed by reason of a will. 3. Legal or Intestate Heirs those who succeed to the estate of the decedent who dies without a valid will, or to the portion of such estate not disposed of by will. They succeed in the absence of a valid will, although this is not the only ground for intestacy. Q: What are requirements for testamentary capacity? A: In order to conclude that the decedent had testamentary capacity it must be shown that the testator is of sound mind at the time of the execution of the will (Art 798, CC), that he is not under 18 years of age (Art. 797, CC), and that he is not expressly prohibited by law to make a will (Art 796, CC). Q: How can we say that the testator is of sound mind? A: The testator is of sound mind if he knew the nature of the estate to be disposed of; he knew the proper objects of his bounty; and if he knew the character of the testamentary act (Art. 799, CC) It is must be noted that 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. (Art. 799, CC). Moreover, soundness of mind is presumed (Art. 800, CC.) Q: What is the effect supervening capacity or supervening incapacity on a will? A: Supervening capacity will not validate a will. Supervening incapacity will not invalidate a will. Q: What are the common requirements for both notarial and holographic wills? A: As provided under Art 804, both kinds of wills must be in writing and must be executed in a language known to the testator. Q: What are the specific requirements for notarial wills? A: The notarial will must be: 1. In writing (Art. 804, CC) 2. In the language known to the testator (Art. 804, CC) 3. Subscribed to, at the end (Art. 805, CC) By the testator himself; or By the testators name written by a representative in his presence and under his express direction. 4. Attested and subscribed by 3 or more credible witnesses in the presence of the testator and of one another (Art. 805, CC). 5. Signed by the testator or his representative under the instruction of the testator and the witnesses on each and every page except the last page (Marginal signatures) 6. Numbered correlatively (Art. 805, CC), i.e., Page One of Five pages (Arabic numerals) 7. Acknowledged before a notary public by the testator and the witnesses (Art. 806, CC) Q: What must the attestation clause contain? A: The attestation clause shall state the ff: 1. Number of pages; 2. The fact that the testator or his representative under his express direction signed the will and every page in the presence of instrumental witnesses 3. That the witnesses signed the will and all its pages in the presence of the testator and of one another.

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Q: How is presence, in relation to the requirement of attestation, determined? A: As provided in the case of Jaboneta vs. Gustilo, (1906), the test of presence is not whether they actually saw each other sign, but whether they might have seen each other sign had they chosen to do so considering their mental and physical condition and position with relation to each other at the moment of inscription of each signature. Q: Must there always be marginal signatures on all pages of notarial wills? A: The general rule is that each and every page of the will must be signed by the testator or his representative and his witnesses. However, in the case of Abangan v Abangan (1919), the Court ruled that when the will consists of only two pages, the first of which contains all dispositions and is signed at the bottom by the testator and the witnesses, and the second page contains only the attestation clause duly signed at the bottom by the witnesses, it is valid. Q: What are the requisites for a holographic will? A: The requisites for a holographic will are: 1. In a language known to the testator (Art. 804, CC) 2. Entirely written, dated and signed in the hand of the testator himself (Art. 810, CC) Q: Who are qualified to be witnesses to notarial wills? A: Under Art. 820, CC, those who may be witnesses must be 1. Of sound mind 2. Aged 18 years or over 3. Not blind, deaf or dumb 4. Able to read and write Q: Who are disqualified as witnesses? A: Under Art. 821, CC, those who may not be witnesses are 1. Person not domiciled in the Philippines 2. Those who have been convicted of falsification, perjury, or false testimony. Q: What is the exception to the general rule that devises or legacies in favor of a spouse, parent or child who also attests to the will as a witness shall be void? A: Devises or legacies in favor of a spouse, parent or child shall not be void if there are three witnesses other than the spouse, parent or child, in which case, the interested witness shall be considered as a mere surplusage.

Q: What is a codicil? A: 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 (Art 825). Q: What is the effect of the insertion of a codicil written by another person in a holographic will? When made Effect After the execution, Insertion considered without consent of not written. Validity testator cannot be defeated by the malice or caprice of a third person After execution, with Will is valid, insertion consent is void. After execution, Insertion becomes part validated by testators of the will. Entire will signature becomes void because it is not wholly written by the testator. Contemporaneous to Will is void because it the execution of the is not written entirely will by the testator Q: What does the principle of equality of heirs mean? A: Heirs instituted without designation of shares shall inherit in equal parts (Art 846) Q: What does the principle of individuality of institution mean? A: 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 (Art 847). Q: What does the principle of simultaneity of institution mean? A: When the testator calls to the succession a person and his children they are all deemed to have been instituted simultaneously and not successively (Art 849). Q: May an institution made on the basis of false cause take effect? A: The general rule is that the false cause is deemed not written and the institution shall take effect. However, if the testator would not have made the institution had he known the false cause, the institution shall not take effect.

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Q: What is the doctrine of dependent relative revocation? A: The rule that where the act of destruction is connected with the making of another will so as to fairly raise the inference that the testator meant the revocation of the old to depend upon the efficacy of the new disposition intended to be substituted, the revocation will be conditional and dependent upon the efficacy of the new disposition; and if for any reason, the new will intended to be made as a substitute is inoperative, the revocation fails and the original will remain in full force. (Molo v Molo 1951) Q: What is probate? A: It is a special proceeding required to establish the validity of a will and in order to pass real or personal property. Q: Can the probate court inquire into the intrinsic validity of testamentary provisions? A: The general rule is that in probate proceedings, the probate court cannot inquire into the intrinsic validity of testamentary provisions. Only the extrinsic validity of such wills may be examined. This rule however admits of certain exceptions: 1. Nuguid v. Nuguid (1966): The Supreme Court, passing on the intrinsic validity of the will in the probate proceedings, ruled that there being no devise or legacy, the institution of heir is totally annulled. 2. Acain vs Diongson (1987): When the will is intrinsically void, on its face such that to rule on its formal validity would be a futile exercise 3. Valera vs. Inserto, (1987): Claimants are all heirs, and they consent, either, expressly or impliedly, to the submission of the question of intrinsic validity to the court. 4. Pastor vs. CA, (1983): Probate court may pass upon the title thereto, but such determination is provisional and not conclusive, and is subject to the final decision in a separate action to resolve title. Q: What are the grounds for disallowance of a will? A: Art 839 CC in relation to Rule 76, Section 9 provides the exclusive list of grounds for disallowance of a will (FIFUSM): 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 some other person; 5. If the Signature of the testator was procured by fraud; or 6. If the testator acted by Mistake or did not intend that the instrument he signed should be his will at the time affixing his signature thereto. Q: What is the difference between revocation and disallowance? A: Revocation Disallowance Voluntary Act of the Given by Judicial Testator Decree With or Without Cause Must always be for a legal cause May be partial or total Always total, except when the ground of fraud of influence for example affects only certain portions of the will Q: What are the classes of substitution? A: 1. Simple or Common or Vulgar The testator may designate one or more persons to substitute the heir/s instituted in case the heirs should: 1. die before him (predecease), 2. should not wish to accept the inheritance (repudiation), or 3. should be incapacitated to accept the inheritance (incapacitated). (Art. 859, CC) 2. Brief or Compendious (Art. 860, CC) 1. Brief Two or more persons were designated by the testator to substitute for only one heir 2. Compendious One person is designated to take the place of two or more heirs 3. Reciprocal If the heirs instituted in unequal shares should be reciprocally substituted, the substitute shall acquire the share of the heir who dies, renounces, or is incapacitated, unless it clearly appears that the intention of the testator was otherwise. If there is more than one substitute, they shall have the same share in the substitution as the institution.

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4. Fideicommissary If the testator institutes an heir with an obligation to preserve and to deliver to another the property so inherited. The heir instituted to such condition is called the First Heir or the Fiduciary Heir; the one to receive the property is the fideicommissary of the second heir. (Art. 863, CC) Q: What are the requisites for fideicommisary substitution? A: 1. A Fiduciary or First Heir instituted is entrusted with the obligation to preserve and to transmit to a Fideicommissary Substitute or Second Heir the whole or part of the inheritance. 2. The substitution must not go beyond one degree from the heir originally instituted. 3. The Fiduciary Heir and the Fideicommissary are living at the time of the death of the testator. 4. The fideicommissary substitution must be expressly made. 5. The fideicommissary substitution is imposed on the free portion of the estate and never on the legitime Q: Is it necessary that there be an obligation imposed on the first heir to take care of the property for a fideicommisary substitution to exist? A: Yes. As held in the case of PCIB vs. Escolin (1974), in the absence of an obligation on the part of the first heir to preserve the property for the second heir, there is no fideicommissary substitution. Q: What is the rule of preference between lines? A: Those in the direct descending line shall exclude those in the direct ascending and collateral lines. Those in the direct ascending line shall, in turn, exclude those in the collateral line (Arts 978 and 985) Q: What is the rule of proximity? A: The relative nearest in degree excludes the farther one (Art 926) Q: What is the rule on the right of representation? A: 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. (Art 972) Q: What is the rule of division between lines in the direct ascending line? A: The father and the mother shall inherit equally if both living. One succeeds to the entire estate of the child if the other is dead. (Art. 986, CC) In default of the mother and the father, the ascendants nearest in degree will inherit. (Art. 987) If there are more than one relative of the same degree but of different lines, one half will go to the paternal ascendants and the other half to the maternal ascendants. (Art. 987) Q: What is the rule of equal division in the direct ascending line? A: The relatives who are in the same degree shall inherit in equal shares. (Art 987) Q: What remedy may be availed of if there is preterition? A: Annulment of institution but devises and legacies shall be valid insofar as they are not inofficious (Art. 854, CC) Q: What remedy may be availed of if there is an impairment or diminution of legitime due to testamentary dispositions? A: Reduction of the disposition insofar as they may be inofficious or excessive (Art. 907, CC) Q: What remedy may be availed of if there is impairment or diminution of legitime due to inofficious donations? A: Collation reduction of donations (Arts. 771 and 911, CC) Q: What is preterition? A: There is preterition when the following elements obtain: 1. There must be a total omission of one, some or all of the heir/s in the will. 2. The omission must be that of a compulsory heir. 3. The compulsory heir omitted must be of the direct line. 4. The omitted compulsory heir must be living at the time of the testators death or must at least have been conceived before the testators death. Q: What are the effects of preterition? A: The following are the effects of preterition: 1. The institution of the heir is annulled.

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2. Devises and legacies shall remain valid as long as they are not inofficious. 3. If the omitted compulsory heir should die before the testator, the institution shall be effective, without prejudice to the right of representation. Neri vs. Akutin (1941): When there are no devises and legacies, preterition will result in the annulment of the will and give rise to intestate succession. Q: What are the requisites for Reserva Troncal? A: The requisites for reserva troncal are: 1. That the property was acquired by a descendant (Prepositus) from an ascendant or from a brother or sister (Source) by gratuitous title, 2. That the Prepositus died without an issue, 3. That the property is inherited by another ascendant (Reservista) by operation of law, and rd 4. That there are relatives within the 3 degree (Reservatarios) belonging to the line from which said property came. Q: How may the reserva be extinguished? A: The reserva may be extinguished by: (DaDaLaRP) 1. Death of the reservista 2. Death of all the relatives within the third degree belonging to the line from which the property came 3. Loss of the reservable property 4. Renunciation by the reservatarios 5. Prescription, when the reservista holds the property adversely against the reservatarios, as free from reservation Q: What are the requisites for a valid disinheritance? A: 1. Heir disinherited must be designated by name or in such a manner as to leave no room for doubt as to who is intended to be disinherited. 2. It must be for a cause designated by law. 3. It must be made in a valid will. 4. It must be made expressly, stating the cause in the will itself. 5. The cause must be certain and true, and must be proved by the interested heir if the person should deny it. 6. It must be unconditional. 7. It must be total.

Q: What are the causes for legal or intestate succession? A:

1. 2. 3. If a person dies without a will (Art 960[1]) If a person dies with a void will (Art 960[1]) If a person dies with a will which has subsequently lost its validity (Art 960[1]) 4. When the will does not institute an heir (Art 960[2]) 5. When the will does not dispose of all the property belonging to the testator. legal succession shall take place only with respect to the property which the testator has not disposed (Art 960[2]) 6. If the suspensive condition attached to the institution of the heir does not happen or is not fulfilled (Art 960[3]) 7. If the heir dies before the testator (Art 960[3]) 8. If the heir repudiates the inheritance, there being no substitution, and no right of accretion takes place (Art 960[3]) 9. When the heir instituted is incapable of succeeding, except in cases provided in the Civil Code (ex. substitution or right of representation) (Art 960[4]) 10. Preterition Intestacy may be total or partial depending on whether or not there are legacies or devises (Balane, p.426) 11. Upon the expiration of a resolutory term attached to the institution of heir (Balane, p.426) 12. Upon fulfillment of a resolutory condition attached to the institution of heir, rendering the will ineffective (Balane, p.426)

Q: What is the right of representation? A: It is a right created by fiction of law by virtue of which the representative is raised to the place and degree of the person represented and acquires the rights which the latter would have if he were living or if he would have inherited. Q: What is the iron-curtain rule? A: An illegitimate child has no right to inherit ab intestato 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. Q: May an adopted child represent his parent in case the latter predeceases his parents? A: If the adopting parent should die before the adopted child, the later cannot represent the former in the inheritance of the parents or ascendants of the adopter. The adopted child is not related to the deceased in that case, because filiation created by fiction of law is exclusively between the adopter and the adopted. (De la Puerta v CA (1990); Sayson v CA (1992))

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Outline of Intestate Shares:

1. Legitimate children only
Divide entire estate equally among all legitimate children (Art. 979, CC) Legitimate children include an adopted child.

12. Surviving spouse only - Entire estate goes to the surviving spouse. (Art.
994/995, CC)

13. Surviving spouse and illegitimate parents

Illegitimate parents get and the spouse gets the other (by analogy with Art. 997, CC)

2. Legitimate children and Illegitimate children

Divide entire estate such that each illegitimate child gets of what a legitimate child gets (Art. 983, CC and Art. 176, FC)

14. Surviving spouse and legitimate brothers and sisters, nephews and nieces
Surviving spouse gets of the estate, while the rest gets the other with the nephews and nieces inheriting by representation if proper. (Art. 1001, CC)

3. Legitimate children and surviving spouse

Divide entire estate equally between the legitimate children and the surviving spouse, the latter deemed as one child. The same rule holds where there is only one child. Children as used in Art. 996 is interpreted to include a situation where there is only one child. (Santillon v Miranda (1965))

15. Surviving spouse and illegitimate brothers and sisters, nephews and nieces
Surviving spouse gets of the estate while the rest gets the other with the nephews and nieces inheriting by representation, if proper; Note that all the other relatives should be illegitimate because of the iron-curtain rule. (Art. 994,CC) Entire estate goes to the illegitimate parents. (Art 993, CC)

4. Legitimate children. Surviving spouse, and Illegitimate children

Divide the entire estate such that the surviving spouse is deemed one legitimate child and each illegitimate child getting of what the legitimate child gets (Art. 996, CC and Art. 176, FC)

16. Illegitimate parents only

-

5. Legitimate parents only

Divide the entire estate equally. (Art. 985, CC)

17. Illegitimate parents and children of any kind (whether legitimate or illegitimate child)
Illegitimate parents are excluded and do not inherit; For the rule on the respective shares of the children, see numbers 1, 2 or 10, whichever is applicable. Divide the entire estate such that full-blood brothers/sisters gets a share double the amount of a half-blood brother or sister. (Art. 1004 and 1006, CC)

6. Legitimate parents)
-

ascendants

only

(excluding
-

Divide the entire estate equally but with the observance of the rule of division by line (Art. 987, CC)

18. Legitimate brothers and sisters only

7. Legitimate parents and illegitimate children

Legitimate parents get of the estate, illegitimate children get the other (Art. 991,CC)

19. Legitimate brothers and sisters, nephews and nieces

Divide the entire estate observing the 2 is to 1 ratio for full and half blood relationships with respect to the brothers and sisters, with the nephews and nieces inheriting by representation, if proper. (Art. 1005 & 1008, CC) Divide the entire estate per capita, observing the 2 is to 1 ratio in case of full blood and half blood. (Arts. 975 and 1008, CC) Divide entire estate per capita. th Collateral relatives must be with the 5 degree of consanguinity. Note: the nearer relative excludes the more remote relatives. If there are no other intestate heirs, the State inherits the entire estate through escheat proceedings. (Art. 1011, CC)

8. Legitimate parents and surviving spouse

Legitimate parents get of the estate; The surviving spouse gets the other (Art. 997,CC)

9. Legitimate parents, surviving spouse and illegitimate children

Legitimate parents get of the estate; surviving spouse and the illegitimate child each get each, the latter to share among themselves if more than one. (Art. 1000, CC)

20. Nephews and nieces only

-

21. Other collaterals (Arts. 1009 and 1010)

-

10. Illegitimate children only - Divide the entire estate equally. (Art. 988, CC) 11. Illegitimate children and surviving spouse - Illegitimate children get of the estate; the surviving spouse gets the other . (Art. 998, CC)

22. State
-

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Q: What is accretion? A: It is a right by virtue of which, when two or more persons are called to the same inheritance, devise or legacy, the part assigned to one who renounces or cannot receive his share or who died before the testator is added or incorporated to that of his co-heirs, co-devisees, or co-legatees (Art 1015). Q: Differentiate acceptance and repudiation of inheritance: A: 1. Acceptance involves the confirmation of transmission of successional rights, while repudiation renders such transmission ineffective. 2. Repudiation is equivalent to an act of disposition and alienation. 3. The publicity required for repudiation is necessary for the protection of other heirs and also of creditors. Q: What are the forms of tacit acceptance? A: Under Article 1050, the following are forms of tacit acceptance. 1. when the heir sells, donates or assigns his right 2. when the heir demands partition of the inheritance 3. when the heir alienates some objects of the inheritance, etc. Q: How is implied acceptance made? A: Within thirty days after the court has issued an order for the distribution of the estate in accordance with the Rules of Court, the heirs, devisees and legatees shall signify to the court having jurisdiction whether they accept or repudiate the inheritance; if they do not do so within that time, they are deemed to have accepted the inheritance. (Art 1057, CC) Q: How is inheritance repudiated? A: Repudiation may be made: 1. in a public instrument acknowledged before a notary public; or 2. in an authentic document equivalent of an indubitable writing or a writing whose authenticity is admitted or proved; or 3. by petition presented to the court having jurisdiction over the testamentary or intestate proceeding Q: What is the effect of repudiation by heirs who are heirs in two capacities? A: If a person is called to the same inheritance as an heir by will and by law and he repudiates the inheritance in his capacity as a testamentary

heir, he will be considered to have also repudiated the inheritance as a legal heir. If he repudiates it as a legal heir, without his being a testamentary heir, he may still accept it in the latter capacity (Art 1055) Q: What is collation? A: It is the act by virtue of which, the compulsory heir who concurs with other compulsory heirs in the inheritance bring back to the common hereditary mass the property which they may have received from the testator so that a division may be effected according to law and the will of the testator. Except, if the donor have so expressly provided or if the donee should repudiate the inheritance UNLESS the donation should be reduced as inofficious. Q: What properties are not subject to collation? A: 1. Expenses for support, education (only elementary and secondary), medical attendance, even in extraordinary illness, apprenticeship, ordinary equipment, or customary gifts. (Art. 1067, CC) 2. Expenses incurred by parents in giving their children professional, vocational or other career unless the parents so provide, or unless they impair the legitime. (Art. 1067, CC) 3. Wedding gifts by parents and ascendants, consisting jewelry, clothing and outfit, except when they exceed 1/10 of the sum disposable by will. (Art. 1070, CC) 4. Donations to the spouse of the child; but if they have been given by the parent to the spouses jointly, the child shall be obliged to bring to collation one-half of the thing donated. (Art. 1066, CC) 5. Parents are not obliged to bring to collation in the inheritance of their ascendants any property which may have been donated by the latter to their children. (Art. 1065, CC) Q: What are the instances when partition could not be demanded? A: 1. When expressly prohibited by the testator for a period not exceeding 20 years (Art 1083, CC) 2. When the co-heirs agreed that the estate shall not be divided for a period not exceeding 10 years, renewable for another 10 years (art. 494, CC)

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3. When prohibited by law 4. When to partition the estate would render it unserviceable for the use for which it is intended Q: What is the effect of a partition legally made? A: A partition legally made confers upon each heir the exclusive ownership of the property adjudicated to him.

Important periods in succession:

1 month or less before making a will 20 years Testator, if publicly known to be insane, burden of proof is on the one claiming validity of the will Maximum period testator can prohibit alienation of dispositions To claim property escheated to the State To report knowledge of violent death of decedent lest he be considered unworthy Action for declaration of incapacity & for recovery of the inheritance, devise or legacy Must signify acceptance/repudiation otherwise, deemed accepted Right to repurchase hereditary rights sold to a stranger by a co-heir To enforce warranty of title/quality of property adjudicated to co-heir from the time right of action accrues To enforce warranty of solvency of debtor of the estate at the time partition is made Action for rescission of partition on account of lesion

5 years from delivery to the State 1 month

5 years from the time disqualified person took possession 30 days from issuance of order of distribution 1 month from written notice of sale 10 years

5 years from partition

4 years from partition

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OBLIGATIONS AND CONTRACTS

Q: What are the sources of obligations?
A: ART. 1157. Law, Contract, Quasi-Contract, Delict (Crime), Quasi-Delict Q: What are the different types of breach of obligation? A: ART. 1170. Fraud (Dolo), Negligence (Culpa), Delay or Default (Mora), Contravention of the Tenor Q: When does a fortuitous event exempt the debtor from liability? A: (1) event must be independent of debtors will; (2) event is unforseeable or inevitable; (3) event renders normal performance impossible; (4) debtor did not participate in aggravating injury to the creditor; (5) event must be the sole cause of the loss Q: What are the primary remedies of the creditor in case of breach of obligation by the debtor? A: PRESS. Specific performance; Substituted performance; Equivalent performance; Rescission; Pursue property of debtor Q: What is the doctrine of constructive fulfillment of condition? A: ART. 1186. The suspensive condition shall be deemed fulfilled when the debtor voluntarily and willfully prevented its fulfillment. Q: What is a potestative condition and which case does it render an obligation void? A: It is a condition which depends on the will of one of the contracting parties for its fulfillment. ART. 1182. A Suspensive Potestative Condition dependent upon the sole will of the debtor renders the obligation void. Q: When does the debtor loses the right to make use of period? A: I GIV A LA. ART. 1198 (1) debtor becomes Insolvent after obligation contracted; (2) debtor fails to furnish Guaranties or securities promised; (3) debtor Impairs guaranties or securities; (4) debtor Violates undertaking which constitutes consideration for the period; (5) debtor attempts to Abscond. Additional (6) By Law or stipulation; (7) Acceleration clause Q: What are the modes of extinguishment of obligations in Article 1231? A: Payment or Performance; Loss; Condonation or Remission; Confusion or Merger;

Compensation; Novation. However, this list is not exclusive. There are other modes of extinguished provided in the Civil Code and other laws. Q: What are the special forms of payment? A: Application of Payments (ARTS. 1252-1254); Payment by Cession (ART. 1255); Dation in payment or Dacion en pago (ART. 1245); Tender and Consignation (ARTS. 1256-1261) Q: When does consignation alone, without tender by the debtor and refusal by the creditor, produces the effect of payment? A: ART. 1256, par. 2. (1) creditor is absent or unknown, or does not appear at the place of payment; (2) creditor incapacitated to receive thing due at the time of payment; (3) creditor refuses to give receipt without just cause; (4) two or more persons claim the same right to collect; (5) title of the obligation has been lost Q: What is the doctrine of unforeseen events which produces the effect of loss of the thing due? A: ART. 1267. The debtor may be released from the obligation (total or partial) if the service has become so difficult as to be manifestly beyond the contemplation of the parties. Q: When is compensation prohibited? A: an obligation arising from depositum or commodatum (ART. 1287, par. 1); a creditor has a claim for future support by gratuitous title (ART. 1287, par. 2); an obligation arising from delict (ART. 1288); obligations due to the government; a partner causing damage to a partnership Q: What are the kinds of passive substitution? A: The two kinds of passive substitution (substitution of the debtor) are: expromission (where the debtor does not initiate the change) and delegacion (where debtor offers the change). Q: What are the classes of innominate contracts? A: Do ut des (I give so that you may give); Do ut facias (I give so that you may do); Facio ut facias (I do so that you may do); Facio ut des (I do so that you may give) Q: What is a stipulation pour autrui? A: It is a stipulation in a contract in favor of a third person. (ART. 1311, par. 2) The third person can demand the fulfillment of a contractual stipulation in his favor if he accepted

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the same to the debtor before its revocation. However, contracting parties must have clearly and deliberately stipulated the same and mere incidental benefit or interest of the third person is not sufficient. Q: What are the essential requisites of a contract? A: ART. 1318. Consent, Object, Cause Q: What is an option contract? A: ART. 1324. A preparatory contract whereby the offeror, for a consideration, grants the offeree a certain period to accept the principal contract. Q: Who are incapable of giving consent to a contract? A: ART. 1327. Minors, Insane or demented persons and deaf-mutes who do not know how to write Q: What are the vices of consent? A: ART. 1330. MIVUF. Mistake, Intimidation, Violence, Undue Influence, Fraud Q: What are the different causa of contracts? A: Onerous Contracts respective prestation of each contracting party; Remuneratory Contracts service or benefit remunerated; Gratuitous Contracts mere liberality Q: What are the different defective contracts? A: Rescissible Contracts, Voidable Contracts, Unenforceable Contracts, Void Contracts Rescissible Contracts (Art 1381):
(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; (5) All other contracts specially declared by law to be subject to rescission

(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 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 of 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.

Void Contracts (Art 1409):

(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.

Voidable Contracts (Art 1390):

(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

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PROPERTY
o

OWNERSHIP
What actions can be filed to recover property?
Movable Property o WRIT OF REPLEVIN: for manual delivery of property Prescription of Right: 4 years (GF) or 8 years (BF) from time the possession is lost (Art 1140) Immovable Property o ACCION REIVINDICATORIA: Recovery of ownership of real property Including but not limited to possession Prescription of Action: 30 years after cause of action accrues (Art 1141) o ACCION PUBLICIANA: Recovery of a better right to possess (de jure) Judgment as to who has the better right of possession Also, actions for ejectment not filed within 1 year must be filed as accion publiciana Prescription: 10 years after cause of action accrues (Art 1134)

ACCION INTERDICTAL: Recovery of actual/physical possession (de facto) FORCIBLE ENTRY: Lawful possessor deprived through FISTS: o Force o Intimidation o Strategy o Threats o Stealth o Prescription: 1 year from dispossession (force, intimidation, threats) or from knowledge of dispossession (strategy, stealth) UNLAWFUL DETAINER: Possessor refused to vacate upon demand by owner o Legal possession (by permission/tolerance) becomes unlawful upon failure to vacate o Prescription of action: 1 year from last notice to vacate In case of leases of residential units, the grounds for judicial ejectment are limited to those enumerated in, RA 9653: Rent Control Law of 2009 (See Section on Special Laws)

ACCESSION
SUMMARY OF BUILDER, PLANTER AND SOWER PROVISIONS (ART. 447-455)
Case 1: Landowner is BPS using material of another Landowner and BPS Owner of Material Good faith Good faith Right to acquire the improvements after paying Limited right of removal if there would be no the value of materials. injury to work constructed, or without plantings or constructions being destroyed. (Article 447) Right to receive payment for value of materials Bad faith Good faith Acquire BPS after paying its value and paying Right to receive payment for value of materials indemnity for damages (Article 447) but Absolute right of removal of the work subject to OMs right to remove constructed in any event Right to be indemnified for damages Good faith Bad faith Right to acquire the improvements without Lose materials without right to indemnity paying indemnity Right to acquire indemnity for damages if there are hidden defects known to OM Bad faith Bad faith Same as though acted in good faith under Same as though acted in good faith under Article 453 Article 453

Case 2: BPS builds, plants, or sows on anothers ;and using his own materials

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Landowner Good faith Landowner has option to: a. Acquire the improvement after paying indemnity which may be the original cost of improvement OR increase in value of the whole brought about by the improvement b. Sell the land to the BP or collect rent from sower UNLESS value of land is more than the thing built, planted or sown or BP shall pay rent fixed by parties or by the court in case of disagreement. NOTE: Landowner can be forced to choose under pain of direct contempt or court can choose for him. Good faith Landowner has right to collect damages in any case and option to: a. Acquire improvements without paying indemnity if the improvements are still standing on the land b. Sell the land to BP or collect rent from the sower unless value of the improvements in which case there will be a forced lease c. Order demolition of improvements or restoration o0f land to its former condition at the expense of the BPS Landowner must pay for necessary expenses for preservation Bad faith Landowner must indemnify BPS for the improvements and pay damages as if he himself did the BPS Landowner has no option to sell the land and cannot compel BPS to buy the land unless BPS agrees to Bad faith Same as though acted in bad faith under Article 453

BPS and Owner of Material Good faith BPS has right to retain (right of retention) the land until the payment of indemnity NOTE: During this period BPS is not required to pay rent.

Bad faith Pay damages to landowner BPS lose materials without right to indemnity No right to refuse to buy the land Recover necessary expenses for preservation of land

Good faith BPS has right to : a. Be indemnified for damages b. Remove all improvements in any event

Bad faith Same as though acted in bad faith under Article 453

Case 3: BPS builds, plants or sows on anothers land with materials owned by third persons

CIVIL LAW Landowner Good faith Right to acquire improvements and pay indemnity to BPS; subsdiarily liable to OM Has option to: a. Sell land to BP except if the value of the land is considerably more b. Rent to sower Good faith Right to acquire improvements and pay indemnity to BPS Has option to: a. Sell land to BP except if the value of the land is considerably more b. Rent to sower Without subsidiarily liability for cost of materials Good faith Landowner has right to collect damages in any case and option to: a. Acquire improvements w/o paying for indemnity; or b. Demolition or restoration; or c. Sell to BP, or to rent to sower Pay necessary expenses to BPS Bad faith Same as when all acted in good faith under Article 453 Bad faith Acquire improvement after paying indemnity and damages to BPS unless latter decides to remove Subsidiarily liable to OM for value of materials Bad faith Acquire improvements after indemnity; subsidiarily liable to OM for value of materials Has option to: a. Sell the land to BP except if the value of the land is considerably more b. Rent to sower Good faith Acquire imrovement after paying indemnity; subsidiarily liable to OM Landowner has option to: a. Sell land to BP except if value of land is considerably more b. Rent to sower Bad faith Acquire improvements and pay indemnity and damages to BPS unless latter decides to remove materials

19
BPS Good faith Right of retention until necessary and useful expenses are paid Pay value of materials to OM

PRE-WEEK Owner of Material Good faith Collect value of material primarily from BPS and subsidiarily liable for landowner if BPS is insolvent Limited right of removal

Good faith Right of retention until necessary and useful expenses are paid. Keep BPS without indemnity to OM and collect damages from him

Bad faith Lose the material without right to indemnity Must pay for damages to BPS

Bad faith Recover necessary expenses for preservation of land from landowner unless landowner sells land

Bad faith Recover value from BPS (as if both are in good faith) If BPS acquires improvement, remove materials if feasible w/o injury No action against landowner but liable to landowner for damages Bad faith Same as when all acted in good faith under Article 453 Good faith Remove materials if possible w/o injury Collect value of materials from BPS; subsidiarily from landowner Good faith Collect value of materials primarily from BPS and subsidiarily from landowner Collect damages from BPS If BPS acquires improvements, remove materials in any event Good faith Collect value of materials primarily from BPS and subsidiarily from landowner Collect damages from BPS If BPS acquires improvements, absolute right of removal in any event Bad faith No right to indemnity Loses right to mnaterial

Bad faith Same as when all acted in good faith under Article 453 Good faith May remove improvements Be indemnified for damages in any event

Bad faith Right of retention until necessary expenses are paid Pay value of materials to OM and pay him damages

Bad faith Right of retention until necessary expenses are paid Pay value of materials to OM Pay damages to OM

Good faith Receive indemnity for damages Absolute right of removal of improvements in any event

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CO-OWNERSHIP
What is co-ownership?
It is a right of common dominion which two or more persons have in a spiritual part of a thing, not materially or physically divided (Sanchez Roman). There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons (Art. 484).

LEASE
What are the rights and obligations of a lessor?
Art. 1654 provides for the obligations of a lessor. (a) Deliver the thing which is the object of the contract in a condition fit for the use intended. (b) Make on the thing all the necessary repairs in order to keep it suitable for the use to which it has been devoted, unless there is a stipulation to the contrary. (c) Maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract. The lessor has the right to ask for rescission in case the lessee does not fulfill his obligations as set forth in Art. 1657. (Art. 1659)

What are the rights of each co-owner over the thing or property owned in common?
1. To use the thing according to the purpose intended (Art. 486) 2. To share in the benefits in proportion to his interest provided the charges are borne by each in the same proportion (Art. 485) 3. To bring an action in ejectment (Art. 487) 4. To compel the other co-owners to contribute to the expense for preservation of the property owned in common and to the payment of taxes (Art. 488) 5. To oppose any act of alteration (Art. 491) 6. To protest against acts of majority which are seriously prejudicial to the minority (Art. 493, par. 3) 7. To exercise legal redemption (Art. 1620, 1623) 8. To ask for partition (Art. 494)

What are the rights and obligations of a lessee?

Art. 1657 provides for the obligations of a lessee. (a) Pay the price of the lease according to the terms stipulated. (b) Use the thing leased as a diligent father of a family, devoting it to the use stipulated, and in the absence of stipulation according to the nature of the thing leased and custom of the place. (c) Pay for the expenses for the deed of lease. The lessee has the right to suspend payment of rentals in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased. (Art. 1658) the lessee also has the right to ask for rescission of the lease contract in case the lessor fails to fulfill his obligations set forth in Art. 1654. (Art. 1659)

POSSESSION
Define possession.
Possession is the holding of a thing or the enjoyment of a right (Art. 523)

What rules are observed to solve conflicts of possession?

In case of conflicting possession, preference is given to: 1. Present possessor or actual possessor. 2. If there are 2 or more possessors, the one longer in possession. 3. If the dates of possession are the same, the one who presents a title. 4. If all conditions are equal, the thing shall be placed in judicial deposit pending determination of possession or ownership through proper proceedings. (Art. 538)

NUISANCE
What is a 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. (Art. 694)

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USUFRUCT
What is Usufruct?
Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. (Art. 562)

(7) Lateral and subjacent support (Art. 684-687)

What are the requisites to establish an easement of Right of Way?

1. 2. 3. Dominant estate is surrounded by other immovables owned by other persons. There must absolutely be no access to a public highway. Even if there is access, it is difficult or dangerous to use, or grossly insufficient. Isolation of the immovable is NOT due to the dominant owners own acts e.g. if he constructs building to others obstructing the old way. Payment of indemnity by the dominant owner.

EASEMENT
What is an Easement?
An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner. (Art. 613)
4.

5.

MODES OF ACQUIRING OWNERSHIP

How can ownership be acquired?
Ownership is acquired by: (1) Occupation (2) Intellectual creation (3) Law (4) Donation (5) Testate and Intestate Succession (6) Tradition, in consequence of contracts (7) Prescription (Art. 712)

What are the Easements provided for in the Civil Code (Legal Easements)?
The following are legal easements: (1) Aqueduct (Art. 644 & 678) (2) Planting of trees (Art. 679) (3) Light and View (Art. 670) (4) Right of Way (Art. 649 & 652) (5) Passage of water from upper to lower tenements (Art. 637) (6) Drainage of buildings (Art. 676)

certain

DONATIONS
Limitation: 1) He reserves in full ownership or in usufruct, sufficient means for his support and all relatives who are at the time of the acceptance of the donation are, by law, entitled to be supported What may be donated (Article 750) All present property of the donor or part thereof Effect of non-reservation: reduction of the donation 2) He reserves sufficient property at the time of the donation for the full settlement of his debts Effect of non-reservation: considered to be a donation in fraud of creditors, and donee may be liable for damages 1) Future property; those which the donor cannot dispose of at the time of the donation (Article 751) 2) More than what he may give or receive by will (Article 752) If exceeds: inofficious

What may not be donated

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22 No accretion one donee does not get the share of the other donees who did not accept (Article 753)

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Donations made to several persons jointly

Donor

Who are allowed: All persons who may contract (of legal age) and dispose of their property (Article 735) Donors capacity is determined at the time of the making of donation (Article 737)

Who are allowed to accept donations: Those who are not specifically disqualified by law (Article 738) Those who are allowed, with qualifications: 1) Minors and others who are incapacitated (see Article 38), provided that their acceptance is done through their parents or legal representatives (Article 741) 2) Conceived and unborn children, provided that the donation is accepted by those who would legally represent them if they were already born Who may accept (Article 745): 1) Donee personally 2) Authorized person with a special power for the purpose or with a general sufficient power He shall be subrogated to all the rights and actions that would pertain to the donor in case of eviction (Article 754) No obligation to warrant (Article 754) If the donation so states, the donee may be obliged to pay the debts previously contracted by the donor and in no case shall he be responsible for the debts exceeding the value of the thing donated (Article 758) Right to dispose of some of the things donated, or of dome amount which shall be a charge thereon The property donated may be restored or returned to 1) Donor or his estate; or 2) Another person

Donee

Exception: those given to husband and wife, except when the donor otherwise provides Who are not allowed: 1) Guardians and trustees with respect to the property entrusted to them (Article 736) 2) Made between person who are guilty of adultery and concubinage (Article 739) 3) Made between persons found guilty of the same criminal offense, in consideration thereof (Article 739) Who are not allowed: 1) Made between person who are guilty of adultery and concubinage (Article 739) 2) Made between persons found guilty of the same criminal offense, in consideration thereof (Article 739) 3) Made to a public officer or his wife, descendant and ascendants, by reason of his office (Article 739) 4) Those who cannot succeed by will (Article 740) 5) Those made to incapacitated persons, although simulated under the guise of another contract (Article 743) When to accept: during the lifetime of the donor or donee (Article 746)

Acceptance donation

of

the

What the donee acquires with the thing Obligation of the donor

Exception: when the donation is onerous

Obligation of the donee

Exception: when intention appears

contrary

What may be reserved by the donor

If the donor dies without exercising this right, the portion reserved shall belong to the done Limitation to (2): the third person whoul be living at the time of the donation

Reversion

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REVOCATION/REDUCTION OF DONATIONS Basis Birth, appearance, adoption Time of Action Within 4 years from birth, legitimation and adoption Transmissibility Transmitted to children and descendants upon the death of donor May be transmitted to donors heirs and may be exercised against donees heirs Effect Property returned/ value (if sold)/ redeem mortgage with right to recover Property returned, alienations and mortgages void subject to rights of third persons in good faith Property returned, but alienations and mortgages effected before the notation of the complaint for revocation in the registry of property subsist Reduced to the extent necessary to provide support Donation takes effect on the lifetime of donor. Reduction only upon his death with regard to the excess Returned for the benefit of the creditor who brought the action Liability (Fruits) Fruits returned from the filing of the complaint

Non-compliance with condition

Within 4 years from noncompliance

Fruits received after having failed to fulfill condition returned

Ingratitude

Within 1 year after knowledge of the fact

Generally not transmitted to heirs of donor/ donee

Fruits received from the filing of the complaint returned

Failure to reserve sufficient means for support Inofficiousness for being in excess of what the donor can give by will

At any time, by the donor or relatives entitled o support

Not transmissible

Donee entitled

Within 5 years from the death of the donor

Transmitted donors heirs

to

Donee entitled

Fraud creditors

against

Rescission within 4 years from the perfection of donation/ knowledge of the donation

Transmitted creditors heirs successors-ininterest

to or

Fruits returned/ if impossible, indemnify creditor for damages

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SALES
What is an option contract?
Option Contract is an accepted unilateral promise to buy or sell supported by a CONSIDERATION DISTINCT from the price (Art 1479).

under the SAME TERMS as offered to the grantee. (Paranaque Kings vs. CA, (1997))

Is the status made in violation of a right of first refusal valid?

A sale made in violation of a right of first refusal is valid but rescissible, and may be the subject of an action for specific performance. However, rd before the sale to the 3 person may be rescinded, he must have been actually or st constructively aware of the right of 1 refusal at the time he bought it. The sanction for the enforcement of the right of first refusal against third persons is based on Art. 19 of NCC, as no real right was created on the property. (Rosencor Devt. Corp. Vs. Inquing (2001))

What is the difference between a sale and an option contract?

SALE Bilateral OPTION CONTRACT Unilateral: gives a right to buy or to sell, but imposes no obligation on the part of the option-holder, aside from the consideration for the offer Sale of right to purchase

Sale of property

What is a contract to sell? What is the difference between a sale and the right of first refusal?
SALE RIGHT OF 1 REFUSAL Bilateral Unilateral Price and other Price and other terms are terms of payment yet to be agreed upon are certain the thing to be sold must be determinate
ST

It is a contract where a seller merely promises to transfer the property at some future date or upon a performance of an act or occurrence of a condition. (Baviera)

How is the contract to sell rescinded?

There is no need to rescind a contract to sell. Failure by one party to abide with by the condition in a contract to sell results in the rescission of the contract. (AFP Mustual Ass. V CA (2001))

What is the difference between an option contract and a right of first refusal?
OPTION CONTRACT Separate consideration is necessary Grantee has the right to buy or sell RIGHT OF 1
ST

REFUSAL

No need for a separate consideration No right to buy or sell, only a right to match the st 1 offer to buy should the grantor decide to sell

What is the difference between a contract of sale and a contract to sell?

Contract of Sale Ownership is transferred upon delivery Non-payment is resolutory condition a Contract to Sell Ownership is only transferred upon full payment of price Full payment is a positive suspensive condition, hence non payment would not give rise to the obligation to transfer ownership Executory Contract to sell No perfected sale yet A subsequent buyer is presumed to be a buyer in good faith

How should the right to the first offer (right of first refusal) be exercised?
If the right to the first offer is embodied in the contract, it should be executed according to the terms stipulated. The right should be enforced according to the law on contracts and not on the panoramic and indefinite rule on human relations. (Equatorial Realty Development vs. Mayfair, (1996)) Only after the grantee fails to exercise its right of st 1 priority under the same terms and conditions within the period agreed upon, could the grantor rd validly offer to sell the property to a 3 person

Consummated Conditional Contract of Sale Sale is already perfected A subsequent buyer is presumed to be a buyer in bad faith

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What is the effect on ownership of the buyer if the seller is not the owner of the thing sold?
The general rule is that ownership is not acquired by the buyer. One cannot give what one does not have. (Art 1505) Exceptions: (RE-ROM) Seller has a Right to transfer ownership - Seller need not be the owner of the thing at the time of perfection of the contract It is sufficient that seller has a right to transfer ownership thereof at the time it is delivered (Art. 1459) Estoppel: Owner is by his conduct precluded from denying the sellers authority to sell. (Art. 1434) Registered land bought in good faith - General rule: Buyer need not go beyond the Torrens title - Exception: When he has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make further inquiry Order of courts, Statutory Sale - In execution sale, the buyer merely steps into the shoes of the judgment debtor (Rule 39, sec. 33, ROC) When goods are purchased in Merchants store, Fair, or Market (Art 1505, CC) - The policy of the law has always been that where the rights and interest of the vendor clash with that of an innocent buyer for value, the latter must be protected. (Sun Brothers and Co. V. Velasco, 1958)

In the sale of immovables, may a buyer pay even beyond the expiration of the period for payment agreed upon by the seller and the buyer?
In the sale of immovable property, buyer may pay even beyond the expiration of the period agreed upon, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act, despite a stipulation providing for ipso jure rescission (Art.1592) After demand, court may not grant him a new term (Heirs of Escanlar, et.al. v. CA, 1997) Please note however, R.A. 6552 (Maceda Law) Applies to sale or financing of real estate on installment. Where a buyer has paid at least 2 years of installments that in case he defaults in the

payment of the succeeding instalments, he has a right to pay, without additional interest, the arrears within a grace period of 1 month for every year of instalments payments made. If contract is to be cancelled, seller must first give 30 day notice of cancellation by notarial act and shall refund to the buyer the cash surrender value of payments made equivalent to 50% of the total payments made and an additional of 5% for every year after 5 years of the life of the contract but not greater than 90%. In case less than 2 years of instalments were paid, the grace period shall be not less than 60 days from the date the instalment became due. If the buyer fails to pay the arrears within the given period, the seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or demand for rescission of the contract by a notarial act. The right to pay arrears within the grace period can only be availed once every 5 years. DOES not apply to: - Industrial lots - Commercial buildings - Sale to tenants under Agricultural Reform Code (RA 3844) Down payments, deposits, or options on the contract shall be included in the total number of installments made. Seller may go to court for judicial rescission in lieu of a notarial act of rescission During the grace period, buyer shall have the right: 1. To sell or assign his rights, to be evidenced in a notarial instrument 2. To update his account 3. To pay in advance any installment, or the full unpaid balance of the price, without any interest

In double sales over movables, how is ownership over the thing determined?
Ownership shall be transferred to the person who had first taken possession in good faith.

In double sales over movables, how is ownership over the thing determined?
Ownership belongs to the person who in good faith first recorded in the Registry of Property or if there is no inscription, ownership passes to the person who in good faith was first in possession; or in the absence thereof, to the person who presents the oldest title,

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provided there is good faith. (NOTE: good faith is required all the time.)

What is the general rule on who bears the risk of loss?

Res perit domino: Owner bears risk of loss.

What is the meaning of oldest title as used in the provisions of double sales?
Oldest Title is any public document showing acquisition of the land in good faith. To constitute title, the transmission of ownership must appear in a public document [Art. 1358 (1)]Examples: Deed of Sale, Deed of Donation, Deed of Trust

How is ownership transferred?

The general rule is that ownership is transferred by delivery. The exceptions to this rule are as follows: 1. Contrary stipulation 2. An obligation to deliver a generic thing is not extinguished by loss. (Art 1263, CC) 3. Risk of loss of specific things is subject to the ff: - When loss occurs before perfection, such loss is borne by seller - When loss occurs at time of perfection, loss must have occurred before the contract was entered into, without the knowledge of both parties

Who is a purchaser in good faith?

One who buys the property of another, without notice that some other person has a right to or interest in such property, and who pays a full and fair price for the sale, at the time of the purchase or before he has notice of the claim/interest of some other person in the property. (Agricultural and Home Extension Development Group v CA, 1992)

When does the presumption that a contract is an equitable mortgage arise?

Under Art 1602 of the Civil Code, 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.

When is a buyer presumed to be in bad faith?

When there is annotation of an adverse claim on the title, the same places any subsequent buyer of the registered land in bad faith. (Balatbat v CA, 1996). A buyer also cannot be considered an innocent purchaser for value where it ignored the lis pendens on the title. Lis Pendens Annotation of Adverse Claim maybe cancelled even may be cancelled only before the action is in one instance, i.e., finally terminated for after the claim is causes which may not adjudged invalid or be attributable to the unmeritorious by the claimant Court Both are intended to protect the interest of a claimant by posing as notices and caution to those said with the property that same is subject to a claim. Note: The two are not contradictory or repugnant to one another; nor does the existence of one automatically nullify the other, and if any of the registrations should be considered unnecessary or superfluous, it would be the notice of lis pendens. (A. Doronila Resources Development Inc v CA, 1988)

In case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage (Art. 1603,CC)

What are the remedies of an apparent vendor in an equitable mortgage?

a. If the instrument does not reflect the true agreement, the remedy is reformation b. If decreed to be an equitable mortgage, then any money, fruits or other benefit to be received by the buyer as rent or otherwise considered as interest. c. If decreed as a true sale with right to purchase- seller may redeem w/in 30 days from finality of judgment, even if the period for redemption has expired.

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27 Commodatum Bailor suffers the loss of the subject matter since he is the owner (Art.1942; Art.1174)

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CREDIT TRANSACTIONS
I. What are credit transactions?

CREDIT TRANSACTIONS include all transactions involving the purchase or loan of goods, services or money in the present with a promise to pay or deliver in the future (contract of security)

Not purely personal in character

Mutuum Borrower suffers the loss even if caused exclusively by a fortuitous event and he is not, therefore, discharged from his duty to pay Purely personal in character

II. What is a loan contract?

LOAN is a contract by which one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it, in which case the contract is called commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid, in which case the contract is simply called a loan or mutuum. (Art.1933)

IV. Define mutuum. How is it different from a lease contract?

A mutuum or simple loan is a contract by which a person (creditor) delivers to another (debtor) money or other consumable thing with the understanding that the same amount of the same kind and quality shall be paid. (Art.1953) MUTUUM Object is money or any consumable (fungible) thing LEASE Object may be any thing, whether movable or immovable, fungible or non-fungible Owner does not lose his right of ownership Relationship created is that of landlord and tenant or lessor and lessee (Tolentino v. Gonzales, 50 Phil 558)

III. What are the two kinds of loan transactions and how are they different from each other?
Under art 1933 of the Civil Code, there are two kinds of loan, commodatum and mutuum. Commodatum Ordinarily involves something not consumable* (Art.1936) Ownership of the thing loaned is retained by lender (Art.1933) Essentially gratuitous (Art.1933) Borrower must return the same thing loaned (Art.1933) May involve real or personal property (Art.1937) Loan for use or temporary possession (Art.1935) Bailor may demand the return of the thing loaned before the expiration of the term in case of urgent need (Art.1946) Mutuum Involves money or other consumable thing Ownership is transferred to the borrower Maybe gratuitous or it maybe onerous, i.e. with stipulated interest Borrower need only pay the same amount of the same kind and quality Refers only to personal property Loan for consumption

Thing loaned becomes property of debtor Relationship created is that of creditor and debtor

V. How is barter defined?

BARTER is contract where by one of the parties binds himself to give one thing in consideration of the others promise to give another thing. (Art.1968)

VI. How are mutuum and commodatum distinguished from barter?

(1) In mutuum, subject matter is money or any other fungible things; in barter, non-fungible (non-consumable) things. (2) In commodatum, the bailee is bound to return the identical thing borrowed when the time has expired or the purpose has been served. In barter, the equivalent thing is given in return for what has been received. (3) Mutuum may be gratuitous and commodatum is always gratuitous. Barter on the other hand is an onerous contract. It is really a mutual sale.

Lender may not demand its return before the lapse of the term agreed upon

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VII. What are the ruled for award of interest in the concept of actual and compensatory damages? (Eastern Shipping Lines v. CA, 234 SCRA 78)
The following are the rules for the award of interest in the concept of actual and compensatory damages: (1) When obligation is breached consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Art.1169. (2) When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. (3) When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

VIII. When is the contract of deposit deemed constituted?

DEPOSIT is constituted from the moment a person receives a thing belonging to another, with the obligation of safely keeping it and of returning the same. (Art.1962)

IX. How can we differentiate between deposit and mutuum? Between deposit and commodatum?
DEPOSIT Principal purpose safekeeping is MUTUUM Principal purpose is consumption of the subject matter Lender must wait until expiration of the period granted to the debtor Only money or any other fungible thing may be the object

Depositor can demand return of subject matter at will Only movables may be the object of deposit (immovables can become the object of deposit in judicial deposits only) DEPOSIT Principal purpose safekeeping May be gratuitous

is

In extrajudicial deposit, only movable (corporeal) things may be the object. But for judicial deposits, object may be movable or immovable.

COMMODATUM Principal purpose is transfer of use Always and essentially gratuitous Both movable and immovable may be the object.

X. How is a judicial deposit constituted?

Judicial deposit takes place when an attachment or seizure of property in litigation is ordered by a court. (Art. 2005)

XI. What is the difference between an extrajudicial and a judicial deposit?

EXTRAJUDICIAL (Voluntary) deposit made by free will of the depositor. Object must be movable property JUDICIAL Constituted by virtue of a court order Object may be either movable or immovable property

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29 JUDICIAL Purpose is to secure or protect the owners right; to maintain status quo during pendency of case Always onerous Thing shall be delivered only upon order of the court Guaranty Guarantor not bound to take notice of default of his principal Guarantor often discharged by the mere indulgence of the creditor and is usually not liable unless notified of the principals default

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EXTRAJUDICIAL Purpose is safekeeping of the thing deposited

Generally gratuitous Depositary is obliged to return the thing deposited upon demand made by the depositor

Suretyship Surety ordinarily held to know every default of his principal Surety not discharged either by the mere indulgence of the creditor or by want of notice of default of the principal

XII. What is a contract of guaranty and how is it different from a surety?

GUARANTY is a contract whereby a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. (Art. 2047) While a surety undertakes to pay if the principal does not pay, the guarantor only binds himself to pay if the principal cannot pay (See benefit of excussion, 2058).

XV.What are the essential elements common to pledge and mortgage?

(Art. 2085) 1) Constituted to secure the fulfillment of a principal obligation. 2) Pledgor or mortgagor must be the absolute owner of the thing pledged or mortgaged. 3) The persons constituting the pledge or mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose. 4) Cannot exist without a valid obligation. 5) Debtor retains the ownership of the thing given as a security. 6) When the principal obligation becomes due, the thing pledged or mortgaged may be alienated for the payment to the creditor. (Also, please take note of the following points:) 1) Future property cannot be pledged or mortgaged. 2) Pledge or mortgage executed by one who is not the owner of the property pledged or mortgaged is without legal existence and registration cannot validate it. 3) Mortgage of a conjugal property by one of the spouses is valid only as to of the entire property. 4) In case of property covered by Torrens title, a mortgagee has the right to rely upon what appears in the certificate of title and does not have to inquire further. 5) Pledgor or mortgagor has free disposal of property. 6) Thing pledged or mortgaged may be alienated. 7) Creditor not required to sue to enforce his credit. 8) Pledgor or mortgagor may be a third person.

XIII. What are the differences between a guaranty and a warranty?

Guaranty Guaranty is a contract by which a person is bound to another for the fulfillment of a promise or engagement of a third party Warranty Warranty is an undertaking that the title, quality, or quantity of the subject matter of a contract is what is has been represented to be, and relates to some agreement made ordinarily by the party who makes the warranty

XIV. How do you distinguish between a guaranty and a suretyship?

Guaranty Guarantors liability depends upon an independent agreement to pay the obligation Guarantors engagement is a collateral undertaking Guarantor is subsidiarily liable i.e. only obliged to pay if the principal cannot pay Suretyship Surety assumes liability as a regular party to the undertaking Surety is an original promissor Surety is primarily liable i.e. bound to pay if the principal does not pay

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XVI. What is the definition of pactum commisorium? How is it constituted and what are its effects?
(Art. 2088) 1. It is a stipulation where thing or mortgaged shall automatically become the property of the creditor in the event of nonpayment of the debt within the term fixed. 2. Requisites of pactum commissorium: a) Pledge or mortgage. b) A stipulation for an automatic appropriation by the creditor of the property in the event of nonpayment. 3. The stipulation is null and void. However, the nullity of the stipulation does not affect validity and efficacy of the principal contract. UY TONG v CA: The 2 elements for pactum commissorium to exist: (1) that there should be a pledge or mortgage wherein a property is pledged or mortgaged by way of security for the payment of the principal obligation; (2) that there should be a stipulation for an automatic appropriation by the creditor of the thing pledged or mortgaged in the event of non-payment of the principal obligation within the stipulated period.

free disposal of the property; in the absence thereof, they should be legally authorized for the purpose. (Article 2085) 4) Cannot exist without a valid obligation. (Art. 2086 cf 2052) 5) When the principal obligation becomes due, the thing in which the mortgage consists may be alienated for payment to the creditor. (Art. 2087) 6) Must appear in a public document duly recorded in the Registry of Property, to be validly constituted. (Art. 2125) - In a legal mortgage, the persons in whose favor the law establishes a mortgage have the right to demand the execution and recording of a document formalizing the mortgage. (Art. 2125, par. 2)

XIX. How is the contract of antichresis defined?

ANTICHRESIS is a contract whereby the creditor acquires the right to receive the fruits of an immovable of the debtor, with the obligation to apply then to the payment of the interest, if owing, and thereafter to the principal of the credit (Art 2132) Special requisites of a contract of antichresis: 1. it can cover only the fruits of an immovable property 2. delivery of the immovable is necessary for the creditor to receive the fruits and not that the contract shall be binding 3. amount of principal and interest must be specified in writing 4. express agreement that debtor will give possession of the property to creditor and that the latter will apply the fruits to the interest, if any, then to the principal of his credit 5. NOTE: The obligation to pay interest is not of the essence of the contract of antichresis; there being nothing in the Code to show that antichresis is only applicable to securing the payment of interest-bearing loans. On the contrary, antichresis is susceptible of guaranteeing all kinds of obligations, pure or conditional

XVII. How is the contract of pledge defined?

PLEDGE is a contract by virtue of which the debtor delivers to the creditor or to a third person a movable or document evidencing incorporeal rights for the purpose of securing the fulfillment of a principal obligation with the understanding that when the obligation is fulfilled, the thing delivered shall be returned with all its fruits and accessions. (Art.2085 in rel to 2093)

XVIII. How is the contract of mortgage defined?

MORTGAGE is a contract whereby the debtor secures to the creditor the fulfillment of a principal obligation, immediately making immovable property or real rights over immovable property answerable to the principal obligation in case it is not complied with at the time stipulated Essential requisites of a mortgage contract: 1) Constituted to secure the fulfillment of a principal obligation. 2) Mortgagor must be the absolute owner of the thing mortgaged. 3) The persons constituting the mortgage have

XX.What is a chattel mortgage contract?

CHATTEL MORTGAGE is a contract by virtue of which a personal property is recorded in the Chattel Mortgage Register as security for the performance of an obligation.

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XXI. What is the difference between concurrence of credits and preference of credits?
CONCURRENCE OF CREDIT implies possession by two or more creditors of equal right or privileges over the same property or all of the property of a debtor. PREFERENCE OF CREDIT is the right held by a creditor to be preferred in the payment of his claim above other out of the debtors assets. -

and those which enjoy preference, as to the amount not paid, shall be satisfied according to the following rules: Order established by Art 2244 Common credits referred to in Art 2245 shall be paid pro rata regardless of dates.

XXIII. What is insolvency?

It is a state of a person whose liabilities are more than his assets. It is the inability of a person to pay his debts as they become due in the ordinary course of business. (Please take note of the following:) Balance Sheet Test relative condition of a mans assets and liabilities that the former if all made immediately available, would not be sufficient to discharge the latter. Equity Test a person may be insolvent although he may be able to pay his debts at some future time on a settlement and winding up of his affairs.

XXII.

How are credits classified?

1) Special preferred credits. (Art. 2241 and 2242, CC) a) Considered as mortgages or pledges of real or personal property or liens within the purview of legal provisions governing insolvency. b) Taxes due to the State shall first be satisfied. 2) Ordinary preferred credits (Art. 2244) Preferred in the order given by law. 3) Common credits (Art. 2245) Credits of any other kind or class, or by any other right or title not comprised in Arts. 2241- 2244 shall enjoy no preference. ORDER OF PREFERENCE OF CREDIT 1) Credits which enjoy preference with respect to specific movables exclude all others to the extent of the value of the personal property to which the preference refers. 2) If there are 2 or more credits with respect to the same specific movable property, they shall be satisfied pro rata, after the payment of duties, taxes and fees due the State or any subdivision thereof 3) Those credits which enjoy preference in relation to specific real property or real rights exclude all others to the extent of the value of the immovable or real right to which the preference refers. 4) If there are 2 or more credits with respect to the same specific real property or real rights, they shall be satisfied pro rata, after the payment of the taxes and assessment of the taxes and assessments upon the immovable property or real right. 5) The excess, if any, after the payment of the credits which enjoy preference with respect to specific property, real or personal, shall be added to the free property which the debtor may have, for the payment of other credits. 6) Those credits which do not enjoy any preference with respect to specific property,

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AGENCY AND PARTNERSHIP

What is the contract of agency?
It is a contract by which a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter (Art 1868).

latter and of the agent, or in the interest of a third person who has accepted the stipulation in his favor (Art. 1930).

How may partnership be constituted?

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 (Art 1771).

What is the purpose of the contract of agency?

The purpose of agency is to extend the personality of the principal. It enables the activity of man which is naturally limited in its exercise by his physiological conditions to be extended, permitting him to perform diverse juridical acts through another, when his physical presence is impossible or inadvisable, at the same time in different places. (De Leon)

What is the Personae?

principle

of

Delectus

How is the contract of agency constituted?

Agency may be express or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority (1869). Agency may be oral, unless the law requires a specific form. Those which require a specific form: a. 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. (1874) b. For instances requiring Special Powers of Attorney (1878)

Under Art. 1804, a partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all other partners. Under Art. 1813, a conveyance by a partner of his whole interest in the partnership does not itself dissolve the partnership. The assignee is merely entitled to receive in accordance with his contract, the profits to which the assignor would have been entitled. It could be a ground for the other partners to dissolve the partnership. The assignee could petition the court for dissolution of the partnership only upon the termination of the period or particular undertaking for which the partnership was formed. (Baviera)

How is the power to manage the partnership granted in the articles of partnership revoked?
The vote of the partners representing the controlling interest shall be necessary for such revocation of power.

When can an agent bind his principal through his acts?

In order that an agent may bind his principal, he must act on behalf of the latter (Art. 1868) and within the scope of his authority (Art. 1881).

What are the causes of dissolution?

Dissolution is caused (Art 1830): (1) Without violation of the agreement between the partners: (a) By the termination of the definite term or particular undertaking specified in the agreement; (b) By the express will of any partner, who must act in good faith, when no definite term or particular is specified; (c) By the express will of all the partners who have not assigned their interests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking; (d) By the expulsion of any partner from the business bona fide in accordance with

When is a contract of agency irrevocable?

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 (Art. 1927). 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

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(2)

(3)

(4)

(5) (6) (7) (8)

such a power conferred by the agreement between the partners; In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this article, by the express will of any partner at any time; 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; When a specific thing which a partner had promised to contribute to the partnership, perishes before the delivery; in any case by the loss of the thing, when the partner who contributed it having reserved the ownership thereof, has only transferred to the partnership the use or enjoyment of the same; but the partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has acquired the ownership thereof; By the death of any partner; By the insolvency of any partner or of the partnership; By the civil interdiction of any partner; By decree of court under the following article (referring to Art 1831).

On the application of the purchaser of a partner's interest under Article 1813 or 1814 (Art 1831): (1) After the termination of the specified term or particular undertaking; (2) At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued.

What acts of a partner could bind a partnership after dissolution?

After dissolution, a partner can bind the partnership by any act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution or by any transaction which would bind the partnership if dissolution had not taken place, provided that in the latter case, the other party to the transaction had extended credit to the partnership prior to dissolution and had no knowledge or notice of the dissolution though he had not so extended credit, had nevertheless known of the partnership prior to dissolution, and, having no knowledge or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general circulation in the place (or in each place if more than one) at which the partnership business was regularly carried on (Art 1834).

Who may apply for dissolution of partnership by decree of court and for what causes?
A partner or a purchaser of a partners interest may apply for dissolution by decree of court. On application by or for a partner the court shall decree a dissolution whenever (Art 1831): (1) A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind; (2) A partner becomes in any other way incapable of performing his part of the partnership contract; (3) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business; (4) A partner wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him; (5) The business of the partnership can only be carried on at a loss; (6) Other circumstances render a dissolution equitable.

What are the instances when a partnership can in no case be bound by the acts of a partner after its dissolution?
The partnership is in no case bound by any act of a partner after dissolution (1) where the partnership is dissolved because it is unlawful to carry on the business and the act is not appropriate for winding up partnership affairs; or (2) where the partner has become insolvent; or (3) Where the partner has no authority to wind up partnership affairs; except by a transaction with one who: (a) Had extended credit to the partnership prior to dissolution and had no knowledge or notice of his want of authority; or (b) had not extended credit to the partnership prior to dissolution, and, having no knowledge or notice of his want of authority, the fact of his want of authority has not been advertised in the manner provided for advertising the fact of dissolution in the first paragraph, Art 1834 No. 2 (b).

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Who has the partnership?

right

to

wind

up

Though he had not so extended credit, had nevertheless known of the partnership prior to dissolution, and, having no knowledge or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general circulation in the place (or in each place if more than one) at which the partnership business was regularly carried on (Art 1836).

What is a limited partnership?

A limited partnership is one formed by two or more persons under the provisions of the following article, having as members one or more general partners and one or more limited partners. The limited partners as such shall not be bound by the obligations of the partnership (Art 1834).

May a person be both a general and a limited partner in the same partnership?
A person may be a general partner and a limited partner in the same partnership at the same time, provided that this fact shall be stated in the certificate provided for in Article 1844. A person who is a general, and also at the same time a limited partner, shall have all the rights and powers and be subject to all the restrictions of a general partner; except that, in respect to his contribution, he shall have the rights against the other members which he would have had if he were not also a general partner (Art 1853).

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TORTS AND DAMAGES

What acts may be considered as quasidelicts?
Article 2176 covers not only acts not punishable by law but also acts criminal in nature, whether intentional or through negligence (Elcano v. Hill)

What are the differences between a delict and a quasi-delict?

Quasi-Delict vs. Delict Quasi-Delict private concern CC repairs the damage by indemnification includes all acts in which "any kind of fault or negligence intervenes." solidary liability of employer ERs defense is that accused observed due diligence of a good father of a family (Barredo vs. Garcia) Delict public interest RPC punishes and corrects the act Punishes only when there is a specific penal law covering the act Subsidiary liability of employer ERs defense is that employees resources must first be exhausted

Can a tort exist even if there is a preexisting contract?

However, the court has held that there can be a tort even where there is a pre-existing contract between the parties. (Far East vs. CA, infra) Moreover, the act that can breach a contract may be a tort (Air France v. Carrascoso).

What is the difference between a contract, a quasi-delict and a delict?

Vinculum Juris CONTRACT Contract QUASI DELICT Negligent act/ omission (culpa, imprudence) DELICT Act committed by means of dolo (deliberate, malicious, in bad faith) Proof beyond reasonable doubt

Proof Needed Defense available

Preponderance of evidence Exercise of extraordinary diligence (in contract of carriage), Force Majeure There is pre-existing contract Contractual party. Prove the ff: 1. existence of a contract 2. breach

Preponderance of evidence Exercise of diligence of good father of a family in the selection and supervision of employees No pre-existing contract [not necessarily] Victim. Prove the ff.: 1. damage 2.negligence 3. causal connection between negligence and damage done

Pre-existing contract Burden of proof

No pre-existing contract Prosecution. Accused is presumed innocent until the contrary is proved.

What is the test used in determining whether a certain act/conduct is negligent?

The test used to determine negligence as enunciated in the case of Picart v Smith is Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent man would have used in the same situation? If not, then he is negligent

What are the instances wherein standard of diligence requirement is other than that of a prudent a man?
Special cases include: a) Children - The rule is that a child under nine years of age must be conclusively presumed incapable of contributory negligence as a matter of law. The presumption of lack of discernment or incapacity for negligence in the case of a child over nine but under fifteen years of age is a rebuttable one. (Jarco v. CA) - A minor should not be held to the same degree of care as an adult, but his

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conduct should be judged according to the degree of care ordinarily exercised by children of the same age, capacity, discretion, knowledge and experience under similar circumstances. (Ylarde v. Aquino) b) Experts/Professionals - When a person holds himself out as being competent to do things requiring professional skill, he will be held liable for negligence if he fails to exhibit the care and skill of one ordinarily skilled in the particular work which he attempts to do. - In the case of PSI v. Agana, the Court has held the owner of a hospital directly liable for its own negligence in supervising its doctor and for failure to take an active step to remedy the latters negligence under the doctrine of corporate negligence. c) Insane persons - A lunatic or insane person who, in spite of his irresponsibility on account of the deplorable condition of his deranged mind, is still reasonably and justly liable with his property for the consequences of his acts. (US v. Baggay) Emergency Rule - An individual who suddenly finds himself in a situation of danger and is required to act without much time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be a better solution, unless the emergency was brought by his own negligence. (Valenzuela v. CA)

the vehicle, could have, by the use of due diligence, prevented the misfortune. It is disputably presumed that the driver was negligent, if he had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months (Art 2184). Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation (Art. 2185). There is prima facie presumption of negligence if the death or injury results from his possession of dangerous weapons or substances, such as firearms and poison, except when the use or possession thereof is indispensable in his occupation or business (Art 2188). In all cases except in cases of calamity, act of public enemy in war, act of owner of the goods, character of the goods, order of competent public authority, if the goods are lost destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required under Art. 1733. Res Ipsa Loquitur (The thing speaks for itself): Where the thing which causes injury is shown to be under the management of the defendant, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident arose from want of care.

What do we mean when we say gross negligence?

Gross negligence has been defined as a want of even a slight care or diligence, which raises the presumption that the person at fault is conscious of the probable consequences thereof, and is indifferent to the danger or injury to persons or property. (Amedo v. Rio)

What are the defenses available to the respondent in torts cases?

1. Plaintiff's Negligence (Art 2179) - When the plaintiffs own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendants lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. 2. Contributory Negligence - The second sentence of Article 2179 and Article 2214 states that the result of such contributory negligence is to reduce the damages that may be recovered.

What are the instances when there arises a presumption of negligence?

The following instances give presumption of negligence: rise to the

In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in

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3. Fortuitous Event ELEMENTS (Art 1174): a. the cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; b. It must be impossible to foresee the event or if it can be foreseen, it must be impossible to avoid; c. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; d. The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. 4. Assumption of Risk General Rule: A risk voluntarily assumed bars the plaintiff from recovery. Exception: If an emergency is found to exist or if the life or property of another is in peril or when he seeks to rescue his endangered property (Ilocos Norte v. CA) 5. Due Diligence - Article 2180 provides that the vicarious liability enumerated in the said provision will be negated by proof that diligence of a good father of a family to prevent damage was observed. 6. Prescription - Four (4) years for quasi-delict; one (1) year for defamation 7. Double Recovery - plaintiff cannot recover damages twice for the same act or omission of the defendant (Art 2177).

What is the doctrine of Last Clear Chance?

1) 2) 3) 4) Also known as: doctrine of discovered peril or doctrine of supervening negligence ELEMENTS: Plaintiffs own negligence put himself in a dangerous situation Defendant saw/discovered, by exercising reasonable care, perilous position of plaintiff In due time to avoid injuring him Despite notice and imminent peril, defendant failed to employ care to avoid injury Injury of plaintiff resulted.

5)

Primary negligence of the defendant contributory negligence of the plaintiff subsequent negligence of the defendant in failing to avoid the injury to the plaintiff

In default of parents of a judicially appointed guardian, who may exercise substitute parental authority?
1. The surviving grandparent, as provided in Art. 214; 2. The oldest brother or sister, over twenty-one years of age, unless unfit or disqualified; and 3. The child's actual custodian, over twentyone years of age, unless unfit or disqualified.

In case of foundling, abandoned and neglected or abused children, who may exercise parental authority?
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.

What is the definition of proximate cause?

Proximate cause is defined as that which, in the natural and continuous sequence unbroken by any efficient, intervening cause, produces the injury, and without which the result would not have occurred.

Who may be held liable for acts of students and apprentices?

Who are liable
Teacher- in- charge (the one designated to exercise supervision over students) Head of establishment of arts and trades School (generally not held liable)

For whose Acts

Pupils and students

Requisite for Liability to Attach

pupils and students remain in teachers custody regardless of the age custody regardless of the age must be below 18

Apprentices 1. 2. If the tortfeasor is a student of the school (Art 218 FC) If the tortfeasor is a teacher/ employee of the school, it is liable as employer under 2180 (5) of CC (St. Francis vs. CA) If the tortfeasor is a stranger, it is liable for breach of contract. (PSBA vs. CA)

3.

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Where the school is academic rather than technical or vocational in nature, responsibility for the tort committed by the student will attach to the teacher in charge of such student. In establishments of arts and trades, it is the head thereof, and only he, who shall be held liable as an exception to the general rule. (Amadora v. CA)

prevents, exonerates or reduces the obligation to indemnify as provided in the Act.

What are the elements interference in contracts?

of tortuous

What is a special agent?

A special agent has been specifically defined in Merritt v. Government of the Philippine Islands as one who receives a definite and fixed order or commission, foreign to the exercise of the duties of his office.

As enunciated in the case of So Ping Bun v CA, the following are the elements of tortuous interference in contracts: 1. Existence of a valid contract; 2. Knowledge of the third person of the existence of such contract; 3. Interference without legal justification or excuse.

What are the Instances where the state gives its consent to be sued?
a. Art. 2180 (6) is an example of an express legislative consent. Here, the State assumes a limited liability for the acts of its special agents. b. Art. 2189 provides for state liability for damages caused by defective condition of public works. c. Local Government Code provides for the liability of local government units for wrongful exercise of its proprietary (as opposed to its governmental) functions. The latter is the same as that of a private corporation or individual. (Mendoza vs. De Leon, 1916)

Should the local government unit own the roads, streets, bridges, buildings and other public works which caused the injury before it could be held liable?
Ownership by the LGU is not necessary. Control and supervision of the LGU makes it liable under Art. 2189.

What needs to proved prosecution to prosper?

for malicious

1. The fact of the prosecution and the defendant was himself the prosecutor and then action was terminated with an acquittal; 2. The prosecutor acted without probable cause; 3. That the prosecutor was impelled by legal malice, that is by improper or sinister motive.

What is the difference between liability of producers of goods under the CC and under the Consumer Act?
The liability under Art. 2187 is limited to those caused by any noxious or harmful substances used; on the contrary, under the Consumer Act, liability attaches to the manufacturer 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.

What are the requisites for a case for dereliction of duty to prosper?
The following are the requisites for dereliction of duty (Art 27): 1. Defendant is a public officer charged with a performance of a duty in favor of the plaintiff; 2. He refused or neglected without just cause to perform the duty; 3. Plaintiff sustained material or moral loss as a consequence of such non-performance; 4. The amount of such damages, if material.

What is the definition of damages?

Damages may be defined as the pecuniary compensation, recompense, or satisfaction for an injury sustained, or the pecuniary consequences which the law imposes for the breach of some duty or the violation of some right.

Should there be a contractual obligation before product liability attaches?

Under Art. 2187, liability attaches despite the absence of contractual relation, the Consumer Act prohibits any stipulation in a contract that

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Differentiate between damage and injury.

Damage is the loss, hurt, or harm which results from the injury. Injury is the illegal invasion of a legal right.

What are the different kinds of damages and when may these be awarde?
1. Actual/Compensatory Damages a pecuniary loss suffered & duly proven 2. Moral Damages - Its award is aimed at the restoration, within the limits of the possible, of the spiritual status quo ante, and it must be proportional to the suffering inflicted. (Visayan Sawmill vs. CA) 3. Nominal Damages - in lieu of the actual, moral, temperate, or liquidated damages 4. Temperate/Moderate Damages - Temperate or moderate damages are more than nominal but less than compensatory damages. It may be recovered when some pecuniary loss has been suffered but its amount can not be provided with certainty. (Art. 2224) 5. Liquidated Damages - Those agreed upon by the parties to a contract, to be paid in case of breach thereof. (Art. 2226) 6. Exemplary/Corrective Damages - Imposed by way of example or correction for the public good in addition to the moral, temperate, liquidated or compensatory damages.