University of Cebu

College of Law
UCLASS Bar Operations
Civil Law Society

CIVIL LAW BAR

NOTES
2012 by:

Rey Cris Panugaling

Marian Jane Alumbro
Richel Carreon
James Luego
Leonardo Escorido Jr
Stephanie Tan
Ruth Restauro

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References: Law Textbooks, Codes, Reviewers, Notes, Compilations, Articles and Internet Sources

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 Civil Law Bar Notes
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GENERAL PRINCIPLES
I. Effect and Application of Laws
A. When the law takes effect (Civil Code, Art.2)
EFFECT and APPLICATION OF LAWS
Effectivity of Laws (Art. 2)
Laws shall take effect fifteen (15) days following
the completion of their publication in the Official
Gazette, or in a newspaper of general circulation,
unless it is otherwise provided. This Code shall
take effect one year after such publication.
(Tanada vs. Tuvera, 146 SCRA 446)
 The New Civil Code became effective on August
30, 1950. (Lara vs. Del Rosario, Jr.,94 Phil 778).
 The phrase unless it is otherwise provided “refers
to the date of effectivity of laws and not to the
requirement of publication. The word laws
includes all laws and not only to those of general
application. (Tanada vs. Tuvera, 146 SCRA 446)
B. Ignorance of the law
Art. 3.  Ignorance of the law excuses no one from
compliance therewith.
C. Retroactivity of Laws
General Rule: Laws have no retroactive effect,
unless the contrary is provided. (Art. 4, NCC)
Exceptions:
1. Expressly provided by the law;
2. Laws creating new rights;
3. Emergency laws;
4. Tax laws;
5. Remedial statutes;
6. Interpretative statutes;
7. Curative statutes; and
8. Penal laws favorable to the accused who is
not a recidivist or a habitual delinquent;
Exceptions to the Exceptions:
1. Ex post facto laws; and
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2. Laws that impair obligation of contracts.
D. Mandatory or prohibitory laws
Art. 5. Acts executed against the provisions of
mandatory or prohibitory laws shall be void,
except when the law itself authorizes their
validity.
E. Waiver of Rights (Art. 6)
General Rule: Rights may be waived.
Exceptions:
1. When waiver is contrary to law, public morals,
public policy and good customs; and
2. When waiver is prejudicial to a third person.
Requisites for a Valid Waiver of Rights
1. The waiving party must actually have the
right he is renouncing.
2. He must have the full capacity to make the
waiver.
3. The waiver must be clear and unequivocal.
4. The waiver must not be contrary to law,
public order, public policy, morals or good
customs or prejudicial to a third person with a
right recognized by law.
5. When formalities are required; such must be
complied with.
Waivers which are Contrary to Law
1. Waiver of future inheritance.
2. Waiver of future support
3. Waiver of political rights
F. Repeal of laws
 Laws are repealed only by subsequent
ones, and their violation or non-observance shall
not be excused by disuse or custom or practice to
the contrary. (Art. 7, NCC)
1. In express repeal, the repeal of repealing law
will not revive the old law.
2. A law is impliedly repealed when the
provisions of the subsequent law are
incompatible with those of the previous law.
However, for this tom occur, the following
must concur:
a. Both laws cover the same subject matter;
and
b. The latter law is repugnant to the earlier
law.
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Civil Law Bar Notes
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Judicial Decisions, NCC Art. 8
Art. 8.  Judicial decisions applying or interpreting
the laws or the Constitution shall form a part of
the legal system of the Philippines. (n)
Duty to Render Judgment, NCC Art. 9
Art. 9.  No judge or court shall decline to render
judgment by reason of the silence, obscurity or
insufficiency of the laws. (6)
A judge must decide the case assigned to him
whether or not he knows what law shall be
applied. In case of silence or insufficiency of the
law, a judge may still be guided by the following:
1) Customs which are not contrary to law, public
order or public policy;
2) Court decisions, foreign or local, in similar
cases;
3) Legal opinions of qualified writers and
professors;
4) General principls of justice and equity; and
5) Rules of Statutory construction.
In criminal cases, however, it is an established
rule that there is no crime where there is no law
punishing it – “Nulla poena sine lege”. The
judge must dismiss the case if there is no law
punishing it.
Presumption and Applicability of Custom,
NCC Arts 10-12
Art. 10.  In case of doubt in the interpretation or
application of laws, it is presumed that the
lawmaking body intended right and justice to
prevail. (n)
Art. 11.  Customs which are contrary to law,
public order or public policy shall not be
countenanced. (n)
Art. 12. A custom must be proved as a fact,
according to the rules of evidence. (n)
Terms & Principles in Interpretation and
Construction
 Statutory construction
the act or process of discovering and
expounding the meaning and intention of the
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authors of the law with respect to its
application to a given case, where that
intention is rendered doubtful, among others,
by reason of the fact that the given case is
not explicitly provided for by the law (Caltex
v. Palomar, 1966)
 Interpretation v. Construction (May be given
as an objective type)
 Interpretation makes use of intrinsic aids or
those found in the statute itself.
 Construction makes use of extrinsic aids or
those found outside the written language of
the law.
 “ONE MUST INTERPRET BEFORE HE
CONSTRUES.”
 In the case of Chartered Bank Employees
Assoc. v. Ople, it said, “If the language of the
law is clear and equivocal, then read the law
to mean exactly what it says. If not, look at
the intention of the legislature.”
 In case of doubt, right and justice is
presumed to prevail.
 “Unimpeachability of legislative journals”
found in Art. VI Sec 16 (14), 1987
Constitution.
 Entries and records contained in the
legislative journals are declared conclusive
upon the courts.
 Administrative Rule and interpretation
distinguished –
When an administrative agency promulgates
rules and regulations, it “makes” a new law
with the force and effect of a valid law, while
when it renders an opinion or gives a
statement of policy, it merely interprets a pre-
existing law. Rules promulgated to law are
binding on to the courts, even if they are not
in agreement. On the other hand,
administrative interpretation of the law is at
best merely advisory, for it is the courts that
finally determine what the law means.
 Stare Decisis - legal maxim which requires
that past decisions of the court be followed in
the adjudication of cases.
Exception: Should not be applied when there
is conflict between the precedent and the law.
The duty of the court is to forsake and
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Civil Law Bar Notes
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abandon any doctrine or rule found to be in
violation of law in force. But this can only be
done by the Supreme Court and cannot be
done by an inferior court.
 Obiter Dictum - does not fall within the
doctrine of stare Decisis. It is an opinion
expressed by a court upon some question of
law which is not necessary to the decision of
the case before it.
 Spirit of the law prevails over the letter
of the law. (Only applies when there is
ambiguity provided by the law itself)
 Literal import must yield to intent.
 Cessante ratione legis, cessate et ipsa
lex - when the reason for the law ceases the
law itself ceases
 Ratio legis et anima- Reason of the law is
its soul
 Surplusagum non noceat - surplusages
does not vitiate the statute
 Utile per inutile non vitiatur - the useful is
not vitiate by the non-useful
 Ibi quid generaliter conceditur; inest
exception, si non aliquid sit contras jus
basque - Where anything is granted
generally, this exception is implied; that
nothing shall be contrary to law and right.
(Every rule is not without exception)
 Sumon jus, summa injuria - Rigor of the
law would become the highest injustice
 Nemo tenetur ad impposible - the law does
not require that impossibility be done.
 Impossibilium nulla onligatio est - no
obligation to do an impossible thing.
 DOCTRINE OF NECESSARY IMPLICATION
It is expressed in the maxim, ex necessitate
legis which means that every statutory grant
of power, right or privilege is deemed to
include all incidental power, right and
privilege.
Except: Authority to charge against public
funds may not be implied unless a statute
expressly provides so.
 Statutes in Pari material - they relate to
the same person or thing, or have the same
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purpose or object, or cover the same specific
or particular subject matter. If they cannot be
harmonized then the earlier one must yield to
the later one, it being a later expression of
legislative will.
 Strictissimi Juris - laws which are strictly
construed:
1) Penal statutes
2) Tax exceptions
3) Statutes in derogation of rights
4) Statutes authorizing authorizations
5) Statutes granting privileges
6) Legislative grants to local government
units
7) Statutory grounds for removal of officials
8) Naturalization laws
9) Statutes imposing taxes and construction
duties
10) Statutes concerning the sovereign
11) Statutes authorizing suits against the
government
12) Statutes prescribing the formalities of a
will
 Statutes liberally construed:
1) Social legislation (labor laws, land reform
laws, social security laws and tenacy
laws)
2) General welfare clause (LGC)
3) Grant of power to the LGU’s-full autonomy
of LGU’s
4) Statutes granting taxing power
5) Statutes prescribing prescriptive period to
collect taxes
6) Statutes imposing penalties for non-
payment of taxes
7) Election laws
8) Amnesty procalamations (amnesty and
pardon are used synonymously in this
sense)
9) Statutes prescribing prescription of crimes
10) Adoption statutes
11) Veteran and pension laws
12) Rules of Court
13) Curative statutes
14) Redemption laws
15) Warehouse receipts laws
16) Probation laws
17) Statutes granting power of agency
Mandatory and directory statues, generally
Mandatory statutes is a statue which commands
either positively that something be done, or
performed in a particular way, or negatively
that something be not done, leaving the
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Civil Law Bar Notes
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person concerned no choice on the matter Month- 30 days

except to obey.
Day-24 hours
Directory statute is a statute which is
permissive or discretionary in nature and
Nighttime- From sunset to sunrise
merely outlines the act to be done in such
way that no injury can result from ignoring
itbor that its purpose can be accomplished in Month: If designated by its name: compute by the
a manner other than that prescribed and number of days which it respectively has.
substantially the same result obtained.
Week: 7 successive days regardless of which day
 Mandatory statutes: it would start
1) Conferring power
2) Granting benefits Calendar week: Sunday to Saturday
3) Prescribing jurisdictional requirements
4) Prescribing time to take action or to
appeal What is the manner of counting periods?
5) Prescribing procedural requirements
6) Election laws on conduct or elections Exclude the first, include the last
7) Election laws on qualification and
disqualification Step 1. From the reckoning date, add the period
8) Prescribing the qualifications of office or number of days which will expire.
9) Statutes relating to assessment of taxes
10) Statutes concerning public auction sale
Eg: Calendar days, not leap year:
 Discretionary Statutes
1) Prescribing guidance for officers Date of commission=Sept 3, 2005
2) Prescribing manner of judicial action
3) Requiring rendition of decision within Prescriptive period=90 days from commission
prescribed period
4) Constitutional time provision to render a 3+90=93
decision on cases by the SC, collegiate
courts and lower courts is directory
(Marcelino v. Cruz) Step 2. From the total, subtract the number f
days, calendar or not, until the difference is less
 Mala in se - those acts which are penalized than the number of days in a month. This
by the RPC. difference shall be the date of the month
immediately succeeding the last month whose
 Mala Prohibita - when the law has been number of days was subtracted.
violated.
93

Less: September 30=63

J. Legal Periods, NCC Art. 13
Less: October 31=32
Art. 13.  When the laws speak of years, months,
days or nights, it shall be understood that years Less: Nobember 30=2
are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four
(December)
hours; and nights from sunset to sunrise.
If months are designated by their name, they
shall be computed by the number of days which November is the last month whose number of
they respectively have. days was subtracted; hence, the remaining
difference of 2 shall be the date in December, the
In computing a period, the first day shall be
month immediately succeeding November.
excluded, and the last day included.

Note: Year-365 Days

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Civil Law Bar Notes
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Hence, the last day for filing the action is
December 2, 2005.
How to compute leap years?
Namarco v. Tuazon held that Feb 28 and 29 of a
leap year should be counted as separate days in
computing periods of prescription. Since this case
was filed on Sept 3, 1965, it was filed one day too
late; considering that the 730 th day fell on Sept 2,
1965-the year 1964 being a leap year.
Rule if the last day falls on a Sunday or a
legal holiday?
Depends: If the act to be performed wihin the
period is:
1) Prescribed or allowed by the:
a) The Rules of Court
b) Order of the court; or
c) Any Other applicable statute
The last day will automatically be the next
working day.
2) Arises from a contractual relationship-the act
will still become due despite the fact that the
last day falls on a Sunday or legal holiday.
K. Applicability of Penal Laws, NCC Art. 14
Art. 14.  Penal laws and those of public security
and safety shall be obligatory upon all who live or
sojourn in the Philippine territory, subject to the
principles of public international law and to treaty
stipulations.
L. Conflict of Laws (Civil Code, Art. 15-18)
[Note: See last part of the Review Notes for the
distinctions & other relevant matters.]
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Theories on Personal Law
1. Domiciliary Theory – the personal laws of a
person are determined by his domicile.
2. Nationality Theory – the citizenship of a
person is the basis for determining the
personal laws of an individual.
Nationality Rule ( Art. 15)
Laws relating to family rights and duties or to the
status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even
though living abroad.
Exception: When a marriage between a Filipino
citizen and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad by
the alien spouse capacitating him/ her to remarry,
the Filipino spouse shall likewise have the
capacity to remarry under Philippine law. (Art.
26[2], Family Code).
RULES ON DIVORCE BETWEEN ALIEN &
FILIPINO SPOUSES:
Under Article 15 of the New Civil Code, only
Philippine nationals are governed by the policy
against absolute divorce obtained abroad by an
alien who may be recognized in the Philippines,
provided it is valid according to the alien’s
national law. Hence, an American national who
had divorced a Filipino wife, cannot justifiably
maintain that under our laws, the Filipina ,
despite the divorce, has to be considered still
married to him and still subject to a wife’s
obligation( Van Dorn vs. Romillo, L-6470, October
8, 1985)
Lex Rei Sitae ( Art. 16)
Principle which applies the law of the place where
the property ( real/ personal) is situated.
Exceptions:
a. Order of the succession in intestacy;
b. Amount of successional rights;
c. Intrinsic validity of the provisions of the
will; or
d. Capacity to succeed.
 Doctrine of Renvoi arises when our law refers a
case to another country for solution, but the law
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 Civil Law Bar Notes
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of that country refers it back to our country for
determination.
 Doctrine of Lex Fori means law of the forum. If
the application of a foreign law is invoked, that
foreign law must be proved as a fact by the rules
of evidence. In the absence of proof, it is
presumed to be the same as that of the Philippine
law.
 Under Texas law, the national law of
Amos Bellis, it does not provide for compulsory
heirs, therefore, no legitimes. Bellis’ illegitimate
heirs cannot claim that they are deprived of their
legitimes under Philippine laws because the
capacity to succeed is governed by the national
law of the decedent. The renvoi doctrine cannot
apply because it is only pertinent where the
decedent is a national of one country and a
domiciliary of another. Furthermore, Texas has no
conflict laws which govern successional rights.
(Bellis vs. Bellis, 20 SCRA 358)
 Lex Loci Celebrations (Art.17)
Principle which applies the law of the place where
the contract was executed as far as the
formalities and solemnities (extrinsic validity) are
concerned.
Exception: Lex Loci Celebrationis does not apply
to contracts of marriage involving Filipinos
solemnized abroad, when such marriages are
void in the Philippines. (Pineda, Persons, 2000
ed., p.60)
The principle of LEX LOCI CELEBRATIONIS holds
that matters bearing upon the execution,
interpretation and validity of a contract are
determined by the law of the place where the
contract is made (Insular Government vs. Frank,
13 Phil 236)
Doctrine of Processual Presumption
 The foreign law, whenever applicable,
should be proved by the proponent thereof;
otherwise, such law shall be presumed to be
exactly the same as the law of the forum.
• Rule on Prohibitive Laws
General Rule: Prohibitive laws concerning
persons, their acts or property and laws which
have for their object public order, public policy or
good customs are not rendered ineffective by
laws, judgments promulgated or conventions
agreed upon in foreign country.
Exception: Art. 26, par. 2 Family Code
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Conflict of Laws and the Law of Nations
(Public International Law) distinguished
[Note: See last part of the Review Notes for the
distinctions & other relevant matters.]
Instances where the law of the forum has to
apply the internal or domestic law (lex fori)
in adjudicating a conflicts problem set before
it. These instances are the following:
1. When the law of the forum expressly so
provides in the conflicts rules;
2. When the proper foreign law has not been
properly provided and pleaded;
3. When the case involves any of the exceptions
to the application of the proper foreign law
(exceptions to the comity)
4. When the foreign law, judgment or contract is
contrary to a sound and established public
policy of the forum
5. When the foreign law, judgment or contract is
contrary to almost universally conceded
principles of morality (contra bonos mores)
6. When the foreign law, judgment or contract
involves procedural matters
7. When the case involves penal laws, contracts
and judgments
8. When the case involves purely fiscal (that is,
revenue producing) or administrative matters
9. When the application of the foreign law,
judgment or contract, ay work undeniable
injustice to the citizens or residents of the
forum
10. When the application of the foreign law,
judgment or contract, may work against the
vital interests and national security of the
state of the forum
11. When the case involves real and personal
property situated in the forum
CASES:
Testate Estate of Bohanan vs. Bohanan, et al. 106
Phil 997
Phisec Investment vs. CA
274 SCRA 102
Pennoyer v. Neff
95 U.S. 714 (1877)
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Civil Law Bar Notes
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Mullane v. Central Hanover Bank & Trust Co.,
339 U.S. 306 (1950).
Margarita Romualdez-Licaros Vs. Abelardo B.
Licaros, G.R. No. 150656. April 29, 2003
Idonah Slade Perkins Vs. Mamerto Roxas
Realty Sales Enterprise, Inc. And Macondray
Farms, Inc. vs. IAC
International Shoe Co. v. Washington, 326 U.S.
310 (1945)[1]
Republic Of The Philippines vs. Hon. Elepano
Heine vs. New York Insurance Company,
45 F2d 426 (1940)
Dial Corporation Vs. Judge Soriano ( 161 SCRA
737)
Bank Of America vs. CA, (400 SCRA )
Wing On Company vs. Syyap, 64 O.G. 8311
(1967)
Fluemer v Hix
Manila Hotel v NLRC
William F. Gemperle vs. Helen Schenker and Paul
Schenker. 19 SCRA 45, Jan. 23, 1967
National Grains Authority vs. IAC , 157 SCRA
380, Jan. 28, 1988
Puyat vs. Zabarte, 352 SCRA 738
Valmonte vs. Court Of Appeals, 252 SCRA 92,
1/22/96
Shaffer vs. Heitner, 433 U.S 186 (1997)
Vicente Caluag et al. vs. CFI Judge Pecson, 82
Phil 8 (10/29/48)
Spouses Patrick And Rafaela Jose vs. Spouses
Helen And Romeo Boyon
G.R. No. 147369. October 23, 2003
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First Philippine International Bank (Formerly
Producers Bank Of The Philippines) And Mercurio
Rivera vs. CA
PATRICIA S. VILLAREAL, for herself and as
guardian of her minor children, CLAIRE HOPE and
TRICIA, both surnamed VILLAREAL vs. CA
In Re: Union Carbide Corporation Gas Plant
Disaster At Bhopal, India In December, 1984
MDL No. 626; Misc. No. 21-38 (JFK) ALL CASES
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK
634 F. Supp. 842; 1986 U.S. Dist. LEXIS 25624
May 12, 1986
CHOICE OF LAW IN PROPERTY
- The controlling law
Immovable property-lex situs
Movable property-lex domicilii, lex situs, the lex
loci actus or the law of the law of transfer
- Old Law-mobilia squuntur personam
(law of the owner’s domicile)
- Capacity to transfer or acquire property
Governed by the law of the place where the
property is located.
-Llantino v. Co liong chong (188 SCRA 592)
A contract is the law between the contracting
parties and when there is nothing in it which is
contrary to law, morals, customs, public policy or
public order the contract is sustained.
- Extrinsic and Intrinsic Validity of
conveyances
GENERAL RULE: The formalities of a contract
to convey property are likewise governed
by the Lex Situs.
EXCEPTIONS:
-Where he transaction does not affect
transfer of the title to or ownership of the
land. (lex intentionis or Lex Voluntatis is
the governing law.)
-Where real property is offered by way of
a security for the performance of an
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obligation such as a loan, the principal i.e:

contract is the loan while the mortgage of procedural process
the land is only an accessory. no counterpart law applies
-Testate or intestate succession and public policy concerns
capacity to suceed are governed by the
national law of the decedent. The Solution
Plaintiff may choose to file suit directly in
the country of the defendant or to arbitrate the
ENFORCEABILITY OF FOREIGN JUDGMENT claim.

A foreign judgment is entitled to

enforcement if the defendant had an opportunity RULE OF RECIPROCITY
for a fair trial. - a country will not enforce judgments
rendered in a foreign country that does not
likewise enforce its judgments.
FAIR TRIAL
DEFENSES OF ENFORCEMENT - is predicated on the foreign court
possessing personal and subject matter
Rule of RECIPROCITY is no longer a factor now jurisdiction, conducting trials using regular
to be considered in the recognition of a foreign procedures, and acting “under a system of
judgment as national legal systems and the U.S. jurisprudence likely to secure an impartial
recognition of other legal systems converged. administration of justice.”
(Hilton vs Guyot, 159 U.S. 113)
A foreign judgment is not due recognition while it
is in the process of being appealed.
CASE:
COMITY
- a recognition that one nation extends to the
Nelson Bunker Hunt vs. BP Exploration Company
legislative, executive, or judicial acts of another
(Libya) Ltd.
not a rule of law
- a nation’s expression of understanding that
demonstrates due regard both to international
duty and convenience and the rights of persons
protected by its own laws
- should be withheld only when its acceptance
would be contrary to the interest of the nation
called upon to give it effect SYNOPSIS OF CONFLICTS RULES FOR
OBLIGATIONS AND CONTRACTS
Conventions applicable
Factual situation Point of Contract
- Brussels Convention on Jurisdiction and
1) Formal or 1) Lex loci Celebrationis
Judgments in Civil and Commercial Matters
extrinsic validity (Art. 17 Par. 1, Civil Code)
- Lugano Convention
exceptions:
- Inter-American Convention on the
a) alienation and a) Lex Situs
Extraterritorial Validity of Foreign Judgments
ecumburance of
- Hague Convention on International Jurisdiction
property b) Law of the Philippines
and Foreign Judgments in Civil and
b) consular
Commercial Matters
contracts
- United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards 2) Capacity of the 2) National law without
(New York Convention) contracting parties prejudice to the case of
(Exception: Insular Government v.
alienation and Frank where the SC
The Problem encumburance of adhered to the theory of
»Enforcement of a judgment in a foreign property) lex loci celebrationis
country is dependent upon the nuances of Exception:
enforcement in that particular country. a) Lex situs

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 Civil Law Bar Notes
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3) Intrinsic validy The proper law of the b) Capacity of c) loci voluntatis or loci
(including contract-the lex contractus parties intentionis
interpretation of (lex loci voluntatis or the c) intrinsic
instruments and lex loci intentionis) validity
amount of damages 4) Contract of 4) fixed situs of carrier
for breach) common carrier of except d) law of
goods destination
Note: The other a) extrinsic validity
theories are: b) capacity of
parties c)
a) Lex loci intrinsic validity
celebrationis d) liability of loss,
b) Lex nationalii
destruction, or
c) Lex loci deterioration of
solutionis (law of goods in transitu
the place of the 5) Contract of 5) a) lex loci
perfomance)
agency celebrationis
d) Prof. Minor's a) extrinsic b) national law of the
solution validity parties except when
1) Perfection of b) capacity of the agency deals
the contract (lex
parties to be with the conveyance
loci celebrationis)
principal or or encumbrance of
) Cause or consideration- agent property-lex situs
(lex loci c) intrinsic c) lex loci voluntatis
Considerationis) validity
3) performance-
lex loci solutionis
6) Simple loan 6) a) lex loci
defect: this theory a) extrinsic validity celebrationis
combines the b) capacity of the b) national law
defects of the
parties c) lex loci volutatis or
others
c) intrinsic validity lex loci intentionis

7) Commodatum 7) lex situs

a) extrinsic validty
b) capacity of the
CONFLICT RULES FOR SPECIFIC CONTRACTS
parties
c) intrinsic validity
Factual Situation Point of contract
1) Sales and Barter Lex situs 8) Pledge, chattel 8) lex situs (note that
a) extrinsic mortgage, real they are accessory
validty mortage, and anti- contracts only)
b) capacity of chresis
parties a) extrinsic validity
c) intrinsic b) capacity of the
validity parties
2) Lease of Lex situs c) intrinsic validity
Property
9) Guaranty and 9) a) lex loci
a) Extrinsic
suretyship celbrationis
validity
a) extrinsic validy b) national law
b) Capacity of
b) capacity of c) lex loci voluntaties or
parties
parties lex loci intentionis
c) Intrinsic
c) intrinsic validity (note that they are
validty
also accessory
3) Lease of services 3) a) lex loci
contracts only that
a) Extrinsic celebrationis
they are defective if
validty b) national law

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the principal contract

is defective)

SYNOPSIS OF CONFLICTS
RULES FOR TORTS

Factual situation Point of Contact

1) Liability of 1) Lex loci delicti
damages for torts in commissi (law of the
general place where the delict
was committed) note:
liabilit yfor the foreign
torts may be enforced
in the Philippines if:

(Locus delicti-place of a) The tort is not penal

the commission of in character
torts) is faced by the b) if the enforcement
problem of of the tortuitous
characterization. In liability will not
civil law countries, the contravene our public
locus delicti is policy
generally where the c) if our judicial
act began, in common machinery is adequate
law countries, it is for such enforcement
where the act first
became effective)

HUMAN RELATIONS

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Exclude: Independent Civil Actions and prejudicial
questions which will be covered by the
examinations in Remedial Law
 Every person must, in the exercise or his rights
and in the performance of his duties, act with
justice, give everyone his due, and observe
honesty and good faith. (Article 19, NCC; Carpio
vs. Velmonte, GR 151866, September 9, 2004)
Every person who, contrary to law, willfully or
negligently causes damage to another, shall
indemnify the latter for the same. (Article 20,
NCC)
Any person who willfully causes loss or injury to
another in a manner that is contrary to morals,
good customs or public policy shall compensate
the latter for the damage. (Article 21, NCC;
Aibenson Enterprise Corp. vs. CA, 217 SCRA 16)
• Article 22 embodies the Roman Law principle of
“nemo cum alterius derimento locupletari poest”
[No one shall unjustify enrich himself at the
expense of another]. (Pacific Merchandising Corp.
vs. Consolacion Insurance and Surety Co., Inc, 73
SCRA 564)
• Government is not exempted from the principle
of unjust enrichment. (CIR vs. Fireman’s Fund
Insurance Co., 148 SCRA 316)
 Bad faith cannot be attributed to the acts of
Dart which was supported by legitimate reasons,
principally to protect its own business. The
exercise of its rights was not impelled by any evil
motive designed, whimsically and capriciously, to
injure or prejudice the Calogcogs. (Dart
Philippines v. Spouses Francisco Caloglog, GR No.
149241, August 24, 2009, 596 SCRA 614)
 Nonfeasance means the omission of an act
which a person ought to do; misfeasance is the
improper doing of an act which a person might
lawfully do; and malfeasance is the doing of an
act which a person ought not to do at all.
 Services are not included in the Article. If
services were rendered by someone benefiting
another. It does not mean that the latter is
exempted from indemnifying the former. The
liability will lie on quasi-contract. (Article 2146,
NCC)
■ Article 25
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Thoughtless extravagance in expenses for
pleasure or display during a period of acute public
want or emergency may be stopped by order of
the courts at the instance of any government or
private charitable institution.
■ Prejudicial Question
General Rule: If both criminal and civil cases are
filed in court, the criminal case takes precedence.
Exception: When there is a prejudicial question
or a question that arises in case, the resolution of
which is a logical antecedent of the issue involved
herein, and the cognizance of which pertains to
another tribunal.
Requisites
a. Previously instituted civil action involves an
issue similar or intimately related to the issue
raised in the subsequent criminal action, and
b. The resolution of such issue determines
whether or not the criminal action may
proceed (Sec. 7, Rule 111, Rules of Court)
◘ A prejudicial question is one based on a fact
distinct and separate from the crime but so
intimately connected with it that it determines the
guilt or innocence of the accused, and for it to
suspend the criminal action, it must appear not
only that said case involves facts intimately
related to those upon which the criminal
prosecution would be based but also that in the
resolution of the issue or issues raised in the civil
case, the guilt or innocence of the accused would
be necessarily determined.
(Librado vs. Cosculluela, Jr., 116 SCRA 303)
Accion in Rem Verso – action for recovery of
what has been paid without just cause
Requisites:
1. Defendant has been enriched
2. Plaintiff suffered a loss
3. Enrichment of defendant is without just or legal
ground
4. Plaintiff has no other action based on contract,
crime or quasi-delict
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Distinguished from solutio indebeti:
Mistake is an essential element in solutio indebeti
but not in accion in rem verso
Art. 30. When a separate civil action is brought to
demand civil liability arising from a criminal
offense, and no criminal proceedings are
instituted during the pendency of the civil case, a
preponderance of evidence shall likewise be
sufficient to prove the act complained of.
Art. 31. When the civil action is based on an
obligation not arising from the act or omission
complained of as a felony, such civil action may
proceed independently of the criminal proceedings
and regardless of the result of the latter.
Art. 32. Any public officer or employee, or any
private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and
liberties of another person shall be liable to the
latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain
a periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property
without due process of law;
(7) The right to a just compensation when private
property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house,
papers, and effects against unreasonable
searches and seizures;
(10) The liberty of abode and of changing the
same;
(11) The privacy of communication and
correspondence;
(12) The right to become a member of
associations or societies for purposes not
contrary to law;
(13) The right to take part in peaceable assembly
to petition the Government for redress of
grievances;
(14) The right to be free from involuntary
servitude in any form;
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(15) The right of the accused against excessive
bail;
(16) The right of the accused to be heard by
himself and counsel, to be informed of the
nature and cause of accusation against him,
to have a speedy and public trial, to meet
the witnesses face to face, and to have
compulsory process to secure the
attendance of witness in his behalf;
(17) Freedom from being compelled to be a
witness against one's self, or from being
forced to confess guilt, or from being
induced by a promise of immunity or reward
to make such confession, except when the
person confessing becomes a State witness;
(18) Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a
statute which has not been judicially
declared unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article,
whether or not the defendant's act or omission
constitutes a criminal offense, the aggrieved party
has a right to commence an entirely separate and
distinct civil action for damages, and for other
relief. Such civil action shall proceed
independently of any criminal prosecution (if the
latter be instituted), and may be proved by a
preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the Penal Code
or other penal statute.
Art. 33. In cases of defamation, fraud, and
physical injuries, a civil action for damages,
entirely separate and distinct from the criminal
action, may be brought by the injured party. Such
civil action shall proceed independently of the
criminal prosecution, and shall require only a
preponderance of evidence.
Art. 34. When a member of a city or municipal
police force refuses or fails to render aid or
protection to any person in case of danger to life
or property, such peace officer shall be primarily
liable for damages, and the city or municipality
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shall be subsidiarily responsible therefor. The civil
action herein recognized shall be independent of
any criminal proceedings, and a preponderance of
evidence shall suffice to support such action.
Rule 111, Sec. 2. Institution of separate civil
action. - Except in the cases provided for in
Section 3 hereof, after the criminal action has
been commenced, the civil action which has been
reserved cannot be instituted until final judgment
has been rendered in the criminal action.
(a) Whenever the offended party shall have
instituted the civil action (arising from the
crime ) as provided for in the first paragraph
of section 1 hereof before the filing of the
criminal action is subsequently commenced,
the pending civil action shall be suspended, in
whatever stage before final judgment it may
be found, until final judgment in the criminal
action has been rendered. However, if no final
judgment has been rendered by the trial court
in the civil action, the same may be
consolidated with the criminal action upon
application with the court trying the criminal
action. If the application is granted, the
evidence presented and admitted in the civil
action shall be deemed automatically
reproduced in the criminal action, without
prejudice to the admission of additional
evidence that any party may wish to present.
In case of consolidation, both the criminal and
the civil actions shall be tried and decided
jointly.
(b) Extinction of the penal action does not carry
with it extinction of the civil, unless the
extinction proceeds from a declaration (need
not be an express declaration- Baltic) in a
final judgment that the fact from which the
civil might arise did not exist. (Rules of
Court.)
Art. 35. When a person, claimining to be injured
by a criminal offense, charges another with the
same, for which no independent civil action is
granted in this Code or any special law, but the
justice of the peace finds no reasonable ground to
believe that a crime has been committed, or the
prosecuting attorney refuses or fails to institute
criminal proceedings, the complainant may bring
a civil action for damages against the alleged
offender. Such civil action may be supported by a
preponderance of evidence. Upon the defendant's
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motion, the court may require the plaintiff to file a
bond to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the
prosecuting attorney, the civil action shall be
suspended until the termination of the criminal
proceedings.
Art. 36. Prejudicial questions, which must be
decided before any criminal prosecution may be
instituted or may proceed, shall be governed by
rules of court which the Supreme Court shall
promulgate and which shall not be in conflict with
the provisions of this Code.
Rule 111, Sec. 5. Elements of prejudicial
question. - The two (2) essential elements of a
prejudicial question are:
(a) the civil action involves an issue similar or
intimately related to the issue raised in the
criminal action;
(b) the resolution of such issue determines
whether or not the criminal action may
proceed. (Rules of Court.)
Rule 111, Sec. 6. Suspension by reason of
prejudicial question. - A petition for suspension
of the criminal action based upon the pendency of
a prejudicial question in a civil action may be filed
in the office of the fiscal or the court conducting
the preliminary investigation. When the criminal
action has been filed in court for trial, the petition
to suspend shall be filed in the same criminal
action any time before the prosecution rests.
(ibid.)
Bigamy - Art. 349, RPC. Contracting of second or
subsequent marriage:
a. before legal dissolution of first marriage
b. before declaration of presumptive death of
absent spouse.
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PERSONS & 3. BIRTH (ART. 40-41)

◘ NATURAL PERSONS
PERSONALITY Beginning of Personality – at conception, such
that the conceived child shall be considered born
for all the purposes that are favorable to it,
provided it be born later with conditions specified
by law.

A. CAPACITY TO ACT ◘ A conceived child, although as yet unborn, is

given by law a provisional personality of its own
1. CIVIL PERSONALITY (Art. 37 of the NCC) for all purposes favorable to it (Quimiguing vs.
Aptitude or being the subject, active or passive, Icao, 34 SCRA 132).
or rights and obligations General Rule: For civil purposes, the fetus is
considered born if it is alive at the time it is
Judicial Capacity Capacity to Act completely delivered from the mother’s womb.
Fitness to be the Power to do act with (Article 41, NCC)
subject of legal legal effects
relations Exception: If the fetus had an intra-uterine life of
Passive Active less than 7 months, it is not deemed born if it
Inherent Merely acquired dies within 24 hours after its complete delivery
Lost only thru death Lost thru death and from the maternal womb.
other causes
Can exist without Cannot exist without ◘ In case of doubt as to whether the child was
capacity to act judicial capacity born alive or dead, the presumption is that it was
Cannot be limited or Can be restricted, alive, and the burden of proof is on the party who
restricted modified or limited alleges the contrary.

◘ The husband of a woman, who voluntarily

THEORIES ON CAPACITY TO ACT procured an abortion, could not recover damages
from the doctor who caused the same under Art.
Theory of General Theory of Special 2206 NCC, for such does not cover the case of an
Capacities Capacities unborn fetus without personality, incapable of
having rights and obligations. Parents, however,
Applies to natural Applies to juridical
may recover moral damages on account of
persons persons
distress and anguish to the loss of the fetus and
One has the ability to This limits the power
the disappointment of their parental expectations.
do all things with legal of juridical persons
(Geluz vs. Court of Appeals, 2 SCRA 801)
effects except only in only to those that are
those specific expressly conferred
circumstances where upon them or those CONTINENTAL STEEL MFG. CORP. VS.
the capacity to act is which can be implied VOLUNTARY ARBITRATOR (GR No. 182836,
restrained. therefrom or October 13, 2009, 603 SCRA 621)
incidental thereto.
FACTS: Hortillano’s wife, Marife, had a pre-mature
2. RESTRICTION ON THE CAPACITY TO ACT: delivery while she was in the 38 th week of
(Art. 38-39) pregnancy which resulted to the death of
1. Minority Hortillano’s unborn child.
2. Insanity or imbecility
3. State of being deaf-mute ISSUE: Whether Hortillano is entitled to
4. Prodigality bereavement benefit on the death of his unborn
5. Civil interdiction child.
◘ Mandatory accessory penalty is deemed
imposed whenever the sentence rendered is
HELD: Yes. Even a child inside the womb already
within the range or reclusion temporal to death, if
has life. No less than the Constitution recognizes
the latter is no executed by reason of
the life of the unborn from conception, that the
commutation or pardon.
State must protect equally with the life of the

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mother. If the unborn already has life, then the

cessation thereof even prior to the child being
delivered, qualifies as death.
It was not disputed that Hortillano and his
wife were validly married and that their child was
conceived during said marriage, hence, making
said child legitimate upon her conception, thus,
Hortillano was entitled to bereavement benefits.
Art. 41. For civil purposes, the foetus is
considered born if it is alive at the time it is
completely delivered from the mother's womb.
However, if the foetus had an intrauterine life of
less than seven months, it is not deemed born if it
dies within twenty-four hours after its complete
delivery from the maternal womb.

Tolentino: Separation from Mother.-- This is

4. DEATH (Art 42-43) produced by the cutting of the umbilical
a) Compare Art. 43 with Rule 131, Sec. 3 (jj) cord, whether the removal takes place
presumption of survivorship naturally or by surgical operation.

◘ SURVIVORSHIP RULE Alive at Birth.-- The duration of extra-uterine

* 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. (Art.
43, NCC)
* The rule only applies when succession is in
issue.
If no successional rights are involved-Rule 131 of
the ROC applies.
The survivorship shall be determined from the
probabilities resulting from the strength and age
of the sexes according to the following rules:
life is immaterial; for acquisition of juridical
personality, it is enough that the child lives
even for an instant.
Test of Life.-- The general opinion is that
independent life required for juridical
personality can be shown only by complete
respiration. The cry of the child, although it
is not a necessary sign of life, is evidence
that it has acquired complete respiration.
Another indication of complete respiration is
the floating of the lungs when placed in
water; this means that air has penetrated
into the lungs by breathing.
Viability Not Required.-- Viability means that
the child is capable of living, and this is
determined by the extent of the
development of its organs.

Age/Sex of the decedents Premature Birth.-- In this case, if the child

at the time of death does not live 24 hours completely separated
from the mother's womb, it does not acquire
Decedent Decedent Who presumed to juridical personality. This is an absolute
A B have survived requirement for feotuses w/c have an
intrauterine life of less than 7 mos. (Balane
Under 15 Under 15 Older quoting Manresa and JBL.)
Above 60 Above 60 Younger
Uder 15 Above 60 Under 15 (younger)
"The aborted creature does not reach the
category of a natural person and consequently is
Above 15 Above 15 Different Sexes- not born in the contemplation of law." (Geluz v.
but under but under Male Same Sex- CA, supra.)
60 60 Older
This is so, even if the child is killed before the
period lapses and it can be proved that it could
have survived that period if it had not been
Under 25 or Between Between 15-60
prevented by the wilful act of another. On the
OVER 60 15-60
other hand, juridical personality is acquired even
if the survival for 24 hours is caused only by

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medical or scientific means w/o w/c the child

would have died before the lapse of that period.

LAW ON MARRIAGE
(Family Code)
B. DOMICILE and RESIDENCE A. Nature of MARRIAGE – is a special contract of
(Art. 50-51) permanent union between a man and a woman
entered into in accordance with the law for the
RESIDENCE DOMICILE establishment of conjugal and family life.
Used to indicate a Denotes a FIXED
◘ As stated, mere breach of promise to marry is
PLACE OF ABODE, PERMANENT
not an actionable wrong. But to formally se a
whether permanent or RESIDENCE, which
wedding and to go thru all the above-described
temporary when absent, one has
preparation and publicity, only to walk out of it
the intention of
when the matrimony is about to be solemnized, is
returning
quite different. This is palpably and unjustifiably
There can be several There can only be
contrary to good customs for which the defendant
places of residence ONE place of domicile
must be made answerable for damages in
accordance with Art. 21 of the New Civil Code
(Wassmer vs. Velez, 12 SCRA 648)
Elements of Domicile
a. Physical presence in a fixed place
b. Intention to remain permanently (animus REQUISITES OF VALID MARRIAGE
manendi) Kinds of Requisites
1.1 Essential Requisites (Art. 5)
Kinds of Domicile
a. Legal capacity of the contracting
1. Domicile of Origin – received by person at parties,
birth.
b. male and female; (age) and
2. Domicile of choice – the place freely
c. Consent freely given in the
chosen by a person sui juris.
d. presence of the solemnizing
3. Constructive Domicile – assigned o a child
officer. (consent)
by law at the time of his birth.

1.2 . Formal Requisites (Art. 3)

a. Authority of solemnizing officer;
b. Valid marriage license; and
c. Marriage ceremony where the
contracting parties appear before the
solemnizing officer and their personal
declaration that they take each other
as husband and wife in the presence
FAMILY RELATIONS of not less than 2 witnesses of legal
age.

Other Requirements of marriage

* E.O. NO. 209 – The Family Code of the
Philippines
* Promulgated on July 6, 1987
* Took effect on August 3, 1988
EXCLUDE: Muslim Code, (PD 1083)
1. If either or both parties is 18 years old and
above but below 21 years of age, parental
consent is necessary.
2. If either or both parties is 21 years of age and
above but below 25, parental advice is
needed.
3. If either or both parties is 18 years old and
above but below 25, marriage counseling is
needed.

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* Absence of the first requirement, the marriage
is voidable.
* Absence of the second/third requirements, it
shall have no effect on the validity of the
marriage. However, this will suspend the
issuance of the marriage license for a period of
3 months from the completion of publication of
the application for marriage license.
* If the parties get married during the 3-month
period without a license, the marriage shall be
void.
*If the parties were able to obtain a marriage
license during the 3-monh prohibition, the
marriage will be valid subject to civil and
criminal liabilities on the part of the erring
party or parties.
◘ A marriage license is a formal requirement; its
absence render the marriage void ab initio. In
addition, the marriage contract shows that the
marriage license was issued in Carmona, Cavite,
yet, neither petitioner nor private respondent ever
resided in Carmona. (Sy vs. Court of Appeals, 330
SCRA 550)
Effect of Absence, Defect or Irregularity in
Requisites: (Art. 4 FCC)
1. Absence of any of the essential or formal
requisites shall render the marriage void ab
initio except as stated in Article 35 (2).
2. Defect in any of the essential requisites shall
render the marriage voidable as provided in
Art. 45.
3. An irregularity in the formal requisites shall
not affect the validity of the marriage but the
parties responsible for the irregularity shall be
civilly, criminally and administratively liable.
(Navarro vs. Domagtoy, 72 SCAD 28)
◘ Thus, credible testimony stating that a wedding
took place gives rise to the presumption that an
exchange of vows was made between the parties
declaring that they take each other as husband
and wife. (Balogbog vs. Court of Appeals, GR No.
83598, March 7, 1997)
◘ A mere Photostat copy of a marriage certificate
is a worthless piece of paper but if such Photostat
copy emanated from the office of the local civil
registrar and duly certified by the local civil
registrar as an authentic copy of the records in his
office, such cerified photostatic copy is admissible
as evidence (Vda. De Chua vs. Court of Appeals,
GR No. 116835, March 5, 1998).
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Persons who may contract marriage
1. Male or female;
2. 18 years old or above;
3. Not subject to impediments in Art. 37 and Art.
38
Validity of Marriage by Proxy
1. Not valid if celebrated in the Philippines;
2. Valid if celebrated abroad and valid there as
such
Marriage License
Duration: valid in any part of the Philippines for a
period of one hundred twenty (120) days.
Marriage Certificate
* Not an essential or formal requisite of marriage
and without which the marriage will still be valid/
◘ Failure to sign a marriage certificate or absence
of the marriage certificate itself does not render
the marriage void or annullable (Madridejo vs. De
Leon, 55 Phil. 1)
Marriages exempt from the Requirement of
Valid License
1. Among Muslims or members of ethnic cultural
communities provided it was solemnize in
accordance with their customs, rites and
practices (Art. 33);
2. In Articulo mortis (Art. 27 & 31);
3. In Remote places (Art. 28)
4. Solemnized outside the Philippines where no
marriage license is required by the country
where it is solemnized.
5. Cohabitation for at least 5 years (Art. 34);
Requisites:
1. The man and woman must have been living
together as husband and wife for at least five
years before the marriage;
2. The parties must have no legal impediment to
marry each other;
3. The fact of absence of legal impediment
between the parties must be present at the
time of marriage;
4. The parties must execute an affidavit stating
that they have lived together for at least five
years [and are without legal impediment to
marry each other; and
5. The solemnizing officer must execute a sworn
statement that he had ascertained the
qualifications of the parties and that he had
found no legal impediment to their marriage
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(Manzano vs. Sanchez GR No. MTJ-00-1329,
March 8, 2001)
Special Requirements for Application of
Marriage License
1. Person previously married:
a. Death certificate of deceased spouse; and
b. Judicial decree of annulment or declaration
of nullity of previous marriage.
2. Persons between 18 and 21 years old:
a. Parental consent; and
b. Certificate of marriage counseling.
3. Persons between 21 and 25 years old
a. Parental advice of parents or guardian; or
b. Certificate of Marriage counseling.
4. Foreigners:
* Certificate of legal capacity to contract
marriage issued by their diplomatic or
consular official.
5. Stateless persons or refuges from other
countries:
a. Affidavit stating circumstances showing
capacity to contract marriage; and
b. Marriage license issued only after 3 months
following completion of publication of
application.
6. Ceremony (Art. 6)
What constitutes a valid marriage
Ceremony?
-That which takes place with the:
1) Appearance of the contracting parties
before the solemnizing officer and
2) Their personal declaration that they shall
take each other as husband and wife
3) In the presence of not less than 2 witness of
legal age
Note: No particular form of ceremony or religios
rite is required by law.
7. PERSONS AUTHORIZED TO SOLEMNIZE A
MARRIAGE
1. Members of the judiciary;
2. Priests, rabbis, ministers of any church;
3. Ship captains or airplane chiefs;
4. Consul generals, consuls or vice consuls;
5. Military commanders of a unit;
6. Duly elected mayors of cities and municipalities
pursuant to the Local Government Code. The
term includes vice-mayor who is “acting
mayor” who is merely “acting as mayor”.
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Authorized Solemnizers of Marriage
A. Judges
* Judges can solemnize marriage only within their
court’s jurisdiction. They must be incumbent and
not retired.
* The jurisdiction of the Court of Tax Appeals,
Sandiganbayan, the Court of Appeals and the
Supreme Court is national in scope. All other
courts are jurisdictional.
◘ Judges who are appointed to specific jurisdiction
may officiate weddings only within the said areas
and not beyond. Where a judge solemnizes a
marriage outside the court’s jurisdiction there is a
resultant irregularity in the formal requisites,
which, while it may not affect the validity of the
marriage, may subject the officiating official to
administrative liability. (Beso vs. Daguman, 323
SCRA 566)
B. Priests, Rabbis, Imam or Minister of Any
Church or Religious Sect
* A priest is one especially consecrated to the
service of a divinity and considered as the
medium thru whom worship, prayer, sacrifice, or
other service is to be offered to the being
worshipped, and pardon, blessing, and
deliverance, obtained by the worshipper.
Requisites to Perform Marriage
1. Must be duly authorized by his or her church or
religious sect;
2. Must act within the limits of the written
authority granted to him or her by the church
or religious sect;
3. Must be registered with the civil registrar
general; and
4. At least one of the contracting parties whose
marriage he or she is to solemnize belongs to
his or her church or religious sect.
C. Ship Captain and Airplane Chief
Requisites to Perform Marriage
1. The marriage must be in articulo mortis (at
least one of the parties is at the point of
death);
2. The marriage must be between passengers or
crew members; and
3. Generally, the ship must be at sea or the plane
must be in flight.
D. Military Commander
Requisites to Perform Marriage
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1. He or she must be a military commander of a
unit;
2. He or she must be a commissioned officer (his
rank should start from a second lieutenant,
ensign and above);
3. A chaplain must be assigned to such unit;
4. The said chaplain must be absent at the time of
marriage;
5. The marriage must be one in ariculo mortis;
6. The contracting parties, whether members of
the armed forces or civilians, must be within
the zone of military operation.
E. Consul-General, Consul or Vice Consul
* They can solemnize marriage abroad only when
the contracting parties are both Filipino citizens.
* When the marriage, which in itself is a special
type of contract, it to solemnized by the consul-
general, consul or vice-consul abroad or,
specifically in his place of assignment, the
solemnities established by Philippine laws shall be
observed in their execution (Article 17 of the Civil
Code)
F. Mayor
* Pursuant to the Local Government Code,
the mayor of a city or municipality, within
their exclusive jurisdiction, is now
empowered to solemnize a marriage.
a) Exception – Art. 35 (2)
Art. 35. The following marriages shall be void
from the beginning:
xxxx
(2) Those solemnized by any person not legally
authorized to perform marriages unless such
marriages were contracted with either or both
parties believing in good faith that the
solemnizing officer had the legal authority to do
so.
8. License Required – Arts 3 (2), 9, 11, 20,
26)
Art. 3. The formal requisites of marriage are:
(1) xxx;
(2) A valid marriage license except in the cases
provided for in Chapter 2 of this Title; xxx
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Art. 9. A marriage license shall be issued by the
local civil registrar of the city or municipality
where either contracting party habitually resides,
except in marriages where no license is required
in accordance with Chapter 2 of this Title. (58a)
Art. 11. Where a marriage license is required,
each of the contracting parties shall file separately
a sworn application for such license with the
proper local civil registrar which shall specify the
following:
(1) Full name of the contracting party;
(2) Place of birth;
(3) Age and date of birth;
(4) Civil status;
(5) If previously married, how, when and where
the previous marriage was dissolved or
annulled;
(6) Present residence and citizenship;
(7) Degree of relationship of the contracting
parties;
(8) Full name, residence and citizenship of the
father;
(9) Full name, residence and citizenship of the
mother; and
(10) Full name, residence and citizenship of the
guardian or person having charge, in case the
contracting party has neither father nor
mother and is under the age of twenty-one
years.
The applicants, their parents or guardians shall
not be required to exhibit their residence
certificates in any formality in connection with
the securing of the marriage license.
Art. 20. The license shall be valid in any part of
the Philippines for a period of one hundred twenty
days from the date of issue, and shall be deemed
automatically canceled at the expiration of the
said period if the contracting parties have not
made use of it. The expiry date shall be stamped
in bold characters on the face of every license
issued. (65a)
Art. 26. All marriages solemnized outside the
Philippines, in accordance with the laws in force in
the country where they were solemnized, and
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valid there as such, shall also be valid in this
country, except those prohibited under Articles 35
(1), (4), (5) and (6), 3637 and 38. (17a)
Where a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry
under Philippine law. (As amended by Executive
Order 227)
 
a) Foreign National – Art. 21
Art. 21. When either or both of the contracting
parties are citizens of a foreign country, it shall be
necessary for them before a marriage license can
be obtained, to submit a certificate of legal
capacity to contract marriage, issued by their
respective diplomatic or consular officials.
Stateless persons or refugees from other
countries shall, in lieu of the certificate of legal
capacity herein required, submit an affidavit
stating the circumstances showing such capacity
to contract marriage.
c. Exceptions – Arts. 27, 31-32, 34
Art. 27. In case either or both of the contracting
parties are at the point of death, the marriage
may be solemnized without necessity of a
marriage license and shall remain valid even if the
ailing party subsequently survives.
Art. 31. A marriage in articulo mortis between
passengers or crew members may also be
solemnized by a ship captain or by an airplane
pilot not only while the ship is at sea or the plane
is in flight, but also during stopovers at ports of
call.
Art. 32. A military commander of a unit, who is a
commissioned officer, shall likewise have
authority to solemnize marriages in articulo
mortis between persons within the zone of
military operation, whether members of the
armed forces or civilians.
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Art. 34. No license shall be necessary for the
marriage of a man and a woman who have lived
together as husband and wife for at least five
years and without any legal impediment to marry
each other. The contracting parties shall state the
foregoing facts in an affidavit before any person
authorized by law to administer oaths. The
solemnizing officer shall also state under oath that
he ascertained the qualifications of the
contracting parties are found no legal impediment
to the marriage.
9. Marriage Certificate, Art. 22
Art. 22. The marriage certificate, in which the
parties shall declare that they take each other as
husband and wife, shall also state:
(1) The full name, sex and age of each
contracting party;
(2) Their citizenship, religion and habitual
residence;
(3) The date and precise time of the celebration
of the marriage;
(4) That the proper marriage license has been
issued according to law, except in marriage
provided for in Chapter 2 of this Title;
(5) That either or both of the contracting parties
have secured the parental consent in
appropriate cases;
(6) That either or both of the contracting parties
have complied with the legal requirement
regarding parental advice in appropriate
cases; and
(7) That the parties have entered into marriage
settlement, if any, attaching a copy thereof.
EXCLUDE: Duties of a Civil Registrar, Arts.
12-19, 23-25
B. Effect of Marriage celebrated abroad and
foreign divorce
◘ ARTICLE 26
General Rule: Where a marriage between a
Filipino citizen and a foreigner is validly celebrated
and a divorce is thereafter validly obtained abroad
by the alien spouse shall likewise have the
capacity to remarry.
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Exception: The general rule does not apply to a
divorce obtained by a Filipino abroad from his/her
Filipino spouse, which divorce is void because
divorce is not allowed in this country, and a
Filipino is governed by his national law wherever
he goes (Article 15, NCC)
◘MARRIAGES SOLEMNIZED ABROAD
General Rule: Marriages solemnized in a foreign
country in accordance with the laws of the foreign
countries shall be valid in the Philippines.
Exceptions:
1. No legal capacity to marry;
2. Marriage is immoral – bigamous or
polygamous;
3. Consent is lacking due o mistake as to the
identity of the other;
4. One of the parties is psychologically
incapacitated.
5. Incestuous; and
6. Void by reason of public policy.
B. VOID and VOIDABLE
MARRIAGES
1) VOID MARRIAGES (Arts. 5, 35, 36-38, 52-53)
a) Due to the ABSENCE of any of the
essential requisites:
1. Legal capacity (below 18 even with the consent
of parents/guardians);
2. Authority of solemnizing officer, unless
both/either of the parties believe in good faith
that the officer had the authority to do so;
3. Marriage license, except those exempted from
license requirement;
4. Immoral (Bigamous or polygamous marriages
no falling under Article 41, FCP);
5. Mistake of one of the contracting parties as to
the identity of the other;
6. Subsequent marriages that are void under
Article 53; and
7. Psychological incapacity, even if such becomes
manifest only after is solemnization.
B. INCESTUOUS marriages, whether the
relationship between the parties be legitimate or
illegitimate. (Art. 37):
1. Ascendants and descendants of any degree;
and
2. Brothers and sisters whether full or half blood.
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C. Those which are declared void because
they are contrary to PUBLIC POLICY (Art.
38) Between:
1. Collateral blood relatives whether legitimate or
illegitimate up to the 4th civil degree;
2. Step-parents and step-children;
3. Parents-in-law and children-in-law;
4. Adopting parent and the adopted child;
5. Surviving spouse of the adopting parent of the
adopted child;
6. Surviving spouse of the adopted child and the
adopter;
7. Adopted child and legitimate child of the
adopter;
8. Adopted children of the same adopter;
9. Parties where one with the intention to marry
the other, killed that other person’s spouse,
or his/her spouse.
b)PSYCHOLOGICAL
INCAPACITY
* A marriage contracted by any party. Who, at
the time of the celebration, was psychologically
incapacitated to comply with the essential marital
obligations of marriage, shall likewise be void if
such incapacity becomes manifest only after its
solemnization.
Essential Elements:
a. Mental condition;
b. Applies to a person who is martially contracted
to one another
c. Marriage entered into volition\
d. Failure to perform its chronic
f. Cause is psychological in nature
g. Cause is serious, with juridical antecedence and
must be curable;
h. Incapacity results in the failure of the
marriage.
* The law does not define what psychological
incapacity is and therefore, the determination is
left solely with the courts on a case-to-case basis.
* The ground is restricted to psychological
incapacity “to comply with the essential marital
obligations of marriage”. The incapacity is clearly
limited to his and/or her failure or disregard to
comply with his and/or her essential marital
obligations.
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* Psychological incapacity, to perform the
essential marital obligations, must be present at
the time of the marriage ceremony, but can be
manifested later on during the marriage. Such a
marriage cannot be cured by cohabitation
considering that it is void and, therefore,
ratification cannot apply.
◘ Mere showing of “irreconcilable differences” and
“conflicting personalities” in no wise constitutes
psychological incapacity. It is enough to prove
that the parties fail to meet their responsibilities
and duties as married persons. It is essential that
it must be shown to the incapable of doing so,
due to some psychological and not physical
illness. (Republic vs. CA, 268 SCRA 198)
◘ Although the respondent failed to provide
material support to the family and may have
resorted to physical abuse and abandonment, the
totality of his acts does not lead to a conclusion of
psychological incapacity on his part. There is
absolutely no showing that his “defects” were
already present at the inception of the marriage
of that they are incurable. (Marcos vs. Marcos,
343 SCRA 755)
◘ A person who is unable to distinguish between
fantasy and reality would be unable to
comprehend the legal nature of the marital bond
much less its psychic meaning and the obligations
attached to the marriage, including parenting.
One unable to adhere to reality cannot be
expected to adhere as well to any legal or
emotional commitments (Antonio vs. Reyes, GR
No. 155800, March 10, 2006)
◘ Psychological incapacity as a ground for nullity
of marriage is equally applicable to “mixed
marriage” (Republic vs. Quintero-Hemano, May
20, 2004)
◘ While disagreements on money matters would,
no doubt, affect the other aspects of one’s
marriage as to make the wedlock unsatisfactory,
this is not a sufficient ground to declare a
marriage null and void. In fact, the Court takes
judicial notice of the fact that disagreements’
regarding money matters is a common, and even
normal, occurrence between husbands and wives.
(Tongol vs. Tongol, GR No. 157610, October 19,
2007)
Respondent’s alleged mixed personality disorder,
the “leaving-the-house” attitude whenever they
quarreled, the violent tendencies during epileptics
attacks, the sexual infidelity, the abandonment
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and lack of support, and his preference to spend
more time with his band mates than his family,
are not rooted on some debilitating psychological
condition but a mere refusal or unwillingness to
assume the essential obligations of marriage.
(Perez-Ferrariz vs. Ferrariz, GR No. 162368, July
17, 2006, 495 SCRA 396)
Guidelines Regarding Psychological
Incapacity
1. Burden of proof belongs to the plaintiff
2. Root cause of the psychological incapacity must
be:
a. Medically or clinically identified
b. Alleged in the complaint
c. Sufficiently proven by experts
d. Explained in the decision
3. Incapacity must be existing at the time of the
celebration of marriage
4. Incapacity must be permanent or incurable
5. Illness is grave enough to bring about disability
to assume marital obligations
6. Marital obligations refer to Art. 68-71 of FC as
well as Art. 220, 221 and 225 of the FC
7. Interpretations of the National Appellate
Matrimonal Tribunal of the Catholic Church of
the Philippines while not controlling should be
given great respect.
8. Trial court must order the prosecuting attorney
or fiscal and the Solicitor General to appear
for the state. (Republic vs. CA and Molina, GR
No. 108763, February 13, 1997)
* Cause of the incapacity must be:
1. Clinically identified;
2. Alleged in the complaint;
3. Sufficiently proven by experts; and
4. Clearly explained in the decision.
* Either party, even the psychologically
incapacitated, can file the action.
* Children conceived or born before the decree of
nullity of marriage are considered legitimate.
* No prescription for action or defenses grounded
on psychological incapacity. (RA 8533)
◘ BIGAMOUS MARRIAGES
General Rule: A marriage contracted by any
person during the subsistence of a previous
valid marriage shall be null and void.
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Exception: When the following conditions concur,
the subsequent bigamous marriage shall be valid:
a. Absence of other spouse must have been for
four consecutive years, or two yeas where
there was danger of death.
b. Well-founded belief of the present spouse that
absent spouse was already dead.
c. Judicial declaration of presumptive death.
Terminable Bigamous Marriage
* Refers to a marriage conditioned on the
reappearance of the absent spouse. This does not
refer to Art. 35, 36, 37 and 38, FCP.
Requisites for the Declaration of
Presumptive Death:
1. Absent spouse has been missing for 4
consecutive years or in case of disappearance
where there is danger of death, for 2
consecutive years;
2. Present spouse wishes to remarry;
3. Well-founded belief that the absentee is dead;
4. Action for a summary proceeding for the
declaration of presumptive death of the
absentee.
◘ A person who marries another, knowing that the
latter is already married and that his marriage is
valid and subsisting, can be prosecuted for
bigamy. (People vs. Archilla, 1 SCRA 698)
* When the law states “the subsistence of a
previous marriage”, the said phrase necessarily
implies a valid marriage. It does not mean a void
marriage because the same is technically non-
existent.
* If previous marriage is void and there is a
subsequent marriage without judicial declaration
of nullity of the first void marriage, the
subsequent marriage is also void, no because it is
bigamous, but because it does not comply with
Articles 40, 52, and 53.
* The declaration of the absent spouse’s
presumptive death does not dissolve the marital
relationship, because the law says the present
spouse can contact marriage without prejudice to
the reappearance of the absent spouse.
Effect of Reappearance
* The subsequent marriage is automatically
terminated by recording the Affidavit of
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Reappearance, unless the previous marriage has
been annulled or declared void ab initio.
* Declaration of nullity of marriage carries ipso
facto, a judgment for the liquidation of property,
custody and support of children and others. There
is no need for filing a separate civil action for such
purposes.
Effects of the Termination of the Subsequent
Marriage
1. Contracted in good faith by both spouses:
a. Children of subsequent marriage conceived
prior to its termination are considered
legitimate;
b. Absolute community of property or the
conjugal partnership shall be dissolved
and liquidated; and
c. Donations by reason of marriage shall
remain valid.
2. Contracted by one party in bad faith:
a. Children of 2nd marriage conceived prior to
its termination shall be considered
legitimate;
b. Absolute community of property or the
conjugal partnership shall be dissolved
and liquidated, but the spouse who acted
in bad faith will have his/her share in the
net profits forfeited:
1) In favor of the common children;
2) If none, in favor of the children of the
guilty spouse by previous marriage;
or
3) In default of children, the innocent
spouse.
c. Donations in favor of spouse bad faith will
be revoked by operation of law.
3. Contracted by both spouses in bad faith:
a. The marriage is void ab initio;
b. Donations by reason of marriage shall be
revoked by operation of law; and
c. Testamentary disposition made by one in
favor of another is also revoked by
operation of law (Art. 44)
5. VOIDABLE MARRIAGES
Grounds:
1. Non-age (18 to below 21, without parental
consent) unless after attaining age of 21, part
freely cohabited with the other;
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2. Unsoundness of mind, unless party after 1. Force, intimidation, or undue influence.

coming to reason, freely cohabited with the Injured Party Within 5 years from the
other; time the force,
3. Fraud, unless party afterwards, with full intimidation, or undue
knowledge of fraud freely cohabited with the influence ceased.
other; 2. Fraud
4. Force, intimidation or undue influence, unless Injured Party Within 5 years after the
same having disappeared or ceased, such celebration of the
party thereafter freely cohabited with the marriage.
other; 3. Incapability to Consummate
5. Impotence; and Injured Party Within 5 years after the
6. Sexually transmitted Disease, if insurable. celebration of the
marriage
4. Insanity
Circumstances Constituting Fraud in Art. a. Sane spouse who a. Anytime before the
45(3): has no knowledge of death of either party.
Non-disclosure or concealment of: the insanity
1. Previous conviction by final judgment of the b. Anytime before the
crime involving moral turpitude; b. Relatives, guardians death of either party.
2. Pregnancy of wife by another man at time of or persons having legal
marriage; charge of the insane. c. During lucid interval
3. Sexually transmissible disease existing at the or after regaining sanity
time of the marriage; c. Insane spouse
4. Drug addiction, habitual alcoholism, 5. Non-consent
homosexuality or lesbianism existing at the
a. Parent/legal a. Anytime before the
time of the marriage.
guardian having charge “no consent” party
of the “no-consent” reaches 21
NOTE: No other misrepresentation as to
party
character, health, rank, fortune or chastity shall
b. Within 5 years after
constitute such fraud as will give grounds for
b. “No consent” party reaching 21
action for the annulment of marriage.
6. STD
◘ Non-disclosure of a husband’s premarital
Injured party Within 5 years after the
relationship with another woman is not one of the
celebration of the
enumerated circumstances that would constitute
marriage
a ground for fraud; and it is further excluded by
the last paragraph of the article, providing that
“no other misrepresentation or deceit as to…
chastity” shall give ground for an action to annul
a marriage. While a woman may detest such non- Requisites for Annulment Due to Impotence
disclosure of premarital lewdness or feel having under Art. 45(5):
been cheated into giving her consent to the
marriage, nevertheless the law does not assuage 1. Existing at the time of the celebration of the
her grief after her consent was solemnly given, marriage;
for upon marriage she entered into an institution 2. Permanent;
in which society, and not herself alone, is 3. Incurable;
interested. (Anaya vs. Palaroan, 36 SCRA 97). 4. Unknown to the other spouse;
5. Other spouse must not also be impotent.
◘ If the woman did not expressly inform the man
her pregnancy, but such physical condition was
readily apparent to the man (seven months
pregnant), he cannot claim lack of knowledge of
such pregnancy (Buccat vs. Buccat, 72 Phil. 19) Doctrine of Triennial Cohabitation (for
Husband’s Impotency)
* A presumption that the husband is impotent
should the wife still remain a virgin after living
Persons who may Prescriptive Period together with the husband for 3 years.
Sue

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No community Absolute community

Requisites for annulment due to Disease property, only exists unless another
under Art. 45(6) ownership (Art. 147) system is agreed upon
1. Either party is inflicted with a sexually in marriage
transmitted disease (STD) settlement
2. STD must exist at the time of the marriage is As to effect on children
celebrated Children are Children are
3. STD must be serious illegitimate legitimate if conceived
4. STD must be apparently incurable before decree of
5. Party mot afflicted by STD must be ignorant of Exceptions: annulment
the other’ affliction a. In case of psycho-
6. Injured party must be free from STD incapacity (Art. 36)

b. Children born of
Additional Requirements for Annulment or subsequent marriage
Declaration of Nullity (Art. 53)
1. Prosecuting attorney or fiscal should: As to how marriage may be impugned
a. Take steps to prevent collusion between a. May be attacked a. Cannot be attacked
the parties directly of collaterally collaterally, only
b. Take care that evidence is not fabricated or but for the purpose of directly, i.e. there
suppressed. remarriage, there must be a decree of
must be judicial annulment
2. The following must be accomplished: declaration of nullity
a. Partition and distribution of the properties b. Can no longer be
of the spouses b. Can still be impugned after death
b. Delivery of the children’s presumptive impugned even after of one of the parties
legitimes death of parties
c. Recording of the judgment of annulment or
absolute nullity
6.Presence of prosecutor, Art. 48
Drug Addiction as a Ground for Declaration
of Nullity of Marriage: Art. 48. In all cases of annulment or declaration
1. The drug addition must amount to of absolute nullity of marriage, the Court shall
psychological incapacity to comply with the order the prosecuting attorney or fiscal assigned
essential obligation of marriage; to it to appear on behalf of the State to take steps
2. It must be antecedent (existing at the time of to prevent collusion between the parties and to
marriage), grave and incurable; take care that evidence is not fabricated or
3. The case must be filed before August 1, 1998. suppressed.

In the cases referred to in the preceding

Drug Addiction as a Ground for Annulment of
paragraph, no judgment shall be based upon a
Marriage
stipulation of facts or confession of judgment.
1. The drug addiction must be concealed;
2. It must exists at the time of marriage;
3. There should be no cohabitation with full
knowledge of the drug addiction;
4. The case is filed within 5 years from discovery. 7. Pendency of action, Art. 49

VOID VOIDABLE
As to nature
Inexistent from the Valid until annulled
time of performance
As to susceptibility to ratification
Cannot be ratified Can be ratified either
be free cohabitation or
prescription
As to effect on property

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Art. 49. During the pendency of the action and in
the absence of adequate provisions in a written
agreement between the spouses, the Court shall
provide for the support of the spouses and the
custody and support of their common children.
The Court shall give paramount consideration to
the moral and material welfare of said children
and their choice of the parent with whom they
wish to remain as provided to in Title IX. It shall
also provide for appropriate visitation rights of the
other parent. (n)
Effects of nullity, Arts. 50-54
Art. 50. The effects provided for by paragraphs
(2), (3), (4) and (5) of Article 43 and by Article
44 shall also apply in the proper cases to
marriages which are declared ab initio or annulled
by final judgment under Articles 40 and 45.
 The final judgment in such cases shall provide
for the liquidation, partition and distribution of
the properties of the spouses, the custody
and support of the common children, and the
delivery of third presumptive legitimes, unless
such matters had been adjudicated in
previous judicial proceedings.
 All creditors of the spouses as well as of the
absolute community or the conjugal
partnership shall be notified of the
proceedings for liquidation.
 In the partition, the conjugal dwelling and the
lot on which it is situated shall be adjudicated
in accordance with the provisions of Articles
102 and 129.
Art. 51. In said partition, the value of the
presumptive legitimes of all common children,
computed as of the date of the final judgment of
the trial court, shall be delivered in cash, property
or sound securities, unless the parties, by mutual
agreement judicially approved, had already
provided for such matters.
The children or their guardian or the trustee of
their property may ask for the enforcement of the
judgment.
The delivery of the presumptive legitimes herein
prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon
the death of either of both of the parents; but the
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value of the properties already received under the
decree of annulment or absolute nullity shall be
considered as advances on their legitime. (n)
Art. 52. The judgment of annulment or of
absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and
the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil
registry and registries of property; otherwise, the
same shall not affect third persons. (n)
Art. 53. Either of the former spouses may marry
again after compliance with the requirements of
the immediately preceding Article; otherwise, the
subsequent marriage shall be null and void.
Art. 54. Children conceived or born before the
judgment of annulment or absolute nullity of the
marriage under Article 36 has become final and
executory shall be considered legitimate. Children
conceived or born of the subsequent marriage
under Article 53 shall likewise be legitimate.
7. Pendency of action (Art. 49)
8. Effects of nullity (Arts. 50-54)
Exclude:
 A.M. No. 02-11-10-SC, Rule on Declaration
of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages;
 R.A. 6955, entitled “An Act to Declare
Unlawful the Practice of Matching Filipino
Women for Marriage to Foreign Nationals on
a Mail Order Basis and Other Similar
Practices…”;
 R.A. 9208 or the Anti-Trafficking in Persons
Act of 2003.
II. Action for annulment
Art. 47. The action for annulment of marriage
must be filed by the following persons and within
the periods indicated herein:
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(1) For causes mentioned in number 1 of Article
45 by the party whose parent or guardian did
not give his or her consent, within five years
after attaining the age of twenty-one, or by
the parent or guardian or person having legal
charge of the minor, at any time before such
party has reached the age of twenty-one;
(2) For causes mentioned in number 2 of Article
45, by the same spouse, who had no
knowledge of the other's insanity; or by any
relative or guardian or person having legal
charge of the insane, at any time before the
death of either party, or by the insane spouse
during a lucid interval or after regaining
sanity;
(3) For causes mentioned in number 3 of Article
45, by the injured party, within five years
after the discovery of the fraud;
(4) For causes mentioned in number 4 of Article
45, by the injured party, within five years
from the time the force, intimidation or undue
influence disappeared or ceased;
(5) For causes mentioned in number 5 and 6 of
Article 45, by the injured party, within five
years after the marriage. (87a)
Art. 48. In all cases of annulment or declaration
of absolute nullity of marriage, the Court shall
order the prosecuting attorney or fiscal assigned
to it to appear on behalf of the State to take
steps to prevent collusion between the parties and
to take care that evidence is not fabricated or
suppressed.
In the cases referred to in the preceding
paragraph, no judgment shall be based upon a
stipulation of facts or confession of judgment.
(88a)
Tolentino V. Villanueva
Facts: Petitioner refused to submit himself for
interrogation by the city fiscal which was the
reason for the dismissal of the case for annulment
of marriage.
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Issue: WON it was proper?
Held: YES, Art. 88 and Art. 101 expresses a
prohibition of the aforesaid laws and rules is
predicated on the fat that the institutions of
marriage and of the family are sacred and
therefore are as much the concern of the state as
of the spouses; because the state and public have
vital interest in the maintenance and the
preservation of these social institutions against
desecration by collusion between the parties or by
fabricating evidence. It stresses the fact that the
marriage is more than a mere contract between
the parties.
Jocson v. Robles
The court found indications of collusion between
the parties in their attempt to secure the
nullification of the said marriage. The court
correctly denied the motion for summary
judgment based on the first paragraph of Art. 88
and 101 of the Civil code of the Philippines.
III. Effects of Annulment
Art. 50. The effects provided for by paragraphs
(2), (3), (4) and (5) of Article 43 and by Article
44 shall also apply in the proper cases to
marriages which are declared ab initio or annulled
by final judgment under Articles 40 and 45.
The final judgment in such cases shall provide for
the liquidation, partition and distribution of the
properties of the spouses, the custody and
support of the common children, and the delivery
of third presumptive legitimes, unless such
matters had been adjudicated in previous judicial
proceedings.
All creditors of the spouses as well as of the
absolute community or the conjugal partnership
shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot
on which it is situated, shall be adjudicated in
accordance with the provisions of Articles 102 and
129.
Art. 51. In said partition, the value of the
presumptive legitimes of all common children,
computed as of the date of the final judgment of
the trial court, shall be delivered in cash, property
or sound securities, unless the parties, by mutual
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agreement judicially approved, had already
provided for such matters.
The children or their guardian or the trustee of
their property may ask for the enforcement of the
judgment.
The delivery of the presumptive legitimes herein
prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon
the death of either of both of the parents; but the
value of the properties already received under the
decree of annulment or absolute nullity shall be
considered as advances on their legitime. (n)
Art. 52. The judgment of annulment or of
absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and
the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil
registry and registries of property; otherwise, the
same shall not affect third persons. (n)
Art. 53. Either of the former spouses may marry
again after compliance with the requirements of
the immediately preceding Article; otherwise, the
subsequent marriage shall be null and void.
IV.Conflict of Law Rules
Art. 26. All marriages solemnized outside the
Philippines, in accordance with the laws in force in
the country where they were solemnized, and
valid there as such, shall also be valid in this
country, except those prohibited under Articles 35
(1), (4), (5) and (6), 3637 and 38.
Van Dorn V. Romillo
Whether or not the divorce obtained in Nevada is
valid and binding in the Philippines?
Held: Owing to the nationality principle embodied
in At. 15 of the Civil Code, only the Philippines
nationals covered by the policy against absolute
divorces the same being considered contrary to
our public policy and morality. Exceptions are
aliens who may obtain valid divorce. Pursuant to
his national law, private respondent is no longer
the husband of the petitioner. He would have no
standing to sue in the case below as petitioner’s
husband entitles to exercise control over conjugal
assets. He is now stopped by his own
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representation before said court from asserting
his right over the alleged conjugal property.
LEGAL SEPARATION
A. Grounds (Art. 55 and R.A. 9262 or the Anti-
Violence Against Women and Their
Children Act of 2004)
B. Defenses (Arts. 56-57)
C. Cooling-off period (Art. 58)
D. Reconciliation efforts (Art. 59)
E. Confession of judgment (Art. 60)
F. Effects of filing petition (Art. 61)
G. Effects of pendency (Art. 62)
H. Effects of legal separation (Arts. 63-64)
1. Legal Separation (Arts. 65-67)
* It is the separation of the husband and wife
from bed or board without having the
marriage bond severed.
A. Grounds:
1. Repeated physical violence or grossly abusive
conduct directed against the petitioner, a
common child or a child of the petitioner;
2. Physical violence or moral pressure to compel
the petitioner to change political or religious
affiliation;
3. Attempt of respondent to corrupt or induced
the petitioner, a common child, or a chills 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 6 years, even if
pardoned;
5. Drug addiction or habitual alcoholism;
6. Lesbianism or homosexuality;
7. Contracting a bigamous marriage;
8. Sexual infidelity or perversion;
9. Abandonment without justifiable cause for
more than 1 year.
10. RA 9262 (Anti- VAWC)
Grounds for Denial of Petition for Legal
Separation
1. Condonation by the aggrieved party;
2. Consent to the commission of the offense;
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3. Connivance between the parties in the
commission of the offense or the act
constituting the ground for legal separation;
4. Collusion between the parties to obtain the
decree of the legal separation;
5. Mutual guilt;
6. Prescription.
Condonation
* The act of forgiving the offense after
commission
* It implies a condition of future good behavior by
the offending spouse. Condonation of the violation
of the marital duties and obligations being
conditional on the future good conduct of the
offending spouse, subsequent offense on his or he
pat revokes or nullifies the Condonation and
revives the original offense.
◘ The failure of the husband to look actively for
his adulterous wife after she left the conjugal
home does not constitute Condonation or consent
of the wife’s adulterous acts. It was not his duty
to search for her to bring her home. Hers was the
obligation to return (Ocampo vs. Florenciano, 107
Phil 35)
◘ The act of giving money to an erring wife and
the fact that no action was taken against her
before the courts of justice are sufficient to
establish forgiveness amounting to Condonation,
for Condonation is the forgiveness of the one of
the married parties of an offense which he knows
the other has committed against the other and, at
any rate, pardon or Condonation does not require
sexual intercourse and it may be express or
implied (Almacen vs. Baltazar, 103 Phil 1147)
Recrimination or Equal Guilt – A
counterchange in a suit for divorce or legal
separation that the petitioner is also guilty of an
offense constituting a ground for divorce of legal
separation. This is based on the maxim that a
person must come to court with clean hands.
Consent
* There is consent when either of the spouses
agreed to or did not object, despite full
knowledge, to the act, giving rise to a ground for
legal separation, before such act was in fact
committed.
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◘ An agreement between the parties that they will
not object to the other’s act of sexual infidelity,
adultery or concubinage has been declared as
void, but, though void, is nevertheless an
expression of their clear consent to the
commission of the sexual infidelity. (People vs.
Schneckenburger, 73 Phil 413)
Prescriptive Period – 5 years from
occurrence of cause.
Cooling-off Period – 6 months period before
trial to enable parties to cool off for possible
reconciliation.
Effects of Filing a Petition for Legal
Separation:
1. Spouses entitled to live separately from each
other;
2. No right to have sexual intercourse with other
spouse;
3. In the absence of an agreement between the
parties, the court shall designate the husband,
the wife or a 3rd person, to manage the
absolute community or conjugal partnership
property.
Effects of the Decree of Legal Separation:
1. Spouses entitled to live separately but the
marriage bond shall not be severed.
2. Liquidation of conjugal properties but share of
the offending spouse shall have no right to the
net profits, such will be forfeited according to
Art. 43(2) of the Family Code. (Macadangdang
vs. CA, 108 SCRA 314)
3. Custody of the minor children shall be awarded
to the innocent spouse subject to the
provisions of Art. 213 of the Code. (Tonog vs.
Daguimol, GR No. 122906 Feb 7, 2002)
4. Disqualification of the offending spouse to
inherit from the innocent spouse by intestate
succession and the provisions in favor of the
offending spouse made in the will of the
innocent spouse shall be revoked by operation
of law.
5. Innocent spouse may revoked the donations
made by him/her in favor of the offending
spouse, as well as the designation of the latter
as beneficiary in any insurance policy, even if
the designation be irrevocable.
Drug Addiction as a Ground for Legal
Separation:
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1. There should be no Condonation or consent to

the drug addiction;
2. The action must be filed within 5 years from
the occurrence of the cause.
3. Drug addiction arises during the marriage and
not at the time of marriage.

Effects of Reconciliation of the Spouses:

A. On their personal relations:

* Presumption of cohabitation and marital
relations.

B. On the Proceedings for and Decree of

Legal Separation:
1. Proceedings will be terminated.
2. If there is a decree of legal separation, it will
be set aside by a court order.

EXCLUDE: SC Rules on legal separation

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DISTINCTIONS
DISTINCTION BETWEEN VOID & VOIDABLE MARRIAGES AND LEGAL SEPARATION
VOID
Grounds 1. If parties are below 18,
even with the consent of
parents/guardians
2. Marriage is solemnized
by any person not legally
authorized, unless both
parties believe in good
faith that said officer had
authority
3. Solemnized without
license, except those that
are expressly exempted by
the Civil Code
4. Bigamous / polygamous
marriages
5. Contracted by mistake
as to identity of the other
party
6. Subsequent marriages
void under Art. 53
7. Psychological incapacity
8. Incestuous relationships
9. Those void by reason of
public policy
* absence of any formal or
essential requisite makes
the marriage void
Nature of Void ab initio; inexistent
Marriage from time contracted
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VOIDABLE
1. Parties are 18 or over but
below 21, married without
consent of parents or
guardian.
2. Either party is of unsound
mind
3. Consent of either party
was obtained by fraud.
4. Consent of either party
was obtained by force,
intimidation, or undue
influence
5. Physical incapability of
consummating the marriage
6. Either party is found to be
afflicted with sexually-
transmissible disease which
is serious and appears
incurable
* defect in any of the
essential requisites makes
marriage voidable
Valid until annulled by
competent court
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LEGAL SEPARATION
1. Repeated physical
violence or grossly abusive
conduct directed at
petitioner, a common child,
or child of the petitioner
2. Physical violence or
moral pressure to compel
petitioner to change
religious or political
affiliation
3. Attempt of respondent
to corrupt or induce
petitioner, common child
or child of petitioner to
engage in prostitution
4. Final judgments
sentencing respondent to
imprisonment of more than
6 years even if pardoned
5. Drug addiction or
habitual alcoholism of
respondent
6. Lesbianism /
homosexuality of
respondent
7. Contracting of
respondent of subsequent
bigamous marriage,
whether here or abroad
8. Attempt by respondent
on the life of petitioner
9. Abandonment without
justifiable cause for more
than one
year.
Subsisting
Even with
Decree of
Legal
Separation.
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VOID VOIDABLE LEGAL SEPARATION

Ratification Cannot be ratified Can be ratified by free No ratification, but
cohabitation or parties may reconcile
prescription
How marriage can be * Directly or * Directly – there must
impugned collaterally; for be a decree
remarriage, a decree is * Can no longer be
needed impugned after death
* Can still be impugned of either party
after the death of
either party
Prescription * Shall not prescribe a. Lack of parental Within 5 years from the
* In case of marriage consent time of occurrence of
celebrated before i. By party underage – cause
effectivity of the family within 5 years after
code, 10 years after its turning 21
effectivity (1998) ii. By parent – before
child turns 21

b. Insanity
i. By sane spouse or
guardian – before
death of either party
ii. Insane spouse –
during lucid interval,
after gaining sanity or
before the death of
either spouse

c. Fraud/force – within
5 years of discovery of
fraud or cessation of
cause

d. Impotence/STD –
within 5 years after the
marriage
Effect of Filing / In absence of or a. Spouses are entitled
Pending Decree inadequacy in a written to live separately from
agreement by spouses, each other
the court shall provide
for support of common b. The court, in the
children; it shall also absence of written
provide for appropriate agreement between
visitation rights spouses, shall
designate either of
them or a 3rd party to
administer the ACP or
CPG
c. Court shall provide
for support of the
spouses & custody &
support of common
children; it shall
provide for appropriate
visitation rights
Effect on Children Illegitimate, except Legitimate if conceived Legitimate

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those children of before annulment * Custody of minor

marriages void under decree was given children shall be given
Arts. 36 and 53 to the innocent spouse
Effect of Decree on Final judgment shall Final judgment shall ACP or CPG shall be
Property provide for the provide for the dissolved and liquidated
liquidation and liquidation and but the offending
dissolution of dissolution of spouse shall have no
properties, as well as properties, as well as right to any share of
for custody and support for custody and support the net profit earned by
of children of children such properties
Who can file action Any of the spouses a. Lacks parental Aggrieved spouse
consent – party under-
aged or
parent/guardian

b. Insanity – sane or
insane spouse,
guardian of insane
spouse

(3) Attempt of respondent to corrupt or induce the

Case: petitioner, a common child, or a child of the
petitioner, to engage in prostitution, or
Tenchavez v. Escano connivance in such corruption or inducement;

Held: Marriage was valid because lack of (4) Final judgment sentencing the respondent to
ecclesiastical authorization from the parish priest imprisonment of more than six years, even if
by Canon Law, is irrelevant to our civil law. pardoned;

Held: The marriage was valid and subsisting

notwithstanding the decree of absolute divorce
the wife obtained under the state of Nevada. But
the wife’s cohabitation with Leo Moran, the man
she subsequently marriage after the divorce
declaration, is technically intercourse with a
person not her husband and entitles petitioner a
decree of legal separation under our own law on
the basis of adultery.
(5) Drug addiction or habitual alcoholism of the
respondent;
(6) Lesbianism or homosexuality of the
respondent;
(7) Contracting by the respondent of a subsequent
bigamous marriage, whether in the Philippines
or abroad;

(8) Sexual infidelity or perversion;

(9) Attempt by the respondent against the life of

the petitioner; or
I. Grounds
(10) Abandonment of petitioner by respondent
without justifiable cause for more than one
Art. 55. A petition for legal separation may be filed
year.
on any of the following grounds:
(1) Repeated physical violence or grossly abusive
conduct directed against the petitioner, a For purposes of this Article, the term "child" shall
common child, or a child of the petitioner; include a child by nature or by adoption. (9a)
(2) Physical violence or moral pressure to compel
the petitioner to change religious or political
affiliation; Art. 56. The petition for legal separation shall be
denied on any of the following grounds:

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(1) Where the aggrieved party has condoned the
offense or act complained of;
(2) Where the aggrieved party has consented to
the commission of the offense or act
complained of;
(3) Where there is connivance between the parties
in the commission of the offense or act
constituting the ground for legal separation;
(4) Where both parties have given ground for legal
separation;
(5) Where there is collusion between the parties to
obtain decree of legal separation; or
(6) Where the action is barred by prescription.
(100a)
II. Limitation of Action
Art. 57. An action for legal separation shall be filed
within five years from the time of the occurrence of
the cause.
People V. Sensano
The husband showed that he consented to the
adulterous relations existing between the accused
and therefore is not authorized by law to institute
the criminal proceeding. We cannot accept the
argument that it was impossible for the husband to
take any action against the accused during the
whole 7 years. (The husband abandoned his wife
and child and during such time she met another
man and he took her and her child to live with
him.)
Bugayong V. Ginez
The fact that the husband slept with his wife
convinces us that there was reconciliation between
them. A single voluntary by the innocent spouse
after discovery of the offense is ordinarily sufficient
to constitute condonation, especially as against the
husband.
Matubis v. Praxedes
The complaint for legal separation was filed outside
the period provided under Art. 102 of the NCC.
(one year) By the very admission of the plaintiff,
she found out of the ground (concubinage) was in
January 1955 and filed a complaint only on April
24, 1956.
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Contreras V. Macaraig
Issue: When did knowledge of the ground occur as
basis for the prescription period to start tolling?
The time the wife heard via hearsay the infidelity
or the time when the husband admitted to her that
he was living with and would no longer leave his
concubine?
Held: The latter case. The first time, the wife was
hurt but it was merely hearsay. The only time she
was cognizant of the infidelity of her husband was
in the early part of Dec. 1963 only when defendant
informed the wife he could no longer leave Lily Ann
and refused to return to the legitimate family.
III.Hearing
Art. 58. An action for legal separation shall in no
case be tried before six months shall have elapsed
since the filing of the petition. (103)
Art. 59. No legal separation may be decreed unless
the Court has taken steps toward the reconciliation
of the spouses and is fully satisfied, despite such
efforts, that reconciliation is highly improbable. (n)
Art. 60. No decree of legal separation shall be
based upon a stipulation of facts or a confession of
judgment.
Ramos V. Vamenta
The 6 month period stated in Art. 103 of the Civil
Code that bars the proceedings for legal separation
does not bar the ancillary writ for preliminary
injunction.
Araneta V. Concepcion
Evidence can still be presented and trial be had on
the question of support pendente lite and custody
for children notwithstanding that 6 months have
not yet elapsed since the filing of the case for legal
separation.
I. Rights and obligations of the parties
Art. 61. After the filing of the petition for legal
separation, the spouses shall be entitled to live
separately from each other.
The court, in the absence of a written agreement
between the spouses, shall designate either of
them or a third person to administer the absolute
community or conjugal partnership property. The
administrator appointed by the court shall have the
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same powers and duties as those of a guardian
under the Rules of Court. (104a)
Art. 62. During the pendency of the action for legal
separation, the provisions of Article 49 shall
likewise apply to the support of the spouses and
the custody and support of the common children.
Reyes V. Ines-Luciano
It is true the adultery is defense against support
penedente lite but must be established by
competent evidence which the petitioner failed to
present any evidence. The complaint for legal
separation contains allegations showing that at
least two occasion the defendant, petitioner, has
made attempts to kill private respondent.
II. Effect of Death of a spouse
Lapuz V. Eufemio Sy-uy
Legal separation is purely personal and it follows
that the death of one party to the action causes
the death of the action relief-actio personalis
moritur cum persona.
Other rights that are personal:
1) Right to dissolution of the conjugal partnership
of gains or of (ACP);
2) Loss of the right of the offending party spouse
to share of the profits earned by the partnership
or community;
3) Disqualification to inherit by intestacy from the
innocent spouse
4) Revocation of testamentary provisions in favor
of the offending spouse made by the innocent
one.
They are vested exclusively in the prsons of the
spouses and such claims and disabilities are
difficult to concelive as assignable and
transmissible.
Macadangdang V. CA
The death of a spouse after a final decree of legal
separation has no legal effect on the legal
separation.
III.Decree of Legal Separation
I. Effects
Art. 63. The decree of legal separation shall have
the following effects:
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(1) The spouses shall be entitled to live separately
from each other, but the marriage bonds shall
not be severed;
(2) The absolute community or the conjugal
partnership shall be dissolved and liquidated but
the offending spouse shall have no right to any
share of the net profits earned by the absolute
community or the conjugal partnership, which
shall be forfeited in accordance with the
provisions of Article 43(2);
(3) The custody of the minor children shall be
awarded to the innocent spouse, subject to the
provisions of Article 213 of this Code; and
(4) The offending spouse shall be disqualified from
inheriting from the innocent spouse by intestate
succession. Moreover, provisions in favor of the
offending spouse made in the will of the
innocent spouse shall be revoked by operation
of law. (106a)
Art. 64. After the finality of the decree of legal
separation, the innocent spouse may revoke the
donations made by him or by her in favor of the
offending spouse, as well as the designation of the
latter as beneficiary in any insurance policy, even if
such designation be stipulated as irrevocable. The
revocation of the donations shall be recorded in
the registries of property in the places where the
properties are located. Alienations, liens and
encumbrances registered in good faith before the
recording of the complaint for revocation in the
registries of property shall be respected. The
revocation of or change in the designation of the
insurance beneficiary shall take effect upon written
notification thereof to the insured.
The action to revoke the donation under this Article
must be brought within five years from the time
the decree of legal separation become final. (107a)
II. Reconciliation
Art. 65. If the spouses should reconcile, a
corresponding joint manifestation under oath duly
signed by them shall be filed with the court in the
same proceeding for legal separation. (n)
Art. 66. The reconciliation referred to in the
preceding Articles shall have the following
consequences:
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(1) The legal separation proceedings, if still
pending, shall thereby be terminated at
whatever stage; and
(2) The final decree of legal separation shall be set
aside, but the separation of property and any
forfeiture of the share of the guilty spouse
already effected shall subsist, unless the
spouses agree to revive their former property
regime.
The court's order containing the foregoing shall be
recorded in the proper civil registries. (108a)
proceeding for legal separation, with copies of both
furnished to the creditors named therein. After due
hearing, the court shall, in its order, take measure
to protect the interest of creditors and such order
shall be recorded in the proper registries of
properties.
The recording of the ordering in the registries of
property shall not prejudice any creditor not listed
or not notified, unless the debtor-spouse has
sufficient separate properties to satisfy the
creditor's claim.

Art. 67. The agreement to revive the former

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

(1) The properties to be contributed anew to the

restored regime;
(2) Those to be retained as separated properties of
each spouse; and

(3) The names of all their known creditors, their

addresses and the amounts owing to each.

The agreement of revival and the motion for its

approval shall be filed with the court in the same

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RIGHTS AND OBLIGATIONS

BETWEEN HUSBAND AND
WIFE

A. Essential obligations (Art. 68)

B. Family domicile (Art. 69)
C. Support (Art. 70)
D. Management of household (Art. 71)
E. Effect of neglect of duty (Art. 72)
F. Exercise of profession (Art. 73)
Exclude: R.A. 7192 or the Women in
Development and Nation Building Act; R.A.
8187, or the Paternity Leave Act of 1996; R.A.
9710 or The Magna Carta of Women.

Essential Obligations, Art. 68

Art. 68. The husband and wife are obliged to live

together, observe mutual love, respect and fidelity,
and render mutual help and support..

Family Domicile, Art. 69

Art. 69. The husband and wife shall fix the family
domicile. In case of disagreement, the court shall
decide.
The court may exempt one spouse from living with
the other if the latter should live abroad or there
are other valid and compelling reasons for the
exemption. However, such exemption shall not
apply if the same is not compatible with the
solidarity of the family.

Support, Art. 70

Art. 70. The spouses are jointly responsible for the

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

Management of household, Art. 71

Art. 71. The management of the household shall

be the right and the duty of both spouses. The
expenses for such management shall be paid in
accordance with the provisions of Article 70.

Effect of neglect of duty, Art. 72

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Art. 72. When one of the spouses neglects his or
her duties to the conjugal union or commits acts
which tend to bring danger, dishonor or injury to
the other or to the family, the aggrieved party may
apply to the court for relief.
Exercise of profession, Art. 73
Art. 73. Either spouse may exercise any legitimate
profession, occupation, business or activity without
the consent of the other. The latter may object
only on valid, serious, and moral grounds.
In case of disagreement, the court shall decide
whether or not:
(1) The objection is proper; and
(2) Benefit has occurred to the family prior to the
objection or thereafter. If the benefit accrued prior
to the objection, the resulting obligation shall be
enforced against the separate property of the
spouse who has not obtained consent.
The foregoing provisions shall not prejudice the
rights of creditors who acted in good faith.
Obligation to live together
Arroyo V. Vasquez
The wife cannot be compelled to return to the
matrimonial home and live with her husband. The
court in this case said the only remedy of the
husband is to refuse to grant support for the
unjustifiable abandonment.
Atilano V. Chua Ching Beng
The option in Art. 299. Which states, “The person
obliged to give support may, at his option, fulfill
his obligation either by paying the allowance fixed,
or by receiving and maintaining in his house the
person who has a right to receive support. The
latter alternative cannot be availed of in case there
is a moral or legal obstacle thereto.” Clearly
provides for only one occasion when the second
alternative could be availed of when there is moral
or legal obstacle thereto. The moral and legal
obstacle in this case were the in-laws which are
third persons to the marriage. Hence, the SC gave
the husband the option to support his wife at their
conjugal dwelling apart from the parents of the
husband and if wife should refuse to abide by the
terms of this decision, the husband is relieves from
the obligation to support his wife.
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II. PROPERTY RELATIONS
BETWEEN HUSBAND & WIFE
A. Marriage settlements (Arts. 76-81)
B. Donations by reason of marriage (Arts. 82-83,
86, 43(3), 50)
C. Void donations by the spouses (Art. 87)
D. Absolute Community of Property
1. General provisions (Arts. 75-85, 88-90)
2. What constitutes community property (Arts.
91-93)
3. Charges upon and obligations of the
community property (Arts. 94-95)
4. Ownership, administration, enjoyment and
disposition of the community
property (Arts. 96-98)
5. Dissolution of community regime (Arts. 99-
101)
6. Liquidation of the absolute community assets
and liabilities (Arts. 102-104)
E. Conjugal Partnership of Gains
1. General provisions (Arts. 105-108)
2. Exclusive property of each spouse (Arts.
109-115)
3. Conjugal partnership property (Arts. 116-
120)
4. Charges upon and obligations of the
Conjugal Partnership of Gains (Arts. 121-
123)
5. Administration of the Conjugal Partnership
of Gains (Arts. 124-125)
6. Dissolution of the regime of Conjugal
Partnership of Gains (Arts. 126-128)
7. Liquidation of the conjugal partnership
assets and liabilities (Arts. 129-133)
F. Separation of property of the spouses and
administration of common property by one
spouse during the marriage (Arts. 134-142)
G. Regime of separation of property (Arts. 143-
146)
H. Property regime of unions without marriage
(Arts. 147-148)
What governs?
1. Marriage settlement
2. Provisions of the Family Code
3. Local Customs
◘ MARRIAGE SETTLEMENT
* A contract entered into by a man and a woman
who intend or plan to get married fixing the
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property regime that will govern their present and
future properties during their marriage
* To bind third persons, the marriage settlement
and any modification thereof must be registered in
the local civil registrar where the marriage contract
is recorded and in the proper registries of property.
* The bind third persons, the marriage settlement
and any modification thereof must be registered in
the local civil registrar where the marriage contract
is recorded and in the proper registries of property
* Pursuant to Article 1403 (2c) of the New Civil
Code dealing with the State of Frauds, an
agreement in consideration of marriage must be in
writing; otherwise, it shall be unenforceable.
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Requisites of Valid Marriage Settlement
1. In writing;
2. Signed by the parties;
3. Executed before the celebration of the marriage;
4. If a party executing the settlement needs
parental consent, the parent/guardian whose
consent is needed must be made a party to the
agreement;
5. If the party executing the settlement is under
civil interdiction or any other disability, the
guardian appointed by the court must be made
a party to the settlement;
6. Registration (to bind third persons)
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DONATIONS BY REASON OF
MARRIAGE

* Donations made in consideration of the marriage

in favor of one or both of the future spouses and
executed before its celebration.

* Donations between common-law spouses are

void. (Art. 87, FC)

One-fifth Limitation
* If there is a marriage settlement providing for a
particular regime other than the absolute
community of property, such as the conjugal
partnership of gains or the separation of property
regime, and there is also a donation proper nuptias
not included in a marriage settlement but
contained in a separate deed, the “not more than
one-fifth” limitation will not apply. Instead, the
general rules on donations contained in Title III of
Book II of the Civil Code shall govern, providing
that:

The donation may comprehend all the

present property of the donor, or part
thereof, provided he reserves, in full
ownership or in usufruct, sufficient means
for the support of himself, and all relatives
who, at the time of the acceptance of the
donation, are by law entitled to be
supported by the donor. Without such
reservation, the donations shall be reduced
on petition of any person affected (Article
750, NCC).

* However the above provision is likewise subject

to the provision in the Civil Code that “no person
may give or receive, by way or donation, more
than he may give or receive by will. The donation
shall be inofficious in all that it may exceed this
limitation (Article 752, NCC).

Grounds for the Revocation of a Donation

Propter Nuptias:
1. Marriage is not celebrated or judicially declared
void ab initio except donations made in the
marriage settlement;
2. Marriage takes place without consent of the
parents or guardians as required by law;
3. Marriage is annulled, and the donee being the
guilty spouse;
4. Upon legal separation, the donee being the
guilty spouse;

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5. If it is with a resolutory condition and the

condition is complied with; 1. If marriage is not celebrated (except donations
6. Donee has committed an act of ingratitude as contained in the marriage settlement which are
specified in the provisions of the NCC. automatically rendered void if the marriage
does not take place) – 5 years (Art. 1149) from
the time the marriage is not solemnized in the
fixed date.
DONATIONS BETWEEN SPOUSES
2. If marriage is judicially void, it depends.
General Rule: Every donation or grant or
a. If subsequent marriage is void pursuant to
gratuitous advantage, direct or indirect, between
Art. 40 in relation to Arts. 52 and 53,
the spouses during the marriage shall be void.
because it was contracted by a spouse
before the prior void marriage is judicially
Exceptions:
declared void – by operation of law if
1. Moderate gifts given on occasion of family
donee-spouse contracted subsequent void
rejoicing.
marriage in bad faith.
2. Donations mortis causa
b. Judicially declared void on grounds other
than Art. 40 in relation to Arts. 52 and 53
* Note: General rule and exception applies
– 5 years from finality of judicial
to common law spouses
declaration of nullity (if action to recover
the property).

3. When the marriage takes place without the

The Following are Donations Void from the
Beginning
1. Those made between persons who were guilty
of adultery or concubinage at the time of the
donation;
2. Those made between persons found guilty of the
same criminal offense, in consideration thereof;
3. Those made to a public officer or his wife,
descendants and ascendantsm by reason of his
office.
required parental consent – 5 years.
4. If resolutory condition is complied with – 5 years
from happening of condition.
5. When marriage is annulled and donee is in bad
faith – 5 years from finality of decree.
6. If donee commits an act of ingratitude – 1 year
from donor’s knowledge of that fact.

* In cases of legal separation – 5 years from the

Prescriptive Period for Revocation of time the decree of separation has become final.
Donations Propter Nuptias

MARRIAGE SETTLEMENT, DONATION PROPTER NUPTIAS AND ORDINARY DONATIONS

NATURE MARRIAGE DONATIONS ORDINARY DONATION

SETTLEMENT PROPTER NUPTIAS
* Should not prejudice * May include future * Cannot comprehend future
3rd persons. property. property.
Scope and * Will be void if marriage * May be made by * Cannot be made by minors.
Restrictions does not take place. minors. * May comprehend all
* Cannot stipulate that * If regime is not ACP property of donor must
donations between them spouses cannot donate reserve sufficient means to
during marriage will be more than 1/5 of their support himself.
valid. present property. * Must not prejudice
* No direct donations. legitimes.
* Must not prejudice
legitimes.
Before the celebration of On the occasion of the
Effectivity the marriage. marriage.

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* Future spouse. * Spouses to each All persons who may contract

* If party is a minor, other. and dispose of their property.
person whose consent is * Parents of the
needed must be a party spouses.
Who executes thereto. * Any 3rd person.
* For persons suffering
from civil interdiction or
other disability, the
guardian must be a party
thereto.
Written, public No form required. * Movables – oral or written.
Form of Execution document, signed by the * Immovable – public
parties. document.
Judicial separation of * Marriage is not * Donor, after the donations
property, voluntarily or celebrated or judicially should have legitimate,
for cause. declared void ab initio. illegitimate, legitimated
Revocation * Marriage takes place children, even though they are
without the needed posthumous.
consent. * Child of donor, whom the
* Marriage is annulled, latter believed dead, turns out
donee acted in bad to be alive.
faith. * Donor is subsequently
* In case of legal adopts a minor child.
separation and donee is * Acts of ingratitude by
guilty spouse. donee.
* Resolutory condition * Failure to comply with
is not complied with. condition attached to
* Donee committed an donation.
act of ingratitude
Heirs of any person Those who have right to
Who may Question whose rights are legitimate and their heirs.
Validity prejudiced.
Sumbad V. CA
Case:
GR: Donation before marriage when they were in
Serrano V. Solomon a common-law relationship was void as the
prohibition extended to common-law relationship
This was not a valid donation propter nuptias but since they were not able to prove the
because the donation was being made not in common law relationship then the donation was
favor of Alejandria, the wife, but rather in favor of valid.
those who acted as her parents and raised her
from girlhood to womanhood in the absence of
her father. The suspensive condition here was
that the marriage would have to be childless and Matabuena V. Cervantes
one of the spouses would have to die before the (Same ruling as Sumbad that the prohibition of
other so that the donation would operate. Also, donation of the brother to his common-law wife
the donation did not fulfill the requirements as it was not valid as Art, 87 extends to common-law
was never accepted by the done either in the relationship)
same instrument or donation or in a separate
document as required by law.

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Solis V. Barroso
Donation proper nuptias here was not valid
because it was made in a private instrument. This
donation must be governed by the rules on
Donation. Real Property may be valid, it must be
made in the public instrument. (Formal Validity)
The only exceptions to this rule are onerous and
remuneratory donations, insofar as they do not
exceed the value of the charge imposed, which are
then governed by the rules on contracts, and those
which are to take effect upon the donor’s death,
which are governed by the rules established for
testamentary succession.
Marriage in DPN is rather a resolutory condition
which presupposes the existence of the obligation
which may be resolved or revoked, and it is not a
condition necessary for the birth of the obligation.
Mateo V. Lagua
Before there could be any conclusion about the
legal share due to a compulsory heir may be
ABSOLUTE COMMUNITY
PROPERTY
All the properties owned by the spouses at the
time of marriage become community property.
Upon dissolution and liquidation of the community
property what is divided equally between the
spouses of their heirs is the net remainder of the
properties of the ACP.
Charges Upon and Obligations of Absolute
Community Property and Conjugal Property
1. Support for family except for illegitimate
children of their spouses;
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reached, it is necessary that certain steps should
be taken first.
The CA should follow Art. 908 to determine the
legitime before reducing the donation for being
inofficious.
A. SYSTEM OF ABSOLUTE
COMMUNITY
General Rule: Community property shall consist
of all property owned by the spouses at the time of
the marriage or acquired thereafter:
Exceptions:
1. Property acquired during the marriage by
gratuitous title by either spouse, its fruits and
income, if any, unless it is expressly otherwise
provided by the donor, testator or grantor.
2. For personal and exclusive use, except jewelry;
3. Before the marriage by either spouse who has
legitimate descendants by a former marriage
including the fruits and income.
CONJUGAL PARTNERSHIP
OF GAINS
Each spouses retains his/her property before the
marriage and only the fruits and income of such
properties become part of the conjugal properties
during the marriage.
Upon dissolution of the partnership, the separate
property of the spouses are returned and only the
net profits of the partnership are divided equally
between the spouses of their heirs.
2. Debts and obligations, which must have been
contracted in any of the following cases: by
administrator, spouse, for the benefit of the
family; by both spouses; one spouse with the
consent of the other;
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3. Debts without marital consent, provided the
family was benefited;
4. Value of what is donated or promised by both
spouses in favor of their common legitimate
children for education or self-improvement;
5. Ante-nuptial debts not falling under number 8 of
this enumeration; support of illegitimate
children of other spouse; and liabilities
incurred by the other spouse by reason of a
crime or quasi-delict in case of insolvency of
exclusive property of debtor spouse, payment
of which shall be advanced by the ACP subject
to deduction from the share of the debtor
spouse;
6. All taxes and expenses for mere preservation
made during the marriage upon separate
property of either spouses used by the family.
7. Expenses of litigation between spouses unless
found to be groundless;
8. Ante-nuptial debts of either spouse in so far as
they have redounded to the benefit of the
family;
9. All taxes, liens, charges and expenses, including
major or minor repairs upon community or
conjugal property;
10. Expenses for education or self-improvement of
either spouse.
* If CP is insufficient to cover liabilities, spouses
shall be solidarily liable for unpaid balance with
their separate properties.
* Gambler-spouse bears losses, but the winnings
shall go to the ACP.
Grounds for Dissolution of Absolute
Community/Conjugal Partnership
1. Decree of legal separation;
2. Annulment;
3. Declaration of nullity of marriage;
4. Death of either spouse;
5. Judicial Separation of property on the ground
of:
a) Civil interdiction;
b) Declared absentee;
c) Loss of parental authority;
d) Abandonment and failure to comply with
the obligations to the family;
e) Abuse of power of administration;
f) At the time of the petition, spouses are
separated in fact for at least 1 year and
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the possibility for reconciliation is highly
improbable.
Procedure for Liquidation of Absolute
Community of Property
1. Inventory
◘ It is error to determine the amount to be
divided by adding up the profits which has been
made on each year of the community’s
continuance and saying that the result thereof is
that amount (De la Rama vs. De la Rama, 7 Phil
754).
◘ In the appraisal of the properties, it is
not the purchase price but the market price or, in
default, the assessed value at the time of the
liquidation that must be taken into account (Prado
vs. Natividad, 47 Phil 775)
2. Payment of Debts
* After the inventory, all debts for which the
absolute community property is liable must be
paid.
* In case of insufficiency of the absolute
community property and/or obligations of the
same for which the separate properties were made
solidary liable for the unpaid balance with their
separate properties.
3. Delivery of Exclusive Properties
* After payment of the advances made by the
absolute community property and/or the
obligations of the same for which the separate
properties were made solidary liable, the next step
is to deliver whatever remains of the exclusive
properties of the spouses to each of them.
4. Partition of Net Assets
* The interest of the parties is limited to the net
assets or net remainder.
* Equal sharing will not apply if there is a different
proportion of division agreed upon in the marriage
settlement, or unless there has been a voluntary
waiver of such share as provided for by the law.
◘ Until a liquidation has been made, it is impossible
to say whether or not there will be a net remainder
to be divided between the parties (Nable Jose vs.
Nable Jose, 41 Phil 713)
5. Delivery of the Presumptive Legitime
* The presumptive legitime is delivered only after
the finality of a judicial decree of annulment on
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grounds provided in Art. 45 or of nullity of a * Property bought on installments paid partly from
subsequent void marriage under Art. 40 in relation exclusive funds of the spouses and partly from
to Arts. 52 and 53. conjugal funds:

a) Full ownership was vested before the

marriage – it shall belong to the buyer
spouse.

b) If full ownership was vested during the

B. CONJUGAL PARTNERSHIP marriage – it shall belong to the conjugal
partnership. (Abalos vs. macatangay, Jr.,
OF GAINS G.R. 155043, September 9, 2004)

Formed by husband and wife whereby they place

in a common fund:
1) The fruits of their separate property, and
2) Income from their work or industry, the same to CONJUGAL CO-OWNERSHIP
be divided equally upon dissolution of marriage or PARTNERSHIP
partnership. Arises only because of May arise by an
the marriage contract. ordinary contract.
Properties Constituting CPG One must be a male, Sex of the co-owners
Those acquired by: the other a female. is immaterial.
1) Share of either spouse in hidden treasure as Conjugal owners are Co-owners may be
finder or owner of property where treasure is always only two. two or more.
found; Profits are generally Profits are
2) Onerous title during the marriage at expense of 50-50 unless a proportional to
common fund; contrary stipulation is respective interests.
3) Through effort and by chance; in a marriage
4) Fruits, natural, industrial or civil, due or settlement.
received during marriage from common Death of either Death of one does not
property as well as net fruits from exclusive husband or wife dissolve the co-
property of each spouse; dissolves the conjugal ownership.
5) Livestock existing upon dissolution of CPG in partnership.
excess of number of each kind brought to Generally, the Generally, all co-
marriage by either spouse; husband is the owners administer.
6) Through occupation; and administrator.
7) Labor, work, profession or industry of either or
Encouraged by law to Co-ownership is
both spouses.
provide for better discouraged by law.
family solidarity.
* All the properties acquired during the marriage
Created by operation Created by will or
are presumed to belong to the conjugal
of law upon consent of the parties.
partnership, unless it is proved that it pertains
celebration of
exclusively to the husband or to the wife. (Art.
marriage.
160, NCC [Presumption of Conjugal Property])
It is the law that The law that governs
governs. is the will of the
parties.
Property Excluded from Conjugal Partnership
It does not possess It possess a legal
(Exclusive Property of the Spouse):
any legal personality personality.
distinct from that of
1. Brought to the marriage as his or her own;
the spouses.
2. Acquired during marriage by gratuitous title;
3. Acquired by right of redemption, by barter or Commences precisely It begins from the
exchange with property belonging to either on the date of the moment of the
spouse; celebration of the execution of the
4. Purchased with exclusive money of either marriage – no contract but a
spouse. contrary stipulation is contrary stipulation is
allowed. allowed.

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Not formed It is formed for profit.
particularly to profit.
Profits are divided Profits are divided
equally. according to previous
agreement; if there is
no previous
agreement, in
proportion to the
amount contributed.
There are few grounds There are many
for dissolution. grounds for
dissolution.
There will be no There may be division
liquidation or giving of of profits even without
profits till after dissolution.
dissolution.
Wong vs. Intermediate Appellate Court
200 SCRA 792
Facts: Romarico and Katrina are married. They
have three children but they have been living
separately from each other most of the time.
During the marriage, Romarico acquired a parcel of
land. While in Hong Kong, Katrina entered into a
contract with Anita Wong, whereby she consigned
to her pieces of jewelry. Anita demanded payment
where Katrina issued a check that bounced. She
was sued criminally and judgment was rendered
against her. The lot was levied upon and sold at
public auction.
Issues: Whether the property is conjugal or not;
whether the property is liable for the indebtedness
of Katrina.
Ruling: Having been acquired during the marriage,
the property is presumed to belong to the conjugal
partnership even though they have been living
separately.
The property is not liable for her
indebtedness. The conjugal nature of the
properties notwithstanding Katrina’s indebtedness
may not be paid for with her obligation not having
been shown by petitioners to be one of the charges
against the conjugal partnership. In addition, to
the fact that her rights over the properties are
merely inchoate prior to the liquidation of the
conjugal partnership, the consent of her husband
and her authority to incur such indebtedness had
not been alleged in the complaint and proven at
trial. It cannot be even said that such loan was
necessary for the support of the family.
◘ The deceased had no conjugal partnership with
petitioner because his having contracted 8
marriages with different Muslim women was in
violation of the Civil Code. A conjugal partnership
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presupposes a valid civil marriage, not a bigamous
marriage or a common-law relationship. The
presumption that properties acquired during the
marriage are conjugal properties is inapplicable
because at the time he acquired the properties, he
decedent was married to four women. If they were
indeed conjugal properties they should have been
registered in he names of both petitioner and the
decedent. (Malang vs. Moson, 338 SCRA 393)
Revival of Conjugal Partnership of Gains
1. Civil interdiction terminates;
2. Spouse who has left conjugal home resumes
common life with the other;
3. Absentee spouse reappears;
4. Court satisfied that guilty spouse would not
again abuse power of administration;
5. Parental authority judicially restored;
6. Spouses who have separated in fact for at after
voluntary dissolution of ACP or CPG, spouses
agree to revive former regime.
C. REGIME OF SEPARATION
OF PROPERTY
Spouses retain the ownership,
management and control of their properties before
the marriage and those acquired after the
marriage (includes earnings and fruits)
Grounds for Judicial Separation of Property
1. Sentenced with a penalty which carries with it
civil interdiction;
2. Loss of parental authority as decreed by the
court;
3. Judicially declared an absentee;
4. Abandonment by the petitioner’s spouse and
failure to comply with the obligations to the
family;
5. Abuse of power of administration granted in
marriage settlement; and
6. Separated in fact for at least one year and the
possibility for reconciliation is highly
improbable.
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D. PROPERTY REGIME OF
UNIONS WITHOUT
MARRIAGE
Unions governed by Article 147
1. When a man and woman capacitated to marry
each other live exclusively with each other as
husband and wife without the benefit of
marriage.
2. A man and woman living together under a void
marriage.
Share of Parties in Property
1. Wages and salaries are owned in equal shares.
2. De Facto Co-ownership – With respect to
property acquired by both through work and
industry, rules on co-ownership shall apply.
3. Care and maintenance of the family and
household are deemed to be joined and equal.
4. Parties cannot encumber or dispose by acts inter
vivos their share in the property acquired during
their cohabitation and owned in common,
without consent of the other, until after
termination of cohabitation.
5. In cases of void marriages, if only one party is
in good faith, the share of the spouse who is in
bad faith shall be forfeited:
a) In favor of their common children;
b) In case of default of or waiver by any or all
of the common children of their descendants,
each vacant share shall belong to the
respective surviving descendants.
c) In the absence of such descendants, such
share belongs to the innocent party.
Unions Governed by Art. 148
1. Bigamous marriages
2. Adulterous relationship
3. Relationships in a state of concubinage
4. Relationships where both man and woman are
married to other persons.
5. Multiple alliances of the same married man
NOTES:
* Only properties acquired by the parties through
their actual joint contribution of money,
property or industry shall be owned in common
in proportion to their respective contributions.
* In the absence of proof to the contrary
contributions and the share to the parties to
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the properties acquired during the cohabitation
are presumed equal.
* If one party is validly married to another:
a) His/her share in the co-owned properties
will accrue to the ACP/CPG of his/her
existing valid marriage.
b) If the party who acted in bad faith is not
validly married to another, his/her share
shall be forfeited in the same manner as
that provided in Art. 147.
c) The same rules on forfeiture shall apply if
both parties are in bad faith.
Valdes vs. RTC
260 SCRA 221
Facts: Antonio Valdes and Consuelo Gomez were
married. Begotten during the marriage were five
children. Valdes sought the declaration of nullity of
the marriage pursuant to Art. 36 of the Family
Code. The trial court granted the petition.
Consuelo sought a clarification of that portion of
the decision directing compliance with Arts. 50, 51,
and 52 of the Family Code. She alleged that the
Family Code contained no provisions on the
procedure for the liquidation of the common
property in “unions without marriage.”
Petitioner moved for a reconsideration of the order.
He alleges that Art. 147 does not apply to cases
where the parties are psychologically
incapacitated.
Issue: What article between 147 & 148 shall
apply?
Ruling: Art. 147 shall apply in this case. Property
acquired by both spouses through their work and
industry shall be governed by the rules on equal
co-ownership. A party who did not participate in
the acquisition of the property shall still be
considered as having contributed thereto jointly if
said party’s efforts consisted in the care and
maintenance of the family household.”
ART. 147 ART. 148
Applicability
1. Without legal 1. With legal
impediment to marry. impediment to marry.
2. Void marriages due 2. Adulterous
to absence of formal relationships
requisite 3. Bigamous or
polygamous marriages
4. Incestuous void
marriages under Art.
37
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5. Void marriages by Judgment in eviction suit cannot be held against

reason of public policy the wife being not lawful against her as she was
under Art. 38 not made party defendant to the said suit. The
Salaries and Wages property was paraphernal in origin being that she
Owned in equal Separately owned by sold the property and bought it back seven months
shares the parties later. The fact that Begoso signed as co-mortgagor
Property Acquired Exclusively by either of a subsequent mortgage made by Plata of the
Party propert does not convert the property into
Belongs to such party Belongs to such party conjugal. The property was paraphernal and the
provided there is creditors and purchasers knew this so the
proof that he/she judgment bound the husband alone and not the
acquired it by wife’s possession of her paraphernal property
exclusive funds which by law she hold and administers
Property Acquired by Both Parties independently, and which she may even encumber
Governed by the rules Owned by them in without her husband’s knowledge and consent.
of co-ownership common in proportion
to their respective Property Acquired by right of redemption or
contributions. exchange with exclusive property of spouse
Presumption (prima facie)
Presumption of joint No presumption of
acquisition and equal joint acquisition.
sharing as to property When there is Rosete v. Prob. Sheriff
acquired while they evidence of joint
live together. acquisition but none The property is now the exclusive property of
as to the extent of the wife by virtue of the right of redemption as
actual contribution, successor in interest of her husband. It has
there is a presumption ceased to be the property of the judgment
of equal sharing. debtor. It can no longer therefore be the
Forfeiture subject of execution under a judgment
exclusively affective the personal liability of the
When only one of the If one of the parties is
latter.
parties is in good validly married to
faith, the share of the another, his/her share
party in bad faith in in the co-ownership
the co-ownership shall shall accrue to the
Conjugal Property-Arts. 116-117
be forfeited: absolute community
or conjugal
Castillo v. Pasco
a. In favor of their partnership existing in
common children; or such valid marriage.
Held: The property was partly conjugal and partly
If the party who acted
paraphernal. Under Spanish CC, determining
b. In default of or in in bad faith is not
ownership of properties acquired by onerous
case of waiver by any validly married to
consideration during the marriage depends on
or all of the common another or if both
source of funds used for acquisition. a. Separate if
children or their parties are in bad
bought w/exclusive money. (Spanish CC Art. 1396)
descendants, in favor faith, such share shall
b. Conjugal if bought w/common funds whether for
of the innocent party. be forfeited in the
partnership or for one spouse only. (Spanish CC
manner provided in
Art. 1401) Last phrase is immaterial since it’s been
the last paragraph of
proven that prop was sold to both spouses. 2.First
Art. 147.
payment: according to CA it came from Pasco’s
private funds. Petitioners: w/o express proof that
Cases:
debt of Gabriel came from Pasco’s private fund,
they should be presumed conjugal (Art. 1407
Exclusive Properties of Each Spouse (Art 109-
Spanish CC). However, Art. 1416 provides that
115 of the FCP)
wife can’t bind conjugal partnership w/o husband’s
consent. Her private transactions are presumed to
Plata V. Yatco be her own. W/o proof that Castillo authorized
Pasco to use community funds to lend money to
Gabriel, presumption that she used her private

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funds would lie. 3.2nd & 3rd payments by loans
guaranteed by mortgage: since they were made to
both spouses as joint borrowers, loan thus became
obligations of conjugal partnership & loan money
became part of conjugal property. Securing
mortgage on wife’s paraphernal prop is mere
accessory oblig w/c lenders can waive if they wish
to do so w/o affecting principal debt owed by
conjugal partnership & w/c creditors can enforce
against latter if they so desire.
If money borrowed by husband upon credit of
wife’s prop became CP & when reinvested in
construction of house, such became CP & was
liable for husband’s debt (Palanca v. Smith Bell &
Co.) then all the more that a loan obtained by both
spouses should be conjugal. Court likewise ruled in
Lim Queco vs. Cartagena that when wife borrows
money guaranteed w/mortgage on her paraphernal
prop, money loaned & property acquired w/such
will still be her exclusive prop even if husband
consented to such. Reason is that she is not the
qualified administrator of CP. Creditor can only
demand repayment from her & her properties.
Palanca ruling applies, thus, property is partly
paraphernal by virtue of first payment & partly
conjugal by virtue of 2nd & 3rd payments. It
belongs to both patrimonies – 1/6 paraphernal +
5/6 CP of Castillo & Pasco. 4.If Pasco paid
mortgages with her private funds, her share is not
increased. Instead, common funds can repay the
amount she has advanced.
Zulueta v. PANAM
The settlement entered into by Mrs. Zulueta with
the defendant PANAM would not bind the conjugal
partnership of the parties herein. In the case at
bar the principal part in interest is the husband.
Considering that the damages in question have
arisen from, inter alia, a breach of plaintiff’s
contract of carriage with the defendant, for which
plaintiffs paid their fare with funds presumably
belonging to the conjugal partnership. We hold
that the said damages fall under par. (1) of Art
153 the right thereto having been “acquired by
onerous title during the marriage. The rights
accruing from said contract, including those
resulting fro breach thereof by the defendant, are
presumed to belong to the conjugal partnership of
mr and mrs. Zulueta.
Jovellanos V. CA
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Facts: Husband entered into a contract of lease
and conditional sale with Philamlife over a house
and lot. He was married at that time and when the
wife died, he married another woman. During the
subsistence of the second marriage, the lease
amounts having been paid, Philamlife executed a
deed of absolute sale to the husband and the latter
donated to herein petitioners all his rights, title and
interest over the lot and bungalow before he died.
The second wife claimed that the land belonged to
the conjugal partnership.
Held: The conditional sale agreement in said
contract is, therefore, also in the nature of contract
to sellm as contradistinguished from contract of
sale. The former case, ownership is not transferred
upon delivery of the property but upon full
payment of the purchase price. The property
belonged to the conjugal partnership of the second
marriage. But since it pertained to the second wife,
she is still liable to pay the corresponding
reimbursements to the petitioners who helped pay
the amortization of the house and lot. Remember
118 of the FCP on the property bought on
installments, whre ownership vested during the
marriage, such shall belong to the conjugal
partnership.
Vitug v. Montemayor
Held: The principal issue is to be determined in this
appeal is whether the thirty parcels of land
involved in this litigation are conjugal, as claimed
by the plaintiff, or paraphernal, as claimed by the
defendants. If the former the relief prayed for
should be granted; if the latter the action should
be dismissed.
the evidence shows that the funds used in
purchasing the thirty parcels of land in question
had come from this refundable amount, it logically
follows that said properties are conjugal and
should have formed part of the estate of the late
Clodualdo Vitug. The fact that said properties are
now registered in the exclusive name of Donata
Montemayor does not destroy their nature as
conjugal because they are acquired during
coverture and the presumption of law created in
favor of the conjugal partnership has not been
overcome by clear proof to the contrary
(Guingguing vs. Abuton, 48 Phil. 144)
Maramba V. Lozano
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Issue:
WON the property was conjugal; and
WON the construction of the house on the
exclusive property of one of the spouses at the
expense of the common fund makes it
automatically conjugal.
Held: Both issues, NO.
The presumption of conjugality under Art. 160 of
the civil code refers to property acquired during
the marriage. But in the instant case, there is no
showing as to when the property in question was
acquired and hence the fact that the tile is in the
wife’s name alone is determinative. Furthermore,
appellant said that the property was paraphernal.
The construction of a house at conjugal expense on
the exclusive property of one of the spouses does
not automatically make it conjugal. The ownership
of the land remains the same until the value
thereof is paid, and this payment can only be
demanded in the liquidation of the partnership.
There is no
showing that there was already liquidation and so
the property being separate property cannot be
made to answer for the liability of the other
defendant.
Dominado v. Darayunan
Held: Par 2 of Art. 1404 of the Civil code provides
that building constructed during the marriage, on
land belonging to one of the spouses, are conjugal
property, but the owner shall be entitled to credit
of the value of th land. The exception, however, is
limited to buildings and does not apply to crops
and other improvements, with respect to which the
general rule applies. Expenses incurred in making
such crops and improvements are conjugal
expenses, for which the conjugal partnership must
be reimbursed.
Caltex V. Felias
Held: A lot belonging to the parents and later
donated by them to their daughter belonged to the
parphernal property and the building constructed
thereon before the donation follows the rule
accessory follows the principal. The donation
transmitted to her the rights of a landowner over
the building constructed on it. As such the lot and
the building are not answerable for the obligations
of her husband.
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Calimlim-Canullas v. Fortun
Facts: Husband abandoned his family and was
convicted for concubinage. In 1980 he sold the
land he inherited from his deceased father during
the marriage to his concubine. The concubine
initiated a complaint to quiet title and damages
against the legal wife.
Held: The alienation of the property without the
consent of the legal wife was not valid because the
contract of sale was null and void for being
contrary to morals and public policy. (Art. 1409 of
the NCC)
Both the land and the building belong to the
conjugal partnership but the conjugal partnership
is indebted to the husband for the
value of the land and so the husband is entitled for
reimbursement at the time of the liquidation of the
conjugal partnership.
Luzon surety V. De Garcua
Conjugal partnership is only liable for such debts
and obligations contracted by the husband for the
benefit of the conjugal partnership, There is none
in this case. This particular codal provision in
question rightfully emphasized the responsibility of
the husband as administrator. He is supposed o
conserve and, if possible, augment the funds for
conjugal partnership, not dissipate them. If out of
friendship and misplaced generosity on his part the
conjugal partnership would be saddled with
financial burden, then the family stands to suffer.
Cobb-perez v. Lantin
In the NCC, Art. 160, the party who invokes this
presumption must first prove that the property in
controversy was acquired during the marriage. In
the case at bar, there is no evidence as to when
the shares of stocks were acquired, the fact that
they are registered in the name of the husband
alone is an indication that the shares belong
exclusively to the said spouse.
Ayala V. CA
FACTS:
Philippine Blooming Mills (PBM) obtained
P50,300,000.00 loan from petitioner Ayala
Investment and Development Corporation (AIDC).
Respondent Alfredo Ching, EVP of PBM, executed
security agreements on December 1980 and March
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1981 making him jointly and severally answerable
with PBM’s indebtedness to AIDC. PBM failed to
pay the loan hence filing of complaint against PBM
and Ching. The RTC rendered judgment ordering
PBM and Ching to jointly and severally pay AIDC
the principal amount with interests. Pending the
appeal of the judgment, RTC issued writ of
execution. Thereafter, Magsajo, appointed deputy
sheriff, caused the issuance and service upon
respondent spouses of the notice of sheriff sale on
3 of their conjugal properties on May 1982.
Respondent spouses
filed injunction against petitioners on the ground
that subject loan did not redound to the benefit of
the said conjugal partnership. CA issued a TRP
enjoining lower court from enforcing its order
paving way for the scheduled auction sale of
respondent spouses conjugal properties. A
certificate of sale was issued to AIDC, being the
only bidder and was registered on July 1982.
ISSUE: Whether or not the debts and obligations
contracted by the husband alone is considered “for
the benefit of the conjugal partnership” and is it
chargeable.
HELD:
The loan procured from AIDC was for the
advancement and benefit of PBM and not for the
benefit of the conjugal partnership of Ching.
Furthermore, AIDC failed to prove that Ching
contracted the debt for the benefit of the conjugal
partnership of gains. PBM has a personality
distinct and separate from the family of Ching
despite the fact that they happened to be
stockholders of said corporate entity. Clearly, the
debt was a corporate debt and right of recourse to
Ching as surety is only to the extent of his
corporate stockholdings.
Based from the foregoing jurisprudential rulings of
the court, “if the money or services are given to
another person or entity, and the husband acted
only as a surety or guarantor, that contract
cannot, by itself, alone be categorized as falling
within the context of obligations for the benefit of
the conjugal partnership”. The contract of loan or
services is clearly for the benefit of the principal
debtor and not for the surety or his family. Ching
only signed as a surety for the loan contracted with
AIDC in behalf of PBM. Signing as a surety is
certainly not an exercise of an industry or
profession, it is not embarking in a business.
Hence, the conjugal partnership should not be
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made liable for the surety agreement which was
clearly for the benefit of PBM.
The court did not support the contention of the
petitioner that a benefit for the family may have
resulted when the guarantee was in favor
of Ching’s employment (prolonged tenure,
appreciation of shares of stocks, prestige
enhanced) since the benefits contemplated in Art.
161 of the Civil Code must be one directly resulting
from the loan. It must not be a mere by product
or a spin off of the loan itself.
Charges upon the Conjugal Partnership
(ART.122 [2])
Carlos v. Abelardo
it must be noted that payment of personal debts
contracted by the husband or the wife before or
during the marriage shall not be charged to the
conjugal partnership except insofar as they
redounded to the benefit of the family. The
defendants never denied that the check of
US$25,000.00 was used to purchase the subject
house and lot. They do not deny that the same
served as their conjugal home, thus benefiting the
family. On the same principle, acknowledgment of
the loan made by the defendant-wife binds the
conjugal partnership since its proceeds redounded
to the benefit of the family. Hence, defendant-
husband and defendant-wife are jointly and
severally liable in the payment of the loan.
The loan is the liability of the conjugal partnership
pursuant to Article 121 of the Family Code:
Article 121. The conjugal partnership shall be liable
for:
xxx
(2) All debts and obligations contracted during the
marriage by the designated administrator-spouse
for the benefit of the conjugal partnership of gains,
or by both spouses or by one of them with the
consent of the other;
(3) Debts and obligations contracted by either
spouse without the consent of the other to the
extent that the family may have been benefited;
If the conjugal partnership is insufficient to cover
the foregoing liabilities, the spouses shall be
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solidarily liable for the unpaid balance with their
separate properties.
Defendant-husband cannot allege as a defense
that the amount of US $25,000.00 was received as
his share in the income or profits of the
corporation and not as a loan. Firstly, defendant-
husband does not appear to be a stockholder nor
an employee nor an agent of the corporation, H. L.
Carlos Construction, Inc. Since he is not a
stockholder, he has no right to participate in the
income or profits thereof. In the same manner that
as he is not an employee nor an agent of H. L.
Carlos Construction, Inc., he has no right to
receive any salary or commission therefrom.
Secondly, the amount advanced for the purchase
of the house and lot came from the personal
account of the plaintiff. If, indeed, it was to be
construed as defendant-husband’s share in the
profits of the corporation, the checks should come
from the corporation’s account and not from the
plaintiff’s personal account, considering that the
corporation has a personality separate and distinct
from that of its stockholders and officers.
Garcia V. Manzano
The Lower court did not err in dismissing the
complaint on the ground that the complaint does
not warrant for a separation of property. Both the
old and new civil code require the separation of
property shall not prevail unless expressly
stipulated in marriage settlements before the union
is solemnized or by formal decree during the
existence of the marriage and in the latter case, it
may only be ordered by the court for causes
specified in Art. 191 of the NCC. Such article must
be limitative, in view of the Code’s restrictive
policy.
The remedy of the aggrieved spouse in case of the
maladministration of the other spouse is to revoke
the power granted the other and resume the
administration of the community property and to
conduct the affairs of the conjugal partnership.
Partosa-Jo vs CA
GR 82606, December 18, 1992
FACTS:
The petitioner, Prima Partosa-Jo, is the legal wife
of Jose Jo, herein private respondent. The latter
admitted to have cohabited with 3
women and fathered 15 children. Prima filed a
complaint against the husband for judicial
separation of conjugal property in addition to an
earlier action for support which was consolidated.
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RTC decision was a definite disposition of the
complaint for support but none of that for the
judicial separation of conjugal property. Jose
elevated the decision to CA which affirmed rulings
of the trial court. The complaint on the separation
of property was dismissed for lack of cause of
action on the ground that separation by agreement
was not covered in Art. 178 of the Civil Code.
Prima contested that the agreement between her
and Jose was for her to temporarily live with her
parents during the initial period of her pregnancy
and for him to visit and support her. They never
agreed to be separated permanently. She even
returned to him but the latter refused to accept
her.
ISSUE: WON there is abandonment on the part of
Jose Jo to warrant judicial separation of conjugal
property.
HELD:
SC is in the position that respondent court should
have made the necessary modification instead of
dismissing the case filed. For abandonment to
exist, there must be an absolute cessation of
marital relations, duties and rights, with the
intention of perpetual separation. The fact that Jo
did not accept her demonstrates that he had no
intention of resuming their conjugal relationship.
From 1968 until 1988, Jose refused to provide
financial support to Prima. Hence, the physical
separation of the parties, coupled with the refusal
by the private respondent to give support to the
petitioner, sufficed to constitute abandonment as a
ground for the judicial separation of their conjugal
property.
Wherefore, the petition was granted and in favor
of the petitioner and that the court ordered the
conjugal property of the spouses be divided
between them, share and share alike. The division
will be implemented after the determination of all
the properties pertaining to the said conjugal
partnership including those that may have been
illegally registered in the name of the persons.
Lacson V. Jose-Lacson
We hold that the compromise agreement and the
judgment of the CFI grounded on the said
agreement are valid with respect to the separation
of property of the spouses and the dissolution of
the conjugal partnership.
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The law allows separation of property of the
spouses and the dissolution of their conjugal
partnership provided judicial sanction is secured
beforehand. Thus the new Civil Code provides:
In the absence of an express declaration in the
marriage settlements, the separation of property
between spouses during the marriage shall not
take place save in virtue of a judicial order. (Art.
190, emphasis supplied)
The husband and the wife may agree upon the
dissolution of the conjugal partnership during the
marriage, subject to judicial approval. All the
creditors of the husband and of the wife, as well as
of the conjugal partnership, shall be notified of any
petition for judicial approval of the voluntary
dissolution of the conjugal partnership, so that any
such creditors may appear at the hearing to
safeguard his interests. Upon approval of the
petition for dissolution of the conjugal partnership,
the court shall take such measures as may protect
the creditors and other third persons. (Art. 191,
par. 4, emphasis supplied).
In the case at bar, the spouses obtained judicial
imprimatur of their separation of property and the
dissolution of their conjugal partnership. It does
not appeal that they have creditors who will be
prejudiced by the said arrangements.
However, in so approving the regime of separation
of property of the spouses and the dissolution of
their conjugal partnership, this Court does not
thereby accord recognition to nor legalize the de
facto separation of the spouses.
however, that the CFI erred in depriving the
mother, the respondent spouse, of the custody of
the two older children (both then below the age of
7).
The Civil Code specifically commands in the second
sentence of its article 363 that "No mother shall be
separated from her child under seven years of age,
unless the court finds compelling reasons for such
measure." The rationale of this new provision was
explained by the Code Commission thus:
The general rule is recommended in order to avoid
many a tragedy where a mother has seen her baby
torn away from her. No man can sound the deep
sorrows of a mother who is deprived of her child of
tender age. The exception allowed by the rule has
to be for "compelling reasons" for the good of the
child: those cases must indeed be rare, if the
mother's heart is not to be unduly hurt. If she has
erred, as in cases of adultery, the penalty of
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imprisonment and the (relative) divorce decree will
ordinarily be sufficient punishment for her.
Moreover, her moral dereliction will not have any
effect upon the baby who is as yet unable to
understand the situation." (Report of the Code
Commission, p. 12).
The use of the word shall2 in article 363 of the
Civil Code, coupled with the observations made by
the Code Commission in respect to the said legal
provision, underscores its mandatory character. It
prohibits in no uncertain: terms the separation of a
mother and her child below seven years, unless
such separation is grounded upon compelling
reasons as determined by a court.
Yaptinchay v. Torres
The common-law husband was already
married and the common-law wife alleges that
the house in question was common property
between them.
Held: She did not prove her actual
contribution of the house. She must prove her
contribution to prove the house was common
property. The presumption does not lie in her
case.
Maxey v. CA
(This was a case of Common-law marriage because
the military style marriage of the spouses were not
recognized. There was no legal impediment for
them to marry. The issue was WON The properties
in question were eXCLUSIVE PROPERTIES OF THE
LATE MELBOURNE MAXEY, TO THE EXCLUSION OF
HIS WIFE REGINA MORALES, BECAUSE THE
MENTIONED PROPERTIES WERE ACTUALLY
ACQUIRED BY THE JOINT EFFORTS AND INDUSTRY
OF BOTH OF THEM AND THEREFORE, THESE
PROPERTIES ARE COMMON PROPERTIES)
The provisions of the Civil Code are premised on
the traditional and existing, the normal and
customary gender roles of Filipino men and
women. No matter how large the income of a
working wife compared to that of her husband, the
major, if not the full responsibility of running the
household remains with the woman. She is the
administrator of the household. The fact that the
two involved in this case were not legally married
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at the time does not change the nature of their
respective roles. It is the woman who traditionally
holds the family purse even if she does not
contribute to filling that purse with funds. As
pointed out by Dean Irene R. Cortes of the
University of the Philippines, "in the Filipino family,
the wife holds the purse, husbands hand over their
pay checks and get an allowance in return and the
wife manages the affairs of the household. . . . And
the famous statement attributed to Governor
General Leonard Wood is repeated: In the
Philippines, the best man is the woman." (Cortes,
"Womens Rights Under the New Constitution".
WOMAN AND THE LAW, U.P. Law Center, p. 10.)
The "real contribution" to the acquisition of
property mentioned in Yaptinchay vs. Torres (28
SCRA 489) must include not only the earnings of a
woman from a profession, occupation, or business
but also her contribution to the family's material
and spiritual goods through caring for the children,
administering the household, husbanding scarce
resources, freeing her husband from household
tasks, and otherwise performing the traditional
duties of a housewife.
Valdes vs. RTC
260 SCRA 221
FACTS:
Antonio Valdez and Consuelo Gomez were married
in 1971 and begotten 5 children. Valdez filed a
petition in 1992 for a declaration of nullity of their
marriage pursuant to Article 36 of the Family Code,
which was granted hence, marriage is null and void
on the ground of their mutual psychological
incapacity. Stella and Joaquin are placed under
the custody of their mother while the other 3
siblings are free to choose which they prefer.
Gomez sought a clarification of that portion in the
decision regarding the procedure for the liquidation
of common property in “unions without marriage”.
During the hearing on the motion, the children
filed a joint affidavit expressing desire to stay with
their father.
ISSUE: Whether or not the property regime should
be based on co-ownership.
HELD:
The Supreme Court ruled that in a void marriage,
regardless of the cause thereof, the property
relations of the parties are governed by the rules
on co-ownership. Any property acquired during
the union is prima facie presumed to have been
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obtained through their joint efforts. A party who
did not participate in the acquisition of the
property shall be considered as having contributed
thereto jointly if said party’s efforts consisted in
the care and maintenance of the family.
Carino v. Carino
In 1969 SPO4 Santiago Carino married Susan
Nicdao Carino. He had 2 children with her. In
1992, SPO4 contracted a second marriage, this
time with Susan Yee Carino. In 1988, prior to his
second marriage, SPO4 is already bedridden and
he was under the care of Yee. In 1992, he died 13
days after his marriage with Yee. Thereafter, the
spouses went on to claim the benefits of SPO4.
Nicdao was able to claim a total of P140,000.00
while Yee was able to collect a total of P21,000.00.
In 1993, Yee filed an action for collection of sum of
money against Nicdao. She wanted to have half of
the P140k. Yee admitted that her marriage with
SPO4 was solemnized during the subsistence of
the marriage b/n SPO4 and Nicdao but the said
marriage between Nicdao and SPO4 is null and
void due to the absence of a valid marriage license
as certified by the local civil registrar. Yee also
claimed that she only found out about the previous
marriage on SPO4’s funeral.
ISSUE: Whether or not the absolute nullity of
marriage may be invoked to claim presumptive
legitimes.
HELD: The marriage between Nicdao and SPO4 is
null and void due the absence of a valid marriage
license. The marriage between Yee and SPO4 is
likewise null and void for the same has been
solemnized without the judicial declaration of the
nullity of the marriage between Nicdao and SPO4.
Under Article 40 of the FC, the absolute nullity of a
previous marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment
declaring such previous marriage void. Meaning,
where the absolute nullity of a previous marriage is
sought to be invoked for purposes of contracting a
second marriage, the sole basis acceptable in law,
for said projected marriage to be free from legal
infirmity, is a final judgment declaring the previous
marriage void. However, for purposes other than
remarriage, no judicial action is necessary to
declare a marriage an absolute nullity. For other
purposes, such as but not limited to the
determination of heirship, legitimacy or illegitimacy
of a child, settlement of estate, dissolution of
property regime, or a criminal case for that matter,
the court may pass upon the validity of marriage
even after the death of the parties thereto, and
even in a suit not directly instituted to question the
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validity of said marriage, so long as it is essential

to the determination of the case. In such
instances, evidence must be adduced, testimonial
or documentary, to prove the existence of grounds
rendering such a previous marriage an absolute
nullity. These need not be limited solely to an
earlier final judgment of a court declaring such
previous marriage void.
The SC ruled that Yee has no right to the benefits
earned by SPO4 as a policeman for their marriage
is void due to bigamy; she is only entitled to
properties, money etc owned by them in common
in proportion to their respective contributions.
Wages and salaries earned by each party shall
belong to him or her exclusively (Art. 148 of FC).
Nicdao is entitled to the full benefits earned by
SPO4 as a cop even if their marriage is likewise
void. This is because the two were capacitated to
marry each other for there were no impediments
but their marriage was void due to the lack of a
marriage license; in their situation, their property
relations is governed by Art 147 of the FC which
provides that everything they earned during their
cohabitation is presumed to have been equally
contributed by each party – this includes salaries
and wages earned by each party notwithstanding
the fact that the other may not have contributed at
all.
IV. FAMILY
◘ FAMILY HOME
* It is constituted jointly by the husband and wife
or by an unmarried head of the family, and is
dwelling house where they and their family reside
and the land on which it is situated.
General Rule: Exempt from execution and forced
sale or attachment.
Exceptions:
1. Non-payment of taxes;
2. Debts incurred prior to the constitution;
3. Debt secured by mortgages;
4. Debts due to laborers, mechanics, architects,
builders, material men and others who have
rendered service or furnished materials for the
construction of the building.
Beneficiaries of Family Home
1. Husband and wife, or an unmarried person who
is the head of the family;
2. Their parents, ascendants, descendants,
brothers and sisters, whether relationship be
legitimate or not, who are living in the family
home and who depend upon the head of the
family for legal support.

Family Relations Include:

Requirements for Sale, Donation, Assignment
or Encumbrances of the
1. Between husband and wife;
Family Home
2. Between parents and children
3. Among ascendants and descendants
1. The person who constituted the same must give
4. Among brothers and sisters whether full or half-
his/her written consent.
blood
2. The spouse of the person who constituted the
family home must give hi/her written consent.
* No suit between members of the same family
3. A majority of the beneficiaries of legal age must
shall prosper unless it should appear from the
also give their written consent.
verified complaint or petition that earnest efforts
4. In case of conflict, the court shall decide.
toward a compromise have been made, but that
the same have failed. If it is shown that no such
efforts were in fact made, the same case must be
dismissed (Art. 151, FCP.) Requisites for Creditor to Avail Rights under
Art. 160
* This rule shall not apply to cases which may not
be the subject of compromise under the Civil Code. 1. He must be a judgment creditor;
2. His claim is not among those excepted under
Art. 155; and

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3. He has reasonable ground to believe that the
family home is worth more than the maximum
amount fixed in Art. 157.
EXCLUDE: Arts. 157, 161 and 162
Case:
MODEQUILLO VS. BREVA
FACTS: On July 7, 1988, the sheriff levied on a
parcel of residential land located at Poblacion
Malalag, Davao del Sur containing an area of 600
square meters with a market value of P34,550.00
and assessed value of P7,570.00 per Tax
Declaration No. 87008-01359, registered in the
name of Jose Modequillo in the office of the
Provincial Assessor of Davao del Sur; and a parcel
of agricultural land located at Dalagbong Bulacan,
Malalag, Davao del Sur containing an area of 3
hectares with a market value of P24,130.00 and
assessed value of P9,650.00 per Tax Declaration
No. 87-08-01848 registered in the name of Jose
Modequillo in the office of the Provincial Assessor
of Davao del Sur. A motion to quash and/or to set
aside levy of execution was filed by defendant Jose
Modequillo alleging therein that the residential land
located at Poblacion Malalag is where the family
home is built since 1969 prior to the
commencement of this case and as such is exempt
from execution, forced sale or attachment under
Articles 152 and 153 of the Family Code except for
liabilities mentioned in Article 155 thereof, and that
the judgment debt sought to be enforced against
the family home of defendant is not one of those
enumerated under Article 155 of the Family Code.
As to the agricultural land although it is declared in
the name of defendant it is alleged to be still part
of the public land and the transfer in his favor by
the original possessor and applicant who was a
member of a cultural minority was not approved by
the proper government agency. An opposition
thereto was filed by the plaintiffs. In the present
case, the residential house and lot of petitioner
was not constituted as a family home whether
judicially or extrajudicially under the Civil Code. It
became a family home by operation of law only
under
Article 153 of the Family Code. It is deemed
constituted as a family home upon the effectivity
of the Family Code on August 3, 1988 not August
4, one year after its publication in the Manila
Chronicle on August 4, 1987 (1988 being a leap
year).
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ISSUE: Whether or not the property in dispute is
deemed to be a family home.
HELD:The contention of petitioner that it should be
considered a family home from the time it was
occupied by petitioner and his family in 1969 is not
well- taken. Under Article 162 of the Family Code,
it is provided that "the provisions of this Chapter
shall also govern existing family residences insofar
as said provisions are applicable." It does not
mean that Articles 152 and 153 of said Code have
a retroactive effect such that all existing family
residences are deemed to have been constituted as
family homes at the time of their occupation prior
to the effectivity of the Family Code and are
exempt from execution for the payment of
obligations incurred before the effectivity of the
Family Code. Article 162 simply means that all
existing family residences at the time of the
effectivity of the Family Code, are considered
family homes and are prospectively entitled to the
benefits accorded to a family home under the
Family Code. Article 162 does not state that the
provisions of Chapter 2, Title V have a retroactive
effect. Is the family home of petitioner exempt
from execution of the money judgment aforecited?
No. The debt or liability which was the basis of the
judgment arose or was incurred at the time of the
vehicular accident on March 16, 1976 and the
money judgment arising therefrom was rendered
by the appellate court on January 29, 1988. Both
preceded the effectivity of the Family Code on
August 3, 1988. This case does not fall under the
exemptions from execution provided in the Family
Code. As to the agricultural land subject of the
execution, the trial court correctly ruled that the
levy to be made by the sheriff shall be on
whatever rights the petitioner may have on the
land.
Petition is DISMISSED for lack of merit.
VII. PATERNITY AND
FILIATION
A. Legitimate children (Arts. 163-171)
B. Proof of filiation (Arts. 172-174)
C. Illegitimate children (Art. 175 and Art. 176 as
amended by R.A. 9255 allowing illegitimate
children to use the surname of their father)
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D. Legitimated children (Arts. 177-182)
Exclude: A.M. No. 06-11-5-SC or the Rule on DNA
Evidence
Paternity – The civil status of the father with
regard to the child.
Filiation – The civil status of the child with regard
to his father.
◘ KINDS OF CHILDREN
A. Legitimate – conceived or born during a valid
marriage or within a lawful wedlock.
Exceptions: Children who are:
1. Result of artificial insemination;
a. Ratified by both parents;
b. In a written instrument;
c. Executed and signed by them before the birth
of the child.
2. Born of a viodable marriage before the decree of
annulment;
3. Conceived or born before judgment of
annulment or absolute nullity under Art. 36 has
become executory;
4. Conceived or born of subsequent marriage
under Art. 53;
5. Of mothers who may have declared against its
legitimacy or was sentenced as adulteress
6. Legally adopted; and
7. Legitimated.
B. Illegitimate – conceived and born outside a
valid marriage.
Exceptions: Children who are:
1. Born of marriages which are void ab initio or
declared void for being contrary to law;
2. Of voidable marriage born after the decree of
annulment.
C. Legitimated – originally illegitimate but later
considered legitimate by legal fiction because of
subsequent marriage of the parents who at the
time of the child’s conception had no legal
impediment to marry each other.
Proof of Filiation:
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1. Primary
* Record of birth appearing in civil register or a
final judgment; or
* Admission of legitimate filiation in a public
document or a private handwritten instrument
signed by the parent concerned.
2. Secondary
a. Open and continuous possession of the status
of a legitimate child; or
b. Any other means allowed by the Rules of
Court and special laws.
◘ Proof of filiation in Civil Code not precluded by
the other Rules of Evidence in Civil Law. (Fornier
vs. Comelec & FPJ, GR 161434, March 3, 2004)
◘ The due recognition of an illegitimate child in a
record of birth, a will, a statement before a court
of record, or in any authentic writing is, in itself, a
consummated act of acknowledgment of the child,
and no further court action is required. (Potenciano
vs. Reynoso, GR No. 140707, April 22, 2003)
◘ A father who acknowledges paternity of a child
through a written instrument must affix his
signature. It is clearly implied in Art. 176 of the
Family Code. However, special circumstances exist
to hold that the unsigned Autobiography of
Dominique substantially satisfies the requirement
of law. First, Dominique died about two months
prior to the child’s birth. Second, the relevant
matters in the Autobiography, unquestionably
handwritten by Dominique. Third, Jenie’s
testimony is corroborated by the Affidavit of
Acknowledgment of Dominique’s father. These
circumstances indicating Dominique’s paternity of
the child give life to his statements in his
Autobiography.
◘ CHILDREN BY ARTIFICIAL INSEMINATION
A child conceived by artificial insemination
is considered legitimate.
Requisites:
1. The artificial insemination is made on the wife,
not on another woman.
2. The artificial insemination on the wife is done
with the sperm of the husband or a donor, or
both the husband and the donor.
3. The artificial insemination has been authorized
or ratified by the spouse on a written
instrument executed and signed by them
before the birth of the child, and
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4. The written instrument is recorded in civil
registry together with the birth certificate of
the child.
◘ IMPUGNING THE LEGITIMACY OF A CHILD
General Rule: Only the husband can impugn the
legitimacy of the child.
Exception: The heirs of the husband may impugn
the child’s filiation in the following cases:
1. If the husband dies before the expiration of
period for filing the action;
2. If the husband dies after filing without desisting;
3. If the child was born after death of the husband
Grounds for Impugning the Legitimacy of a
Child
1. Physically impossibility for the husband to have
sexual intercourse with his wife within the first
120 days of 300 days immediately preceding
the birth of the child due to:
a. Physical incapacity of the husband;
b. The spouses are living separately;
c. Serious illness of the husband which
absolutely prevented intercourse.
2. Biological or scientific proof that the child could
not have been that of the husband; and
3. Written authorization or ratification for
artificial insemination was obtained through the
mistake, fraud, violence, intimidation, or undue
influence.
◘ While it is true that an artificial document such
as a Birth Certificate enjoys the presumption of
regularity, the specific facts that there were
already irregularities regarding the Birth Certificate
itself, such as it was not signed by the Local Civil
Registrar, and that the alleged mother’s signature
therein was different from her other signatures, as
well as such other circumstances showing that the
latter is not the real mother, sufficiently negate
such presumption. (Babiera vs. Catotal 333 SCRA
487)
Prescriptive Period
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1. One year, from knowledge of borth recording in
the civil register, if husband or heirs lives in the
same city/municipality.
2. Two years, if residing in the Philippines.
3. Three years, if abroad.
Who May Impugn Legitimacy of a Child
General Rule: Only the husband may impugn.
Exception: The heirs, if the husband dies before
the end of the prescription of the action, or if the
husband dies after filing the complaint, or child
was born after death.
◘ There is not almost universal scientific
agreement that the blood grouping tests are
conclusive as to non-paternity, that is, the fact
that the blood type of the child is a possible
product of the mother and the alleged father does
not conclusively proved that the child is born by
such parents. If the blood type of the child is not
the possible blood of the mother and of the alleged
father after it had been cross-matched, then the
child cannot possibly be that of the alleged father.
Accordingly, the court affirms the decision of the
CA and hold that the result of the blood grouping
test involved in the case at bar are admissible and
conclusive on the non-paternity of respondent Jao
vis-à-vis Janice. The result of such test is to be
accepted, therefore accurately reflecting a
scientific fact. (Jao vs. CA, 152 SCRA 359)
◘ RULE ON THE STATUS OF CHILDREN BORN
AFTER 300 DAYS FOLLOWING TERMINATION
OF MARRIAGE
Requisites:
1. First marriage terminated
2. Mother contracted a subsequent marriage
3. A child was born
4. No evidence as to the status of the child
Rules as to Whom the Child Belongs:
1. To first marriage – if child was born before the
lapse of 180 days after the celebration of the 2nd
marriage provided child was born within 300
days after the termination of the 1st marriage.
2. To second marriage – if child was born after 180
days following the celebration of the 2 nd
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marriage whether born within 300 days after

the termination of the 1st marriage or
afterwards.

LEGITIMATE, ILLEGITIMATE, LEGITIMATED CHILDREN

NATURE LEGITIMATED ILLEGITIMATED LEGITIMATED

Definition a. Conceived or born Conceived and born Originally illegitimated
during a valid marriage outside a valid but later considered
of parents or lawful marriage or outside legitimate by legal
wedlock. lawful wedlock. fiction by subsequent
marriage of parents
b. Children conceived as who, at the time of
a result of artificial conception, had no
insemination on the wife. legal impediment to
marry each other.
c. Children born to
marriages void under
Arts. 36 and 53.
Rights 1. Bear surname of 1. Use of surname of 1. Bear surname of
father. the mother. father.

2. Receive support from 2. Support 2. Receive support from

parents, ascendants, parents, ascendants,
brothers and sisters. 3. Legitimate (half of brothers and sisters.
the legitimate of
3. Entitled to legitimes legitimate children) 3. Entitled to legitimate
and other successional and other successional
rights under the Civil rights under the Civil
Code Code.
Proof of Filiation *Primary (Same as for legitimate
1. Record of birth children)
appearing in the civil
register or a final
judgment.

2. Admission of
legitimate filiation in a
public document or
private handwritten
instrument and signed
by parent concerned.

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* Secondary
1. Open and continuous
possession of the status
of a legitimate child.

2. Any other means

allowed by the Rules of
Court and special laws.

To establish status * May be brought by a * In the same way and *Acknowledgment not
child during his or her on the same evidence needed: marriage of
lifetime and should be as a legitimate child. parents enough.
transmitted to the heirs
id the child dies during * Same period, except * If parents who
minority or in a state of if action is based on contract marriage do
insanity. Art. 172, par. 2 it must not accept child as their
be filed within the child must prove
* Heirs shall have 5 lifetime of the alleged filiation by the means
years within which to parent. provided in Arts. 172,
institute the action. 173, 175.
Ground for 1. Physical impossibility 1. Subsequent
Impugning of husband to have marriage of parents
sexual intercourse with void.
his wife within first 120
days of the 300 days 2. Child really not a
immediately preceding child of the parents.
birth.
3. Child legitimated is
2. Biological and not a natural child.
scientific reason.

3. For children conceived

through artificial
insemination, written
authorization obtained
thru fraud, mistake,
violence, intimidation or
undue influence.
Who may impugn * Husband or heirs Same as for legitimate Those who are
* Heirs may impugn only children. prejudiced in their
in the ff. cases: rights.
1. Husband dies before
expiration of the period
for bringing action.
2. Husband dies after
filing without desisting
therefrom.
3. Child was born after
death of husband.
Periods of Filing * 1 year if husband/heirs Within 5 years from
reside in the city or time their cause
municipality where the accrues.
child was born or birth
was recorded.
*2 years if
husband/heirs do not
reside in the same city

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or municipality.
* 3 years if husband is
abroad and birth is here
or recorded here, or vice
versa.

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under paragraph 2, Article 175 of the Family Code,

the action to establish filiation of the illegitimate
minor child must be brought during the lifetime of
the alleged putative father. In the case at bar,
EXCLUDE: SC Rule on DNA Evidence considering that the complaint was filed after the
death of the alleged parent, the action has
prescribed and this is another ground for the
dismissal of the complaint. Petitioner theorizes that
Article 285 of the Civil Code is not applicable to the
case at bar and, instead, paragraph 2, Article 175
of the Family Code
should be given retroactive effect. The theory is
premised on the supposition that the latter
provision of law being merely procedural in nature,
VI. ADOPTION no vested rights are created, hence it can be made
to apply retroactively.
EXCLUDE: Family Code, Arts. 183-188, 191- Article 285 of the Civil Code provides:
193
Art. 285. The action for the recognition of
A. DOMESTIC ADOPTION ACT natural children may be brought only during the
lifetime of the presumed parents, except in the
OF 1998 REPUBLIC ACT NO. following cases:
8552
(1) If the father or mother died during the
Who May Adopt? minority of the child, in which case the latter may
file the action before the expiration of four years
from the attainment of his majority;
A. Filipino Citizen

xxx xxx xxx

1. Of legal age;
2. With full civil capacity or legal rights;
3. With good moral character;
4. Has not been convicted of any crime involving
moral turpitude;
5. Emotionally and psychologically capable of
caring children;
6. In a position to support and care for his/her
children in keeping with the means of the
family; and
7. At least 16 years older than the adoptee.
Except:
a. Adopter is the biological parent of the adoptee;
b. Adopter is the spouse of the adoptee’s parent.
Cases:
Tayag v. CA
Facts : Petitioner argues that assuming arguendo
that the action is one to compel recognition,
private respondent's cause of action has prescribed
for the reason that since filiation is sought to be
proved by means of a private handwritten
instrument signed by the parent concerned, then
On the other hand, Article 175 of the Family Code
reads:
Art. 175. Illegitimate children may establish
their illegitimate filiation in the same way and on
the same evidence as legitimate children.
The action must be brought within the same period
specified in Article 173, except when the action is
based on the second paragraph of Article 172, in
which case the action may be brought during the
lifetime of the alleged parent.
\Under the circumstances obtaining in the case at
bar, we hold that the right of action of the minor
child bas been vested by the filing of the complaint
in court under the regime of the Civil Code and
prior to the effectivity of the Family Code. 14 We
herein adopt our ruling in the recent case of
Republic of the Philippines vs. Court of Appeals, et
al. 15 where we held that the fact of filing of the
petition already vested in the petitioner her right to
file it and to have the same proceed to final
adjudication in accordance with the law in force at

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the time, and such right can no longer be
prejudiced or impaired by the enactment of a new
law.
Even assuming ex gratia argumenti that the
provision of the Family Code in question is
procedural in nature, the rule that a statutory
change in matters of procedure may affect pending
actions and proceedings, unless the language of
the act excludes them from its operation, is not so
pervasive that it may be used to validate or
invalidate proceedings taken before it goes into
effective, since procedure must be governed by the
law regulating it at the time the question of
procedure arises especially where vested rights
may be prejudiced. Accordingly, Article 175 of the
Family Code finds no proper application to the
instant case since it will ineluctably affect
adversely a right of private respondent and,
consequentially, of the mind child she represents,
both of which have been vested with the filing of
the complaint in court. The trial court is therefore,
correct in applying the provisions of Article 285 of
the Civil Code and in holding that private
respondent's cause of action has not yet
prescribed.
Benitez v. CA
FACTS:
Spouses Vicente Benitez and Isabel Chipongian
were owners of various properties located in
Laguna. Isabel died in 1982 while his husband
died in 1989. Vicente’s sister and nephew filed a
complaint for the issuance of letters of
administration of Vicente’s estate in favor of the
nephew, herein private respondent. The
petitioner, Marissa Benitez-Badua, was raised and
cared by the deceased spouses since childhood,
though not related to them by blood, nor legally
adopted. The latter to prove that she is the only
legitimate child of the spouses submitted
documents such as her certificate of live birth
where the spouses name were reflected as her
parents. She even testified that said spouses
continuously treated her as their legitimate
daughter. On the other hand, the relatives of
Vicente declared that said spouses were unable to
physically procreate hence the petitioner cannot be
the biological child. Trial court decided in favor of
the petitioner as the legitimate daughter and sole
heir of the spouses.
ISSUE: WON petitioner’s certificate of live birth will
suffice to establish her legitimacy.
HELD:
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The Court dismissed the case for lack of merit.
The mere registration of a child in his or her birth
certificate as the child of the supposed parents is
not a valid adoption. It does not confer upon the
child the status of an adopted child and her legal
rights. Such act amounts to simulation of the
child's birth or falsification of his or her birth
certificate, which is a public document.
It is worthy to note that Vicente and brother of the
deceased wife executed a Deed of Extra-Judicial
Settlement of the Estate of the latter. In the
notarized document, they stated that they were
the sole heirs of the deceased because “she died
without descendants and ascendants”. In
executing such deed, Vicente effectively repudiated
the Certificate of Live Birth of the petitioner where
it appeared that the was the petitioner’s father.
Rodriguez v. CA
A mother cannot impugn the legitimacy of the
child.
Can a mother testify as to the legitimacy of the
child? That depends. Voluntarily, Generally, NO
(Expn) Compulsory as to compel the father to
recognize the child (Ex. Rape)
We find that had the appellate court sanctioned the
trial court's disallowance of the testimony of
plaintiff's mother, private respondent would have
been deprived of a speedy and adequate remedy
considering the importance of said testimony and
the erroneous resolution of the trial court.
On the merits of his petition, petitioner contended
that Felicitas Agbulos Haber should not be allowed
to reveal the name of the father of private
respondent because such revelation was prohibited
by Article 280 of the Civil Code of the Philippines.
Said Article provided:
When the father or the mother makes the
recognition separately, he or she shall not reveal
he name of the person with whom he or she had
the child; neither shall he or she state any
circumstance whereby the other party may be
identified.
On the other hand, private respondent argued that
his mother should be allowed to testify on the
identity of his father, pursuant to paragraph 4,
Article 283 of the Civil Code of the Philippines and
Section 30, Rule 130 of the Revised Rules of Court.
Article 283 of the Civil Code of the Philippines
provided:
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In any of the following cases, the father is
obliged to recognize the child as his natural
child:
(1) In cases of rape, abduction or seduction, when
the period of the offense coincides more or less
with that of the conception;
(2) When the child is in continuous possession of
status of a child of the alleged father by the
direct acts of the latter or of his family;
(3) When the child was conceived during the time
when the mother cohabited with the supposed
father;
(4) When the child has in his favor any evidence or
proof that the defendant is his father.
Section 30, Rule 130 of the Revised Rules of Court
provides:
Testimony generally confined to personal
knowledge; hearsay excluded. — A witness can
testify only to those facts which he knows of his
own knowledge, that is, which are derived from his
own perception, except as otherwise provided in
these rules.
Private respondent cannot invoke our decision in
Navarro v. Bacalla, 15 SCRA 114 (1965). While we
ruled in Navarro that the testimony of the mother
of the plaintiff in said case, could be used to
establish his paternity, such testimony was
admitted during the trial without objection and the
defendant accepted the finding of the trial court
that he was the father of the plaintiff.
In the case at bench, petitioner timely objected to
the calling of the mother of private respondent to
the witness stand to name petitioner as the father
of said respondent.
Likewise, in Navarro we clearly stated:
We are not ruling whether the mere testimony of
the mother, without more, is sufficient to prove the
paternity of the child. Neither are we ruling on the
scope of Art. 280, New Civil Code which enjoins
the mother in making a separate and voluntary
recognition of a child from revealing the name of
the father, specifically, as to whether the mother's
testimony identifying the father is admissible in an
action to compel recognition if and when a timely
objection to such oral evidence is interposed (at p.
117).
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Navarro, therefore, is not the end but only the
beginning of our quest, which felicitously was
reached with our conclusion that the prohibition in
Article 280 against the identification of the father
or mother of a child applied only in voluntary and
not in compulsory recognition. This conclusion
becomes abundantly clear if we consider the
relative position of the progenitor of Article 280,
which was Article 132 of the Spanish Civil Code of
1889, with the other provisions on the
acknowledgement of natural children of the same
Code.
Article 132 was found in Section I
(Acknowledgment of Natural Children), Chapter IV
(Illegitimate Children), Title V (Paternity and
Filiation), Book First (Persons) of the Spanish Civil
Code of 1889.
The first article in said Section provided:
Art. 129 — A natural child may be acknowledged
by the father and mother jointly or by either of
them alone.
The next article provided:
Art. 130 — In case the acknowledgment is made
by only one of the parents, it shall be presumed
that the child is a natural one if the parent
acknowledging it was, at the time of the
conception, legally competent to contract
marriage.
The article immediately preceding Article 132
provided:
Art. 131 — The acknowledgment of a natural child
must be made in the record of birth, in a will, or in
some other public document.
Article 132 of the Spanish Civil Code provided:
When the acknowledgment is made separately by
the father or the mother, the name of the child's
other parent shall not be revealed by the parent
acknowledging it, nor shall any circumstance be
mentioned by which such person might be
recognized.
No public officer shall authenticate any document
drawn in violation of this provision and should he
do so notwithstanding this prohibition shall be
liable to a fine of from 125 to 500 pesetas, and the
words containing such revelation shall be striken
out.
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Article 280 of the Civil Code of the Philippines was
found in Section 1 (Recognition of Natural
Children), Chapter 4 (Illegitimate Children), Title
VIII (Paternity and Filiation) of said Code. The
whole section was repealed by the Family Code.
The first article of this section was Article 276
which was a reproduction of Article 129 of the
Spanish Civil Code. The second article was Article
277 which was a reproduction of Article 130 of the
Spanish Civil Code. The third article was Article
278 which was a reproduction of Article 131 of the
Spanish Civil Code.
However, unlike in the Spanish Civil Code, wherein
the progenitor of Article 280 followed immediately
the progenitor of Article 278, a new provision was
inserted to separate Article 280 from Article 278.
The new provision, Article 279, provided:
A minor who may contract marriage without
parental consent cannot acknowledge a natural
child, unless the parent or guardian approves the
acknowledgment, or unless the recognition is made
in the will.
If the sequencing of the provisions in the Spanish
Civil Code were maintained in the Civil Code of the
Philippines, and Article 280 was numbered Article
279, it becomes clear that the prohibition against
the identification by the parent acknowledging a
child of the latter's other parent refers to the
voluntary recognition provided for in Article 278.
Under Article 172 of the Family Code, filiation of
legitimate children is by any of the following:
The filiation of legitimate children is
established by any of the following:
(1) The record of birth appearing in the civil
register or a final judgment; or
(2) An admission of legitimate filiation in a public
document or a private handwritten instrument
and signed by the parent concerned.
In the absence of the foregoing evidence, the
legitimate filiation shall be proved by:
(1) The open and continuous possession of the
status of a legitimate child; or
(2) Any other means allowed by the Rules of Court
and special laws. (265a, 266a, 267a)
Of interest is that Article 172 of the Family Code
adopts the rule in Article 283 of the Civil Code of
the Philippines, that filiation may be proven by
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"any evidence or proof that the defendant is his
father."
WHEREFORE, the Decision of the Court of Appeals
is AFFIRMED. The trial court is DIRECTED to
PROCEED with dispatch in the disposition of the
action for compulsory recognition.
RULE ON ADOPTION BY SPOUSES
General Rule: The husband and the wife shall
jointly adopt.
Exceptions:
1. One spouse seeks to adopt the legitimate
son/daughter of the other;
2. One spouse seeks to adopt his/her own
illegitimate son/daughter;
3. If the spouses are legally separated.
WHO MAY BE ADOPTED
1. Person below 18 years of age who has been
administratively/judicially declared available for
adoption;
2. Legitimate son/daughter of one of the spouse by
other spouse;
3. Illegitimate son/daughter by a qualified adopter
to improve his/her status to that of legitimacy;
4. Any person of legal age, if, prior, to the
adoption said person has been consistently
considered by the adopter(s) as his/her own
child since minority;
5. Child whose adoption has been previously
rescinded;
6. Child whose biological/adoptive parent(s) has
died.
Persons Who May Not Be Adopted
1. Person o f legal age, except:
a. If adopted is a child by nature of adopter or
his spouse; or
b.Adopted has been consistently considered and
treated by adopter as his or her own child
during minority;
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2. Alien whose government the Philippines has no
diplomatic relations; and
3. Person who has been previously adopted, unless
such adoption has been revoked or rescinded.
RULE ON ADOPTION BY SPOUSES
1. All legal ties between the biological parents and
the adoptee shall be severed and the same shall
be vested in the adopters.
Except when biological parent is the spouse of
the adopter.
2. Adoptee shall be considered a legitimate child of
the adopter for all the intents and purposes;
3. In legal and intestate succession, the adoptee
and adopters shall have reciprocal rights of
succession without distinction from legal
filiation. However, if a will was left, the rules on
testamentary succession shall be followed.
Grounds for Rescission of Adoption
1. Repeated physical/verbal maltreatment by the
adopter(s);
2. Attempt on the life of the adoptee;
3. Sexual assault or violence;
4. Abandonment or failure to comply with the
parental obligations.
Rules for Legal or Intestate Succession to the
Estate of the Adopted
1. Legitimate and illegitimate children and
descendants and the surviving spouse of the
adopted, in accordance with the ordinary rules of
legal or intestate succession.
2. When the parents, legitimate or illegitimate, or the
legitimate ascendants of the adopted concur with
the adopter, they shall divide the entire estate,
one-half to be inherited by the parents or
ascendants and the other half, by the adopters.
3. When the surviving spouse or the illegitimate
children of the adopted concur with the adopters,
they shall divide the entire estate equal shares,
one-half to be inherited by the spouse or the
illegitimate children of the adopted and the other
half, by the adopters.
4. When the adopters concur with the illegitimate
children and the surviving spouse of the adopted,
they shall divide the entire estate in equal shares,
one-third to be inherited by the illegitimate
children, one-third by the surviving spouse, and
one-third by the surviving spouse and one-third by
the adopters.
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5. When only the adopters survive, they shall inherit
the entire estate.
6. When only collateral blood relatives of the adopted
survive, then the ordinary rules.
Rights of an adopted child – include FC, Arts.
189 and 190 on successional rights
Art. 189. Adoption shall have the following effects:
(1) For civil purposes, the adopted shall be
deemed to be a legitimate child of the adopters
and both shall acquire the reciprocal rights and
obligations arising from the relationship of
parent and child, including the right of the
adopted to use the surname of the adopters;
(2) The parental authority of the parents by nature
over the adopted shall terminate and be
vested in the adopters, except that if the adopter
is the spouse of the parent by nature of the
adopted, parental authority over the adopted
shall be exercised jointly by both spouses; and
(3) The adopted shall remain an intestate heir of
his parents and other blood relatives.
Art. 190. Legal or intestate succession to the
estate of the adopted shall be governed by the
following rules:
(1) Legitimate and illegitimate children and
descendants and the surviving spouse of the
adopted shall inherit from the adopted, in
accordance with the ordinary rules of legal or
intestate succession;
(2) When the parents, legitimate or illegitimate, or
the legitimate ascendants of the adopted
concur with the adopter, they shall divide the
entire estate, one-half to be inherited by the
parents or ascendants and the other half, by
the adopters;
(3) When the surviving spouse or the illegitimate
children of the adopted concur with the
adopters, they shall divide the entire estate in
equal shares, one-half to be inherited by the
spouse or the illegitimate children of the
adopted and the other half, by the adopters.
(4) When the adopters concur with the illegitimate
children and the surviving spouse of the
adopted, they shall divide the entire estate in
equal shares, one-third to be inherited by the
illegitimate children, one-third by the surviving
spouse, and one-third by the adopters;
(5) When only the adopters survive, they shall
inherit the entire estate; and
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(6) When only collateral blood relatives of the
adopted survive, then the ordinary rules of
legal or intestate succession shall apply.
(39(4)a, PD 603)
Sec.  18. Succession. — In legal and intestate
succession, the adopter(s) and the adoptee shall
have reciprocal rights of succession without
distinction from legitimate filiation. However, if the
adoptee and his/her biological parent(s) had left a
will, the law on testamentary succession shall
govern.
EXCLUDE: AM No. 02-6-02-S.C. (Aug. 22,
2002), RA9523 – requiring certification of the
department of DSWD to declare a “child
legally available for adoption”
B. INTER-COUNTRY
ADOPTION (1995) REPUBLIC
ACT NO. 8043
Inter-Country Adoption
* The socio-legal process of adopting a Filipino
child by a foreigner or a Filipino citizen
permanently residing abroad where the petition is
filed, the supervised trial custody is undertaken,
and the decree of adoption is issued outside the
Philippines.
* The child must first be placed under adoption in
the Philippines before he is placed for inter-country
adoption.
Who May Be Adopted:
* Only a “legally-free child” (a child who has been
voluntarily committed to the DSWD of the
Philippines, in accordance with the Child Youth
Welfare Code).
 An alien qualified to adopt under the Child Youth
and Welfare Code, which was in force at the time
of the filing of the petition, acquired a vested right,
which could not be affected by the subsequent
enactment of a new law disqualifying him.
(Republic vs. Miller, 306 SCRA 183)
 Spouses Clause cannot adopt under any
exceptional cases in the provision because:
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1. The adopter is not a Filipino citizen but a
natural born citizen of USA;
2. The adopter is neither his relative by
consanguinity not the legitimate child of the
other spouse;
3. When the adopters jointly filed the petition to
adopt, the other spouse is no longer a Filipino
citizen. (Republic vs. Toledano, 233 SCRA 9)
Who May Adopt:
Any alien or Filipino citizen permanently residing
abroad may file an application for inter-country
adoption of a Filipino child if he/she:
1. Is at least 27 years of age and at least 16 years
older than the child to be adopted, at the time
of the application unless the adopter is the
parent by nature of the child to be adopted or
the spouse of such parent.
2. If married, his/her spouse must jointly file for
the adoption.
3. Has the capacity to act and assume all rights
and responsibilities of parental authority under
his national laws, and has undergone the
appropriate counseling in his/her country.
4. Has not been convicted of a crime involving
moral turpitude.
5. Is eligible to adopt under his/her national law.
6. Is in a position to provide the proper care and
support and to give the necessary moral values
and example to all his children, including the
child to be adopted.
7. Agrees to uphold the basic rights of the child as
embodied under Philippine laws, the UN
convention on the Rights of the Child, and to
abide by the rules and regulations issued to
implement the Inter-country Adoption Act
8. Comes from a country with whom the
Philippines has diplomatic relations and whose
government maintains a similarly authorized
and credited agency and that adoption is
allowed under his/her national laws.
9. Possesses all the qualifications and none of the
disqualifications under the Inter-country
adoption act and other applicable Philippine
laws
Inter-Country Adoption Board
* Acts as the central authority in matters relating
to inter-country adoption.
* The Board shall ensure that all possibilities for
the adoption of the child under the Family Code
have been exhausted and that inter-country
adoption is in the best interest of the child.
Trial Custody:
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◘ 6 months from the time of placement
1. Starts upon actual physical transfer of the child
to the applicant who, as actual custodian, shall
exercise substitute parental authority over the
person of the child.
2. The adopting parent(s) shall submit to the
governmental agency or authorized and accredited
agency, which shall in turn transmit a copy of the
Board, a progress report of the child’s adjustment.

RA 8552 – Domestic Adoption FAMILY CODE

Law
Date of Effectivity July 28, 1998 August 3, 1998

WHO MAY ADOPT

Filipino Citizen Any Filipino citizen with the ff. Any Filipino citizen with the ff.
qualifications: qualifications:
a. Of legal age a. Of legal age
b. In possession of full civil capacity b. In possession of civil capacity
and legal rights and legal rights
c. In a position to support and care forc. In a position to support and care
children in keeping with the means for children in keeping with the
of the family means of the family
d. Good moral character
e. Has not been convicted of any crime
involving moral turpitude
Psychologically and emotionally
capable of caring for children
Age Gap At least 16 years older than the At least 16 years older than the
adoptee adopted
Exceptions: Exceptions:
a. When the adopter is the biological a. When the adopter is the natural
parent of the adopted parent of the adopted
b. When the adopter is the spouse of b. When the adopter is the spouse
the biological parent of the legitimate parent of the
child to be adopted.
Aliens or Foreigners Any Alien: Generally, aliens may not adopt
a. Possessing the same qualifications
as above stated for a Filipino Exceptions:
b. His/her country has diplomatic a. Former Filipino citizen who
relations with the Philippines seeks to adopt a relative by
c. Residency in the Phil. For at least 3 consanguinity
continuous years prior to the filing b. One who seeks to adopt the
of the application and maintains legitimate son or daughter of
such residence until adoption is his/her Filipino spouse
decreed c. One who is married to a Filipino
d. Certification of legal capacity to citizen and seeks to adopt
adopt in own country from jointly with his/her spouse a
diplomatic or consular office relative by consanguinity
d. Adoption in accordance with the
Exceptions to last two rule on inter-country adoption
qualifications:
a. Former Filipino citizen who seeks to
adopt a relative within the 4th degree
of affinity or consanguinity
b. One who seeks to adopt the
legitimate son or daughter of his/her
Filipino spouse
c. One who is married to a Filipino
citizen and seeks to adopt jointly

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with his/her spouse a relative within

the 4th degree of affinity or
consanguinity
d. Guardian with respect to the ward
after termination of the guardianship
Husband and Wife Mandatory; shall adopt jointly and Mandatory; must jointly adopt
Adopting Jointly exercise parental authority jointly and exercise joint parental
Exceptions: authority
a. If one spouse seeks to adopt the Exceptions:
legitimate son/daughter of the othera. When one spouse seeks to
b. If one spouse seeks to adopt his/her adopt the legitimate child of the
own illegitimate son or daughter, other
provided that the spouse has b. When spouse seeks to adopt his
signified his or her consent own illegitimate child
c. Spouses are legally separated from
each other
WHO MAY NOT ADOPT
-no specific provision a. The guardian with respect to
the ward prior to the approval of
the final accounts rendered
upon the termination of their
guardianship relationship
b. Any person who has been
convicted of a crime of moral
turpitude
a. An alien (subject to
exceptions)
WHO MAY BE ADOPTED
Minor Any person below 18 years of age Only minors may be adopted
who has been administratively or except in cases when the
judicially declared available for adoption of a person of majority
adoption age is allowed in the Family
Code

spouses jointly filed a petition with the RTC to

VII. SUPPORT
It comprises everything indispensable in keeping
with the financial capacity of the family: Food or
Sustenance; Dwelling or Shelter; Clothing;
Medical attendance; Education; Transportation.
Case on adoption:
Republic v. CA and the spouses James and Lenita
Hughes
Facts: James Hughes, a natural born citizen of
the United States of America, married Lenita
Mabunay, a Filipino Citizen, who herself was later
naturalized as a citizen of that country. The
adopt the minor niece and nephews of Lenita,
who had been living with the couple even prior to
the filing of the petition. The minors, as well as
their parents, gave consent to the adoption. The
RTC rendered a decision granting the petition.
Issue: Can the spouses adopt the minors?
Held: While James Anthony unquestionably is not
permitted to adopt under any of the exceptional
cases enumerated in paragraph (3) of the
aforequoted article, Lenita, however, can qualify
pursuant to paragraph (3)(a). Lenita may not
thus adopt alone since Article 185 requires a joint
adoption by the husband and the wife, a condition
that must be read along together with Article
184.Art 185 provides: Art. 185. Husband and wife

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must jointly adopt, except in the following cases:
(1) When one spouse seeks to adopt his own
illegitimate child; or (2) When one spouse seeks
to adopt the legitimate child of the other. As
amended by Executive Order 91, Presidential
Decree No. 603, had thus made it mandatory for
both the spouses to jointly adopt when one of
them was an alien. The law was silent when both
spouses were of the same nationality. The Family
Code has resolved any possible uncertainty.
Article 185 thereof now expresses the necessity
for joint adoption by the spouses except in only
two instances: (1) When one spouse seeks to
adopt his own legitimate child; or (2) When one
spouse seeks to adopt the legitimate child of the
other. It is in the foregoing cases when Article
186 of the Code, on the subject of parental
authority, can aptly find governance. Article 186.
In case husband and wife jointly adopt or one
spouse adopts the legitimate child of the other,
joint parental authority shall be exercised by the
spouses in accordance with this Code.
Cases:
Luna v. IAC
The SC rules that in all questions relating to the
care, custody and education and property of the
children, the latter’s welfare is paramount. This
means that the best interest of the minor can
override procedural rules and even the rights of
the parents to the custody of their children. The
desire and preference of the child to stay with her
grandparents instead of her biological parents and
who had signified her intention to kill herself and
run away from home if she should be separated
from her grandparents and forced to live with her
biological parents should prevail over procedural
rules.
of a final judgment declaring the existence or
non-existence of the marriage, nothing exist
except the allegation of marriage and a denial
thereof (Yangco vs. Rohde, 1 Phil 404).
2. Legitimate ascendants and descendants;
 A husband may validly refuse to support a child
who is a fruit of an adulterous relationship
(Sanchez vs. Zulueta, 68 Phil 11).
3. Parents and their legitimate children and the
legitimate and illegitimate children of the latter;
4. Parents and their illegitimate children and the
legitimate and illegitimate children of the latter;
* The persons obliged to support each other are
limited from the grandparents to the
grandchildren only and vice versa.
 If in a hearing for support pendente lite, the
status of the child is at issue, the alleged child can
get support in the meantime while the case is
pending from the alleged parent is his status as
such has been proven provisionally.
(Mangulabnan vs. IAC, 185 SCRA 760)
5. Legitimate brothers and sisters whether of the
full or half-blood.
* The right to receive support under this Title as
well as any money or property obtained as such
support shall not be levied upon on attachment or
execution. (Art. 205)
Order of Liability if Two or More Are Obliged
to Support
1. Spouse
2. Descendants in nearest degree
3. Ascendants in nearest degree
4. Brothers and sisters

Persons Obliged to Support Each Other:

1. Spouses;
 The adultery of the wife is a valid defense against SOURCES OF SUPPORT
an action for support (Quintana vs. Lerma, 24 Phil
285). SPOUSES CHILDREN
During the Marriage
 Once a marriage is annulled, or declared void ab From the community From the
initio, the obligation to give support ceases property. community
(Mendoza vs. Parungao, 41 Phil 271). property.
Pending Litigation
 In a case for support between husband and wife From the community From the separate
where the validity of the marriage is in issue, the property assets except in property of the
aggrieved party cannot be given support Art. 203 applies, that if spouse.
pendente lite by the other spouse immediately the claimant spouse is
without due hearing because prior to the rendition the guilty spouse, he/she

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will not be entitled to
support. If the spouses
are under conjugal
partnership of gains,
support is considered an
advance of such spouses’
share; the rule does not
apply if the spouses are
under absolute
community of property,
based on Art. 153.
After Litigation
No obligation to support
except is there is legal
separation, in which case
the court may require
the guilty spouse to give
support.
 Where a spouse obtained a sum of money on
different occasions from her sister, and where the
sister and the husband sued the husband of the
said spouse for reimbursement under Art. 206, for
one to recover, it must be alleged and proved,
first, that support has been furnished a dependent
of one bound to give support but who fails to do
so; second that the support was given without the
knowledge of the person charged with the duty.
The negative qualification is when the support is
given without the expectation of recovering it. (De
Marcaida vs. Redfern, 49 Phil 849)
 The right to receive support can neither be
renounced nor transmitted to a third person.
Neither can it be compensated with what the
recipient owes the obligator. Further, future
support cannot be the subject of compromise. (De
Asis vs. CA, 303 SCRA 176)
Case:
Leouel Santos vs. Court of Appeals and Santos
GR No. 112019 / 58 SCAD 17
Januray 4, 1995
FACTS:
Lt. Leouel Santos married private respondent Julia
Bedia on Sept. 20, 1986 in Illoilo MTC and later
by church wedding. They lived with the latter’s
parents and eventually gave birth to Leouel
Santos, Jr. on July 18, 1987. The relationship
turned sour when they began quarelling over
frequent interferrence of Julia’s parents and the
issue of liveing independently from the in-laws.
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On May 18, 1988, Julia left for the United States
(US) to work as nurse despite Leouel’s
protestations. Seven months thereafter or on
January 1, 1989, she called up from the US with
the promise of returning home soon, but she
never did. Given the chance, Leouel went to the
US for a training program sponsored by the
Armed Forces of the Philippines (AFP) from April
to August 1990. He desperately tried to locate
her there but failed.
He then filed with the Regional Trial Court (RTC)
for the nullification of their marriage under Article
36 of the Family Code, on the ground of
psychological incapacity. Summons was served
by publication in a newspaper of general
circulation in Negros Oriental. In her answer,
Julia claimed that it was Leouel who was
irresponsible and incompetent. The RTC in
November 1991 dismissed the case for lack of
merit. On appeal, the Court of Appeals (CA)
affirmed the RTC decision.
ISSUE: Whether or not the marriage may be
declared a nullity prusuant to Artcile 36 of the
Family Code.
HELD:
Article 36 cannot be taken and construed
independently, but must stand in conjunction with
existing precepts of laws on marriage. Thus
correlated, “psychological incapacity” should refer
no less than a mental (not physical) incapacity
that causes a party to be truly incognitive of the
basic marital covenants that concomitantly must
be assumed and discharged by the parties to the
marriage which, as so expressed by Article 68 of
the Family Code, include their mutual obligations
to live together, observe love, respect and fidelity
and render help and support. There is hardly any
doubt that the intendment of the law has been to
confine the meaning of psychological incapacity to
the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or
inability to give meaning and significance to the
marriage. This psychological condition must exist
at the time the marriage is celebrated. The law
does not evidently envision an inability of the
spouse to have sexual relations with the other.
This conclusion is implicit under Article 54 of the
Family Code which considers children conceived
prior to the judicial declaration of nullity of the
void marriage to be legitimate.
The well-considered opinions of psychiatrists,
psychologists and persons with expertise in
psychological disciplines might be helpful or even
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desirable in establishing the parameters of
psychological incapacity.
Marriage is not just and adventure but a lifetime
commitment. We should continue to be reminded
that innate in our society, then enshrined in the
Civil Code, and even now still indelible in Section
1 of the Family Code…the Constitution is no less
emphatic.
The latter’s wealth is not a deciding factor
particularly that there is no proof that petitioner is
in no position to support the boy. The fact that he
was unable to provide financial support for his
minor son from birth up to over 3 years when he
took the boy fro his in-laws without permission,
should not be sufficient reason to strip him of his
permanent right to the child’s custody.
Support during marriage litigation, Art. 198
Art. 198. During the proceedings for legal
separation or for annulment of marriage, and for
declaration of nullity of marriage, the spouses and
their children shall be supported from the
properties of the absolute community or the
conjugal partnership. After the final judgment
granting the petition, the obligation of mutual
support between the spouses ceases. However, in
case of legal separation, the court may order that
the guilty spouse shall give support to the
innocent one, specifying the terms of such order.
Amount, Arts. 201-202
Art. 201. The amount of support, in the cases
referred to in Articles 195 and 196, shall be in
proportion to the resources or means of the giver
and to the necessities of the recipient. (296a)
Art. 202. Support in the cases referred to in the
preceding article shall be reduced or
increased proportionately, according to the
reduction or increase of the necessities of the
recipient and the resources or means of the
person obliged to furnish the same.
When Demandable, Art. 203
Art. 203. The obligation to give support shall be
demandable from the time the person who has a
right to receive the same needs it for
maintenance, but it shall not be paid except from
the date of judicial or extra-judicial demand.
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Support pendente lite may be claimed in
accordance with the Rules of Court.
Payment shall be made within the first five days
of each corresponding month or when the
recipient dies, his heirs shall not be obliged to
return what he has received in advance.
Options, Art. 204
Art. 204. The person obliged to give support shall
have the option to fulfill the obligation either by
paying the allowance fixed, or by receiving and
maintaining in the family dwelling the person who
has a right to receive support. The latter
alternative cannot be availed of in case there is a
moral or legal obstacle thereto.
Attachment, Art. 205
Art. 205. The right to receive support under this
Title as well as any money or property obtained
as such support shall not be levied upon on
attachment or execution.
VI
II. PARENTAL AUTHORITY
Rules as to the exercise of PA:
1. The father and the mother shall JOINTLY
exercise penalty authority over the persons of
their common children. In case of disagreement,
the father’s decision shall prevail unless there is a
judicial order to the contrary/
2. If the child is illegitimate, parental authority is
with the mother.
Parental preference rule
* The natural parent, who are of good character
and who can reasonably provide for the child are
ordinarily entitled to custody as against all
persons
General Rule: No child under 7 years of age shall
be separated from the mother. (Espiritu vs. CA,
242 SCRA 362; Maternal Preference Rule)
Exception: When the court finds compelling
reason to order otherwise.
 What constitutes compelling reason must be
clearly shown by positive and clear evidence of
the unfitness of the mother and its determination
is left to the sound judgment of the courts
(Medina vs. Makabali, 27 SCRA 502).
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 Whether the child is under or over 7 years of
age, the paramount consideration must always be
the child’s interests. The considerations involving
the choice made by a child must be ascertained at
the time that either parent is given custody over
the child. The matter of custody is not permanent
and unalterable (Espiritu vs. CA, 242 SCRA 362).
 When the welfare of a helpless child is at
stake, it is the bounden duty of courts – which
they cannot shirk – to respect, enforce, and give
meaning and substance to a child’s natural and
legal right to live and grow in the proper physical,
moral and intellectual environment. (Chua vs.
Cabangbang, 27 SCRA 791).
* Parental authority and responsibility may not be
renounced or transferred except in the cases
authorized by law (Art. 210, FCP).
 Parental authority, being purely personal, the
law allows a waiver of parental authority only in
cases of adoption, guardianship and surrender to
children’s home or an orphan institution. When a
parent entrusts, such as a friend or godfather,
even in a private document, what is given is
merely temporary custody and it does not
constitute a renunciation of parental authority.
Even if a definite renunciation is manifest, the law
still disallows the same. Only in the case of the
parent’s death, absence, or unsuitability may
substitute parental authority be exercised by the
surviving parents. In the case at bar, there is no
proof that the father cannot support the child at
the present time. The fact that he failed to
financially support the child for three years is not
sufficient reason to strip him from custody. His
efforts to get the child and take care of him may
be construed as an act to rectify his past
misdeeds. The father’s employment of trickery in
spiriting away his son from the maternal
grandparents though unjustifiable, is not a ground
to wrest custody from him. (Santos vs. CA, 242
SCRA 407)
Substitute Parental Authority
* Exercised in case of death, absence or
unsuitability of parents.
* Exercised in the order indicated:
a. Surviving grandparent;
b. Oldest brother/sisters over 2 years of age
unless unfit/disqualified;
c. Child’s actual custodian who is over 21 years of
age, unless unfit or disqualified.
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Effect of Parental Authority upon the
Persons of the
Children, Arts. 220-224
Art. 220. The parents and those exercising
parental authority shall have with the respect to
their unemancipated children on wards the
following rights and duties:
(1) To keep them in their company, to support,
educate and instruct them by right precept
and good example, and to provide for their
upbringing in keeping with their means;
(2) To give them love and affection, advice and
counsel, companionship and understanding;
(3) To provide them with moral and spiritual
guidance, inculcate in them honesty, integrity,
self-discipline, self-reliance, industry and
thrift, stimulate their interest in civic affairs,
and inspire in them compliance with the
duties of citizenship;
(4) To furnish them with good and wholesome
educational materials, supervise their
activities, recreation and association with
others, protect them from bad company, and
prevent them from acquiring habits
detrimental to their health, studies and
morals;
(5) To represent them in all matters affecting
their interests;
(6) To demand from them respect and obedience;
(7) To impose discipline on them as may be
required under the circumstances; and
(8) To perform such other duties as are imposed
by law upon parents and guardians. (316a)
Art. 221. Parents and other persons exercising
parental authority shall be civilly liable for the
injuries and damages caused by the acts or
omissions of their unemancipated children living
in their company and under their parental
authority subject to the appropriate defenses
provided by law. (2180(2)a and (4)a )
Art. 222. The courts may appoint a guardian of
the child's property or a guardian ad litem when
the best interests of the child so requires. (317)
Art. 223. The parents or, in their absence or
incapacity, the individual, entity or institution
exercising parental authority, may petition the
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proper court of the place where the child resides,
for an order providing for disciplinary measures
over the child. The child shall be entitled to the
assistance of counsel, either of his choice or
appointed by the court, and a summary hearing
shall be conducted wherein the petitioner and the
child shall be heard.
However, if in the same proceeding the court
finds the petitioner at fault, irrespective of the
merits of the petition, or when the circumstances
so warrant, the court may also order the
deprivation or suspension of parental authority or
adopt such other measures as it may deem just
and proper. (318a)
Art. 224. The measures referred to in the
preceding article may include the commitment of
the child for not more than thirty days in entities
or institutions engaged in child care or in
children's homes duly accredited by the proper
government agency.
The parent exercising parental authority shall not
interfere with the care of the child whenever
committed but shall provide for his support. Upon
proper petition or at its own instance, the court
may terminate the commitment of the child
whenever just and proper.
EXCLUDE: Rule on Guardianship of Minors,
Rule on Custody of Minors, RA 8972 – Solo
Parents Act, RA 8980 – Policy for Childhood
Care
Effects of Parental Authority upon the
Property of the Children, Arts. 225-227
Art. 225. The father and the mother shall jointly
exercise legal guardianship over the property of
the unemancipated common child without the
necessity of a court appointment. In case of
disagreement, the father's decision shall prevail,
unless there is a judicial order to the contrary.
Where the market value of the property or the
annual income of the child exceeds P50,000, the
parent concerned shall be required to furnish a
bond in such amount as the court may determine,
but not less than ten per centum (10%) of the
value of the property or annual income, to
guarantee the performance of the obligations
prescribed for general guardians.
A verified petition for approval of the bond shall
be filed in the proper court of the place where the
child resides, or, if the child resides in a foreign
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country, in the proper court of the place where
the property or any part thereof is situated.
The petition shall be docketed as a summary
special proceeding in which all incidents and
issues regarding the performance of the
obligations referred to in the second paragraph of
this Article shall be heard and resolved.
The ordinary rules on guardianship shall be
merely suppletory except when the child is under
substitute parental authority, or the guardian is a
stranger, or a parent has remarried, in which case
the ordinary rules on guardianship shall apply.
Art. 226. The property of the unemancipated child
earned or acquired with his work or industry or by
onerous or gratuitous title shall belong to the
child in ownership and shall be devoted
exclusively to the latter's support and education,
unless the title or transfer provides otherwise.
The right of the parents over the fruits and
income of the child's property shall be limited
primarily to the child's support and secondarily to
the collective daily needs of the family.
Art. 227. If the parents entrust the management
or administration of any of their properties to an
unemancipated child, the net proceeds of such
property shall belong to the owner. The child shall
be given a reasonable monthly allowance in an
amount not less than that which the owner would
have paid if the administrator were a stranger,
unless the owner, grants the entire proceeds to
the child. In any case, the proceeds thus give in
whole or in part shall not be charged to the child's
legitime.
EXCLUDE: RA 9231 – Child Labor Law (to be
covered by Labor
Law)
Suspension or Termination of Parental
Authority, Arts. 228-233
Art. 228. Parental authority terminates
permanently:
(1) Upon the death of the parents;
(2) Upon the death of the child; or
(3) Upon emancipation of the child. (327a)
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Art. 229. Unless subsequently revived by a final

judgment, parental authority also terminates:
RA 7610 – Child Abuse Law
(1) Upon adoption of the child;
Emancipation
(2) Upon appointment of a general guardian;
(3) Upon judicial declaration of abandonment of
Arts. 234 and 236, as amended by RA 6809
the child in a case filed for the purpose;
(4) Upon final judgment of a competent court
Art. 234. Emancipation takes place by the
divesting the party concerned of parental
attainment of majority. Unless otherwise
authority; or
provided, majority commences at the age of
(5) Upon judicial declaration of absence or twenty-one years.
incapacity of the person exercising parental
authority.
Emancipation also takes place:

Grounds for Judicial Suspension of Parental
Authority
1. Excessive harshness or cruelty on the child;
2. Gives the child corrupting orders, counsel for
example;
3. Compels the child to beg;
4. Subjects the child or allows him/her to be
subjected to acts of lasciviousness;
5. Conviction of a crime with the penalty of civil
interdiction.
 Custody may even be granted to persons who
are strangers to the family if such award would
best serve the paramount interest of the child.
(Balatbat vs. Balatbat, 98 Phil 998)
 Where the custody of the child was awarded to
the grandparents by the lower court, but was
reversed by the Court of Appeals and was
affirmed by the Supreme Court, such decision by
the Supreme Court can be set aside when, after
the decision the child manifested the she would
kill herself if she were delivered to her natural
parents instead of letting her stay with her
grandparents. The decision of the lower court, as
held by the Supreme Court, in a subsequent case,
should be maintained. (Luna vs. IAC, 137 SCRA
(1) By the marriage of the minor; or
(2) By the recording in the Civil Register of an
agreement in a public instrument executed by
the parent exercising parental authority and
the minor at least eighteen years of age. Such
emancipation shall be irrevocable. (397a,
398a, 400a, 401a)
Art. 235. The provisions governing emancipation
by recorded agreement shall also apply to an
orphan minor and the person exercising parental
authority but the agreement must be approved by
the court before it is recorded. (n)
Art. 236. Emancipation for any cause shall
terminate parental authority over the person and
property of the child who shall then be qualified
and responsible for all acts of civil life.
Summary Judicial Proceedings in the Family
Law
Final Provisions – Retroactive effect, Art.
256

Cases Where Parental Authority May Be
revived
1. Adoption of Child
2. Appointment of general abandonment
3. Judicial declaration of abandonment
4. Final judgment divesting parental authority
5. Judicial declaration of absence or incapacity or
person exercising parental authority.
Art. 256. This Code shall have retroactive effect
insofar as it does not prejudice or impair vested
or acquired rights in accordance with the Civil
Code or other laws.
EXCLUDE: Arts. 254-255, 257
Funeral, NCC Arts. 305-301

EXCLUDE: Care and Education of Children, Arts.

356-363

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USE OF SURNAME
A Married Woman May Use:
1. Her maiden first name and surname and add
her husband’s surname; or
2. Her maiden first name and her husband’s
surname; or
3. Her husband’s full name, but prefixing a word
indicating the she is his wife, such as “Mrs”.
 In case of annulment of marriage, and the
wife is the guilty party, she shall resume her
maiden name and surname. If she is the
innocent spouse, she may resume her maiden
name and surname. However, she may
choose to continue employing her former
husband’s surname, unless:
(1) The court decrees otherwise, or
(2) She or the former husband is married
again to another person.
 When legal separation has been granted, the
wife shall continue using her name and
surname employed before the legal
separation.
Proper and Reasonable Causes That May
Warrant the Grant of a Petition for Change of
Name
1. The petitioner’s true and official name is
ridiculous.
2. The petitioner’s true and official name is
tainted with dishonor.
3. The petitioner’s true and official name is
extremely difficult to write or pronounce.
4. When the request for the change is a
consequence of a change of status, such as
when a natural child is acknowledged or
legitimated.
5. When the change is necessary to avoid
confusion.
 Usurpation of a name and surname may be
the subject of an action for damages and
other relief.
 The use of pen names or stage names is
permitted, provided it is done in good faith
and there is no injury to third persons. Pen
names and stage names cannot be usurped.
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Grounds for Change of First Name or
Nickname
1. The petitioner finds the first name or nickname
to be ridiculous, tainted with dishonor or
extremely difficult to write or pronounce
2. The new first name or nickname has been
habitually and continuously used by the
petitioner and he has been publicly known by
that first name or nickname in the community
3. The change will avoid confusion
Cases:
Republic v. CA and Maximo Wong
In the Wong case, therein petitioner Maximo
Wong sought the change of his surname which he
acquired by virtue of the decree of adoption
granted in favor of spouses Hoong Wong and
Concepcion Ty Wong. Upon reaching the age of
majority, he filed a petition in court to change his
surname from Wong to Alcala, which was his
surname prior to the adoption. He adduced proof
that the use of the surname Wong caused him
embarrassment and isolation from friends and
relatives in view of a suggested Chinese ancestry
when in reality he is a Muslim Filipino residing in a
Muslim community, thereby hampering his
business and social life, and that his surviving
adoptive mother
consented to the change of name sought. This
Court granted the petition and regarded the
change of the surname as a mere incident in,
rather than the object of, the adoption.
It should be noted that in said case the change of
surname, not the given name, and the legal
consequences thereof in view of the adoption
were at issue. That it was sought in a petition
duly and precisely filed for that purpose with
ample proof of the lawful grounds therefor only
serves to reinforce the imperative necessity of
seeking relief under and through the legally
prescribed procedures.
Llanet v. Agrava
Teresita's mother, one Atanacia Llaneta, was once
married toSerafin Ferrer with whom she had but
one child named Victoriano Ferrer. In1942 Serafin
Ferrer died, and about four years later Atanacia
had relationswith another man out of which
Teresita was born. Shortly after Teresita'sbirth,
Atanacia brought her and Victoriano to Manila
where all of them livedwith Atanacia's mother-in-
law, Victoria vda. de Ferrer. Teresita was raisedin
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the household of the Ferrer's, using the surname

of Ferrer in all herdealings and throughout her
schooling. When she was about twenty yearsold,
she applied for a copy of her birth certificate in
Sorsogon, where shewas born, as she was
required to present it in connection with
ascholarship granted to her by the Catholic
Charities. It was then that shediscovered that her
registered surname is Llaneta not Ferrer and that
sheis the illegitimate child of Atanacia and an
unknown father.On the ground that her use
thenceforth of the surname Llaneta,instead of
Ferrer which she had been using since she
acquired reason,would cause untold difficulties
and confusion, Teresita petitioned the courtfor
change of her name from Teresita Llaneta to
Naldoza v. Republic
Teresita Llaneta Ferrer.Issue:Whether or not
petitioner be allowed to change her surname
basedon her alleged facts.Ruling: The petition of We hold that the trial court did not err in denying
Teresita Llaneta for change of her name to the petition for change of name. The reasons
TeresitaLlaneta Ferrer is hereby granted. The adduced for eliminating the father's surname are
petitioner has established that shehas been not substantial enough to justify the petition. To
allow the change of surname would cause
confusion as to the minors' parentage and might
using the surname Ferrer for as long as she can
create the impression that the minors are
remember. Asudden shift at this time by the
illegitimate since they would carry the maternal
petitioner to the name Teresita Llaneta inorder to
surname only. That would be inconsistent with
conform to that appearing in her birth certificate
their legitimate status as indicated in their birth
would result inconfusion among the persons and
records.
entities she deals with and entailendless and
vexatious explanations of the circumstances of (Desirous of obliterating any connection between
her new surname. her two minor children and the scrapegrace father
is not a good reason. The crime of the father is
not ground to change the surname.)
Silva v. Peralta
In view of the non-existence of appellee’s
marriage with Saturnino Silva, and the
latter’s actual marriage to plaintiff Ledesma,
it is not proper for Esther to continue
representing herself as the wife of Saturnino.
Art. 370 of the Civil Code of the Philippines
authorizes a married woman to use the X. ABSENCE
surname of her husband; impliedly excludes
others from doing otherwise.
Presumption of Death:

Calderon v. Republic
A petition to change the name of the infant to
the surname of her stepfather, as in this case,
should be granted where to do so is clearly for
the best interest of the child it appearing that
such change would promote the personality of
the child and remove the stigma of illegitimacy
as long as it does not cause prejudice or injury
to the interest of the State or of other
persons. The stepfather already agreed.
A. Ordinary Absence
1. 7 years – it being unknown whether or not the
absentee still lives, he is presumed dead for all
purposes except for those of succession.
2. 10 years – for purposes of opening succession.
3. Disappearance after the age of 75 – an
absence of 5 years is sufficient.
 A judicial declaration of absence is necessary for
interested persons to be able to protect their

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rights, interests and benefits in connection with

the person who has disappeared. (Art. 386)

Provisional measures in Case of Absence,

Who May Ask for the Declaration of Absence Arts. 381-383

1. The spouse present;
2. The heirs instituted in a will, who may present
an authentic copy of the same;
3. The relatives who may succeed by the law of
intestacy;
4. Those who may have over the property of the
absentee some right subordinated to the
condition of his death.
Art. 381. When a person disappears from his
domicile, his whereabouts being unknown, and
without leaving an agent to administer his
property, the judge, at the instance of an
interested party, a relative, or a friend, may
appoint a person to represent him in all that may
be necessary.
This same rule shall be observed when under
similar circumstances the power conferred by the
absentee has expired. (181a)

B. Qualified/Extra-Ordinary Absence:
1. On board vessel lost during a sea voyage or an
airplane which is missing; period is counted
from the loss of the vessel or airplane;
2. In the armed forces who has taken part in war;
3. In danger of death under other circumstances
and his existence has not been known.
NCC Art. 43. 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.
FC Art. 41. A marriage contracted by any
person during subsistence of a previous
marriage shall be null and void, unless
before the celebration of the subsequent
marriage, the prior spouse had been absent
for four consecutive years and the spouse
present has a well-founded belief that the
absent spouse was already dead. In case of
disappearance where there is danger of
death under the circumstances set forth in
the provisions of Article 391 of the Civil
Code, an absence of only two years shall be
sufficient.
Art. 382. The appointment referred to in the
preceding article having been made, the judge
shall take the necessary measures to safeguard
the rights and interests of the absentee and shall
specify the powers, obligations and remuneration
of his representative, regulating them, according
to the circumstances, by the rules concerning
guardians. (182)
Art. 383. In the appointment of a representative,
the spouse present shall be preferred when there
is no legal separation.
If the absentee left no spouse, or if the spouse
present is a minor, any competent person may be
appointed by the court.
Declaration of Absence, Arts. 384-389
Art. 384. Two years having elapsed without any
news about the absentee or since the receipt of
the last news, and five years in case the absentee
has left a person in charge of the administration
of his property, his absence may be declared.
(184)

For the purpose of contracting the

subsequent marriage under the preceding
paragraph the spouse present must institute Art. 385. The following may ask for the
a summary proceeding as provided in this declaration of absence:
Code for the declaration of presumptive
(1) The spouse present;
death of the absentee, without prejudice to
the effect of reappearance of the absent (2) The heirs instituted in a will, who may present
spouse. an authentic copy of the same;

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(3) The relatives who may succeed by the law of
intestacy;
(4) Those who may have over the property of the
absentee some right subordinated to the
condition of his death. (185)
Art. 386. The judicial declaration of absence shall
not take effect until six months after its
publication in a newspaper of general circulation.
Art. 389. The administration shall cease in any of
the following cases:
(1) When the absentee appears personally or by
means of an agent;
(2) When the death of the absentee is proved and
his testate or intestate heirs appear;
(3) When a third person appears, showing by a
proper document that he has acquired the
absentee's property by purchase or other
title.

In these cases the administrator shall cease in the

performance of his office, and the property shall
be at the disposal of those who may have a right
Administration of the Property of the thereto.
Absentee, arts. 387-389

EXCLUDE: Arts. 393-396, contingent assets

Art. 387. An administrator of the absentee's
property shall be appointed in accordance with
Article 383. (187a)

Art. 388. The wife who is appointed as an

administratrix of the husband's property cannot
alienate or encumber the husband's property, or
that of the conjugal partnership, without judicial
authority. (188a)

ABSENCE AND ITS REMEDY

STAGES OF WHEN TO FILE WHO MAY FILE REMEDY

ABSENCE
Provisional Absence No statutory period. Spouse. a. receivership;
b. Judicial separation of
property; or
c. Authority to be sole
administrator of the conjugal
partnership.
Declaration of * Without administrator a. The spouse; Declaration of Absence and
Absence – 2 years from time of b. Voluntary heirs; Appointment of Administrator
disappearance c. Intestate heirs; and (Spouse shall be preferred)
* With administrator – d. Those who may have but only under the following
5 years from time of over the property of cases:
disappearance. the absentee some a. When the absentee has
right subordinated to properties which have to be
the condition of the taken care of or administered

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absentee’s death. by a representative appointed

by the Court
b. When the spouse of the
absentee is asking for
separation of property
c. When the spouse of the
absentee is asking the Court
that the administration of all
classes in the marriage be
transferred to her
Presumption of * Ordinary absence – 7 Spouse * Action to declare a person
Death years presumptively dead is proper
 4 years for purposes only when the spouse of the
of remarriage absentee wants to remarry.
Exception:
a. Succession – 10 years
b. 75 years of age – 5
years

*Extraordinary absence
– 4 years (2 years for
purposes of remarriage)

Cases: knows what has happened to him. He could have

Lukban v. Republic
The wife intends to remarry and alleged a well
founded belief that her husband is dead
(husband left after huge quarrel and was gone
for 20 years)
The SC held that the petition to declare
absence is denied. Back then, there was no
law about absentism and so absentism must
be based on well grounded belief which was
not established in this case.
Aboitiz v. Pepito
We go deep into the recitals of the notice and
claim for compensation. It simply says that while
thevessel was navigating, "the herein deceased
was lost or reported missing". This claim was filed
onJanuary 12, 1962, or barely 42 days after the
event took place. At that time, no presumption
existed thatDemetrio Pepito was dead. The boat
was not lost. This opens up a number of
possibilities. Becausenothing is certain. Nobody
transferred to another vessel or watercraft. He
could even have swam to safety. Or he could have
died. Or worse, he couldhave taken his own life.
Legal implications such as right to compensation,
succession, the legal statusof the wife are so
important that courts should not so easily be
carried to the conclusion that the man isdead.
2
The result is that death cannot be taken as a
fact.Non-controversion in compensation cases, as
in the case of pleadings in ordinary civil cases,
3
simplymeans admission of facts, not conclusions of
law.As applied to the case before us, the mere
failure to controvert the statement that Demetrio
Pepito isbelieved to be "dead" or "deceased"
because he "was lost" or was "reported missing",
does not importan admission that the man is
actually dead, but that he was just lost or missing.
Eastern Shipping v. Lucero
Wife claims she can still clain monthly allotments
and allowances because 4 years have not yet
lapsed to declare absence but there was evidence
to show the ship had sunk and that persons aboard
had perished with it.

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Held: Where the facts, known to be knowable,
from which a rational conclusion can be made, the
presumption of absence does not step in, and the
rule of preponderance of evidence controls.
Reyes v. Alejandro
Considering that neither the petition alleges, nor
the evidence shows, that Roberto L. Reyes has any
rights, interest or property in the Philippines, there
is no point in judicially declaring him an absentee.
... For the purposes of the civil marriage law, it is
not necessary to have the former spouse judicially
declared an absentee. The declaration of absence
made in accordance with the provisions of the Civil
Code has for its sole purpose to enable the taking
of the necessary precautions for the administration
of the estate of the absentee. For the celebration
of civil marriage, however, the law only requires
that the former spouse has been absent for seven
consecutive years at the time of the second
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marriage, that the spouse present does not know
his or her former spouse to he living, that such
former spouse is generally reputed to be dead and
the spouse present so believes at the time of the
celebration of the marriage (section III, paragraph
2, General Orders, No. 68). (On page 183).
The need to have a person judicially declared an
absentee is when he has properties which have to
be taken cared of or administered by a
representative appointed by the Court (Article 384,
Civil Code); the spouse of the absentee is asking
for separation of property (Article 191, Civil Code)
or his wife is asking the Court that the
administration of an classes of property in the
marriage be transferred to her (Article 196, Civil
Code). The petition to declare the husband an
absentee and the petition to place the
management of the conjugal properties in the
hands of the wife may be combined and
adjudicated in the same proceedings, Peyer vs.
Martinez, 88 Phil. 72, 80).
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Civil Registrar
A. Arts. 407-413
Art. 407.   Acts, events and judicial decrees
concerning the civil status of persons shall be
recorded in the civil register. (325a)
Art. 408. The following shall be entered in the
civil register:
(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void from
the
beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or (12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name.
Art. 409. In cases of legal separation,
adoption, naturalization and other judicial
orders mentioned in the preceding article, it
shall be the duty of the clerk of the court which
issued the decree to ascertain whether the
same has been registered, and if this has not
been done, to send a copy of said decree to
the civil registry of the city or municipality
where the court is functioning. (n)
Art. 410. The books making up the civil
register and all documents relating thereto
shall be considered public documents and shall
be prima facie evidence of the facts therein
contained. (n)
Art. 411. Every civil registrar shall be civilly
responsible for any unauthorized alteration
made in any civil register, to any person
suffering damage thereby. However, the civil
registrar may exempt himself from such
liability if he proves that he has taken every
reasonable precaution to prevent the unlawful
alteration. (n)
Art. 412. No entry in a civil register shall be
changed or corrected, without a judicial order.
(n)
Art. 413. All other matters pertaining to the
registration of civil status shall be governed by
special laws. (n)
B. RA 9048-clerical errors
C. Rule 108, Rules of Court
EXCLUDE: Act. No. 375, IRR of RA 9048
Cases:
Republic v. Macliing
The principal ground relied upon in this appeal
is that Rule 108 of the Rules of Court upon
whichprivate respondents anchor their Petition
is applicable only to changes contemplated in
Article 412of the Civil Code, which are clerical
or innocuous errors, or to corrections that are
notcontroversial and are supported by
indubitable evidence. (Tiong v. Republic, 15
SCRA 262[1965]). It is true that the change
from Esteban Sy to Sy Piao would necessarily
affect the Identity of thefather. (Barillo v.
Republic, 3 SCRA 725 [1961]) In that sense, it
can be said to be substantial. However, we find
indubitable evidence to support the correction
prayed for. . . . xxx xxx xxxIn the case of Ty
Kong Tin v. Republic, 94 Phil. 321 (1954), as
well as subsequent casespredicated thereon,
we forbade only the entering of material
corrections in the record of birth by virtue of a
judgment in a summary action. the
proceedings below, although filed under Rule
108 of the Rules of Court, were not summary.
The Petition was published by order of the
lower Courtonce a week for three consecutive
weeks in a newspaper of general circulation in
accordance withlaw. The Solicitor General was
served with copy of the Petition as well as with
notices of hearings.He filed his Opposition to
the Petition. The Local Civil Registrar of the
City of Baguio was likewiseduly served with
copy of the Petition. A Fiscal was always in
attendance at the hearings inrepresentation of
the Solicitor General. He participated actively
in the proceedings, particularly, inthe cross-
examination of witnesses. And,
notwithstanding that all interested persons
were cited toappear to show cause why the
petition should not be granted, no one
appeared to oppose exceptthe State through
the Solicitor General. But neither did the State
present evidence in support of its
Opposition.To follow the petitioner's argument
that Rule 108 is not an appropriate proceeding
without in anyway intimating what is the
correct proceeding or if such a proceeding
exists at all, would result in manifest injustice.
FACTS: In this case, the father wanted to
correct the birthcertificates of is sons In one bi
r th certificate, the father's name is being
corrected f rom 'Esteban Sy" to "Sy Piao" whi
le in another bi r th certificate. the son's name
is being cor rected from "Noe" to "Joe"
RULING: ' In the case of Ty Kong Tin vs•
Republic, 94 Phil 321 (7954), as well as
subsequent cases predicated thereon, we
forbade only the entering of material
corrections in the record of birth by virtue of a
judgment in a summary action The
proceedings below, although filed under Rule
108 of the Rules of Court, were not summary
The Petition was published by order of the
lower court
once a week for three consecutive weeks in a
newspaper of general circulation in accordance
with law. The Solicitor General was served wi
th the copy of the Petition as well as the
notices of hearings He filed his opposition to
the Petition. The Local Civil Registrar of the
City of Baguio was likewise duly served a copy
of the Petition. A Fiscal was always in at
tendance at the hearings in representat ion of
the Solicitor General. He part icipated actively
in the proceedings, particularly. In the cross
examination of witnesses And, not
withstanding that all interested persons were ci
ted to appear to show cause why the petit ion
should not be granted, no one appeared to
oppose except the State through the Solicitor
General But neither did the State present
evidence in support of its opposition"
Republic V. Valencia
FACTS: In this case, the pet i t ioner wish to
correct the following in her children's birth
certificates: citizenship from Chinese to
Filipino; status from legitimate to illegitimate;
and mother's status f rom married to single.
It is undoubtedly t rue that if the subject mat
ter
of a petition is not for correction of clerical
error of a harmless and innocuous nature but
one involving nationality or citizenship, which
is indisputably substantial as well as
controverted, affirmative relief cannot be
granted in a proceedings summary in nature.
However, it is also true that a f ight in law
may be enforced and a wrong maybe remedied
as long as the appropr iate remedy is used.
Where SC held that even substantial errors in a
civil registry may be corrected and the true
facts established under Rule 108 provided the
parties aggrieved by the error avail themselves
of the appropriate adversary proceeding. An
appropriate adversary suit or proceeding is one
where the trial court has conducted
proceedings where all relevant facts have been
fully and properly developed, where opposing
counsel have been given opportunity to
demolish the opposite party’s case, and where
the evidence has been thoroughly weighed and
considered.
Kumala v. Abubakar
FACTS: The correction sought here was to
change the ent ry of the sex f rom' M" to 'F" in
the bi r th certificate of the minor female
RULING: "'Nor would it be the first time that a
procedure, of this character did suf f ice for the
correction of an error in the records of Civil
Registrar In Malicden vs. Republic [1964], this
Court ruled that test imonial evidence may
override an erroneous entry Thereafter, in
Alioso vs. Lastimoso [1965), this court ruled
that an unauthorized false entry may be
cancelled by the Court through an act ion of
this nature Matias vs. Republic [1969], the
opinion being penned by then Acting Chief
Justice JBL Reyes. is even more in point."
Thus: "Granting that the supplying of a name
that was left in blank in the original recording
of the birth does not constitute, as contended
by the Solicitor General a rectification of a
mere clerical error. It is well to observe that
the doct r ine of the case of Ty King Tin vs.
Republic 94 Phil 321, and subsequent
adjudications predicated thereon forbade only
the entering of material corrections or
amendments in the record of bi r th by virtue
of a judgment in a summary action against the
Civil Registrar In the case of the petitioner
herein. However, the proceedings were not
summary, considerIng the publication of the
pet i t ion made by order of the court in order
to give not ice to any person that might be
interested, including direct service on the
Solicitor General himself "
Leonor v. CA
Facts: Husband gave grounds for cancellation
of the registration of the marriage because it
was a nullity due to the non-observance of the
legal requirements of a valid marriage.
(Registration of the marriage license was not a
formal nor essential requisite for marriage)
PROPERTY,
OWNERSHIP, & ITS
MODIFICATIONS
PROPERTY is that branch of civil law which
classifies and defines the different kinds
appropriable objects, provides for their
acquisition and loss, and in general, treats of
the nature and consequences of real rights.

Held: The only errors that can be cancelled or

corrected under Rule 108 of the Rules of Court I. CHARACTERISTICS OF PROPERTY
are typographical or clerical errors, not a. utility for the satisfaction of moral or
material or substantial ones like the validity or economic
nullity of a marriage. “A clerical error is one b. susceptibility of appropriation
which is visible to the eyes or obvious to the c. individuality or substantivity
understanding; error made by a clerk or a
transcriber; a mistake in copying or writing II. Classification (Arts. 415-418)
(Black vs. Republic, L-10869, Nov. 28, 1958); A. Hidden treasure (Arts. 438-439)
or some harmless and innocuous change such B. Right of accession (Art. 440)
as a correction of name that is clearly 1. Fruits (Arts. 441-444)
misspelled or of a mis-statement of the 2. With respect to immovable property
occupation of the parent. Where the effect of a a) Builder, planter, sower on land of
correction in a civil registry will change the civil another in the concept of owner
status of petitioner and her children from (i) Builder, planter, sower in good
legitimate to illegitimate, the same cannot be faith (Arts. 448-456)
granted except only in an adversarial (ii) Builder, planter, sower in bad faith
proceeding. (Arts. 449-450)
b) Usufructuary (Art. 579)
The summary procedure under Rule 108, and 3. Lands adjoining river banks
for that matter under Art. 412 of the Civil a) Alluvion (Art. 457)
Code, cannot be used by Mauricio to change b) Change of course of river (Arts. 461-
his and Virginia’s civil status from married to 462 and P.D. 1067 or the Water
single and of their three children from Code)
legitimate to illegitimate. Neither does the trial c) Avulsion (Arts. 459-463)
court, under said Rule, have any jurisdiction to 4. Islands (Arts. 464-465)
declare their marriage null and void and as a C. By object
result thereof, to order the local civil registrar 1. Real or immovable
to cancel the marriage entry in the civil 2. Personal or movable
registry. Further, the respondent trial judge D. By owner
gravely and seriously abused his discretion in 1. Of public dominion
unceremoniously expanding his very limited 2. Of private ownership
jurisdiction under such rule to hear evidence a) Patrimonial property
on such a controversial matter as nullity of a (i) Distinction between private property
marriage under the Civil Code and/or Family of individual persons and of state
Code, a process that is proper only in ordinary entities
adversarial proceedings under the Rules. E. By nature
1. Consumable/non-consumable vs.
Fungible/non-fungible

CLASSIFICATIONS OF
PROPERTY

KINDS OF IMMOVABLES
1. Mobility or non-mobility: movable/personal
or immovable/real
2. Ownership: public or private dominion
3. Alienability: within the commerce of man or
outside the commerce of man
4. Materiality: tangible/corporeal or
intangible /incorporeal
5. Capability of substitution: fungible or non-
fungible
A. IMMOVABLE PROPERTY (Art. 415)
1. Land, buildings, roads and constructions of
all kinds adhered to the soil;
2. Trees, plants, and growing fruits, while
attached to the land or form an integral
part of an immovable;
3. Everything attached to an immovable in a
fixed manner (it cannot be separated
therefrom without breaking the material or
deterioration of the object;
4. Statues, relief, paintings or other objects
for use or ornamentation, places in
buildings or on lands by the owner of the
immovable (intent is to attach them
permanently to the tenements);
5. Machinery, receptacles, instruments or
implements intended by the owner of the
tenement for an industry or works which
may be carried on in a building or on a
piece of land, and which tend directly to
meet the needs of the industry or works;
Requisites:
5.1. Placing must be made by the owner, his
agent, or duly authorized legal
representative;
5.2. Industry or work must be carried on in a
building or on the land;
5.3. Machines must tend directly to meet the
needs of said industry or works;
5.4. Machines must be essential and principal
and not merely incidental.
 A house built on a rental land can be
the object of real mortgage. It may even be
the subject of a chattel mortgage provided; 1)
consent of the parties are obtained; 2) no
innocent third person will be prejudiced.
6. Animal houses, pigeon-houses,
beehives, fishponds or breeding places
of similar nature, in case their owner
has placed them or preserves them
with the intention to have them
permanently attached to the land,
and forming a permanent part of it;
the animals in these places are
included;
7. Fertilizer actually used on a piece of
land;
8. Mines, quarries, and slag dumps, while
the matter thereof forms part of the
bed, and waters either running or
stagnant;
9. Docks and structures which, though
floating, are intended by their nature
and object to remain at a fixed place
on a river, lake or coast;
10. Contracts for public works, and
servitudes and other real rights over
immovable property.
◘ The mere fact that the parties decided to
deal with the building, as personal property not
change its character as real property. Thus,
neither the original registry in the chattel
mortgage registry, nor the annotation in said
registry of the sale of the mortgaged property
had any effect on the building. However, since
the land and the building had first been
purchased by defendant ahead of petitioner,
and this fact was known to the latter, it follows
that he was not a purchasee in good faith and
should not be entitled to the property.
Defendant, thus, has a better right to the
property. (Leung Yee vs. Strong Machinery
Co., 37 Phil 644).
◘ As a rule, the machinery should be
considered as personal, since it was not placed
on the land by the owner of said land.
Immobilization by destination or purpose can
not generally be made by a person whose
possession of the property is only temporary.
Otherwise, we will be forces to presume that
he intended to give the property permanently
away in favor of the owner of the premises
(Davao Sawmill Co. vs. Castillo, 61 Phil 709).
ACADEMIC CLASSIFICATION OF REAL
PROPERTY
a. Real property by nature (trees and plants)
b. Real property by incorporation (buildings)
c. Real property by destination or purpose
d. Real property by analogy
Cases:

NAVARRO V. PINEDA
9 SCRA 631
FACTS:
Pineda and his mother executed real estate
and chattel mortgages in favor of Navarro, to
secure a loan they got from the latter. The
REM covered a parcel of land owned by the
mother while the chattel mortgage covered a
residential house. Due to the failure to
pay the loan, they asked for
extensions to pay for the loan. On the second
extension, Pineda executed a PROMISE
wherein in case of default in payment, he
wouldn’t ask for any additional extension and
there would be no need for any formal
demand. In spite of this, they still failed to
pay.
Navarro then filed for the foreclosure of the
mortgages. The court decided in his favor.
HELD:
Where a house stands on a rented land
belonging to another person, it may be the
subject matter of a chattel mortgage as
personal property if so stipulated in the
document of mortgage, and in an action by the
mortgagee for the foreclosure, the validity of
the chattel mortgage cannot be assailed
by one of the parties to the contract of
mortgage.
Furthermore, although in some instances, a
house of mixed materials has been considered
as a chattel between the parties and that the
validity of the contract between them, has
been recognized, it has been a constant
criterion that with respect to third persons,
who are not parties to the
contract, and specially in execution
proceedings, the house is considered as
immovable property.
BICERRA V. TENEZA
FACTS:
The Bicerras are supposedly the owners of the
house (PhP 20,000) built on a lot owned by
them in Lagangilang, Abra; which the Tenezas
forcibly demolished in January 1957, claiming
to be the owners thereof. The materials of the
house were placed in the custody of the barrio
lieutenant. The Bicerras filed a complaint
claiming actual damages of P200, moral and
consequential damages amounting to P600,
and the costs. The CFI Abra dismissed the
complaint claiming that the action was within
the exclusive (original) jurisdiction of the
Justice of the Peace Court of Lagangilang,
Abra.
The Supreme Court affirmed the order
appealed. Having been admitted in forma
pauperis, no costs were adjudged.
ISSUE:
Whether or not the house is immovable
property even if it is on the land of another
RULING:
Yes.
House is immovable property even if situated
on land belonging to a different owner;
Exception, when demolished.
A house is classified as immovable property by
reason of its adherence to the soil on which it
is built (Article 415, paragraph 1, Civil Code).
This classification holds true regardless of the
fact that the house may be situated on land
belonging to a different owner. But once the
house is demolished, as in this case, it ceases
to exist as such and hence its character as an
immovable likewise ceases.
DAVAO SAW MILL CO. VS. CASTILLO
61 SCRA 709
FACTS:
Petitioner is the holder of a lumber concession.
It operated a sawmill on a land, which it
doesn’t own. Part of the lease agreement was
a stipulation in which after the lease
agreement, all buildings and improvements
would pass to the ownership of the lessor,
which would not include machineries and
accessories. In connection to this,
petitioner had in its sawmill machineries and
other equipment wherein some were bolted in
foundations of cement.
HELD:
The machinery must be classified as personal
property.
The lessee placed the machinery in the
building erected on land belonging to another,
with the understanding that the machinery was
not included in the improvements which would
pass to the lessor on the expiration of the
lease agreement. The lessee also treated
the machinery as personal
property in executing chattel mortgages in
favor of third persons. The machinery was
levied upon by the sheriff as personalty
pursuant to a writ of execution obtained
without any protest being registered.
Furthermore, machinery only becomes
immobilized when placed in a plant by the
owner of the property or plant, but not when
so placed by a tenant, usufructuary, or any
person having temporary right, unless such
person acted as the agent of the owner.
MINDANAO BUS COMPANY V. CITY
ASSESSOR AND TREASURER
6 SCRA 197
FACTS:
Petitioner is engaged in a public utility
business, solely engaged in transporting
passengers and cargoes by motor trucks, over
its authorized lines in Mindanao. It owns a
main office and branch offices. To be found in
their offices are machineries and equipment,
which were assessed by the City Assessor as
real properties.
HELD:
Movable equipments to be immobilized in
contemplation of law must first be essential
and principal elements of an industry or works
without which such industry or works would
be unable to function or carry on the
industrial purpose for which it was
established. We may here distinguish
those movables, which are essential and
principal elements of an industry, from those
which may not be so considered
immobilized by destination because they are
merely incidental, not essential and principal.
In the case at bar, the tools and equipments in
question are by their nature not essential and
principal elements of petitioner’s business of
transporting passengers and cargoes by motor
trucks. They are merely incidentals.
B. MOVABLE PROPERTY (Art. 416 & 417)
1. Real property which by any provision of law
is considered as personality;
2. Obligations and actions which have for their
object movables or demandable sums;
3. In general, all things which can be
transported from place to place without
impairment of the real property to which
they are fixed;
4. Those movables susceptible of appropriation
which are not included in the enumeration
of immovable;
5. Forces of nature, which is brought under
control by science;
6. Shares of stock of agricultural, commercial
and industrial entities, although they may
have real estate.
 A share in the partnership is considered a
personal property, as a matter of fact, all
shares in all juridical persons should be
considered personal property for there is no
reason to discriminate between shares in a
corporation and shares in other juridical
persons.
TESTS TO DETERMINE WHETHER
PROPERTY IS MOVABLE
a. By exclusion: movables are everything not
included in Art. 415
b. By description: an object is movable if it
possesses
1. capable of being carried from place to
place
2. change in location can be made
without injuring the real property to
which it is attached
Cases:
RICARDO PRESBITERO vs, FERNANDEZ
(Immovable – Calinisan)
Facts: 1) ESPERIDION Presbitero failed to
furnish Nava the value of the properties under
litigation. 2) Presbitero was ordered by the
lower court to pay Nava to settle his debts. 3)
Nava's counsel still tried to settle this case with
Presbitero, out of court. But to no avail. 4)
Thereafter, the sheriff levied upon and
garnished the sugar quotas allotted to the
plantation and adhered to the Ma-ao Mill
District and registered in the name of
Presbitero as the original plantation owner. 5)
The sheriff was not able to present for
registration thererof to the Registry of Deeds.
6) The court then ordered Presbitero to
segregate the portion of Lot 608 pertaining to
Nava from the mass of properties belonging to
the defendant within a period to expire on
August 1960. 7) Bottomline, Presbitero did not
meet his obligations, and the auction sale was
scheduled. 8) Presbitero died after. 9)
RICARDO Presbitero, the estate administrator,
then petitioned that the sheriff desist in
holding the auction sale on the ground that the
levy on the sugar quotas was invalid because
the notice thereof was not registered with the
Registry of Deeds.
Issue: W/N the sugar quotas are real
(immovable) or personal properties.
Held: 1) They are real properties. 2) Legal
bases: a) The Sugar Limitation Law xxx
attaching to the land xxx (p 631) b) RA 1825
xxx to be an improvement attaching to the
land xxx (p 631) c) EO # 873 "plantation" xxx
to which is attached an allotment of centrifugal
sugar. 3) Under the express provisions of law,
the sugar quota allocations are accessories to
the land, and cannot have independent
existence away from a plantation. 4) Since the
levy is invalid for non-compliance with law, xxx
the levy amount to no levy at all
BOARD OF ASSESSMENT APPEALS V.
MANILA ELECTRIC COMPANY
10 SCRA 68
FACTS:
City Assessor of QC declared the steel towers
for real property tax under Tax Declarations.
After denying the respondent’s petition to
cancel these declarations, an appeal was taken
with the CTA which held that the steel towers
come under the exception of “poles” under
the franchise given to MERALCO; the steel
towers are personal properties; and the City
Treasurer is liable for the refund of the amount
paid.
HELD:
The steel towers of an electric company don’t
constitute real property for the purposes of
real property tax.
IMPORTANT DOCTRINES/PRINCIPLES ON
IMMOVABLE AND MOVABLE PROPERTIES:
a) A Building is an immovable even if not
erected by the owner of the land. The only
criterion is union or incorporation with the
soil. (Ladera vs. Hodges, 48 O.G. 4374).
b) Parties to a contract may by agreement
treat as personal properties that which by
nature would be real property; and it is a
familiar phenomenon to see things classes
as real property for purposes of taxation
which on general principle might be
considered personal property (Standard Oil
Co. vs. Jaranillo, 44 Phil 631).
c) For purposes of attachment and execution
and for purposes of the Chattel Mortgage
Law, ungathered products have the nature
of personal property. (Sibal vs. Valdez, 50
Phil, 512).
d) The human body, whether alive or dead, is
neither real nor personal property, for it is
not even property at all, in that it generally
cannot be appropriated. Under certain
conditions, the body of a person or parts
thereof may be subject matter of a
transaction. (See RA No. 349, RA No.
7170, RA No. 7719).
e) What is the effect of temporary separation
of movables from the immovables to which
they have been attached?
2 Views:
1) They continue to be regarded as
immovables.
2) Fact of separation determines the
condition of the objects thus
recovering their condition as
movables.
* the latter view is supported by Paras and
Tolentino who maintains that the failure of
the codifiers to reproduce the provision of
the partidas on the matter is an indication
that they did not intend the rule to
continue.
f) A building that is to be sold or mortgaged
and which would be immediately demolished
may be considered personal property and the
sale or mortgage thereof would be a sale of
chattel, or a chattel mortgage respectively, for
the true object of the contract would be the
materials.
PROPERTY OF PUBLIC
DOMINION
Definition: Properties owned by the State in
the sense that the State has control and
administration; in another sense, it is owned
by the public in general.
Kinds(3):
1. For Public Use
2. Not for public use, but intended for
some Public Service
3. For the Development of the National
Wealth
Characteristics:
1. Outside the commerce of man
Therefore cannot be leased, sold,
donated, or be the object of any
contract. (Mun. of Cavite vs Rojas, 30
Phil 602)
2. Cannot be acquired by prescription (Art
1113)
Even a city or municipality cannot
acquire them by prescription as against
the State. (City of Manila vs Insular
Gov’t, 10 Phil 327)
3. Not subject to attachment or execution
4. Cannot be registered under the Land
Registration Law & be the subject of a
Torrens title (Palanca vs
Commonwealth, 69 Phil 449)
Public Lands: Those that have not yet been
subjected to private right or devoted to public
use. Public Lands can be classified as: Timber,
Mineral and Public Agricultural Land.
Patrimonial Property of the State: Property
not devoted to public use, public service, or
the development of the national wealth (Art
421), or no longer intended for public use or
service (Art 422). It is owned by the State in
its private capacity.
Properties of LGU: (Art 424)
1. Property for Public Use – consists of
roads, streets, squares, fountains,
public waters, promenades and public
works for public service paid for by the
LGU.
2. Patrimonial Property – all other
property of the LGU without prejudice
to provisions of special laws.
Cases:
1. Salas vs Jarencio, L-29788
Facts: The City of Manila had a Torrens Title
over a parcel of land. The Municipal Board of
Manila requested the President of the Phils to
have the lot declared as patrimonial property
of the City so that it could be sold by the City
to the actual occupants of the lot. In 1964,
Congress passed RA 4118 whereby the lot was
made disposable & alienable land of the State
(not of the City), and its disposal was given to
a national gov’t entity, the Land Tenure
Administration.
Issue: Can this be lawfully done by the
National Government?
Held: Yes. There being no proof that the lot
had been acquired by the City with its own
funds, the presumption is that it was given to
it by the State in trust for the benefit of the
inhabitants. Residual control remained in the
State and therefore the State can lawfully
dispose of the lot.
(Note: Thus, it can be said that properties of
the LGU may also be classified into:
1. Those acquired with their own funds –
here, the LGU has ownership & control.
2. Those which do not fall under (1) –
these are subject to the control &
supervision of the State. These are
only held by the LGU in trust for the
State for the benefit of the
inhabitants.)
2. Mun. of Cavite vs Rojas, 30 Phil 602
Facts: The Municipal Council of Cavite in 1907
withdrew and excluded from public use a part
of its plaza in order to lease to Rojas.
Issue: Was the lease valid?
Held: The lease is null & void, because streets
& plazas are outside the commerce of man
since they are properties for public use.
PROPERTY OF PRIVATE
OWNERSHIP
Definition: Patrimonial property of the State
and LGU, and those that belong to private
persons either individually or collectively.
Muebles/Furniture: When used alone, it
shall not be deemed to include other things
which do not have as their principal object the
furnishing or ornamenting of a building,
EXCEPT where from the context of the law, or
the individual declaration, the contrary
appears. (Art 426)
OWNERSHIP

Definition: Ownership is the independent and
general right of a person to enjoy, dispose and
recover a thing without limitations except
those imposed by the State or private persons,
without prejudice to the provisions of the law.
It may be exercised over things or rights. (Art
427)
Kinds of Ownership:
1. Full Ownership – includes all the rights
of an owner.
2. Naked Ownership – where the right to
the use and fruits has been denied.
3. Sole Ownership – vested in only one
person.
4. Co-ownership – (or Tenancy in
Common) vested in two or more
persons.
Possessory Information: When duly recorded in
the Registry of Property is prima facie evidence
that the registered possessor is also the owner
of the land involved.
Case:
1. Phil Suburban Development Corp vs The
Auditor-General, L-19545
Facts: Petitioner sold to the Government a
parcel of land to be used by the latter in
connection with the relocation of squatters.
The Government occupied the land at once,
although it had only paid the down payment,
the balance to be paid after the seller have
caused the registration of the property in its
name.
Issue: In the meantime, is the seller(who has
not been completely paid, but already
delivered the land) required to pay the real
estate taxes?
Held: No, the seller is not required to pay the
real estate taxes on the land sold because it
has already delivered the land to the
Government. Ownership has therefore been
transferred by virtue of the said delivery.
Article 428. The owner has the right to
enjoy and dispose of a thing, without
other limitations than those established
by law.
The owner has also a right of action
against the holder and possessor of the
thing in order to recover it.
SEVEN RIGHTS OF OWNERSHIP:
1. Jus possidendi – the right to possess
2. Jus utendi – the right to use
3. Jus fruendi – the right to the fruits
4. Jus abutendi – right to consume,
transform or abuse
5. Jus disponendi – the right to dispose
6. Jus vindicandi – the right to recover
and the right to exclude others from
possession of the thing
7. Jus accesiones – the right to the
accessories
ACTIONS TO RECOVER
RECOVERY OF PERSONAL PROPERTY
1. Replevin
- Governed by Rule 60, Rule of Court
(ROC)
- An action or provisional remedy
where the complainant prays for
the recovery of the possession of
real property.
MACHINERY AND ENGINEERING
SUPPLIES, INC. V. CA, 96 PHIL 70
Machinery and equipment used for an
industry and indispensable for the carrying on
of such industry, cannot be the subject of
replevin, because under the premises, they are
real, and not personal property.
CALUB V. CA, 331 SCRA 55 (2000)
A property that is validly deposited in
custodial legis cannot be the subject of a
replevin suit.
RECOVERY OF REAL PROPERTY
1. Accion interdictal
a. Forcible Entry
- a summary action to recover
material or physical possession of
real property when a person
originally in possession was
deprived thereof by force,
 intimidation, strategy, threat, or ordinary or extraordinary
stealth (FISTS) prescription).
- The action must be brought within
one (1) year from dispossession or
unlawful deprivation, or from
discovery, in case of stealth or
stategy

b. Unlawful Detainer SARMIENTO V. CA 250 SCRA 108 (1995)

- An action brought when possession
Where the facts averred in the
by a landlord, vendor or vendee or
complaint reveals that the action is neither one
other person of any land or
of forcible entry nor unlawful detainer but
building is being unlawfully
essentially involves a boundary dispute, the
withheld after the termination or
same must be resolved in an accion
expiration of the right to hold
reivindicatoria.
possession, by virture of a
contract, express or implied.
- The action must be brought within
one (1) year from the time the
possession became unlawful –
receipt of last demand or letter of
demand

2. Accion publiciana
- It is a plenary action in an ordinary
civil proceeding before the RTC
intended for the recovery of the
better right to possess.
- The action must be brought within
a period of ten (10) years
- The issue is possession de jure.
- There are two kinds of accion
publiciana:
a. That were the entry was not
obtained thru FISTS (this can
be brought as soon as the
dispossession takes place,
without waiting for the lapse of
one year); and
b. That were the one (1) – year
period for bringing forcible
entry or unlawful detainer has
already expired

3. Accion reivindicatoria
(reivindicatory action)
- An action to recover ownership
over real property and must be
brought in the RTC where the real
estate is situated.
- It must be brought within 10 years
or 30 years as the case may be
(depending on whether the other
party seeks to obtain ownership by
  ACCION
REPLEVIN FORCIBLE ENTRY UNLAWFUL DETAINER ACCION PUBLICIANA
REIVINDICATORIA
Definition An action or provisional A summary action to Action brought when It is a plenary action in an An action to recover
remedy where the recover material or possession by a landlord, ordinary civil proceeding ownership over real
complainant prays for the physical possession of vendor or vendee or other before the RTC intended property and must be
recovery of the real property when a person of any land or for the recovery of the brought in the RTC where
possession of real person originally in building is being better right to possess. the real estate is situated.
property. possession was deprived unlawfully withheld after There are two (2) kinds of
thereof by force, the termination or accion publiciana:
intimidation, strategy, expiration of the right to
threat, or stealth hold possession, by a. That were the entry
(FISTS). virture of a contract, was not obtained thru
express or implied.D5 E2FISTS (this can be
brought as soon as the
dispossession takes place,
without waiting for the
lapse of one year); and

b. That were the one (1)

year period for bringing
forcible entry or unlawful
detainer has already
expired.

Issue Recovery of possession of Material or mere physical Material or mere physical Better right of possession Ownership of real
involved personal property possession of real possession of real of real property property
property (possession de property (possession de (possession de jure)
facto) facto)
Where to file MTC or RTC depending on
the amount of money MTC MTC RTC RTC
involved
Prescription   one (1) year one (1) year from the 10 years 10 or 30 years depending
dispossession (FIT - from time the possession on whether it is ordinary
dispossession, SS - from became unlawful - receipt or extraordinary
discovery) of last demand or letter of
demand
Type of
in personam quasi in rem quasi in rem quasi in rem quasi in rem
Action
Others Steps: 1) complaint is May be brought against If there's a fixed period of   It can be filed
filed at commencement or the owner in some cases, - one (1) year from the simultaneously with
at any time before such as lease. Complaint expiration of the lease. If forcible entry. Judgment
answer of other party 2) must state FISTS or else the reason is non- of ownership usually
complaint should allege it would just be an accion payment of rent or non- includes the right of
OWTA (owner, wrongfully publiciana which should fulfillment of the possession. Should
taken, taken against the be filed with the RTC conditions of the lease - remember Article 434. In
law) 3) pay bond double one (1) year from the an action to recover
the amount of property 4) receipt of last demand or ownership, the property
sheriff takes property 5) letter of demand to must be identified, and
doors broken if necessary vacate. Complaint filed 5 the plaintiff must rely on
Defendant's remedy: a) days after demand the strength of his title
File a bond double the (buildings) or 15 days and not on the weakness
amount; and b) Give copy (land). Refers to any kind of the defendant's claim.
to plaintiff Stranger's of land. It should be
remedy - File a third alleged that the right to
party claim possess had been
terminated and that the
continued possession was
unlawful. Not the remedy
if what is sought is
specific performance.
Necessity of demand -
necessary: if there is a
breach not necessary - if
the fixef period just
expires

◘ HIDDEN TREASURE
By treasure is understood, for legal purposes,
any hidden and unknown deposit of money,
jewelry, or other precious objects, the lawful
ownership of which the doer not appear. (Art.
439, NCC)
If the ownership of the treasure is known, but
the owner is already dead, same will not be
considered “hidden treasure” and must
therefore go to the owner’s rightful heirs.
General Rule: Belongs to the owner of the land,
buildings or other property on which it is found.
Exceptions: Finder is entitled to ½ of the
treasure if:
1. Made in the property of another or the state or
any of its subdivision;
2. Made by chance; and
3. The finder is not a trespasser/agent of the
landowner.
REAL RIGHT – autonomous power to derive
directly from an appropriate thing certain economic
advantages, independently of whoever should be
the possessor of the thing.
PERSONAL RIGHT – power to demand of another
as definite passive subject the fulfillment of a
prestation to give, to do or not to do.
DOCTRINE OF SELF-HELP
The owner or lawful possessor of a thing has the
right to exclude any person from the enjoyment
and disposal thereof. For this purpose, he may
use such force as may be reasonably necessary
to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of his
property. (Art. 429)
Ex: I have a car; I see a thief about to get it. I can
use force in driving the thief away, provided
that the means I resort to are reasonable. As a
matter of fact, I can even chase him
immediately and recover the car from him by
force. If, however, I lose sight of him, and I see
him only tow or three days later, I will not be
justified in taking the law into my own hands. I
will have to resort to the courts of justice.
STATE OF NECESSITY
The owner of a thing has no right to prohibit the
interference of another with the same, if the
interference is necessary to avert an imminent
danger and the threatened damage, compared
to the damage arising to the owner from the
interference, is much greater. The owner may
demand from the person benefited indemnity
for the damage to him. (Art. 432)
TWO (2) REQUIREMENT DISPUTABLE
PRESUMPTION OF OWNERSHIP:
1. actual possession; and
2. claim of ownership.
REQUISITES IN ACTION TO RECOVER
1. Identity of the property
2. Strength of plaintiff's title (e.g. Torrens
certificate, Titles granted by the Spanish
Government, long and actual possession,
occupation of a building for a long time without
rentals therefor, testimony of adverse and
exclusive possession of ownership corroborated
by tax declaration of properties)
EMINENT DOMAIN
The superior right of the State to own
certain properties under certain conditions, is a
limitation on the right of ownership, and may be
exercised even over private properties of cities and
municipalities, and even over lands registered with
a Torrens title.
EMINENT DOMAIN vs. EXPROPRIATION
While eminent domain refers to the right,
expropriation usually refers to the procedure,
thru which the right is exercised.
ESSENTIAL REQUISITES OF EMINENT
DOMAIN
1. taking by competent authority
2. observance of due process of law
3. taking for public use
4. payment of just compensation.
TWO (2) STAGES OF EXPROPRIATION
1. First step - concerned with the
determination of the authority of the
plaintiff to exercise the power of eminent
domain and the propriety of its existence in
the context of the facts involved in the
suit. It ends with an order, if not of
dismissal of the action. Of condemnation
declaring that the plaintiff has a lawful
 RIGHTS OF
right to take the property sought to be
condemned, for public use, or purpose

ACCESSION
described in the complaint.

2. Second step – concerned with the

determination by the court of the just
Arts. 440-475
compensation by the property sought to be
taken.

JUST COMPENSATION FORMULA

JC = Market Value + Consequential Damages – ACCESSION
Consequential Benefits  The right of a property owner to everything which
Note: Incidental or consequential benefits may be is produced thereby or incorporated or attached
set off only against the consequential thereto, either naturally or artificially.
damages, and NOT against the basic value of
the property taken. CLASSIFICATION OF ACCESSION:
Ex: If the market value is P1,000,000, the
consequential damages amount to
P500,000 and the consequential benefits
are valued at P1,500,000, how much 1) Accession Discreta - It is the right
should be the just compensation? pertaining to the owner of a thing over
Answer: everything produced thereby
JC = P1,000,000 + (P500,000 – P500,000)
(MV) (CD) (CB) a. Natural fruits
= P1,000,000 is the just compensation * Spontaneous products of the soil, and the young
and other product of animals.
* Pratus sequitor ventrem (offspring follows the
EXAMPLE OF INCIDENTAL OR mother).
CONSEQUENTIAL DAMAGES:
1. Injuries to adjoining portions of the land
b) Industrial fruits
* Produced by lands of any kind through cultivation
2. Demolition or destruction of buildings or
of labor
houses on the land
c) Civil fruits
3. Depreciation caused to the remaining * The rents of buildings, the price of leases of
lands and other property and the amount of
property.
perpetual or life annuities or other similar income.

2. Accession Continua

a) With reference to real property

i. Artificial accession [B.P.S.]
a. Building
b. Planting
c. Sowing
ii. Natural accession [C.A.F.A.]
a. Alluvium
b.Avulsion (change of course of
rivers)
c. Formation of island
b) With respect to personal property
i. Adjunction or conjunction [WAPEW]
a. Weaving
b. Attachment
 c. Painting
d. Engraftment
e. Writing
ii. Mixture
a. Confusion
TWO KINDS OF NATURAL FRUITS
b. Commixtion
iii. Specification
1. The spontaneous products of the soil [no
human intervention]
2. the young and other products of animals
Reason behind Accession:

1. for accession discreta- justice, pure and INDUSTRIAL FRUITS

simple, for one who owns a thing should
also enjoy its fruits - those produced by lands of any kind
2. For accession continua- economic - done thru cultivation or human labor
convenience; it’s better to have one
owner than two owners
CIVIL FRUITS
Consists of:

a. rent of buildings
b. price of leases of lands and other property
NATURAL FRUITS
c. amount of perpetual or life annuities or
General Rule: To the owner belong to the natural, other similar income
industrial and civil fruits.
Exceptions:
If the thing is:
NOTE: Bonus granted as a reward or as
1. In possession of a possessor in good faith;
compensation to a person who mortgaged and
2. Subject to usufruct;
thus risks his land to secure another’s
3. Leased or pledged;
indebtedness is not considered as Civil Fruits
4. In possession of an antichretic creditor
NOTE: A Mortgagee is not entitled to the fruits if
the mortgaged land/

TO WHOM DO THE FRUITS BELONG?

RIGHTS OF ACCESSION General Rule: To the owner belong to the natural,

industrial and civil fruits. (Art. 441, NCC)
WITH RESPECT TO WHAT Exceptions:
If the thing is:
IS PRODUCED BY 1. In possession of a possessor in good faith;
2. Subject to usufruct;
PROPERTY 3. Leased or pledged;
4. In possession of an antichretic creditor

ACCESSION DISCRETA
RIGHT TO THE FRUITS

Arts. 442-444
 Basic Principles of Accession Continua:
RIGHTS OF ACCESSION BADONG-E

WITH RESPECT TO 1. He who is in Bad faith is liable for damages.

IMMOVABLE PROPERTY
ACCESSION CONTINUA
(Accession Industrial)
Arts. 445-465
Accession Continua - It is the right pertaining
to the owner of a thing over everything
incorporated or attached thereto either
naturally or artificially; by external forces.
2. Accessory follows the principal
3. Union or incorporation must generally be
effected in such a manner that to separate the
principal from the accessory would result in
substantial Damage to either or diminish its
value.
4. To the Owner of the thing belongs the extension
or increases to such thing.
5. Bad faith of one party Neutralizes the bad faith
of the other so that they shall be considered in
good faith.
6. He who is in Good faith may be held responsible
but not penalized.
7. No one shall unjustly Enrich himself at the
expense of another

a) With reference to real property

i. Artificial accession [B.P.S.]
a. Building
b. Planting
c. Sowing
ii. Natural accession [C.A.F.A.]
a. Alluvium
b. Avulsion (change of course of
rivers)
c. Formation of island
Note: In case of uprooted trees, the owner retains
ownership if he makes a claim within 6 months.
This does not include trees which remain planted
on a known portion on land carried by the force of
the waters . In the latter case , the trees are
regarded as accessions of the land through gradual
changes in the course of adjoining stream.
(Payatas v. Tuazon, No. 30067, March 23,1929
◘ Good faith consists of the belief of the builder
that the land he is building on is his and of his
ignorance of any defect or flaw in his title. Kee
believed that the said lot was what he bought from
petitioner. He was not aware that it was not Lot 8,
Kee is then is in good faith. The rest of the
controversy can be traced directly to the errors
committed by CTTEI, when it pointed to the wrong
property CTTEI is liable for damages due to
negligence. (Pleasantville Development Corp. vs.
CA 253 SCRA 10).
◘ As landowner, defendant may either sell the lot
or appropriate the improvements for himself with
reimbursement to the builder, sower, planter who
was in good faith. (Corporation vs. CA, 208 SCRA

b) With respect to personal property

Reason behind Accession:
i. Adjunction or conjunction [WAPEW]
a. Weaving 1. for accession discreta- justice, pure and
b. Attachment simple, for one who owns a thing should
c. Painting also enjoy its fruits
d. Engraftment
e. Writing 2. For accession continue- economic
ii. Mixture convenience; it’s better to have one owner
a. Confusion than two owners
b. Commixtion
iii. Specification
 1. LANDOWNER IS THE IMPROVER

LAND OWNER AND BUILDER, PLANTER, OWNER OF MATERIALS

SOWER
Good Faith Good Faith
* Acquire the bldg., etc. after paying indemnity for 1. Remove them w/o injury to work constructed or
the value of materials. w/o plantings or constructions being destroyed.
2. Receive indemnity for value of materials.
Bad Faith Good Faith
* Acquire after paying the value and indemnity for 1. Remove the materials in any event;
damages but subject to the right of owner of 2. Be indemnified for damages.
materials to remove.
Good Faith Bad Faith
* Acquire w/o paying indemnity. * Lose materials w/o right to be indemnified.
Bad Faith Bad Faith
* Same as though both acted in good faith (in pari delicto).

2. LANDOWNER IS NOT THE IMPROVER

LANDOWNER IMPROVER, BUILDER, PLANTER, SOWER,

OWNER OF MATERIALS
Good Faith Bad Faith
Landowner has the option to: * In case landowner exercises (2), builder has the
1. Sell the land to builder/planter (BP) or collect right to retain until indemnity is paid and cannot
rent from sower (S); unless the value of the land be required to pay rent.
is considerably greater than the building, etc., in
which case, BP may rent under the terms fixed
by the parties.

2. Acquire improvement after paying indemnity w/c

could either be:
a. Original cost of improvements; or
b. Increase in the value of the whole.
Good Faith Bad Faith
1. Option to: 1. Lose them w/o right to be indemnified.
a. Acquire improvements w/o paying indemnity
and collect damages. 2. Recover necessary expenses for preservation of
b. Sell the land to BP, rent land to S and collect land.
damages in both cases.
c. Order demolition of work or restoration to 3. Pay damages to landowner.
former condition and collect damages in both
cases.
2. Pay necessary expenses for preservation.
Bad Faith Good Faith
1. Landowner must indemnify BPS for 1. Remove them in any event; and/or
improvements and pay damages. 2. Be indemnified for damages.
2. Cannot compel BPS to buy land.
Bad Faith Bad Faith
* Same as though both acted in good faith (in pari delicto)
PERSONS:

3. LANDOWNERS, IMPROVERS AND

MATERIAL OWNERS ARE DIFFERENT
LANDOWNER (LO)
Good Faith
1. Acquire the improvements and
pay indemnity to BPS and be
subsidiarily liable for materials
to OM.
2. a. Sell the land to BP except if
value of the land is
considerably more;
b. Rent to S.
Good Faith
1. Option to:
a. Acquire improvements
b. Sell to BP except: value of
land is considerably more,
then forced lease.
c. Rent to S.
2. Without subsidiary liability for
cost of materials.
Good Faith
1. Option to:
a. Acquire improvement w/o
paying indemnity and
collect damages;
b. Demolition/restoration plus
damages;
c. Sell to BP or collect rent
from s plus damages.
2. Pay necessary expenses to
BPS.
Bad Faith
* Same as though all acted in good faith.
BUILDER, PLANTER, SOWER OWNER OF MATERIALS
(BPS) (OM)
Good Faith Good Faith
1. Right to relation for necessary 1. Collect value of materials
and useful expenses. primarily from BPS or
subsidiarily from LO if BPS is
insolvent.
2. Pay value of materials to OM. 2. Remove without perjury.
Good Faith Bad Faith
1. Right of retention for necessary 1. Lose materials w/o right to
and useful expenses. indemnity.
2. Keep building, etc., w/o 2. Pay damages.
indemnity to OM and collect
damages from him.
Bad Faith Bad Faith
1. Recover necessary expenses for 1. Recover value from BPS (in
land preservation. pari delicto).
2. Loses improvement w/o right to 2. If BPS, acquired
indemnity from LO unless LO improvement, remove
sells the land. materials if possible (w/o
injury)
3. No action against LO and
may be liable to LO for
damages.
Bad Faith Bad Faith

NOTE: This article applies only when the fruits are

ART 443 He who receives the fruits has the
obligation to pay the expenses made by a
third person in their production, gathering,
and preservation.
already gathered and only when the planter acted
in bad faith
Duties of the recipient of the fruits to pay the
expenses:
1. necessary for the production of the fruits
2. necessary for the gathering of the fruits
3. necessary for the preservation of the land
TWO KINDS OF CROPS:
1. Annual Crops
- are deemed manifest the moment their
seedlings appear from the ground
2. Perennial Crops
- are deemed to exist only when they actually
appear on the trees
Art 446 raise two disputable presumptions:
1. The works, sowing and planting were made by
the owner
2. They were made at the expense of the owner
Cases:
FILIPINAS COLLEGES , plaintiff-appellee, vs.
TIMBANG, defendants. G.R. No. L-12812
TIMBANG, plaintiff-appellant vs. BLAS, defendant-
appellee.
September 29, 1959
This is an appeal taken from an order of the CFI of
Manila (a) declaring the Sheriff's certificate of sale
covering a school building sold at public auction
null and void unless within 15 days from notice of
said order the successful bidders, defendants-
appellants spouses Maria Garcia Timbang and
Marcelino Timbang, shall pay to, appellee Maria
Gervacio Blas the sum of P5,750.00 that the
spouses Timbang had bid for the building at the
Sheriff's sale; (b) declaring the other appellee
Filipinas Colleges, Inc. owner of 24,500/3,285,934
undivided interest in Lot No. 2-a covered by
certificate of tile No 45970, on which the building
sold in the auction sale is situated; and (c)
ordering the sale in public auction of the said
undivided interest of the Filipinas Colleges, Inc., in
lot No. 2-a aforementioned to satisfy the unpaid
portion of the judgment in favor of appellee Blas
and against Filipinas Colleges, Inc. in the amount
of P8,200.00 minus the sum of P5,750.00
mentioned in (a) above. In the judgment of the
Court of Appeals, the respective rights of the
litigants have been adjudicated as follows:
(1) Filipinas Colleges, Inc. was declared to have
acquired the rights of the spouses Timbang in and
to lot No. 2-a mentioned above and in
consideration thereof, Filipinas Colleges, Inc., was
ordered to pay the spouses Timbang the amount of
P15,807.90 plus such other amounts which said
spouses might have paid or had to pay after
February, 1953, to Hoskins and Co. Inc., agent of
the Urban Estates, Inc., original vendor of the lot.
Filipinas Colleges, Inc. original vendor of the total
amount with the court within 90 days after the
decision shall have become final.
(2) Maria Gervacio Blas was declared to be a
builder in good faith of the school building
constructed on the lot in question and entitled to
be paid the amount of P19,000.00 for the same.
Filipinas Colleges, Inc., purchaser of the said
building was ordered to deliver to Blas stock
certificate (Exh. C) for 108 shares of Filipinas
Colleges, Inc. with a par value of P10,800.00 and
to pay Blas the sum of P8,200.00 of the house. (3)
In case Filipinas Colleges, Inc. failed to deposit the
value of the land, which after liquidation was fixed
at P32,859.34, within the 90-day period set by the
court, Filipinas Colleges would lose all its rights to
the land and the spouses Timbang would then
become the owners thereof. In that eventuality,
the Timbangs would make known to the court their
option under Art. 448 of the Civil Code whether
they would appropriate the building in question, in
which even they would have to pay Filipinas
Colleges, Inc. the sum of P19,000.00, or would
compel the latter to acquire the land and pay the
price thereof. Appellant contended that because
the builder in good faith has failed to pay the price
of the land after the owners thereof exercised their
option under Article 448 of the Civil Code, the
builder lost his right of retention provided in Article
546 and by operation of Article 445, the appellants
as owners of the land automatically became the
owners ipso facto, the execution sale of the house
in their favor was superfluous. Consequently, they
are not bound to make good their bid of P5,750.00
as that would be to make goods to pay for their
own property. By the same token, Blas claim for
preference on account of the unpaid balance of the
purchase price of the house does not apply
because preference applies only with respect to the
property of the debtor, and the Timbangs, owners
of the house, are not the debtors of Blas.
ISSUES/RULING:
(1)
Suppose that the owner of the land should avail
himself of the 2nd remedy provided for in Art
448compelling the builder in good faith to pay the
value of the land- but such builder fails to pay,
does he become automatically the owner of the
building?
Under Arts 448 and 546, the owner of the land has
the right to choose between appropriating the
building by reimbursing the builder of the value
thereof or compelling the builder in good faith to
pay for his land. Even this second right cannot be
exercised if the value of the land is considerably
more than that of the building. In addition to the
right of the builder to be paid the value of his
improvement, Article 546 gives him the corollary
right of retention of the property until he is
indemnified by the owner of the land. There is
nothing in the language of these two article, 448
and 546, which would justify the conclusion of
appellants that, upon the failure of the builder zo
pay the value of the land, when such is demanded
by the land-owner, the latter becomes
automatically the owner of the improvement under
Article 445. (2) What then is the remedy left to the
owner of the land if the builder fails to pay? Where
the builder in good faith fails to pay the value of
the land when such is demanded by the
landowner, the parties may resort to: (a) Parties
may decide to leave things as they are and assume
the relation of lessor and lessee, and should they
disagree as to the amount of rental then they can
go to the court to fix that amount. (b) Should the
parties not agree to leave things as they are and to
assume the relation of lessor and lessee, the
owner of the land in entitled to have the
improvement removed when after having chosen
to sell his land to the other party, i.e., the builder
in good faith fails to pay for the same. (c) The land
and the improvement may be sold at public auction
applying the proceeds thereof first to the payment
of the value of the land and the excess, if any, to
be delivered to the owner of the house in payment
thereof.
(3)
The appellants , owners o the land, instead of
electing any of the alternative above indicated
chose to seek recovery of the value of their land by
asking for a writ of execution; levying on the house
of the builder; and selling the same in public
auction with the owner as highest bidder, what is
the effect upon the rights of the parties? When
there is a claim by a third-party, to the proceeds of
the sale superior to his judgment credit, the
execution creditor, as successful bidder, must pay
in cash the amount of his bid as a condition
precedent to the issuance to him of the certificate
of sale. In the instant case, the Court of Appeals
has already adjudged that appellee Blas is entitled
to the payment of the unpaid balance of the
purchase price of the school building. Blas is
actually a lien on the school building are
concerned. The order of the lower court directing
the Timbang spouses, as successful bidders, to pay
in cash the amount of their bid in the sum of
P5,750.00 is therefore correct. With respect to the
order of the court declaring appellee Filipinas
Colleges, Inc. part owner of the land to the extent
of the value of its personal properties sold at public
auction in favor of the Timbang, this Court
Likewise finds the same as justified, for such
amount represents, in effect, a partial payment of
the value of the land. If this resulted in the
continuation of the so-called involuntary
partnership questioned by the difference between
P8,200.00 — the unpaid balance of the purchase
price of the building and the sum of P5,750.00 —
amount to be paid by the Timbangs, the order of
the court directing the sale of such undivided
interest of the Filipinas Colleges, Inc. is likewise
justified to satisfy the claim of the appellee Blas.
The first part of the dispositive portion of the order
appealed from is modified in the sense that upon
failure of the Timbang spouses to pay to the
Sheriff or to Manila Gervacio Blas said sum of
P5,750.00 within fifteen (15) days from notice of
the final judgment, an order of execution shall
issue in favor of Maria Gervasio Blas to be levied
upon all properties of the Timbang spouses not
exempt from execution for the satisfaction of the
said amoun In all other respects, the appealed
order of the court a quo is hereby affirmed, with
costs against the appellants.
1. Sarmiento vs. Agana- “The landowner
on which a building has been constructed in good
faith by another has the option to buy the building
or sell his land to the builder, he cannot refuse to
exercise their option and compel the builder to
remove or demolish the improvement. An order by
a court compelling a builder in good faith to
remove his building from a land belonging to
another who chooses neither to pay for such
building nor sell the land is null and void for being
offensive to Art. 448”
2. Depra vs. Dumlao- “Owner of the land
on which an improvement was built by another in
good faith is entitled to removal of the
improvement only after the landowner has opted
to sell the land and the builder refused to pay for
the same. Where the land’s value is considerably
more than the improvement, the landowner cannot
compel the builder to buy the land. In such event,
a forced lease is created and the court shall fix the
terms thereof in case the parties disagree
thereon.”
3. Ballatan vs. CA- “The right to choose
between appropriating the improvement or selling
the land is given to the owner of the land and not
the court.”
4. Pleasantville Development
Corporation vs. CA- “A lot buyer who constructs
improvements on the wrong property erroneously
delivered by the owner’s agent, honestly believing
that the said lot was what he brought from the
seller, is NOT guilty of negligence and his violation
of the contract of sale or instalment may not be
the basis to negate the presumption of good faith
as such violation has no bearing on his state of mid
at the time he built the improvements.”
5. Pecson vs. CA- “Parties may agree that
Art. 448 and 546 are applicable and indemnity for
the improvements may be paid although they
differ as to the basis of the indemnity.”
6. Manila Railroad Co. vs. Paredes-
“When Manila Railroad Co. built its track on a land
without any opposition from the owner who merely
stood by, the owner was deemed to have waived
his right to recover possession of his property and
the construction thereon. His only remedy would
be to recover damages for the value of the
property taken considering that the corporation
merely exercised its power of eminent domain as
authorized by law.”
7. Nuguid vs. CA- “Offsetting necessary
and useful expenses with the fruits received by the
builder-possessor in good faith is not allowed.”
8. Manotok Realty, Inc. vs. Tecson-
“Where the improvements have been destroyed by
a fortuitous event without the fault of the
landowner, the basis for the builder’s right to
retain the premises is extinguished; hence there is
no other recourse for him but to vacate the
premises and deliver the same to the landowner.”
9. Calapan Lumber Co. vs. Community
Sawmill Co.- “The right of retention of a builder
in good faith until payment of the proper indemnity
does not apply to property of public domain. The
builder may however be entitled to the cost of
construction with interest upon securing
authorization of proper authorities or designate
such road a toll road to raise the funds necessary
to reimburse the company.”
10. Mendoza vs. Deguzman- “Once the
owner elects to appropriate the improvements, the
BPS cannot exactly be considered a possessor in
good faith. Hence, whatever fruits he receives
during the pendency of retention must be deducted
from whatever indemnity is due to him; and in
case it exceeds the value of the indemnity, the
excess shall be returned to the owner of the land.”
11. Sps. Del Ocampo vs. Obesia- “A co-
owner is not a 3rd Person with respect to the land
owned in common for it cannot be said that it
exclusively belongs to another but of which he is a
co-owner. However, if the co-ownership is
terminated by partition and it appears that the
house of the defendant (a former co-owner)
overlaps or occupies a portion of the land
pertaining to the plaintiff (another former co-
owner) which the defendant build in good faith,
then Art. 448 should apply even when there was a
co-ownership.”
IGNAO V. IAC
When co-ownership is terminated by division of
land, Art 448 applies to parties in good faith. The
party whose land is encroached upon has the sole
right to choose whether to sell his land encroached
or to appropriate that which encroaches his land.
FACTS:
The case involves Petitioner Florencio Ignao and
his Uncles Juan and Isidro Ignao as Respondents.
Both Petitioner and Respondents co-owned land
with 534 sqm (about the size of an Olympic
swimming pool.) in Cavite. The parties had a
falling out (maybe the uncles had bad breath) and
so attempted to partition the land, with 133 going
to the uncles and 266 going to Petitioner. The
attempt failed. Later, Petitioner discovered that the
two houses of Respondent uncles encroached his
land. Juan ate 42 sqm and Isidro ate 59 sqm… for
the grand total of 101 sqm. He complained.
The RTC said that uncles built in good faith
therefore that exempts them from damages. Art
448 therefore applies But things didn’t go to well
for the Petitioner. The RTC said that if Petitioner
opted to appropriate the sections of the
encroaching houses, the Uncles will be left with
worthless hovels. Hence, RTC ordered Petitioner to
just sell his land which was encroached. “No
Good!” cried Petitioner and he appealed to the IAC.
He lost again. Petitioner trooped to the SC for
vindication
ISSUE:
1. Whether or not Petitioner has the right to
choose whether to appropriate the house
encroaching his land or to sell his land.
2. Whether or not the courts and respondents can
rob Petitioner of the options provided for under Art
448.
HELD:
Petitioner has the right whether to appropriate the
houses or to sell his land! The ruling of the RTC
and IAC contravened the explicit provisions of Art
448 which granted him the explicit right to choose.
The law is clear when it bestows choice upon the
aggrieved land owner and not upon the builders or
the courts.
PECSON V. CA
244 SCRA 407
FACTS:
Petitioner was the owner of a parcel of land
wherein he built an apartment complex. Due to
his failure to pay for realty taxes, his land was sold
in a public auction and was sold to spouses
Nuguid. He moved for the setting aside of the
auction but was denied.
HELD:
 Article 448 doesn't apply to a case where the
owner of the land is the builder who then later
loses ownership of the land by sale or auction.
 Nevertheless, the provision therein on
indemnity may be applied by analogy considering
that the primary intent of this provision is to avoid
a state of forced ownership.
 The current market value of the
improvements which should be made the basis
of reimbursement to the builder in good faith
 The right to retain the improvements
while the corresponding indemnity is not paid
implies the tenancy or possession in fact of the
land on which it is built, planted or sown and
retention of ownership of the improvements,
and necessarily, the income therefrom.
Reasons Why Alluvium is Granted the
Riparian Owner
1. To compensate him for the loss he may
suffer due to erosion or the destructive
force of the water and danger from floods.
2. To compensate him because the property is
subject to encumbrances and legal
easements.
3. The interests of agriculture require that the
soil be given to the person who is in the
best position to cultivate the same.
4. Since after all, it cannot be said with
certainty from whom the soil came, it may
just as well be logically given to him can
best utilize the property.
Requisites of Alluvium:
1. Deposit of soil or sediment be gradual and
imperceptible.
2. It be the result of the action of the waters of the
river; and
3. The land where the accretion takes place is
adjacent to the banks of rivers.
REASONS WHY ALLUVIUM IS GRANTED THE
RIPARIAN OWNER
a. to compensate him for the loss he may suffer
due to ersion or the destructive force of the water
and danger from floods
b. to compensate him because the property is
subject to encumbrances and legal easements
c. the interest of agriculture require that the soil be
given to the person who is in the best position to
cultivate the same
since after all, it cannot be said with certainty from
whom the soil came
Vda. De Nazareno vs. CA
257 SCRA 589
Facts: The subject land is located in Cagayan de
Oro. Said land was formed as a result of sawdust
dumped into the dried up Balancanas Creek and
along the banks of Cagatan River. In 1979, private
respondent Salasalan and Rabaya leased the said
lots on which their houses stood from Antonio,
petitioner’s predecessor in interest. In 1982,
private respondent stopped paying rentals. Antonio
and petitioner filed an ejectment suit and they
were ejected. Before Antonio died, he caused the
approval by the Bureau of Lands the survey plan to
perfect his title over the accretion area claimed by
him. Private respondent however protested. The
District Land officer ordered the cancellation of the
survey plan form Antonio and directed private
respondent to file public land applications.
Issue: Whether the subject land is public land or
private land being an accretion to petitioner’s titled
property applying Article 457 of the New Civil
Code.
Ruling: Since the accretion was for med by the
dumping of boulders, soil, sawdust and other filing
materials, it cannot be claimed that the
accumulation of such was gradual and
imperceptible. The deposit was not also due to the
effect of current water. The article excludes all
deposits caused by human intervention. Alluvium
must be the exclusive work of nature. The Whether or not the land forms part of the public
accretion in this case is man-made hence part of domain
the public domain. HELD: YES

REPUBLIC V. CA 1. The law on accretion cited by Ignacio in

131 SCRA 532
FACTS:
Subject land was 20 meters away from the shores
of Laguna de Bay. It was owned by Benedicto
del Rio. After his death, it was acquired by
Santos del Rio. Private oppositors sought
permission and obtained the same to construct
duck houses. They violated agreement by
consructing residential houses. Santos then
sought to register the land which was opposed.
The oppositors was able to obtain sales application
on the land. The director of Lands alleged that
since a portion of the land is submerged in water 4
to 5 months, then it forms part of the public
domain.
inapplicable in the present case because it refers to
accretion or deposits on the banks of rivers while
this refers to action in the Manila Bay, which is
held to be part of the sea
2. Although it is provided for by the Law of Waters
that lands added to shores by accretions caused by
actions of the sea form part of the pubic domain
when they are no longer necessary for purposes of
public utility, only the executive and the legislative
departments have the authority and the power to
make the declaration that any said land is no
longer necessary for public use. Until such
declaration is made by said departments, the lot in
question forms part of the public domain, not
available for private appropriation or ownership.

HELD:
According to the Law of Waters, the natural bed or
basin of lakes, ponds, or pools is the covered
by their waters when at their highest ordinary
depth—regular, common, natural, which occurs
almost or most of the time during the year.

Laguna de Bay is a lake and that part around

it which becomes covered with water 4 to 5
months a year, not due to tidal action, but due to ◘ ARTIFICIAL ACCESSION
rains cannot be considered as part
of the bed or basin of Laguna de Bay nor as a
foreshore land. Property not being so, the land is A. Alluvium – soil deposited to the lands
registrable. adjoining the banks of rivers and gradually
received as an effect of the current of waters. It is
owned by the riparian owners.
IGNACIO V. DIRECTOR OF LANDS AND
VALERIANO
108 SCRA 335 Requisites:

FACTS 1. Deposit should be gradual.

Faustino Ignacio filed an application to register a 2. It is caused by the current of the river.
parcel of land (mangrove) which he alleged he 3. River must continue to exist
acquired by right of accretion since it adjoins a 4. Increase must be comparatively little.
parcel of land owned by the Ignacio. His
application is opposed by the Director of Lands,
Laureano Valeriano, contending that said land
forms part of the public domain. The Trial Court
dismissed the application holding that said land
formed part of the public domain. Thus the case at
bar.

ISSUE:
B. Avulsion – process whereby the current of General Rule: River bends abandoned through
a river, creek, and torrent segregates from an natural change in the course of the water ipso
estate on its bank a known portion of land and facto belongs to owners whose lands are occupied
transfer it to another state. by the new course in Proportion to Areas Lost.

Exception: Owners of land adjoining old bed shall

ALLUVIUM AVULSION have right to acquire same by paying value
thereof, which shall not exceed the value of area
The deposit of the soil Deposit is sudden or
occupied by the new bed.
here is gradual. abrupt; may be seen.
Soil cannot be Soil is identifiable or
identified. verifiable.
REPUBLIC V. CA
Belongs to the owner Belongs to the owner
132 SCRA 514
of the property to from whose property
which it is attached. it was detached.
FACTS:
Respondents sought the registration of land
adjacent to their fishpond. They are the
River- a natural stream of water, of greater
registered owners of parcel of lot bordering on
volume than a creek or rivulet flowing, in a more
the Bocaue and Meycauyan rivers. The lower and
or less permanent bed or channel, between defined
appellate court allowed registration but this was
banks or walls, with a current which may either be
opposed by the government.
continuous in one direction or affected by the ebb
and flow of the tide.
HELD:
There is no accretion if by man-made causes.
Creek- a small stream less than a river

Torrent- a violent, rushing, or turbulent stream

C. Change of River Beds
Requisites:

RULE ON UPROOTED TREES 1. Definite abandonment of government and no

-Trees uprooted and carried away by the current of
the waters belong to the owner of the land
upon which they may be cast, if the owners do
not claim them within six (6) months.
-If owners claim them, they shall pay the expenses
incurred in gathering or putting them in a safe
place.
-If transplanted by the owner of the land where
they have been cast, ownership still pertains to
the person who lost the trees provided claim
was made properly
HOW TO RECOVER LANDS AND TREE IN
AVULSION:
1. Known portion of land;
2. It was detached by the current of the river;
3. Recover land within two years.
step was taken to revive old bed;
2. Change must be sudden;
3. Changing of the course must be more or less
permanent and not temporary;
4. River must continue to exist; and
5. Change must be natural.
 In the absence of evidence that the change in the
course of river was sudden or that it occurred
through avulsion, the presumption is that the
change was gradual and was caused by alluvium
and erosion.
 In avulsion, it is essential that the detached
portion be known or identifiable. Therefore mere
placing on top will not nor make the article
inapplicable as long as the identification is
possible. But if because of some force, say
continuous rain, the two have so mixed with each
other that identification cannot take place, the
article should not apply. In this case, the principles
of commixion or confusion should apply.
Case:
In Hilario v. City of Manila, this Court held that Case:
the word “current” indicates the participation of the
body of water in the ebb and flow of waters due to JAGUALING V. CA
high and low tide. Petitioners’ submission not 194 SCRA 607
having met the first and second requirements of
the rules on alluvion, they cannot claim the rights FACTS:
of a riparian owner. Eduave owned a parcel of land which later
was eroded due to a typhoon and through the
Petitioners are estopped from denying the public movement of land deposit. Eduave granted
character of the subject land, as well as the defendants to plant corn and bananas. She
jurisdiction of the Bureau of Lands when the late also hired a surveyor to put monuments.
Antonio Nazareno filed his Miscellaneous Sales She also paid taxes. Here comes petitioner
Application MSA (G-6) 571. The mere filing of said who opposes the claim of ownership claiming
Application constituted an admission that the land the typhoon caused the formation of island, the
being applied for was public land, having been the same they occupied for 15 years now.
subject of Survey Plan MSI-10-06-000571-D which
was conducted as a consequence of Antonio HELD:
Nazareno’s Miscellaneous Sales Application wherein The island formed belongs to the owner of
said land was described as an orchard. Said the land with the nearest margin.
description by Antonio Nazareno was controverted
by the findings of the ocular inspection that said If the riparian owner fails to assert his claim, it
land actually covers a dry portion of Balacanas could be open to adverse possession.
Creek and a swampy portion of Cagayan River.

Rule if New River Bed is on Private Estate

-It becomes the property of public dominion.

Rule if River Divides Itself into Branches RIGHTS OF ACCESSION

-the owner of the land retains his ownership and
he also retains it if a portion of land is separated WITH RESPECT TO
from the estate by the current. MOVABLE PROPERTY
-this applies whether the river is navigable or not Arts. 466-475

Kinds of accession continua as regard

D. Formation of Islands movables: AMS
Rules of Ownership:
1. If formed on the sea: 1. Adjunction or conjunction
a. Within territorial waters – State 2. Mixture
b. Outside territorial waters – First country to
occupy. 3. Specification
2. If formed on lakes, navigable / floatable rivers –
State
3. If formed on non-navigable / floatable rivers:
a. If nearer in margin to one bank – owner of
nearer margin is the sole owner. A. Adjunction – process by virtue of which
b. If equidistant – island shall be divided two movable things belonging to different owners
longitudinally in halves. are united in such a way that they form a single
object and each of the things untied preserves its
Navigable or floatable river- if useful for floatage own nature.
and commerce, whether the tides affect the water
or not

What are its characteristics?


Ans: That there are: 2BUS
1. 2 movables;
2. Belonging to different owners;
3. United forming a single object;
4. Separation would impair their nature or result
in substantial injury to either thing.
What are the classes of adjunction or
conjunction?
A: PEWWS
1. Painting (pintura)
2. Engraftment ‐ like setting a precious stone on a
golden ring)
3. Writing (escritura)
4. Weaving
5. Soldering
a. ajoining a piece of metal to another metal)
b. Ferruminacion ‐ principal and accessory are
of the same metal
c. Plumbatura – different metals (Art. 468,
NCC)
Bad Faith in the Adjunction
1. Owner of the accessory is in bad faith
- lose the thing incorporated and shall have the
obligation to indemnify the owner of the principal
thing for the damages he may have suffered
2. Owner of the Principal is in Bad Faith
- the owner of the accessory thing shall have a
right to choose between the paying him its value
or that the thing belonging to him be separated,
even though, for this purpose it be necessary to
destroy the principal thing;
-indemnity for damages
3. Bad Faith on the Part of Both
- both should be considered in good faith
Consent of owner had not been obtained
- right to indemnity either by
a. delivery of a thing equal in kind and value
(quantity, quality)
b. payment of price as appraised by experts.
 Sentimental value must be considered
Test to determine which is the principal and
which is the accessory:
The principal is (order of preference)
a. That to which the other has been united as
an ornament, or for its use, or perfection
TEST OF INTENTION- accessory has
been united as an ornament, etc.
b. That of greater value
c. That of greater volume
d. That which has greater merits (combined
consideration of utility and volume)
-with reference to a motor vehicle, the
engine may be considered as the principal,
all the other parts of the vehicle being
regarded as mere accessories.
Painting, sculpture, writings, printed matter,
engraving, lithographs, the board, metal,
stone, canvas, paper or parchment- deemed
the accessory thing
How is ownership determined if the
adjunction involves three or more things?
- The court should first distinguish the principal
and apply Art. 466 in an equitable manner
such that the principal acquires the accessory,
indemnifying the former owner thereof for its
value.
How about if the adjunction involves three or
more things?
- : The principal should first be distinguished,
after, Art. 466 will be applied in an equitable
manner, such that the principal acquires the
accessory, indemnifying the former owner
thereof for its value.
Note: Art. 466 states that “Whenever two
movable things belonging to different owners
are, without bad faith, united in such a way
that they form a single object, the owner of
the principal thing acquires the accessory,
indemnifying the former owner thereof for its
value.
When is separation of things allowed?
A: WAB
1. Separation Without injury
2. Accessory is more precious than the principal
3. Owner of the principal acted in Bad faith. (Art.
469, NCC)

Rule when there can be separation without

injury on things
-the respective owners may demand their
separation

Rule if Accessory is more precious than the

principal What are the rules as regards rights of
-Separation is allowed, although with injury (not owners over the thing in adjunction?
destruction), if the thing united for the use,
embellishment, or perfection of the other is much
more precious than the principal.
OWNER OF THE OWNER OF THE
PRINCIPLE ACCESSORY
Good Faith Good Faith

1. Acquire 1. Receive
accessory and pay owner payment for value of
of the accessory for its accessory; OR
value; OR 2. GR: Demand
2. Demand separation provided the
separation provided the thing suffers no injury
thing suffers no injury.
XPN: If accessory is more
precious than principal,
he may demand
separation w/ or w/o
injury to the thing.

Good Faith Bad Faith

Acquire accessory w/o Lose accessory and pay
paying the owner of damages.
accessory and entitled to
damages.
Bad Faith Good Faith

1. Pay value of 1. Receive payment

accessory and pay
damages; OR
2. Have the things
separated, even though
there is injury to the
principal and pay
damages.
and damages; OR
1. Have accessory
separated w/ or w/o
injury to principal and
receive damages

Bad Faith Bad Faith

Same as though both acted in good faith
 C. Specification – giving of a new form to
another’s material through the application of labor
(labor is the principal)
How is the indemnity made?
Rules in Specification
1. Delivery of a thing equal in kind and value; or a. If the worker (principal) is in good faith-
2. Payment of its price including the sentimental 1. He appropriates the new thing
value. (Article 471, NCC) 2. But he must indemnify for the
materials

Exception: If the materials (accessory) is more

precious than the new thing or is more valuable,
the owner of the material has an option-
1. To get the new thing but he must pays for
the work;
2. Or to demand indemnity for the material

B. Mixture – combination or union of materials
where with respective identities of the component
elements are lost.
Two Kinds of Mixture : ComCon
a. COMMIXTION- solids are mixed
b. CONFUSION- liquids are mixed
b. If the WORKER is in Bad Faith, the owner
of the material has an option; he-
1. Can appropriate the work without
paying for the labor;
2. Or he can demand indemnity for the
material plus damages
Exception: The option of appropriation is not
available if the value of the resultant work is more
valuable for artistic and scientific reasons

Rules for Mixture

a. If the mixture is caused by one owner
in good faith, or by the will of both
owners, or by chance (accident), or by
a common agent -CO-OWNERSHIP In all instances, sentimental value shall be
results, each owner acquiring an interest or duly appreciated.
right proportional to the value of his
material Sentimental Value- worth to its owner much
b. If the mixture is made by one owner in
more than its actual value
BAD FAITH then-
1. He loses his material (in favor of the
other)
2. And is liable for damages (to penalize
his bad faith)
c. Mutual Bad Faith- both must be Distinction between Adjunction, Micture &
considered in good faith Specification:

Adjunction Mixture Specification

Involves at Involves at May involve
If parts mixed are of same kind, quantity and least two least two only one thing
things things
quality- divide the mixture into two equal parts
Accessory Co-ownership Accessory
follows the results follows the
If caused by negligence of one of the parties
principle principle
-the party negligent is liable for his culpa Thing Things mixed The new object
acquiliana and should indemnify for damages adjoined or confused retains or
retain their may either preserves the
nature retain or lose nature of the
their original object.
 respective vexatious litigation in cancellation, release of
natures respect to the property an instrument,
concerned. encumbrance, or claim
in the plaintiff’s title –
which affect the title or
enjoyment of the
property.
Plaintiff asserts own Plaintiff declares his
claim and declares that own claim and title,
the claim of the and at the same time
defendant is indicates the source and
unfounded and calls on nature of the
the defendant to defendant’s claim,
justify his claim on the pointing its defects and
property that the same prays for the
may be determined by declaration of its
the court. invalidity.

QUIETING OF TITLE Existence of the “CLOUD”

Arts 476-481
It is a common-law remedy for the removal of any
cloud upon or doubt or uncertainty with respect to
title to real property. (Vda.de Aviles v. CA)
-To remove a cloud from the title to real estate, it
shall be brought in the province where the land is
situated
Kinds of Actions referred to
a. Remedial- action to remove the cloud or
to quite title
b. Preventive- action to prevent a future
cloud or doubt
Requisites of the action to quiet title:
1. Legal or equitable title to, or interest in real
property
2. There must be cloud on such title;
3. Plaintiff must return to the defendant all
benefits he may have received from the latter,
or reimburse him for expenses that may have
redounded to his benefit.
Prescriptive Period:
1. If the plaintiff is in possession of property –
action does not prescribe.
2. If the plaintiff is not in possession of property –
action may prescribe (10 or 30 years).
ACTION TO QUIET ACTION TO
TITLE REMOVE CLOUD
To put an end to To procure the
The “cloud” (or doubt) on title exists
because:
a. Of an instrument (deed, or contract) or
record or claim or encumbrance or
proceeding
b. Which is APPARENTLY valid or effective
c. BUT is, in truth and in fact, invalid,
ineffective, voidable, or unenforceable, or
extinguished (terminated) or barred by
extinctive prescription.
d. AND may be prejudicial to title
- when the instrument is not valid on its face, the
remedy does not apply
- If the plaintiff is in possession of the property,
the action does not prescribe (Uberas v. CFI of
Negros Occidental L-48268, Oct. 30, 1978)
- If the plaintiff is not in possession of the
property, the action may prescribe.
Nature of Action
-“In Personam”- enforceable only against the
defeated party, or privies.
-But technically, quasi in rem- an action in
personam concerning real property
Examples of Existence of Cloud over the Title:
a. An agent with the written authority of his
principal to sell the latter’s property, sold the
same AFTER the death of the principal but
antedated the contract of sale.
b. If the contract is forged
c. Contract by an incapacitated person
d. Mortgage valid on its face and will cause
prejudice although in reality invalid.

Requisite Needed to bring an Action to
Prevent a Cloud (Action or Bill QUIA TIMET)
-It must be made clear that there is a fixed
determination on the part of the defendant to
create a cloud and it is not sufficient that the
danger is merely speculative.
Necessity for title of the Plaintiff
- The plaintiff must either have the legal
(registered) ownership or the equitable
(beneficial) ownership. Otherwise the
action will not prosper. He need not be in
possession of said property.
Two Instances where the action to quiet title
or remove a cloud may be Used:
a. When the contract, instrument, or other
obligation has been extinguished or
terminated
b. When the action is barred by extinctive
prescription
Duty of Plaintiff to make Certain
Reimbursement
- The plaintiff must return to the defendant
all benefits he may have received from the
defendant, or reimburse him for expenses
that may have redounded to the plaintiff’s
benefit.
If Plaintiff is in If Plaintiff is out of
Possession Possession
a.Period does not a. Period prescribes
prescribe b. The right to remove
b.Only right is to cloud, he may also bring
remove or prevent the ordinary actions of
cloud ejectment, publiciana or
reivindicatoria within the
proper prescriptive
periods.
-principles of the general law on the quieting of
title are hereby adopted insofar as they are not in
conflict with Civil Code
Defenses: The defendant can win if he can
prove:
a. The plaintiff does not have legal or
equitable title
b. The defendant has acquired the ownership
by, for example, adverse possession
c. The case has already been previously
decided between the parties on the same
issue-res judicata
d. The defendant became the owner after the
action had been filed, but before he filed
his answer (succession, donation, etc.)
e. The action has prescribed, the plaintiff
being outside of possession
Regarding the reliefs given:
1. Unauthorized mortgages may be cancelled
2. In ordinary case, the defendant may in his
counter-claim ask for quieting of title as
against the plaintiff.
3. Injunction may be availed of such as
prohibition to destroy certain properties.
When the action to quiet title will not prosper
1. It is merely an action to settle dispute
concerning boundaries
2. It involves the proper interpretation and
meaning of a contract or document
3. The plaintiff has no title, either legal or
equitable
4. The action has prescribed and the plaintiff
is not in possession of the property
5. The contract, instrument, etc. is void on its
face
6. It is a mere claim or assertion
CASES:
Gallar vs. Hussain
L-20954, May 24, 1967
Facts:
Hussain sold a retro in a private
instrument, a parcel of land protected by a Torrens
Title to Chichirita, but the right to purchase was
never exercised. The buyer sold the land to
another who in turn sold and delivered the
property in 1919 to Gallar. These subsequent sales
were in private instruments. Gallar who had been
in possession since 1919 sued in 1960 the heirs of
Hussain to compel them to execute a fomal deed
of conveyance so that Gallar could obtain a TCT.
The heirs interposed the defense of prescription.
Issues:
a. Is the suit one for specific performance or
quieting of title?
b. Has the action prescribed?
c. If the heirs of Hussain had been the possessors
of the property would the answer be the same?
Ruling:
a. Gallar’s suit should be considered an action to
quiet title because Gallar was the owner and the
sale had been consummated, despite the fact that
the transactions had all been merely in private
instruments.
b. Gallar’s suit should be considered an action to
quiet title because Gallat was the owner and the
sale had been consummated, despite the fact that
the transaction had all been merely in private
instruments.
b. Gallar’s suit had not prescribed. In an action to
quiet title, if the plaintiff is in possession, the suit
does not prescribe.
c. If the heirs of Hussain’s had been in
possession, Gallar’s suit would have prescribed
for then the action would not be one to quiet
title, but one to recover real property.
Sps. Felix & Nicanora Bucton vs. Sps. Zosimo
& Josefina Gabar G.R. No. L-36359 January 31,
1974
Facts:
Nicanora Bucton & Josefina Gabar are sisters-in-
law. Josefina bought a land from Villarin on
installment basis. Josefina then entered into a
verbal agreement with Nicanora that the latter
would pay one-half of the price and would then
own one-half of the land. Nicanora agreed. She
paid the initial amount evidenced by a receipt. Sps
Bucton then took possession of the land and made
thereon improvements. When a deed of sale was
executed in favor of Sps Gabar for the land, Sps
Bucton sought to obtain a separate title but was
refused. Sps Bucton filed a case for specific
performance which was granted by the trial court.
CA reversed, ruling that the action for specific
performance was based on the receipt of the initial
payment which was executed 22 years ago, thus
had already prescribed (10 years prescription for
an action based on a written agreement –Art.
1444). Sps Bucton argues that as owners in actual,
continuous and physical possession of the land
since its purchase, their right of action did not
prescribe.
Issue; WON Sps Bucton’s right of action to compel
Sps Gabar to execute a formal deed of conveyance
in their favor, has prescribed.
Held: No.
The real and ultimate basis of petitioners’ action is
their ownership of one-half of the lot coupled with
their possession thereof (not the receipt), which
entitles them to a conveyance of the property.
By the delivery of the possession of the land, the
sale was consummated and title was transferred to
Sps Bucton, that the action is actually not for
specific performance, since all it seeks is to quiet
title, to remove the cloud cast upon Bucton’s
ownership as a result of Gabar’s refusal to
recognize the sale made and that as Sps Bucton
are in possession of the land, the action is
imprescriptible.
GARCIA V. CA, 95 SCRA 380
> A Transfer Certificate of Title cannot be nullified
by the issuance 43 years later of another Transfer
Certificate of Title over the same lot to another
person due to failure of the Register of Deeds to
cancel the Original Certificate of Title preceding the
title previously issued
> The earlier Transfer Certificate of Title prevails
> In case of involuntary registration, entry in the
day book is sufficient notice
> In voluntary registration, the buyer becomes the
registered owner the moment the deed is entered
in the day book and he surrenders the owner’s
duplicate certificate of title and pays the fees
Jalandoni v. PNB
The employees of the bank were negligent. They
did not require the sheriff to sell Jalandoni's land at
public auction. The bank is bound by its
employees' negligence. This case should teach the
responsible officers of the bank to be more vigilant
in exercising its rights and in supervising its
employees. The law helps the diligent and vigilant,
not those who sleep on their rights.
For laches and neglect on the part of those, who,
under the law are entitled to require of others the
fulfillment of their obligations, the statute of
limitations has been enacted, which provides that
such rights prescribe after a certain period of time,
in order that it may serve alike as a punishment
for those who do not know how to look after their
own interests, and as a source of reassurance to
those who may have rested in the belief that their
creditors had waived their rights, and also to
insure economic stability and the certainty of
rights. (Villareal, J., in Lutero vs. Siuliong & Co.,
54 Phil. 272, 280.)
We find that the "notice of embargo" annotated in
1964 on Jalandoni's title is no longer enforceable
and has become a cloud upon his title. Following
the rule in the Ansaldo case, he and his heirs have
a good cause of action under article 476 of the
Civil Code for the removal of that state
encumbrance.
Moreover, article 478 of the Civil Code provides
that "there may also be an action to quiet title or
remove a cloud therefrom when the contract,
instrument or other obligation has been
extinguished or has terminated, or has been
barred by extinctive prescription". (See sec. 112 of
Act No. 496.)
A court of equity will remove a cloud cast upon
title to property by a lien, interest, or title which
has become barred by reason of laches or the
running of the statute of limitations. ...
Liens which were acquired by virtue of judgments
or levies of execution, and which have become
barred by limitations or by delay in enforcing
them, and sales based on such hens, have been
held to be removable as clouds. (65 Am Jur 2nd
163-164).
Juliana Caragay-Layno vs Court of Appeals,
26 December 1984, 133 scra 718
Judgment Confirms Title
portion/property can be adjudged
– Only claimed
Mariano De Vera died in 1951. His widow
administered his property until her death in 1966.
De Vera’s nephew (Salvador Estrada) took over as
administrator of De Vera’s estate. Prior to the
widow’s death, she made an inventory showing
that De Vera’s property (located in Calasiao,
Pangasinan) measures 5417 sq. m (more or less).
Estrada however noticed that the Torrens title
under De Vera indicated that his property
measures 8752 sq. m. He learned that the
discrepancy is the 3732 sq. m. being occupied by
Juliana. Estrada sued to evict Juliana.
Juliana averred that she and her father have been
in open, continuous, exclusive and notorious
possession and in the concept of an owner of the
land since 1921; that they’ve been paying taxes;
that the title held by Estrada was registered in
1947 but it only took them to initiate an action in
1967 therefore laches has set in.
ISSUE: Whether or not the disputed portion should
be adjudged in favor of De Vera’s estate.
HELD: No. The inclusion of Juliana’s land in De
Vera’s title was erroneously done. It was shown
that Juliana, an unlettered woman, agreed to have
Mariano de Vera borrow her title for the purposes
of Mariano obtaining a loan during de Vera’s
lifetime; that when de Vera registered his portion
of land adjoined to that of Juliana, the latter’s land
was erroneously included.
The error is highlighted by the fact that de Vera’s
widow, in her inventory before she died, attested
that de Vera’s portion of land is only 5417 sq. m.
more or less. The discrepancy approximates the
portion of land actually being occupied by Juliana.
By that, the only portion that can be adjudged in
favor of de Vera’s estate is that which was being
claimed by the widow (in her inventory). A
recalculation must however be made to specify the
exact measure of land belonging to each: 3732 sq
m should be retained by Juliana (portion which she
actually occupies) and 5020 sq. m. should go to de
Vera’s estate.
RUINOUS BUILDINGS
AND TREES IN DANGER
OF FALLING
Arts. 482-483
Rule in Case of Building, Etc. in danger of
Falling
- The owner of the building, wall, column, or
any other construction shall be obliged to
demolish it or execute the necessary work
in order to prevent it from falling.
- If the proprietor does not comply, the
administrative authorities may order the
demolition of the structure at the expense of
 the owner, or take measures to insure public 4. Each co-owner must respect each other in
safety. the common use, enjoyment, or
preservation of the physical whole
5. Each co-owner holds almost absolute
Rule with Respect to Large Trees about to Fall control over the same IDEAL SHARE.
- Whenever a large tree threatens to fall in such 6. Not a juridical person
a way as to cause damage to the land or 7. A co-owner is in a sense a trustee for the
tenement of another or to travelers over a other co-owners.
public or private road, the OWNER of the tree
shall be obliged to: What Governs Co-ownership?
1. Remove it and a. Contracts
2. Should he not do so, it shall be done at b. Special legal provisions
his expense by order of the c. Provisions of the Title on Co-ownership
administrative authorities

Sources of Co-ownership
1. Law
2. Contract
3. Chance
4. Occupation
5. Succession or will

The share in the benefits and charges is

proportional to the interest of each.  Any
stipulation in a contract to the contrary is void.
CO-OWNERSHIP
G.R: Each co-owner shares proportionately in the
accretion or alluvium of the property.
Arts. 484-501
Exception:   Unless the contrary is proved

Right to Use Property owned in common

Co-ownership
- that state where an undivided thing or right
belongs to two or more persons
- not a juridical person, nor is it granted any form
of juridical personality
- The share of the co-owners in the benefits and
charges arising from the co-ownership shall be
in proportion to their respective interest, any
stipulation to the controversy shall be void.
Right to use the property for the purpose
intended (purpose), BUT
A. the interest of the co-ownership must
not be injured or prejudiced
B. and the other co-owners must not be
prevented from using it
-Any one of the co-owners may bring an action in
ejectment.

Ejectment covers the following actions:

1. Forcible entry
 Co-owner can only alienate his pro indiviso share 2. Unlawful detainer
in the co-owned property. (Nufable v. Nufable, 3. Accion publiciana
108 SCAD 204, 1999) 4. Accion reivindicatoria
5. Quieting of title
 A co-owner can validly lease his undivided 6. Replevin
interest to a third party (Sanchez v. Court of
Appeals, 404 SCRA 540, 2003) In ejectment cases, the only issue for resolution is
physical or material possession of the property
Requisites of Co-ownership: involved, independent of any claim of ownership
1. Plurality of subjects- many owners set forth by any party litigants. (Gachon v. Devera,
2. One physical whole divided into IDEAL Jr. 84 SCAD 12, 1997)
3. Each IDEAL share is definite in amount, but
is not physically segregated from the rest
 Death or incapacity of a Death dissolves the
co-owner does not partnership.
CO-OWNERSHIP JOINT OWNERSHIP dissolve the co-
Each co-owner owns Each joint-tenant and all ownership. The
only his deal share in of them own the whole deceased will be
the whole property. property. represented by his
Each co-owner may Each joint tenant cannot estate of heirs in the
dispose of his deal dispose of his own share co-ownership.
share without the without the consent of all
consent of the the others.
others.
In case of death, the In case of death, the CO-OWNERSHIP CONJUGAL
share of a co-owner share of joint-tenant PARTNERSHIP
descends to his goes to other joint- May arise by an Arises only because of
estate. tenant. ordinary contract. the marriage contract.
Prescription runs Prescription does not run Sex of the co-owners is One must be a male
against all co- against all join-tenants if immaterial. and other a female.
owners, even if one one of them is a minor or Co-owners may be two Conjugal owners are
of them happens to is under legal disability. or more. always only two.
be a minor. Profits are proportional Profits are generally
to respective interests. 50-50 unless a
contrary stipulation is
CO-OWNERSHIP ORDINARY in a marriage
PARTNERSHIP settlement.
Created by law, Contract. Death of one does not Death of either
contract, succession, dissolve the co- husband or wife
fortuitous event or ownership. dissolves the conjugal
occupancy. partnership.
For common enjoyment To obtain profits. Generally, all co-owners Generally, the
of the thing or right administer. husband is the
owned in common. administrator.
No juridical personality. Has a juridical Co-ownership is Encouraged by law to
personality. discouraged by law. provide for better
Share is proportionate Shares or profits may family solidarity.
to the respective be subject to
interests of the co- stipulation.
owners.
Co-owners may dispose A partner cannot Extinction of Co-ownership
of his share without the dispose of his share
consent of the others – and substitute the 1. Total destruction of the thing
except when personal buyer/assignee in his 2. Merger of all interest
rights are involved. place without the 3. Prescription
consent of the others. 4. Partition or division.
Agreement to exist in Law fixes no limit.
co-ownership for not
more than 10 years is Rules in Co-ownership
valid.
1. Co-owner has the right to use the property for
the purpose intended.
Limitations:
CO-OWNERSHIP ORDINARY a. Interest of the co-ownership must not be
PARTNERSHIP injured or prejudiced.
Generally, there is no Generally, there is b. Other co-owners must not be prevented from
mutual representation. mutual representation using it.
Exception: when a co- , unless otherwise
owner files a case for stipulated. 2. Each co-owner has full ownership of his part,
ejectment, the rest are and his share of the fruits and benefits, thus he
represented. may:
 a. Alienate, mortgage or assign such;
b. Substitute another to its enjoyment except
when personal rights are involved;
c. Exempt himself from necessary expenses and
taxes by renouncing part of his interest in
the co-ownership.
3. No co-owner shall be obliged to remain in the
co-ownership, thus, he may demand partition of
the thing owned in common in so far as his
share is concerned.
4. No co-owner may acquire ownership of the
property co-owned by prescription, except when
he:
a. Repudiates the rights of the others;
b. Repudiation is brought to the knowledge of
the other co-owners;
c. Evidence thereon is clear and conclusive;
d. Lapse of the period fixed by law.
When Co-owner May not Demand Partition:
1. By agreement (not exceeding 10 years),
partition is prohibited.
2. Partition prohibited by donor or testator (not
exceeding 20 years).
3. Partition prohibited by law.
4. Physical partition would render property
unserviceable.
5. Legal nature of common property does not allow
partition.
Partition of Co-owned Property – The division
between 2 or more persons of real or personal
property which they own in common so that each
may enjoy and possess his sole estate to the
exclusion of and without interference from others.
◘ Prescription of an action for partition does not lie,
except when the co-owners is properly repudiated
by the co-owner. (Mariategui vs. CA, 205 SCRA
337)
Right of the Co-owner to Undertake
1. Acts of preservation – may be made at the
will of one of the co-owners, but he must first
notify others of the necessity of such repairs.
2. Acts of administration – can be performed
only with the concurrence of the majority.
3. Acts of alteration – can be performed only
with the consent of the other co-owners.
◘ A person who occupies the land of another at the
latter’s tolerance permission, without any contract
between them, is necessarily bound by an implied
promise that he will vacate the same upon
demand, failing which, a summary action for
ejectment is the proper remedy. (Refugia vs. CA,
258 SCRA 347)
◘ In actions for partition, the court cannot properly
issue an order to divide the property, unless it first
makes a determination as to existence of co-
ownership. It must initially settle the issue of
ownership, the first stage in an action of partition.
An action for partition will not lie if the claimant
has no rightful interest over the subject property.
The possession contemplated as foundation for
prescriptive right must be one under claim of title
adverse to or in concept of owner. Possession by
tolerance, as in the case of petitioner, is not the
kind of possession that may lead to title by
prescription. It is the respondents’ open,
continuous, adverse and interrupted possession far
beyond the 30-year extraordinary period for
acquisitive prescription, coupled with the tax
declarations of their predecessors-in-interest, that
continues a superior weight of evidence that
clinched their claim. (Catapusan vs. CA, 264 SCRA
534).
CONDOMINIUM ACT
(RA NO. 4726)
Concept of Condominium – may include, in
addition, a separate interest in other portions
of such real property. Title to common areas,
including the land, or the appurtenant
interests in such areas, may be held by the
corporation specially formed for the purpose
(known as the “condominium corporation” in
which the holders of separate interest shall
automatically be members, to the exclusion
of others, in proportion to the appurtenant
interest of their respective units in the
common areas.
Condominium - an interest in real property
consisting of;
1. a separate interest in a unit in residential,
industrial or commercial building; and
2. an undivided interest in common directly or
indirectly, in the land on which it is located and
in other common areas of the building.
What is a Unit?
It is a part of the condominium project intended
for an type of independent use or ownership,
including one or more rooms or spaces located in
one or more floors in a buildings and such
accessories as may be appended thereto.
What are Common Areas?
-it is the entire project excepting all units
separately granted or held or reserved.
What is a Project
– entire parcel of real property divided or to be
divided in condominiums, including all structures
thereon.
What is the governing law on condominiums?
It is REPUBLIC ACT NO. 4726, June 18, 1966,
otherwise known as AN ACT TO DEFINE
CONDOMINIUM, ESTABLISH REQUIREMENTS
FOR ITS CREATION, AND GOVERN ITS
INCIDENTS, or simply “The Condominium Act”,
as amended by RA 7899 (1995).
What is a condominium?
Per Sec. 2 of the law, a condominium is an
interest in real property consisting of separate
interest in a unit in a residential, industrial or
commercial building and an undivided interest
in common, directly or indirectly, in the land on
which it is located and in other common areas
of the building. A condominium may include, in
addition, a separate interest in other portions
of such real property.
In whose name would the title of common
areas be made?
Title to the common areas, including the land,
or the appurtenant interests in such areas,
may be held by a corporation specially formed
for the purpose (hereinafter known as the
“condominium corporation”) in which the
holders of separate interest shall automatically
be members or shareholders, to the exclusion
of others, in proportion to the appurtenant
interest of their respective units in the
common areas.
What are the contents of the enabling or
master deed of the condominium?
An enabling or master deed which shall
contain, among others, the following:
(a) Description of the land on which the building
or buildings and improvements are or are to be
located;
(b) Description of the building or buildings, stating
the number of stories and basements, the
number of units and their accessories, if any;
(c) Description of the common areas and
facilities;
(d) A statement of the exact nature of the interest
acquired or to be acquired by the purchaser in
the separate units and in the common areas of
the condominium project. Where title to or the
appurtenant interests in the common areas is
or is to be held by a condominium corporation,
a statement to this effect shall be included;
(e) Statement of the purposes for which the
building or buildings and each of the units are
intended or restricted as to use;
(f) A certificate of the registered owner of the
property, if he is other than those executing
the master deed, as well as of all registered
holders of any lien or encumbrance on the
property, that they consent to the registration
of the deed;
(g) The following plans shall be appended to the
deed as integral parts thereof:
(1) A survey plan of the land included in the
project, unless a survey plan of the same
property had previously bee filed in said office;
(2) A diagrammatic floor plan of the building or
buildings in the project, in sufficient detail to
identify each unit, its relative location and
approximate dimensions;
(h) Any reasonable restriction not contrary to law,
morals or public policy regarding the right of
any condominium owner to alienate or dispose
of his condominium.
May the master deed be amended or
revoked? By whom?
Per Sec. 4 of the law, the enabling or master
deed may be amended or revoked  upon
registration of an instrument executed by a
simple  majority of the registered owners of
the property: Provided,  That in a
condominium project exclusively for either
residential  or commercial use, simple majority
shall be on per unit of  ownership basis and
that in the case of mixed use, simple  majority
shall be on floor area of ownership basis:
Provided  further, That prior notifications to all
registered owners are  done, and Provided,
finally, That any amendment or revocation
already decided by a simple majority of all
registered  owners shall be submitted to the
Housing and Land Use Regulatory Board and
the city/municipal engineer for approval
before  it can be registered. Until registration
of a revocation, the  provision of the Act shall
continue to apply to such property." (Amended
by RA 7899 (1995))
In case a unit is transferred, what is/are
deemed included?
Per Sec. 5 of the law, any transfer or
conveyance of a unit or an apartment, office or
store or other space therein, shall include the
transfer or conveyance of the undivided
interests in the common areas or, in a proper
case, the membership or shareholdings in the
condominium corporation: Provided, however,
That where the common areas in the
condominium project are owned by the owners
of separate units as co-owners thereof, no
condominium unit therein shall be conveyed or
transferred to persons other than Filipino
citizens, or corporations at least sixty percent
of the capital stock of which belong to Filipino
citizens, except in cases of hereditary
succession. Where the common areas in a
condominium project are held by a
corporation, no transfer or conveyance of a
unit shall be valid if the concomitant transfer of
the appurtenant membership or stockholding
in the corporation will cause the alien interest
in such corporation to exceed the limits
imposed by existing laws.
What are the incidents of a condominium
grant?
Under Sec. 6 of the law, unless otherwise
expressly provided in the enabling or master
deed or the declaration of restrictions, the
incidents of a condominium grant are as
follows:
(a) The boundary of the unit granted are the
interior surfaces of the perimeter walls, floors,
ceilings, windows and doors thereof. The
following are not part of the unit bearing walls,
columns, floors, roofs, foundations and other
common structural elements of the building;
lobbies, stairways, hallways, and other areas of
common use, elevator equipment and shafts,
central heating, central refrigeration and
central air-conditioning equipment, reservoirs,
tanks, pumps and other central services and
facilities, pipes, ducts, flues, chutes, conduits,
wires and other utility installations, wherever
located, except the outlets thereof when
located within the unit.
(b) There shall pass with the unit, as an
appurtenance thereof, an exclusive easement
for the use of the air space encompassed by
the boundaries of the unit as it exists at any
particular time and as the unit may lawfully be
altered or reconstructed from time to time.
Such easement shall be automatically
terminated in any air space upon destruction of
the unit as to render it untenantable.
(c) Unless otherwise, provided, the common areas
are held in common by the holders of units, in
equal shares, one for each unit.
(d) A non-exclusive easement for ingress, egress
and support through the common areas is
appurtenant to each unit and the common
areas are subject to such easements.
(e) Each condominium owner shall have the
exclusive right to paint, repaint, tile, wax,
paper or otherwise refinish and decorate the
inner surfaces of the walls, ceilings, floors,
windows and doors bounding his own unit.
(f) Each condominium owner shall have the
exclusive right to mortgage, pledge or
encumber his condominium and to have the
same appraised independently of the other
condominiums but any obligation incurred by
such condominium owner is personal to him.
(g) Each condominium owner has also the
absolute right to sell or dispose of his
condominium unless the master deed contains
a requirement that the property be first offered
to the condominium owners within a
reasonable period of time before the same is
offered to outside parties;
Can the common areas be partitioned?
Under Sec. 7 of the law, except as provided in
Sec. 8 of the law, the common areas shall
remain undivided, and there shall be no
judicial partition thereof.
When is judicial partition allowed of the
common areas?
Per Sec. 8 of the law, where several persons
own condominiums in a condominium project,
an action may be brought by one or more such
persons for partition thereof by sale of the
entire project, as if the owners of all of the
condominiums in such project were co-owners
of the entire project in the same proportion as
their interests in the common areas: Provided,
however, That a partition shall be made only
upon a showing:
(a) That three years after damage or destruction
to the project which renders material part
thereof unit for its use prior thereto, the
project has not been rebuilt or repaired
substantially to its state prior to its damage or
destruction, or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein
untenantable and that condominium owners
holding in aggregate more than thirty percent
interest in the common areas are opposed to
repair or restoration of the project; or
(c) That the project has been in existence in
excess of fifty years, that it is obsolete and
uneconomic, and that condominium owners
 holding in aggregate more than fifty percent
interest in the common areas are opposed to
repair or restoration or remodeling or
modernizing of the project; or
(d) That the project or a material part thereof has
been condemned or expropriated and that the
project is no longer viable, or that the
condominium owners holding in aggregate
more than seventy percent interest in the
common areas are opposed to continuation of
the condominium regime after expropriation or
condemnation of a material portion thereof; or
(e) That the conditions for such partition by sale
set forth in the declaration of restrictions, duly
registered in accordance with the terms of the
Act, have been met.
When is the Declaration of Restrictions
binding? What is its effect?
Under Sec. 9 of the law, the owner of a
condominium project shall, prior to the
conveyance of any condominium therein,
register a declaration of restrictions relating to
such project, which restrictions shall constitute
a lien upon each condominium in the project,
and shall insure to and bind all condominium
owners in the project. Such liens, unless
otherwise provided, may be enforced by any
condominium owner in the project or by the
management body of such project. The
Register of Deeds shall enter and annotate the
declaration of restrictions upon the certificate
of title covering the land included within the
project, if the land is patented or registered
under the Land Registration or Cadastral Acts.
What does the Declaration of Restrictions
provide?
The declaration of restrictions shall provide for
the management of the project by anyone of
the following management bodies: a
condominium corporation, an association of the
condominium owners, a board of governors
elected by condominium owners, or a
management agent elected by the owners or
by the board named in the declaration. It shall
also provide for voting majorities quorums,
notices, meeting date, and other rules
governing such body or bodies.
Such declaration of restrictions, among other
things, may also provide:
(a) As to any such management body;
(1) For the powers thereof, including power to
enforce the provisions of the declarations of
restrictions;
(2) For maintenance of insurance policies,
insuring condominium owners against loss by
fire, casualty, liability, workmen’s
compensation and other insurable risks, and
for bonding of the members of any
management body;
(3) Provisions for maintenance, utility, gardening
and other services benefiting the common
areas, for the employment of personnel
necessary for the operation of the building, and
legal, accounting and other professional and
technical services;
(4) For purchase of materials, supplies and the
like needed by the common areas;
(5) For payment of taxes and special assessments
which would be a lien upon the entire project
or common areas, and for discharge of any lien
or encumbrance levied against the entire
project or the common areas;
(6) For reconstruction of any portion or portions
of any damage to or destruction of the project;
(7) The manner for delegation of its powers;
(8) For entry by its officers and agents into any
unit when necessary in connection with the
maintenance or construction for which such
body is responsible;
(9) For a power of attorney to the management
body to sell the entire project for the benefit of
all of the owners thereof when partition of the
project may be authorized under Section 8 of
this Act, which said power shall be binding
upon all of the condominium owners regardless
of whether they assume the obligations of the
restrictions or not.
(b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less
than a majority in interest of the owners is
obtained.
(c) For independent audit of the accounts of the
management body;
(d) For reasonable assessments to meet
authorized expenditures, each condominium
unit to be assessed separately for its share of
such expenses in proportion (unless otherwise
provided) to its owners fractional interest in
any common areas;
(e) For the subordination of the liens securing
such assessments to other liens either
generally or specifically described;
(f) For conditions, other than those provided for in
Sections eight and thirteen of this Act, upon
which partition of the project and dissolution of
the condominium corporation may be made.
Such right to partition or dissolution may be
conditioned upon failure of the condominium
owners to rebuild within a certain period or
upon specified inadequacy of insurance
proceeds, or upon specified percentage of
damage to the building, or upon a decision of
 an arbitrator, or upon any other reasonable
condition.
What is the effect if the common areas in a
condominium project are held by a
condominium corporation?
Under Sec. 10 of the law, whenever the
common areas in a condominium project are
held by a condominium corporation, such
corporation shall constitute the management
body of the project. The corporate purposes of
such a corporation shall be limited to the
holding of the common areas, either in
ownership or any other interest in real
property recognized by law, to the
management of the project, and to such other
purposes as may be necessary, incidental or
convenient to the accomplishment of said
purposes. The articles of incorporation or by-
laws of the corporation shall not contain any
provision contrary to or inconsistent with the
provisions of the Act, the enabling or master
deed, or the declaration of restrictions of the
project.
Is membership in a condominium project
transferrable?
Membership in a condominium corporation,
regardless of whether it is a stock or non-stock
corporation, shall not be transferable
separately from the condominium unit of which
it is an appurtenance. When a member or
stockholder ceases to own a unit in the project
in which the condominium corporation owns or
holds the common areas, he shall
automatically cease to be a member or
stockholder of the condominium corporation.
What is the term of the condominium
corporation?
Per Sec. 11 of the law, the term of a
condominium corporation shall be co-terminus
with the duration of the condominium project,
the provisions of the Corporation Law to the
contrary notwithstanding.
What happens to the common areas in the
event of an involuntary dissolution?
Per Sec. 12 of the law, in case of involuntary
dissolution of a condominium corporation for
any of the causes provided by law, the
common areas owned or held by the
corporation shall, by way of liquidation, be
transferred pro-indiviso and in proportion to
their interest in the corporation to the
members or stockholders thereof, subject to
the superior rights of the corporation creditors.
Such transfer or conveyance shall be deemed
to be a full liquidation of the interest of such
members or stockholders in the corporation.
After such transfer or conveyance, the
provisions of the Act governing undivided co-
ownership of, or undivided interest in, the
common areas in condominium projects shall
fully apply.
While the enabling or master deed is not yet
revoked, can the condominium corporation be
voluntarily dissolved?
Under Sec. 13 of the law, until the enabling or
the master deed of the project, in which the
condominium corporation owns or holds the
common area, is revoked, the corporation shall
not be voluntarily dissolved through an action
for dissolution under Rule 104 of the Rules of
Court except upon a showing:
(a) That three years after damage or destruction
to the project in which the corporation owns or
holds the common areas, which damage or
destruction renders a material part thereof
unfit for its use prior thereto, the project has
not been rebuilt or repaired substantially to its
state prior to its damage or destruction; or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein
untenantable and that more than thirty percent
of the members of the corporation, if non-
stock, or the shareholders representing more
than thirty percent of the capital stock entitled
to vote, if a stock corporation, are opposed to
the repair or reconstruction of the project, or
(c) That the project has been in existence in
excess of fifty years, that it is obsolete and
uneconomical, and that more than fifty percent
of the members of the corporation, if non-
stock, or the stockholders representing more
than fifty percent of the capital stock entitled
to vote, if a stock corporation, are opposed to
the repair or restoration or remodeling or
modernizing of the project; or
(d) That the project or a material part thereof has
been condemned or expropriated and that the
project is no longer viable, or that the
members holding in aggregate more than
seventy percent interest in the corporation, if
non-stock, or the stockholders representing
more than seventy percent of the capital stock
entitled to vote, if a stock corporation, are
opposed to the continuation of the
condominium regime after expropriation or
condemnation of a material portion thereof; or
(e) That the conditions for such a dissolution set
forth in the declaration of restrictions of the
project in which the corporation owns of holds
the common areas, have been met.
Under what other circumstance may a
condominium corporation be dissolved?
 Under Sec. 14 of the law, the condominium
corporation may also be dissolved by the
affirmative vote of all the stockholders or
members thereof at a general or special
meeting duly called for the purpose: Provided,
That all the requirements of Section 62 of the
Corporation Law are complied with.
May the condominium corporation sell or
dispose of the members’ separate interests?
Under Sec. 15 of the law, unless otherwise
provided for in the declaration of restrictions
upon voluntary dissolution of a condominium
corporation in accordance with the provisions
of Sections thirteen and fourteen of the Act,
the corporation shall be deemed to hold a
power of attorney from all the members or
stockholders to sell and dispose of their
separate interests in the project and liquidation
of the corporation shall be effected by a sale of
the entire project as if the corporation owned
the whole thereof, subject to the rights of the
corporate and of individual condominium
creditors.
◘ The buyer of a unit in a condominium acquires
ownership over the unit only after he has paid in
full its purchase price. The ownership of a
condominium unit is the “separate interest” of the
owner which makes him automatically a
shareholder in the condominium. (Condominium
Corp. vs. Campos, Jr., 104 SCRA 295).
◘ The act of a subdivision developer of mortgaging
the subdivision without notifying an installment
buyer is voilative of PD 957. Said case falls under
the exclusive jurisdiction of the HLURB (Union
Bank vs. HLURB, 210 SCRA 558)
◘ A co-owner is an owner of the whole and over
the whole, he exercises the right of dominion, but
he is, at the same time, the owner of a portion
which is truly abstract. (De Guia vs. CA GR
120864, October 8, 2003)
◘ In co-ownership, sale by one of the co-owners
pertains to his share only. (Coronel vs. CA GR
121069, February 7, 2003)

Can a condominium corporation dispose the

common areas? Term of the Condominium Corporation –
Under Sec. 16 of the law, a condominium coterminous with the duration of the subdivision
corporation shall not, during its  existence, sell, projects, the provision of the corporation law to
exchange, lease or otherwise dispose of the  the contrary notwithstanding.
common areas owned or held by it in the
condominium project  unless authorized by the
affirmative vote of a simple majority  of the
registered owners: Provided, That prior
notifications to  all registered owners are done:
and, Provided, further, That the condominium
corporation may expand or integrate the
project  with another upon the affirmative vote
of a simple majority of the registered owners,
subject only to the final approval of the 
Housing and Land Use Regulatory Board.
(amended by RA 7899, (1955)) SOME SPECIAL
PROPERTIES
 Any transfer or conveyance of a unit or an
apartment, office or store or other space
therein, shall include transfer or conveyance of
the undivided interest in the common areas or,
in proper case, the membership or share 1. WATERS
holdings in the condominium corporation;
Provided, however, that where the common
areas in the common project are held by the Use of Public Waters
owners of separate units as co-owners thereof,
no condominium unit therein shall be conveyed Is acquired by :
or transferred to persons other than Filipino
citizens or corporations at least 60% of which
belong to Filipino citizens, except in cases of A. Administrative concession
hereditary succession.
 - Governed by Irrigation Law as C. Right of accretion
amended by Act 3523.

- The application is made to the

Secretary of Public Works and GOVERNING LAWS
Communications thru the Director of
Public Works.

A. Spanish law of waters of Aug. 3, 1866

B. Prescription for 10 years B. Irrigation law (amended by Act 3523)

- The manner and form of using the C. Civil code

waters

SUBTERRANEAN WATERS

ORDER OF OBTAINING CONCESSION Classes of Subterranean waters:

A. The FIRST TO APPROPRIATE is given a A. Flowing water - more or less permanent;

better right to ask for concession.
B. When the claimants appropriated AT THE
SAME TIME, then preference is in
accordance w/ the USE INTENDED, in this
order:
definite course
B. Percolating water – no definite course or
channel; ex. Rain water seeping thru the
soil.

P.D 1067
- A decree instituting a water code, thereby
- Domestic use (drinking, cooking) revising and consolidating the laws governing the
- Agricultural use or power development ownership, appropriation, exploitation,
for agricultural purposes development, conservation and protection of water
resources.
- Industrial uses

- Fishponds OWNERSHIP OF WATERS

(P.D 1067)
- Mining uses or milling connected w/
What belongs to the state
milling purposes

a. Rivers and their natural beds

b. Continuous or intermittent waters of
EXTINGUISHMENT OF THE RIGHT TO MAKE
springs and brooks
USE OF PUBLIC WATERS
c. Natural lakes and lagoons
A. Non user for 5 years
B. Lapse of the concession d. All other categories of surface waters, such
as:

- Water flowing over lands

Art. 507 Use of waters of private ownership - Water from rainfall either artificial or
natural
RIPARIAN RIGHTS
- Water from agricultural runoff, seepage
A. Right to the natural flow of the waters and drainage
B. Right of access to and use of the waters
 e. Atmospheric water Duration of Marks

f. Subterranean or ground water - A certificate of registration shall remain in

force for 10 YEARS.
g. Seawater

REMEDIES IN CASE OF INFRINGEMENT

Waters found on PRIVATE LANDS which
belongs to the State

A. Injunction
B. Seizure and destruction of all necessary
a. Continuous or intermittent waters rising on
paraphernalia
such lands
b. Lakes and lagoons naturally occurring on C. Damages, which consist of
such lands

c. Rain water falling on such lands (i) Reasonable profit the complainant
would have made
d. Subterranean or ground waters
(ii) Actual profit which inringer made
e. Waters in swamps and marshes

GROUNDS FOR CANCELLATION OF THE

REGISTRATION

2. MINERALS A. Abandonment
B. Registration is fraudulent or illegal

- Inortanic elements or substances found in C. Registered name is used to MISREPRESENT

nature whether in gaseous, liquid or solidified the source of the goods
stage. EXCLUDED are the SOIL, ORDINARY
EARTH, SAND, STONE and GRAVEL D. The name has become GENERIC or
common descriptive name

GOODWILL (Art. 521 – 522)

- Is the advantage acquired by any product

3. TRADEMARKS AND or firm because of general encouragement
and patronage of the public.
TRADE NAMES
Trademark – name or symbol of goods made or ELEMENTS OF GOODWILL
manufactured. Ex. Mc Gregor

Trade name – name or symbol of store, business A. Place

or occupation. Ex. Calvein Klein B. Name

Service mark – name or symbol of service C. Reputation

rendered. Ex. Metropolitan Express Company, Inc.
 WHAT GOVERNS THE TRADEMARKS AND
TRADENAMES?
- It is governed by Special Laws known
as Intellectual Property Code of the
Philippines (R.A. 8293)
 POSSESSION
The holding of a thing or the enjoyment of a right
(Art. 523) either by material occupation or by the
fact of subjecting the thing or right to the action of
our will.
ESSENTIAL REQUISITES OF POSSESSION
(1) Holding or control of a thing or right
(corpus) consists of either:
(a) the material or physical possession
(b) subject action of our will - exercise
of a right
(c) constructive possession
DOCTRINE OF CONSTRUCTIVE
POSSESSION
- applies when the possession is under
title calling for the whole, i.e.,
possession of a part is possession of
the whole.
-Constructive possession
a) tradicion brevi manu (one who
possess a thing short of title of
owner – lease );
b) tradicion constitutum
possesorium (owner alienates
thing but continues to possess –
depositary, pledgee, tenant)
(2) Intention to possess (animus
possidendi)
- it is a state of mind whereby the
possessor intends to exercise and
does exercise a right of possession,
whether or not such right is legal
-intention may be inferred from the
fact that the thing in question is
under the power and control of the
possessor
- may be rebutted by contrary
Evidence
(3) Possession must be by virtue of one’s own
right.
DEGREES OF POSSESSION
1. Possession with No right or title‐ possessor
knows that his possession is wrongful,
e.g. Possession of a thief or a usurper of
land.
2. With Juridical title ‐ possession peaceably
acquired and will not ripen into full ownership
as long as there is no repudiation of the
concept under which property is held.
 e,g. Possession of a tenant, depositary, POSSESSION OCCUPATION
agent. Applies to properties Applies only to
with or without an property without an
3. With Just title or title sufficient to transfer owner owner
ownership, but not from the true owner ‐ Possession does not Occupation confers
ripens to full ownership by the lapse of time. confer ownership ownership
There can be There can be no
e,g. Possession of a buyer of a piece of possession without occupation without
land from one who pretends to be the ownership ownership
owner thereof.

4.With a title in fee Simple ‐ springs from Q: Is it possible for a person who has been
ownership; highest degree of possession. declared as the owner of a certain property
not to be entitled to its possession?

A: Yes. Possession and ownership are distinct legal

CLASSES OF POSSESSION
1. In one’s Own name – possessor claims the thing
for himself
2. Voluntary – by virtue of an agreement
3. In the name of Another – held by the possessor
for another; agent, subject to authority and
ratification; if not authorized, negotiorum
gestio
concepts. Ownership confers certain rights to the
owner among which are the right to enjoy the
thing owned and the right to exclude other persons
from possession thereof. On the other hand,
possession is defined as the holding of a thing or
the enjoyment of a right. Literally, to possess
means to actually and physically occupy a thing
with or without a right. Thus a person may be
declared an owner but not entitled to possession.
(Heirs of Roman Soriano v. CA, GR No. 128177,
August 15, 2001)

4. Legal – by virtue of law; Note: Possession is merely one of the attributes of

e.g. possession in behalf of incapacitated ownership. (Jus Possidendi)

5. In the Concept of an owner – possessor, by his SOME PRESUMPTIONS REGARDING

actions, is believed by others as the owner, POSSESSION:
whether he is in good or bad faith
a. GOOD FAITH - Good Faith is always presumed
6. In the concept of a Holder – possessor holds it (Art. 527)
merely to keep or enjoy it, the ownership b. CONTINUITY OF CHARACTER OF POSSESSION
pertaining to another; ex. usufructuary (whether in good faith or bad faith) Art. 529
c. NON-INTERRUPTION OF POSSESSION (Art.
Note: None of these holders may assert a 533)
claim of ownership for himself over the d. PRESUMPTION OF JUST TITLE – (Art. 541)
thing but they may be considered as e. NON-ITERRUPTION OF POSSESSION OF
possessors in the concept of an owner, or PROPERTY UNJUSTLY LOST BUT LEGALLY
under a claim of ownership, with respect to RECOVERED –(Art. 561)
the right they respectively exercise over f. POSSESSION DURING INTERVENING PERIOD-
the thing. (Art. 1138 [2])
g. POSSESSION OF MOVABLES WITH REAL
7. Possession in Good faith PROPERTY- (Art. 542)
h. EXCLUSIVE POSSESSION OF COMMON
8. Possession in Bad faith PROPERTY – (Art. 543)

9. Constructive possession ‐ does not mean that a

man has to have his feet on every square
meter of ground.
ACQUISITION OF
POSSESSION
Ways of Acquiring Possession
Possession vs. Occupation
 1. By Material occupation/exercise of a right
2. By Subjection of the thing/right to our will
3. By proper Acts and legal Formalities established
for acquiring such right (Art. 531, NCC)
WHEN POSSESSION IS ACQUIRED BY A
STRANGER
Where possession is acquired not by an agent or
representative but by a stranger without agency,
possession is not acquired until the act of the
agent or representative is ratified (Art. 532, NCC).
2. Acts executed clandestinely and without the
knowledge of the possessor which means that:
a. acts are not public; and
b. unknown to the owner or possessor
3. Mere Tolerance by the owner or the lawful
possessor.
4. Acts executed by Violence. (Art 537, NCC)
KIND OF POSSESSION THAT CAN SERVE AS A
TITLE FOR ACQUIRING DOMINION

DISTINCTION BETWEEN GOOD FAITH & BAD -Only the possession acquired and enjoyed in the
FAITH IN POSSESSION concept of owner. (Art. 540, NCC)

EFFECTS OF POSSESSION

Possessor in Good Faith

When he is not aware that there exists in his title
ACTS WHICH DO NOT GIVE RISE TO or mode of acquisition any flaw which invalidates
POSSESSION it. (Art. 526, NCC).

Possession through: Possession in good faith ceases from the moment

defects in his title are made known to the
1. Force or intimidation as long as there is a possessor.
possessor who objects thereto. (Art. 536,
NCC) This interruption of good faith may take place:
1. at the date of summons or
2. that of the answer if the date of summons
GOOD FAITH BAD FAITH does not appear at the date
As to fruits Entitled while Entitled while
received possession is possession is However, there is a contrary view that the date of
in good faith in good faith summons may be insufficient to convince the
possessor that his title is defective.
As to Liable to the No right to
pending lawful such pending
fruits possessor for fruits
expenses of
cultivation and
shall share in EFFECT WHEN POSSESSION CEASES TO BE IN
net harvest to GOOD FAITH
time of Possessor in bad faith is required to pay rent or in
possession case vacate the property, in both cases he is
As to required to pay damages to the lawful owner or
expenses Right of Right of possessor of the property.
(Necessary reimbursement reimbursement
expenses) and retention and retention

(Useful Right of No right of

Expenses) removal removal
RIGHTS OF A POSSESSOR:
As to No liability, Always liable
liability in unless due to for
case his fault/ deterioration
Of negligence or loss
deterioration
or loss
 2. Final judgment in favor of another
(with a better right)
WHEN FRUITS CONSIDERED RECEIVED 3. Expropriation
4. Prescription in favor of another
1. Natural and industrial fruits ‐ from the time 5. Recovery or reivindication by the
they are gathered or severed legitimate owner or possessor.
c. Because of the object
2. Civil fruits ‐ from the time of their accrual 1. Destruction or total loss of the thing
and not their actual receipt. (Art. 544, (Art.555)
NCC) 2. Going out of commerce(Art.555)
3. Escaping from possessor’s control of
EXPENSES: wil[d animals (Art.560)
1. Necessary Expenses
-They are those without which the thing
would physically deteriorate or be lost; ◘ RULES OF PREFERENCE OF
hence, those made for the preservation of
POSSESSION:
the thing.
1. Present/actual possessor shall be preferred;
2. Useful Expenses
2. Two possessors, the one longer in possession;
(Gastos Utiles)
3. If the dates of possession are the same, the one
- They are those that add value to the
with a title; and
property, or increase the object’s
4. If the above are equal, the fact of possession
productivity, or useful fr the satisfaction of
shall be judicially determined, and in the
spiritual and religious yearnings, or give
meantime, the thing shall be placed in judicial
rise to all kinds of fruits.
deposit.
3. Ornamental Expenses
- Those which add value to the thing only
for certain determinate persons in view of
their particular whims. They are neither
Cases:
essential for preservation nor useful to
everybody in general.
DBP v. CA, 316 SCRA 650
Facts:
Spouses Pineda were the owners of a parcel of
RULES APPLICABLE ON POSSESSOR’S
land which they mortgaged to DBP in consideration
LIABILITY:
of a loan. As the loan was unpaid, the mortgage
a. Possessor in GOOD FAITH
was foreclosed and DBP took possession of the
1. BEFORE the receipt of judicial
property. It was opined by the Ministry of Justice
summons – NOT LIABLE
that the subject property may not be the subject of
2. AFTER judicial summons
foreclosure proceedings. The spouses then sought
a. Loss or deterioration through
to redeem the property
fortuitous event- not liable
but was denied as the land was allegedly tenanted.
b. Through fraudulent intent or
They then sought the cancellation of the title and
negligence- liable
specific performance.
b. Possessor in BAD FAITH
HELD:
Whether before or after judicial summons,
A possessor in good faith is one who is not aware
and whether due to fortuitous event or not,
that there exists in his title or mode of acquisition
such possessor is LIABLE.
any flaw, which invalidates it and he who alleges
bad faith on the part of the possessor has the
burden of proof.
WAYS OF LOSING POSSESSION
(Art. 555)
a. Thru the possessor’s voluntary will
and intent
1. Abandonment
2. Assignment (onerous or gratuitous
conveyance)
b. Against the possessor’s will USUFRUCT
1. Possession of another for more than
one year. It is a real right by virtue of which a person is
given a right to enjoy property of another with the
obligation of preserving its form and substance RIGHTS OF ACTION AVAILABLE TO
unless the title constituting it or the law provides USUFRUCTUARY
otherwise. (the person entitled to the usufruct)
(Jus Utendi + Jus Fruendi = Usufruct) a. Action to protect the usufruct itself;
b. Action to protect the exercise of the
usufruct.

Characteristics
1. real right of use and enjoyment USUFRUCT EASEMENT
of property owned by another Includes all uses of Limited to a specific
2. of a temporary duration the property and for use.
3. transmissible all purposes, including
4. may be constituted on real or jus fruendi.
personal property, on tangibles Constituted on an Constituted on an
or intangibles immovable property. immovable property.
Extinguished by the Not extinguished by
death of the the death of the
usufructuary, unless owner of the dominant
◘ DISTINCTION BETWEEN USUFRUCT AND contrary intention estate.
LEASE appears.
1. As to nature of right - Usufruct is always a Contemplates only Contemplates two
real right, whereas lease becomes a real right one property (real or estates belonging to
only when registered; personal) whereby the two different owners.
2. As to constitution – Usufruct is constituted by usufructuary uses and
law, by the will of private persons expressed in enjoys the property as
acts inter vivos or in a last will or testament, well as its fruits, while
and by prescription; whereas lease is a rule another owns the
constituted by contract; naked title during the
3. As to the person constituting it - In period of the usufruct.
usufruct, the person constituting it is the Usufruct may be Cannot be alienated
owner, whereas in lease the person alienated separately separately from the
constituting it need not be the owner; from the property to property to which it
4. As to extent – Usufruct includes the right to which it attaches. attaches.
use and to enjoy the fruits (jus utendi and jus
fruendi) of the thing, whereas lease is more
limited; Art. 564
5. As to duration – There is no limitation to the CLASSIFICATION OF USUFRUCT ACCORDING
duration of a usufructuary right, whereas there TO QUANTITY OR EXTENT (OF FRUITS OR
is a limitation to the duration of a lease right; OBJECT)
6. As to repairs – The usufructuary is responsible a. As to fruits – total or partial
for ordinary repairs, whereas the lessee is not; b. As to object – universal (if entire
and patriomony) or singular or particular (if
7. As to taxes – The usufructuary is responsible only individual things)
for taxes on the fruits, whereas in lease, the
lessee is not.
CLASSIFICATION OF USUFRUCT AS TO THE
NUMBER OF PERSONS ENJOYING THE RIGHT
a. Simple – if only one Usufructuary
enjoys
OBJECT OF USUFRUCT b. Multiple – if several usufructuaries
a. May be real or personal property enjoy
b. May be sterile or productive (fruitful 1. Simultaneous – at the same time
things) 2. Successive – one after another
c. May be created over a right (as long as it
is not strictly personal or intransmissible,
and as long as it has an independent Classification of usufruct as to the QUALITY
existence). or KIND of OBJECTS involved
a. Usufruct over rights
 b. Usufruct over things 3. Rights to transfer usufructuary but is co-
-normal terminus with the term of usufruct. (Art. 572)
-abnormal  he may alienate (sell, donate,
bequeath, or devise) the usufructuary
RIGHT (except a legal usufruct)
 he may pledge or mortgage the
ABNORMAL USUFRUCT usufructuary right BUT he cannot
 Those where the usufructuary does not have the pledge or mortgage the thing itself
obligation of preserving the form and the because he does not own the thing.
substance of the property which is the object of
the usufruct, 4. Right to exempt from execution and can be sold
at public auction by the owner.
How Constituted:
6. Naked owner still have rights but without
prejudiced to the usufructuary; may still
1. By law exercise rights of ownership.
2. By will of private persons in act inter vivos
3. By will of private persons expressed in the last 7. Rights to fruits growing at time of usufructuary;
will and testament growing fruits at termination of usufruct
4. By prescription. belongs to owner. (Art. 567)
 Fruits pending at the beginning of the
usufruct belong to the usufructuary,
CAUCION JURATORIA with no obligation to refund the
 a sworn duly to take good care of the property of expenses of the owner
another and return same as the end of the  But, if expenses for production were
usufruct. incurred by third persons, they must
Requisites: be reimbursed
1. Proper court petition.  Fruits growing at the time of the
2. Necessity for delivery of furniture, termination of the usufruct belong to
implements or house the owner, but the usufructuary must
3. Approval of the court be reimbursed from the proceeds of
4. Sworn promise such fruits for his production expenses.

Note: This does not apply if usufructuary is 8. Right to necessary expenses from cultivation at
exempted from giving security. end of usufruct.

9. Right to enjoy accession and servitudes in its

RIGHTS OF USUFRUCTUARY
1. Rights to civil, natural, and industrial fruits of
property. (Art. 566)
 right to possess and enjoy the thing
itself, its fruits and accessions; right to
lease the thing and improve the thing
 a dividend (whether in the form of cash
or stock) is income or civil fruits and
should belong to the usufructuary and
not to the remainderman (naked
owner).
2. Rights to hidden treasure as a stranger. (Art.
566)
 not entitled as owner, but is entitled as
a finder (to one-half of the treasure, as
a rule, unless there is a contrary
agreement) if he really is the finder. If
somebody else is the finder, the
usufructuary gets nothing.
favor and all benefits inherent therein. (Art.
571)
10. Right to make use of dead trunks of fruit
bearing trees and shrubs or those uprooted or
cut by accident but obliged to plant a new one.
(Art 575).
11. Right to usufructuary of woodland. (Art. 577)
12. Right to leave dead, uprooted trees at the
disposal of owner with right to demand the
owner should clear and remove them. (Art.
576)
13. Right to oblige owner to give authority and
furnish him with proofs if usufruct is extended
to recover real property. (Art. 578)
14. Rights to necessary expenses.
15. Right to introduce useful and luxurious
expenses (Art. 579)but with no obligation of
reimbursement on the part of the owner.
 he must not alter the form or substance of
the property held in usufruct
 he is not entitled to a refund but he may
either remove the improvements if no
substantial damage to the property in
usufruct is caused (Art. 579) OR set off
(compensate) the improvements against
damages for which he may be liable (Art.
580)
16. Right to set-off improvements against
damages he made against property. (Art. 580)
 Requisites Before a Set-Off Can Be Made
a. The damage must have been caused by
the usufructuary
b. The improvements must have
augmented the value of the property
17. Right to administer when property is co-
owned. (Art. 582)
18. Right to demand the increase in value of
property if owner did not spend for
extraordinary repairs when urgent and
necessary for preservation of thing (Art. 594).
As a rule, the lease executed by the
usufructuary should terminate at the end of the
usufruct or earlier, except in the case of leases of
rural lands (Art. 572), because in said case, if the
usufruct ends earlier than the lease, it continues
for the remainder of the agricultural year.
It is not the naked owner, but the usufructuary
that has the right to choose the tenant.
 The lease agreements with no specified period
but in which rentals are paid monthly are
considered to be on a month to month basis. They
are for a definite period and expire after the last
day of any given thirty-day period, upon proper
demand and notice by the lessor to vacate. (LMR
Corp. vs. CA, 252 SCRA 335)
SALE BY THE USUFRUCTUARY
 Future crop may be sold; but such
sale will be void if not ratified by the
owner. It’s a sale of property not
belonging to the usufructuary and
those gathered at the termination of
the usufruct belonging to the owner.
 If things are consumable or were
appraised when delivered, the
usufructuary can dispose of them.
◘ RIGHTS OF THE NAKED OWNER:
1. At the beginning of the usufruct
 all obligations of the usufructuary
at the beginning of the usufruct
2. During the usufruct
 retains title to the thing and
improve it
 may alienate the property
3. At the termination or end of the
usufruct
 recover property from the
usufructuary in the same
preserved form and substance
with room for ordinary wear and
tear subject to ordinary repairs
DOUBLE SALE BY NAKED OWNER
 The naked owner is ordinarily not allowed
to sell the usufructuary to another after
having sold it first to the usufructuary; but
if he does so, Art. 1544 relating to double
sale applies. Thus, if the second buyer in
good faith registers the usufruct, he can
oust the first buyer who did not register,
even though the latter be in the
possession. The right of the first
usufructuary would be to proceed against
the naked owner for breach of the
warranty against eviction.
◘ OBLIGATIONS OF THE USUFRUCTUARY:
1. At the commencement of the usufruct:
a. Make an inventory of the property, (Art 583,
par. 1)
EXCEPT when no one will be injured thereby
(as in the case of usufruct over a periodical
pension or incorporeal right) provided the naked
owner consents, and in case of waiver by the
naked or the law or when there is a stipulation in
a will or contract
d. Give necessary security. (Art 583, par. 2)
When Security is Not Required:
1.) When no one will be injured thereby
(NO PREJUDICE) (Art. 583)
 2.) When there is waiver by the naked
owner, or there is a stipulation either
in a will or by contract
3.) When the usufructuary is the donor of
the property (who has reserved the
usufruct). (Art. 584)
4.) When there is a parental usufruct (that
is in the case of parents who are
usufructuaries of their children’s
property, except when the parents
contract a second marriage or
subsequent marriage, PROVIDED that
each child’s property does not exceed
Php 50,000 in which case the parents
have to file a bond not as usufructuary,
but as guardian or administrator
5.) When there is a caucion juratoria,
which takes the place of a bond, and is
made by taking an oath to fulfill
properly the duties of a usufructuary,
BUT this is available only under the
conditions prescribed in Art.
587(promise under oath)
2. During the pendency of the usufruct
a. Take care of the property as a good father of
the family (Art. 589)
 bad use of the thing will not extinguish the
usufruct
 owner becomes entitled to delivery and
administration of the thing should the
abuse cause substantial injury to the
owner
b. Make ordinary repairs (Art. 592)
 for the preservation
 if not repairs made by usufructuary, even
after the demand by the owner, the latter
may pay for the repairs, with right of
reimbursement from the usufructuary
c. Notify the owners in case the need of
extraordinary repairs in the property is
urgent
 Those caused by exceptional
circumstances, WON they are necessary
for the preservation of the thing
 Those caused by the natural use of the
thing, but are not necessary for its
preservation
 Naked owner obliged to undertake them
but when made by the owner, usufructuary
pays legal interest on the amount while
usufruct lasts
 Naked owner cannot be compelled to
undertake extraordinary repairs
 If indispensable and owner fails to
undertake extraordinary repairs – may be
made by the usufructuary
d. Pay annual taxes and those considered as
liens on the fruits (Art. 596);
e. Notify the owner of any act of a third person
that may be prejudicial to the right of
ownership (Art. 601); and
f. Pay the expenses, cost and liabilities in suits
with regard to the usufruct. (Art. 602)
LIABILITY OF USUFRUCTUARY FOR ACTS OF
THE SUBSTITUTE
a. Usufruct made liable for acts of
subsitute either through fault, negligence ior
deceit.
b. in sub-usufructuary, payment of
ordinary repairs shall still be given to the
naked owner by the ususfruct.
◘ Other SPECIAL Usufructs:
1. Of periodical pension, income, dividends.
(Art. 570)
2. Of woodland. (Art. 577)
3. Of right of action to recover real property,
real right, or movable property. (Art. 578)
4. Of part of property owned in common.
(Art. 582)
5. Of the entire patrimony of a person (Art.
598)
6. On a mortgaged immovable (Art. 600)
7. On a flock or herd of livestock (Art. 591)
MODES OF EXTINGUISHING USUFRUCT (Art.
603):
1. Death of the usufructuary, unless contrary
intention appears;
2. Expiration of the period or fulfillment of the
resolutory condition;
3. Merger of the usufruct and ownership in the
same person;
4. Renunciation of the usufructuary;
5. Total loss of the thing;
6. Termination of the right of the person
constituting the usufruct;
7. Prescription.
 EASEMENT OR
◘ CLASSIFICATION OF EASEMENTS:
SERVITUDES 1. As to Recipient Benefit:
a. Real – in favor of another immovable.
Section 1: Different Kinds of Easements b. Personal – in favor of community, or of one
or more persons to whom encumbered
Easements or Servitudes estate does not belong.
Encumbrance imposed upon an immovable for
benefit of another immovable belonging to a 2. As to Source:
different owner (Art. 613) a. Legal – established by law.
1) Public legal easements
■ Easement is a real right on another’s property, 2) Private legal easements
corporeal and immovable, whereby the owner of b. Voluntary – established by will of owners.
the latter must refrain from doing or allowing c. Mixed – created partly by agreement and
somebody else to do or something to be done on partly by the law
his property, for the benefit of another person or
tenement. (Quimen vs. Court of Appeals, 257 3. As to exercise:
SCRA 163) a. Continuous – use of which is or may be
incessant without intervention of acts of
Dominant Estate - in favor of which an man.
easement is established. (Art. 613, NCC) b. Discontinuous – used at intervals and
Servient Estate - that which is subject to depends upon the acts of man.
easement. (Art. 613, NCC)
4. As to Existence Indicated:
a. Apparent – made known and are continually
EASEMENT DISTINGUISHED FROM LEASE kept in view like external signs.
LEASE EASEMENT b. Non-apparent – shows no external
A real right only when it Always a real right. indication of their existence.
is registered or when
the lease (of real 5. As to Purpose:
property) exceeds one a. Positive – impose upon the owner of
year. servient estate obligation of allowing something
There is a rightful and There is rightful to be done or of doing it himself; and
limited use and limited use without b. Negative – prohibit the owner of servient
possession without ownership or estate from doing something which he could
ownership. possession. do if the easement did not exist.
May involve real or Can refer only to
personal property. immovable. 6. As to Right Given:
a. Right to partially use the servient estate
b. Right to get specific materials or objects
CHARACTERISTICS OF EASEMENT c. Right to participate in ownership
1. A real right d. Right to impede or prevent the neighboring
2. Imposable only on another’s property estate from performing a specific act of
3. It is a jus n re aliena or a real right that may be ownership.
alienated although the naked ownership is
maintained)
4. It is a limitation or encumbrance on the servient
estate f or another’s benefit INSEPARABILITY OF EASEMENTS
5. There is inherence or inseparability from the Easements are inseparable from the estate to
estate to which it belongs which they actively or passively belong. (Art. 617)
6. It is indivisible even if the tenement is divided
7. It is intransmissible unless the tenement CONSEQUENCES OF INSEPARABILITY
affected be also transmitted or alienated a. Easements cannot be sold or donated or
8. It is perpetual as long as dominant and/or mortgaged independently of the real property
servient estate exists unless sooner extinguished to which they may be attached.
by the causes enumerated in the law.
b. Registration of the dominant estate under
Torrens System without the registration of the
voluntary easements in its favor, does not
extinguish the easements; but the registration
of the servient estate without the registration
of the easements burdening it extinguishes
said voluntary easements.
INDIVISIBILITY OF EASEMENTS
Partition or division of an estate doe not divide the
easement, which continues to be complete in that
each of the dominant estates can exercise the
whole easement over each of the servient estates,
but only on the part corresponding to each of
them.
MODES OF ACQUIRING
EASEMENTS
EASEMENTS ARE ACQUIRED THROUGH:
1. If continuous and apparent
a. By title – not necessarily mean a document.
It means a juridical act or law sufficient to
create the encumbrance.
b. By prescription – requires 10 years
irrespective of the good faith or bad faith, the
presence or absence of just title on the part of
the possessor. (Art. 620)
1. If discontinuous and apparent - only by title
2. If continuous and non-apparent – only by title
3. If discontinuous and non-apparent – only by
title
 The easement of right of way cannot be
acquired by prescription because it is discontinuous
or intermittent. The limitation on the servient
owner’s right of ownership exists only when the
dominant owner actually crosses or passes over
the servient estate. Since the dominant owner
cannot be continually crossing the servient estate,
but can do so only at intervals, the easement is
necessarily of a discontinuous nature. (Ronquillo
vs. Roco, et al, L-10619, February 28, 1958)
RULES 0N EASEMENTS ACQUIRABLE BY
PRESCRIPTION
1. If the easement is POSITIVE, begin counting
the period from the day the dominant estate began
to exercise it.
2. If the easement is NEGATIVE, begin counting
from the time notarial prohibition was made on the
servient estate.
 The dominant estate, thru its owner or
usufructuary or possessor or legal
representative makes the notarial
prohibition.
PROOFS THAT MAY BE GIVEN ON THE
EXISTENCE OF THE EASEMENTS
1. By deed of recognition by the servient owner
2. Final judgment- court does not create the
easement, but merely declares its existence.
RULES ON APPARENT SIGNS OF AN
EASEMENT THAT APPARENTLY EXISTS
Sign – does not mean a placard or sign post, but
an outward indication that the easement exists.
a. Before the alienation, there is no true
easement
b. After alienation
1. There arises an easement if the sign
continues to remain there unless there
is a contrary agreement.
2. There is no easement if the sign is
removed or if ther is an agreement to
this effect.
RIGHTS AND OBLIGATONS OF THE
OWNERS OF THE DOMINANT AND
SERVIENT ESTATES
RIGHTS TO DOMINANT ESTATE
1. To exercise the easement and all necessary
rights for its use including accessory easement.
(Art.625)
2. To make on the Servient estate all works
necessary for the use and preservation of the
servitude out.
a. This must be at his own expense
b. He must notify the Servient owner
c. Select convenient time and manner
d. He must not alter the easement not render
it more burden some
3. To ask for a mandatory injunction to prevent
impairment or obstruction in the exercise of
the easement as when the owner of the
servient estate obstructs the right of way by
building a wall or fence.
4. To renounce totally the easement if he desires
exemption from contribution to expenses.

OBLIGATIONS OF THE DOMINANT ESTATE
1. He cannot alter the easement. (Art.627)
2. He cannot make it more burdensome. (Art.627)
a. Thus he cannot use the easement except for
movable originally contemplated. (Art.626)
b. In the easement of right of way, he cannot
increase the agreed width of the path, nor
deposit soil or materials outside of the
boundaries agreed upon, but he may allow
others to use the path except if the contary
has been stipulated. ( Valderrama v. North
Negros Sugar Co., 48 Phil 492)
c. If there be several dominant estates, each
must contribute to necessary repairs and
expenses in proportion to the benefits received
by each estate.
RIGHTS OF THE SERVIENT ESTATE
1. To retain ownership and possession of the
portion of his land affected by the easement
unless the contrary has been stipulated.
2. To make use of the easement, unless deprived
by stipulation and provided further that he
contributes to the expenses in proportion to
benefits received, unless there is contrary
stipulation.
3. To charge the location of a very inconvenient
easement provided that an equally convenient
substitute is made, without injury to the
dominant estate.
OBLIGATIONS OF THE SERVIENT ESTATE
1. He cannot impair the use of easement.
2. He must contribute to expenses in case he uses
the easement, unless there is a contrary
stipulation.
3. In case of impairment, to restore conditions to
the status quo at his expense plus damages.
4. To pay for the expenses incurred for the cha nge
of location or form of the easement.
MODES OF EXTINGUISHMENT OF
EASEMENTS
EASEMENTS ARE EXTINGUISHED:
1. By merger in the same person of the ownership of the
dominant and servient estates;
 Merger must be absolute, complete, not
temporary. Thus, if the owner of the servient
estate buys the whole portion affected, the
merger is complete and the easement is
extinguished. But if the portion bought is not
the portion affected, the easement naturally
remains. In Cabacungan v Corrales, L-6626,
Sept. 30, 1964), it was held that if the
dominant estate acquires only a part interest
in the servient estate, there is deemed to be
no merger.
2. By non-user for ten-years; with respect to
discontinuous easements, this period shall be
computed from the day on which they ceased to be
used; and with respect to continuous easements
from the day on which an act contrary to the same
took place;
 Non- user refers to an easement that has
once been used because one cannot
discontinue using what one has never used.
 From what time to compute
a. if discontinuous easement – from the time
it ceased to be used.
b. if a continuous easement – from the day on
which an act contrary to the same took
place.
3. When either or both of the estates fall into such
condition that the easement cannot be used; but it
shall revive if the subsequent condition of the
estates or either of them should again permit its
use, unless when the use becomes possible,
sufficient time for prescription has elapsed, in
accordance with the provisions of the preceding
number;
4. By the expiration of the term or the fulfillment
of the condition, if the easement is temporary or
conditional;
4. By the renunciation of the owner of the
dominant estate;
 Renunciation must be express, clear,
specific.
6. By the redemption agreed upon between the
owners of the dominant and servient estates.
OTHER CAUSES FOR EXTINGUISHMENT OF
EASEMENT
1. Expropriation of the servient estate
2. Permanent impossibility to make use of the
easement
3. Annulment, rescission, or cancellation of the
title that constituted the easement
4. Abandonment of the servient estate
5. Resolution of the right of the grantor to create
the easement
6. Registration of the servient estate as FREE,
that is, although the servient estate was
registered under the Torrens system, the
easement thereon was not registered, unless
there is a stipulation or actual knowledge of
the existence of the easement on the part of
the transferee
7. In the case of the legal easement of right of
way, the opening of an adequate outlet to the
highway extinguishes the easement, if the
servient owner makes a demand for such
extinguishment
PRESCRIPTION ON VOLUNTARY EASEMENTS
a. The easement may itself prescribe.
b. The form or manner of using may also prescribe
in the same manner as the easement itself.
PRESCRIPTION ON LEGAL EASEMENTS
a. Some legal easements do not prescribe,
moreover, the right to exercise them cannot
also prescribe. But the manner and form of
using them may prescribe, as in the case of
the easement of right of way.
b. But some legal easements do prescribe, as in
the case of the servitude of natural drainage.
PRESCRIPTION OF USE BY ONE CO-OWNER
OF THE DOMINANT ESTATE
The use benefits the other co-owners; hence,
there will be no prescription even with respect to
their own shares.
LEGAL EASEMENTS
THE DIFFERENT LEGAL EASEMENTS:
a. the easements relating to waters
b. right of way
c. party wall
d. light and view
e. drainage
f. intermediate distances
g. easement against nuisance
h. lateral and subjacent support
EASEMENTS RELATING TO WATERS
Duties of Servient Estate:
The owner cannot construct works that would
impede the easement, which would divert the flow,
and burden another tenement but he may regulate
or control the descent of the water.
DUTIES OF DOMINANT ESTATE:
a. He cannot make works which will increase he
burden.
b. But he may construct works preventing erosion.
c. If the descending waters are the result of
artificial development recently set up, the
owner of the lower estate shall be entitled to
compensation for his loss or damage.
EASEMENT ALONG RIPARIAN BANKS
Width of zone burdened:
a. 3 meters along the river margins, for navigation,
floatage, fishing, salvage
b. Tow path –
 2 meters – if for animals
 1 meter – if for pedetrians
EASEMENT FOR DRAWING WATER OF FOR WATERING
ANIMALS
A combined easement for drawing of water and right
way
Requisites:
a. Must be imposed for reasons of public use
b. Must be in favor of a town or village
c. The right must be sought not by one individual,
but by the town or village, thru its legal
representation
d. There must be payment of the proper indemnity
e. The right of way should have a maximum width
of 10 meters, which cannot be altered by the
owners of the servient estates although the
direction of the path may indeed be changed.
◘ EASEMENT OF AQUEDUCT
The right arising from a forced easement by virtue
of which the owner of an estate who desires to
avail himself of water for the use of said estate
may make such waters pass through the
intermediate estate with the obligation of
indemnifying the owner of the same and also the
owner of the estate to which the water may filter
or flow.
ART. 642 to 646 deal with the legal (compulsory)
easement of aqueduct.
NOTE: the existence of the easement of right of
way does not necessarily include the easement of
aqueduct.
REQUISITES TO ACQUIRE EASEMENTS:
1. Indemnity must be paid. The amount usually
depends on duration and inconvenience caused.
2. If for private interest, the easement cannot be
imposed on EXISTING buildings, courtyards,
annexes, out-houses, orchards, or gardens (but
can be on other things, like road, provided no
injury is caused to said properties.) (See Art.
644)
3. There must be proof:
 a. Dominant owner must prove that he has the
capacity to dispose of the water; (the right is
given thru prescription or administrative
concession)
b. That the water is sufficient for the intended
use; (The use must be indicated, otherwise,
it is hard to determine the sufficiency.) (4
Manresa 727). But the use may be any kind
as long as it is lawful, and may be, for
example, for irrigation, or for a fish pond.
c. That the course is most convenient, and least
onerous to the 3rd person and servient
estate;
d. that proper administrative permission be
obtained.
RULES IF GRANTOR’S OR GRANTEE’S LAND IS
ENCLOSED (ART. 653)
1. if the ENCLOSING estates is that of the grantor,
(seller, barter, or co-owner but NOT donor), the
grantee does not pay indemnity for the
easement.
2. If the ENCLOSED estate is that of the grantor
(seller, barterer, or co-owner but NOT donor),
the grantor must pay indemnity.
 Special Cause of Extinction: the opening of a public
road, or joining the dominant tenement to another
with exit on a public road.

EASEMENT OF RIGHT OF WAY FOR THE

PASSAGE OF LIVESTOCK
◘ EASEMENT OF RIGHT OF WAY Width:
The right granted to the owner of an estate which a. animal path- 75 meters
is surrounded by other estates belonging to other b. animal trail- 37 meters and 50 centimeters
persons and without an adequate outlet to a public c. cattle- 10 meters (unless prior to the OCC,
highway to demand that he be allowed a vested rights had been acquired to a
passageway throughout such neighboring estates greater width.)
after payment of proper indemnity.

Requisites:

1. The property is surrounded by estates of others.

◘ EASEMENT OF PARTY WALL or
2. There must be no adequate outlet to a public SERVIDUMBRE DE MEDIANERA
highway.  A common wall which separates 2 estates built by
3. Demandable only by the owner or one with a common agreement at the dividing line such that it
real right like usufructuary. occupies a portion of both estates on equal parts.
 It is indivisible and the part pertaining to each co-
4. Isolation must not be due to the proprietor’s
owner can be materially designated.
own act.
 Rights of a co-owner of a party wall are greater
5. Easement must be established at the point least than those of an ordinary co-owner such as with
prejudicial to the servient estate. respect to increasing the height of the wall.
6. Payment of proper indemnity.  Co-ownership must be accepted unless the
contrary appears from title showing that the entire
Proper indemnity: If the passage is permanent, wall belongs to one of the property owners or
pay the value of land occupied by the path plus unless there is an exterior sign to destroy such
damages and if temporary, pay for the damages presumption (Art. 660, NCC)
caused.
In an extrajudicial partition of land, a legal
easement of right of way was annotated in the Party Wall Co-ownership
deed of partition (the lot in whose favor the Shares of parties Shares of the co-
easement was granted had no convenient access cannot be physically owners can be divided
to highway). It is alleged that 2 signatures (of the segregated but they and separated
debtor and the co-owners) had not been obtained. can be physically physically but before
Can the annotation be ordered cancelled? Supreme identified. such division, a co-
Court held that No, in as much as the easement is owner cannot point to
a legal or compulsory one (there being no access any definite portion of
to highway), not a mere voluntary easement . its the property as
existence does not depend on the consent of the belonging to him
co-owners. (Jartol v Court of Appeals L-57641, No limitation as to use None of the co-owners
Oct. 23, 1982) of the party wall for may use the
exclusive benefit of a community property
 party for his exclusive 1. Must be total or complete (not partial);
benefit 2. Must be made voluntarily and with full
Owner may free Partial renunciation is knowledge of the facts;
himself from allowed. 3. Must be made before the expenses are
contributing to the incurred;
cost of repairs and 4. Is made with the implied condition that the
construction of a other owner should make or pay for the
party wall by repairs;
renouncing all his 5. Must be both the share in the wall and the
rights thereto share in the land, for the wall cannot be used
without the land.
PRESUMPTIONS TO EXISTENCE
1. In adjoining walls of buildings, up to common
elevation;
2. In dividing walls of gardens and yards; ◘ EASEMENT OF LIGHT AND VIEW
3. In dividing fences, walls, and live hedges of
rural tenements;
1. Easement of Light (jus luminum)- the right to
4. In ditches or drains between tenements.
admit light from the neighboring estate by virtue of
the opening of a window or the making of certain
PRESUMPTION IS REBUTTED BY:
openings
a. title to the contrary;
Requisites:
b. exterior signs to the contrary;
a. opening must not be greater than 30
c. proof to the contrary.
centimeters squared, made on the ceiling or
A title conferring (expressly) ownership in one
on the wall; and
owner prevails over a mere exterior sign (from
b. there must be an iron grating.
which, there is merely an inference).
2. Easement of View (jus prospectus) – the right
to make openings or windows, to enjoy the view
RIGHTS OF PART OWNERS:
through the estate of another and the power to
1. To make use of the wall in proportion to their
prevent all constructions or work which would
respective interests, resting buildings on it or
obstruct such view or make the same difficult. It
inserting beams up to one-half of the wall’s
necessarily includes easement of light
thickness.
2. To increase the height of the wall:
Restrictions on Openings
a. at his expense;
(When contiguous and less than the 2 meters to
b. upon payment of proper indemnity;
another’s tenement):
c. to acquire the half interest in any increase of
1. It cannot exceed 1 foot square 30 cm. each
thickness or height, paying a proportionate
side;
share in the cost of the work and of the land
2. Openings must be at height of the joists near
covered by the increase.
the ceiling; ( Choco vs. Santa Maria, 21 Phil 32)
3. The abutting owner may:
a. close the openings if the wall becomes a
party wall;
OBLIGATIONS OF EACH PART OWNER
b. block the light by building or erecting his own
1. To contribute proportionately to the repair and
wall unless a servitude is acquired by the
maintenance unless he renounces his partner
title or prescription;
ownership.
c. ask for the reduction of the opening to the
2. If one part owner raises the height of the wall,
proper size;
he must:
a. bear the cost of maintenance of the
RESTRICTION AS TO VIEWS
additions;
b. bear the increased expenses of preservation;
c. bear the cost of construction; 1. Direct Views: The distance of 2 meters
d. give additional land, if necessary, to thicken between the wall and the boundary must be
of the wall. observed.
2. Oblique views: (walls perpendicular or at an
angle to the boundary line) must not be less
REQUISITES FOR THE RENUNCIATION OF than 60 cm from the boundary line to the
SHARE: nearest edge of the window.

It is permissible to build even up to the boundary
line provided that NO regular windows are opened
(restricted windows are allowed) (Art. 669).
◘ EASEMENT OF DRAINAGE
a. A person should let rain water FALL on his own
land, and not on the adjacent land, even if he
be a co-owner of the latter.
b. Rain water must be collected, instead of just
being allowed to drift to the adjacent or lower
land.
◘ EASEMENT OF INTERMEDIATE
DISTANCES AND WORKS
1. No constructions can be built or plantings made
near fortified places or fortresses without
compliance with the conditions required in
special laws, ordinances, and regulations
relating thereto.
Reason: public safety.
2. In the construction of any aqueduct, well,
sewer, furnace, forge, chimney, etc. The
person building shall follow the distances
prescribed by the regulations (ordinances) and
customs, if there be any, otherwise take
precautions.
3. No trees shall be planted near a tenement or
piece of land belonging to another, except
when authorized by:
a. ordinances
b. customs
c. civil code
1) Tall trees – 2 meters from boundary
line to center of tree
2) Small trees or shrubs – 50 cm from
boundary line to center of tree or shrub
4. Intrusions or Extensions of Branches and Roots
a. Branches – adjacent owner has the right to
demand that they be cut off (insofar as
they spread over his property)
b. Roots – he may cut them himself (he has
acquired ownership by right of accession)
5. Fruits naturally falling upon adjacent land
belong to the owner of said land.
◘ EASEMENT AGAINST NUISANCE
Nuisance, is that which, among others, annoys or
offends the senses and it should therefore be
prohibited.
1. Dominant – the general public, or anybody
injured by the nuisance
2. Servient – the person who commits the
nuisance
◘ EASEMENT OF LATERAL AND
SUBJACENT SUPPORT
1. No proprietor shall make such excavations upon
his land as to deprive any adjacent land or
bilding of sufficient lateral or subjacent
support.
2. Any stipulation or testamentary provision
allowing excavations that cause danger to an
adjacent land or building shall be void.
3. Not only for buildings standing at the time of
excavations, but also for constructions that
may be erected.
◘ MODES OF ACQUIRING EASEMENTS:
1. By the title ;
2. by prescription of 10 years (continuous and
apparent easements);
a. Positive – counted from the time of the
opening of the window. If it is through a
party wall.
b. Negative – counted from the formal
prohibition on the servient owner
3. by deed of recognition;
4. by final judgment; and
5. by apparent sign established by the owner of
the two adjoining estates.
 NUISANCE
◘ MODES OF
EXTINGUISHMENT OF Any acts, omission, establishment, business
EASEMENTS or condition of the property or anything else which
-
1. Merger in same person of ownership of 1. injures or endangers the health and safety of
dominant and servient estate others;
Non-user 2. annoys or offends the senses
Discontinuous: 10 years from cessation 3. shocks, defies or disregards the decency or
of usage; morality;
Continuous: 10 years from day on 4. obstructs or interferes with the free passage to
which act contrary to the same took any public highway or street or any body of
place water or;
2. When anymore easement cannot be 5. hinders or impairs the use of the property
used;
3. By expiration of the term or the
fulfillment of the condition; CLASSES OF NUISANCES
4. Renunciation of owner of the dominant 1. PER SE – nuisance at all times and under all
estate; and circumstances regardless of location and
5. Redemption agreed upon. surroundings;
2. PER ACCIDENS – considered nuisance by
reason of circumstances, location, and
surroundings;
3. PUBLIC – affects the community or a
considerable number of persons.
4. PRIVATE – affects only a person or a small
OTHER CAUSES FOR EXTINGUISHMENT OF number of persons.
EASEMENT
1. Permanent impossibility to make use of the
easement.
2. annulment, rescission or cancellation of the
title that constituted the easement.
3. resolution of the right of the grantor to create
the easement (as when there is redemption of
REMEDIES AGAINST PUBLIC NUISANCE
the property sold a retro because of the
1. Prosecution under Penal Code or any local
exercise of the right of conventional
ordinance
redemption).
2. Civil Action
4. expropriation if the servient estate.
3. Abatement, without judicial proceedings.
5. registration of the servient estate as free, that
is, although the servient estate was registered
under the Torrens System, thereon was not
REMEDIES AGAINST PRIVATE NUISANCE
registered, unless there is a stipulation or
1. CIVIL ACTION
actual knowledge of the existence of the
2. Abatement, without judicial proceedings
easement on the part of the transferee.
6. in the case of legal easement of right of way,
the opening of an adequate outlet to the
DEFENSES AGAINST PRIVATE NUISANCE
highway extinguishes the easement, if the
1. Estoppel
servient owner makes a demand for such
2. Public Necessity
extinguishment.
3. Non-existence of the nuisance
7. abandonment of the servient estate
4. Impossibility of abatement

REQUISITES OF SUMMARY OF ABATEMENT OF

PRIVATE NUISANCE
 1. Must be especially injurious to the person
affected;
2. No breach of peace or unnecessary injury must
be committed;
3. Demand made;
4. Demand has been rejected;
5. Approval by the district health officer and
assistance of local police; and
6. Value the destruction does nor exceed
P3,000.00
Third Persons (those who did not participate in the
act, contract, or deed registered) shall not be
prejudiced by titles of ownership or other rights
over immovable property, which are not duly
inscribed or annotated in the Registry of Property.
NOTE: Actual knowledge by third persons of a
contract that binds the parties thereto, is
equivalent to registration.

The books in the Registry of Property shall be

DOCTRINE OF ATTRACTIVE NUISANCE public (includes even those without a pecuniary or
 A person who maintains in his premises a financial interest), except when the purpose of
dangerous instrumentally of a character which is examining the registration is:
attractive to children of tender years at play and 1. clearly unlawful
who fails to exercise due diligence to prevent such 2. arises from sheer, idle curiosity
children from playing therewith or resorting
thereto, is liable to a child who is injured thereby,
even if the child is technically a trespasser. ( Jarco
vs. Marketing vs. CA, 321 SCRA 375)

REGISTRY OF
PROPERTY

‘Register’ may refer to:

1. the act of recording or annotating
2. the book of registry
3. the office concerned DIFFERENT MODES OF
4. the official concerned
ACQUIRING
THREE SYSTEMS OF REGISTRATION:
1. Land Registration Act (Torrens System) OWNERSHIP
2. Spanish Mortgage Law
3. Sec. 194 of the Revised Administrative Code, as
amended by Act 3344. MODES OF ACQUIRING
OWNNERSHIP

PURPOSE OF REGISTRATION: 1. Occupation;

1. to give true notice of the true status of real 2. intellectual creation;
property and real rights 3. donation;
2. to prejudice third persons 4. prescription;
3. to record acts or contracts 5. law;
4. to prevent commission of frauds, thus insuring 6. testate and intestate succession;
the effectivity of real rights over real property 7. in consequence certain contacts.
NOTE: Registration is not a mode of acquiring
ownership. It is simply a means of
notification. However, some modes of
acquiring ownership cannot be binding
without the proper registration as required
by law.
1. OCCUPATION_____
-Seizure of a corporeal thing, without an owner,
with the intention to acquire ownership in
accordance with law.
REQUISITES:
1. There must be seizure of a thing;
2. The thing seized must be corporeal personal
property;
3. The thing must be susceptible of appropriation
by nature;
4. The thing must be without an owner;
5. There must be an intention to appropriate.
6. Requisites laid down by law must be complied
with (Villanueva vs. Claustro, 23 Phil. 54);
SPECIFIC INSTANCES:
1. Hunting and fishing
2. Finding of movables which do not have an
owner
3. Finding of abandoned materials
4. Finding of hidden treasure
5. Catching of swarm bees that has escaped from
its owner, under certain conditions
6. Catching of domesticated animals that have
escaped from their owners, under certain
conditions
7. Catching of pigeons without fraud or artifice
8. Transfer of fish to another breeding place
without fraud or artifice
IMPORTANT DOCTRINES/PRINCIPLES:
*A thing that has been lost or taken by force is not
ipso facto converted to res nullius for it to
belong to the person who takes possession of
the same without the necessity of proving the
mode of his acquisition and it may thus be
recovered by the original owner (See Art. 559).
Such thing cannot be acquired by prescription
even if extraordinary.
*Land cannot be the object of occupation because
when land is without an owner, it pertains to
the State (Report of Code Commission).
TRADITION / DELIVERY
■ Derivative mode of acquiring ownership and
other real rights by virtue of which they previously
existed, to that of the grantee by means of a just
title, there being both the intention to appropriate
REQUISITES:
1. Right transmitted should have previously
existed in the patrimony of the grantor;
2. Transmission should be by just title;
3. grantor and grantee should have intention and
capacity to transmit and acquire;
4. Transmission should be manifested by some
act, which is physical, symbolical or legal.
KINDS:
1. REAL TRADITION – actual delivery
2. CONSTRUCTIVE TRADITION
a. Traditio Symbolica – parties make use of
a token or symbol to represent the thing
delivered
b. Traditio Longa Manu – by mere consent
of the parties if the thing sold cannot be
transferred to the possession of the vendee
at the time of sale
c. Traditio Brevi Manu – when the vendee
already has the possession of the thing
sold not as owner but in some other
capacity
d. Traditio Constitutum Possessorium -
when the vendor continues in possession of
the thing sold not as owner but in some
other capacity
3. QUASI-TRADITION – exercise of the right of
the grantee with the consent of the grantor.
4. TRADICION POR MINISTERIO DE LA LEY –
delivery by operation of law
5. TRADITION BY PUBLIC INSTRUMENT
2. INTELLECTUAL
CREATION
Mode where the author acquires ownership over
the products of his intellect and consists,
fundamentally, in the power to authorize or refuse
the publication or production of such creations or
products (Please read the notes on Commercial
Law: Intellectual Property Rights)
The following persons acquire ownership by virtue
of intellectual creation (Art. 721):
1. The author with regard to his literary,
dramatic, historical, legal, philosophical,
scientific or other work;
2. The composer, as to his musical
composition;
3. The painter, sculptor, or other artist, with
respect to the product of his art;
 4. The scientist or technologist or any other
person with regard to his discovery or
invention.
Definition of Intellectual Property/ Intellectual
Property Rights - It refers to creations of the mind:
inventions, literary and artistic works, and symbols,
names, images and designs used in commerce.
(Source: Property by Elmer T. Rabuya)
According to the Intellectual Property Code of the
Philippines, the scope of the term “intellectual
property rights,” is as follows:
1. Copyright and related rights;
2. Trademarks and service marks;
3. Geographic indications;
4. Industrial designs;
5. Patents;
6. Layout-designs (topographies) of
integrated circuits; and
7. Protection of undisclosed information
1. Letter itself belongs to the recipient of the
letter
2. Ideas/thought/Content/Copyright of the
letter belongs to the sender. (Sec. 178, R.A.
No. 8293)
If the author’s consent is not obtained in the
publication of the contents of the letter, the author
may seek injunctive relief in the courts and the right
to recover damages.
If the public good/interest of justice requires, the
courts may authorize the publication/dissemination
of the letter.
3. DONATION
-An act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another,
who accepts it. (Ocampo vs. Ocampo, GR 150707,
April 14, 2004)

REQUISITES:
1. Donor must have capacity to make the
WHEN OWNERSHIP IS ACQUIRED donation
2. He must have donative intent (animus
donandi)
The author, the composer, the painter, the 3. There must be delivery
sculptor or other artists, the scientists and the 4. Donee must accept or consent to the
inventors acquire ownership over their works from donation
the moment of creation, even before the same are
published, copyrighted or patented. (Art. 721-722, ESSENTIAL FEATURES/ELEMENTS OF A TRUE
NCC) DONATION:
a. Consent, subject matter, cause (as in other
Being the owner thereof, the creator has contracts)
b. The necessary form (including delivery in
absolute control over his work and he may do some cases)
anything with it as he pleases, including the right to c. Consent or acceptance by donee during
share it with others. He also enjoys the exclusive donor’s lifetime
right to its publication—but this exclusive right is d. Irrevocability by the donor (except for legal
causes)
limited only to the first publication. (Santos v.
c. Intent to benefit the donee (Animus
McCullough Printing, 12 SCRA 321) donandi)
d. Consequent impoverishment of the donor
Ownership of Letters - With respect to the (diminution of his assets)
ownership of letters and other private
communications in writing, a distinction must be CLASSIFICATION of DONATIONS:
made between the material or physical object (the 1. As to their effectivity:
letter itself) and the ideas or thoughts contained in a. Donations inter vivos
the letter (its contents). (Art. 723) b. Donation morits causa
 c. Donation propter nuptias
2. As to perfection or extinguishment:
a. Pure (immediately demandable)
b. With condition
c. With term
3. As to consideration:
a. Simple - gratuitous
b. Remuneratory or compensatory –
made on account of donee’s merits
c. Modal–impose upon the donee a burden
which is less than the value of the thing
donated.
DONATIONS INTER VIVOS & MORTIS CAUSA
DISTINCTIONS AS TO FORM AND EFFECT
a) Inter Vivos
1. Must comply with the formalities of donations
required by Arts. 748 and 749 of the Code;
2. Made out of donor’s pure generosity;
3. Title conveyed to the donee before the donor’s
death;
4. Takes affect during the lifetime of the donor;
5. Cannot be revoked except for grounds provided
for by the law (Arts. 760-765);
6. In case of impairment of the legitimate
donations inter vivos are referred to donations
mortis causa;
7. The right to disposition is completely transferred
to the donee;
8. Acceptance by donee must be during lifetime of
donor;
9. Subject to donor’s tax
b) Mortis Causa
1. Takes effect upon donor’s death with
conveyance of title;
2. Made in contemplation of his death without the
intention to lose the thing or its free disposal in
case of survival;
3. Void if donor survives donee;
4. Must follow the formalities of wills or codicils
(holographic or notarial);
5. In case the legitime is impaired, donations
mortis causa (since they partake of the nature
of, or are really, legacies or devises) are
reduced ahead of donations inter vivos, the
latter being preferred;
6. The right of disposition is not transferred to the
donee while the donor is still alive;
7. Acceptance by donee mortis causa can only be
done after the donor’s death; any prior
acceptance is immaterial or void;
8. Always revocable at any time and for any reason
before the donor’s death;
9. Subject to estate tax.
FORMALITIES IN DONATIONS:
1. Formalities of movable property
a. With simultaneous delivery of property
donated:
i. if value is P5,000.00 or less – may
be made orally or in writing.
ii. if value exceeds P5,000 - shall be
made in writing; otherwise, it shall
be void.
b. Without simultaneous delivery
* Both the giving and acceptance must
be in writing, regardless of value.
2. Formalities of Immovable Property
a. must be in a public instrument,
specifying therein the property donated
and the value of the charges which the
donee must satisfy.
b. acceptance must be either:
i. in the same deed of donation; or
ii. if in a separate public instrument, the
donor shall be notified thereof in an
authentic form, and this step shall be
noted in both instruments.
Otherwise, donation is void.
Note: This shall not take effect unless
it is done during the lifetime of the
donor.
NOTE: Expression of gratitude to the
donor without express acceptance was held a
sufficient acceptance (Cuevas vs. Cuevas, G.R. No.
L-8327, December 14, 1955)
DONATIONS PROHIBITED BY LAW:
1. Made by persons guilty of adultery or
concubinage at the time of donation;
2. Made between persons found guilty of same
criminal offense, in consideration thereof;
3. Made to a public officer or his or her spouse,
descendants and ascendants, by reason of his
or her office;
4. Made to the priest who heard confession of
donor during latter’s last illness, or minister of
gospel who extended spiritual aid to him during
the same period;
5. Made to relatives of such priest or minister
within the 4th degree, the church, order, etc., to
which such priest or minister may belong;
6. Made by ward to the guardian before approval
of final accounts;
7. Made to an attesting witness of execution of
donation, if there is any, or to the spouse,
parents, or children, or anyone claiming under
them;
8. Made to a physician, surgeon, nurse, health
officer or druggist who took care of donor
during his/her last illness;
9. Made by individuals, associations and
corporations not permitted by law to make
donations; and
10. Made by spouses to each other during
marriage, or to persons of whom the other
spouse is a presumptive heir.
LIMITATIONS ON DONATION OF PROPERTY
1. Future property cannot be donated;
2. Present property that can be donated:
a. if the donor has forced heirs: he cannot
give or receive by donation more than what
he can give or receive by will
b. if the donor has no forced heirs: donation
may include all present property he
reserves in full ownership or in usufruct:
i. the amount necessary to support him and
those relatives entitled to support from
him
ii. property’s sufficient to pay the donor’s
debt contracted prior to the donation
3. Donation should not prejudice creditors;
4. Donee must reserve sufficient means for his
support and for his relatives which are entitled
to be supported by him.
EFFECTS OF DONATION
1. Donee may demand the delivery of the thing
donated.
2. Donee is subrogated to the rights of the donor
in the property.
3. In donations propter nuptias, the donor must
release the property from encumbrances,
except servitudes.
4. Donor’s warranty exists if:
a. expressed
b. donation is propter nuptias
c. donation is onerous
d. donor is in bad faith
5. When the donation is made to several donees
jointly, they are entitled to equal portions,
without accretion, unless the contrary is
stipulated.
PAYMENT OF THE DONOR’S DEBT BY THE
DONEE
1. If there is express stipulation: the donee is
to pay only debts contracted before the
donation, if not otherwise specified; but the
donee answers only up to the value of the
property donated, if no stipulation is made to
the contrary.
2. If there is no stipulation: the donee is
answerable for the debts of the donor only in
case of fraud against creditors.
REVOCATION AND REDUCTION OF
DONATIONS (Art. 760)
Every donation inter vivos, made by a person
having no children or descendants, legitimate or
legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as
provided in Art. 761, by the happening of any of
these events:
(1) If the donor, after the donation, should
have legitimate or legitimated or
illegitimate children, even though they be
posthumous;
(2) If the child of the donor, whom the latter
believed to be dead when he made the
donation, should turn out to be living;
(3) If the donor should subsequently adopt a
minor child.
WHAT THE DONEE MUST DO IF THE
DONATION IS REDUCED:
a. If the property is still with him, return the
property.
b. If the property has been sold, give the value
(usually the price of the sale) to the donor.
c. If the property has been mortgaged, the donor
may pay off the debt, but he can recover
reimbursement from the donee.
d. If the property cannot be returned (as when it
has been lost or totally destroyed), return its
value (value not at time of loss but at
perfection of donation).
GROUNDS FOR REDUCTION
a. Birth, adoption, reappearance (Art. 760)
b. Inofficiousness (Art. 771)
c. If insufficient property is left for support of
donor and his relatives (Art. 750)
d. If made in fraud of creditors (creditors at the
time of the donation) (Art. 1387)
VOID, INEFFECTIVE, OR UNPERFECTED
DONATIONS:
a. Those not perfected in accordance with the
forms and solemnities of law (particularly when
there is no proper acceptance).
b. Those made with property outside the
commerce of man.
c. Those made with future property (Art. 751)
except those provided for in marriage
settlements.
d. Those made to persons specially disqualified:
1) by reason of public policy
2) by reason of unworthiness
3) by reason of possible undue influence
* The donation shall be revoked or reduced insofar
as it exceeds the portion that he may be freely
disposed of by will, taking into account the whole
estate of the donor at the time of the birth,
appearance or adoption of a child (Art. 761).
* The action for revocation or reduction on the
grounds set forth in Article 760 shall prescribe
after four years from the birth of the first child, or
from his legitimation, recognition or adoption, or
from the judicial declaration of filiation, or from the
time information was received regarding the
existence of the child believed dead.
This action cannot be renounced, and is
transmitted upon the death of the donor, to his
legitimate and illegitimate children
descendants (Art. 763).
INOFFICIOUS DONATIONS
1. Those referred to in Articles 760 and 761 (where
the donor at the time of donation either had no
children or thought he had no more).
2. Those referred to in Art. 771-772 (where the
donor had at least one child already at the
time he made the donation).
ACTS OF INGRATITUDE (ART. 765)
1. If the donee should commit some offense
against the person, the honor or property of
the donor, or of his wife or children under his
parental authority;
2. He imputes to the donor any criminal offense,
or any act involving moral turpitude, even
though he should prove it, unless the crime or
the act has been committed against the donee
himself, his wife or children under his
authority; and
3. He unduly refuses him support when the
donee is legally or morally bound to give
support to the donor.
Query: At time of donation, the donor’s child
was already conceived but not yet born.
Should article 760 or article 771 be applied?
Answer: It depends:
1. If the donor did not know of such conception,
Article 760 applies. For all intents and purposes,
it is as if he had no child.
2. If the donor knew of such conception, then
Article 771 applies because in such a case the
non-knowledge required by the reason of the
law for article 760 will not apply.
 The prohibition in the deed of donation against the
alienation of the property for an entire century,
being an unreasonable emasculation and denial of
an integral attribute of ownership, should be
declared as an illegal or impossible condition within
the contemplation of Article 727. Such condition
shall be considered as not imposed. The net result
is that, absent said proscription, the deed of sale
supposedly constitutive of the cause of action for
the nullification of the deed of donation is not in
truth violative or the latter hence, for lack of cause
of action, the case for private respondents must
fail. (Roman Catholic Archbishop of Manila vs.
Court of Appeals 198 SCRA 300)
Since the donee becomes the owner from the time
the donation was perfected, it is only logical that
he bears the loss and the risk of deterioration or
and
depreciation.
4. PRESCRIPTION
Acquisition of ownership and other real rights
through the lapse of time in the manner and under
the conditions laid down by law
In the same way, “rights and actions are lost by
prescription” (Art. 1106, NCC)
Persons with capacity to alienate property may
renounce prescription already obtained, but not
the right to prescribe in the future. Prescription is
deemed to have been tacitly renounced when the
renunciation results from acts which imply the
abandonment of the right acquired. (Art. 1112,
NCC)
 Who May Acquire By Prescription
1. Person who is capable of acquiring property by
other legal modes
2. State
3. Minors – through guardians
Against Whom Prescription Run
1. Minors and incapacitated person who have
guardians
2. Absentees who have administrators
3. Persons living abroad who have administrators
4. Juridical persons except the state with regards
to property not patrimonial in character
5. Between husband and wife
6. Between guardian and children (during
minority/insanity)
7. Between guardian and ward (during
guardianship)
8. Between co-heirs/co-owners
9. Between owner of property and person in
possession of property in concept of holder
 All things within the commerce of man. Such as
patrimonial property and patrimonial property of
the state, are subject to prescription/
 Public domain, intransmissible rights, movables
possessed through a crime and registered land are
not subject to prescription.
◘ KINDS OF PRESCRIPTION
1) Acquisitive Prescription – one acquires
ownership and other real rights through the lapse
of time.
a. Ordinary Acquisitive Prescription – requires
possession of things in good faith and with just
title for the time fixed by law;
Requisites:
1. Possession in good faith
2. Just title
3. Within the time fixed by law (4 years for
movables and 8 years for immovables)
4. In the concept of an owner
5. It must be public, peaceful and uninterrupted
b. Extraordinary Acquisitive Prescription -
acquisition of ownership and other real rights
without need of title or of good faith or any other
condition;
Requisites:
1. Just title is proved
2. Within the time fixed by law (10 years for
movables, 30 years for immovables)
3. In the concept of an owner
4. Public, peaceful and uninterrupted
2. Extinctive prescription – rights and actions
are lost through the lapse of time.
GOOD FAITH
 Reasonable belief that a person who
transferred thing is the owner and could validly
transmit ownership (Positive Aspect, Art. 1127,
NCC)
 Ignorance of the possessor of any flaw of
acquisition (Negative Aspect, Arts. 1128, 526,
NCC)
 It must exist throughout the entire period
required for prescription
JUST TITLE
 There is just title when the adverse claimant came
into the possession of the property through one of
the modes recognized by law for the acquisition of
ownership or other real right, but the grantor was
not the owner or could not transmit any right.
Requisites:
1. It must be proved and never presumed;
2. Capacity to acquire prescription;
3. The object must be susceptible of prescription;
4. The possession must be in concept of owner,
public, peaceful, continuous, and uninterrupted;
and
5. The period of possession must be 8 years if the
object is movable or 30 years if it is immovable.
◘ INTERRUPTION OF PRESCRIPTION
1. Naturally – when through any cause, the
possession shall cease for more than one year
(Arts. 1120, 1121, NCC) if the interruption is
for only one year or less, the time elapsed
shall be counted in favor of the prescription.
(Art. 1122)
2. Civilly – when there is a judicial summons to
the possessor. (Art. 1123)
Exceptions:
a) If it should be void for lack of legal
solemnities
b) If the plaintiff should desist from the
complaint or should allow the proceedings
to lapse; and
c) If the possessor should be absolved from
the complaint
3 Express or tacit recognition by the possessor of
the owner’s right. Possession in wartime.

PYabao Notes
TABLE OF PRESCRIPTIVE
PERIODS
Prescriptive Actions
Period
Imprescriptible  To declare an inexistent or void
contract
 To quiet title
 To demand a right of way
 To demand the cutting of branches
if tolerated by invaded owner (Art.
680, NCC)
 To cut off the roots, unless notaria
prohibition is made (Art. 680, NCC;
4 Manresa 830)
 To bring an action for abatement of
public nuisance
 To demand partition in
ownership
 To enforce a trust
 Probate of a will
 To recover possession of
registered land under the land
registration act by the registered
owner
 To recover a movable possessed
thru a crime
 To declare absolute nullity of
marriage on the grounds in Arts.
35/36, FC.
 Action to claim legitimacy. (Art.
173, FC.)
 Action to obtain declaration of
illegitimate filiation. (Art. 175, FC.)
30 Years  Real actions over immovables (but
not foreclosure, not reconveyance
of real property in case of implied
or constructive trust, not those
other actions with their specific
prescriptive periods) without
prejudice to the acquisition of
ownership or real rights by
acquisitive prescription
Note: Take note of the requisites of
acquisitive prescription = Just title
within the time fixed by law; In
the concept of an owner; Public,
adverse, peaceful and
uninterrupted.
10 Years  Actions upon a written contract
(Art.1144, eg. Arts.1191, 1592 )
 Actions upon an obligation created
by law (Art. 1144)
 Actions upon a judgment from the
time judgment becomes final (Art.
1144)
 Actions among co-heirs to enforce
warranty against eviction in
partition
 Action for declaration of nullity
under Art. 36, where marriage was
celebrated before effectivity of the
FC.
 Action for recovery of possession of
immovables (accion publiciana) if
real right of possession is lost.
(Arts. 555, 1134, CC.)
 Action for recovery of ownership of
immovables (accion
reinvindicatoria) if possessor is in
good faith. (Art. 1134, CC.)
co-  Action for reconveyance of
property based on an implied or
constructive trust (Art 1144 CC in
relation to Art, 1456 CC and Sec 53
a (3) of PD 1529) – reckoned from
the date trustee repudiates the
express trust – ie., registration of
sale/issuance of the certificate of
title
Note: In the case Sps. Pascual, et
al. vs. CA, et al. GR 115925,
Aug. 15, 2003, it was held
that repudiation takes place
when the adverse party
registers the land.
Note: This is not ordinary fraud,
where the prescriptive period
for reconveyance of the titled
immovable is 4 years from
discovery of fraud, cf. Arts.
1390, 1391
 Action for damages against those
who caused fraud or were
instrumental I depriving one of his
property by fraudulent registration
– if reconveyance based on
constructive trust, if the property is
now registered by an innocent
purchaser for value, cannot be had
 Action upon a mortgage contract.
(Art. 1142, CC.)
 To demand the cutting of branches
if not tolerated by invaded owner
as when demand is made from
 date of said demand (Art. 680,
NCC)
8 Years  Action to recover movables
(repliven) if possessor is in bad
faith, without prejudice to
acquisition of title for a shorter
period or to the possessor’s title
(Arts. 559, 1505 and 1133 )
6 Years  Actions upon an oral (verbal)
contract
 Actions upon a quasi-contract
 Actions for compensation against
the Assurance Fund by the person
deprived of his land under the
Torrens system, from the time the
right to bring such action occurred
(Sec. 102, PD 1529)
NOTE: If party is minor, insane or
imprisoned, 2 years after such
disability has been removed
notwithstanding the expiration of
the original period of 6 years.
5 Years  Actions for annulment of marriages
based on
(1) lack of parental consent (Art. 47,
par. 1, FC),
(2) Fraud (par. 3);
(3) Force, intimidation or undue
influence (par. 4);
(4) Physical incapacity and afflicted
with a sexuality transmissible
disease (par. 5.) - except on the
ground of insanity - from the
occurrence of the cause
 Action for legal separation counted,
from the occurrence of the cause
(Art. 57, FC.)
 Actions against the co-heirs for
warranty of solvency the debtor in
credits assigned in partition
 Action for the declaration of the
incapacity of an heir (devisee or
legatee) to succeed (Art. 1040,
CC)
 Action to claim legitimacy if child
should die during minority or in
state of insanity. (Art. 173, FC.)
 Action for warranty of solvency of
debtor if credit is assigned to co-
heir during partition. (Art. 1095,
CC.)
 All other actions whose periods are
not fixed by law. (Art. 1149, CC. -
counted from the time the right of
action accrues
4 Years  Action to revoke donations due to
non-compliance of conditions –
counted from date of non-
compliance (Art. 764)
 Action to rescind partition of
deceased’s estate on account of
lesion
 Action for reconveyance of titled
immovable if registered by another
with the use of fraud under his
name (but without implied/
constructive trust) - from
discovery of the fraud
NOTE:
The 4-year prescriptive period
under Art. 1391 applies only if
the fraud does not give rise to an
implied trust, and the action is to
annul a voidable contract under
Art. 1390.
 Action to claim rescission of
contracts (Art. 1389 on Rescissible
Contracts under Art. 1381)
Note: Remember the different
causes; if fraud, from date of
discovery of the fraud
 Actions upon a quasi-delict
 Action to revoke or reduce
donations based on birth,
appearance or adoption of a child –
counted from the birth of the first
child, or from his legitimation,
recognition or adoption, or from
the judicial declaration of filiation,
or from the time information was
received regarding the existence of
the child believed dead. (Art. 763)
 Actions upon an injury to the rights
of the plaintiff (not arising from
contract)
 Action for repliven where possessor
is in good faith
 Action for annulment of voidable
contracts (Art.1391) – reckoned
date depends on the ground
 Right to redeem in a Conventional
Redemption, from date of contract,
if no period is agreed; but if there
is an agreement, the period should
not exceed 10 years. (Art.1606 in
relation to Art. 1601)
NOTE: Vendor may still exercise the
right to repurchase within 30 days
 from the time final judgment was
rendered in a civil action on the
basis that the contract was a true
sale with right to repurchase.
(Art.1606)
3 Years  Actions under the eight-hour labor
law
 Actions to recover losses in
gambling
 Money claims as a consequence of
employer-employee relationship
 Action to impugn legitimacy of a
child if the husband or his heirs
reside abroad (Art. 170, FC)
2 Years
 Action to impugn child's legitimacy
if husband is in the Philippines but
not in same place as wife. (Art.
170, FC.)
1 Year  Action by husband against wife to
impugn child's legitimacy if
husband is in the same place as
wife. (Art. 170, FC.)
 Action for revocation of donation
for acts of ingratitude. (Art. 769,
CC.)
 Action for forcible entry or unlawful
detainer. (Art. 1147, CC.)
 Action for defamation. (Art. 1147,
CC.)
 Action for rescission or for
damages if immovable sold is
encumbered with non-apparent
burden or servitude. (Art. 1560,
CC.)
6 Months  Action for reduction of price, or for
OBLIGATIONS AND
CONTRACTS
I. OBLIGATIONS
rescission in case of breach of sale
of real estate, either with a
statement of its area at a certain
price for a unit of measure or
number (Arts. 1543, 1539, CC), or
for a lump sum - from the delivery
of the thing sold (Arts. 1543, 1542,
CC.)
 Rescission by vendee of sale, even
if area is the same, when the
inferior value of the thing sold
exceeds 1/10 of the price agreed
upon - from delivery of the thing
sold (Arts. 1539, 1543 CC)
 Rescission of sale if the vendee
would not have bought the
immovable had he known of the
smaller area or inferior quality -
from delivery of the thing sold
(Arts. 1539, 1543, CC)
 Action for warranty against hidden
defects of thing sold - from the
delivery of the thing sold (Art.
1571, CC.)
40 Days
 Redhibitory action based on defects
of animals - from date of delivery
of animals to vendee. (Art. 1577,
CC.)
30 Days
 Vendor’s right to repurchase, from
the time final judgment was
rendered in a civil action on the
basis that the contract was a true
sale with right to repurchase. (Art.
1606, CC)
A. GENERAL PRINCIPLES
Obligation
Juridical necessity to give, to do or not to do. (Art.
1156)
SOURCES OF OBLIGATION
1. Law
Must be expressly or impliedly set forth and cannot
be presumed.
2. Contract
Must be complied with in good faith.
The law between the parties
Parties are allowed to enter into any stipulations,
provided they are not contrary to law, morals,
good customs, public order or public policy.
3. Quasi-Contract
Juridical relations resulting from a lawful, voluntary
and unilateral act, and which has for its purpose,
the payment of indemnity to the end that no one
shall be unjustly enriched r benefited at the
expense at the expense of another.
Two Kinds of Quasi-Contracts
a. Negotiorum Gestio
Unauthorized management; this takes place when
a person voluntarily takes charge of another’s
abandoned business or property without the
owner’s authority.
b. Solutio Indebiti
Undue payment; this tales place when something
is received when there is no right to demand it,
and it was unduly delivered thru mistake.
4. Delict
See appropriate provisions of the Revised Penal
Code (Art. 100 RPC).
Civil liability arising from crimes include restitution,
reparation of damage caused and indemnity for
consequential damages.
Effect Of Acquittal: if acquittal is due to
reasonable doubt, there is no civil liability. If the
acquittal is due to exempting circumstance or
there is preponderance of evidence, there is civil
liability.
◘ DELAY (MORA) – Incurred from the moment the
5. Quasi-Delict
It is a fault or act of negligence which causes
damage to another, there being no pre-existing
contractual relations between the parties.
Requisites of Obligation
1. Juridical tie (vinculum juris)
2. Active subject (obligee or creditor)
3. Passive subject (obligor or debtor)
4. Prestation (object of the obligation)
Accessory Obligations
1. Exercise due diligence/preserve the thing
2. Delivery of fruits
3. Delivery of accessories and accessions
Rights of the Creditor:
A. Determinate Obligations:
1) Specific performance and
2) Damages exclusive or in addition to the
remedy at the option of the creditor
B. Generic Obligations
1) Specific performance
2) To demand that obligation be complied
with at the expense of the debtor, and
3) Damages
Obligations of the Debtor
A. Determinate Obligations:
1) Specific performance
2) Take care of the thing with proper diligence
3) Deliver all accessions and accessories
4) Pay for damages in case of breach by
reason of delay, fraud, negligence or
contravention of the tenor thereof
B. Generic Obligations:
1) Deliver the thing which is neither of
superior nor inferior quality; and
2) Pay damages in case of breach of
obligation.
◘ BREACH OF OBLIGATIONS
1. Voluntary – debtor, in the performance of the
obligation, is guilty of:
a. default (mora)
b. fraud (dolo)
c. negligence (culpa)
d. contravention of the tenor of the obligation
Note: debtor is liable for damages
2. Involuntary – debtor is unable to comply with
his obligation because of fortuitous event
Note: debtor is not liable for damages
obligee judicially or extra-judicially demands the
fulfillment of the obligation.
General Rule: There must be a demand before
delay may be incurred.
Exceptions:
1. Time is of the essence
2. Obligation or law expressly declares
3. Demand is useless as when obligor has
rendered it beyond his power to perform
4. There is an acknowledgement of default
Classification of Delay (MORA)
1. Mora solvendi (delay of the debtor)
 Mora sovendi ex person – demand is
necessary.
 Mora sovendi ex re – demand is not
necessary.
2. Mora accepiendi (delay of the creditor)
 3. Compensatio morae (mutual delay of the
parties); has the effect of canceling the
liabilities of the parties.
Fraud (DOLO) – Must be present during the
performance of the obligation and not fraud at the
time of the birth of the obligation (CAUSAL OR
INCIDENTAL FRAUD).
Essential Characteristics of a Fortuitous Event
1. Cause is independent of the will of the debtor;
2. Impossibility of foreseeing or impossibility of
avoiding it to be foreseen even if foreseen;
3. Occurrence renders it impossible for debtor to
fulfill his obligation in a normal manner; and
4. Debtor is free from any participation in the
aggravation of the injury to the creditor.

Negligence (CULPA) – Consists in the omission of  The lessee failed to employ reasonable foresight,
that diligence which is required by the nature of diligence and care that would have exempted it
the circumstances of the persons of the time and from liability resulting from the burning of the
of the place. truck. Negligence as commonly understood, is that
conduct that naturally or reasonably creates undue
Diligence Required risk or harm to others. It may be a failure to
1. That agreed upon by the parties; observe that degree of care, precaution or
2. In the absence of stipulation, that required by vigilance that the circumstances justly demand.
law in the particular case; and (Valenzuela vs. CA, 253 SCRA 303; Quibal vs.
3. If both the contract and law are silent, Sandiganbayan, 244 SCRA 224; Citibank vs.
diligence of a good father of a family. Gatchalian, 240 SCRA 212) or to do any other act
that would be done by a prudent and reasonable
Incidental Fraud Causal Fraud person, who is guided by consideration that
(Dolo Incidente) (Dolo Causante) ordinarily regulate the conduct of human affairs.
Present during the Present during the (Layuga vs. IAC, 167 SCRA 363; Buillan vs. COA,
performance of a pre- time of birth of the 300 SCRA 445; Minder Resources Development vs.
existing obligation. obligation Morillo, GR 138123, March 2002)
Purpose is to evade Purpose is to secure
the normal fulfillment the consent of the  In order that a common carrier may be absolved
of the obligation. other to enter into a from liability where the loss, destruction or
contract. deterioration or the goods is due to a natural
Results in the non- Results in the vitiation disaster or calamity, it must further be shown that
fulfillment or breach of consent. such natural disaster or calamity was the
of the obligation. proximate and only cause of the loss (Art. 1739,
Gives rise to a right of Gives rise to a right of NCC). There must be an entire exclusion of human
the creditor to recover an innocent party to agency from the cause of the injury or the loss.
damages from the annul the contract.  Moreover, even in cases where natural disaster is
debtor. the proximate and only cause of the loss, a
common carrier is still required to exercise due
diligence to prevent or minimize loss before, during
and after the occurrence of the natural disaster, for
◘ FORTUITOUS EVENT – an event which could not it to be exempt from liability under the law for the
be foreseen, or which, though foreseen is loss of the goods (Art. 1739, NCC). If a common
inevitable. carrier fails to exercise due diligence or that
ordinary care which the occasion of a natural
General Rule: No liability in case of fortuitous disaster, it will be deemed to have been negligent
event. and the loss will not be considered as having been
Exceptions: due to a natural disaster under Article 1734
1. By contrary stipulation in the contract; (Philippine American General insurance Co. vs.
2. Declared by law; MGG Marine Services, Inc., GR 135645, Mar. 8,
E.g. Art. 552(2), 1165(3), 1268, 1942, 2147, 2002)
2148 and 2159 of the Civil Code.
3. Nature of the obligation requires assumption of
risk when expressly declared by law
4. When the obligor is in default or has promised B. KINDS OF OBLIGATION
to deliver the same thing to 2 or more persons 1) Pure and Conditional
who do not have the same interest (Art. 2) Obligation with a period
1165(3)). 3) Alternative and Facultative
4) Joint and Solidary
5) Divisible and indivisible
6) Obligation with a penal clause
◘ PURE OBLIGATION
Effectivity or extinguishment does not depend
upon the fulfillment or non-fulfillment of a
condition or upon the expiration of a term or
period.
CONDITIONAL OBLIGATION
Effectivity is subordinate to the fulfillment or non-
fulfillment of a future and uncertain fact of event.
Kinds of Conditions:
1) Suspensive – fulfillment of the condition
results in the acquisition of rights arising out of
the obligation
2) Resolutory - fulfillment of the condition
results in the extinguishments of rights arising
out of the obligation
3) Potestative - fulfillment of the condition
depends upon the will of a party to the
obligation
4) Casual – fulfillment of the condition depends
upon chance and/or upon the will of a third
person
5) Mixed – fulfillment of the condition depends
partly upon chance and/or the will of a third
person
6) Possible – condition is capable of realization
according to nature, law, public policy and
good customs
7) Impossible – condition is not capable of
realization according to nature, law, public
policy and good customs
8) Positive – condition involves the performance
of an act
9) Negative – condition is susceptible of partial
realization
10) Divisible – condition is susceptible of partial
realization
11) Indivisible – condition is not susceptible of
partial realization
12) Conjunctive – where there are several
conditions, all of which must be realized
13) Alternative – where there are several
conditions but only one must be realized.
Rule in Potestative Conditions
1. Before the fulfillment of
the condition, the right which the creditor has
already acquired by virtue of the obligation is
required by virtue of the obligation is subject
to a threat of extinction.
2. Upon fulfillment of the
condition, the parties shall return to each other
what they received including the fruits.
Loss, Deterioration and Improvement (During
the Pendency of the Condition)
1. Loss
 Without debtor’s fault – obligation is
extinguished.
 With debtor’s fault – debtor pays damages.
2. Deterioration
 Without debtor’s fault – obligation is
extinguished.
 With debtor’s fault – creditor may
choose between the rescission of the obligation
and its fulfillment with indemnity for damages
in either case.
3. Improvements
 By the thing’s nature or by time –
improvement shall inure to the benefit of the
creditor
 At the debtor’s expense – debtor shall have no
other right that that granted to a usufructuary
A Thing is Lost when it:
1. Perishes;
2. Goes out of commerce (selling children as
slaves, prohibited by law);
3. Disappears in such a way that its existence is
unknown or it cannot be recovered (cargo
sinks with ship).
Reciprocal Obligations
 Those which are created or
established at the same time, out of the same
cause, and which result in mutual relationships of
creditor & debtor between the parties
TACIT RESOLUTORY CONDITION
 If one of the parties fails to comply
with what is incumbent upon him, there is a right
on the part of the other to rescind the obligation.
Right to Rescind
General Rule: The right to rescind needs judicial
approval.
Exceptions:
1. If there is an express stipulation of automatic
rescission
2. When the debtor voluntarily retuned the thing
 ◘ OBLIGATION WITH A PERIOD
 Consequences are subjected in one ◘ ALTERNATIVE OBLIGATION –
way or another to the expiration of the period or Debtor may give the creditor wither one of several
term. prestations (to give, to do, or not to do).

When May Court Fix Term

1. Obligation does not fix a period, but from its
nature it can be inferred that a period was FACULTATIVE ALTERNATIVE
intended by the parties. OBLIGATIONS OBLIGATIONS
2. Duration of the period depends upon the will of 1. Comprehends only 1.Comprehends
the debtor. one object or several objects or
3. Debtor finds himself when his means permit prestations which is prestations which are
him to do so. due, but it may be due but may be
complied with by the complied with by the
When Debtor Losses the Right to Make Use of delivery of another delivery or
the Period object or performance performance of only
1. He becomes insolvent, unless of another prestation one of them
he gives a sufficient guaranty or security; in substitution
2. He does not furnish to the 2. Choice pertains 2. Choice may pertain
creditor the guaranties or securities he only to debtor to creditor or even
promised; third person
3. By his own act he has impaired 3. Culpable loss 3. Culpable loss of any
said guaranties or securities after their obliges the debtor to object due will give
establishment, and when through fortuitous deliver substitute rise to liability to
event they disappear, unless he gives new prestation without debtor
ones equally satisfactory; liability to debtor
4. Debtor violates any 4. Fortuitous loss 4. Fortuitous loss of
undertaking, in consideration of which the extinguishes the all prestations will
creditor agreed to the period; or obligation extinguish the
5. Debtor attempts to abscond. obligation

TERM CONDITION EFFECT OF LOSS OF OBJECT OF OBLIGATION

1. Interval of time 1. Fact or event which
which is future & is future and uncertain 1. If right of choice belongs to debtor
certain a. If through a fortuitous event – debtor cannot
2. Interval of time w/c 2. Future and be held liable for damages
must necessarily uncertain fact or b. If one or more but not all of the things are lost
come, although it may event w/c may or may or one or some but not all of the prestations
not be known when not happen cannot be performed due to the fault of the
3. Exerts an influence 3. Exerts an influence debtor, creditor cannot hold the debtor liable
upon the time of upon the very for damages because the debtor can still
demandability or existence of the comply with his obligation
extinguishment of an obligation itself
obligation 2. If right of choice belongs to the creditor
4. Does not have any 4. Has retroactive a. If one of the things is lost through a fortuitous
retroactive effect effect event, the debtor shall perform the obligation
unless there is an by delivering that which the creditor should
agreement to the choose from among the remainder, or that
contrary which remains if only 1 subsists.
5. When it is left 5. When it is left b. If the loss of 1 of the things occurs through the
exclusively to the will exclusively to the will fault of the debtor, the creditor may claim any
of the debtor, the of the debtor, the very of those subsisting, or the price of that which,
existence of the existence of the through the fault of the former, has
obligation is not obligation is affected. disappeared with a right to damages.
affected. c. If all the things are lost through the fault of the
debtor, the choice by the creditor shall fall
 upon the price of any of them, also with
indemnity for damages.
◘ JOINT AND SOLIDARY
OBLIGATIONS
Joint Obligation – Each debtor is liable only for
the appropriate part of the debt, and each creditor
is entitled only to a proportionate part of the
credit.
General Rule: Obligation is presumed joint if
there is concurrence of 2 or more creditors in the
same obligation
Exceptions:
1. Expressly stated to be
solidary
2. Law requires solidarity
3. Nature of the obligation
requires solidarity
Solidary Obligation – Each of the debtors are
liable for the entire obligations and each of the
creditors are entitled to demand the whole
obligation from any or all of the debtors.
Divisible Obligations – Those which have as
their object a prestation which is susceptible of
partial performance without the essence of
obligation changed
Indivisible Obligation – An obligation is not
susceptible of partial performance.
Reciprocal Obligation – Created or established
at the same time, out of the same cause, and
which result are mutual relationships of creditor
and debtor between partners
Joint Divisible Obligations – each creditor can
demand for the payment of his proportionate share
of the credit, while each debtor can be held liable
only for the payment of his proportionate share of
the debt.
Joint Divisible Obligations
1. If there are 2 or
more debtors, compliance with the obligation
requires the concurrence of all of them, although
each for his own share. Consequently, only
proceeding against all of the debtors can enforce
the obligation.
2. If there are 2 or
more creditors, the concurrence of the collective
acts of all the creditors, although each for his own
share is also necessary for the enforcement of the
obligation. A creditor cannot act in representation
of the others, and it is also indivisible and,
therefore, not susceptible of partial fulfillment,
Effect of Assignment by Solidary Creditor
without Consent of Others
1. Assignee is co-creditor – no violation of Art.
1213 because there can be no invasion of the
personal or confidential relationship
2. Assignee is third person – co-creditors and
debtors are not bound by the assignment.
Effect of Novation upon Solidary Obligation
1. If the Novation is prejudicial, the solidary
creditor who effected the Novation shall
reimburse the others for damages incurred by
them
2. If it is beneficial and the creditor who effected
the Novation is able to secure performance of
the obligation, such creditor shall be liable to
the others for the share which corresponds to
them, not only in the obligation, but also in the
benefits.
3. If the Novation is effected by substituting
another person in place of the debtor, the
solidary creditor who effected the Novation is
liable for the acts of the new debtor in case
there is deficiency in performance or in case
damages are incurred by the other solidary
creditors as a result of the substitution.
4. If the Novation is effected by subrogating a
third person in the rights of the solidary
creditor responsible for the Novation, the
relation between the other creditors not
substituted and the debtor or debtors is
maintained.
Effect of Compensation and Confusion upon
Solidary Obligation
1. If the confusion or compensation is partial, the
rules regarding application of payment shall
apply.
2. If the confusion or compensation is total, the
obligation is extinguished, what is left is the
ensuing liability for reimbursement within each
group:
a. The creditor causing the confusion or
compensation is obliged to reimburse the other
creditors
b. The debtors benefited by the extinguishments
of the obligation is obliged to reimburse the
debtor who made the confusion or
compensation possible
Effect of Remission upon Solidary Obligation
1) If the remission covers the entire obligation,
the obligation is totally extinguished and the
 entire juridical relation among the debtors is
extinguished all together
2) If the remission is for the benefit of one of the
debtors and it covers his entire share in the
obligation, he is completely released from the
creditors but is still bound to his co-debtors
3) If the remission is for the benefit of one of the
debtors and it covers only a part of his share in
the obligation, his character as a solidary
debtor is not affected.
Effect of Payment by Solidary Debtor
1) Whole or partial extinguishment of debt
2) Right to recover against co-debtor
3) Right to recover interest from time the
obligation becomes due
Defenses available to a Solidary Debtor
1) Defenses derived from the very nature of the
obligation
2) Defenses personal to him or pertaining to his
own share
3) Defenses personal to the others, but only as
regards that part of the debt for w/c the latter
are responsible
◘ OBLIGATION WITH A PENAL
CLAUSE
One to which an accessory undertaking is attached
for the purpose of insuring its performance by
virtue of which the obligor is bound to pay a
stipulated indemnity or perform a stipulated
prestation in case of breach.
General Rule: The penalty fixed by the parties is
a compensation or substitute for damages in case
of breach of obligation.
Exceptions: (Cases where creditor can recover
penalty plus damages)
1. Stipulation to contrary
2. Obligor is sued for the refusal to pay the
agreed penalty; and
3. Obligor is guilty of fraud.
Purpose Penalty Clause
1. To insure the performance of the obligation
2. To liquidate the amount of damages to be
awarded to the injured party in case of breach
of the principal obligation.
3. In certain exceptional cases, to punish the
obligor in case of breach of the principal
obligation
General Rule: The penalty fixed by the parties is
a compensation or substitute for damages in case
of breach.
Exceptions:
1. Stipulation to the contrary
2. Debtor is sued for refusal to pay the agreed
penalty
 The stipulated penalty
might even be deleted such as when there has
been substantial performance in good faith by the
obligor, (Article 1234, NCC), when the penalty
clause itself suffers from fatal infirmity or when
exceptional circumstances so exist as to warrant it.
(Garcia vs. CA 167 SCRA 815; Palmares vs. CA,
288 SCRA 423; Ibarra vs. Aveyro, 37 Phil. 278;
Ligutan vs. CA, et al., GR 138677, February 12,
2002)
Extraordinary Inflation
 In case extraordinary
inflation or deflation of the currency stipulated
supervene, the value of the currency at the rime of
the establishment of the obligation shall be the
basis of payment, unless there is an agreement to
the contrary. (Article 1250, NCC; Singson vs.
Caltex (Phil.), Inc., GR 137798, October 4, 2000).
 Extraordinary inflation
exists when there is a decrease or increase in the
purchasing power of the Philippine currency which
is unusual or beyond the common fluctuation in
the value of said currency and contemplation of
the parties at the time of the establishment of the
obligation (Hubonhoa vs. CA, GR 95897 and
102604, December 14, 1999; Serra vs. CA, 299
SCRA 60; Hanh vs. CA, 173 SCRA 675; Filipino
Pipe and Foundry Foundation Corporation vs.
NAWASA 161 SCRA 32)
 The effects of extraordinary
inflation are applicable only when there is an
official declaration by competent authorities
(Lantion vs. NLRC, 181 SCRA 513; Commissioner
of Public Highways vs. Burgos, 96 SCRA 831)
C. MODES OF
EXTINGUISHING AN
OBLIGATION
1. Loss of a thing due
2. Annulment
3. Rescission
4. Novation
5. Confusion or merger of rights of the
creditor and debtor
6. Compensation
7. Condonation or remission of the debt
8. Payment or performance
9. Prescription
10. Fulfillment of resolutory condition
 General Rule: If payment is made to a person
other than those enumerated, it shall not be valid.
Exceptions:
i. Payment made to a 3 rd person, provided that it
has redounded to the benefit of the creditor.
ii. Payment made to the possessor of the credit,
provided that it was made in good faith.

Obligation to Deliver a Generic Thing

 If the quality and circumstances have not been
stated, the creditor cannot demand a thing of
superior quality; neither can the debtor deliver a
thing of inferior quality.
Note: The enumeration is not exclusive.
Other modes not found in Art. 1231 are:
Rules in Monetary Obligations:
1. Death
1. Payment in Cash – must be made in the
2. Discharge in cases of insolvency
currency stipulated; if not possible, then in the
3. Discharge under Negotiable Instruments
legal tender in the Philippines
Law
2. Payment in Check or Other Negotiable
4. Fortuitous event
Instrument – not considered payment; not
5. Mutual desistance (mutuo disenso) considered legal tender and may be refused by
the creditor. It shall only produce the effect of
payment:
a. when it has been cashed or
b. when it has been impaired through the
fault of the creditor

◘ PAYMENT OR PERFORMANCE LEGAL TENDER

 Such currency which may be used for the
General Rule: Creditor is not bound to accept payment of all debts, whether private or public.
payment or performance by a third person.  Legal tender of the Philippines would be all
Exceptions: notes and coins issued by the Central Bank
1. When made by third person who has an  COINS: Section 52, RA No. 7653
interest in the fulfillment of the obligation; and 1. 25 cents and above, legal tender
2. Contrary stipulation. up to P50
2. 10 cents and below, legal tender
up to P20
Rights of a Third Person Who Paid the
Obligation of Another Special Forms of Payment
1) Application of payment
2) Dation in Payment
3) Payment by Cession
With the knowledge Without the 4) Tender of payment and Consignation
and consent of the knowledge or
debtor against the will of
debtor 1) Application of Payment
1. Recover entire Can recover only  Designation of the debt to which the payment must
amount paid. insofar as payment be applied when the debtor has several obligations
2. Subrogated to all has been beneficial to of the same kind in favor of the same creditor
the rights of the the debtor. 
creditor. Requisites:
1) One debtor and one creditor;
2) Two or more debts of the same kind;
To Whom payment must be made: 3) All debts must be due; and
1. The third person whose favor the obligation 4) Amount paid by the debtor must not be
has been constituted sufficient to cover the debts
2. His successor in interest
3. Any person authorized to receive it.
 General Rule: The right to designate the debt to the thing delivered as ceded or assigned
which the payment shall be applied primarily agreed upon, proved unless there is
belongs to the debtor. or implied from the contrary intention.
Exception: If the debtor does not avail of such conduct of the
right and he accepts from the creditor a receipt in creditor
which the application is made.

2) Dation in Payment (Dacion En Pago) 4) TENDER OF PAYMENT AND

 The property alienated by the debtor to the CONSIGNATION
creditor in satisfaction of the debt in money, as an
accepted equivalent of the performance of the Tender of Payment
obligation.  Manifestation of
Requisites: the debtor to the creditor of his decision to comply
a. Existence of a money obligation immediately with his obligation
b. Alienation to the creditor of a property by the
debtor with the consent of the former Consignation
c. Satisfaction of the money obligation of the  Deposit of the
debtor object of the obligation in a competent court in
accordance with rules prescribed by law after
 In dacion en pago, properties are alienated to the refusal or inability of the creditor to accept the
creditor in satisfaction of a debt in money. (Art. tender of payment.
1245, NCC). It is “delivery and of a thing by a  The rationale for consignation is to avoid the
debtor to the creditor as an accepted equivalent of performance of an obligation for becoming more
the performance of the obligation “It extinguishes onerous to the debtor by reason or causes not
the obligation to the extent of the value of the imputable. (Jespajo Realty Corp vs. CA et al., GR
thing delivered, either as agreed upon by the 113626, September 27, 2002)
parties or as may be proved, unless the parties by
agreement, expressed or implied, or by their Requisites:
silence, considered the thing as equivalent to the a. The debt sought to be paid must be due.
obligation, in which case the obligation is totally b. There must be a valid and unconditional tender
extinguished. (Caltex [Philippines], Inc. vs. IAC, of payment or any of the causes stated by law
215 SCRA 580) for effective consignation without previous
tender of payment exists.
3) Payment By Cession c. The consignation of the thing due must be first
 Debtor abandons all of his property for the benefit announced to the persons interested in the
of his creditors in order that from the proceeds fulfillment of the obligation.
thereof, the latter may obtain payment of their d. Consignation shall be made by depositing the
credit things due at the disposal of judicial authority.
e. The consignation having been made, the
Requisites: interested parties shall also be notified thereof.
a) Plurality of debts
b) Partial or relative insolvency of the debtor General Rule: It shall produce effects of payment
c) Acceptance of the cession by the creditors only if there is valid tender of payment.
Exceptions:
DATION IN PAYMENT BY 1. Creditor is absent or unknown or does nor
PAYMENT CESSION appear at the place of the payment.
One creditor Plurality of creditors 2. Creditor is incapacitated to receive payment at
Not necessarily in Debtor must be the time it is due;
state of financial partially or relatively 3. When 2 or more persons claim the right to
difficulty. insolvent collect;
Thing delivered is Universally of 4. When the title to the obligation has been lost.
considered as property of debtor is 5. When w/o just cause he refuses to give a
equivalent of what is ceded. receipt.
performance
Payment extinguishes Merely releases the
obligation to the debtor for net
extent of the value of proceeds of things
 ◘ LOSS OF THE THING DUE
In Determinate Obligation to Give:
General Rule: Extinguishes obligation.
Exceptions:
1. By law, or stipulation in the contract, obligor is
liable even for fortuitous event.
2. Nature of the obligation requires the
assumption of risk.
3. Due partly to the fault of the creditor.
4. Occurs after the debtor incurred delay.
5. Promised by debtor to deliver the same thing
to 2 or more persons who do not have the
same interests.
6. Debt of a certain and determinate thing
proceeds from a criminal offense.
7. When the obligation is generic.
In Generic Obligations to Give:
General Rule: Obligation is not extinguished; the
genus of the thing never perishes (genus nunquam
perit)
Exception: In case of a generic obligation whose
object is particular class or group with specific or
determinate qualities (limited generic obligation)
In Obligation to Do: Obligation is extinguish
when prestation becomes legally or physically
impossible
◘ REMISSION OR
CONDONATION
An act of pure liberality by virtue of which the
oblige, without receiving any price or
equivalent, renounces the enforcement of the
obligation, as result of which it is extinguished
in its entirety or in that part or aspect of the
same to which the remission refers.
Requisites:
1. It must be gratuitous.
2. It must be accepted by the obligor.
3. Formalities of a donation must be complied
in case of express remission.
4. Obligation must be demandable.
Kinds:
1. As to form
Express – made in acceptance with formalities
prescribed by law of donations.
Implied – not made in acceptance with
formalities of donation but deducible from
the acts of oblige/creditor.
2. As to extent
Total – when the entire obligation is
extinguished.
Partial – refers only to principal or accessory
obligation.
3. As to constitution
Inter Vivos – constituted by agreement
between obligor and oblige which partakes
the nature of donation inter vivos.
Mortis Causa – constituted by last will and
testament which partakes the nature of
donation mortis causa.
Essential Characteristics of Remission (Art.
1270)
1. Gratuitous in character.
2. Must be an act of pure liberality.
3. Creditor should not have received any price or
equivalent from the debtor as a result of his
act in removing the enforcement of obligation.
Necessity of Acceptance by Debtor
 Because in reality it is by nature a
donation.
 For a valid donation, there must be
acceptance by the debtor.
Applicability of Rules on Donations
 Governs the forms of donation if remission is
express, those governing the extent or amount
of donation; and those governing the revocation
of donation.
◘ CONFUSION OR MERGER OF
RIGHTS
Merger of the characters of the creditor and
the debtor in one and the same debtor in
one person by virtue of which the obligation
is extinguished.
 DISTINCTION BETWEEN:

Compensation Payment
Requisites: Takes place ipso jure. Takes effect by act of
the parties.
Characters of creditors and debtors must Capacity to give and Capacity to give and
be in the same person. acquire not essential. acquire is essential.
Take place in the person of either the As a rules, partial. As a rule, couple are
principal creditor or the principal debtor. indivisible.
Complete and definite.

Compensation Confusion
There must be two There is only one
persons who, in their person in whom is
Kinds: own right, are creditor merged the qualities of
1. As to cause or constitution and debtors with each creditor and debtor.
Inter Vivos – constituted by agreement of the other.
parties. Must be at least two. There is only one.
Mortis Causa – by succession.
2. As to extent or effect:
Total – if it results in the extinguishment of the Kinds of Compensation
entire obligation.
Partial – only a part is extinguished. A. As to cause:
1. Legal – take effect by operation of law from the
moment all requisites are present.
2. Voluntary – parties who are mutually creditor
and debtors agreed to compensate their
respective obligation, even though requisites
are not present.
3. Judicial – takes effect by judicial decree

◘ COMPENSATION
Extinguishment in the concurrent amount
of the obligation of those persons who are
reciprocally debtors and creditors of each
other.
Requisites:
1. Two parties, who, in their own right, are
principal creditors and principal debtors of
each other.
2. Both debts must:
a. Consists in money or of the same kind
and quality.
b. Due, liquidated and demandable.
3. No retention or controversy commenced by
3rd persons over either of the debts and
communicated in due time to the debtor.
4. Not prohibited by law.
B. As to effect:
1. Total – debts are equal in amount.
2. Partial – not equal in amount.
Right of Guarantor to Set up Compensation
 Exception for the rule that principal debtor
can only set up compensation with the creditor
for what the latter owes to him. (Art. 1279 in
relation to 1278)
 The guarantor, in case the payment of the
debt was demanded from him, may set up
compensation, not only for what such creditor
owes him, but also for what such creditor owes
the principal debtor.
 Basis: Bond of the guarantor cannot be
resorted to as long as the debtor can pay
although it may be in the abbreviated form or
compensation and also on the fact that if the
principal obligation is extinguished, the
accessory obligation of the guarantor is also
extinguished since it is subordinated thereto.

Judicial Compensation
 In reality, what is set up with the other party is
a counterclaim.
 A counterclaim must be pleaded to be
effectual; whereas compensation takes place
by mere operation of law.
 Hence, counterclaim defined by Rules of Court
is not the legal compensation contemplated by
the Code.
 Reason: The very nature of counter claim can
have no effect unless it is pleaded.
Rules in Case of Rescissible or Voidable Debts
(Art. 1284)
 Above rule is an exception to the general rule
of demandability in order that compensation
shall take place.
 Justified by the fact that rescissible or voidable
obligations are considered demandable while
the vices with which they are tainted are not
yet judicially declared.
 Consequently, if the action for rescission or
annulment is not exercised, or is renounced, or
if the debts are ratified the obligation or
obligations are susceptible of compensation.
Effect of Assignment of Rights (Art. 1285)
It is a firmly settled doctrine that the rights of an
assignee are not any greater that the rights of the
assignor, since the assignee is merely substituted
in the place of the assignor and the assignee
acquired his rights subject to the equities – i.e. the
defenses – which the debtor could have set up
against the original assignor before notice of the
assignment was given to the debtor. (Sesbreno vs.
CA and Delta Motors Corp., and Pilipinas Band, GR
89252, May 24, 1993)
Effect of Assignment of Credit to Third Person
 If the assignment of credit to third person is
made after compensation took place, it shall
have no effect since the compensation has
already been perfected.
 If the assignment is made before the
compensation took place, this would depend:
a. if the assignment was made with consent of
the debtor, he is estopped unless he reserves
his right and gave notice to the assignee;
b. if the assignment was with knowledge but
without consent of the debtor, the
compensation may be set up as to debts
maturing prior to the assignment;
c. if the assignment was without knowledge, the
compensation may be set-up on all debts prior
to his knowledge.
Compensation with Knowledge but Without
Consent of Debtor
1. If notification preceded the assignment, the
effects of the assignment are produced from
the time it is made and not from the time the
notification is given. Consequently, debtor can
set up the defense of compensation of debts
contracted prior to the assignment.
2. If made simultaneously, debtor can set up a
defense of compensation.
3. Of notification is made after the assignment
had already made, it is evident that the
assignment must have been effected without
the knowledge and consent of the debtor in
which case the provision of Article 1285 is
applicable.
Debts Not Susceptible of Compensation
1. Arising from contract of deposit.
2. Arising from contracts of commodatum
3. Claims for support due by gratuitous title.
4. Obligation arising from criminal acts.
5. Certain obligations in favor of government
Effect of Compensation
 Most fundamental: extinguishes the
obligation/debt to the extent that the amount
of one is covered by the amount of the other.
 If compensation is total because both
debts are equal, obligation totally
extinguished, since the amount of one is
entirely covered by the other.
 However, if partial, because the amounts
are different, the extinguishment would be
total with respect to the other.
◘ NOVATION
Substitution or change in the obligation by another
resulting in the extinguishment or modification
either by:
1. Changing the object or principal conditions
(Objective)
2. Substituting another in place of the debtor
(passive subjective)
3. By subrogating another person in the rights of
the creditor.
Requisites of Novation Subjective or Personal Novation – Refers to the
substitution of the person of the third person in
the rights of the creditor.
1. Previous valid obligation;
2. Agreement of the parties to the new obligation;
2. As to Form and Constitution:
3. Extinguishment of the old obligation; and Express Novation
4. Validity of the new obligation. - Declared in unequivocal terms that the old is
extinguished by a new one and is incompatible
with each other at every point.
- Takes effect only when the intention to effect a
Distinction Between Extinctive & Modificatory Novation clearly results from the terms and
Novation agreement or is shown by full discharge of the
original debtor.
Extinctive Novation Modificatory
Novation Implied or Tacit Novation
The old obligation is Old obligation subsists – When the old obligation and the new one are
terminated by the to the extent it incompatible with each other at every point.
creation of a new remains compatible - There are no express declarations that the old
obligation that takes with the amendatory obligation is extinguished by the new one.
place of the former agreement However, the old and the new obligations are
Results either by The unmodified potion incompatible on every material point such that
changing the object or of the obligation they cannot co-exist
principal conditions remains effective
(objective or real), or by In case of doubt on 3. As to Extent or Effect:
substituting the person whether the Novation Total Novation – there is absolute
of the debtor or is extinctive or extinguishment
subrogating a third modificatory, it is
person in the rights of presumed that it is Partial Novation – Merely a modification
the creditor (subjective only Modificatory.
or personal)
Novation in Case of an Obligation with a Term
or Period
 Distinction must be made by the effect of any
Requisites of Extinctive Novation subsequent change of the term or period.
 Changes that breed incompatibility must be
A previous valid obligation; essential in nature and not merely accidental.
An agreement of all parties concerned to a  Incompatibility must take place in any
new contract; essential element, otherwise a change would
The extinguishment of the old obligation; and only be Modificatory
The birth of a valid new obligation.

Novation by Substitution of Debtor:

Novation is never presumed, (Rillo vs. CA, 274
SCRA 461) and the animus novandi (intent to
novate), whether total or partial, must appear by
express agreement of the parties, or by their acts
that are too clear and unequivocal to be mistaken.
(Fortune Motors Phils. Corp vs. CA, 267 SCRA 653)
 Consists in the substitution of new debtor in
the place of the original debtor.
 It must be effected with the consent of the
creditor at the instance of either the new
debtor or the old creditor.

Two Forms of Substitution of Debtors

Kinds: First Form:

1. As to essence:
Objective or Real Novation – Refers to change Expromission Delegacion
either in the cause, object or principal Effected with the Effected with the
conditions of the obligation. consent of the creditor consent of the creditor
 at the instance of the at the instance of the 2. A third person not interested in the obligation
new debtor even old debtor with the pays with the express or tacit approval of the
without the consent or concurrence of the new debtor; or
even against the will debtor. 3. Even without debtor’s knowledge, a person
of the old debtor. interested in the fulfillment of the obligation
pays without prejudiced to the effects of
confusion as to the latter’s share.
Second Form:

Conventional Assignment of Necessity of Creditor’s Consent

Subrogation Credit or Rights Whether substitution is through expromission or
Extinguishes the The transfer of the credit delegacion, the consent of the creditor must
original obligation or rights does not always be secured.
and creates new extinguish or modify the
one. obligation. The
transferee becomes the
new creditor for the Distinction Between Payment by 3 rd Person &
same obligation. Change of Debtor
The consent of the The consent of the
debtor is necessary. debtor is not necessary. Payment by 3rd Change of debtor
(Art. 1301). Notification is enough for Person
the validity of the 1. Debtor is not 1. One debtor is
assignment (Art. 1626) necessarily released released.
Effectivity begins Effectivity begins from from debt
from the moment or the notification of the 2. Can be done w/o 2. Needs consent of
subrogation. debtor. consent of creditor creditor- express or
The defect in the old The defect in the credit implied.
obligation may be or rights is not cured by 3. There is only one 3. Two obligations:
cured such that the its mere assignment to a obligation One is extinguished
new obligation third person. and new one created.
becomes valid. 4. Third person has no 4. New debtor is
Debtor cannot set up The debtor can still set obligation to pay if obliged to pay
a defense against up a defense (available insolvent
the new creditor against the old creditor)
which he could have against the old creditor.
availed himself of Effect upon Accessory Obligation
against the old  General Rule: It is a necessary
creditor. consequence of the principle that an accessory
This is governed by This is governed by obligation is dependent upon the principal
Articles 1300-1304 Articles 1624-1627 obligation to which it is subordinated.
 Exception: When stipulation refers
to a third person, which is demanded
Subrogation separately from the principal obligation,
 It is the transfer of all the rights of the although subordinated to the latter.
creditor to a third person, who substitutes him in
all his rights. It may either be legal or
conventional. Legal subrogation is that which takes Two Forms of Subrogating a Third Person in
place without agreement but be operation of law the Rights of the Creditor:
because of certain acts. Conventional subrogation 1. Conventional Subrogation – takes place
is that which takes place by agreement of parties. upon agreement of the original creditor, debtor
and the third person subrogating the original
creditor.
General Rule: Subrogation cannot be presumed. 2. Legal Subrogation – takes place by operation
Exceptions: of law
1. Creditor pays another creditor who is
preferred, without debtor’s knowledge;
Effect of Total Subrogation
 Accessory obligations are not
extinguished because in such obligation the
person subrogated also acquires all the rights
which the original creditor had.
Effect of Partial Subrogation
 Both rights shall co-exist
II. CONTRACTS
Definition of Contract
Contract is a meeting of minds between two
persons whereby one binds himself, with respect to
the other, to give something or to render some
service. (Art. 13050)
A. ELEMENTS OF CONTRACTS
1. Essential Elements – those without which
there can be no contract.
a. Consent
b. Object
c. Consideration
In Real Contracts, DELIVERY is also an Essential
Element.
2. Natural Elements – Those derived from the
nature of the contract and ordinarily accompany
the same. They are presumed to exist unless the
contrary has been stipulated.
3. Accidental Elements – those which exist only
when the parties expressly provide for them for
the purpose of limiting or modifying the normal
effects of the contract.
◘ CONSENT
Manifested by the meeting of the offer and
Requisites:upon the thing and the cause
acceptance
which are to constitute the contract.
Legal capacity of the contracting parties;
Manifestation of the conformity of the
contracting parties;
The parties’ conformity to the object,
cause, and the terms and conditions of
the contract must be intelligent,
spontaneous and free from all vices of
consent;
The said conformity must be real, and
not simulated or fictitious.
Offer – a proposal made by one contracting party
to another to enter into a contract. Offer must be
definite.
Acceptance – manifestation by the offeree of his
assent to the terms of the offer. Acceptance must
be absolute; otherwise it is a counter-offer.
Withdrawal of Offer/Withdrawal of
Acceptance:
1. Offer may be withdrawn so long as the offeror
has no knowledge of acceptance by the
offeree.
2. Acceptance may be revoked before it comes to
the knowledge of the offeror.
Cognition Theory – Contract is perfected from
the moment the acceptance comes to the
knowledge of the offeror.
General Rule: Contracts, being consensual in
nature (except real contracts), are perfected from
the moment there is a manifestation of
concurrence between the offer and the acceptance
regarding the object and the cause.
Exception: Acceptance by letter or telegram,
which does not bind the offeror except from the
time it came to his knowledge.
◘ CHARACTERISTICS OF CONTRACTS
1. Autonomy – The parties are free to stipulate
anything they deem convenient provided that
they are not contrary to law, morals, good
customs, public order and public policy. (Art.
1306, NCC)
2. Mutuality – The contract must bind both
parties; its validity or compliance must not be
left to the will of one of them. (Art. 1308, NCC)
3. Obligatoriness – Contracts are perfected by
mere consent and from the moment, the
 parties are bound not only to the fulfillment of
what has been expressly stipulated but also to
all consequences which, according to their
nature may be in keeping with good faith,
usage and law. (Art. 1315, NCC)
4. Relativity – Contracts take effect only between
parties, their assigns and heirs. (Art. 1311,
NCC)

RELATIVITY OF CONTRACTS

General Rule : A contract is valid only between

parties, assigns, and heirs. (Art. 1311, NCC) Requisites if Mistake of Law:

Exceptions: A. Mistake must be with respect to the legal

1. Stipulation Puor Atrui – stipulation in favor of a effect of an agreement.
third party. B. Mistake must be mutual.
Requisites: C. The real purpose of the parties must have
a) Stipulation must be in part, not the whole been frustrated.
contract itself.
b) Contracting parties must have clearly and
deliberately conferred a favor upon a third
person.
c) Third person must have communicated his
acceptance.
d) Neither of the parties bears the legal
representation of the third person.

 Test of Beneficial Stipulation – The fairest test to

determine whether the interest of a 3 rd person in a
contract is a stipulation pour atrui or merely an
incidental interest it to rely upon the intention of
the parties as disclosed by their contract.
Determine whether the contracting parties desired
to tender him such an interest (Uy Tam vs.
Leonard, 30 Phil. 471).

2. When a third person induces a party to violate

contract (Art. 1314, NCC)
Requisites:
a. Existence of a valid contract.
b. Knowledge of contract by third person.
c. Interference by third person without
justification.
d. Third persons who come into possession of
the object of the contract creating real
rights.
e. Contracts
VICES entered into in fraud of creditors.
OF CONSENT
1. Mistake – it should refer to the
substance of the thing which is the
object of the contract or to the
conditions which principally mo ved the
parties to enter into the contract.
General Rule: Mistake should be a
Mistake of Fact and not Mistake of
Law.
Exception: Mistake of Law under Art.
1334
2. 2. Intimidation – when one of the
contracting parties is compelled by a
reasonable and well-grounded fear of an
imminent and grave evil upon his person
or property, or upon the person or
property of his spouse, descendants, or
ascendants, to give his consent.
3. 3. Violence – when, in order to wrest
consent, serious or irresistible force is
employed.
4. 4. Undue Influence – when a
person takes improper advantage of his
power over the will of another depriving
the latter of a reasonable freedom of
choice.
5. 5. Fraud – when, through insidious
words or machinations of one of the
contracting parties, the other is induced
to enter into a contract which without
them, he would not have agreed to.

Reluctant Consent – A contract is valid even
though one of the parties entered into it against
his wishes and desires or even against his better
judgment. Contracts are also valid even though
they are entered into by one of the parties without
hope of advantage or profit. (Martinez vs. Hong
Kong and Shanghai Bank, 15 Phil 252)
SIMULATION OF CONTRACTS
1. Absolute simulation – no real transaction is
intended.
Effect: Simulated contract is inexistent.
2. Relative simulation – the real contract is
void but the hidden contract is valid if it is
lawful and has the necessary requisites.
Effect as to third persons with notice: The
apparent contract is valid on the principle of
estoppel.
 OBJECT
 The thing, rights, or service which is the subject
matter of the obligation arising from the contract.
Requisites:
1. The object must be within the commerce of
man.
2. The object should be real or possible.
3. The object should be licit (not contrary to law
morals, good customs, public order and public
policy)
4. The object should be determinate.
Things Which Cannot be the Object of
Contract
1. Things which are outside the commerce of
man.
2. Intransmissible rights.
3. Future inheritance, except in cases expressly
authorized by law
4. Services which are contrary to law, morals,
good custom, public order or public policy.
5. Impossible things or services.
6. Objects which are not possible or
determination as to their kind.
 CAUSE
 It is the immediate, direct or most
proximate reason which explains and justifies the
creation of an obligation through the will of the
contracting parties.
Requisites:
1. The cause should be in existence at the time of
the celebration of the contract.
2. The cause should be licit, or lawful.
3. The cause should be true.
Effects of Absence, Falsity, Illegality or
Inadequacy of Cause
1. Absence of cause – there is no perfected
contract; thus, it produces no effect
whatsoever. (Art. 135, NCC)
2. Falsity of cause – the contract is void. (Art.
1353, NCC)
3. Illegality of cause – the contract is void.
(Art. 1353, NCC)
4. Inadequacy of cause – it shall not invalidate
a contract, unless there has been fraud,
mistake or undue influence (Art. 1353, NCC)
Different Kinds of Causes:
1. In onerous contracts – the prestation or
promise of a thing or service by the other.
2. In remuneratory contracts – the service of
benefit remunerated.
3. In gratuitous contracts – pure beneficiary or
liberality of the benefactor.
4. In accessory contracts – the cause if the
accessory contract is identical with that of the
principal contract.
B. FORMS OF CONTRACTS
General Rule: Contracts should be obligatory, in
whatever form they may have been entered into,
provided all the essential requisites for their
validity are present.
Exceptions:
1. When law requires that a contract be in some
form in order that it may be valid.
2. When the law requires that a contract be in
some form in order that it may be enforceable.
3. For the convenience of the parties or to bind
third persons.
Contracts Where Form is Required for
Validity:
1. Donation of MOVABLE property, the value of
which exceeds P5,000.00. Donation and
acceptance must be in writing. (Art. 748)
2. Donation of IMMOVABLE property. Donation
and acceptance must be contained in a public
instrument (Art. 749)
3. Sale of land through an AGENT. The authority
must be in writing; otherwise the sale is void.
(Art. 174)
4. Partnerships where IMMOVABLE property or
real rights are contributed to the common
fund, the contract must appear in public
instrument and there must be inventory of the
immovable property or real rights signed by
the partners, and attached to the public
instrument. (Art. 1771; Art. 1773, NNC)
 The contracting parties may
compel each other to observe the form
required by law once the contract is valid and
enforceable. (Art. 1357)
 The required formality of contracts
under Article 1358 is merely for convenience of
the parties and to ensure the efficacy of the
contract, and does not affect its validity and
enforceability between them.
C. REFORMATION OF INSTRUMENTS
Reformation is that remedy in equity by
means of which the instrument is amended to
conform to the real intention of the parties.
Requisites:
1. Meeting of the minds to the contract.
2. True intention is not expressed in the
instrument by reason of mistake, accident,
relative simulation, fraud, or inequitable
conduct (FIRMA)
3. Clear and convincing proof of mistake, accident,
relative simulation, fraud, or inequitable
conduct
Instances When There Can Be No
Reformation:
1. Simple, unconditional donations inter vivos;
2. Wills;
3. When the agreement is void;
4. When one of the contracting parties has
brought an action to enforce the instrument.
 The remedy of reformation if an instrument is
grounded on the principle of equity where, in order
to express the true intention of the contracting
parties, an instrument already executed is allowed
by law to be reformed. The right of reformation is
necessarily exercised with great caution and
zealous care. Moreover, the reformation of an
instrument must be brought within the period
prescribed by law; otherwise it will be barred by
the mere lapse of time. (Benir and Gormida vs.
Judge Leanda and Leyte Gulf Traders, Inc. GR
128991, April 12, 2000.
D. RESCISSIBLE CONTRACTS
A rescissible contract is one which is valid
because it contains all of the essential
requisites prescribed by law, but which is
defective because of contracting parties or to
third persons, as a consequence of which it
may be rescinded by means of proper action
for rescission.
Rescission – a remedy granted by law to the
contracting parties and even to third persons, to
secure the reparation of damages caused to them
by a contract, even if the same should be valid, by
means of restoration of things to their condition
prior to the celebration of the contract.
What Contracts are Rescissible
1. Those entered into by guardians where the
ward suffers lesion of more than ¼ of the
value of the things which are objects thereof;
2. Those agreed upon in representations of
absentees, of the latter suffer lesion by more
than ¼ of the value of the things which are
subject thereof;
3. Those undertaken in fraud of creditors when
the latter cannot in any manner claim what are
due to 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 and the court.
5. All other contracts especially declared by law
to be subject to rescission; and
6. Payments made in a state of insolvency on
account of obligations not yet enforceable.
Requisites of Rescissible Contracts:
1. Must be rescissible;
2. No other means to obtain reparation for the
damages suffered by party asking for
rescission;
3. Persons demanding rescission must be able to
return whatever he may be obliged to restore
is rescission is granted;
4. Object of the contract must not have passed
legally to the possession of a third person
acting in good faith;
5. Action must be brought within the prescriptive
period of 4 years.
 It is the legal possibility of bringing the
action, which determines the starting point
for the computation of the four-year
prescriptive period as provided in the law.
(Khe Hong Cheng v. CA GR 144169, March
28, 2001)
cancel the contract. reparation for the
damage or injury
caused, thus allowing
partial rescission of
the contract.
 Under Art. 1191 of the Civil Code, the right to
resolve reciprocal obligations is deemed implied in
case one of the obligors shall fail to comply with
what is incumbent upon him but right mist me
invoked judicially. The same article also provides
“The court shall decree the resolution demanded,
unless there should be ground which justify the
allowance of a terms, for the performance of the
obligation. (Escueta vs. Pando, 76 Phil 256)
 Consequently, even if the right to rescind is
made available to the injured party (Mateos vs.
Lopez, 6 Phil. 206; Bosque vs. Chipco, 14 Phil 95),
the obligation is not ipso facto erased by the failure
of the other party to comply with what is
incumbent upon him. The party entitled to rescind
should apply to the court for a decree of rescission
(De Larena v. Villanueva 53 Phil 923).
The right cannot be exercised solely on the party’s
own judgment that the other committed a breach
of obligation (Tan vs. CA, 175 SCRA 656).
The operative act which produces the resolution of
the contract is the decree of the court and not the
mere act of the vendor (Ocejo, Perez and Co. vs.
International Bank, 37 Phil 631).

Since a judicial or notarial act is required by law

Rescission in Article Rescission in Article for a valid rescission to take place, the letter
1191 1381 written by respondent declaring his intention to
1. It is principal action 1. It is subsidiary rescind did not operate to validly rescind the
retaliatory in remedy. contract (Iringan vs. CA, et al. GR 129107, Sept.
character. 26, 2001).
2. The only ground is 2. There are 5 grounds
non-performance of to rescind. Non-
one’s obligations/s or performance by the Badges of Fraud:
what is incumbent other party is not 1. Consideration of the conveyance is inadequate
upon him. important. or fictitious;
3. It applies only to 3. It applies to both 2. Transfer was made by a debtor after a suit has
reciprocal obligation. unilateral and been begun and while it is pending against
reciprocal obligations. him;
4. Only a party to the 4. Even 1 3rd person who 3. Sale upon credit by an insolvent debtor;
contract fulfillment or is prejudiced by the 4. Evidence of indebtedness or complete
seek the rescission of contract may demand insolvency;
the contract. the rescission of the 5. Transfer of all his property by a debtor when
contract. he is financially embarrassed or insolvent;
5. Court may fix a period5. Court cannot grant 6. Transfer made between father and son, where
or grant extension of extension of time for there is present any of the above
time for the fulfillment fulfillment of the circumstances;
of the obligation. obligation. 7. Failure of the vendee to take exclusive
6. Its purpose is to 6. Its purpose is to seek possession of all the property.

E. VOIDABLE CONTRACTS
Kinds of Voidable Contracts:
1. Those where one of the parties in incapable of
giving consent to a contract;
2. Those where the consent is vitiated by
mistake, violence, intimidation, undue
influence or fraud.
Remedy: Annulment of contract, which must be
commenced 4 years from:
1. The time the incapacity ceases;
2. The time the violence, intimidation or undue
influence ends;
3. The time the mistake or fraud is discovered.
 Discovery of fraud must be reckoned to have
taken place from the time the document was
registered in the office of the register of deeds.
Registration constitutes constructive notice to the
whole world. (Carantes vs. Cam, 76 SCRA 514)
Ratification of Voidable Contracts:
Requisites:
1. There must be knowledge of the reason which
renders the contract voidable;
2. Such reason must have ceased; and
3. The injured party must have executed an act
which expressly or impliedly conveys an
intention to waive his right.
How may a Voidable Contract be
Convalidated:
1. Prescription of the action for annulment;
2. Ratification or confirmation; and
3. Loss of the thing which is the object of the
contract through the fraud or fault of the
person who is entitled to institute the action
for annulment of the contract.
F. UNENFORCEABLE CONTRACTS
Those which cannot be enforced by proper action
in court unless they are ratified.
What Contracts are Unenforceable:
1. Entered into in the same of another person by
one who has been given no authority or legal
representation, or has acted beyond his power;
2. Both parties are incapable of giving consent’
and
3. Do not comply with the Statute of Frauds.
 STATUTE OF FRAUDS
 Statute of Frauds requires certain classes of
contracts to be in writing to be enforceable. The
statute does not deprive the parties of the right
to contract with respect to the matters
involved; it merely regulates the formalities of
the contract to render it enforceable.
 The purpose is to prevent fraud and perjury in
the enforcement of the obligation. Making
satisfies the statute. The application of such
statute presupposes the existence of a
perfected contract.
 The contracts/agreements under the Statute of
Frauds require that the same be evidenced by
some note, memorandum of writing,
subscribed by the party charged or by his
agent, otherwise, the said contracts shall be
unenforceable.
 The statute of frauds applies only yo
executory contracts, not to those that are
partially or completely fulfilled.
Agreements within the Statute of Frauds:
(Exclusive Enumeration)
1. Agreements not to be performed within one
year from the making thereof;
2. Special promise to answer for the debt, default
or miscarriage of another;
Note: The promise referred to here is a
collateral promise; and NOT the original
promise of the debtor to his own creditor.
3. Agreement in consideration of marriage other
than a mutual promise to marry;
4. Agreement for the sale of goods, etc. at a price
not less than P500.00;
5. Contracts of lease for a period longer than one
year;
6. Agreements for the sale of real property of
interest therein; and
7. Representation as to the credit of a third
person.
 G. VOID OR INEXISTENT
CONTRACTS
VOID CONTRACTS
Void contracts are those were all of the
requisites of a contract are present but the
cause, object, or purpose is contrary to law,
morals, good customs, public order or public
policy, or contract itself is prohibited or declared
void by law.
Kinds of Void Contracts:
1. Those whose cause, object or purpose is
contrary to law, morals, good customs, public
order or public policy;
2. Those whose object is outside the commerce of
man;
3. Those which contemplate an impossible service;
4. Those where the intention of the parties relative
to the principal object of the contract cannot be
ascertained; and
5. Those expressly prohibited or declared void by
law.
INEXISTENT CONTRACTS
 Those where one or some or all of the requisites
essential for the validity of a contract are
absolutely lacking.
Kinds of Inexistent Contracts:
1. Those which are absolutely simulated or
fictitious; and
2. Those whose cause or object did not exist at the
time of the transaction.
PRINCIPLE OF IN PARI DELICTO:
 The principle of in pari delicto is applicable only
to void contracts and NOT as to inexistent
contracts.
General Rule: When the defect of a void contract
consists in the illegality of the cause or object of
the contract and both of the parties are at fault or
in pari delicto, the law refuses them every remedy
and leaves them where they are.
Exceptions:
1. Payment of usurious interest.
2. Payment of money or delivery of property for
an illegal purpose, where the party who paid or
delivered repudiates the contract before the
purpose has been accomplished, or before any
damage has been caused to a 3rd person.
3. Payment of money or delivery of property
made by an incapacitated person.
4. Agreement or contract which is not illegal per
se & the prohibition is designed for the
protection of the plaintiff.
5. Payment of any amount in excess of the
maximum price of any article or commodity
fixed by law or regulation by competent
authority.
6. Contract whereby a laborer undertake to work
longer than the maximum number of hours
fixed by law.
7. Contract whereby a laborer accepts a wage
lower than the minimum number of hours fixed
by law.
8. One who lost in gambling because of
fraudulent schemes practiced on him is allowed
to recover his losses [(Art. 315, 3(b), RPC]
even if gambling is a prohibited one.
Rules When Only One of the Parties is at
Fault:
1. Executory Contracts – neither of the
contracting parties can demand for the
fulfillment of any obligation from the contract
not may be compelled to comply with such
obligation.
2. Executed Contracts:
a. Guilty Party is barred from recovering what
he has given to the other party and is barred
from recovering what he has given to the
other party by reason of the contract.
b. Innocent Party may demand for the return
of what he has given.
 COMPARATIVE TABLE ON VOID, VOIDABLE, RESCISSIBLE and
UNENFORCEABLE

VOID VOIDABLE RESCISSIBLE UNENFORCEABLE

Defect is caused by Defect is caused by Defect is caused by Defect is caused by lack
lack of essential vice of consent. injury/damage either to of form, authority, or
elements or illegality. one of the parties of to capacity of both parties
a 3rd person. not cured by
NATURAL
Do not, as a general Valid and enforceable Valid and enforceable
prescription.
Cannot be enforced by

effect.
OBLIGATIONS
rule produce any legal until they are annulled
by a competent court.
until they are rescinded a proper action in
by a competent court. court.
Action for the Action for annulment or Action for rescission Corresponding action
declaration or nullity or defense of annulability may prescribe. for recovery, if there
inexistence or defense may prescribes. was total or partial
of nullity or inexistence performance of the
does
Civil not prescribe.
obligations give a right of action to compel Problem: unenforceable contract
their performance. under No. 1 or 3 of
Suppose in the problemArticle 1403
above, maythere was
prescribe.
Natural obligations, not being based on positive payment of X’s obligation in 1986 by a friend,
Not cured
law but onby
equity and naturalCured bydo
law, prescription
not grant a Cured by prescription Not cured by
A, without his knowledge and consent. Can A,
prescription
right of action to enforce their performance, but prescription
the friend who made the payment, ask for
Cannot be ratified.
after voluntary Canthe
fulfillment by beobligor,
ratified.they Need not be ratified. Can be ratified.
reimbursement from X? Can A recover from
authorize the retention of what has been delivered X? Why?
or rendered
Assailed not by reason
only by a thereof. (Art.only
Assailed 1423, NCC).
by a Assailed not only by a Assailed only by a
contracting party but contracting party. contracting party but
Ans: No. Under the contracting
law, when party.
without the
even
Basicby a third person
distinctions between civil and natural even by a third person
knowledge or against the will of the debtor, a
whose
obligations: us
interest who is prejudiced or
third person pays a debt which the obligor is
directly
1. Civil affected.
obligations derive their binding force from damaged by the
not legally bound to pay because the action
contract.
positive law; while natural obligations derive
Assailed directly force
or thereon
directly has
only. prescribed,
Assailed but theor debtor
their binding fromAssailed directly
equity and or
justice; Assailed directly
collaterally. voluntarily reimburses the third person, the
2. Civil obligations can collaterally.
be enforced by court collaterally.
obligor cannot recover what he has paid.
action; while natural obligations cannot be
(Art. 1425, NCC).
enforced by court action but depends
exclusively upon the good conscience of the
debtor.
Problem:
Problem:
X, the father of Y, was indebted to Z in the amount
X contracted a loan with the DBP in 1965 but of PIM during his lifetime. He died without paying
failed to pay, hence, in 1966, the obligation it. Y inherited from X properties worth only
became due and demandable. In 1987, the DBP P400,000.00. Y paid Z the amount of PlM one
month after X's death. Can Y ask for the refund of
unearthed his obligation and demanded
what he paid to Z? Why?
payment. Upon receipt of the demand letter, X
paid the obligation together with its interest. Ans: No. Under the law, when a testate or
Advised that the action has already prescribed, intestate heir voluntarily pays a debt of the
he sued DBP for reimbursement of whatever he decedent exceeding the value of the property
had paid. Will the action prosper? Why? which he received by will or by the law of intestacy
from the estate of the deceased, the payment is
valid and cannot be rescinded by the payer. (Art.
1429, NCC).
Ans: No, because when a right to sue upon a
civil obligation has lapsed by extinctive Problem:
prescription, the obligor who voluntarily
performs the contract cannot recover what he
has delivered or the value of the service he has
rendered. (Art. 1424, NCC; DBP vs. Adil, G.R.
No. L-48889, May 11, 1988).
 Suppose in the problem above X executed a will
but it was declared void and the heirs paid a legacy
to a friend of his father, can Y revoke it or ask for
a refund? Why?
Ans: No, because when a will is declared void
because it has not been executed in accordance
with the formalities required by law, but one of the
intestate heirs, after the settlement of the debts of
the deceased, pays a legacy in compliance with a
2. Technical Estoppel
clause in the defective will, the payment is effec-
tive and irrevocable. (Art. 1430, NCC).
ESTOPPEL
Estoppel is a condition or state by virtue of
which an admission or representation is
rendered conclusive upon the person making
it and cannot be denied or disproved as
against the person relying thereon.
Kinds Of Estoppel:
1. Estoppel In Pais
2. Technical Estoppel
3. Estoppel by Record
4. Estoppel by Judgment
1. Estoppel in Pais (by conduct)
a. Estoppel by silence
b. Estoppel by acceptance of benefits
Essential Elements of Estoppel in Pais
A. On the party to be Estopped:
1. Commits conduct amounting to false
representation or concealment of material facts
or at least calculated to convey the impression
that facts are inconsistent with those which the
party subsequently attempts to assert;
2. Has the intent, or at least expectation that his
conduct shall at least influence the other party;
and
3. Has knowledge, actual or constructive, of the
real facts.
B. On the Party Claiming the Estoppel:
1. Has lack of knowledge and of the means of
knowledge of the facts in question;
2. Has relied, in good faith, on the conduct or
statement of the party to be estopped;
3. Has acted or refrained from acting based in
such conduct or statement as to change the
position or status of the party claiming the
estoppels, to his injury, detriment or prejudiced.
a. Estoppel by deed – a party to a deed and his
privies are precluded from asserting as against
the other party and his privies any right or title
in designation of the deed, or from denying any
material fact asserted therein.
b. Estoppel by record – a party and his privies
are precluded from denying the truth of matters
set forth in a record whether judicial or
legislative.
3. Estoppel by Judgment – the party to a case is
precluded from denying the facts adjudicated by
a court of competent jurisdiction.
4. Estoppel by Laches – one which arises when a
party, knowing his rights as against another,
takes no step or delays in enforcing then until
the condition of the latter, who has no
knowledge or notices that the former would
assert such rights, has become so changed that
he cannot without injury or prejudiced, be
restores to his former state.
Laches or “Stale Demands”
Failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by
exercising due diligence, could or should have been
done earlier; it is negligence or omission to assert
a right within reasonable time, warranting a
presumption that the party entitled to assert it
either has abandoned it or declined to assert it.
Elements of Laches:
1. Conduct on the part of the defendant, or of one
under whom he claims, giving rise to the
situation of which complainant seeks remedy.
2. Delay in asserting the complainant’s rights, the
complainant having had knowledge or notice, or
defendant’s conduct and having been afforded
an opportunity to institute a suit;
3. Lack of knowledge or notice in the part of the
defendant that the complainant would assert
the right on which he bases his suit; and A. NATURE AND FORM OF CONTRACT
4. Injury or prejudiced to the defendant in the
event relief is accorded to the complainant, or  ELEMENTS:
the suit is not held to be barred. (Miguel v.
Catalino, 26 SCRA 234) 1. Essential Elements – those without which there
can be no valid sale:
a. Consent or meeting of minds
Laches Prescription b. Determinate subject matter
Concerned with effect Concerned with fact of c. Price certain in money or its equivalent
of delay. delay. 2. Natural Elements – inherent in the contract, and
Question of inequity Question or mater of which in the absence of any contrary provision,
of permitting the time. are deemed to exist in the contract:
claim to be enforced. i. Warranty against eviction
Not statutory. Statutory.
ii. Warranty against hidden defects
Applies in equity. Applies at law.
Not based on a fixed Based on a fixed time. 3. Accidental Elements – may be present or
time. absent depending on the stipulation of the
parties.

 Estoppel by laches, which is a certain of equity,

laches cannot interfere with the running of  Characteristics:
prescription. Laches may not be strictly applied 1. Principal
between near relatives; under the facts and 2. Consensual
circumstances of the case even an extremely 3. Bilateral
liberal application of laches would bar the filing of 4. Nominate
the case. (Capitle, et al. v. Vda. De Gaban, et al., 5. Commutative; in
GR No. 146890). some cases aleatory (emptio spei)
6. Onerous

CONTRACT TO SELL

* A bilateral contract whereby the prospective

SALES seller, while expressly reserving the ownership of
the subject property despite delivery thereof to the
prospective buyer binds himself to sell the said
A nominate contract whereby one of the property exclusively to the prospective buyer upon
contracting parties obligates himself to fulfillment of the condition agreed upon, that is full
transfer the ownership of and to deliver a payment of the purchased price.
determinate thing and other to pay therefore
a price certain in money or its equivalent. Contract to Sell Contract to Sell
(Art. 1458, NCC) 1. Transfer of Ownership
Title passes to the Ownership is reserved
buyer upon delivery of to the seller and is not
 A contract of sale, which is subject to probate the thing said. to pass until full
court approval, is a conditional sale, and not a payment.
contract to sell if the condition is not satisfies the 2. As to Perfection of Sale
obligation to deliver remains. It is not converted to Meeting of the minds. Upon full payment.
a mere money claim. It is not converted to a mere 3. As to Condition
money claim. It is not even a contract to sell Full payment is a Full payment is a
because in a contract to sell, the payment of the negative resolutory positive suspensive
purchase price is a positive suspensive condition. condition. condition.
The vendor’s obligation to convey the title does not 4. Effect of Non-Payment
become effective in case of failure to pay. (Cheng Injured party can file No contract of sale
v. Gonato, 300 SCRA 722) action for specific perfected, rescission
performance or is not necessary. 3. Uncertainty
rescission with The uncertainty is The uncertainty is
damages. with regard to the with regard the
quantity and quality existence of the thing.
 In a contract to sell real property on of the thing.
installments, the full payment of the purchase 4. Object of the Sale
piece is a positive suspensive condition, the failure Object is a future Object is a present
of which is not considered breach, casual or thing. thing, which is the
serious but simply an event that prevents the hope or expectancy.
obligation of the vendor to convey title from
acquiring any obligatory force. The transfer of Sale DATION IN
ownership and title would occur after full payment PAYMENT
of the installments prevents the obligation of the No pre-existing credit. Obligations are
seller to convey the property from arising. (Leaño extinguished.
v. CA, GR No. 129018, Nov. 15, 2001) Consideration on the Consideration of the
part of the seller is debtor is the
 A deed of sale in which the stated consideration the price; on the part extinguishments of
had not in fact been paid, is null and void, and of the buyer is the the debt; on the part
produces no effect whatsoever where the same is acquisition of the of the creditor, it is
without cause or consideration in that the purchase object. the acquisition of the
price which appears thereon as paid has in fact object offered in lieu
never been paid by the purchaser to the vendor. of the original credit.
(Yu Bun Guan v. Ong, GR No. 144735, Oct. 18, Greater freedom in Less freedom in the
2001) determining the price. determining the price.
Buyer still has to pay The payment is
the price. received by the debtor
before the contract is
 OBJECT OF SALE perfected.
Requisites:
1. Things:
Sale Contract for Piece
a. Deteminate or determinable (Arts. 1458, 1460)
of Work
b. Lawful (Arts. 1347, 1409 [1, 4])
The thing transferred The thing transferred
c. Should not be impossible (Art. 1348)
is one which would is one not in existence
have been the subject and which never
2. Rights – must be transmissible
of sale to some other would have existed
Exceptions:
person, even if the but for the order of
* Future inheritance
order had not been the party desiring to
* Service
given. acquire it.
The primary objective The services dominate
Goods which may be Objects of Sale
of the contract is a the contract even
a. Existing goods – goods owned or possessed by
sale of the though there is a sale
the seller.
manufactured item; it of goods involved.
b. Future goods – goods to be manufactured,
is a sale of goods
raised or acquired by the seller after the
even though the item
perfection of the contract.
is manufactured by
labor furnished by the
Emptio Rei Emptio Spei
seller and upon
Speratae
previous order of the
1. Subject Matter
customer.
Sale of a thing having Sale of Hope.
Within the Statute of Not within the Statute
a potential existence.
Frauds of Frauds.
2. Existence of Object
Sale is subject to the Sale produces effect
Sale Agency to Sell
condition that the even if the thing does
Buyer receives the Agent receives the
thing will exist. If it not come into
goods as owner. goods as goods of the
does not, there is no existence.
principal who retains
contract.
his ownership over
 them.
Buyer pays the price. Agents deliver the
price which in turn he
got from his buyer.
Seller warrants the Agent can return the
thing sold. goods in case he is
unable to sell the
same to a third
person.
Seller warrants the Agent makes no
thing sold. warranty for which he
assumes personal
liability as long as he
acts within his
authority and in the
name of the seller.
Buyer can deal with Agent in dealing with
the thing sold as he the thing received,
pleases being the must act and is bound
owner. according to the
instructions of the
principal.
2. Involuntary Sales
General Rule: mere inadequacy of the price is not
a sufficient ground for the cancellation of the sale.
Exception: when the price is so low as to be
shocking to the moral conscience, sale will be set
aside.
 PERFECTION OF SALE
General Rule: it is perfected at the moment there
is meeting of the minds upon a determinate thing
(object), and a certain price (consideration), even
if neither is delivered.
Exception: When the sale is subject to a
suspensive condition by virtue of law or stipulation
 Sale is a consensual contract; hence, delivery and
payment are not essential for its perfection.

 TRANSFER OF OWNERSHIP
BARTER
General Rule: While the contract of sale is
 One of the parties binds himself to give one
consensual, ownership of the thing sold is acquired
thing in consideration of the other’s promise to
only upon its delivery, actual or constructive, to
give another thing.
the buyer. (Daus v. Sps. De Leon, 16 June 2003)
 The only point of difference between contract
Exceptions:
of sale and barter in the element which is
1. Contrary stipulation or Pactum reservati
present in sale but not in barter, namely: price
dominli (contractual reservation of title) – a
certain money or its equivalent.
stipulation, usually in sales by installment,
whereby, despite delivery of the property sold,
ownership remains with the seller until full
payment of the price is made.
 PRICE
2. Contract to sell
 The sum stipulated as the equivalent of the
3. Contract of insurance – a perfected contract of
thing sold and also every incident taken into
sale, even without delivery, vests in the vendee
consideration for the fixing of the price, put to the
an equitable title, an existing interest over the
debt of the vendee and agreed to by him.
goods sufficient to be the subject of insurance.
 Characteristics of Price:
1. Certainty;
2. Real, not fictitious;
3. In some cases, must not be grossly inferior
Effect of Promise Treated under Art. 1479
to the value of the thing sold.
Civil Code:
1. Accepted unilateral promise to sell or buy
a. Only one makes the promise, this promise
is accepted by the other.
Effect of Gross Inadequacy of Price:
b. Does not bind the promissory even if
accepted and may be withdrawn anytime.
1. Voluntary Sales
General Rule: Mere inadequacy of the price does
 Pending notice of its withdrawn, the accepted
not affect validity of the sale
promise partakes the nature of an offer to sell
which if accepted, results in a perfected contract of
Exceptions:
sale. (Sanchez v. Rigos 45 SCRA 368)
a. Low price indicates vice of consent, sale may
be annulled;
 If the promise is supported by a consideration
b. Price is so low as to be “shocking to
distinct and separate from the price (option
conscience,” sale may be set aside
 money), its acceptance will give rise to perfected
contract.
2. Bilateral promise to buy and sell
 One party accepts the other’s promise to buy
and the latter, the former promise to sell a
determinate thing for a price certain.
 Reciprocally demandable.
 It is true that the acquisition by a third person of
Policitation
 Unaccepted unilateral promise to buy and sell.
Even if accepted by the other party, it does not
bind the promissory and may withdrawn anytime
before knowledge of acceptance of offer.
Option Contract
 A contract granting a person the privilege to buy a
certain object at anytime within the agreed period
at the fixed price.
 The rule is applicable even if the right of first
Right of First Refusal
 An innovative juridical relationship. If such right is
incorporated in a contract. It is enforceable by
specific performance.
 The Statute of Frauds does not contemplate cases
involving a right of first refusal because the
application of such statute presupposes the
existence of a perfected contract. A right of first
refusal is not by any means a perfected contract of
sale of real property. It is a contractual grant, not
of the sale of the real property involved, but of the
right of first refusal over the property sought to be
sold. Thus, a right of first refusal need not be
written to be enforceable and may be proven by
oral evidence.
 A right of first refusal is not among those listed as
enforceable under the statute of frauds.
Furthermore, the application of Article 1403, par.
2(e) of the New Civil Code presupposes the
existence of a perfected, albeit unwritten, contract
of sale a right of first refusal is of by any means
perfected contract of sale of real property. At best,
it is a contractual grant, not of the real property
involved, but of the right of first refusal over the
property sought to be sold.
 it is thus evidence that the statute of frauds does
not contemplated cases involving a right of refusal.
As such, a right of first refusal need not be written
to be enforceable and may be proven by oral
evidence (Rosencor Dev’t. Corp. v. Inquing, GR
No. 140479, March 8, 2001).
 In Guzman Bocaling and Co. Inc, v. Bonnavie 206
SCRA 668, it was said that such contract of sale is
not voidable but recissible. Under Art. 1380 to
1381 (3) of the Civil Code, a contract otherwise
valid may nonetheless be subsequently rescinded
by reason of injury to their persons, like creditors.
The status of creditors could be validly accorded
parties for they had substantial interests that were
prejudiced by the sale of the subject property to
another without recognizing their right of first
priority under the Contract of Lease.
the property subject of the contract is an obstacle
to the action for its rescission where it is shown
that such third person is in lawful possession of the
subject of the contract and that he did not act in
bad faith. However, thus rule is not applicable in
cases where a party is considered a third party in
relation to the Contract of Sale nor may its
possession of the subject property be regarded as
required lawfully in good faith. (Equitorial Realty &
Dev’t., Inc. v. Mayfair Theater Inc. 264 SCRA 483).
refusal is embodied in mortgage contract. (Litonjua
v. L&R Corp., 320 SCRA 405).
Pactum Reservatu Domini
A stipulation stating that despite delivery, the
ownership of the thing shall remain with the seller
until the buyer has fully paid the price.
Assignment of Credit
A contract by virtue of which one person
transfer to another his rights and actions against a
third person in consideration of the price certain in
money or its equivalent.
Earnest Money
A partial payment of the purchase price and
considered as proof of the perfection of the sale.
It shall be deducted from the total price.
Earnest Money Option Money
Title passes to the Ownership is reserved
buyer upon delivery of to the seller and is not
the thing sold. to pass until full
payment.
In case of non- In case if non-
payment, an action payment, there can be
for specific action for specific
performance or for performance
rescission can be filed
by the injured party. C. FORMALITIES OF CONTRACT OF SALE
Part of the purchase Money given as a
price distinct consideration General Rule: Sale is a consensual contract and is
for an option contract. perfected by mere consent of the parties.
When given, the The would-be-buyer is
buyer is bound to pay not required to buy. Exceptions: In order to be performed within a
the balance year from the date thereof.
Given when there is Applies to sale not yet 1. Sale of personal property at a price not less
already a sale perfected. than P500.
2. Sale of real property or an interest therein.
3. Sale of property not to be performed within a
year from the date thereof.
4. “Applicable statute” requires that the contract of
B. LOSS OF THE OBJECT OF SALE sale be in a certain form.
C.
1. Before Perfection – seller bears the loss
2. At the time of Perfection – contract is void
and inexistent. Seller bears the loss. D. CAPACITY TO BUY OR SELL
3. After the Perfection but Before Delivery –
buyer bears the loss an exception to the rule of General Rule: All persons who can bind
Res Perit Domino. themselves also have legal capacity to but sell.
4. After Delivery – buyer bears the loss. Exceptions:
1. Absolute Incapacity (minor, demented
persons, imbeciles, deaf and numb, prodigals,
EFFECT OF LOSS AT THE TIME OF SALE civil interdictees) – party cannot bind
a. Thing entirely lost at the time of perfection themselves in any case.
Contract is void and inexistent. 2. Relative Incapacity – incapacity exists only
b. Thing only partially lost; Vendee may elect with reference to certain persons or a certain
between withdrawing from the contract or class of property.
demanding the remaining part, paying its
proportionate price.
RELATIVE INCAPACITY
A. Husband and Wife (Art. 1490)
 The husband and wife cannot sell property to
 EQUITABE MORTGAGE (Art. 1602) each other except:
1. Separation of property was agreed upon the
spouses
Requisites: 2. There has been a judicial separation of
property under Art. 134 and 165 of the
1. Price of the sale with right to repurchase is Family Code
usually inadequate; B. Incapacity by Reason of Relation to
2. When the vendor remains in possession as Property
lessee or otherwise;  The following persons cannot acquire property
3. When upon or after the expiration of the period, by purchase, even at a public auction, either in
to repurchase another instrument extending the person or through the mediation of another.
period of redemption of granting a new period is 1. Guardian, with respect to the property of his
executed; ward;
4. The purchase retains for him a part of the 2. Agents, with respect to the property whose
purchase price; administration or sale may have been
entrusted to them, unless the consent of the
5. When the vendor binds himself to pay the taxes
principal has been given;
on the things sold; and
3. Pubic officers and employees, with respect to
6. The real intention of the parties is that the
the properties of the government, its political
transaction shall secure the payment of a debt or
subdivisions, or GOCCs, that are entrusted to
the performance and obligation.
them;
4. Executor or administrator, with respect to
the property of the estate under
administration;
5. Person specially disqualified by law;
 6. Judges, justices, prosecuting attorneys, clerk
of courts, etc., with respect to the property
in custodia legis.
Effect of Violation:
1. With respect to nos. 1, 2, and 3, the sale is
voidable.
Reason: Only private rights, which are subject
to ratification, are violated.
2. With respect to nos. 4, 5 and 6, the sale is null
and void.
Reason: Violation of public policy cannot be
subject to ratification.
E. OBLIGATIONS OF THE VENDOR
1. Deliver the thing sold;
2. Warranties;
3. Transfer of Ownership;
4. Take care of the thing, pending delivery, with
proper diligence; and
5. Pay for the expenses of the deed of sale unless
there is a stipulation to the contrary.
F. OBLIGATIONS OF THE VENDEE
A. Principal Obligations
1. To accept delivery; and
2. To pay the price of the thing sold in legal tender
unless another mode has been agreed upon.
B. Other Obligations
1. To take care of the goods without the obligation
to return where the goods are delivered to the
buyer and he rightfully refuses to accept;
2. To be liable as depositary if he voluntarily
constituted himself as such; and
3. To pay interest for the period between delivery
of the thing and the payment of the price in the
following cases:
a. Should it have been stipulated
b. Should the thing sold and delivered produce
fruits or income
c. Should he be in default, from the time of
judicial or extra-judicial demand for the
payment of the price.
 DELIVERY
Not only a necessary condition for the
enjoyment of the thing, but also the mode of
transferring ownership.
Kinds:
Actual or Real – placing the thing under the
control and possession of the buyer.
Legal or Constructive – delivery if
represented by other signs or acts indicative
thereof.
a. Legal Formalities – delivery by the
execution of a public instrument (Boy v. CA
GR 125088, April 14, 2004)
 Notwithstanding the presence of illegal
occupants on the subject property, transfer of
ownership by symbolic delivery can still be
effected through the execution of the deed of
conveyance. (Art. 1498, NCC) It is well-settled
rule that the key word is control not possession
of the subject properly. The rule is true
especially if the deed of conveyance does not
stipulate or inter that the buyers could not
exercise control over the said property, delivery
can be effected through the mere execution of
said deed. (Power Commercial and Industrial
Corporation v. CA, 274 SCRA 597)
 Under the law, when the sale is made
through a public instrument, the execution
thereof shall be equivalent to the delivery of the
object of the contract, if, from the deed, the
contrary does not appear or cannot be inferred.
Possession is also transferred along with
ownership thereof to the petitioners by virtue of
the deed of conveyance. (Ong Ching v. 239
SCRA 741: Article 1498, NCC)
 It was also said that since the execution of
the deed of conveyance is deemed equivalent to
delivery, prior physical delivery or possession is
not legally required. (Dulay Enterprise Inc. v.
CA 225 SCRA 678: Garcia v. CA 312 SCRA 180)
b. Traditio Symbolica – to effect delivery, the
parties makes use of a token or symbol to
represent the thing delivered.
c. Traditio Longa Manu – seller pointing out
to the buyer the things, which are,
transferred which at the time must be in
sight.
d. Tradition Brevi Manu – buyer already had
the property in his possession for any other
reason than ownership.
1. Quasi-tradition – delivery of rights, credits or
incorporeal property, made by:
a. Placing titles of ownership in the hands of the
buyer
b. Allowing buyer to make use of rights
 2. Tradition by Operation of law
4.
Constructive delivery requires three things
before ownership may be transferred:
1. The seller must have control over the thing.
2. The buyer must be put under control
3. There must be the intention to deliver the thing
for purposes of ownership
When is the vendor not bound to deliver the
thing sold:
1. If the vendee has not paid him the price.
2. If no period for payment has been fixed in the
contract.
3. Even if a period for payment has been fixed in
the contract, if the vendee has lost the right to
make use of the same.
and subsequent signifies his approval
return reverts or acceptance to the
ownership in the seller
seller
Risk of loss or injury 4. Risk of loss remains
rests upon the buyer with the seller
Instances where Seller is still the Owner
despite Delivery:
1. Sale on trial, approval or satisfaction
2. Contrary intention appears by the term of the
contract;
3. Implied reservation of ownership (Art. 1503)
a. If under the bill of lading, the goods are
deliverable to seller or agent or their order;
b. If the bill of lading, although stating that the
goods are to be delivered to the buyer or his
agent, is kept by the seller or his agent;
c. When the buyer, although the goods are
deliverable to order of buyer, and although the
bill of lading is given to him, does not honor the
bill of exchange sent along with it.

Sale Or Return
 Property is sold, but the buyer, who becomes the PLACE OR DELIVERY (In Order of Priority)
owner of the property on delivery, has the option 1. That was agreed upon;
to return the same to the seller instead of paying 2. Place determined by usage of trade;
the price. 3. Seller’s place;
4. Seller’s residence; or
5. In case of specific goods where they can be
found.
Sale On Trial, Approval, or Satisfaction
 A contract in the nature of an option to purchase
is the goods prove to be satisfactory, the approval Time of Delivery:
of the buyer being a condition precedent. 1. Stipulated time; or
Rules: 2. In the absence thereof, within a reasonable
1. Title remains in the seller time.
2. Risk of loss remains with seller except when the
buyer is at fault or has agreed to bear the loss
3. Buyer must give goods a trial, except where it is DELIVERY TO THE CARRIER
evident that is cannot perform the work. General Rule: Where the seller is authorized or
required to send the goods to the buyer, delivery
to the carrier is delivery to the buyer.
Exceptions:
1. When a contrary intention appears
DISTINCTION BETWEEN SALE/RETURN & 2. Implied reservation of ownership under pars.
SALE ON TRIAL 1, 2, 3 of Art. 1503

Sale or Return Sale on Trial

1. Subject to a 1. Subject to a
resolutory condition. suspensive condition.
2. Depends entirely on 2. Depends on the
the will of the buyer character or quality of
the goods.
3. Ownership passes to 3. Ownership remains in
the buyer on delivery the seller until buyer

Kinds of Delivery to the Carrier
C.I.F. (cost, insurance, freight) – signify
that the price fixed covers not only the costs
of the goods, but the expense of the freight
and the insurance to be paid by the seller.
F.O.B (free on board) – goods are to be
delivered free of expense to the buyer to the
point where they are F.O.B., either at the
point of shipment or the point of destination,
determines when the ownership passes.
C.O.D. (collect on delivery) – the carrier
acts for the seller in collecting the purchase
price, which the buyer must pay to obtain
possession of the goods.
 SALE OF GOODS BY A NON-OWNER
General Rule: Buyer acquired no title even if in
good faith and for value under the maxim Nemo
dat quid non habet (“You cannot give what you
don’t have”)
Exceptions:
1. Owner is estopped or precluded by his conduct
2. When sale is made by the registered owner or
apparent owner in accordance with recording or
registration laws
3. Sales sanctioned by judicial or statutory
authority
4. Purchases in a merchant’s store, fairs or
markets
5. When a person who is not the owner sells and
delivers a thing, subsequently acquires title
thereto.
6. When the seller has a voidable title which has
not been avoided at the time of the sale (Art.
1506)
 PAYMENT OF THE PURCHASE PRICE
General Rule: The seller is not bound to deliver
the thing sold unless the purchase price has been
paid.
Exception: The seller is bound to deliver even if
the price has not been paid, if a period of payment
has been fixed.
 SALE OF REAL PROPERTY BY UNIT
 Entire area stated in the contract must be
delivered
 When the entire area could not be delivered,
vendee may:
a. If the lack in area is at least 1/10 than that stated
or stipulated
b. If the deficiency in quality specified in the contract
exceeds 1/10 of the price agreed upon
c. If the vendee would not have bought the
immovable had he known for its smaller area of
inferior quality irrespective of the extent of lack of
area or quality.
◘ SALE FOR A LUMP SUM (A Cuerpo Cierto)
 Vendor is obligated to deliver all the land included
within the boundaries, regardless of whether the
real area should be greater or smaller.
 Ordinary, there can be no rescission or reduction
or increase whether the area be greater or lesser,
unless there is gross mistake.
◘ NEGOTIABLE DOCUMENT OF TITLE
 A document of title in which it is stated that the
goods referred to therein will be delivered to the
bearer, or the order of any person named such
document.
The document is Negotiable if:
1) The goods are deliverable to the bearer; or
2) The goods are deliverable to the order of a
certain person
◘ DOUBLE SALES
Requisites:
1. Two or more valid sales;
2. Same subject matter;
3. Bought from same or immediate seller; and
4. Two or more buyers who are at odds over the
rightful ownership of the subject matter must
represent conflicting interest.
Rule: Primus Tempore, Portior Jure (First in Time,
Strong in Right)
Rules on Ownership in Double Sales:
1. Personal Property – to the first possessor in
good faith;
Doctrine of Innocent Purchaser
 It is true that a person dealing with registered
lands need not go beyond the certificate of title, it
is likewise a well-settled rule that a purchaser or
mortgagee cannot close his eyes to facts which
should put a reasonable man on his guard, and the
claim that he acted in good faith under the belief
that there was no defect in the title of the vendor
or mortgagor. His mere refusal to face up to the
fact that such defect exist, or his willful closing of
his eyes to the possibility of the existence of a
defect in the vendor’s or mortgagor’s title, will not
make him an innocent purchaser for value, it if
afterwards develops that the title was in fact
defective and it appears that he had such notice of
the defect as would have led to its discovery has
he acted with the measure of precaustin which
may be required of a prudent man in a like
situation (Crisostomo v. CA, 197 SCRA 833;
Spouses Uy v. CA, et al., G.R. No. 109197, June
21, 2001)
2. Real Property
a. To the person who first recorded it, in the
registry of property in good faith.
b. If not inscripted, to the first possessor in good
faith.
c. If one of the above, to the person with the
oldest title, in good faith. (Occeba v. Esponila et
al., G.R. No. 156973, June 4, 2004)
◘ WARRANTY
Statement or representation made by the seller of
goods, contemporaneously and as a part of the
contract of sale, having reference to the character,
quality, or title, of the goods, and by which he
promises or undertakes to insure that certain facts
are or shall be as he then represents.
Kinds of Warranties:
1) Express – any affirmation of fact or any promise
by the seller relating to the thung if the natural
tendency of such affirmation or promise is to
induce the buyer to purchase the same and if the
buyer purchases the thing relying thereon.
Note: A mere expression of opinion, no matter how
positively asserted, does not import a warranty
unless the seller is an expert and his opinion was
relied upon by the buyer.
2) Implied – that which the law derives by
implication or inference from the nature of the
transaction or the relative situation or
circumstances of the parties; irrespective of any
intention of the seller to create it.
a) Warranty against eviction
b) Warranty against hidden defects
c) warranty as to the fitness and
merchantability
Kinds of Implied Warranties:
1. Warranty against Eviction – warranty in
which the seller guarantees that he has the right to
sell the thing sold and to transfer ownership to the
buyer who shall not be disturbed in his legal and
peaceful possession thereof.
Elements:
a) Vendee is deprived of the thing purchased;
b) Deprivation is by virtue of the final judgment;
c) Judgment is based on the prior right of the sale
or an act imputable to the vendor;
d) Vendor was summoned in the suit of eviction at
the instance of the vendee;
e) No waiver of warranty by the vendee.
Remedies of the Vendee:
1) Total eviction
a. Value of the thing at the time of the
eviction.
b. Income or fruits if ordered to deliver them
to the party who won the suit.
c. Cost of the suit.
d. Expenses of the contract.
e. Damages and interests if the sale was in
bad faith.
2) Partial Eviction
a. To enforce vendor’s liability for eviction;
or
b. Rescind the contract
2. Warranty Against Hidden Defects
Elements:
a. Defects must be serious and important;
b. Must be hidden;
c. It must exist at the time of the sale;
d. Vendee must give notice of the defect to the
vendor within reasonable time; and
e. No prescription (6 months from delivery of the
thing or 40 days in case of animals.
Remedies of the Vendee:
1. Accion redhibitoria (rescission)
2. Accion quanti minoris (reduction of price).

◘REMEDIES FOR BREACH OF
CONTRACT
A. Remedies of the Seller
1. Action for payment of the price (Art. 1595,
NCC)
2. Action for damages for non-acceptance for the
goods (Art. 1596, NCC)
3. Action for rescission (Art. 1597, NCC)
B. Remedies of the Buyer
1. Action for specific performance (Art. 1598,
NCC)
2. action for rescission or damages for breach of
warranty (Art. 1599, NCC)
◘ REMEDIES FOR THE SELLER FOR
BREACH OF CONTRACT
A. REMEDIES FOR SELLER IN CASE OF
MOVABLES
1. Ordinary Remedies
a. Movables in General – failure of the vendee
to appear to received delivery or having
appeared, failure to tender the price at the
same time, unless a longer period for its
payment has been stipulated.
 action to rescind the sale (Art. 1593, NCC)
b. Sale of Goods
 Action for the price (Art. 1595, NCC)
 Action for damages (Art. 1596, NCC)
UNPAID SELLER
Types:
a. The seller of the goods who has not been paid or
to whom the price has not been tendered.
b. The seller of the goods, in case a bill of
exchange or other negotiable instrument has
been received as conditional payment, and the
condition on which it was received has been
broken by reason of the dishonor of the
instrument, insolvency of the buyer or
otherwise.
Remedies:
1. Possessory lien over the goods; or
2. Right of stoppage in transit after he has
parted with the possession of the goods and
the buyer becomes insolvent
3. Special Right of resale
4. Special Right to rescind the sale
5. Action for the price
6. Action for damages
2. Article 1484
or RECTO LAW
[ Remedies of Vendor in Sale of Personal
Property by Installments]
1. Contract of sale
2. Personal property
3. Payable in installments
4. In the case of the second and third remedies,
that there has been a failure to pay two or
more installments
 RECTO Law does not apply to a sale:
1. Payable on straight terms (party in cash and
party in one term)
2. Of real property
Remedies under Recto Law:
1) Specific performance in case that buyer fails
to pay.
2) Rescission of the sale in case of default of 2
or more installments.
3) Foreclose the chattel mortgage on the thing
sold in case of default of 2 or more
installments. In this case, he shall have no
further action for deficiency judgment.
4) Retain the installments paid provided that
the forfeiture is unconscionable.
A. REMEDIES OF SELLER IN CASE OF
IMMOVABLES
1. Ordinary Remedies
a. In case of anticipatory breach –
(Art. 1591, NCC)
b. Failure to pay the purchase price
Rescission upon judicial or notarial demand
for rescission (Article 15921, NCC)
The vendee may pay, even after the expiration of
the period, as long as no demand for rescission
has been made upon him
Note: Article 1592 does not apply to:
1) sale on installment of real estate;
2) contract to sell;
3) conditional sale; and
4) cases covered by RA 6552: Realty
Installment Buyer Protection Act.
2. R.A. No. 6552 or MACEDA LAW
 An act to Provide Protection to buyers of
Real Estate on Installment Payments
 Law governing sale or financing of real estate
on installment payments
Requisites:
1. Transaction or contracts involving the sale or
financing of real estate on installment
payments, including residential condominium
apartments; and
2. Buyer defaults in payment of succeeding
installments.
RIGHTS OF THE BUYER under Maceda Law:
A. If Buyer has paid at least two (2) years of
installments
1) The buyer must pay, without additional interest,
the unpaid installments due within the total be
one (1) month grace period for every one (1)
year of installment payments made
Note:. This right shall be exercised by the
buyer ONLY once in every 5 years of the life
f the contract and its extensions.
2) Actual cancellation can only take place after 30
days from receipt by the buyer of the notice of
cancellation of demand for rescission by a
notarial act and upon full payment of the cash
surrender value to the buyer (Olympia Housing
vs. Panastatic, GR 140468 16 January 2003)
Note: This right the seller shall refund to the
buyer the cash surrender value of the payments
on the property equivalent to 50% of the total
payments made. After five (5) years but not to
exceed 90% of the total payments made.
3) The buyer shall have the right to sell his rights
or assign the same to another person OR to
reinstate the contract by updating the account
during the grace period and before actual
cancellation of the contract
4) The buyer shall have the right to pay in advance
any installment or thefull-unpaid balance of the
purchase price any time without interest and to
have such full payment of the purchase price
annotated in the certificate of title covering the
property.
B. If Buyer has paid less than 2 years of
installments.
1) The seller shall give the buyer a grace period of
NOT less than 60 days from the date the
installment became due. If the buyer fails to
pay the installments due at the expiration of the
grace period, the seller may cancel the contract
after 30 days from receipt by the buyer of the
notice of cancellation or the demand for
rescission of contract by a notarial act.
2) Same No. 3 and 4 paragraph A above
3) Installment became due. If the buyer fails to
pay the installments due at the expiration of the
grace period, the seller may cancel the contract
after 30 days from receipt by the buyer of the
notice of cancellation or the demand for
rescission of contract by a notarial act.
4) Same No. 3 and 4 paragraph A above
Note: Down payments, deposits or options on
the contract shall be included in the
computation of the total number of
installment payments made
POSSESSORY LIEN
When Exercised:
1. Goods have been sold without any stipulation as
to credit;
2. Goods have been sold on credit, but the term of
credit has expired; and
3. Buyer becomes insolvent.
When Lost:
1. Delivery of the goods to an agent or bailee of
the buyer without reserving ownership or right of
possession;
2. Buyer lawfully obtains possession of the goods
by waiver of the lien; and
3. By waiver.
STOPPAGE OF GOODS IN TRANSITU:
Requisites:
1. Unpaid seller;
2. Insolvent buyer;
3. Goods must be in transit;
4. Seller must either actually take possession of
the goods sold or give notice to his claim to the
carrier or other person in possession;
5. Seller must surrender the negotiable document
of title, it any issued by the carrier or bailee;
and
6. Seller must bear the expenses of the delivery of
the goods after the exercise of the right.

RESCISSION
Types:
1. Special Right to Surrender Under Art. 1534 – if
the seller has either the right of lien OR a right
to stop the goods in transitu AND under either
of 2 situations:
a. Where the right to rescind on default has
been expressly reserved
b. Where the buyer has been in default for an
unreasonable time
2. Under Art/ 1597 (“technical rescission”)
 Where the goods have not been delivered to the
buyer, and the buyer has repudiated the
contract of sale, or has manifested his inability
to perform his obligations thereunder, the seller
may totally rescind the contract of sale by
giving notice of his election so to do to the
buyer
ACTION FOR THE PRICE
When may be exercised:
1. Where the ownership has passed to the
buyer AND he wrongfully neglects OR refuses
to pay for the price
2. Where the price is payable on a day certain
AND he wrongfully neglects OR refuses to pay
for the price, irrespective of the delivery or
transfer of title
3. Where the goods cannot readily be resold
for a reasonable price AND the buyer
wrongfully refuses to accept them even before
the ownership of the goods has passed, if Art.
1596 is inapplicable
ACTION FOR DAMAGES
When may be exercised:
1. In case of wrongful neglect or refusal by the
buyer to accept or pay for the thing sold (Art.
1596[1], NCC)
2. In an executory contract, where the ownership
in the goods has not passed, and the seller
cannot maintain an action to recover the price
(Art. 1595, NCC)
3. If the goods are not yet identified at the time
of the contract or subsequently
◘ REMEDIES OF THE BUYER FOR BREACH OR
CONTRACT
1. Action for specific performance
 Where the seller has broken the contract to
deliver specific or ascertained goods
 The judgment or decree may be unconditional,
or upon such terms and conditions as to
damages, payment of the price and otherwise
as the court may deem just (Art. 1598)
2. Remedies of buyer for breach of warranty
by seller (Art. 1599):
a. Recoupment – accept the goods and set up the
seller’s breach to reduce or extinguish the price
b. Accept the goods and maintain an action for
damages for breach of warranty
c. Refuse to accept the goods and maintain an
action for damages for breach of warranty
d. Rescind the contract by returning ot offering the
return of the goods, and recover the price of
any part thereof
NOTE: These are alternative remedies.
When Rescission By buyer Not Allowed:
1. If the buyer accepted the goods knowing of the
breach of warranty without protest
2. If he fails to notify the seller within a reasonable
time of his election to rescind
3. If he fails to return or offer to return the goods
in substantially as good condition as they were
in at the time of the transfer of ownership to
him.
Note: These are alternative remedies.
G. EXTINGUISHMENT OF SALE
Same causes as in all other obligations
Conventional redemption
Legal redemption
◘ CONVENTIONAL REDEMPTION
 The vendor reserves to himself the
right to reacquire the property sold. It occurs in
sales with pacto de retro. It must be stipulated in
the contract.
Period for Exercise of the Right of
Redemption:
1. By agreement – the period agreed but not to
exceed 10 years.
2. No agreement as to period – 4 years from
date of the contract.
Note: HOWEVER the vendor may still exercise the
right to repurchase within 30 days from the
time the final judgment was rendered in a
civil action on the basis that the contract was
a true sale with the right of repurchase.

◘ LEGAL REDEMPTION
 The right to be subrogated upon
the terms and conditions stipulated in the contract,
in the place of one who acquires a thing by
purchase or donation in payment or by any other
transaction whereby ownership is transferred by
onerous title.
WHEN CONVENTIONAL REDEMPTION IS
DEEMED TO BE AN EQUITABLE MORTGAGE
1. Price of sale is unusually inadequate
2. Vendor remains in possession
3. Period of redemption is extended after
expiration
4. Purchaser retains part of the purchase price
5. Vendor binds himself to pay the taxes of the
thing sold.
6. Any other case where the parties really
intended that the transaction shall secure the
payment of the debt or the performance of any
other obligation. (Art. 1602)
Instances of Redemption:
a. Under the Civil Code (legal redemption)
b. Sale of the co-owner by his share to a stranger
(Art. 1620, NCC)
c. When a credit or other incorporeal right in
litigation is sold (Art. 1634, NCC)
d. Sale of an heir of his hereditary rights to a
stranger (Art. 1088, NCC)
e. Sale of adjacent rural lands not exceeding 1
hectare (Art. 1621, NCC)
f. Sale of adjacent small urban lands bought
merely for speculation (Art. 1622, NCC)
Under Special Laws
1. Equity of redemption in case of judicial
foreclosures
2. A right of redemption in cases of extra-judicial
foreclosures.
EQUITABLE MORTGAGE
 One which lacks the proper formalities, form
of words, or other requisites prescribed by law for
a mortgage, but shows the intention of the parties
to make the property subject of the contract as
security for a debt and contains nothing impossible
or contrary to law (Cachola vs. CA, 208 SCRA
496).
When can there be Presumption as to
Equitable Mortgage?
1. Parties must have entered into a contract
denominated as a contract of sale
2. The intention of the parties was to secure an
existing debt by way of mortgage
Note: In the cases referred to in Arts. 1602 and
1604, the apparent vendor may ask for the
reformation of the instrument.
Remedy of Reformation: To correct the
instrument so as to make it express the true intent
of the parties.
 This refers to cases involving a transaction
where one of the parties contests or denies that
the true agreement is one of sale with right to
repurchase; not to cases where the transaction is
conclusively a pacto de retro sale. Example: Where
a buyer a retro honestly believed that he entered
merely into an Equitable Mortgage, not a pacto de
retro transaction, and because of such belief he
had not redeemed within the proper period.
 Tender of payment is sufficient to compel
redemption, but is not in itself a payment that
relieves the vendor from his liability to pay the
redemption price (Paez vs. Magno, GR L-793, April
27, 1949).
H. ASSIGNMENT OF CREDITS
An agreement by virtue of which the owner of a
credit, known as the assignor, by a legal cause,
such a sale, dacion en pago, exchange or
donation, and without the consent of the
debtor, transfers his credit and accessory rights
to another, known as the assignee, who
acquired the power to enforce it to the same
extent as the assignor could enforce it against
the debtor.
 It is perfected by mere consent (Arts. 1475 and
1624). What the law requires an assignment of
credit is not the consent of the debtor but
merely notice to him as the assignment takes
effect only from the time he has knowledge
thereof. (Art. 1626)
 An assignment of a credit, right or action shall
produce no effect as against third persons,
unless it appears in a public instrument is
recorded in the Registry of Property in case the
assignment involves real property.
 A creditor may validly assign his credit and its
accessories without the debtor’s consent (NIDC v.
De Los Angeles, 40 SCRA 289)
SUCCESSION
SUCCESSION
A mode of acquisition by virtue of which the
property rights and obligation to the extent of the
value of the inheritance of a person, are
transmitted through his death to another or others
by his will or by operation at law (Art. 774 NCC).
An heir may sell his shares of the estate even
before partition and even without the consent of
the others heirs because his hereditary share
has already been transmitted to him from the
moment of the death of the predecessor (De
Borja vs. De Borja, 46 SCRA 577)
Requistites:
1. Death of the predecessor;
2. Existence and capacity of the successor;
3. Provision of the law or will granting the right of
succession;
4. Acceptance by the successor;
5. Successor did not predecease the predecessor
Kinds of Succession
1. Testamentary
2. Intestate
3. Mixed
Heir – A person called to the succession either by
the provision of a will or by operation of law (Art.
782, NCC)
Devisee/Legatee – Persons to whom gifts or real
and personal property are respectively given by
virtues of a will (Art. 782, NCC)
DEVISEE or HEIRS
LEGATEES
Always called to Called to succeed to
succeed to individual an indeterminate or
items of property aliquot portion of the
decendent’s
hereditary estate.
Called to succeed by Called to succeed
means of a will either by a will or by
operation of law
Instances Where the Distinction between
Heirs and Devisees/Legatees are important
1. Preterition
The effect is to annul entirely the institution of
heirs, but legacies and devisees shall be valid in
so far as they are not inofficious
2. Defective disinheritance
The effect is to annul the institution of heirs to
the extent that the legitimes of the disinherited
heir is prejudiced, but legacies and devisees
shall be valid insofar as they are not inofficious.
3. After-acquired properties
As a rule, are not included, unless it should
expressly appear in the will itself that such was
the testator’s intention. This rule is applicable
only to legacies and devisees and not to
institution of heirs.
TESTAMENTARY
SUCCESSION
A. WILLS IN GENERAL
Wills – An act whereby a person is permitted, with
the formalities prescribed by law, to control to a
certain degree the disposition of his estate, to
take effect after his death.
Elements of a Will
1. Written instrument
2. Duly executed and attested
3. By a competent person
4. Voluntary disposition of property of a person
5. In favor of another competent person
6. To take effect after the maker’s death
7. Meantime being revocable.

CHARACTERISTICS OF A WILL
1. Personal Act
Matters that cannot be left to the
Discretion of Third Persons
a. Duration or efficacy of the designation of
heirs, devisees of legatees
b. Determination of the portions which they
are to take, when referred to by name.
(Art. 785, NCC); and
c. Determination of whether or not the
testamentary disposition is to be operative
(Art. 787, NCC)
Matters that the Testator may Entrust to a
Third Person:
a. Distribution of a specific property or sums
of money that he may leave in general to
specified classes or causes (Art. 786)
b. Designation of the persons, institutions or
establishments to which such property or
sums are to be given or applied. (Art. 786)
2. Unilateral
3. Formal or solemn
4. Free and voluntary
5. Ambulatory or revocable
6. Individual, not joint
7. Mortis causa
INHERITANCE – inheritance refers to the
university or entirely of the property, rights and
obligations of a person who died. Succession refers
to the legal mode by which this inheritance is
transmitted to the persons entitled to it.
Inheritance Include:
1. Property, rights and obligations not
extinguished by his death.
2. All which have accrued thereto since the
opening of succession. (Art. 781)
INTERPRETATION OF WILLS
* The testator’s intent (animus testandi), as well
as giving effect to such intent, is primodial. It is
sometimes said that the supreme law in succession
is the intent of the testator. All rules of
construction are designed to ascertain and give
effect to that intention. It is only when the
intention of the testator is contrary to law, morals,
or public policy that it cannot be given effect.
B. TESTAMENTARY CAPACITY AND INTENT
Requisites:
1. At least 18 years of age
2. Of sound mind at the time of execution of the
will, wherein he knows:
a. The nature of the estate to be disposed of;
b. The proper objects of his bounty; and
c. The character of the testamentary act.
* The law presumes that the testator is of sound
mind, unless:
a. One month or less, before making his will, he
was publicly known to be insane; and
b. was under guardianship at the time of making
his will.
C. FORMS OF WILLS
1. Notarial will – executed in accordance with the
formalities prescribed in Arts. 804 to 808 of the
Civil Code.
2. Holographic will – a will be entirely written,
dated and signed by the hand of the testator
HIMSELF without the necessity of any witness.
Ordinarily, when a number of erasures, corrections
and interlineations made by the testator in a
holographic will have not been noted under his
signature, x x x the will is not thereby invalidated
as a whole, but at most only as respects the
particular and erased, corrected and interlined.
(Kalaw vs. Revolva, 132 SCRA 257)
Thus, unless the authenticated alternatives,
cancellations or insertions were made in the date
of the holographic will or on testator’s signature,
their presence does not invalidate the will itself.
The lack of authentication will only result in
disallowance of such changes.
(Ajero vs. CA, GR 106720, Sept. 15, 1994)
◘ FORMALITIES OF WILLS
Common Formalities of Wills:
1. Must be written;
2. In a language or dialect known to the
testator.
Special Formalities of NOTARIAL WILLS:
1. Subscribed at the end thereof by testator
himself or by testator’s name written by person
in his presence and express direction.
(Subscription)
2. Attested and subscribed by 3 or more credible
witnesses in the presence of the testator and of
one another. (Attestation and Subscription by 3
witnesses)
3. Signature of testator and his witnesses on the
left margin of each and every page. (Marginal
Signatures)
4. Pages numbered correlatively in letters placed
on the upper part of each page. (Page
Numberings)
5. Contain an attestation clause.
* As a rule, if the attestation clause does not state
that the will was signed by the testator in the
presence of the witnesses, it is void unless if
such statement is made in some other part of
the will.
6. Acknowledged before a notary public by the
testator and his witnesses. An indispensable
requisite for the validity of the will.
(Acknowledgement)
ATTESTATION CLAUSE
A memorandum or record of facts wherein the
witnesses certify that the will has been executed
before them, and that it has been executed in
accordance
Contents of Attestation Clause
1. Number of pages of will;
2. Fact that the testator signed the will or caused
some other person to write his
name under his express direction, in the presence
of the instrumental witnesses; and
3. Witnesses signed the will in the presence of the
testator and of one another. (Art. 805)
“In the Presence”
 Implies contiguity with an uninterrupted
view between the testator and the witnesses
 Testator need not actually see the
witnesses provided he could have seen them if
he desired to do so, even though it would be
necessary for him to move slightly to do so.
Purpose of Requiring a Witness to Attest and
Subscribe to a Will:
1. Identification of the instrument
2. Protection of the testator from fraud and
deception
3. The ascertainment of the testamentary capacity
of the testator.
 If a witness to the will merely turned his back, the
signing is still considered in his presence. What is
important is that, the witnesses and the testator
had the opportunity to have seen the signing of the
document (Jaboneta vs. Gustillo, 5 Phil 241).
ADDITIONAL FORMALITIES OF NOTARIAL
WILLS IN SPECIAL CASES
a. Deaf or Deaf-Mute Testator:
1) Personally read the will, if able to do so; or
2) Designate two persons to read and
communicate to him, the contents thereof.
(Art. 807)
b. Blind Testator (Art. 808)
 Will shall be read to him twice; once, by one of
the subscribing witnesses, and again, by the
notary public before whom the will is
acknowledged (Alvarado vs. Gaviola, GR 74695,
September 14, 1993).
Special Formalities of HOLOGRAPHIC Wills
(Art. 810)
1. Written by the hand of the testator;
2. Dated by the hand of the testator;
3. Signed by the hand of the testator;
In the probate of the holographic will it shall be
necessary that at least one witness who knows the
handwriting and signature of the testator explicitly
declare that the will and the signature are in the
handwriting of the testator. If the will is centered,
at least three of each witness shall be required. In
the absence of any competent witness and if the
court deems it necessary, expert testimony maybe
resorted to. (Heirs of Matilde Montinola-Samson
vs. CA, GR 76648, February 26, 1988)
Law Which Governs Formal Validity of Wills:
(See table under Conflicts of Laws)
The validity of a will as to its form depends upon
the observance of the law in force at the time it is
made (Art. 795).
Effects of insertion on the Validity of a
Holographic Will
1) If made after the execution of the
will, but without the consent of the testator,
such insertion is considered as not written the
validity of the will cannot be defeated by the
malice or caprice of third persons
2) If the insertion after the execution
of the will was with the consent of the testator,
the will remains valid but the insertion is void.
3) If the insertion after the execution explained, added to or altered. In order that it
is validated by the testator by his signature may be effective, it shall be executed as in the
thereon, then the insertion becomes part of case of a will. (Art. 825)
the will, and the entire will becomes void,  Has the effect of
because of failure to comply with the republishing the will of modified by the codicil.
requirement that it must be wholly written by
the testator
4) If the insertion made by a third Requisites for the Validity of
person is made contemporaneous to the Incorporation by Reference
execution of the will, then the will is void Must be in existence at the time of the
because it is not written entirely by the testator execution of the will;
Will must be clearly described and identify
the same stating among other things, the
Doctrine of Liberal Interpretation number of pages thereof;
 In the absence of bad faith, It is be identified by clear and satisfactory
forgery, or fraud, or undue and improper pressure proof; and
and influence, defects and imperfections in the It is be signed by the testator and the
form of attestation or in the language used therein witnesses on each and every page.
shall not render the will invalid if it is proved that
the will was in fact executed and attested in
substantial compliance with Article 805. (Art. 809).

JOINT WILLS
D. WITNESS TO THE WILLS A single testamentary instrument which contains
the wills of two or more persons, jointly executed
by them, either for their reciprocal benefit of for
Requirements for Witnesses to Wills the benefit of for the benefit of the third person.
* This is prohibited under Art. 818.
1. Domiciled in the Philippines;
2. Able to read and write;
3. Not blind, deaf or dumb;
4. At least 18 years of age;
5. Has not been convicted of falsification of F. REVOCATION OF WILLS AND
a document, perjury, or false testimony; TESTAMENTARY DISPOSITIONS
6. Of sound mind.
REVOCATION OF WILLS
A. By Implication of law:
1. Legal separation
2. Preterition
 The notary public cannot be considered as a 3. Bringing action for the recovery of credit
witness since he could not have acknowledged 4. Transformation, alienation or loss of bequeathed
before himself his having signed the will. He property
cannot split his personality into two so that one will 5. Unworthiness
appear before the other to acknowledge his 6. Marriage in bad faith
participation in the marking of the will. To permit 7. Void/annulled marriage
such a situation to obtain would be sanctioning
sheer absurdity (Cruz vs. Villasor, 54 SCRA 31) B. By some will, codicil or other writing.

Doctrine of Presumed Revocation

E. CODICILS AND INCORPORATION BY Whenever it is established that the testator has in
REFERENCE his possession or had access to the will, but upon
his death it cannot be found or located the
CODICIL presumption arises that it must have been revoked
 Is a supplement or addition by him by an overt act. (Art. 830)
to a will, made after an execution of a will
annexed to be taken as a part thereof, by which Doctrine of Conditional or Relative Revocation
any disposition made in the original will is
 If testator revokes a will with a present
intention of making a new one immediately as a
substitute, and the new will is not made, or, if
made, fails to effect for any reason, it will be
presumed that the testator preferred the old will to
intestacy.
C. By burning, Tearing, Canceling or
Obliterating with Intent to revoke the will.
Requisites:
1. Testamentary capacity: In order that a will may
be considered as revoked the testator at the
time of performing the act must have
testamentary capacity. The same degree of
mental capacity to make a will is necessary to
revoke;
2. Intention to revoke;
3. Actual physical act of destruction; and
4. Performed by testator himself or by some other
person in his presence and under his express
direction.
Laws Which Govern Revocation
1. If the revocation takes place in the Philippines,
whether the testator is domiciled in the
Philippines or in some other country, it is valid
when it is in accordance with the laws of the
Philippines
2. If the revocation takes place outside the
Philippines, by a testator who is domiciled in the
Philippines, it is valid when it is in accordance
with the laws of the Philippines
3. Revocation done outside the Philippines, by a
testator who does not have his domicile in this
country, is valid when it is done according to
the:
a. law of the place where the will was made; or
b. law of the place in which the testator had his
domiciled at the time of revocation
G. REPUBLICATION AND REVIVAL OF WILLS
REPUBLICATION – Act of the testator whereby
he reproduces in a subsequent will the dispositions
contained in the previous will that is void as to its
form.
Requisites of Republication
1. To republish a will void as to its form, all the
dispositions must be reproduced or copied in
the new or subsequent will; and
2. To republish a will valid as to its form, but
already revoked, the execution of a codicil
which makes reference to the revoked will is
sufficient.
Effects of Republication by Virtue of a Codicil
1. The codicil revived the previous will
2. The old will is republished as of the date of the
codicil
3. A will republished by a codicil is governed by a
statute enacted subsequent to the execution of
the will, but which was operative when the
codicil was executed.
REVIVAL – Restoration to validity of a previously
revoked will by operation of law.
Principle of Instanter
Express revocation of the first will renders it
void because the revocatory clause of the
second will, not being testamentary in the
character, operates to revoke the previous will
instantly upon execution of the will containing
it.
H. ALLOWANCE AND DISALLOWANCE OF
WILLS
PROBATE
To probate a will means to prove before some
officer or tribunal:
a. The instrument to be probated is the last will
and testament of the deceased person;
b. That it has been executed, attested and
published as required by law; and
c. That the testator was of sound and disposing
mind.
Prescriptive Period to Probate a Will?
The statute of limitations is not applicable to the
probate of wills.
 As a general rule, courts in probate
 proceedings are limited only to passing upon
the extrinsic validity of the will sought to the
probated and the compliance with the
requisites or solemnities prescribed by law.
(Nufable vs. Nufable, 309 SCRA 692)

 Pending the filing of administration

proceedings, the heirs without doubt have
legal personality to bring suit in behalf of the
estate of the decedent in accordance with the
provision of Article 777.

 Even if administration proceedings have

already been commenced, the heirs may still
bring the suit if an administrator has not yet
been appointed.

 Even if there is an appointed administrator,

jurisprudence recognizes two exceptions, viz: I. INSTITUTION OF HEIRS
1 if the executor or administrator is unwilling  An act of virtue of which a testator
or refuses to bring suit: and designates in his will the person or persons
2. When the administrator is alleged to have who are to succeed him in his property and
participated in the act complained of and he transmissible rights and obligations. (Art. 840)
is made a party defendant
(Rioferion, et. All vs. CA et. al, January 13, 2004)  A will shall be valid even though it
should not contain an institution of heir, or
such institution should not compromise the
entire estate, and even though the person
instituted should not accept the inheritance or
should be incapacitated to succeed. (Art. 841)
Questions Determinable by the
Probate Court:
Requisites for a Valid Institution of Heir
1. Due execution of the will. 1. The will must be valid;
2. Identity of the will; and 2. Personally made by the testator;
3. Testamentary capacity of the testator 3. Within the authority granted by law;
Ground for the Disallowance of 4. Heir designated must be capable of succeeding;
Wills 5. Heir must be certain or ascertainable;
6. No Preterition.
Formalities required by law have not
been complied with;
Testator acted by mistake or did not
PRESUMPTIONS
intend that the instrument he signed
should be his will at the time of
1. Presumption of Equality – Heirs instituted
affixing his signature thereto.
without designation of shares shall inherit in equal
It was procured by undue and improper
parts.
pressure and influence, on the part
2. Presumption of Individuality – When the
of the beneficiary or of some other
testator institutes some heirs individually and
person;
others collectively, those collectively designated
Testator was insane or mentally
shall be considered as individually instituted,
incapable of making a will, at the
time of its execution;
Will was executed through force or
under duress, or the influence of
fear, or threats;
Signature of the testator was procured
by fraud.
 unless it clearly appears that the intention of the
testator was otherwise.
3. Presumption of Simultaneity – When the
testator call to the succession a person and his
children they are deemed to have been instituted
simultaneously and not successively.

Institution Based on False Cause

General Rule: The statement of a false cause for
the institution of an heir shall be deemed not
written.
Exception: If it appears from the face of the will
that the testator would not have made the 1.
institution had he known the falsity of the cause.
2.
3.
K. SUBSTITUTION OF HEIRS
The appointment of another heir so that he may
enter into the inheritance in default of the heir
originally instituted.
Its purpose is to avoid intestacy.
It is impossible only on the free portion and never
on the legitimes. (Art. 857)

J. PRETERITION
 Preterition is the Omission in the testator’s will
of one, some or all of the compulsory heirs in
the direct line, whether living at the time of the
execution of the will or born after the death of
the testator. (Art. 854)
 The institution is VOID (not really “annulled” as
stated in the law), automatically without need
of court order)
 If the only provision in the will is the institution
of an heir/heirs totally preteriting one or some
compulsory heirs, the entire will is void; hence,
if there is a petition for probate of that will, the
petition should be dismissed and the court
should not proceed with the probate of the will
(because it is already void).
 If there are clear provisions for legacies and
devises (not just universal institution without
designating the amount or property), these
provisions are valid provided they are not (not
annulled as in the law) automatically without
need of court order) inofficious – reducible if
need be.
 If the heir was given a share, even if very small or
minimal, there is no Preterition. All he has to do is
ask for the completion of his share. (Art. 906,
Reyes vs. Barreto-Datu, 19 SCRA 85)
Instances When Substitution is Extinguished
1. When the substitute predeceases the testator
2. When the substitute is incapacitated
3. When the substitute renounces the inheritance
4. When the institution of heir is annulled
5. When the institution or the substitution is revoked
by the testator
6. When a will is void or disallowed or revoked
KINDS OF SUBSTITUTION
1. Simple – testator designates one or more
persons to substitute the heir/s in case such
heir/s die before him or should not wish or
should be incapacitated to inherit.
2. Brief – two or more persons are designated to
substitute for only one heir.
3. Compendious – only one person is designated
to substitute for two or more heirs.
4. Reciprocal – two or more persons are not only
instituted but are also designated mutually as
substitutes for each other.
5. Fideicommissary – takes place when the
fiduciary or first heir instituted is entrusted with
the obligation to preserve and to transmit to the
second heir the whole or part of the inheritance,
provided such substitution does not go beyond
one degree from the heir originally instituted
and provided further and the second heir are
living at the time of the death of the testator.

Requisites:
Heir omitted must be a Compulsory Causes When Simple or Common Substitution
heir in the direct line. May Take Place:
Omission must be complete and total 1. Instituted heir dies before the testator.
in character in such a way that the
omitted heir does not and has not
receive anything at all from the
testator by any title whatsoever; and
Compulsory heir omitted must survive
the testator.
2. He repudiates the inheritance
3. He is incapacitated to succeed.
Requisites for a VALID FIDEICOMMISSARY
SUBSTITUTION:
1. First heir primarily called to the enjoyment of
the estate;
2. Second heir;
3. Obligation imposed upon first heir to preserve
the estate and transmit it to the second heir.
Limitations:
1. Substitution must not go beyond one degree
from the heir originally instituted.
2. Fiduciary and the Fideicommissary must be
living at the time of the death of the testator.
3. Substitution must not be burden the legitime
4. Substitution must be made expressly
Rights of Fiduciary – all the rights of a
usufructuary until the moment of delivery to the
fideicommissary.
Obligations of Fiduciary:
1. Preserve the property or inheritance;
2. Transmit said property or inheritance to the
second heir or fideicommissary.
CONDITIONAL TESTAMENTARY
SUBSTITUTION
 Effectivity is subordinate to the fulfillment or
non-fulfillment of a future and uncertain event.
 If a condition is so vaguely worded that even
after applying rules on construction and
interpretation, it is still meaningless,
contradictory, or cannot be understood, the
condition will be regarded as an impossible
condition and should therefore be disregarded.
(6 Sanchez Roman 607)
 An absolute prohibition to contract a first or
subsequent marriage shall be considered as not
written unless such condition has been imposed
on the widow or widower by the deceased
spouse, or by the latter’s ascendants or
descendants (Art. 874)
DISPOSITION CAPTATORIA –
Disposition made upon the condition that the heir
shall make some provision in his will in favor of the
testator or of any other person shall be void. (Art.
875, NCC)
Institution Modal
The statement of the object of the institution, or
the application of the property left by the testator,
or the charge imposed by him. (Art. 882, NCC)
CELESTINO BALUS vs. SATURNINO BALUS (GR
No. 168970, January 15, 2010, 610 SCRA 178)
FACTS: Rufo, the father of Celestino and
Saturnino, mortgaged a parcel of land he owns as
a security for a loan with the Rural Bank. For his
failure to pay his loan, the mortgaged property
was foreclosed and was subsequently sold to the
Bank as the sole bidder. The property was not
redeemed within the period allowed by law and a
new title was issued in the name of the bank.
Later, Celestino and Saturnino executed an
Extrajudicial Settlement where they intended to
redeem the property mortgaged by their father
with the Bank.
Saturnine bought the subject property
from the bank and thereafter, he filed a complaint
for recovery of possession against Celestino.
ISSUE: Whether there ever a co-ownership
between Celestino and Saturnino over the subject
property at any given point of time.
HELD: NONE. At the time of the execution of the
Extra-judicial Settlement, the subject property
formed part of the estate of their deceased father.
The rights to a person’ successions are transmitted
from the moment of his death. In addition, the
inheritance of a person consists of the property
and transmissible rights and obligations existing at
the time of his death, as well as those which have
accrued thereto since the opening of the
succession. Since Rufo lost ownership of the
subject property during his lifetime, it only follows
that at the time of his death, the disputed parcel of
land no longer formed part of his estate.
L. LEGITIME
That part of the testator’s property which he
cannot dispose of because the law has reserved it
for certain heirs, who are, therefore, called would be reduced pro rata without
compulsory heirs. (Art. 886, NCC) preference among them.

◘ COMPULSORY HEIRS Kinds of Compulsory Heirs

1. Primary – always entitled to their legitimate
2. Secondary – may be excluded by other
In general, compulsory heirs are those for whom
compulsory heirs
the law has reserved a portion of the testator’s
3. Concurring – those who succeed together with
estate which is known as the legitime. (Art. 887,
the primary or the secondary compulsory heirs
NCC)
(i.e widow or widower, illegitimate children and
descendants [legitimate or illegitimate])
1. Legitimate children and descendants, with
respect to their legitimate parent and
Rules:
ascendants;
1. Direct descending line
2. In default of the foregoing, legitimate parents
a. Rule of preference between lines
and ascendants, with respect to their
b. Rules of proximity
legitimate children and descendants;
c. Right of representation ad infinitum or
3. The widow or widower;
disinheritance (LC: LD only; IC; both LD
4. Acknowledged natural children and natural
and ID)
children by legal fiction;
d. If all the LC repudiate their legitimes, the
5. Other legitimate children referred to in Art.
next generation of LD succeed in their own
287.
right
2. Direct ascending line
a. rule of division by lines
b. rule of equal division
Kinds of Illegitimate Children under the New
3. Non-impairment of legitimes
Civil Code
1. Acknowledged Natural Children
 Includes all natural children who may have been
acknowledged either voluntarily or by a final
If the testator is a If the testator is an
judgment of a competent court.
legitimate person illegitimate person
 A natural child who has not been acknowledged
Legitimate children and Legitimate children
is not a compulsory heir.
descendants (LCD) and descendants
2. Natural Children by Legal Fiction
(LCD)
 All those children born or conceived of void
In default of the Illegitimate children
marriages as well as those conceived of
foregoing, legitimate and descendants
viodable marriages after the decree of
parents and ascendants (ICD)
annulment.
(LPA)
3. Acknowledged Illegitimate Children
 Children born outside of wedlock of parents Surviving spouse (SS) Illegitimate children
whom, at the time the conception of the former and descendants
was disqualified by some impediment to marry (ICD)
each other. Illegitimate children and Surviving spouse (SS)
descendants (ICD)
NOTE:
Art. 176 (sent. 2) of the Family Code
amended Art. 895 of the NCC by doing away STEPS IN DETERMINING THE
with any distintion between the different LEGITIMES OF COMPULSORY
kinds of illehgtimate children for purposes
determining their legitime/inheritance. HEIRS
a. Determination of the gross value of the estate
It is now uniform: ½ of the legitime of a at the time of the death of the testator;
legitimate child, unless there are many IC b. Determination of all debts and charges which
which would result to impairing the LC’s are chargeable against the estate;
legitime since the disposable portion would c. Determination of the net value of the estate by
be insufficient to cover the legtimes of all the deducting all the debts and charges from the
IC – in which case the legitimes of the IC gross value of the estate;
 d. Collation or addition of the value of all 10 901 IC alone -1/2 1/2
donations inter vivos to the net value of the
estate; 11 903 IP -1/4 1/2
e. Determination of the amount of the legitime SS -1/4
from the total thus found;
f. Imputation of the value of all donations inter 12 903 IC -1/2 1/2
vivos made to compulsory heirs against their IP -0
legitime and of the value of all donations inter
vivos made to strangers against the disposable 13 895 LC -1/2 Depends on
free portion and restoration to the hereditary & Note: Can’t the no. of
estate if the donation is inofficious; and Amended be reduced. IC.
by
g. Distribution of the residue of the estate in Maybe
FC
accordance with the will of the testator. -1/2 share there is FP
176 IC of 1 LC or there is
(2) none left.
(Note: If the other
Note: May be
half of estate –
reduced if
disposable portion-
the other
is not enough for
half is not
all the IC following
enough for
TABLE OF LEGITIMES PYabao Notes
the 1:2 formula,
such portion shall
all the IC.
be divided equally
by all IC.)

Legend:
LC – Legitimate Children
IC – Illegitimate Children
SS – Surviving Spouse
IP – Illegitimate Parents
LPA – Legitimate Parents/ Ascendants
CH – Compulsory Heirs

N NCC HEIRS LEGITIMES FREE

o Arts PORTION

1 888 LC alone - 1/2 1/2

2 894 IC - 1/3 1/3

SS - 1/3
3 899 LPA - 1/2 1/8
IC - 1/4
SS - 1/8
4 889 LPA alone - 1/2 1/2

5 903 IP alone - 1/2 1/2

6 896 IC (1) -1/2 1/4

892 LP -1/4

7 892 IC (2) -1/2 1/4

SS -1/4

8 892 IC (2 or more) -1/2 FP

SS -Equal to depends
1 LC on SS’s
share
share
9 893 LPA -1/2 1/4
SS -1/4
14 900 SS alone 15 897 LC -1/2 of Depends on
-1/2 -1/2 estate the number
- ordinary
of IC.
- in articulo -1/3 -2/3 898 (Note: Can’t
be reduced)
mortis, Maybe
testator dies 892 there is still
-1/4 if 1
within 3 mos. FP or there
SS LC or
from date of 895 Same as
is NONE
marriage (no left.
one share
live-in or with of one LC
live-in (Note: Can’t
relationship of be reduced)
less than 5
years -1/2
- In articulo - 1/2 -1/2 share of
mortis, each LC
testator dies IC
within 3 mos. NOTE:
from date of Legitime of
marriage but NOTE: When IC IC may be
living as are so many that reduced if
husband and the remaining they are
wife for more estate shall not many.
than 5 years be enough to all
IC if the 1:2
already
formula is
followed -- in
NOTE: In case which case, the
of articulo remaining
portion (after
mortis
giving the LC
marriage, if and SS their
testator dies legitimes) shall
after 3 months be divided
equally among
from date of all the IC.
marriage, the
ordinary rule
applies, hence
the legitime of 16 FC AC- Adopted Equal to As may be
SS is ½ (with 189 Child one LC applicable
or w/o live-in (3)
relationship) NOTE: Although the FC mentions the Adopted
NOTE: In case Child remaining an intestate heir of his parents and
of legal other blood relatives, Tolentino opines the AC can’t
separation, the be deprived of his legitime which is an integral part
SS may inherit of a child’s intestate share. Hence, an AC inherits
if it was the from two sources: from his adoptive parents and
deceased who from his parents & other blood relatives. However,
had given an AC does not have any right by intestacy from
cause for the any relative of the adopting parents, whether
same; if it is ascending or descending line – his relationship is
otherwise, the limited to the adopter.
SS cannot
inherit. (892)
 6 - RA AC - 1/2 Depends
LEGITIMES IN THE 8552 (or AC/LC) (Note: Can’t on the
be reduced)
ESTATE OF ADOPTER 17-18 number
- NCC IC of IC.
(Generally, apply the same rules above) - 1/2 of 1
895 (Thereaft
AC
No LAW HEIRS LEGITIME FREE (Note: May be er there
. PORTION reduced. If may or
the remaining may not
1 - RA Adopted - 1/2 1/2 portion of
be any
estate is not
Child enough for all FP left.)
8552 (AC) alone the IC, such
17-18 portion shall
- NCC be divided
equally by all
888
IC.)

2 - RA AC (1) - 1/2 1/4

7 - RA LPA alone - 1/2 1/2
8552
SS 8552
17-18 - 1/4
17-18
- NCC
-NCC
893
889
3 - RA AC/LC - 1/2 There is 9 - RA LPA - 1/2 1/4
8552 (2 or more) FP, but 8552 SS - 1/4
17-18 it 17-18
- NCC SS - Same as depends - NCC
892 one (1) on SS’s 893
share of share.
one AC/LC 10 - RA LPA - 1/2 1/8
8552 SS - 1/8
4 - RA AC/LC - 1/2 Depends 17-18 IC - 1/4
8552 on the - NCC
17-18 SS - 1/4 or if no. of 899
- NCC many IC.
897 equal to 1 Maybe 11 - RA SS - 1/3 1/3
898 AC/LC there is 8552 IC - 1/3
892 FP or 17-18
895 IC - Half of there is - NCC
the share none left. 894
of 1 AC/LC
12 - RA IC alone -1/2 1/2
8552
5 - RA AC/LC 1/2 to be 1/2 17-18 NOTE: The
8552 divided by - NCC
presence of

17-18 the total illegitimate

901 children
number of
- NCC (primary CH)
AC and LC
888 excludes the
illegitimate
parents
(secondary CH)
13 - RA IP alone - 1/2 1/2
8552
17-18 COLLATION
- NCC Fictitious mathematical process of adding
903 the value of the thing donated to the net
value of the hereditary estate (Art. 908
14 - RA IP - 1/4 1/2 and Arts. 1061-1077)
8552 SS - 1/4
Act of charging or imputing such value
17-18
against the legitime of the value against
- NCC
the legitime of the compulsory heir to
903 whom the thing was donated (Arts. 1061-
1077)

ESTATE OF ADOPTED Act of changing or imputing such value

against the legitime of the compulsory
(Generally, apply the same rules above)
heir to whom the thing was donated.
No LAW HEIRS LEGITIME FREE
. PORTION Actual act of restoring to the hereditary
estate that part of donation which is
1 888 LC alone - 1/2 1/2 inofficious in order not to impair the
legitime of compulsory heirs.
2 892 LC - 1/2 1/4
SS - 1/4
3 892 LC (2 or - 1/2 There is  The purpose of collation is to attain equality among
more) FP. the compulsory heirs insofar as possible for its is
Depends presumed that the intention of the testator or
predecessor-in-interest in making a donation or
SS - Equal to on the
gratuitous transfer to a force heir is to give him
the share no. of LC something in advance on account of his share in
of 1 LC the estate, and the predecessor’s will is to treat all
his heirs equally, in the absence of any expression
4 897 LC - 1/2 Depends to the contrary. (Vizconde vs. CA, GR 118449,
898 SS - 1/4 or if on the no. February 11, 1669)
892 many equal of IC.
to 1 LC Maybe
895
- 1/2 of there is FP
IC
or maybe
the share
of 1 AC/
there is  RESERVA TRONCAL
none left.  The reservation by virtue of which an ascendant
LC; if the
who inherits from his descendant any property
remaining
which the latter may have acquired by gratuitous
part of title from another ascendant, or a brother or sister,
estate is is obliged to reserve such property as he may have
not enough acquired by operation of law for the benefit or
for all IC, relatives who are within the third degree and who
then divide belong to the line from which said property came
(Art. 891)
that
portion
eually
Purpose:
among the 1. To reserve certain property in favor of certain
IC. persons;
2. To prevent persons outside a family from
acquiring, by some chance or accident, property
which otherwise would have remained with the
said family;
3. To maintain a separation between paternal and
maternal lines.
Requisites:
1. The property should have been acquired by
operation of law by an ascendant (reservista)
from his descendant (propositus) upon the
death of the latter.
2. The property should have been previously
acquired by gratuitous title by the descendant
(propositus) from another ascendant or from a
brother or sister (originator).
3. The descendant (propositus) should have died
without any legitimate issue in the direct
descending line who could inherit from him.
Personal Elements
1. Origin – also called Originator, the ascendant,
or brother or sister from whom the propositus
had acquired the property by gratuitous title
(e.g. donation, remission, testate or intestate
succession);
2. Propositus – the descendant who died and
from whose death the reservista in turn has
acquired the property by operation of law (e.g.
by way of legitime or intestate succession). The
so-called “arbiter of the fate of the reserve
troncal.”
3. Reservista – also called Reservor, the
ascendant, not belonging to the line from which
the property came and for whose benefit the
reservation is constituted. They must be related
by blood not only to the propositus but also to
the originator.
4. Reservatarios or Reservees
Note: All personal elements must be joined.
Qualification of the RESERVATARIOS:
1. Belong to the line from where the property
originally came.
2. Related by blood to the propositus and to the
brother/sister/other ascendant who gratuitously
gave the property to propositus.
3. Within the 3rd degree.
4. Survive the reservista.
5. Reservatorio need not to be capable of
succeeding the reservista, since he does not
inherit from the latter, but from propositus.
Requisites for the Property Involved to
become Reservable:
1. Acquired by the propositus by lucrative title.
2. Comes to the propositus from another
ascendant or sister or brother.
3. Passes to the ascendant by operation of law.
Cabardo vs. Villanueva
44 Phil.186
Facts: ‘’A’’ died intestate leaving a considerable
fortune. His widow “B” gave birth to a son three
months after “A’s” death. The child died two days
after it was born. The widow “B” died two days
after the child. The inheritance left by “A” is
claimed by the legitimate mother of “B”, and a
legitimate brother of “A”. there are no other
relatives/
Issue: Who is entitled to the inheritance?
Ruling: Upon “A’s” death, his fortune was inherited
by his widow (1/2) and by his son (1/2) by
intestate succession. The son inherited because at
the time of his father’s death, he was already
conceived, and a conceived child is already
considered born for all purposes favorable to it.
Upon the death of the son, without issue,
the mother inherited by operation of law, his half-
share. On this half-share, there is a reseva troncal,
the requisites thereof all being present – and
therefore, on the widow “B’s” death, said one-half
should properly go to the legitimate brother of A,
who is a relative within the 3rd degree counted
from propositus. Said half is indeed not part of the
estate of “B”.
Causes for Extinguishment of the Reserva
Troncal
1. Death of the reservatarios;
2. Death of the reservista;
3. Loss of the reservable properties, provided the
reservor had no fault or negligence;
4. Prescription of the right of reservetarios, when
the reservista holds the property adversely
against them in the concept of an absolute
owner;
5. Registration under the Torrens System as free
from reservation;
6. Renunciation or waiver by all the reserves after
the death of the reservoir.
 The reservista may dispose of the reservable
property by aits intervivos. This is logical because
he acquires the ownership of the reservable
property upon the death of the descendant-
propositus, subject to the resolutory condition that
there must exist at the time of his death relatives
of the descendants ho are within the third degree
and who belong to the line from which the property
came. He can, therefore, alienate or encumber the
property of he so desires but he will only alienate
or encumber what he has and nothing more. As a
consequence, the alquirer will only receive a
limited and reservable title, therefore, after the
death of the reservistam the reservatorios may
then rescind the alienation or encumbrance,
because the resolutory condition to which the
reserve is subject has already been fulfilled.
(Lunsod vs. Ortega 46 Phil. 664)
 The reservista cannot dispose of the reservable
property by acts mortis causa. The reason is
crystal clear – upon the death of said ascendant-
reservista, the reservable property does not belong
to his or her estate because the resolutory
condition to which the reserve is subject has
already been fulfilled, therefore the reservatorios
or reservees nearest the descendant – propositus
have already become automatically and by
operation of law owners of the reservable property.
(Gonzales vs. Legarda, 104 SCRA 479)
 The right of representatives on the part of the
reservatorios applies to relatives who are within
the third degree mentioned by law, as in the case
of the deceased person from when the reservable
property come. Therefore, relatives of the fourth
degree and the succeeding degrees can never be
considered as reservatarios, will the law does not
recognize them as such. The reason for the rules is
that, the reserve being an exceptional case, its
applications should be limited to what is strictly
needed to accomplish the purpose of the law.
(Toico de Papa vs. Camacho, L-28032, Sept. 24,
1986)
DISINHERITANCE
A testamentary disposition by which a
person is deprived of, or exclude from, the
inheritance to which he has a right.
Requisites for a valid Disinheritance
1. Effected through a valid will;
2. For a cause;
3. Legal cause must be specified in the will itself;
4. Cause must be certain and true;
5. Unconditional; and
6. Total.
Effects of Valid Disinheritance
1. Deprivation of the disinherited compulsory heir
who is disinherited of any participation in the
inheritance includes the legitime.
2. Children and descendants of the person
disinherited shall take his or her place and shall
preserve the rights of compulsory heirs with
respect to the legitime.
3. Disinherited parent shall not have the usufruct or
administration of the property, which constitutes
the legitime.
Implications of Disinheritance
1. Since disinheritance must be made in a will, there
is no disinheritance in legal succession.
2. Only compulsory heirs can be disinherited, for they
alone are entitled to the legitime.
3. Since compulsory heirs maybe disinherited only for
lawful causes, it is clear that the courts may
properly inquire into the validity of the
disinheritance.
4. A disinheritance excludes the heir not only from
the legitime but also from the free portion.
IMPERFECT DISINHERITANCE – express
attempt of the testator in depriving a compulsory
heir of his legitime without the requisite formalities
prescribed by law. The effect is partial annulment
of the institution of heirs.
Effects:
1. If testator had made disposition of the entire
estate: annulment of the testamentary
dispositions only in so far as they prejudiced the
legitime of the person disinherited; does not
affect the dispositions of the testator with
respect to the free portion.
2. If testator did not dispose of the free portion:
compulsory heir is given all that he is entitled to
receive as if the disinheritance has not been
made, without prejudiced to lawful dispositions
made by the testator in favor of others/
3. Devise, legacies and other testamentary
dispositions shall be valid to such extent s will
not impair the legitime.
 Imperfect Preterition
disinheritance C. Spouse:
Persons disinherited Person omitted must 1. Convicted of an attempt against the life of
may be any compulsory be a compulsory heir. testator, his/her spouse, descendants /
heir. ascendants.
Attempt to deprive the The attempt to 2. Accused of testator of a crime for which the law
heir of legitime is deprive legitime is prescribes imprisonment for 6 years or more
always express. always implied. and accusation has been found to be false;
Attempt to deprive the Attempt may or may 3. By fraud, violence, intimidation, or undue
heir of his legitime is not be intentional. influence, causes the testator to make a will or
always intentional. to change one already made;
Partial annulment of Total annulment. 4. Has given cause for legal separation;
institution of heirs. 5. Has given a ground for loss of parental
authority; and
6. Unjustifiable refusal to support the children or
other spouse.
GROUNDS FOR DISINHERITANCE OF:
A. Children and Descendants
1. Leads a dishonorable life;
2. Accused the testator of a crime of which the law
prescribes imprisonment for 6 years or more N. LEGACIES AND DEVISES
and accusation has been found to be
groundless;  A legacy is a gift of personal property given
3. Convicted of adultery / concubinage with the in a will, while a devise is a gift of real property
spouse of the testator; given in a will. A legacy is “bequeathed”.
4. Conviction of a crime which carries with it the
penalty of civil interdiction;
5. By fraud, violence, intimidation, or undue Order of Preference of Legacies and Devises
influence causes the testator to make a will or under ARTICLE 950:
to change one already made; 1. Remuneratory legacies or devises;
6. Attempt against the life of the testator, his/her 2. Preferred legacies or devises;
spouse, ascendants / descendants; 3. Legacies for support;
7. Refusal without justifiable cause to support the 4. Legacies for education;
parent or ascendant; 5. Legacies or devises of a specific, determinate
8. Maltreatment of the testator by word or deed. thing which forms part of the estate; and
6. All others pro rata (Art. 950)
B. Parent or Ascendants
1. Abandoned their children or induced their
daughters to live a corrupt or immoral life, or Application of the Order Preference:
attempted against their virtue; 1. When there are no compulsory heirs and the
2. Convicted of an attempt against the life of the entire estate is distributed by the testator as
testator, his/her spouse, descendants / legacies or devises; or
ascendants. 2. When there are compulsory heirs, but their
3. Accused testator of a crime for which the law legitimes has already been provided for by the
prescribes imprisonment for 6 years or more testator and there are no donations inter vivos.
and accusation has been found to be false;
4. Convicted of adultery / concubinage with the
spouse of the testator; Order of Preference of Legacies and Devises
5. By fraud, violence, intimidation or undue under ARTICLE 911:
influence causes the testator to make a will or 1. Legitime of compulsory heirs
to change one already made; 2. Donations inter vivos
6. Loss of parental authority; 3. Preferential legacies or devises
7. Refusal without justifiable cause to support the 4. All other legacies or devises pro rata
children/ descendants;
8. Attempt by one of the parents against the life of Note: When the question of reduction is
the other, unless there has been reconciliation exclusively among legatees and devisees
between them. themselves, Article 950 governs; but when there is
a conflict between compulsory heirs and devisees
and legatees, Article 911 applies.

GROUNDS FOR REVOCATION OF LEGACIES

AND DEVISEES

1. Testator transforms the thing bequeathed in

such a manner that it does not retain either
the form or the denomination it had.

2. Testator by any title or for any cause alienates

the thing bequeathed, or any part thereof, it
being understood that in the later case the
legacy/devise shall be without effect only with
respect to the part alienated.

3. Thing bequeathed is totally lost during the

lifetime of the testator, or after his death
without the heirs fault.

4. Other causes: nullity of the will;

noncompliance with suspensive conditions
affecting the bequests.

VALID AND EFFECT OF LEGACY & DEVISE

NATURE VALIDITY / EFFECT

Thing owned in part by General Rule: Conveys only interest or part owned by testator
testator
Exceptions: If testator otherwise provides –
a. He may convey more than what he
owns – the state should try to acquire the part or interest owned by other
parties. If other parties are unwilling to alienate, the estate should give the
legatee/devisee the monetary equivalent.
b. He may convey less than what he owns.

Thing owned by another. General Rule:

If testator ordered acquisition of the thing – the order should be complied with.
If the owner is unwilling to part with the thing, the legatee/devisee should be
given the monetary equivalent.

If testator erroneously believed that the thing belonged to him –

legacy/devisee is void.

Exception: If the testator acquire the thing onerously or gratuitously after

making of the disposition, disposition is validated.

If testator knew that the thing did not belong to him but did not order
its acquisition – code is silent but disposition should be considered valid there is
an implied order to acquire and doubts must be resolved in favor of intestacy.
 Thing already owned to if thing already belonged to legate/devisee at the time of execution of will –
the legatee/devisee. legacy/devisee is void.

If thing was owned by another person at time of making the will and thereafter
if it is acquired by legate/devisee –
1) If testator erroneously believed that he owned the thing – legacy/devise
is void.
2) If testator was not in error –
i. if thing was acquired onerously by legatee/devisee – legatee/devisee
II. LEGAL OR is entitled to be reimbursed;
ii. if thing was acquired gratuitously by legatee/devisee – nothing is due;
INTESTATE SUCCESSION iii. if thing was owned by testator at time will was made and
legatee/devisee acquired the thing from him thereafter – law is silent.

Legacy/Devise to remove Valid, if the encumbrance can be removed for a consideration.

an encumbrance over a
- thing
Thatbelonging
which taketo place by operation of law in
default
testator of a will.
Legacy/Devise of a thing The encumbrance must be removed by paying the debt unless the testator
A. CAUSES OF INTESTACY
pledged or mortgaged. intended otherwise.
1. If a person dies without a will
2. If a person dies with a void will
Exceptions:
3. If a person dies with a will which has
1. Inheritance is divided between paternal and
subsequently lost its validity;
maternal grandparents.
4. When the will does not institute an heir to, or
dispose of all the property belonging to the 2. Inheritance is divided among brothers and
testator. In such case, legal succession shall sisters, some of the full blood, other of the
take place of which the testator has not half blood.
disposed; 3. In cases where the right of representation
5. If the suspensive condition attached to the takes place.
institution of heir does not happen or is not
fulfilled.
6. If the heir dies before the testator;
7. If the heir repudiates the inheritance, there 4. Rule of Barrier Between the
being no substitution, and no right of accretion Legitimate Family and Illegitimate (Iron
takes place. Curtain Rule) – illegitimate family cannot
8. When the heir instituted is incapable of inherit ab intestato from the legitimate
succeeding, except in cases provided in this family and vice-versa.
Code.
5. Rule of Double Share for Full Blood
Collaterals – when full and half-blood
brothers and sisters, nephews and nieces
survive, the former shall take a portion in
the inheritance double that of the latter.
◘ RULES ON INTESTATE SUCCESSION

1. Rules of Preference Between Lines –

those in the direct descending line shall
exclude in the succession and collateral
lines, and those in the direct ascending line
shall, in turn, exclude those in the collateral
line. B. RELATIONSHIP

2. Rule of Proximity – the relatives 1. Number of generations determines proximity.

nearest in degree to the decedent shall 2.
exclude the more distant ones, except when 3.
there is right to representation. 4.
3. Rule of Equal Division – relatives of the
same degree shall inherit in equal shares.
Each generation forms a degree.
A series of degrees forms a lines.
A line may be direct or collateral. A direct line
is that constituted by the series of degrees
 among ascendants and descendants
(ascending and descending)
5. A collateral line is that constitutes by the
series of degrees among persons who are not
descendants or descendants, but who come
from a common ancestor.
6. Full blood: same father and mother; half
blood: only one of either parent is the same.
7. In adoption, the legal filiation is personal and
exists only between the adopter and the
adopted. The adopted is deemed a legitimate
child of the adopter (AP), but still remains as
an intestate heir of his natural parents and
other blood relatives.
C. RIGHT OF REPRESENTATION
 A right created by fiction of law by
virtue of which the representatives is raised to the
place and the degree of the person represented,
and acquired the rights which the latter would
have if he were living or if he could have
inherited.
 The widow of a husband who
predeceased his mother cannot inherit from the
latter (her mother-in-law) because the widow is
not an intestate heir of her mother-in-law, either
by her own right or by right of representative.
When Right of Representation Takes Place
1. Testamentary Succession:
a. Compulsory heir in the direct descending line:
i. Predeceased the testator and is survived by
his children or descendants.
ii. Excluded from the inheritance due to
incapacity or unworthiness and he has
descendants.
iii. Disinherited and who has children or
descendants. Representation covers only
the legitime.
b. A devisee or legatee who died after the death
of the testator may be represented by his
heirs. (Art. 954)
2. Intestate Succession:
a. Legal heir in the direct descending line had
predeceased the descendant and is survived
by his children or descendants (Arts. 981 and
982)
b. Legal heir in the direct descending line is
excluded from the inheritance by reason of
incapacity or unworthiness. (Art. 1035)
c. Brothers or sisters had predeceased the
decedent and they had children or
descendants.[Art. 975]
d. Illegitimate children represent their
illegitimate parents who already died in the
estate of their grandparents. [Art. 989]
e. Nephews and nieces inherit together with
their uncles and aunts, in representation of
their deceased parents who are the
brothers/sisters of their said uncles or aunts.
[Art. 1005]
D. ORDER OF INTESTATE SUCCESSION
Regular Order of Succession
1. Legitimate children or descendants (LCD)
2. Legitimate parents or ascendants (LPA)
3. Illegitimate children and descendants (ICD)
4. Surviving Spouse (SS)
5. Brothers and sisters, nephews, nieces
(BS/NN)
6. Collateral relatives within the 5th degree (CR5)
7. State
 A son-in-law is not a compulsory heir of the
father-in-law. Nothing in Art. 887, NCC shows
that he is an heir, so he may not be permitted or
allowed to intervene as he has no personality as
interest in the said proceeding. (Vizconde vs. CA,
GR 118449, February 11, 1998)
Irregular Order of Succession
1. Legitimate children or descendants (LCD);
2. Illegitimate children or descendants (ICD);
3. Illegitimate parents (IP);
4. Surviving spouse (SS);
5. Brothers and sisters, nephews and nieces
(BS/NN) and
6. State.
Order of Concurrence
1. LCD, ICD, and SS
2. LPA, ICD, and SS
3. ICD and SS
4. SS and IP
5. BS/NN and SS
6. C5 (alone)
7. State (alone)

Notes:
 Even if there is an order of intestate
succession, the Compulsory Heirs are never
excluded. The Civil Code follows the
concurrence theory, not the exclusion theory.
 Right of Representation in the collateral line
occurs only in intestate succession, never in
testamentary succession because a voluntary
heir cannot be represented (collateral
relatives are not compulsory heirs).
 The intestate are either equal to or greater
than the legitime.
General Rule: Grandchildren always inherit by
Right of Representation, provided
representation is proper.
Exception: Whenever all the children
repudiate, the grandchildren, inherit in
their own right because Right of
Representation would not be proper.
testamentary dispositions can affect only the
disposable free portion but never the
legitimes.
2. If among the concurring intestate heirs there
are compulsory heirs, whose legal or intestate
portions exceed their respective legitimes,
then the amount of the testamentary
disposition must be deducted from the
disposable free portion, to be borne by all the
intestate heirs in the proportions that they are
entitled to receive from such disposable free
portion as intestate heirs.
3. If the intestate share of a compulsory heir is
equal to his legitime, then the amount of the
testamentary disposition must be deducted
only from the intestate shares of the others,
in the proportions stated above.
4. If the testamentary dispositions consume the
entire disposable free portion, then the
intestate heirs who are compulsory heirs will
get only their legitimes, and those who are
not compulsory heirs will get nothing.

 Nephews and nieces inherit either by

Right of Representation or in their own
right.
a. Right of Representation: when
they concur with aunts and uncles.
b. In their own right: when they do
not concur with aunts and uncles.

Illegitimate Children or Descendants of

LEGITIMATES cannot represent because of
the barrier, but both the Legitimate Children
or Descendants and Illegitimate Children or
Descendants of ILLEGITIMATES can.

 There can be reserve troncal in intestate

succession.
 A renouncer can represent, but cannot be
represented.
 A person who cannot represent a near
relative cannot also represent a relative
farther in degree.

E. MIXED SUCCESSION OR PARTIAL

INTESTACY
 Succession that is effected partly by will
and partly by operation of law.

1. The law of legitimes must be brought into

operation in partial intestacy, because of
 TABLE OF INTESTATE SHARES
PYabao Notes
[NOTE: Take note of the Rules of Proximity, Exclusion, Concurrence, Preference in Lines, etc.]

No. NCC HEIRS SHARES IN THE ESTATE

Arts.

0 962 Any class alone - Whole estate

1 LC alone - Whole estate; divide equally if there are several

979

2 980 LC - 1/2 (to be satisfied first which should not be

FC 176 less than their legitime of ½ of the
estate)
IC - Generally, each IC gets 1/2 of the share of 1 LC
(Provided the total shares of LC should not be less than
their legitime which is 1/2 of the estate – depending on
the numberof LC and IC – in which case divide the other
½ among the IC pro rata without distinction)

3 996 LC - The share of SS is equal to 1 LC.

SS
Thus, divide the whole estate by the total number of LC
and SS.

4 LC - LC’ s share must not be less than 1/2

999 SS - SS considered as 1 LC.
FC 176 IC - The Illegitimate Child’s share is equal to 1/2 of the
share of 1 LC

NOTE: But if there are many IC and the legitimes of the

LC and SS are reduced, the sharing is:
- Determine first the legitime of LC, which is 1/2 of
the estate
- Then SS’s share, which is equal to the share of 1 LC
- The remaining portion is to be divided among all the
IC
(See Paras: discussion # 3 in Art. 999. See also
Tolentino, De Leon, Pineda, Balane and Mison)

5 985 LP alone - Whole estate; divide equally if both are alive

6 LA (GP) alone - Whole estate; divide equally if both are alive, and
987 observing in proper cases the rule of equal division by
line (paternal & maternal, if surviving).
 NOTE: There is no representation in the ascending line.
7 LP - 1/2
991 IC - 1/2

NOTE: If decedent is an NOTE: In case of partial intestacy where there is

illegitimate Person, his
natural parents (IP) are
excluded by presence of
illegitimate
child. (cf. 903, 2nd
sentence)
legacy or devise, the Legacy or devise shall be charged
against the share of the IC, provided the legitime of the
IC (1/4) shall not be reduced
(Please see Paras: discussion # 2 in Art. 991 & #2 in
Art. 1000 on partial intestacy, by analogy. See also
Tolentino, Pineda, De Leon, Balane & Mison)

8 - LPA - 1/2
997 - SS - 1/2*
NOTE: In case of partial intestacy where there is legacy
or devise, the Legacy or devise shall be charged against
the share of the SS, provided the legitime of the SS
(1/4) shall not be reduced.
(Please see Paras: discussion # 2 in Art. 1000 on partial
intestacy. See also Tolentino, Pineda, De Leon & Mison)

9 LPA - 1/2
1000 SS - 1/4*
IC - 1/4
FC 176 * NOTE: In case of partial intestacy where there is
Legacy or Devise, the Legacy or Devise shall be charged
(NOTE: Apply by analogy against the share of the SS, provided the legitime of the
to # 34, specially in case SS (1/8) shall not be reduced.
of partial intestacy) (Please see Paras: discussion # 2 in Art. 1000 on partial
intestacy. See also Tolentino, Pineda, De Leon & Mison)

10 988 IC alone – Whole estate; divide equally if there are several

11 998 IC - 1/2*
FC 176 SS - 1/2 *

12 994, 995 SS alone - Whole estate

13 Only by SS - 1/2*
analogy IP - 1/2*
with
997, in
relation
to 993,
994, &
903 on
their
legitimes
14 SS - 1/2
1001 Legitimate Brothers, - 1/2 *
Sisters / Nephews, Nieces
(BSNN) NOTE:
If all brothers and sisters are alive, to be divided equally
Note: These are per capita -- nieces & nephews excluded.
collateral relatives within
2nd and/or 3rd degree. If one or more brothers/sisters predeceased/
(994 par 2, 1001) disinherited/ incapacitated, the corresponding
nieces/nephews will inherit by representation per
 stirpes that share which was supposed to that bro/sis.

If one or some bros/sis repudiated, no representation is

allowed and the nephews and nieces cannot inherit.

But if all bros/sis repudiated, all nieces and nephews will

inherit in their own right directly from the deceased –
not from their repudiating parents - per capita or
equally.)

If there are half blood, they will get 1/2 of the share
of the full blood.

15. 992 ID (Illeg. Descendant - ID of a LC cannot represent the latter or inherit ab

Of a LC intestato from the LC and LR of his father (LC)
because the Barrier or Bar Rule or Iron Curtain Rule
or BARRIER BETWEEN LEGITIMATE AND
ILLEGITIMATE FAMILIES
Applies. This prevents him (IC) from inheriting 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. (Art. 992)

LD (Leg. Descendants) of - LD of a LC can represent the latter,

LC and can inherit ab intestate by representation per
stirpes, or in their own right per capita from the LC
or LR of his legitimate father (LC) in accordance
with applicable rules; BUT such LC or LRC cannot
inherit from the IC of their legitimate father. (Art.
992)

- LD and ID of an IC can inherit by representation per

stirpes, or in their own right per capita in
accordance with applicable rules
Suntay III vs. Conjuangco-Suntay, 621 SCRA 142

NOTE:
Legitimate and illegitimate descendants (LD & ID) of an
IC can represent the latter – Reason: The Bar Rule or
Iron Curtain Rule DOES NOT APPLY BETWEEN TWO
ILLEGITIMATE FAMILIES – the law is very explicit on the
use of the words ID of a LC

16 - Surviving Spouse - 1/2

994 (SS) of an illegitimate
child (decedent) - 1/2 * observing the following rules:
- Illegitimate Brothers,
Sisters / Nephews, Rule # 1: If all brothers and sisters are alive, to be
Nieces – whether divided equally per capita -- nieces & nephews excluded
legitimate or
illegitimate children of Rule #2: If one or more brothers./sisters predeceased/
Brothers and Sisters disinherited/ incapacitated, the corresponding
(BSNN) nieces/nephews will concur with their uncles/aunts (ie.,
bro/sis of the nieces’/nephews’ parents), and the
nieces/nephews will inherit by representation per
Note: These illegitimate stirpes that share which was supposed to go that
BSNN are collateral bro/sis.
 relatives within 3rd
degree.
Note: The Bar Rule or
Iron Curtain Rule DOES
NOT APPLY BETWEEN
TWO ILLEGITIMATE
FAMILIES – the law is
very explicit on the use of
the words ID of a LC
Rule #3: If one or some bros/sis repudiated, no
representation is allowed and the nephews and nieces
cannot inherit – accretion takes place.
But if all bros/sis repudiated, all nieces and nephews will
inherit in their own right directly from the deceased –
not from their repudiating parents - per capita or
equally. (Art. 969)

17 993 IP alone - Whole estate; divide equally if both are alive

18 993 IP - IP are excluded

cf: 979, LC or IC - Children will inherit accordingly as legitimate or
983 & illegitimate
988 (by analogy with Nos. 1, 2 & 10)

19 BS (Leg. Brothers & - The whole estate, to be divided

1004 & Sisters) alone Equally
1006 - If there are half blood, they will get ½ of the share
of the full blood (2:1 rate)

20 BSNN (Leg. Brothers - Whole estate, observing the following rules:

&Sisters, Nephews &
Nieces) alone

Note: (1) If all brothers and sisters are alive, to be divided

1005 & - The nearer excludes
1008 the farther, hence the
nieces/nephews are
excluded if all bros/sis
concur
equally per capita – while nieces & nephews are
excluded by principle of the nearer excludes the
farther.

- In proper cases of
representation, the
nephews/nieces (per
stirpes)
will inherit together
with bros/sis
(per capita)
(970) (2) If one or more brothers./sisters
(972) predeceased/disinherited/
incapacitated, the corresponding nieces/nephews will
inherit by representation per stirpes that share which
was supposed to go to that bro/sis. (Arts. 970, 972)

(975) (3) But if all bros/sis of decedent do not survive (by

predecease), all nieces and nephews will inherit in their
own right directly from the deceased – not from their
repudiating parents - per capita or equally, not per
stirpes. (Art. 975)

(977) (4) If one or some bros/sis repudiated, no

representation is allowed and the nephews and nieces
cannot inherit. The bros/sisters inherit in their own right
 and by accretion (Art. 977)

(969) (5) But if all bros/sis repudiated, all nieces and nephews
(977) will inherit in their own right directly from the deceased
– not from their repudiating parents -- per capita or
equally, not per stirpes. (Art. 969, ref Art. 977 last
sentence.)

(1006) (6) If there are half blood, they will get ½ of the share
of the full blood. (Art. 1006)

21 cf. 965 - Nephews & Nieces - The whole estate for nephews and nieces, to be
975 last (inheriting in their own divided equally;
sentence right) - if full blood and half blood concur, one half blood
will get 1/2 of the share of one full blood (2:1
inferred Note: Applying the ratio)
from principle of the - if all are half blood, the estate
1009 nearer excludes the will be divided equally
farther; the nieces/
nephews are nearer and NOTE: Hence, Uncles and Aunts of decedent are
more direct to the excluded (Bacayo v. Borromeo, 145 SCRA 986 in 1986)
common bloodline of the
parents of both the
decedent and his bros/sis
– who are the parents of
the nieces/nephews
inheriting in their own
right, per capita – than
the decedent’s
uncles/aunts
22 Cf. 1004 - Illegitimate Brothers - Whole estate, observing 2:1 proportion of full-blood
&1006 & Sisters alone and half- blood fraternity (by analogy with No.19)

23 By - Illegitimate Brothers, - Whole estate, as in No. 20 by analogy

analogy Sisters, Nephews &
only with Nieces alone (of an
1005 & illegitimate decedent NOTE: If the decedent BS is Legitimate, then the
1008 Brother/Sister) illegitimate BSNN cannot inherit because of the Barrier
(992)
Observe these rules:
1. the nearer excludes
the farther, hence the
nieces/nephews are
excluded if all bros/sis
concur
2. in proper cases of
representation, the
nephews/nieces will
inherit with bros/sis
24 975 & - Nephews & Nieces - Whole estate, per capita, but observing the 2:1
1008 alone (3rd civil proportion for the full blood and half blood
degree)

25 1009 & OCR (Other Collateral - Whole estate, per capita, observing the rule: the
1010 Relatives from the 3rd - nearer in degree excluding the more remote.
Uncles & Aunts, but not
BSNN -, 4th & to 5th civil NB: The rule: the nearer excludes the farther (but
degree without distinction as to collateral lines & full blood

NB: This applies if
decedent is legitimate and
the OCR are also
legitimate. This does not
apply if decedent is
illegitimate, in which case
the 40 & 50 collateral
relatives are excluded, as
implied by Art. 994 par.
2, and De Guzman v.
Sevilla, 47 Phil 991.
NB: All the heirs in the
same degree can concur
and inherit without
distinction of lines or
preference among them
by reason of the
relationship by the whole
blood (1009).
NB: Representation does
not apply in OCR (UA, 40
& 50 )
26 1011 S - thru escheats
proceedings under the
Revised Rules of Court
27 FC 189 Adopted
(3)
relations) still applies; Hence, the 40 is preferred before
the 50 (without representation); in the absence of the
40, then the 50 will inherit (also without representation).
[Ofelia Hernando Bagunu vs. Pastora Piedad, GR
140975, Dec. 8, 2000]
- Personal property assigned by RTC to the Philippine
municipality or city where the decedent last resided
- Real property to the Philippine municipality or city
where it is located
- If decedent never resided in the Philippines, the real
or personal property will be assigned where it is
situated
- His legitime is equal to that of a LC. Apply the
ordinary rules for LC.
NOTE:
AC remains a compulsory heir of his natural/blood
parents – Tolentino- aside from being an intestate heir of
his parents and other blood relatives – FC 189(3)
Although the FC mentions the Adopted Child remaining
an intestate heir of his parents and other blood relatives,
Tolentino opines the AC can’t be deprived of his legitime
which is an integral part of a child’s intestate share.
Hence, an AC inherits from two sources: from his
adoptive parents and from his parents & other blood
relatives. However, an AC does not have any right by
intestacy from any relative of the adopting parents,
whether ascending or descending line – his relationship
is limited to the adopter.
 INTESTATE ESTATE OF ADOPTED

1 FC - Legitimate Children (LC) - LC’ s share must not be less than 1/2
190 - Illegitimate Children (IC) - SS is considered as 1 LC.
(1) - Surviving Spouse (SS) - The Illegitimate Child’s share is equal to
1/2 of the share of 1 LC, but the
legitime of the LC must not be reduced
(which may take place when there are
many IC)

2 FC 190 Adopters or Adoptive Parents (AP) alone - Whole

(5)
RA
8552
(18)
3 Legitimate or Illegitimate Parents or - Whole
Ascendants alone

4 FC 190 - Adopters or Adoptive Parents (AP) - 1/2

(2) - Legitimate or Illegitimate Parents or
Ascendants ( LP or IP ) alone - 1/2

5 FC 190 - Illegitimate Children (IC) - 1/2

(3) - Adopters (AP) - 1/2

6 FC 190 - Surviving Spouse (SS) - 1/2

(3) - Adopters (AP) - 1/2
RA
8552
(18)
7 FC 190 - Illegitimate Children (IC) - 1/3
(4) - Surviving Spouse (SS) - 1/3
RA - Adopters (AP) - 1/3
8552
(18)

7 FC 190 - Collateral Relatives of adopted (up to - Collateral relatives of adopted will get
(6) the 5th civil degree) the whole estate – applying the
ordinary rules in legal or intestate
succession

NOTE: Collateral Relatives of adopter are

excluded for they are not legal heirs (by
blood) of adopted. The relationship of
adoption is between the adopter and
adopted only (JBL Reyes, Paras &
Tolentino)

NOTE: Apply the ordinary rules in legal succession in all other combinations, if any.
 INTESTATE ESTATE OF ADOPTER
1 RA
8552 - Adopted Child (AC) - Whole estate
Arts
17-18
2 980 - Adopted Child/Children (AC) - Divide Estate by the total No. of AC and
FC 176 - Surviving Spouse (SS) SS
RA
8552 Reason: because the share of SS is equal to
Art. 17 the share of One AC or LC

3 979 NOTE: Generally, the adopted child
succeeds to the property of the adopter
in the same manner as the legitimate
child.
The adopted has the same right as that
of the legitimate child. Examples:
* What if one AC, IC & SS concur?
- Adopted has the same share as that of
the legitimate child. Thus, by analogy, if
he is alone, he will get the whole estate;
if he survives with SS only, he will get 1/2
while the SS will get the other 1/2.
- AC=1/2 , IC= 1/4 , SS= 1/4 (but may
also vary in certain situations)

* What if AC & IC concur? - 2:1 ratio (but may also vary in certain
situations, if legitime of AC is
reduced due the big number of IC)

NOTE 1:
The collateral relatives of the adopted cannot inherit from the adopter because they are not heirs by law.
Apply the ordinary rules in legal succession in all other combinations, if any. Be careful with partial
intestacy (where the will only provides for legacy or devise), most especially where the intestate share
affected is that of the heir whose legitime is lower than his/her intestate share – such as in Arts. 983,
991, 996, 997, 998, 1000, 1001 per discussion by Paras, Tolentino, Dy, Pineda, De Leon, Balane and
Mison).

NOTE 2:
Under Art. 189 (3) of the Family Code, the adopted shall remain as an intestate heir of his parents and
other blood relatives

TABLE OF EXCLUSION AND CONCURRENCE IN LEGAL SUCCESSION

PYabao Notes
 LEGAL HEIRS EXCLUDE CONCUR WITH EXCLUDED BY
Leg. Children LP, S (State), CR SS, IC No one
- LC (Collateral Relatives)
Illeg. Children IP, S, CR SS, LC, LP No one
- IC
Leg. Parents S, CR SS, IC LC
- LP
Illeg. Parents S, CR SS LC, IC
- IP
Surv. Spouse S LC, IC, LP, IP, BSNN No one
- SS OCR (other than BSNN
– inferred in 994)
Nearer Collateral S SS LC, IC, LP, IP
Relatives (NCR 2nd OCR (Uncles/Aunts, 4th
& 3 ) Brother, Sister,
rd
and 5th degree)
Nephew, Niece - implied by 994, NB: There is
1001, 1004, 1005 and Representation here
-BSNN expressly provided in between the BSNN.
NB: Be careful with the 1009 & 1010
Barrier between
legitimate & illegitimate
families/ BSNN & OCR
(992)
Other Collateral S All OCR in the same LC, IC, LP, IP, SS, BSNN
Relatives up to the 5th OCR in remoter degree (3 0 Uncle/Aunt,
degree - OCR degrees (6th and 4th or 5th degree,
 3rd 0 but not BSNN: beyond - 1010) without distinction of
Uncles & Aunts lines or preference
 4th & 5th DEGREES among them by whole
blood relations).
NB 1: Applies only if NB 2: Review the
decedent is legitimate; orders of legal NB: No Representation
not if illegitimate succession to the here.
(Guzman v. Sevilla, estates of legitimate
47Phil 991 & inferred and illegitimate
from 994 par. 2. But persons
1009 & 1010 do not
specify legitimate or
illegitimate decedent (?)
– it’s only presumed to
be legitimate.

State No one No one Everyone

-S

NOTE:
1. In the absence of parents, ascendants inherit in proper cases. In the absence of children, other
descendants inherit in proper cases.
2. Memorize the tables of legitimes and intestate shares.
3. The effects of legitimation shall retroact to the time of the child's birth (Art. 180FC).
4. The legitimation of children who died before the celebration of the marriage shall benefit their
descendants (181FC).
5. The adoptee shall be considered the legitimate son/daughter of the adopter for all intents and purposes
and as such is entitled to all the rights and obligations provided by law to legitimate children born to
them without discrimination of any kind (17 RA8552).
6 In legal and intestate succession, the adopter and the adoptee shall have reciprocal rights of succession
without distinction from legitimate filiation (18 RA8552).
7. Order of intestate succession to the estate of a legitimate person.
8. Order of intestate succession to the estate of an illegitimate person.

Take note of the possible applications of the following rules

(singly or in combination with one or more) in both testate and legal succession:
1. Rule on Concurrence
2. Rule on Exclusion (based on several grounds)
3. Rule on Proximity (nearness or remoteness in direct and collateral lines
4. Rule on Preferences in the direct line and collateral lines (in legal succession), and ISRAI
5. Rule on Full-blood and Half-blood relations
6. Rule on Per Capita sharing (by heads)
7. Rule on Per Stirpes sharing (by groups, to be shared equally within the group)
8. Rule on Inheriting in one’s own right
9. Rule on Inheriting by representation (in direct line & among BSNN but does not to extend to 4 th & 5th
OCR (Sarita vs. Candia 23 Phil. 443; Fuentes vs. Cruz, 36 OG No. 103, p. 1813)
10. Order of intestate succession to the estate of a legitimate child (decedent) 978n
11. Order of intestate succession to the estate of an illegitimate child (decedent) 978n
12. No representation in legacy, devise and voluntary institution of strangers & even compulsory heirs.
13. Rule on capacity to succeed by will or intestacy
14. Rule on Incapacity (both in testate and legal succession): 2 groups – Absolute (2) & Relative:
Possible undue influence (6) 1027 affecting legacy/devise/voluntary institution; Public Policy &
Morality (3)1028, 739; & Unworthiness (8) 1032 affecting both legitime and
legacy/devise/voluntary inst.
15. Rule on Disinheritance (only in testate succession): 3 groups – Children/Descendants (8) 919,
16. Rule on disinheritance of Parents/Ascendants (8) 920, & Spouses (6) 921
17. Rule on Predecease (both in testate and legal succession)
18. Rule on Partial intestacy (mixed succession where the intestate share of the heir with lower legitime
is reduced by legacy/devise/voluntary institution; Imperfect disinheritance; Ineffective
disinheritance; Ineffective dispositions
19. Rule on the Iron Barrier or absolute separation between legitimate and illegitimate families (992) --
The illegitimate child have no right to inherit ab intestato from the legitimate children & relatives of
his father, and vice versa.
20. Rule on representation of illegitimates -- The illegitimates of legitimates cannot represent the latter
because of the BARRIER, but the illegitimates (& legitimates) of an illegitimate can represent the
latter.
21. Rule on inofficious donation, legacy, devise and voluntary institution
22. Rule on Acceptance (who can accept, kinds, form, when, irrevocable & can’t be impugned generally)
23. Rule on Repudiation (effect of one/some or of all, how, form, when, irrevocable & can’t be impugned
generally)
24. Rule on Accretion (study also in relation to repudiation, substitution & representation)
25. Rule on Reserva Troncal (be careful with rules of exclusion, direct line, proximity of reservees within
3rd degree from the origin of property or propositus, manner of acquiring property, & both in testate
and legal succession)
26. Rule on Collation (collationable and non-collationable donations/properties/sums)
27. Rule on Preterition of compulsory heirs from inheritance (testate succession) , not just omission from
will, & its effects on the will
28. Rule on preterition of objects in the partition - 1103, or of compulsory heirs in the partition -1104
29. Rule on determining the Net Hereditary Estate (NHE)
30. Rule on Partition/Distribution of estate (who, forms, period, imprescriptibility & prescription, executor
& administrator)
31. Rule on Legal redemption by co-heir
32. Rule on Rescission/Annulment of Partition

III. PROVISIONS COMMON
TO TESTATE & INTESTATE
SUCCESSION
A. RIGHT OF ACCRETION
 A rights based in the presumed will of the
deceased that he prefers to give certain
properties to certain individuals, rather than to his
legal heirs
Requisites of Accretion
1. Two or more persons be called to the same
inheritance, or to the same portion thereof, pro
indiviso;
2. One of the persons thus called die before the
testator, or renounce the inheritance, or be
incapacitated to receive it.
SUMMARY OF RULES ON ACCRETION
A. Testamentary Succession
1. Legitime:
a. In case of predeceased of an heir, there is
representation if there are children or
descendants; if none, the others inherit in
their own right.
b. In case of incapacity of an heir, the results
are the same as in predeceased (ie., . there is
representation if there are children or
descendants; if none, the others inherit in
their own right).
c. In case of disinheritance of an heir, the
results are the same as in predeceased (ie., .
there is representation if there are children or
descendants; if none, the others inherit in
their own right).
d. In case of repudiation by an heir, the other
heirs inherit in their own right.
2. Disposable Free Portion
 Accretion takes place when requisites stated
in Art. 1016 are present; but if such requisites
are not present, the other heirs inherit in their
own right.
Intestate Succession
1. In case of predecease, there is
representation if there are children or
descendants; if none, the other heirs inherit in
their own right
2. In case of incapacity, the results are the same
as in predeceased (ie., there is representation
if there are children or descendants; if none,
the other heirs inherit in their own right).
3. In case of repudiation, there is always
accretion (ie., there is representation if there
are children or descendants; if none, the
other heirs inherit in their own right).
B. CAPACITY TO SUCCEED BY
WILL OR INTESTACY
Requisites:
1. The heir, legatee/devisee must be living or in
existence at the moment the succession
opens; and
2. He must not be incapacitated or disqualified
by law to succeed.
THE FOLLOWING ARE INCAPABLE OF
SUCCEEDING:
A. Based on Undue Influence or Interest
1. Priest/Minister who heard the confession or
gave spiritual aid to testator during his last
illness.
2. Individuals, associations, corporations, NOT
remitted by law to inherit. Not by law to
inherit.
3. Guardian with respect to testamentary
dispositions given by a ward in his favor.
4. Relatives of such priest or minister of the
gospel within the fourth degree, the church,
order, chapter, community, organization, or
institution to which such priest or minister
may belong;
5. Attesting witness to the execution of a will,
the spouse, parents, or children; and
6. Physician, surgeon, nurse, health officer or
druggist who took care of the testator during
his last illness; (Art. 1027, NCC)
B. Based on Morality or Public Policy
1. Those made in favor of a person with whom
the testator was guilty of adultery or
concubinage at the time of the making of the
will.
2. Those made in consideration of a crime of
which both the testator and the beneficiary
have been found guilty.
3. Those made in favor of a public officer or his
spouse, descendants and ascendants, by
reason of his public office. (Article 739)
 C. Based on Acts of Unworthiness
1. Parents who have Abandoned their children or
induced their daughters to lead a corrupt or
immoral life, or attempted against their
virtue;
2. Person convicted of an Attempt against the
life of the testator, his or her spouse,
descendants, or ascendants;
3. Person who has Accused the testator of a
crime for which the law prescribes
imprisonment for six years or more, if the
accusation has been found groundless;
4. Person convicted of Adultery or concubinage
with the spouse of the testator;
5. Heir of full age who, having knowledge of the
violent death of the testator, should Fail to
report it to an officer of the law within a
month, unless the authorities have already
taken action; this prohibition shall not apply
to cases wherein, according to law, there is no
obligation to make an accusation;
6. Person who by fraud, violence, intimidation,
or undue influence should cause the testator
to make a will or to change one already
made;
7. Person who Falsifies or forges a supposed will
of the decedent.
8. Person who by the same means Prevents
another from making a will, or from revoking
one already made, or who supplants,
conceals, or alters the latter’s will. (Art. 1032,
NCC)
PARDON – an act of the testator in condoning
the cause of unworthiness and it must be in
writing.
C. ACCEPTANCE AND
REPUDIATION
Acceptance
 Act by virtue of which
an heir, legatee or devisee manifests his desire in
accordance with the formalities prescribed by law
to succeed to the inheritance legacy or devise.
Repudiation
 Act by virtue of which
an heir, legatee or devise manifests his desire in
accordance with the formalities prescribed by law
not to succeed to the inheritance, legacy or
devise.
Note: If the heir should die without having
accepted or repudiated the inheritance his right
shall be transmitted to his heirs (Art. 1053, NCC)
Where Repudiation Made
1. Public instrument
2. Authentic instrument
3. Petition presented to the court having
jurisdiction over the testamentary or intestate
proceedings.
 The acceptance or repudiation of
an inheritance, once made, is irrevocable, and
cannot be impugned, except when it was made
through any of the causes that vitiate consent, or
when an unknown will appears. (Art. 1056, NCC)
D. COLLATION
Person Obliged to Collate:
General Rule: compulsory heirs
Exceptions:
a. When the testator should have so expressly
provided; and
b. When the compulsory heir should have
repudiated his inheritance.
When to Collate
1. Any property or right received by gratuitous
title during the testator’s lifetime
2. All that they may have received from the
decedent during his lifetime.
3. All that their parents would have brought to
collation if alive.
Properties Subject to Collation
1. Property received by heir by way of donation
or gratuitous title (1061)
2. In case of grandparent’s estate, the
grandchildren shall bring into collation what
their parents received (1064-a) & what they
(the grandchildren) likewise received (1064-
b) by donation or /gratuitous title from their
grandparents
3. Inofficious donations even if prohibited to be
collated by decedent (1063, 1064)
4. 1/2 of the property donated by parent to his
child & child’s spouse jointly – ½ refers to the
child’s share (1066)
5. Inofficious sums provided by parent for the
child’s career - but the value which the child
would have spent if he had lived with his
parents shall be deducted from the said sum
(1068)
6. Wedding gifts by parents to child exceeding
1/10 of the disposable portion of estate
(1070)
7. Sums paid by parent to satisfy child’s debts,
election expenses, fines & similar expenses
(1069)
8. Fruits & interests of property to be collated
reckoned from the death of decedent (1075)
NOTE: If donation is by both parents and one
parent dies, only 1/2 of the value shall be
collated (1072)
Properties Not Subject to Collation
Absolutely no collation (all concepts):
1. Expenses for support, education (elementary
and secondary only), medical attendance,
even in extraordinary illness, apprenticeship,
ordinary equipment, or customary gifts. (Art.
1067)
2. Wedding gifts by parents and ascendants
consisting of jewelry, clothing, outfit except
when they exceed 1/10 of the sum disposable
by will.
3. Proceeds of life insurance - Southern Luzon
Employees Assn. vs. Gulpan, Oct. 30, 1954
4. Donation expressly prohibited to be collated
by the donor, except when it is inofficious
(1063, 1064)
5. The parent can’t collate in the grandparent’s
inheritance the latter’s donation to the
grandchildren (1065)
6. Donation by parent to the child’s spouse
(1066)
7. Expenses for support, education, medical
attendance, even in extraordinary illnesses,
apprenticeship, ordinary equipment or
customary gifts (1067)
8. Expenses for child’s professional, vocational
or other career, not impairing the legitime
(1068)
9. Wedding gifts by parents to children (jewelry,
clothing, outfit) not exceeding 1/10 of the
sum disposable by will (1070)
10. Fruits & interests of property subject to
collation for the period from date of donation
until the death of decedent/donor (1075)
E. PARTITION
The separation, division and assignment of a thing
held in common among those to whom it may
 belong. The thing itself may be divided, or its 4. Partition the estate would render it
value (Art. 1079, NCC) unserviceable for the use for which it is
 intended.
A partition may be rescind or annulled for the
same causes as contracts (Art. 1097, NCC)

FOUR WAYS IN WHICH ESTATE OF

Persons to Demand Partition
DECEDENT MAY BE PARTITIONED
1. Decedent himself during his lifetime by an act
inter vivos or by will; or
2. third person designated by the decedent; or 1. By extrajudicial settlement
3. The heirs themselves; or 2. By ordinary action for partition
4. Competent court 3. By judicial summary settlement
4. By administration proceeding
When Partition Cannot be Demanded
1. Expressly prohibited by the testator for a Partition Inter Vivos – it is one that merely
period not exceeding 20 years. allocates specific items or pieces of the property
on the basis of the pro-indiviso shares fixed by
law or given.
2. Co-heirs agreed that the estate shall not be
divided for a period which shall exceed 10
years, renewable for another 10 years.

3. Partition is prohibited by law.


PARTNERSHIP
Partnership
1. By the contract of partnership two or more
persons bind themselves to contribute money,
property or industry to a common fund, with
the intention of dividing the profits among
themselves,
2. A partnership has a juridical personality which
is separate and distinct from that of the
partners.
FORM OF PARTNERSHIP CONTRACT
General Rule: No special form is required
Exceptions:
1. Where immovable property or real rights are
contributed, the partnership contract shall be
reduced to writing in a public instrument
(Art. 1771) and an inventory of the property
contributed is made, signed by the parties
and attached to the public instrument. (Art.
1773)
2. Where the contract is by its terms not be
performed within a year from the making
thereof, such partnership contract is covered
by the statute of frauds and thus requires a
written agreement to be enforceable.
Where the contract of partnership has a
capital of 3,000 pesos or more, in money or
property, it shall appear in a public
instrument and must be recorded in the
office of the Securities and Exchange
Commission. However, a partnership has a
judicial personality even in case of failure to
comply with this requirement.
Requisites of Partnership
1. intention to create a partnership
2. common fund obtained from the contributions
3. joint interest in the profits
Essential Features of Partnership:
1. Valid contract;
2. The parties have legal capacity to enter into
the contract;
 Aurbach vs. Sanitary Wares
Manufacturing Corporation, 180 SCRA
130 [1989] although a corporation
cannot enter into a partnership contract,
it may however engage in a joint venture
with others, A joint venture has been
generally understood to mean an
organization to temporary purpose.
3. There must be mutual contribution of money,
property and industry to a common fund.
 Putting up money to buy a sweepstakes
ticket for the sole purpose of dividing
equally the prize which they may win as
they did in fact in the amount of
P50,000. (Gatchalian vs. CIR 67 Phil 666
[1939]
 Where the father sold his rights over 2
parcels of land to his 4 children so they
can build their residences, but the latter
after 1 year sold them and paid the
capital gains, they should not be treated
to have formed an unregistered
partnership and taxed corporate income
tax on the sale and on dividend income
tax on their shares of the profits from
the sale.
4. the object must be lawful; and
5. the primary purpose must be to obtain
profits.
 Distinction Between Partnership &
Co-ownership
485).
Partnership Co-ownership 10. Form
1. Creation May be in any from No public instrument
Always created by a Generally created by except when real is needed even if real
contract, either law, but may even property is contributed property is the object
express or implied. without a contract. (here a public of the co-ownership.
Partnership Co-ownership instrument is
2. juridical Personality required).
Has a juridical Has no juridical
personality separate personality.
and distinct from that
of each partner. Distinction Between Partnership &
3. Purpose Corporation
Realization of profits. Common enjoyment
of a thing or right; Partnership Corporation
does not necessarily 1. Creation
involve sharing of Created by mere Created by law or by
profits. agreement of the operation of law.
4. Duration partners.
No limitation upon the An agreement to keep 2. Number of Incorporators
duration is set by law. the thing undivided May be organized by Requires at least five
for more than 10 at least two persons incorporators (except a
years is not allowed. corporation sole).
5. Transfer of Interest 3. Commencement of Juridical Personality
A partner may not A co-owner can Acquires juridical Acquires juridical
dispose of his dispose of his share personality from the personality from the
individual interest in without the consent of moment of execution date of issuance of the
the partnership so as the others. of the contract of certificate of
to make the assignee a partnership. incorporation by the
partner without Securities and Exchange
unanimous consent. Commission.
6. Power to Act with Third Person 4. Powers
In the absence of A co-owner cannot Partnership may Corporation can
stipulation to the represent the co- exercise any power exercise only the
contrary, a partner ownership. authorized by the powers expressly
may bind the partners (provided it granted by law or
partnership. is not contrary to implied form those
7. Dissolution law, morals, good granted or incident to
Death or incapacity of Death or incapacity or customs, public its existence.
a partner results in the a co-owner does not order, and public
dissolution of necessarily dissolves policy).
partnership. the co-ownership. 5. Management
8. Agency or Representation When management The power to do
As a rule, there is As a rule, there is no is not agreed upon, business and manage
mutual agency. mutual representation every partner is an its affairs is vested in
(although it is enough partnership. the board of directors of
for a co-owner to trustees.
bring an action for 6. Effect of Mismanagement
ejectment against a A partner as such The suit against a
stranger). can sue a co-partner member of the board of
9. Profits who mismanages. directors of trustees
May be stipulated Must always depend who mismanages must
upon, upon proportionate be in the name of the
shares and any corporation.
stipulation to the 7. Right of Succession
contrary is VOID (Art. Partnership has no Corporation has right of
 right of succession succession. 2. A right to direct and govern the policy in
8. Extent of Liability to Third Persons connection therewith;
Partners are liable Stockholders are liable 3. Duty to share profits and losses.
personality and only to the extent of the (Kilosbayan, Incorporated vs. Gilngona, Jr
subsidiarily shares subscribed by 232 SCRA 110 [1994])
(sometimes them.
solidarily) for
partnership debts to
third persons. Rules to Determine Existence of Partnership
9. Transferability of Interest (Art 1769)
Partner cannot Stockholder has 1. General Rule: Persons who are not partners
transfer his interest generally the right to as to each other are not partners as to third
in the partnership so transfer his shares persons.
as to make the without prior consent of Exception: Partnership by estoppel
transferee a partner the other stockholders 2. Co-ownership of a property does not itself
without the because corporation is establish a partnership, even though the co-
unanimous consent not based on this owners share in the profits delivered from
of all the existing principle. the incident or joint ownership.
partners because the 3. Sharing of gross returns alone does not
partnership is based indicate a partnership, whether or not the
on the principle of persons sharing them have a joint or
delectus common right or interest in any property
personarum. from which the returns are derived.
10. Term of Existence General Rule: Receipt of share in the profits
Partnership may be Corporation may not be is a strong presumptive evidence of
established for any formed for a term in partnership.
period of time excess of 50 years in Exceptions: No such inference will be drawn
stipulated by the any one instance. if such profits were received in payment:
partners. a. As a debt by installments or otherwise;
11. Firm Name b. As wages of an employee or rent to a
landlord;
Limited partnership Corporation may adopt
c. As an annuity to a widow or
is required by law to any name provided it is
representative of a deceased partner;
ass the word “Ltd. To not the same as or
d. As interest on a loan, though the amount
its name. similar to any registered
of payment vary with the profits of the
firm name.
business; and
12. Dissolution
e. As the consideration for the sale of a
May be dissolved at Can only be dissolved
goodwill of a business or other property
any time by any or with the consent of the
by installments or otherwise.
all the partners state.
13. Governing Law
Governed by the Governed by the
contract and the Civil Corporation Code CLASSIFICATION OF PARTNERSHIP
Code 1. As to object:
a) Universal partnership
i. Universal partnership of all present
property
ii. Universal partnership of profits
b) particular partnership
2. As to liability of partners:
a) general partnership
PARTNERSHIP VS. JOINT VENTURE b) limited partnership
 The court defined a joint venture as an 3. As to duration:
association of persons or companies jointly a) partnership at will
undertaking some commercial enterprise; b) partnership with a fixed period
generally all contribute assets and share risks. 4. As to legality of existence.
Its requisites are: a) de jure partnership
1. A community of interest in the performance b) de facto partnership
of the subject matter; 5. As to representation to others:
 a) ordinary or real partnership
b) ostensible or partnership by estoppel
6. As to publicity:
a) secret partnership
b) notorious or open partnership
7. As to purpose:
a) commercial or trading
b) professional or non-trading
UNIVERSAL PARTNERSHIP
◘ A universal partnership of all present
property is one wherein the partners
contribute all the property, which actually
belong to them to a common fund, with the
intention of dividing the same among
themselves, as well as all the profits, which
they may acquire therewith.
◘ In universal partnership of all present
property, the property which belongs to each
of the partners at the time of the constitution
of the partnership, becomes the common
property of all the partners, as well as the
profits which they may acquire therewith.
◘ A stipulation for the common enjoymentt
of any other profits may also be made; but
the properties, which the partners may
acquire subsequently by inheritance, legacy
or donation, cannot be included in such
stipulation, except the fruits thereof.
◘ Where the articles of partnership do not
specify the nature of the universal
partnership, whether it is one of “present
property” or of “profits” only, it will be
presumed that the parties intended merely a
partnership of profits.
Note: Future properties cannot be contributed.
Thus, property subsequently acquired by (q)
inheritance, (2) legacy or (3) donation
cannot be included by stipulation except the
fruits thereof.
◘ Movable or immovable property which
each of the partners may possess at the time
of the celebration of the contract shall
continue to pertain exclusively to each, only
the usufruct to the partnership.
Note: Persons who are prohibited from giving
each other any donation or advantage cannot
enter in to a universal partnership. (Art. 739,
Art. 87, Family Code)
Profits acquired but their partners
through chance (i.e. lottery) without
employment of any physical or intellectual efforts
are not included.
PARTICULAR PARTNERSHIP
◘ A particular partnership is one which has
for its object determined things, their use and
fruits, or a specific undertaking, or the exercise
of a profession or vocation,
GENERAL PARTNERSHIP
◘ A partnership consisting of general
partners who are liable pro rata and subsidiarily
and sometimes solidarily with their separate
property for partnership debts.
LIMITED PARTNERSHIP
◘ One formed by two or more persons
having as members one or more general
partners and one or more limited partners, the
latter not being personally liable for the
obligations of the partnership.
PARTNERSHIP AT WILL
◘ A partnership wherein no time is
specified and is not formed for a particular
undertaking or venture and which may be
terminated at anytime by mutual agreement of
the partners, or by the will of anyone partner
alone; or one for a fixed tremor particular
undertaking but had been continued by the
partners after termination of such term or
particular undertaking without express
agreement.
PARTNERSHIP WITH A FIXED TERM
◘ A partnership wherein the term for which
the partnership is to exist is fixed or agreed upon
or one formed for a particular undertaking, and
upon the expiration of the term or completion or
the particular enterprise, the partnership is
dissolved, unless continued by the partners.
Other Kinds of Partnership
1. De Jure Partnership – one that has
complied with all the legal requirements for
its establiahment.
2. De facto Partnership – one which has
failed to comply with all the legal
requirements for its establishment.
3. Ordinary or real partnership – one which
actually exists among the partners and also
as to third person.
4. Ostensible partnership or partnership de
facto – one which in reality is not a
partnership, but is considered a partnership
only in relation to those who, by their
 conduct or admission, are precluded to deny
or disprove its existence. DISTINCTION BETWEEN CAPITALIST &
5. Secret partnership – one wherein the INDUSTRIAL PARTNERS
existence of certain persons as partners is
not avowed or made known to the public by Capitalist Partner Industrial Partner
any of the partners. 1. As to contribution
6. Open or notorious partnership – one Contributes money Contributes his industry
whose existence is avowed or made known or property. (mental or physical)
to the public by the members of the firm. 2. As to prohibition to engage in other
7. Commercial or trading partnership – one business
formed for the transaction of business. Cannot generally Cannot engage in any
8. Professional or non-trading partnership engage in the same business for himself.
– one formed for the exercise of a or similar enterprise
profession. as that of his firm.
3. As to profits
1. Shares in the Receives a just and
profits according to equitable share.
agreement thereon;
2. If none, pro rata
◘ CLASSIFICATION OF PARTNERS to his contribution.
4. As to losses
1. As to CONTRIBUTION: 1. First, the Exempted as to losses
a) Capitalist partner – one who contributes stipulation in the (as between partners);
money or property to the common fund. same or similar but is liable to third
b) Industrial partner – one who contributes enterprise as that of persons, without
only his industry or personal service. his firm. prejudice to
2. As to LIABILITY: 2. If none, the reimbursement from the
a) General partner – one whose liability to agreement as to capitalist partners.
third persons extends to his separate property, profits.
he may either be a capitalist or industrial 3. If none, pro rata
partner. to contribution.
b) Limited partner – one whose liability to
third person is limited toi his capital contribution.
3. As to MANAGEMENT:
a) Managing partner – one who manages the
◘ ALTERATION OF PARTNERS AMONG
business or affairs of the partnership; he may be
THEMSELVES:
appointed in the articles of partnership or after
constitution of the partnership.
I. Obligation with respect to contribution of
b) Silent partnership – one who does not take
property
any active part in the business although he may
be known to be a partner.
1. To contribute what had been
c) Liquidating partner- one who takes charge
promised;
of the winding up of the partnership affairs upon
2. To answer for eviction in case the
dissolution.
partnership is deprived of determinate property
contributed;
3. To answer to the partnership for
Miscellaneous:
the fruits of the property the contribution of
a) Ostensible partner – one who takes active
which was delayed, from the date they should
part and known of the public as a partner in the
have been contributed to the time of actual
business, whether or not he has actual interest
delivery;
in the firm.
4. To preserve the property with
b) Secret partner- one who takes active part in
the diligence of a good father of a family pending
the business by is not known to be a partner by
delivery to the partnership; and
outside parties nor held out as a partner by the
5. To indemnify the partners for any
other partners.
damages caused to it by the retention of the
c) Dormant partner – one who does not take
same or by delay in its contribution.
active part in the business and is not known or
held out as partner.
II. Obligations with respect to contribution
of money and money converted to personal
use
1. To contribute on the date due the amount
he has undertaken to contribute to the
partnership;
2. To reimburse any amount he may have
taken from the partnership coffers and
converted to his own personal use;
3. To pay the agreed or legal interest, if he
fails to pay his contribution on time or in
case he takes any amount from the
common fund and converted to his own
personal use;
4. To indemnify the partnership for the
damages caused to it by the delay in the
contribution or the conversion of any sum
for his personal benefit.
III. Obligations Not to Engage in Other
Business for Himself
1. Industrial partner – cannot engage in any
business for himself unless the partnership
expressly permits him to do so; and if he
should do so, the capitalist partners may
avail themselves of the benefits which he
may have obtained in violation of this
provision, with a right to damages in either
case (Art. 1789, NCC)
 It is not disputed that the provision against
the industrial partner engaging in business
for himself seeks to prevent any conflict of
interest between the industrial partner and
the partnership, and to insure faithful
compliance by said partner with this
prestation. (Evangelista & Co., v. Abad
Santos, 51 SCRA 416, 1973)
2. Capitalist partner – the prohibition extends
only to any operation only to any operation
which is of the same kind of business in
which the partnership is engage unless there
is a stipulation to the contrary (Art. 1808)
IV. Obligation to Contribute Additional
Capital
As a general rule, a capitalist partner is not
bound to contribute to the partnership more than
what he agreed to contribute but in case of an
imminent loss of the business, he is under
obligation to contribute an additional share to
save the venture. If he refuses to contribute, he
shall be obliged to sell his interest in the
partnership to other partners.
V. Obligations of Managing Partner who
Collects Debt
Where the person is separately indebted to the
partnership and to the managing partner at the
same time, any sum received by the managing
partner shall be applied to the two credits in
proportion to their amounts, except where he
received it entirely for the account of the
partnership. In which case the whole sum shall
be applied to the partnership credit only.
Requisites for the application of the rule:
1. There exists two debts, one
where the collecting partner is the creditor,
the other, where the partnership is creditor.
2. Both debts are demandable;
3. The partner who collects is
authorized to manage and actually manages
the partnership.
VI. Obligations of Partner Who Receives
Share in Partnership Credit
A partner who receives, in whole or in part, his
share in the partnership, when the others have
not collected theirs, shall be obliged, if the
debtor should thereafter become insolvent, to
bring to the partnership capital what he received
even though he may have given receipt got his
share only.
Requisites for application of rule:
1. A partner has received. In whole or in part,
his share in the partnership credit;
2. The other partners have not collected their
shares;
3. The partnership debtor has become
insolvent.
VII. Obligation of Partners for Damages to
Partnership
Every partner is responsible to the partnership
for damages suffered by it through his fault. He
cannot compensate them with the profits and
benefits which he may have earned for the
partnership by his industry.
VIII. Duty to Render Information
Partners shall render on demand true and full
information of all things affecting the partnership
to any partner or the legal representative of any
deceased partner of any partner under legal
disability.
1) Share of capitalist partner shall be in
proportion to his capital contribution.
2) Industrial partner shall receive such
share as may be just and equitable
under the circumstances.

IX. Obligation to account for any benefit 2. Distribution of losses

and hold as trustee unauthorized personal
profits
Every partner must account to the partnership
for any benefit, and hold as trustee for it any
profits derived by him without the consent of the
other partners from any transaction connected
with the formation, conduct, liquidation of the
partnership or form any use by him of his
property.
Rights of a Partner:
1. Property rights of a partner
a. His rights in the specific
partnership property;
b. His interest in the partnership;
and
c. His right to participate in the
management.
2. Right to reimbursement for amounts
advanced to the partnership and to
indemnification for risks in consequences of
management.
3. Right to associate with another person in his
share.
4. Right of access and inspection of partnership
books.
5. Right to true and full information of all things
◘ One formed between a member of a
affecting the partnership.
6. Right to a formal account of partnership
affairs under certain circumstances.
◘ It is a partnership within a partnership
Note: The ten-year period to demand an
accounting by a partner begins at the dissolution
of the partnership.
7. Right to have partnership dissolved under
certain conditions.
a. According to their agreement as to losses
(but not iniquitously to defeat Art. 1799)
b. If none, according to their agreement as
to profits.
c. If none, in proportion to his capital
contribution, but the purely industrial
partner shall not be liable for the losses
General Rule: A stipulation excluding a
partner from any share in the profits or
losses is VOID (Article 1799, NCC)
Exception: Article 1797(2) excludes an
industrial partner from losses. Thus, a
stipulation excluding an industrial partner
from losses is VALID, but he is NOT
exempted from liability insofar as third
persons are concerned.
Note: In general, LIABILITY refers to
responsibility towards third persons, and LOSSES
refers to responsibility as among partners.
CONTRACT OF SUB-PARTNERSHIP
partnership and a third person for a division of
profits owing him from the partnership
enterprise.
distinct and separate from the main or principal
partnership.
Note: In the absence of unanimous consent of
all the partners, a sub-partner does not become
a member of the partnership. Hence, a sub-
partner does not acquire the rights of a partner
nor is he liable for its debts.

◘ RULES FOR DISTRIBUTION OF PROFITS

AND LOSSES
◘ PROPERTY RIGHTS OF A PARTNER
1. Distribution of Profits
1. Right to specific partnership property
a. According to their ◘ Contemplates tangible property
agreement (but not iniquitously to defeat ◘ The specific partnership property belongs to
Art. 1799) the partnership as a separate juridical
b. If none, personality. The partners have no actual
interest in it until after dissolution.
 ◘ Equal right with other partners to possess
specific partnership property for partnership
purposes.
◘ Not assignable, except in connection with the
assignment of rights of all partners in the
same property.
◘ Not subject to attachment or execution,
except on a claim against the partnership.
◘ Not subject to legal support.
Note: Any immovable property or an interest
therein may be acquired in the
partnership name. The title so acquired
may be conveyed only in the partnership
name subject to the provisions of Article
1819 of the Civil Code.
2. Interest in the partnership
◘ Share in the profits and surplus
◘ A partner actually owns his respective share.
Effects of Conveyance by a Partner of His
interest in the Partnership:
1. Conveyance of his whole
interest – partnership may either remain or
be dissolved.
2. Assignee does not
necessarily become a partner.
3. Assignee cannot interfere
in the management or administration of the
partnership business or affairs.
4. Assignee cannot demand
information accounting and inspection of the
partnership books.
Remedies of Separate Judgment Creditor of
a Partner
◘ Application for
a charging order after securing judgment on his
credit to subject the interest of the debtor
partner with payment of unsatisfied amount of
the judgment debt.
Redemption of Interest Charged
1. General Partnership
a. With separate property of a partner; or
b. With the partnership property, with the
consent of all the partners whose interests
are not so charged or sold.
2. Limited Partnership (interest of limited
partner)
a. With separate property of any general
partner but NOT with partnership property.
3. Right to participate in the management.
◘ MANAGEMENT OF PARTNERSHIP
I. When the Manner of Management Has
Been Provided for in the Partnership
Agreement (Art. 800)
A. When a managing partner has been
appointed:
1. Appointment in the articles of partnership-
a. Power is irrevocable without just or lawful
cause
1) to remove him for JUST cause, vote
of partners representing controlling
interest is necessary.
2) to remove him without just cause or
for an UNJUST cause, there must be
unanimity including his own vote.
b. Extent of Power
1) if he acts in good faith, he may do all
acts of ADMINISTRATION, despite
opposition of his partners.
2) if in bad faith, he cannot.
2. Appointment other than in the articles of
partnership-
a. Power to act may be revoked at any
time, with or without just cause
b. Extent of power as long as he remains
manager, he can perform all acts of
administration, but if others oppose and
he persists, he can be removed.
B. When two or more managing partners
have been entrusted with the management
of partnership
1. Without specification of their respective duties
and without stipulation requiring unanimity
of action. (Art. 1801)
General Rule: Unanimous consent of all the
managing partners shall be necessary for
the validity of the acts and absence or
inability of any managing partner cannot
be alleged.
Exception: When there is an imminent
danger of grave or irreparable injury to
the partnership, partner may act alone
without the consent of the partner who is
absent or under disability.
2. With specification that none of the managing
partners shall act without the consent of the
others (Art, 1802)
General Rule: Concurrence of all managing
partners is necessary – even if one is
absent or disabled
Exception: The absence or disability of one
or some of the managing partners may
be invoked (disregarded) if there is
 imminent danger of grace and
irreparable injury to the partnership Where one partner, acting within the scope of his
apparent authority receives money or property of
a third person and misapplies it (Article 1823,
II. When Manner of Management has Not NCC)
Been Agreed Upon
A. All partners shall be considered managers Where the partnership, in the course of its
and agents business, receives money or property and it
B. Unanimous consent required for alteration of misapplied by any partner while it is in the
immovable property custody of the partnership. (Article 1823, NCC)

Note: All partners are solidarily liable with the

partnership for any penalty or damage arising
◘ OBLIGATIONS OF PARTNERS TO THIRD
from a partnership tort or breach of trust.
PERSONS (Arts. 1815-1827)

I. Liability for Contractual Obligations

1. All partners, including industrial partners, are

◘ CRIMINAL LIABILITIES OF PARTNERSHIP
personally liable with all their property. Their
individual liability is pro rata and subsidiary,
General Rule: Partnership liability does not
unless otherwise stipulated.
extend to criminal liability where the wrongdoing
2. Liability of partnership for acts of partners
is regarded as individual in character.
a. Acts for apparently carrying on in the usual
Exception: When the crime is statutory,
way the business of the partnership
especially when it involves a fine rather than
General Rule: Acts binds the partnership
imprisonment, criminal liability may be imposed.
Exception: Partnership is not bound if:
1) acting
partner has not in fact no authority;
LIABILITY OF STOCKHOLDERS IN A
and
DEFECTIVELY FORMED CORPORATION –
2) the third
WHEN NOT LIABLE AS A PARTNER WITH
person knows that the acting partner
OTHER SUBCRIBERS
has no authority
b. Acts of Strict Dominion or Ownership (Acts
General Rule: Persons who attempt but fails to
which are not apparently for carrying on in the
form a corporation and carry out business under
usual way the business of the partnership)
the corporate name occupy the position of
General Rule: Act does not bind the
partners inter se. Thus where persons associate
partnership.
themselves together under Articles to purchase
Exception: Partnership is bound if:
property to carry on a business, and their
1) The act is authorized by all the
organization is so defective as to come short of
partners; or
creating a corporation within the statute, they
2) They have abandoned the business.
become in legal effect partners inter se.
c. Acts in contravention of a restriction on
Exception: One who takes no part except to
authority
subscribe for stock in a proposed corporation,
Rule: Partnership is not liable to third person
which was never legally formed, does not
having actual or presumptive knowledge of
become a partner with other subscribers who
the restrictions.
engage in business under the name of the
pretended corporation, so as to be liable as such
in an action for settlement of the alleged
II. Liability arising from partner’s Torts
partnership and contribution. (Pioneer Insurance
(Art. 1822)or Breach of Trust (Art. 1823)
& Surety Corp. v. CA, 175 SCRA 668[1989])
Where, by any wrongful act or omission of any Principle of Delectus Personae
partners acting in the ordinary course of ◘ A rule inherent
business of the partnership or with authority of in every partnership wherein no one can become
his co-partners, loss or injury is caused to any a member of the partnership without the consent
person, not being a partner in the partnership of all the partners.
(Art. 1822)
 Note: This element of delectus personae is true
only in case of general partner, but NOT as
regards a limited partner.
MUTUAL AGENCY
◘ Partnership is a
contract of “mutual agency”, each partner acting
as a principal on his own behalf, and as an agent
of his co-partners and the partnership.
Requisites When a Partner Binds the
Partnership
1. When he is expressly or impliedly authorized.
2. When he acts in behalf and in the name of
the partnership.
PARTNERSHIP BY ESTOPPEL
Arises when a person, by words spoken or
written o r by conduct, represents himself or
consents to another representing him to anyone,
as partner an existing partnership, or with one or
more persons not actual partners; he is liable to
any such person to whim such representation
has been made, who has, on the faith of such
representation given credit to the actual or
apparent partnership. Art. 1825, NCC)
Note: Art. 1825 does not create a partnership as
between the alleged partners. A contract,
express or implied is essential to the creation of
partnership. The law considers them partners
and the association as a partnership insofar as it
is favorable to third persons. However,
partnership liability is created only in favor of
persons who on the faith of such representation
given credit to the actual or apparent
partnership.
◘ DISSOLUTION
◘ Change in the relation of the
partners caused by any partner ceasing to be
associated in carrying on the business. (Article
1828, NCC)
◘ It is the point in time when the
partners cease to carry on the business together.
It represents the demise of a partnership.
WINDING UP
◘ Process of settling the partnership
business or affairs after dissolution.
TERMINATION
◘ Point in time when all partnership affairs
are wound up or completed and is the end of the
partnership life.
CAUSES OF DISSOLUTION
1. Extrajudicial dissolution (Art. 1830, NCC)
– the parties may agree to expand the
grounds provided under Art. 1830 but NOT
to delimit them. The causes enumerated are
as follows:
a. Without violation of the agreement
between the partners.
1) By the termination of the definite
term or particular undertaking
specified in the agreement;
2) By the express will of any partner,
who must act in good faith, when no
definite term or particular
undertaking is specified;
3) By the express will of all the partners
who have not assigned their interest
or suffered them to be charged for
their separate debts, wither before or
after the termination of any specified
term or particular undertaking;
4) By the expulsion of any partner from
the business bona fide in accordance
with such power conferred by the
agreement between the partners;
b. In contravention of the agreement
between the partners, where the
circumstances do nor permit a
dissolution under any other provision of
this article by the express will of any
partner at any time.
c. By any event which makes it unlawful for
the business of the partnership to be
carried on or for the members to carry it
on in partnership.
d. When a specific thing, a partner had
promised to contribute. Or where the
partner only contributed the use or
enjoyment of the thing and has reserved
ownership thereof, its loss, before or
after delivery dissolves the partnership.
e. By the death of any partner;
f. By the insolvency of any partner or the
partnership;
g. By the civil interdiction of any partner;
2. Judicial dissolution (Art. 1831, NCC) –
when so decreed by the court, the presiding
judge may place the partnership under
receivership and direct an accounting to be
made towards winding up the partnership
affairs.
 a. On the application by or for any partner,
the court shall decree dissolution
whenever:
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 has part of
the partnership contract;
3) A partner has been guilty of such
conduct as tend to affect prejudicially
the carrying on the business;
4) A partner willfully or persistently
commits a breach of the partnership
agreement, or otherwise so conducts
himself in matters relating to the
partnership business that it is not
reasonably practicable to carry on
the business in partnership with him;
5) The business of the partnership can
only be carried on in a loss;
6) Other circumstances render
dissolution equitable.
b. On application of the purchaser of a
partner’s interest under Article 1813 or
1814:
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.
EFFECT OF DISSOLUTION
A. As to Partner’s Authority to Act for the
Partnership
General Rule: Dissolution terminates all
authority of any partner to act for the
partnership
Exceptions:
1. Acts necessary to wind up
partnership affairs; or
2. Acts necessary to complete
transactions begun but not then finished
Note: Dissolution terminates the ACTUAL
authority of a partner to undertake NEW
business for the partnership.
Qualifications to the General Rule:
1. With respect to the partners (in so far as
partners themselves are concerned)
a. Dissolution is NOT by act, insolvency or
death of a partner: General Rule applies.
Hence, dissolution terminates the
ACTUAL authority of a partner to
undertake NEW business for the
partnership
b. Dissolution is by act, insolvency or death
of a partner:
General Rule: Each partner is liable to
his co-partners for his share of any
liability created by any partner acting for
the partnership as if the partnership has
not been dissolved
Exceptions:
1) The cause of dissolution is the ACT of
a partner and the acting partner had
KNOWLEDGE of such dissolution.
2) The cause of dissolution is the
DEATH or INSOLVENCY of a partner
and the acting partner has
KNOWLEDGE or NOTICE of such
dissolution
2. With respect to persons not partners
(third persons)
a. When partnership is bound to third
persons after dissolution
1) Act appropriate for winding up
partnership affairs
2) Act appropriate for completing
unfinished transactions
3) Completely NEW transaction which
would bind the partnership if
dissolution had not taken place
provided: the other party is in good
faith meaning:
a) Previous creditor (had previously
extended credit) AND he had NO
KNOWLEDGE or NOTICE of the
dissolution; or
b) NOT a previous creditor AND the
fact of dissolution had not been
published in a newspaper of
general circulation.
b. When partnership is NOT bound to third
persons after dissolution
1) Where partnership was dissolved
because it was unlawful to carry on
the business, except when the act is
for winding up
2) Where the acting partner in the
transaction has become insolvent
3) Where the partner is unauthorized to
wind up, except if the transaction is
with third person in good faith (under
the same circumstances as defined
above)
 4) Where act is NOT appropriate for
winding up partnership affairs or for
completing unfinished transactions
5) Completely NEW transaction which
would bind the partnership if
dissolution had not taken place with
third persons in bad faith.
B. As to partner’s existing liability
General Rule: Dissolution does not
automatically discharged the existing liability of
any partner
Exception: A partner may be relieved from all
existing liabilities upon dissolution ONLY by an
agreement between:
1. Partner concerned
2. Other partners
3. Partnership creditors
Note: The consent of the partnership creditors
and the other partners to the Novation may be
implied from their conduct.
RIGHTS OF A PARTNER UPON DISSOLUTION
1. Where dissolution is NOT in
contravention of the partnership agreement
a. To have partnership
property applied to discharge partnership
liabilities
b. To receive in cash his
share of the surplus
2. Where dissolution is in contravention of
the partnership agreement
a. Rights of a partner who has not caused the
dissolution wrongfully:
1) To have partnership property applied to
discharge partnership liabilities
2) To receive in cash his share of the
surplus
3) To be indemnified for damages caused
by the partner guilty of the wrongful
dissolution
4) To continue the business in the same
name during the agreed term of the
partnership, by themselves or jointly
with others
5) To possess partnership property should
they decide to continue the business
b. Rights of a partner who has wrongfully caused
the dissolution:
1) If the business is not continued by the
other partners-
a) To have partnership property applied
to discharge partnership liabilities
b) To receive in cash his share of the
surplus less damages caused by his
wrongful dissolution
2) If business is continued-
a) To have the value of his interest in
the partnership at the time of the
dissolution, surplus less damages
caused by his co-partners,
ascertained and paid in cash or
secured by a bond approved by the
court; and
a. To be released from all existing
liabilities
Note: The value of the goodwill of the business
is not considered in ascertaining the value of the
interest of the guilty partners.
Rights of a Partner Where Partnership
Contract is Rescinded On the Ground of
Fraud or Misinterpretation
(Note: The following are the rights of the
partner entitled to rescind)
1. Right of LIEN on, or RETENTION of, the
surplus of partnership liabilities for any sum
of money paid or contributed by him
2. Right of SUBROGATION in place of the
partnership creditors after payment of
partnership liabilities; and
3. Right of INDEMNIFICATION by the guilty
partner against all debts and liabilities of the
partnership
MANNER OF WINDING UP
1. Extrajudicial – by the partners themselves
without the intervention of the court.
2. Judicial – under the control and direction of
the court upon proper cause shown by any
partner, his legal representatives or his
assignee.
Persons Authorized to Wind Up
1. Partners designated by the agreement
2. In the absence of such agreement, all
partners who have not wrongfully dissolve
the partnership
3. Legal representative of last surviving partner
4. not insolvent
ORDER OF PAYMENT IN WINDING UP
1. General Partnership (Art. 1839[2])
a. those owing to creditors other than
partners
 b. those owing to partners other than for
capital or profits
c. those owing to partners in respect of
capital
d. those owing to partners in respect of
profits
2. Limited Partnership (Art. 1863, NCC)
a. those owing to creditor, except those to
limited partners on account of their
contribution, and to general partners
b. those owing to limited partners in
respect of their share of the profits and
other compensation by way of income
c. those owing to limited partners in
respect to their capital contributions
d. those owing to general partners other
than for capital and profits
e. those owing to general partners in
respect to profits
f. those owing to general partners in
respect of capital
Doctrine of Marshalling of Assets
1. Partnership creditors have preference in
partnership assets
2. Separate or individual creditors have
preference in separate or individual
properties
3. Anything left from either goes to the other
(Article 1839[8])
Partner’s Lien
◘ Right of every partner to have
the partnership property applied to discharge
partnership liabilities AND to have the surplus
assets, if any, distributed in cash to the
respective partners, after deducting what may be
due to the partnership from them as partners.
LIMITED PARTNERSHIP
◘ One formed by two or more
persons having as members one or more general
partners and one or more limited partners, the
latter not being personally liable for partnership
debts.
 The Supreme Court declared a firm to be a
general partnership in a case where it appears
that the inclusion of “Ltd.” (Limited) in the firm
was only a subterfuge resorted to by the
partners in order to evade liability for possible
losses, while assuming their enjoyment of
Limited Partner / Partnership
advantages to be derived from the relation. (Jo
Chung Cang v. Pacific Commercial Co. 45 PHIL
142 [1923]). In other words if the parties
intended a general partnership, they are general
partners although their purpose is to avoid the
creation of such a relation/
Characteristics of Limited Partnership
1. Limited partnership is formed by substantial
compliance in good faith with the statutory
requirements
2. One or more general partner control the
business and are personally liable to creditor
3. One or more limited partners contribute to
the capital and share in the profits but do not
participate in the management of the
business and are not personally liable for
partnership obligations beyond the amount
of their capital contributions
4. The limited partners may ask for the return
of their capital contributions under the
conditions prescribed by law
5. The partnership debts are paid out of the
common fund and the individual properties of the
general partners.
Essential Requirements for Formation of
Limited Partnership
1. A certificate or articles of limited
partnership which states the matters
enumerated in Art. 1844, which must be
signed and sworn;
2. Such certificate must be filed for record in
the Office of the Securities and Exchange
Commission.
 A strict compliance with the legal
requirements is not necessary. It is sufficient
that there is substantial compliance in good faith.
If there is no substantial compliance, the
partnership becomes a general partnership as far
as the third persons are concerned, in which all
the members are liable as general partners. (Jo
Chung Cang v. Pacific Commercial Co., 45 Phil.
142 [1923])
◘ However, a firm, which fails to
substantially comply with the formal
requirements of a limited partnership, is a
general partnership only as to its relations to
third persons. If creditors deal with the firm as a
limited partnership, or that the terms of the
partnership were not sufficiently stated in the
notice of its formation. (40 Am. Jur. 476)
General Partner / Partnership
 1. Extent of liability
Limited partner’s liability extends only to his capital General partner is personally liable for partnership
contribution. obligations.
2. Right to participate in the management of partnership
Limited partner has no share in the management of General partners have an equal right in the
a limited partnership and renders himself liable to management of the business (when the manner of
partnership creditors as a general partner if he takes management has not been agreed upon)
part in the control of the business.
3. Contribution
Limited partner must contribute cash or property to General partner may contribute money, property or
the partnership but not services. industry to the partnership.
4. Proper party to proceedings by or against the partnership
Limited partner is not a proper party to proceedings General partner is the proper party to proceedings by
by or against a partnership Unless: or against a partnership.
a. He is also a general partner; or
b. Where the object of the proceeding
is to enforce a limited partner’s right against or
liability to the partnership.
5. Transferability of interest
Limited partner’s interest is freely assignable, with General partner’s interest in the partnership may not
assignee acquiring all the rights of the limited be assigned as to make the assignee a new partner
partner subject to certain qualifications. without the consent of the other partners, although
he may associate a third person with him in his
share.
6. Inclusion of partner’s name in the firm name
As a general rule, name of a limited partner must Name of a general partner may appear in the firm
not appear in the firm name. name.
7. Prohibition to engage in other business
No such prohibition in the case of a limited partner General partner is prohibited from engaging in a
who is considered a mere contributor to the business which is the SAME kind of business in which
partnership. the partnership is engaged, if he is a capitalist
partner, or in ANY of business for himself if he is an
industrial partner.
8. Effect of retirement, death, insanity or insolvency
Retirement, death, insanity or insolvency of a limited Retirement, death, insanity or insolvency of a general
partner does not dissolve the partnership for his partner dissolves the partnership.
executor or administrator shall have the rights of a
limited partner for the purpose of selling his estate.
9. Creation
Limited partnership is created by the members after General partnership, as a general rule, may be
substantial compliance in good faith with the constituted in any form by contract or conduct of the
requirements set forth by law. partnership.
10. Members of the partnership
Composed of one or more general partners and one Composed only of general partners.
or more limited partners.
11. Firm name
Firm name must be followed by the word limited. No such requirement.
12. Rules governing dissolution and winding up
Governed by Art. 1839. Governed by Art. 1863.

Liability for False Statement in Certificate
1. Any partner to the certificate containing a false
statement is liable to one who suffers loss by
reliance on such certificate provided the following
requisites are present:
2. He knew the statement to be false at the time
he signed the certificate, or subsequently having
sufficient time to cancel or amend it or file a
petition for its cancellation or amendment, he
failed to do so;
 3. The person seeking to enforce liability has relied a. All the liabilities of the partnership have
upon the false statement in transacting business been paid OR sufficient to pay partnership
with the partnership; liabilities; and
4. The person suffered a loss as a result of reliance b. The consent of all the members (general
upon such false statement. and limited partners) has been obtained.
Exception:
When the return of the contribution may be
Management of Limited Partnership
rightfully demanded:
◘ A general partner in a limited
1. On the dissolution of the partnership;
partnership is vested with the entire control of the
2. Upon the arrival of the date specified in the
firm’s business and has all the rights and powers
certificate for the return;
and is subject to all the liabilities and restrictions
3. After he has given 6 months notice in writing
of a partner in a general partnership.
to all other partners, if no time is specified in
◘ A general partner in a limited
the certificate for the return of the contribution
partnership however has no authority, without
or for the dissolution of the partnership.
written consent or ratification of all limited
c. The certificate is cancelled or so amended as to
partners, to:
set forth the withdrawal or reduction.
1. Do any act in contravention of the certificate;
2. Do any act which would make it impossible to
carry on the ordinary business of the
LIABILITIES OF A LIMITED PARTNER
partnership;
1. Liability for unpaid contribution
3. Confess judgment against the partnership;
a. For the difference between his contribution
4. Possess partnership property, or assign their
as actually made and that stated in the
rights in specific partnership property, for
certificate as having been made; AND
other that a partnership purpose;
b. For any unpaid contribution which he has
5. Admit a person as a general partner;
agreed in the certificate to make in the
6. Admit a person as a limited partner, unless the
future at the time and the conditions
right to do so is given in the certificate; or
stated in the certificate.
7. Continue the business with the partnership
2. Liability as trustee
property on the death, retirement, insanity,
a. Specific property stated in the certificate as
civil interdiction or insolvency of a general
contributed by him, but which was not
partner, unless the right to do so is given in
contributed or which has been wrongfully
the certificate.
returned; and
b. Money or other property wrongfully paid or
◘ A limited partner is liable as a
conveyed to him on account of his
general partner for the firm’s obligations if he
contribution.
takes part or interferes in the management of the
business.
Waiver of Liabilities of Limited Partner
These can be waived or compromised only
Rights of a Limited Partner
by consent of all the members.
1. To have the partnership books kept at the
principal place of business of the partnership
Substituted Limited Partner
2. To inspect, at a reasonable hour, partnership
◘ A person admitted to all the rights of a
books and copy any of them
limited partner who has died or has assigned his
3. To demand true and full information of the
interest in the partnership
things affecting the partnership
General Rule: He has all the rights and powers,
4. To demand a formal account of the partnership
and is subject to all the restrictions and liabilities
affairs whenever circumstances render it just
of his assignor.
and reasonable
Exception: Those liabilities, which he was ignorant
5. To ask for dissolution and winding up by
at the time, he became a limited partner and which
decree of court
could not be ascertained from the certificate.
6. To receive a share in the profits or other
compensation by way of income provided: that
Requisites in Order that the Assignee Mat
the partnership assets are in excess of
become a Substituted Limited Partner
partnership liabilities after such payment
1. All the members must consent to
7. To receive the return in his contribution
the assignee becoming a substituted limited
provided:
partner, OR the limited partner, being empowered
 by the certificate must give the assignee the right
to become a limited partner. AGENCY
2. The certificate must be amended in
accordance with Art. 1865 (set forth clearly to
change in the certificate which it is desired to
make and signed and sworn to by all members, Contract of Agency
and an amendment substituting a limited partner
shall be signed also by the member to be A contract whereby a person (agent) binds himself
substituted or added, and when a limited partner is to render some service or to do something in
to be substituted, the amendment shall also be representation or on behalf of another (principal),
signed by the assigning limited partner. with the consent or authority of the later. (Article
3. The certificate as amended must 1868)
be registered in the Securities and Exchange
Commission. Parties
1. Principal – one whom the agent represents
and from he derives authority
Allowable Transactions of a Limited Partner 2. Agent – one who acts for and represents
Being merely a contributor to the partnership is another
not prohibited from:
a. granting loans to the partnership
b. transacting other business with the
partnership DISTINCTION BETWEEN AGENCY & LEASE OF
c. receiving a pro rata share of the
partnership assets with the general SERVICES
creditors if he is NOT also a general Agency Lease of Services
partner Principle of Principle of
representation is employment is
NOTE: In transacting a business with the applied. applied.
partnership as a non-member, the limited partner Extinguished at will of Concurrence of
is considered a non-partner creditor the principal. parties is necessary.
Agent exercise Employee exercise
discretionary power to ministerial functions
attain an end for which only
Prohibited Transaction of a Limited Partner he was appointed.
1. receiving or holding as collateral security any Preparatory Contract Principal Contract.
partnership property; or Agency to Sell Sale
2. receiving any payment, conveyance, or release Agent receives the The buyer receives
from liability if it will prejudice the partnership goods as the goods of goods as owner.
creditors the principal.
Agent delivers the Buyer pays the price.
NOTES: proceeds of the sale.
 Violation of the prohibition will give rise to the Agent can return the The buyer, as a rule,
presumption that it has been made to defraud object in case he is cannot return the
partnership creditors. unable to sell the same. object sold.
 The prohibition is NOT ABSOLUTE, there is no Bound to act according The buyer can deal
such prohibition if the partnership assets are to the instructions of his with the thing as he
sufficient to discharge partnership liabilities to principal. places being the
persons not claiming as general or limited owner.
partners.

Purpose of Agency
 The purpose of agency is to extend the
personality of the principal through the facility of
the agent. It enables the activity of man which is
naturally limited in its exercise by the impositions
of his physiological conditions to be legally
extended by permitting him to be constructively
present in many different places and to perform
diverse juridical acts and carry on many different
activities through another when physical presence
is impossible or inadvisable at the same time. (11
Manresa 434)
ELEMENTS OF AGENCY
A. Consent
 Any person or entity having
juridical capacity and capacity to act and
not otherwise disqualified, may enter into
an agency.
 But as regards the party with
whom the agent acts or a contract, the
legal capacity of the principal rather than
the agent, is of the greater import.
B. Object
 The services to be undertaken by the agent
may cover all acts pertaining to a business
of the principal (general agency) or one
or more specific transaction (special
agency)
 The extent of the agent’s authority to act,
whether it be a general or a special
agency, depends on how the agency is
couched.
C. Cause
 May be onerous or gratuitous but
presumed for compensation
Note: The agent may not be deprived of his right
to compensation by an unjustified revocation of the
agency.
KINDS OF AGENCY
1. As to manner of creation
a) Express – one where the agent has been
actually authorized by the principal, either
orally or in writing;
a) Implied – one which is implied from the
i. Acts of the principal – from his silence
or lack of action, or his failure to
repudiate the agency knowing that
another person is acting on his behalf
without authority.
ii. Acts of the agent – when he carries out
the agency, or from his silence or
inaction according to the
circumstances.
2. As to its character
a) Gratuitous – one where the agent
receives no compensation for his services.
b) Compensated or onerous – one where
the agent receives compensation for his
services.
3. As to extent of business covered
a) General – one which comprises all the
business of the principal;
b) Special – one which comprises one or
more specific transactions.
4. As to authority conferred
a) couched in general terms – one which is
created in general terms and is deemed to
comprise only acts of administration;
b) couched in specific terms – one
authorizing only the performance of a
specific act or acts.
5. As to its nature and effects
a) ostensible or representative – one
where the agent acts in the name and in
representation of the principal.
b) simple or commission – one where the
agent acts in his own name but for the
account of the principal.
ACTS WHICH MAY BE DELEGATED TO AN
AGENT
General Rule: What a man may do in person, he
may do thru another.
Exceptions:
1. Personal acts – if personal performance is
required the doing of an act by a person on
behalf of another does not constitute
performance by the latter.
a) Voting during an election;
b) Making a will;
c) Making statements which are required to
be done under oath;
d) A member of the board of directors or
trustees in a corporation cannot validly act
as such by proxy
e) An agent cannot delegate to a sub-agent
the performance of acts which he has been
appointed to perform in person.
2. Criminal acts or acts not allowed by law-
there could be no agency in the perpetration if
a crime or unlawful act.
a) An alien principal using an agent to acquire
lands;
b) Persons who, because of their position and
relation with the persons under control, are
prohibited from acquiring said property and
cannot do so through an agent.
FORMS OF AGENCY
 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 1. Universal Agent – one employed to do all acts
authority. (Article 1869, NCC) that the principal may personally do, and which
he can lawfully delegate to another the power
General Rule: There are not formal requirements of doing.
governing the appointment of an agent. The 2. General Agent – one employed to transact all
agent’s authority may be oral or written. It may be the business of the principal, or all the
in a public or private writing. business of a particular place, or in other
Exception: When the law requires a specific form words to do all acts, connected with a
particular trade, business or employment.
 The equality of an agent to execute a 3. Special or Particular Agent – one authorized to
contract of sale of real estate must be conferred in act in one or more specific transactions, or to
writing and must give him specific authority, either do one or more specific acts, or to act upon a
to conduct the general business of the principal or particular occasion.
to execute a binding containing terms and
conditions which are the contract he did execute.
(Dizon et al. vs. CA et al., GR 124741, January 26, General Agent Special Agent
2003) 1. Scope of Authority
Usually authorized to Authorized to do only
do all acts connected acts in pursuance of
with the business or particular
Form of Acceptance by Agent employment in which instructions or with
Acceptance by the agent may also be express or he is engaged. restrictions
implied from his silence or inaction according to necessarily implied
the circumstances. from the acts to be
done.
2. Continuity
Conducts a series of Usually involves a
transactions single transactions or
KINDS OF IMPLIED ACCEPTANCE involving a continuity a series of
of service. transactions not
Where persons are present involving continuity.
Acceptance may be implied if: 3. Extent by which agent may bind
a. principal delivers his power of attorney to the principal.
agent and Binds his principal by Cannot bind his
b. agent receives it without any objection an act within the principal in a manner
scope of his authority beyond or outside
although it may be the specific acts
Where persons are absent contrary to his which he is
General Rule: Acceptance cannot be implied special instructions. authorized to
from silence of the agent perform on behalf of
Exception: the principal.
1. principal transmits his power of attorney to the 4. Termination of Authority
agent, who receives it without any objection; Apparent authority Mere revocation is
2. principal entrusts to him by letter or telegram does not terminate effective to terminate
a power of attorney with respect to the by the mere the authority as to
business in which he is habitually engaged as revocation of his third persons
an agent, and he did not reply to the letter or authority without because the third
telegram notice to the third person has a duty to
party. inquire.
Rule on Agency by Estoppel
5. Construction of Instruction of
 On who clothes another with apparent authority
Principal
as his agent, and holds him out toe the public as
Statement of Authority of agent
such, cannot be permitted to deny the authority of
principal with respect must be strictly
such person in good faith, and in the honest belief
to the agent’s pursued.
that he is what he appears to be. (Cuison v. CA,
authority would
GR 88531, October 26, 1993)
ordinarily regarded
as advisory only.
◘ CLASSES AND KINDS OF AGENT

Special Power of Attorney (SPA)
An instrument in writing by which one
person, as principal, appoints another as
his agent and confers upon him the
authority to perform certain specified acts
or kinds of acts on behalf of the principal.
Instances Where SPA is Necessary
1. To make such payments as are not usually
considered as acts of administration,
2. To effect Novation which put an end obligations
already in existence at the time the agency
was constituted;
3. To compromise, to submit questions to
arbitration, to renounce the right to appeal
from a judgment, to waive objections to the
venue of the action or to abandon a
prescription already acquired;
4. To waive any obligation gratuitously;
5. To enter into any contract by which the
ownership of an immovable is transmitted or
acquired either gratuitously or foe a valuable
consideration;
6. To make gifts, except customary ones for
charity or those made to employees in the
business managed by the agents;
7. To loan or borrow money, unless the latter’s
act be urgent and indispensable for the
preservation of the things which are under
administration;
8. To lease any real property to another person
for more than one year;
9. To bind the principal to render some service
without compensation;
10. To bind the principal in a contract of
partnership
11. To obligate the principal as guarantor or
surety;
12. To create or convey real rights over immovable
property;
13. To accept or repudiate an inheritance;
14. To ratify or recognize obligations contracted
before the agency;
15. Any other act of strict dominion.
Note: A third person with whom the agent wishes
to contact on behalf of the principal may require
the presentation of the power of attorney or the
instructions as regards the agency; except private
or secret orders.
 The scope of the agent’s authority is what appears
in the written terms of the power of attorney.
While third person are bound to inquire into the
extent or scope of the agent’s authority, they are
not required to go beyond the terms of the written
power of attorney. Third persons cannot be
adversely affected by an understanding between
the principal and his agent as to the limits of the
latter’s authority. In the principal to his agent
outside the written power of attorney. (Siredy
Enterprises, Inc. vs CA, et al. GR 129039,
September 27, 2002)
Notes:
 SPA to sell does not include the power to
mortgage; and vice versa.
 SPA to mortgage includes the power to allow
the extrajudicial foreclosure of the
mortgaged property;
 SPA to compromise does not authorize
submission to arbitration
 SPA for an agent to institute any action in
court to eject all persons in the principal could take
material possession thereof, and for this purpose,
to appear at the pre-trial and enter into any
stipulation of facts and/or compromise agreement
but only insofar as this is protective of the rights
and interest of the principal in the property, does
not grant any power to the agent to sell the
subject property nor a portion thereof. (Cosmic
Lumber Corp. vs.CA 265 SCRA 168)
Effect of Lack of Spa Where One Is Required:
Unenforceable
When principal Bound by Act of Agent
1. Agent must act within the scope of his
authority;
2. Agent must act in behalf of the principal.
 The limits of the agent’s authority shall not be
considered exceeded should it have been
performed in a manner more advantageous to the
principal than that specified by him.
When A Person Not Bound By Act of Another
1. Latter acts without or beyond the scope of
his authority in the former’s name; and
2. Latter acts within the scope of his authority but
in his own name (UNDISCLOSED PRINCIPAL),
except when the transaction involves a thing
belonging to the principal. In such case, the
contract is deemed as entered between the
principal and the third person.
 EFFECTS OF AGENT’S ACTS
 1. With Authority
A. In Principal’s Name – valid; principal is
bound; agent not personally liable unless
he bound himself(article 1897)
B. In His Own Name – apply article 1883;
generally not binding on the principal;
agent and stranger are the only parties,
except regarding things belonging to the
principal or when the principal ratifies the
contract or derives benefit therefrom.
2. Without Authority
A. In Principal’s Name – unauthorized
and unenforceable but may be ratified;
in which case, may be validated
retroactively from the beginning (Article
1407)
B. In His Own Name – valid, whether or
not the subject matter belongs to the
principal, provided that at the time of
delivery, the “agent” can transfer legally
the ownership of the thing otherwise, he
will be held liable for breach of warranty
against eviction; article 1883 does not
apply
Occasions When Principal Is Bound By Acts Of
The Agent Beyond The Latter’s Powers
General Rule: The principal is not bound by the
acts of the agent beyond his limited powers.
Exceptions:
1. Where the principal’s acts have contributed to
deceive the third person in good faith;
2. Where the limitations upon the power created
by him could not have been known by the third
person;
3. Where the principal has placed in the hands of
the agent instruments signed by him in blank
4. Where the principal has ratified the acts of the
agent.
DOCTRINE OF AGENCY BY NECESSITY
By virtue of the existence of an emergency, the
authority of an agent is correspondingly enlarged
in order to cope with the exigencies or the
necessities of the moment
 OBLIGATIONS OF AGENT TO PRINCIPAL
General:
1. To act with utmost good faith and loyalty for
furtherance of principal’s interests;
2. To obey all lawful orders and instructions of
principal within the scope of the agency; and
3. To exercise reasonable care, skill and
diligence.
Specific:
1. To carry out the agency which he has
accepted;
2. To answer for damages which through his
performance the principal may suffer;
3. To finish the business already begun on the
death of the principal should delay entail any
danger;
4. To observe diligence of a good father of a
family in the custody and preservation of the
goods forwarded to him by the owner in case
he declines an agency, until an agent is
appointed;
5. To advance the necessary funds should there
be a stipulation to do so;
6. To act in accordance with the instructions of
the principal, and in default thereof, to do all
that a good father of a family would do;
7. Not to carry out the agency if its execution
would manifestly result in loss or damage to
the principal;
8. To answer for damages if there being a conflict
between his interest and those of the principal,
he should prefer his own;
9. Not to loan to himself if he has been
authorized to lend money at interest;
10. To render an account of his transactions and to
deliver to the principal whatever he may have
received by virtue of the agency;
11. To distinguish goods by countermarks and
designate the merchandise respectively
belonging to each pri8ncipal, in the case of a
commission agent who handles goods of the
same kind and mark which belong to different
owners;
12. To be responsible in certain cases for the acts
of the substitute appointed by him;
13. To pay interest on funds he has applied to his
own use;
14. To inform the principal, where an authorized
sale of credit has been made, of such sale;
15. To bear the risk of collection, should he receive
also on sale, a guarantee commission;
16. To indemnify the principal for damages for his
failure to collect the credits of his principal at
the time that they become due; and
17. To be responsible for fraud or negligence.
General Rule: Knowledge of agent is knowledge
of the principal.
Exceptions:
1. Agent’s interest are adverse to those of the
principal;
2. Agent’s duty is not to disclose the information
(confidential information);
3. Where the person claiming the benefit of the
rule colludes with the agent to defraud the
principal.

SUB-AGENT
A person to whom the agent delegates, as his
agent, the performance of an act for the principal
which the agent has been empowered to perform
through his representative.
Instances When Agent Shall Be Responsible
for the Acts of the Substitute:
1. When he was not given the power to appoint; or
2. When he is given such power but without
designating the person and the person
appointed was notoriously incompetent or
insolvent.
Note: In these two cases the principal may further
bring an action against the substitute with
respect to the obligations which the latter has
contracted under the substitution.
JOINT AGENTS
a. Agents appointed by one or more principals
under such circumstances as to induce the
inference that it was the principal’s intent that
all should act in conjunction in consummating
the transaction for which they were appointed.
b. Their responsibility is joint; except if solidarity
has been expressly stipulated.
c. If solidarity has been agreed upon, each agent
is responsible for the:
d. non-fulfillment of the agency
e. fault or negligence of his fellow agents; except
when the fellow agents acted beyond the scope
of their authority.
Agent May Incur Personal Liability:
1. When the agent expressly binds himself
 The individual liability of the agent can be
considered a further security in favor of the
creditor and does not affect or preclude the
liability of the principal; both are liable
2. When agent exceeds his authority
3. When agent by his acts prevents performance
on the part of the principal
4. When a person acts as an agent without
authority or without a principal
5. When a person who acts as an agent of an
incapacitated principal unless the third party
was aware of the incapacity at the time of the
making of the contract
Factor/Commission Agent
 One engaged in the purchase and sale for a
principal of personal property, which for this
purpose, has to be placed in his possession and
at his disposal.
 If the commission agent received goods
consigned to him, he is responsible for any
damage or deterioration suffered by the same in
the terms and conditions and as described in
the consignment.
 The commission agent who handles goods of
the same kind and mark, which belong to
different owners, shall distinguish them by
countermarks, and designate the merchandise
respectively belonging to each principal.
 A commission agent can sell on credit only with
the express or implied consent of the principal.
If such sale is made without authority, the
principal is given two alternatives:
i. He may require payment in cash, in which case
any interest or benefit from the sale on credit
shall belong to the agent since the principal
cannot be allowed to enrich himself at the
agent’s expense;
ii. He may ratify the sale on credit in which case it
will have3 all the risks and advantages to him.
 If the commission agent is authorized to sell on
credit, he shall inform the principal with a
statement of the names of the buyers. Without
such statement, the sale shall be deemed to be
for cash as far as the principal is concerned.
 The commission agent who does not collect the
credits of his principal at the time when they
become due and demandable shall be liable for
damages, unless he proves the exercise of due
diligence for that purpose.
BROKER
 A middleman or intermediary who, in behalf of
others and for a commission or fee, negotiates
contracts/transactions relating to real or personal
property.
Factorage
 Compensation of a factor or commission agent.
Ordinary Commission
 Compensation for the sale of goods which are
placed in his possession or at his disposal.
Guaranty Commission
 Fee that is given in return for the risk, which the
agent has to bear in the collection of credits.
 An agent with a del credere commission is liable to
the principal if the buyer fails to pay or is incapable
of paying.

 OBLIGATIONS OF PRINCIPAL TO THE AGENT
A. General
 Duties and liabilities of the principal are
primarily based upon the contract and the
validity of the contract between them.
B. Specific
1. To comply with all the obligations which the
agent may have contracted within the scope of
his authority and in the name of the principal;
2. To advance to the agent, should the latter so
request, the sums necessary for the execution
of the agency;
3. To reimburse the agent for what the latter has
advanced (plus interest), even if the business
was not successful, provided the agent was
free from fault;
4. To indemnify the agent for all the damages,
which the execution of the agency may have
caused the later without fault or negligence on
his part; Note: the agent may retain in pledge
the things which are the object of the agency
until the principal effects this reimbursement
and pays the indemnity.
5. To pay the agent the compensation agreed
upon, or if no compensation was specified, the
reasonable value of the agent’s services.
Rule on Liability of Principal for Tort of Agent:
The principal is civilly liable to third persons for
torts of an agent committed at the principal’s
direction or in the course and within the scope of
the agent’s authority.
Reason for Liability: The rule is based upon the
principle that he who does an act through another
does it himself.
Conditions for Ratification
1. Principal must have capacity and power to
ratify
2. Principal must have had knowledge of material
facts
3. Principal must ratify the acts in its entirety
4. Act must be capable of ratify of ratification
5. Act must be done in behalf of the principal
Principal by Estoppel
 Even when the agent has exceeded his authority,
the principal is solidarily liable with the agent if the
former allowed the latter to act as though he had
full powers.
Joint Principals
a. Two or more persons who appoint an agent for
a common transaction or undertaking;
b. Liability: solidarily liable to the agent for all the
consequences of the agency.
Requisites of Solidary Liability:
1. There are two or more principals;
2. The principals have all concurred in the
appointment of the same agent; and
3. The agent is appointed for a common
transaction or undertaking.
Rules on Double Sale by Principal and Agent
1. When two persons contract with regard to the
same thing, one of them with the agent and the
other with the principal, and the two contracts
are incompatible with each other, that of prior
date shall be preferred, without prejudiced to
articles 1544 (double sale)
2. If the agent has acted in good faith, the
principal shall be liable in damages to the third
person whose contract must be rejected. If the
agent is in bad faith, he alone shall be
responsible.
Instances When Principal is Not Liable for the
Expenses Incurred by the Agent:
1. If the agent acted in contravention of the
principal’s instructions, unless the latter should
wish to avail himself of the benefit derived
from the contract;
2. When the expenses were due to the fault of
the agent;
3. When the agent incurred them with knowledge
that an unfavorable result would ensure, if the
principal was not aware thereof;
4. When it was stipulated that the expenses
would be borne by the agent, or that the latter
would be allowed only a certain sum.
 MODES OF EXTINGUISHMENT OF AGENCY
1. Expiration of the period
2. Death, civil interdiction, insanity or insolvency
of the principal or of the agent
3. Withdrawal of the agent
 Agent may withdraw by giving notice to the
principal, but must indemnify the principal for
damages that he may suffer by reason of such
withdrawal.
4. Accomplishment of the object or the purpose of
the agency
5. Revocation
6. Dissolution of the firm or corporation, which
entrusted or accepted the agency.
Instances when death of principal does not
terminate agency
1. If the agency has been constituted in the
common interest of the principal and the agent
2. If it has been constituted in the interest of a
third person who has accepted the stipulation
in his favor
Revocation of agency by principal
General Rule: agency is revocable at will of the
principal, regardless of the term of the agreement.
Exceptions:
1. If a bilateral contact depends upon it;
2. If it is the means of fulfilling an obligation
already contracted;
3. If a partner is appointed manager of a
partnership and his termination is unjustifiable;
and
4. If it is created not only for the interest of the
principal but also for the interest of third
persons, who have accepted the stipulation in
their favor.
Agency Coupled With an Interest
a. An agency wherein the agent has acquired
some interest of his own in the execution of
the authority granted to him, in addition to his
mere interest in the contract of employment
with the resulting gains.
b. The agency becomes merely a part of another
obligation or agreement, or an incidental
element thereof so it cannot be unilaterally
revoked.
Note: However, in Coleongco v. Claparals (10
SCRA 577), the SC made a sweeping statement
that coupled with an interest or not, the authority
(agency) can certainly be revoked for a just cause.
Implied Revocation May Be Effected:
1. By the act of the principal in appointing
another agent for the same business or
transaction;
2. By the act of the principal in directly managing
the business entrusted to the agent; or
3. By the act of the principal in subsequently
granting a special power of attorney as regards
the same business to another agent, where he
had previously granted a general power of
attorney to one agent.
TRUST
TRUST
A legal relationship between one person having an
equitable ownership in property and another
owning the legal title to such property.
CLASSIFICATION
1. Effectivity – from the viewpoint of whether
they become effective after the death if the
trustor or during his life, it may be either:
a. Testamentary Trust
b. Trusts Inter Vivos (sometimes called
“living trusts”)
2. Creation – from the viewpoint of the creative
force bringing them into existence, it may be
either:
a. Express trust – created by the intention
of the trustor or of the parties
b. Implied Trust – one which comes into
being by operation of law. This may be
either:
1) Resulting Trust – one which the
intention to create a trust is presumed
by law to exist from the transaction
and facts of the case
2) Constructive trust – one imposed by
law irrespective of and even contrary
to the intention of the parties. It is
designed to promote justice, frustrate
fraud and prevent unjust enrichment.
Persons Involved in the Creation of a Trust:
1. Trustor – the one who intentionally creates a
trust
2. Trustee – the person who holds the legal title
to the trust property for the benefit of another
and with certain powers and subject to certain
duties
3. Beneficiary or the cestui que trust – the
one who has the equitable interest in the
property and enjoys the benefit of
administration by the trustee. He may be a
natural person or a legal entity. The trustor
 may establish a trust with himself as the
beneficiary (usual case)
PROOF OF TRUST
Elements of Express Trust General Rule: Trust whether express or implied
1. Competent trustor and trustee; may be proved by parol or oral evidence
Exception: An express trusts over an immovable
2. Ascertainable trust res; and
property or any interest therein.
3. Sufficiently certain beneficiaries.

NECESSITY OF ACCEPTANCE TO THE

Trust Property CREATION AND VALIDITY OF TRUST
 The concept of a trust arises from or is the RELATIONSHIP
result of a fiduciary relation between the trustee 1. Acceptance of the Trustee
and the cestui que trust as regards certain  The acceptance of the trustee is not necessary
property – real, personal, funds or money, choses to its existence and validity since if he declines,
in action held by the trustee. (Pacheco v. Arro, 85 the courts will appoint a trustee to fill the office
PHIL 505) that he declines.
 But a trustee’s acceptance of the trust is
Trust Contract necessary to charge him with the office of the
Always involves A legal obligation based trustee and the administration of the trust and
ownership, embracing on an undertaking to vest the legal title in him.
a set of rights and supported by a 2. Acceptance of the beneficiary
duties fiduciary in consideration, which  The acceptance by the beneficiary is essential to
character which may obligation may or may the creation and validity of a trust. However,
be created by a not be fiduciary in such acceptance is presumed if there is no proof
declaration without character. to the contrary and the trust does not impose
consideration any onerous condition upon the beneficiary.

Requisites for a Trustee to Claim Title by

Trust Donation Prescription:
An existing legal There is a transfer of 1. He has performed open and unequivocal acts of
relationship and property as well as the repudiation
involves the separation disposition of both legal 2. Such positive acts of repudiation have been
of legal and equitable and equitable ownership made known to the beneficiary or the cestui que
title except in cases of gifts trust
in trust. 3. The evidence thereon should be clear and
The beneficiary of a The done must comply convincing and
trust may demand with the legal 4. The period fixed by law has expires (10 years
performance of the requirements in from the time that the repudiation is made
obligation without accepting donations. known to the beneficiary in cases of express
having formally trust or resulting trust while 10 years from the
accepted the benefit of time a constructive trust arises).
the trust in public
document, upon mere
acquiescence in the
formation of the trust Resulting Trust Constructive Trust
and acceptance under 1. Intention to Create Trust:
the second paragraph The intent of the The trust is created
of articles 1311 parties to create a irrespective of or even
(stipulations pour trust is presumed or contrary to the intention
autrui) implied by law from of the parties to
the nature of their promote justice,
 The trust property is owned by two or more transaction. frustrate fraud and to
persons at the same time, the relation between the prevent unjust
two owners being such that one of them is under enrichment.
an obligation to use his ownership for the benefit 2. Prescriptive Period
of the other. The 10 year The 10 year prescriptive
 prescriptive period period shall be counted 2. As to proof of trust
shall be counted from from the time that the An express trust over An implied trust over
the time repudiation constructive trust an immovable property an immovable or any
is made known to arises. of any interest therein interest therein may be
beneficiary. cannot be proved by proved by oral
3. Examples: parol evidence evidence.
Illustrated in Arts. Illustrated in Arts. 3. As regards repudiation of trust
1448, 1449, 1451, 1450, 1454, 1455, 1456 An express repudiation In constructive trusts,
1452, 1453 made known to the even if there is no
beneficiary is repudiation, laches
 In order that a trustee may sue or be sued necessary in order that may bar an action to
alone, it is essential that his trust should be laches or acquisitive enforce an implied
express, that is a trust created by the direct and prescription may bar trust.
positive acts of the parties, by some writing deed an action to enforce an
or will, or by proceedings in court. Rule 3, sec. 3 express trust.
does not apply in cases of implied trust that is, a
trust which may be inferred merely by the acts of Exceptions:
the parties or from other circumstances. (PAL v.
Heald Lumber Co.) Donations made to a person but the beneficial
interest is vested in another. The done is to trustee
while the designated third person is the
Prescriptive Periods beneficiary. (Art. 1449, NCC).

 The 10-year prescriptive period in case of

Purchase with borrowed funds and the conveyance
implied trust begins to run from the date the
is made to lender to secure payment of debt. (Art.
trustee repudiates the express trust. In the
1450)
case Sps. Pascual, et al. vs. CA, et al. GR
115925, Aug. 15, 2003, it was held that
repudiation takes place when the adverse Legal title to land inherited by heir placed in the
party registers the land. name of another. (Art. 1451)

 The 4-year prescriptive period under Art. 1391 Legal title to property purchased taken in one co-
applies only if the fraud does not give rise to owner. (Art. 1452, NCC)
an implied trust, and the action is to annul a Conveyance under a promise to hold for, or
voidable contract under Art. 1390. transfer to another. (Art. 1453)

Absolute conveyance to a person to secure

performance of grantor’s obligation. (Art. 1454,
Trust Pursuit Rule NCC)
Equity will pursue property that is wrongfully
converted by the fiduciary, or otherwise compel
restitution to the beneficiary. A trust will follow the Purchase of property with use of trust funds. (Art.
property through all changes in its state and form, 1455, NCC)
provided its product or proceeds are capable of
identification. Acquisition of property through mistake or fraud.
(Art. 1456, NCC)
Implied Trust
Are those, without being express, are deductible Note: An action for reconveyance of a parcel of
from the nature of the transaction as matters of land based on an implied or constructive trust
intention, or which are superinduced on the prescribes in ten years, the point of reference
transaction by operation of law, as matters of being the date of registration of the deed or the
equity independently of the parties. date of issuance of the certificate of title over the
property. BUT, this rule applies only when the
plaintiff (or person enforcing the trust) is not in
Express trust Implied trust possession of the property, since if a person
1. As to creation claiming to be the owner thereof is in actual
Created by the Come into being by possession of the property, the right to seek
intention of the parties operation of law.
reconveyance, which in effect seeks to quiet title to  All transactions or loan of goods, services, or
property, does not prescribe. money in the present with a promise to pay or
deliver in the future.

Requisites Before Period or Prescription May Types:

Start in Regard to an Action Based on an 1. Secured Transaction or Contract of Real
Implied Trust: Security – supported by a collateral or an
a) The trustee has performed unequivocal acts of emcumbrance of property.
repudiation amounting to an ouster of the 2. Unsecured Transaction or Contracts of
cestui sque trust. Personal Security – supported only by a
b) Such positive acts of repudiation have been promise and deals with:
made know to the cestui quie trust; and
c) Evidence thereon is clear and positive. (Vda. A. Principal Contracts
De Cabrera vs. Court of Appeals 267 SCRA 339 1. Loan (commodatum and mutuum)
[1997]); 2. Deposit
Note: The enumeration is not exclusive.
B. Accessory Contracts
1. Personal guaranty
Other Examples of Implied Trust: 2. Guaranty proper
1. The registration of land under torrens in the 3. Suretyship
name of one person do not bar evidence to 4. Real Guaranty
show it was only held in trust for another. a. Real property
2. Certificate of registration of vehicle placed in 1) Real Mortgage
the name of a person although the price was 2) Antichresis
not paid by him but by another.
3. One arising from the agent’s willful violation of b. Personal property
the trust reposed in him by the principal by 1) Pledge
buying for himself the property he was 2) Chattel mortgage
supposed to buy for the principal who 3) Preference and concurrence of
designated and appointed him to negotiate credits
with the owner.
4. In consonance with the trust fund doctrine in
Corporation Law, the assets of the corporation,
as represented by the capital stock, are
regarded as “trust fund” to be maintained BAILMENT
unimpaired for the payment of corporate
creditors. The delivery of property of one person to another
in trust for a specific purpose, with a contract,
express or implied, that the trust shall be faithfully
executed and the property returned or duly
accounted for when the special purpose is
accomplished or kept until the bailor claims it.

Parties:
1. Bailor – the giver;one who delivers property.
2. Bailee – the recipient; one who receives the
custody or possession of the thing thus
delivered.
CREDIT
TRANSACTIONS
____________________________________
LOAN
Credit Transactions
 A contract wherein one of the parties delivers to same for a certain time, then return it after using
another, either something not consumable so that the same.
the latter may use the same for a certain time and
return it or money or other consumable thing,
upon the condition that the same amount of the Kinds of Commodatum:
same kind and quality shall be paid. (Art. 1933, a. Ordinary Commodatum (Art. 1933
NCC) b. Precarium – one whereby the bailor may
 A contract of loan is not consensual but real demand the thing loaned at will (Art. 1947,
contract. It is perfected only upon deliver of the NCC)
object of contract (Monte de Peidad v. Javier 35
OG 2176).
2. Mutuum or Simple Loan – contract where
one of the contracting parties delivers to the other
Characteristics: money or any other consumable thing subject to
1. Real Contract – delivery of the ting loaned is the condition that the same amount of the same
necessaryfor the perfection of the contract. kind and quality be paid and returned.
 An accepted promise to make a future loan is a
consensual contract, and therefore binding upon  “Consumable goods may be the subject of
the parties but it is only after delivery will the real commodatum if the purpose of the contract is not
contract of loan arise. (Art. 1934) the consumption of the object, as when it is merely
2. Unilateral Contract – once the subject matter for exhibition.” Thus, if consumable goods are
has been delivered, it creates obligations on the loaned only for purposes of exhibition, or when the
part of only one of the parties (i.e borrower) intention of the parties is to lend consumable
goods and to have the very same goods returned
Loan Credit at the end of the period agreed upon, the loan is a
Delivery by one party Ability of a person to commodatum and not a mutuum. (Producers Bank
and the receipt of borrow money or of the Phils. V. CA, Feb. 19, 2003, 397 SCRA 659).
other party of a things by virtue of
given sum of money the trust or
or other consumable confidence reposed Commodatum Mutuum
thing upon an by the lender that 1. Object
agreement, express the borrower will pay Non-consumable Consumable
or implied, to repay what he promised. 2. Cause
the same. Gratuitous Gratuitous or
Interest taken at the Interest is taken in onerous
expiration of the advance. 3. Purpose
credit. Use or temporary Consumption
Always on a double Always on a single possession
name paper (two name paper (i.e. 4. Subject Matter
signatures appear promissory note with Real or personal Only personal
with both parties no indorse-ment property property
held liable for other than the 5. Ownership of the thing
payment). maker). Retained by the Passes to the debtor
LOAN SALE bailor
Real contract Consensual contract. 6. Thing to be returned
Generally unilateral Bilateral and The exact thing Equal amount of the
because only reciprocal. loaned same kind and
borrower has quality
obligations. 7. Who bears the risk of loss?
Bailor Bailee
8. When to return?
In case of urgent Only after the
KINDS OF LOAN: need, even before expiration of the
the expiration of the term
term
1. Commodatum – contract where one of the
contracting parties delivers to another a non-
consumable thing so that the other may use the
 c. When the thing loaned has been delivered
with appraisal of its value;
d. When, being able to save either of thing
borrowed or his own things, he chose to save
A. COMMODATUM (Art. 1935-1952) the latter; or
e. When the bailee devoted the thing for any
NATURE:
purposes different from that for which it has
1. Purpose: Bailee in commodatum acquires the
been loaned (Art. 1942, NCC)
temporary use of the thing but not its fruits (unless
3. To be liable for the deterioration of thing loaned,
stipulated as an incidental part of the contract)
the ff: requisites must concur
(Art. 1935)
a. If expressly stipulated;
Use must be temporary, otherwise the contract
b. If guilty of fault or negligence; or
may be a deposit
c. If he devotes the thing to any purpose
2. Cause: Essentially gratuitous; it ceases to be a
different from that for which it has been
commodatum of any compensation is to be paid by
loaned.
the borrower who acquires the use, in such case
4. To pay for extraordinary expenses arising from the
there arises a lease contract.
actual use of the thing by the bailee, which shall be
Similar to a donation in that it confers a benefit to
borne equally by both the bailor and the bailee,
the recipient. The presumption is that the bailor
even though the bailee acted without fault, unless
has loaned the thing for having no need therefore.
there is a stipulation to the contrary (Art. 1949
3. Subject Matter:
par. 2)
General Rule: Non-consumable whether real or
5. To return the thing loaned
personal
General Rule: The bailee has no right to retain
Exception: If the consumable goods are not for
the thing loaned as security for claims he has
consumption as when they are merely for
against the bailor even for extraordinary expenses.
exhibition, consumable goods may be the subject
Exception: for a claim for damages suffered
of the commodatum. (Art. 1936, NCC)
because of the flaws of the thing loaned.
4. Bailor need not be the owner of the thing owned
(Art. 1938, NCC) since by the loan, ownership does
Notes:
not pass to the borrower.
a. However, the bailee’s right extends no further
5. Purely Personal (Art. 1939):
than retention of the thing loaned until he is
a. Death of either party terminates the
reimbursed for the damages suffered to him.
contract unless by stipulation, the
b. He cannot lawfully sell the ting to satisfy such
commodatum is transmitted to the heirs of
damages without court’s approval.
either or both parties.
c. In case there are two or more bailees, their
b. A mere lessee or usufructuary may lend
obligation shall be solidary.
but the borrower or bailee himself may not
lend nor lease the thing loaned to him to a
third person. (Art. 1932[2])
c. Use of the thing loaned may extend to
OBLIGATIONS FO THE BAILOR (Art. 1946 –
members of the bailee’s household except:
Art. 1952):
a. Contrary stipulation;
1. To respect the
b. Nature of the thing forbids such use
duration of the loan
General Rule: Allow the bailee the use of
thing loaned for the duration of the period
OBLIGATIONS OF THE BAILEE: (Arts. 1941 –
stipulated or until the accomplishment of
1945)
the purpose for which the commodatum
1. To pay for the ordinary expenses for the use
was instituted.
and preservation of the thing loaned. (Art.
Exceptions:
1941)
a. In case of urgent need in which bailee may
2. To be liable for the loss of the thing even if it
demand its return or temporary use;
should be through a fortuitous event in the
b. The bailor may demand immediate return
following cases:
of the thing if the bailee commits any act
a. When he keeps it longer than the period
of ingratitude specified in Art. 765.
stipulated, or after the accomplishment for
2. To refund to the
which the commodatum was intended;
bailee extraordinary expenses for the
b. When he lends or leases it to third persons
preservation of the thing loaned, provided that
who are not members of his household
the bailee brings the same to the knowledge of
the bailor before incurring them, except when
 they are so urgent that the reply to the held that the same must be equitably reduced for
notification cannot be awaited without danger. being iniquitous, unconscionable and exorbitant
3. To be liable to the (Spouses Solangon v. Salazar, G.R. No. 125944,
bailee for damages for known hidden flaws. June 29, 2001).

Requisites:
1. There is flaw or defect in the thing loaned;
2. The flaw or defect is hidden;
3. The bailor is aware thereof;
4. He does not advise the bailee of the same; and
5. The bailee suffers damages by reason of said
flaw or defect.
 The obligation is “to pay” and not to return
because the consumption of the thing loaned is
the distinguishing character of the contract of
mutuum from that of commodatum.
 No estafa is committed by a person who
refuses to pay his debt or denies its existence.

Simple Rent
If the above requisites concur, the bailee has the Loan/Mutuum
right of retention for damages. Delivery of money or Delivery of some
The bailor cannot exempt himself from the some consumable non-consumable
payment of expenses or damages by abandoning thing with a promise order that the other
the thing of the bailee. to pay an equivalent may use it during a
of the same kind and certain period and
quality return it to the
former.
B. Simple Loan or Mutuum There is a transfer of
ownership of the
There is no transfer
of ownership of the
(Art. 1953 – 1961)
thing delivered thing delivered.
A contract whereby one party delivers to another,
money or other consumable thing with the
understanding that the same amount have the FORM OF PAYMENT (Art. 1995):
same kind and quality shall be paid. (Art. 1953) 1. if the thing loaned is money
General Rule: payment must be made in the
currency stipulated, if it is possible;
 The mere issuance of the checks does otherwise it is payable in the currency which
not result in the perfection of the contract of loan. is legal tender in the Philippines
The Civil Code provides that the delivery of bills, of Exception: In case of extraordinary inflation or
exchange and mercantile documents, such as deflation, the basis of payment shall be the
checks, shall produce the effect of payment only value of the currency at the time of the
when they have been encashed (General vs. CA creation of the obligation.
218 SCRA 638). It is only after the checks have 2. If what was leaned is a fungible thing
produced the effect of payment that the contract of other than money – the borrower is under
loan may be deemed perfected. obligation to pay the lender another thing of the
same kind, quality and quantity. In case it is
 CB cir. 905 cannot apply retroactively impossible to do so, the borrower shall pay its
to a contract executed prior to its effectively. CB value at the time of the perfection of the loan.
905 did not repeal nor in anyway amend the Usury
Law, but simply suspend the Latters effectively
(Medel v. CA, 299 SCRA 481)

 While the Usury Law ceiling on interest INTEREST

was lifted by C.B. Circular No. 905, nothing in the  The compensation allowed by law or fixed by the
said circular grants lenders carte blanche authority parties for the loan or forbearance of money,
to raise interests rates to levels which will either goods or credits
enslave their borrowers or lead to a hemorrhaging 
of their assets. In Medel v. CA (220 SCRA 481), it  Requisites for Demandability:
was said that the stipulated rate of interest at 1. Must be expressly stipulated
5.5% per month on a loan amounting to Exceptions:
P500,000.00 is usurious. While decreeing that the a. Indemnity for damages
aforementioned interest was not usurious, it was
 b. Interest accruing from unpaid interest Relationship is that Relationship is that of
2. Must be lawful of lender (creditor) depositor and
3. Must be in writing and borrower depositary.
(debtor)
5. compensation
Requisites for Recovery of Interest: There can be NO compensation of
General Rule: Unpaid interest shall not earn compensation of things deposited with
interest. credits. each other (except
Exceptions: by mutual
1. When judicially demanded under Art. 2212 agreement.)
2. When there is an express stipulation

DEPOSIT COMMODATUM
Purpose is Purpose is the
safekeeping. transfer of the use.
May be gratuitous Essentially and
always gratuitous
Movable/corporeal Both movable and

DEPOSIT things only in case of

extrajudicial deposit.
immovable may be
the object.

KINDS OF DEPOSIT:
A contract constituted from the moment a person 1. Judicial (sequestration) – when an
receives a thing belonging to another with the attachment or seizure of property in litigation
obligation of safely keeping it and returning the is ordered.
same. If the safekeeping of the thing delivers is 2. Extra-judicial
not the principal purpose of the contract, there is
no deposit but some other contract (Art. 1962)  The prevailing rule is that the relation between a
bank renting out safety deposit boxes and its
customer with respect to the contents of the box is
that of a bailor and bailee, the bailment being for
hire and manual benefit (CA Agro-industrial
Development Corp. vs. Court of Appeals, Mar. 3,
Characteristics
1993, 219 SCRA 435)
1. Real Contract – contract is perfected by the
delivery of the subject matter
Judicial Extra-Judicial
2. Unilateral – only the depositary has an
1. Creation
obligation
3. Bilateral – gives rise to obligations on the part Will of the court Will of the parties
of both the depository and depositor or contract.
2. Purpose
DEPOSIT MUTUUM Security or to Custody and
1. Purpose insure the right of safekeeping.
a party to property
Principal purpose is Principal purpose is
or to recover in
safekeeping or consumption
case of favorable
custody
judgment.
2. When to return
Depositor can The latter must wait
demand the return of until the expiration of
the subject matter at the period granted to 3. Subject Matter
will the debtor. Movables or Movables only.
3. Subject Matter immovables, but
Subject matter may Subject matter is generally
be movable or only money or other immovables.
immovable property fungible thing
4. Relationship 4. Cause
 Always onerous. May be person designated although he has not made
compensated or any demand for its return.
not, but generally
gratuitous.
5. When must the thing be returned
Upon order of the Upon demand of EXTINGUISHMENT OF VOLUNTARY DEPOSIT
court or when depositor. (Art 1995)
litigation is ended.
6. In whose behalf it is held a. loss or destruction of the thing deposited
Person who has a Depositor or third b. in case of gratuitous deposit, upon the death of
right. person designated. either the depositor or the depositary
c. other causes, such as return of the thing,
novation, merger, expiration of the fulfillment
General Rule: contract of deposit is gratuitous of the resolutory condition etc (Art 1231)
(Art 1965)
Exceptions:
1. When there is contrary stipulation; Necessary Deposits
2. Depositary is engaged in business of 1. made in compliance with a legal obligation;
storing goods; or 2. made on the occasion of any calamity such as
3. Property saved from destruction without fire, storm, flood, pillage, shipwreck or other
knowledge of the owner. similar events(deposito miserable)’ or
3. made by the travelers in hotels and inns or b
travelers with common carrier.
General Obligations of Depository And
Depositor:
Deposit by Travelers in Hotels and Inns:
Depository Depositor the keepers of hotels or inns shall be
1. Keep the thing safely; 1. If gratuitous- responsible as depositories for the deposit of
2. Not to use it, to reimburse effects made by travelers provided:
generally; the necessary expenses a. notice was given to them or to their employees
3. Keep the secret of the for preservation of the effects brought by the guest; and
deposit 2. If onerous- to pay b. the guests take the precautions which said
4. Return the thing with the price agreed upon hotel-keepers or their substitutes advised
all its products, generally, to reimburse relative to the care and vigilance of their
accessories upon the depository for loss effects.
demand even though imputable to the
a specified period of depositor Notes:
time has been fixed  liability extends to vehicles, animals and
for such return articles which have been introduce or placed
in the annexes of the hotel.

Rule when there are two or More Depositors
(Art 1965)
1. If thing deposited is divisible and depositors
are not solidary. Each depositor can demand
only his proportionate share thereto.
2. If obligation is solidary or if thing is not
divisible: Rules on active solidarity shall apply.
i.e. each one of the solidary depositors may do
whatever may be useful to the others but not
anything which may be prejudicial to the latter,
(Art. 1212) and the depository may return the
thing to an one of the solidary depositors
unless a demand, judicial or extrajudicial, for
its return has been made by one of them in
which case, delivery should be made to him.
3. Return to one of depositors stipulated. The
depositary is bound to return it only to the
General rule: liability shall EXCLUDE losses
which proceed from force majeure.
Exception: the act of a thief or robber is not
deemed force majeure unless done with the use of
arms or irresistible force.
 The hotel-keeper cannot free himself from the
responsibility by posting notices to the effect
that he is not liable for the articles brought by
the guest. Any stipulation to such effect shall
be void.
 Notice is necessary only for suing civil liability
but not in criminal liability

GUARANTY
AND SURETYSHIP
GUARANTY
An accessory 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, Par. 1, NCC)
& By guaranty 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. When a person binds himself solidarily with the
principal debtor, the contract is called suretyship.
Guaranty and surety are nearly related for there is
a promise to answer for the debt or default or
another. Surety is usually bound with his principal
by the same contract of guaranty, guarantor’s own
separate undertaking often supported by a
consideration separate from the supporting the
contract of the principal, the original contract of his
principal is not his contract. (Phil. Export &
Guarantee v. VPEusebio Construction, Inc. G.R.
no. 140047 July 13, 2004).
& While a surety is solidarily liable with the principal
debtor, his obligation to pay only arises upon the
principal debtor’s failure or refusal to pay. A
contract of surety is an accessory promise by
which a person binds himself for another already
bound, and agrees with the creditor to satisfy the
obligation if the debtor does not pay. A surety, as
an insurer of the debt, promises to pay the
principal’s debt if the principal will not pay (Babst
v. CA, G.R. No. 99398, January 26, 2001).
CLASSIFICATION OF GUARANTY:
1. In the Broad sense:
a. Personal – the guaranty is the credit given by
the person who guarantees the fulfillment of the
principal obligation.
b. Real – the guaranty is the property, movable or
immovable.
2. As to its Origin
a. Conventional – agreed upon by the parties.
b. Legal – one imposed virtue of a provision of
a law.
c. Judicial – one which is required by a court
to guarantee the eventual right of one of the
parties in a case.
3. As to Consideration
a. Gratuitous – the guarantor does not receive
any price or remuneration for acting as such.
b. Onerous – the guarantor receives valuable
consideration.
4. As to the Person guaranteed
a. Single – one constituted solely to guarantee
or secure performance by the debtor of the
principal obligation.
b. Double or sub-guaranty – one constituted
to secure the fulfillment by the guarantor or
a prior guaranty.
5. As to Scope and Extent
a. Definite – the guaranty is limited to the
principal obligation only or to a specific
portion thereof.
b. Indefinite or simple – one which not only
includes the principal obligation but also all
its accessories including judicial costs.
SURETYSHIP
A contract of guaranty where the guarantor binds
himself solidarily with the principal debtor (Art.
2047, Par. 2)
Solidary liability is one of the primary
characteristics of surety contract, solidary
obligation proceed against any one of the
solidary debtors or some or all of them
simultaneously. (Land & Company (Phils.)
Inc., el al., v. Metropolitan Bank & Trust
Company, G.R. No. 159622, 07/30/2004).
Nature of Surety’s undertaking:
1. Liability is contractual and accessory but direct
& He directly, primarily and equally binds himself
with the principal as original promisor, although he
possesses no direct or personal interest over the
latter’s obligation, nor does he receive any benefits
therefrom. (PNB vs CA, 198 SCRA 767)
2. Liability limited by the terms of the contract.
& It cannot be extended by implication beyond the
terms of the contract (PNB vs CA, 198 SCRA 767)
3. Liability arises only if principal debtor is held liable.
 The creditor may sue separately or together the
principal debtor and the surety. Where there are
 several sureties, the oblige may proceed against
any one of them.
& In the absence of collusion, the surety is bond by a
judgment against the principal even though he was
not a party to the proceedings. The nature of its
undertaking makes it privy to all proceedings
against its principal (Finman General Assurance
Corp. vs. Salik, 188 SCRA 740)
& The surety assumes a solidary liability for the
fulfillment of the principal obligation as an original
promissory and debtor from the beginning (Towers
Assurance Corp vs. Ororama Supermart 80 SCRA
262).
4. Surety is not entitled to the benefit of exhaustion
5. Undertaking is to creditor and not to debtor.
& The surety makes no covenant or agreement with
the principal that it will fulfill the obligation
guaranteed for the benefit of the principal. Such a
promise is not implied by law either; and this is
true even where under the contract the creditor is
given the right to sue the principal, or the latter
and the surety at the same time. (Arranz vs.
Manila Fidelity & Surety Co., Inc., 101 Phil. 272)
1. Accessory – it is an indispensable condition for its
existence that there must be a principal obligation.
 Guaranty may be constituted to guarantee the
performance of a voidable or unenforceable
contract. It may also guarantee a natural
obligation. (Art. 2052, NCC)
 The guarantor cannot bind himself for more than
the principal debtor and even if he does, his
liability shall be reduced to the limits of that of the
debtor. (Art. 2054, NCC)
2. Subsidiary and Conditional – takes effect only
in case the principal debtor fails in his obligation.
 A guaranty may be given, as security for future
debts, the amount of which is not yet known; there
can be no claim against the guarantor until the
debt is liquidated. A conditional obligation may also
be secured. (Art. 2053, NCC)
3. Unilateral – may be entered even w/o the
intervention of the principal debtor, in which case
Art. 1236 and 1237 shall apply and it gives rise
only to a duty on the part of the guarantor in
relation to the creditor and not vice versa.
4. Nominate
5. Consensual
 It is a contract between the guarantor/surety and
creditor.
GUARANTY SURETYSHIP

Liability depends upon an Surety assumes

6. Surety is not entitled to notice of principal’s default independent agreement liability as regular
& The creditor owes no duty of active diligence to to pay the obligation if party to the
take care of the interest of the surety and the primary debtor fails to do undertaking.
surety is bound to take notice of the principal’s so.
default and to perform the obligation. He cannot
complain that the creditor has not notified him in Collateral undertaking Original promissory.
the absence of a special agreement to that effect.
(Palmares vs CA, 288 SCRA 422) Guarantor is secondarily Surety primarily liable
liable.
7. Prior demand by the creditor upon principal is not Insurer of insolvency of Insurer of the debt.
required.
debtor.
 As soon as the principal is in default, the surety
likewise is in default.
Guarantor can avail of Surety cannot.
benefit of excussion and
8. Surety is not exonerated by neglect of creditor to division in case creditor
sue principal proceeds against him.

INDORSEMENT GUARANTY

Primarily of transfer Contract of security

CHARACTERISTICS OF GUARANTY AND
Unless the note is Failure in either or both of
SURETYSHIP
promptly presented these particulars does not
 for payment at generally work as an ordinarily by the party
maturity and due absolute discharge of a who makes the
notice of dishonor guarantor’s liability but warranty.
given to the indorser his is discharged only to
within a reasonable the extent of the loss
time he will be which he may have
Double or Sub-Guaranty
discharged suffered in consequence
absolutely from all thereof.  One constituted to guarantee the obligation of a
liability thereon, guarantor (Art. 2051(2)).
whether the has  Guarantor’s liability cannot exceed principal’s
suffered any actual obligation. It is subsidiary and accessory contract.
damage or not.

Indorser does not Guarantor warrants the Extent of Guarantor’s Liability:

warrant the solvency of the promisor
solvency. He is 1. Definite Guaranty – limited to the principal debt to
the exclusion of the accessories.
answerable on a
2. Indefinite or Simple guaranty – not only the
strict compliance principal obligation, but also all its accessories,
with the law by the including judicial costs.
holder, whether the
promisor is solvent
or not. & As a guaranty, it is still characterized by its
subsidiary and conditional quality because it does
Indorser can be sued Guarantor cannot be sued not take effect until the fulfillment of the condition,
as promisor. as promisor namely, that the principal obligor should fail in his
obligation at the time and in the form he bound
himself. Unconditional guarantee is still subject to
the condition that the principal debtor should
Benefit of Excussion default in his obligation. Guaranty, as opposed to
an unconditional guaranty, is one which depends
 Right of the guarantor to have the property of the upon some extraneous event, beyond the mere
debtor exhausted before he (guarantor) can be default of the principal and generally upon notice
made liable. of the principal’s default and reasonable diligence
in exhausting proper remedies against the
principal. (Philippine Export and Foreign Loan
Guarantee Corp. vs. VP Eusebio construction, Inc.,
Benefit of Division
et. al,. G.R. 140047, July 13, 2004).
&
 Should there be several guarantors of only one
When Guarantor not Entitled to the Benefit of
debtor and for the same debt, the obligation to
answer for the same is divided among all. The Excussion
creditor cannot claim from them except shares
they are bound to pay except when solidarity is 1. Renunciation has been expressly made by the
stipulated. guarantor;
2. It would be useless because execution on the
property of the principal debtor would not after
GUARANTY WARRANTY all result in the satisfaction of the obligation;
3. When guarantor has bound himself solidarily
A contract by which a An undertaking that the with the principal debtor;
4. Insolvency of the debtor; or
person is bound to title, quality or quantity
5. When the debtor has absconded or cannot be
another for the of the subject matter of sued within the Philippines, unless he has left a
fulfillment of a promise the contract is what it manager or representative.
or engagement of a has been represented to
third party. be, and relates to some
agreement made Rights of the Guarantor after Payment of the
Principal’s Obligation
1. Reimbursement
a. Total amount of the debt;
b. Interest (legal) from the time payment was
made known to the debtor;
c. Expenses incurred by the guarantor after
having notified the debtor that payment had
been demanded of him; and
d. Damages, if they are due (Art. 2066).
Bondsman (Art 2082)
 A surety offered in virtue of a provision of law or a
judicial order. He must have the qualifications
required of a guarantor and in special laws like the
Rules of Court.

2. Subrogation
NOTES:
When Guarantor May Proceed Against
Principal Debtor Even Before Payment:
Judicial bonds constitute merely a special class of
contracts of guaranty by the fact that they are
1. Reasonable ground to fear that principal debtor given “in virtue… of a judicial order.”
will abscond;
If the person required to give a legal or judicial
2. After the lapse of ten years;
3. Period has expired; bond should not be able to do so, a pledge or
4. Imminent danger of debtor becoming mortgage sufficient to cover the obligation shall be
insolvent; admitted in lieu thereof (Art. 2083, NCC)
5. Debtor is insolvent;
6. Debt is already demandable; and A judicial bondsman and the sub-surety are NOT
7. Sued for payment. entitled to the benefit of excussion because they
are not mere guarantors, but sureties whose
liability is primary and solidary. (Art 2084, NCC)
Extinguishment of Guaranty

Release in favor of one of the guarantors, without

the consent of the others, benefits all to the extent
of the share of the guarantor to whom it has been
granted (Art. 2078, NCC)

If the creditor voluntarily accepts immovable or

other properties in payment of the debt, even if he
should afterward lose the same through eviction or PLEDGE
conveyance of property (Art 2077, NCC);

Whenever by some act of the creditor, the

guarantors even though they are solidarily liable
cannot be subrogated to the rights, mortgages and
preferences of the former (Art 2080, NCC);
For the same causes as all other obligations (Art
1231, NCC);
When the principal obligation is extinguished;
Extension granted to the debtor by the creditor
without the consent of the guarantor (Art. 2079,
NCC)
PLEDGE
A contract by virtue of which the debtor
delivers to the creditor or to a third
person a movable, or a 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.

Bond
Essential Requirements of Pledge and
 An undertaking that is sufficiently secured, and not Mortgage
cash or currency
1. Constituted to secure the fulfillment of a
principal obligation;
 2. Pledgor or mortgagor is the absolute owner of
the thing pledged or mortgaged;
3. Persons constituting the pledge or mortgage
have the free disposal of their property, or
legally authorized for the purpose;
4. When the principal obligation becomes due,
the things in which the pledge or mortgage
consists may be alienated for the payment of
the creditor;
5. Thing pledged must be delivered to the
creditor or to a third person by common
agreement.
Pactum Commissorium
A stipulation whereby the thing pledged or
mortgaged or under antichresis shall automatically
become the property of the creditor in the event of
nonpayment of the debt within the term fixed.
Such is forbidden by law and declared null and
void.
If there are reasonable grounds to feat the
destruction or impairment of the thing pledged,
without the fault of the pledge, the pledgor may
demand the return of the thing, upon offering
another thing in pledge, provided the latter is of
the same kind as the former and not of inferior
quality, and without prejudice to the right of the
pledge under the provisions of the following article.
The pledge is bound to advise the pledgor,
without delay, of any danger to the thing pledged.
Extinguishment of Pledge:
1. Thing pledged returned to pledgor;
2. Statement in writing by pledge that pledge is
renounced or abandoned; or
3. Public sale of thing when credit not satisfied in
due time.
4.
RIGHTS AND OBLIGATIONS OF A PLEDGOR
Rights Obligations

 Foreclosure is but a necessary consequence of a 1. To demand return in 1. To advise the pledge of

non-payment of mortgage indebtedness. As a rule, case of reasonable the flaws of the thing
the mortgage can be foreclosed only when the grounds to fear (Art 2101, NCC)
debt remains unpaid at the time it is due. destruction or 2. Not to demand the
(Government of the Philippine Island v. Espejo, 57 impairment of the thing return of the thing
Phil. 496). without the pledgee’s until after full payment
 Since the respondents have been constantly fault, subject to the of the debt, including
paying, the foreclosure cannot be made. If the fact duty of replacement interest due thereon
that their payment of P960,000.00 was not (Art 2107, NCC) and expenses incurred
credited cannot be their fault. Thus, the loan 2. for its preservation
cannot be considered unpaid as to warrant 3. To bid and be preferred (Art 2105, NCC)
foreclosure of the mortgage. Furthermore, at the public auction
respondents have not yet defaulted on the (Art 2113, NCC)
payment since the same was payable in 3 years, 4.
hence the foreclosure was premature, as the 5. To alienate the thing
obligation has not yet become due and pledged provided the
demandable. (Producers Bank of the Philippines v. pledge consents to the
CA, et el., G.R. No. 111584, Sept. 17, 2001). sale (Art 2097, NCC)
6.
7. To ask that the thing
Requisites of Pactum Commissorium: pledged be deposited
(NCC)
1. A pledge, mortgage, or antichresis of property
by way of security for the payment of the principal
obligation, and RIGHTS OF THE PLEDGEE

1. Option to demand replacement or immediate

2. A stipulation for an automatic appropriation by
payment of the debt in case of deception as to
the creditor of the property in the event of
substance or quality (art 2109, NCC);
nonpayment of the obligation within the
2. To sell at public auction in case of reasonable
stipulated period.
grounds to fear destruction or impairment of
the thing without his fault (art 2108, NCC);
3. To bring actions pertaining to the owner (Art
Article 2107 2103, NCC);
4. To choose which of several things pledged shall
be sold;
5. To bid at the public auction (Art 2113, NCC);
6. To appropriate the thing in case of failure of
the 2nd public auction (Art 2112, NCC);
7. To apply said fruits, interest or earnings to the
interests, if any, then to the principal of the
credit (Art 2102, NCC);
8. To retain excess value received in the public
sale (Art 2115, NCC)
9. To retain the thing until after full payment of
the debt (Art 2098, NCC);
10. To be reimbursed for the expenses made for
the preservation of the thing pledged(Art
2099, NCC)
11. To object the alienation of the thing;
12. To possess the thing (Art 2098, NCC);
13. To sell at public auction in case of nonpayment
of debt at maturity (Art 2112, NCC) to choose
which of the several thing pledged shall be sold
(Art 2119, NCC). Option to demand
replacement or immediate payment of the debt
in case of deception as to substance or quality
k(Art 2109, NCC)
OBLIGATIONS OF THE PLEDGEE
1. Take care of the thing with the diligence of a
good father of a family (art 2099);
2. Not to use thing unless authorized or by the
owner or its preservation requires it use (Art
2104, NCC);
3. Not to deposit the thing with a 3rd person unless
so stipulated (Art 2100);
4. Responsibility for acts of agents and employees
as regards the thing (Art 21000);
To advise pledgor of danger to the thing Art 2107,
NCC); and
5. To advise pledgor of the result of the public
auction (Art 2113, NCC).
Effect of Sale of the Thing Pledged:
1. Extinguish the principal obligation, whether or
not the proceeds of the sale are equal to the
amount of the principal obligation, interest and
expenses in a proper case
2. If the price of the sale is more than the
amount due the creditor, the debtor is not
entitled to the excess unless the contrary is
provided
3. If the price if the sale is less, the creditor is not
entitled to recover the deficiency even if there
is a stipulation to that effect. (Art 2115)
MORTGAGE
A. REAL MORTGAGE
 A contract whereby the debtor secures to the
creditor the fulfillment of a principal obligation,
specially subjecting to such security immovable
property in case the principal obligation is not
complied with at the time stipulated.
 An essential requisite of a contract of mortgage is
that the mortgagor be the absolute owner of thing
mortgaged. The effect of a mortgage by a co-
owner shall be limited to the portion that may be
allotted to that person upon the termination of the
co-ownership. (Ocampo, et al., Ocampo, et al.,
G.R. No. 150707, April 14, 2004)
Kinds of Mortgage
Voluntary
Legal
Equitable (Art. 1602, NCC)
Special Characteristics of Real Mortgage:
1) Real right;
2) Accessory obligation;
3) Indivisibility;
4) Retention of Possession; and
5) Inseparability
 In the accessory contract of real mortgage, in
which immovable property or real rights thereto
are used as security for the fulfillment of the
principal loan obligation, the bid price may be
lower than the property’s fair market value. Loan
value itself is only 70 percent of the appraised
value. A low bid price will make it easier for the
owner to effect redemption by subsequently
reacquiring the property or by selling the right to
redeem and thud recover alleged losses. No
personal notice is even required, because an
extrajudicial foreclosure is an action of rem,
requiring only notice by publication and posting, in
 order to bind parties interested in the foreclosed
property. (New Sampaguita Builders Construction
Inc. et al., Philippine National Bank, G.R. No.
148753, July 30, 2004)
which said third person possesses (Art 2129,
NCC)
 It is necessary that prior demand for payment
must have been made on the debtor and the
latter failed to pay (BPI vs. Concepcion & Hijos,
Inc., 53 Phil 906)

Pledge Real Mortgage

1. Constituted on 1. Constituted on FORECLOSURE

movables immovables
2. Property is delivered to 2. delivery is not
pledge or by common necessary The remedy available to the mortgagee by which
consent to a third he subjects the mortgaged property to the
person satisfaction of the obligation to secure that for
3. Not valid against third 3. not valid against which the mortgage was given.
persons unless third persons unless
registered
Kinds of Foreclosure

1. Judicial

2. Extrajudicial
Extent of Mortgage:

 Absent express stipulation to the contrary, the JUDICIAL EXTRAJUDICIAL

mortgage includes the accessories, improvements, FORECLOSURE FORECLOSURE
growing fruits and income of the property not yet
received when the amount of the indemnity There is court No court intervention.
granted or owing to the proprietor from the intervention.
insurers of the property mortgaged, or in virtue of
expropriation for public use (Art 2127) Decisions are Not appealable because
appealable. it is immediately
Object of Mortgage: executory.

Future property cannot be an object of a Order of court cuts off Foreclosure does not
contract of mortgage (Art 2085[2], NCC) all rights of the parties cut off right of all
However, a stipulation subjecting to the impleaded. parties involved.
mortgage the mortgagor may subsequently
acquire install, or use in connection with real There is equity of There is a right of
property already mortgaged belonging to the redemption except on redemption.
mortgagor is valid (People’s Bank and Trust banks which provides
Co.,20 SCRA 84)
for a right of
Special rights: redemption.

1. Mortgagor – to alienate the mortgaged Period of redemption There is a right of

property but the mortgage shall remain except on banks which redemption.
attached to the property. provides for a right of
 A stipulation forbidding the owner from redemption.
alienating the immovable mortgage shall be
void (Art 2130, NCC) being contrary to public No need for a special Special power of
policy inasmuch as the transmission of property power of attorney in attorney in favor of
should not be unduly impeded.
the contract of mortgagee in needed in
2. Mortgagee – To claim from a 3rd person in
possession of the mortgaged property the mortgage. the contract.
payment of the part of the credit secured by the

“Tipo” or “Upset Price”
 A stipulation in a mortgage of real property fixing a
minimum price at which the property shall be sold,
to become operative in the event of a foreclosure
sale at public auction.
 Where the proceeds of the sale are insufficient
to cover the debt in an extrajudicial foreclosure of
mortgage, the mortgagee is entitled to claim the
deficiency from the debtor. The creditor is not
preclude from taking action to recover any unpaid
balance on the principal obligation simply because
he choose to extrajudicially foreclose the real
estate mortgage. (Cunada, et al., vs. Drilon, GR
No. 159118, June 28, 2004)
REDEMPTION OF FORECLOSED PROPERTY:
 A transaction by which the mortgagor
reacquires or buys back the property which may
have passed under the mortgage may have
created.
 Registration in the Registry of Property is
necessary in order to bind third persons but not
for the validity of the contract.
KINDS OF REDEMPTION
1. Equity of Redemption
 The equity of the mortgagor to redeem the
mortgaged property after his default in the
 A stipulation in a mortgage by which the
performance of the conditions of the mortgage but
before the sale of the mortgaged property or
confirmation of the sale.
2. Right of Redemption
 Right of the mortgagor to redeem the mortgaged
property within a certain period after it was sold
for the satisfaction of the mortgaged debt.
Exercised within one year from the registration of
sale.
 Existence of the right of redemption operates to
depress the market value of the land until the
period expires, and to render that period indefinite
by permitting the tenant to file a suit for
redemption, with either party unable to foresee
when final judgment will terminate the action,
would render nugatory the period of two years
fixed by statue for making the redemption and
virtually paralyzed any efforts of the landowner to
realize the value of his land. No buyer can be
expected to acquire it without any certainty as to
the amount for which it may be redeemed, so that
he can recover at least his investment in case of
redemption. In the meantime, the landowner’s
need and obligations cannot be met. It is doubtful
if any such result was intended by the statute,
absent clear wording to that effect. (BPI Family
Savings Bank v. Sps. Veloso, G.R. No. 141974,
08/09/2004).
Requisites for Valid Redemption:
1. Must be made within 12 months from the time
of the registration of the sale;
2. The following should also be observed: (a) the
price which the purchaser paid or the property;
(b) interest of 1% per month on the purchase
price; (c) the amount of any assessment and
taxes which the purchaser may have paid on
the property after purchase; (d) interest of 1%
per month on such assessment and taxes.
Payment of the purchase price of the property
plus 1% interest per month together with the
taxes thereon, if any, paid by the purchaser
with the same rate of interest computed from
the date of registration of the sale; and
3. Written notice of the redemption served on the
officer who made the sale and a duplicate filed
with the Register of Deeds
PACTO DE NON ALIENDO
mortgagor agrees not to alienate or encumber the
mortgaged premises to the prejudice of the
mortgagee
ANTICHRESIS
CONTRACT
Whereas the creditor acquires the right to receive the right to receive the any right to receive the
the fruits of an immovable of his debtor, with the fruits of the property, fruits; but the
obligation to apply them to the payment of the hence, it does not mortgage creates a
interest, if owing, and thereafter to the principal of produce a real right real right over the
his credit. (Art. 2132)
property.

The creditor, unless The creditor has no

Characteristics there is stipulation to such obligation.
the contrary, is obliged
1. Accessory contract – it secures the performance
to pay the taxes and
of a principal obligation
charges upon the
2. Formal Contract – it must be valid in a specified estate.
form to be valid, i.e. “in writing.” (Art. 2134,
It is expressly stipulated There is no such
NCC)
that the creditor given obligation on part of
possession of the mortgagee
property shall apply all
Special Requisites (In Addition to the the fruits thereof to the
Common Essential Requisites) payment of interest, if
owing, and thereafter to
1. Covers only the fruits of an immovable the principal
property;
Subject matter of both is real property
2. Delivery of an immovable is necessary for the
creditor to receive the fruits;

3. Amount of principal and interest must be

specified in writing; and
Obligations of Antichretic Creditor:
4. Express agreement that debtor will give
1. To pay taxes and charges on the estate,
possession of the property to creditor and that
including necessary expenses
the latter will apply the fruits to the interest, if  Creditor may avoid said obligation by:
any, then to the principal of his credit. a. Compelling debtor to reacquire enjoyment
of the property; or
b. By stipulation to the contrary.
2. To apply all the fruits, after receiving them, to
the payment of interest, if owing, and
thereafter to the principal;
ANTICHRESIS PLEDGE 3. To render an account of the fruits to the
debtor;
Refers to real property. Refers to personal 4. To bear the expenses necessary for its
property. preservation and repair.

Perfected by mere Perfected by delivery

consent. of the thing pledged. Remedies of Creditor in Case of Non-Payment
of Debt

1. Bring an action for specific performance; or

ANTICHRESIS
Property is delivered to
creditor.
Creditor acquires only
REAL MORTGAGE 2. Petition for the sale of the real property as in a
foreclosure of mortgages under Rule 68 of the
Debtor usually retains Rules of Court. (Art. 2137, NCC)
possession of the
property
 The parties, however, may agree on an
Creditor does not have extrajudicial foreclosure in the same manner as
 they are allowed in contracts of mortgage and
pledge (Tavera vs. El Hogar Filipino, Inc., 68 Phil
712)
A stipulation authorizing the antichretic creditor to
appropriate the property upon the non-payment of
the debt within the agreed period is void. (Art.
2088, NCC)
CHATTEL MORTGAGE
& A mortgage containing a stipulation in regard to
 That contract by virtue of which personal property
is recorded in the Chattel Mortgage Register as a
security for the performance of an obligation.
personal property that which by its nature
would be real property;
2. Registration of the mortgage with the Chattel
Mortgage Register where the mortgagor
resides; if property is located in a different
province, registration in both provinces
required;
3. Description of the property as would enable the
parties or other persons to identify the same
after reasonable investigation and inquiry; and
4. Accompanied by an affidavit of good faith to
bind third persons, but not for the validity of
the contract.
5. It can cover only obligations existing at the
time the mortgage is constituted.
future advances in the credit will take effect only
form the date the same are made and not from the
date of the mortgage (Jaca vs Davao Lumber Co.,
113 SCRA 107)

& A registered mortgaged lien is considered

inseparable from the property inasmuch as it is a
ANTICHRESIS CHATTEL MORTGAGE
right in rem. The mortgage creates a real right or a
lien which, after being recorded, follows the chattel Creditor has right to No right to the fruits.
wherever it goes. Under Article 2129 of the same
receive the fruits if the
Code, the mortgage on the property may still be
foreclosed despite the transfer. Even if the property but with the
mortgaged property is in the possession of the obligation to apply
debtor, the creditor is still protected. To protect them to the interest
the latter from the former’s possible disposal of the and principal debts.
property, the chattel mortgage is made effective
against third persons by the process of Creditor, as a rule shall Debtor always in
registration. (Philippine National Bank v. RBL have possession possession.
Enterprises, Inc., et. al., G.R. No. 149569, May 28,
2004). Contract must always Required to registered
be in writing. only for the purpose of
binding third persons.
Characteristics:
Obligation to pay taxes No such obligation is
1. Accessory contract – it is for the purpose of
and charges and imposed on the
securing the performance of a principal
obligation. necessary expenses creditor.
2. Formal contract – registration in the Chattel are borne by creditor.
Mortgage Register is indispensable for its
validity. Foreclosure is judicial Foreclosure may be
3. Unilateral contract – it produces only but parties may agree judicial or extra-
obligations on the part of the creditor to free that it be extra- judicial at option of the
the thing from the encumbrance on fulfillment judicial. creditor.
of the obligation.

Special Requisites (In Addition to the Chattel Mortgage Pledge

Common Essential Requisites):
1. Consensual contract 1. Real contract
1. It can cover only personal or movable property 2. Possession of the thing2. Possession of the thing
in general; however, the parties may treat as mortgaged remains pledged vested in
 with the debtor creditor 2. Payment of the obligation secured by the
3. Must be recorded in 3. Requires that contracts mortgage;
CMR for validity be in public instrument 3. Claims of persons holding subsequent
so as to bind 3rd mortgages in their order; and
persons 4. The balance, if any, shall be paid to the
4. Procedure for 4. Sale at public auction mortgagor or person holding under him.
foreclosure is different
from pledge
5. Debtor still liable for 5. Debtor not liable for
deficiency deficiency
General Rule: The creditor may maintain an
action for the deficiency Exception: if the chattel
CHATTEL MORTGAGE REAL ESTATE mortgage is constituted as security for the
MORTGAGE purchase of personal property payable in
installments (Recto Law, Art. 1484. Note: for the
Personal property Real property Recto Law to be made applicable, the mortgage
must be over the very same thing sold).
Requirement of Merely for the purpose
registration is essential of binding third
for the validity of the persons  The action for deficiency may be brought within
contract ten (10) years from the time the cause of action
accrues (Arts 1141 and 1142).

 Only equity of redemption is available to the

Affidavit of Good Faith
 An oath in a contract of chattel mortgage wherein
the parties severally swear that: (1) the mortgage
is made for the purpose of securing the obligation
specified in the conditions thereof and for no other
purposes; and (2) that the same is a just and valid
obligation and one not entered into for the purpose
of fraud.
FORECLOSURE OF CHATTEL MORTGAGE
 Foreclosure sale in chattel mortgage is by public
auction under Act No. 1508, but the parties may
stipulate that it be by private sale.
mortgagor; the latter can no longer redeem
after the confirmation of the foreclosure sale.
Right of Redemption
 When the condition of a chattel mortgage is
broken the following may redeem:
a. Mortgagor;
b. Person holding a subsequent mortgage; or
c. Subsequent attaching creditor.
 An attaching creditor who so redeems shall be
subrogated to the rights of the mortgagee and
entitled to foreclose the mortgage in the same
manner that the mortgage could foreclose it.

The redemption is made by paying or delivering to

& The mortgagee may, after thirty (30) days from the mortgagee the amount due on such mortgage
the time of the condition broken, cause the and the costs, and expenses incurred by such
mortgaged property to be sold at public auction by breach of condition before the sale thereof (Sec.
a public officer. The 30-day period is also a grace 13, Act No. 1508).
period for the mortgagor to discharge the
mortgage obligation. After the sale of the chattel at
public auction, the right of redemption is no longer
available to the mortgagor (Cabral vs. Evangelista,
28 SCRA 1000). RIGHT TO POSSESSION OF FORECLOSED
PROPERTY

Application of Proceed of Sale: 1. Real Mortgage – After the redemption period

has expired, the purchaser of the property has
1. Costs and expenses of keeping and sale; the right to a conveyance and to be placed in
possession thereof.
 Purchaser is not obliged to bring a separate
suit for possession. He must invoke the aid of
the courts and ask for a WRIT OF
POSSESSION.
 The purchaser is allowed to take possession of
the foreclosed property during the period of
redemption upon filing of an ex parte
application and approval of a bond. (Section 7
of Act No. 3135)
2. Chattel Mortgage – When default occurs and
the creditor desires to foreclose, the creditor
has the right to take the property as a
preliminary step for its sale.
 Where the debtor refuses to yield the property,
the creditor’s remedy is to institute an action
either to effect judicial foreclosure directly or
to secure possession (REPLEVIN) as a
preliminary to the sale contemplated in Sec.
1508
CONCURRENCE AND
PREFERENCE OF
CREDITS
CONCURRENCE OF CREDITS
 Implies the possession by two or more
creditors of equal rights or privileges over the
same property or all of the property of a debtor.
Preference of Credit
 The right held by a creditor to be preferred in
the payment of his claim above others out of the
debtor’s assets.
Preference of Credit and Lien Distinguished
Preference of Lien
Credit
Applies only to Creates a charge on
claims which do not a particular property.
attach to specific
properties.
Assignment of credit does not need the
consent of the debtor. Such assignment
does not extinguish the obligations of the
parties. (South City Homes Inc. et al. v. BA
Finance, et al., GR 135462, December 7,
2001)
An assignment of credit is an agreement by virtue
of which the owner of a credit, known as the
assignor, by a legal cause, such as sale, dacion en
pago, exchange or donation, and without the
consent of the debtor, transfers his credit and
accessory rights to another, known as the assignee
who acquires the power to enforce it against the
debtor. As a consequence the third party steps into
the shoes of the original creditor as subrogee of
the latter. The obligation is not extinguished. In
assignment the debtor’s consent is not essential
for the validity of the assignment (Article 1624 in
relation to Art. 1475, Civil Code), his knowledge
therefore affecting only the validity of the payment
he might make. (Art. 1626, Civil Code) What the
law requires in an assignment of credit is not the
consent of the debtor but merely notice to him.
 A creditor may, therefore, validly assign his credit
and its accessories without the debtors’ consent.
(National Investment and Development
Corporation vs. de los Angeles, 40 SCRA 489).
 The purpose of the notice is only to inform the
debtor that from the date of the assignment,
payment should be made to the assignee and not
to the original creditor. (Rodriguez vs. CA, 207
SCRA 553)
 In an assignment of credit, the consent of the
debtor is not necessary in order that the
assignment may fully produce legal effects. (Sison
and Sison v. Yap Tico and Avanceña, 37 Phil. 587).
 Conventional subrogation requires an agreement
among the three parties concerned – the original
creditor, the debtor and the new creditor. It is a
new contractual relation based on the mutual
agreement among all the necessary parties. Thus,
Art. 1301 of the Civil Code explicitly states that the
“conventional subrogation of a third person
requires the consent of the original parties and of
the third person” (Licaros vs. Gatmaitan, GR No.
142838, August 9, 2001)
Reflectionary Credit
Primarily indebtedness incurred in the repair or
reconstruction of something previously made such
repair or construction being made necessary by the
deterioration or destruction of the things as it
formerly existed.
TWO – TIER ORDER OF PREFERENCE
◘ Articles 2241 and 2242, jointly with
Article 2246 to 2249, established a two-tier order
of preference. The first tier includes only taxes,
duties and fees due on a specific movable or
immovable property. All other special preferred
(non-tax) credits stand on the second-tier to be
satisfied pari passu and pro rata, out of any
residual value of the specific property to which
such other credits relate.
LEASE
Lease
A consensual, bilateral, onerous and
commutative contract by virtue of which
one person binds himself to grant
temporarily the use of the thing or to
render some service to another who
undertakes to pay some rent.
 Generally, the renewal of a contract connotes
the death of the old contract, and the birth or
emergence of a new one. A clause in a lease
providing for a renewal merely creates an
obligation to execute a new lease contract for the
additional term. As renewal of the contract
contemplates the cessation of the old contract,
then it is necessary that a new one be executed
between the parties. (Buce v. CA, GR No. 136913,
May 12, 2000)
Characteristics or Requisites for Lease of
Things
1. Consensual
2. Principal
3. Nominate
4. Purpose is allow to enjoyment or
use of a thing (the person to enjoy is the
lessee; the person allowing the enjoyment by
another is the lessor)
5. Subject matter must be within the
commerce of man
6. Purpose to which the thing will be
devoted should not be immoral
7. Onerous (there must be rent or
price certain)
8. Period is temporary (not perpetual,
hence, the longest period is 99 years)
9. Period is either definite or
indefinite
 If no term is fixed, we
should apply Art. 1682 (for rural leases) and
Art. 1687 (for urban lessee)
 If the term is fixed but
indefinite, the court will fix the term under the
law of obligations and contracts
10. Lessor need not be the owner.
 A usufructuary may thus lease the premises in
favor of a stranger, such lease to end at the
time that the usufruct itself ends.
Rent
 The compensation either in money,
provisions, chattels, or labor, received by the
lessor from the lessee
 When a student boards and lodged in a
dormitory, there is no contract of lease. The
contract is not designated specifically in the Civil
Code. It is an innominate contract. It is however;
believe that the contract can be denominated as
the contract of board and lodging.
 There is a contract of lease when the
use and enjoyment of a safety deposit box in a
bank is given for a price certain. This is certainly
not a contract of deposit.
LEASE SALES
 Only use or enjoyment Ownership is subletting in the contract itself. To bar the lessee
is transferred. transferred from subletting, the contract of lease must
Transfer is temporary Transfer is permanent expressly stipulate the prohibition on subletting.
Lessor need not be Seller must be the (Mon v. Court of Appeals, et al., G.R. No. 118292,
theowner owner at the time the 04/14/204)
property is delivered
The price of the object, Usually, the selling When Lessee may Suspend the Payment of
distinguished from the price is mentioned Rent:
rent, is usually not 1) Lessor fails to undertake necessary repairs.
mentioned 2) Lessor fails to maintain the lessee in peaceful
and adequate enjoyment of the property
leased.

LEASE OF THINGS LEASE OF SERVICES  When the period of lease has expired, there was
Object of contract is a Object is some work or no longer any lease has expired, there was no
thing service longer any lease that could be extended by the
Lessor has to deliver Lessor has to perform court. Hence when the court extended it, it in
the thing leased some work or service effect, made a new contract for the parties, a
In case of breach, In case of breach, no power it did not have (Henson v. IAC, 148 SCRA
11).
there can be an action action for specific
for specific performance
 Lease for an indefinite period is one with a
performance
resolutory condition. In this case, the contract
provided that the lease period shall continue for an
indefinite period provided that the lessee is up-to-
date in the payment of his monthly rentals.
(Jespajo Realty Corp. v. CA et al., GR 113626,
LEASE OF SERVICES CONTRACT FOR A
September 27, 2002).
(location operatum) PIECE
(location operas)
SUBLEASE ASSIGNMENT OF
The important object is The important object is
LEASE
the labor performed by the work done
There are two leases There is only one
the lessor
and two distinct juridical relationship,
The result is generally The result is generally
juridical relationships that of the lessor and
not important, hence important; generally,
although immediately the assignee, who is
the laborer is entitled the price is not payable
connected and related converted into a
to be paid even if there until the work is
to each other lessee
is destruction of the completed, and said
The personality of the The personality of the
work through price cannot be
lessee does not lessee disappears
fortuitous event lawfully demanded if
disappear
the work is destroyed
The lessee does not The lessee transmits
before it is finished and
transmit absolutely his absolutely his rights
accepted
rights and obligations to to the assignee
the sublessee
The sublessee, The assignee has a
generally, does not direct action against
SUBLEASE have any direct action the lessor
against the lessor
 A separate and distinct contract of lease
wherein the original lessee becomes a
sublessor to a sublessee. Rights of Lessor if Sublease Prohibited but
 Allowed unless expressly prohibited. Entered into by Lessee:
 The sublessee is subsidiarily liable for any rent 1) Rescission and damages;
due. The lessor has a direct action against the 2) Damages only (Contract will be allowed to
sublessee for unpaid rentals and improper use remain in force); or
of the object. 3) Ejectment.

 The lessee can sublease the leased property,

unless there is an express prohibition against
 Instances When Sublessee is Liable to the
Lessor:
1) All acts which refer to the use and preservation
of the thing leased in the manner stipulated
between the lessor and the lessee
2) The sublessee is subsidiarily liable to the lessor
for any rent due from the lessee.
 The sublessee shall not be responsible beyond the
amount of rent due from him.
Accion Discreta – direct action which the lessor
may bring against a sublessee who misuses the
subleased property.
Obligations of the Lessor:
1) Delivery of the object ( cannot be waived);
2) Making of necessary repairs;
3) Maintenance in peaceful and adequate
possession.
Obligations of the Lessee:
1) To pay rent;
2) To use thing leased as a diligent father of a
family, devoting it to the use stipulated;
3) To pay expenses for the deed of lease;
4) To notify the lessor of usurpation or untoward
acts;
5) To notify the lessor of need for repairs; and
6) To return the property leased upon termination
of the lease.
EFFECT OF DESTRUCTION OF THE THING
LEASED:
1. Total destruction by a fortuitous event
a.Lease is extinguished
2. Partial destruction
a.Proportional reduction of the rent, or
b.Rescission of the lease
WHEN LESSEE MAY SUSPEND PAYMENT OF
RENT:
Lessor fails to undertake necessary repairs
 “Suspend” – for the intervening period,
the lessee does not have to pay the rent.
 In either case, rescission may be
Effectivity of the Suspension
The right begins:
1. In case of repairs, from the time he made the
demand for said repairs, and the demand went
unheeded.
2. In the case of eviction, from the time the final
judgment for eviction becomes effective.
Alternative Remedies of Aggrieved Party
(Lessor/Lessee) in Case Non-Fulfillment of
Duties:
1. Rescission and damages
2. Damages only, allowing the
contract to remain in force
3. Specific performance
Note: Damages Recoverable in ejectment cases
the rent or the fair rental value of the premises.
The following cannot be successfully claimed:
1. Profits plaintiff could have earned were it not
for the possible entry or unlawful detainer;
2. Material injury to the premises; and
3. Actual, moral, or exemplary damages.
Immediate Termination of Lease Under Art.
1660 Applies:
1. Only to dwelling place or any other building
intended for human habitation
2. Even if at the time the contract was perfected,
the lessee knew of the dangerous condition or
waived the right to rescind on account of this
condition
Rules on Alteration of the Form of the Lease:
1. The Lessor can alter provided there is no
impairment of the use to which the thing is
devoted under the terms of the lease
2. Alteration can also be made by the Lessee so
long as the value of the property is not
substantially impaired.
Rules in Case of Urgent Repairs:
1. The lessee is obliged to tolerate the work
although it may be very annoying to him and
although during the same time he may be
deprived of a part of the premises.
2. If repairs last for more than 40 days: Lessee
cannot act for reduction of rent or rescission.
3. If 40 days or more: lessee can ask for
proportionate reduction.
availed of if the main purpose is to provide a
dwelling place and the property becomes
uninhabitable.

Effects If Lessor Fails to Make Urgent
Repairs:
1. Lessee may order repairs at the lessor’s cost.
2. Lessee may sue for damages.
3. Lessee may suspend the payment of the rent.
4. Lessee may ask for rescission, in case of
substantial damage to him.
Trespass in Lease:
1. Trespass in fact (perturbacion de mere
hecho):
 Physical enjoyment is reduced.
 Lessor will not be held liable.
2. Trespass in law (perturbacion de derecho):
 A third person claims legal right to enjoy the
premises
 Lessor will be held liable
Note: While the Japanese Occupation was a
fortuitous event, the lessor is still not excused
from his obligation to warrant peaceful legal
possession. Lease is a contract that calls for
prestations both reciprocal and repetitive; and
the obligations of either party are not
discharged at any given moment, but must be
fulfilled all throughout the term of the contract.
(Villaruel vs. Manila Motor Co., GR L-10394,
December 13, 1958)
Duration of Lease
1. Lease made for a determinate time or fixed
period
 Lease will be for the said period and it ends on
the day fixed without need for a demand
2. If there is no fixed period
A. For Rural Lands (Article 1680)
 It shall be for all time necessary for the
gathering of fruits which the whole estate may
yield in 1 year, or which it may yield once.
B. For Rural Lands (Article 1687)
a. If rent is paid daily: lease
is from day to day
b. If rent is paid weekly:
lease is from week to week
c. If rent is paid monthly:
lease is from month to month
d. If rent is paid yearly:
lease is from year to year
RULES ON EXTENSION OF THE LESSEE
PERIOD:
1. If a lessee contract for a definite term allows
lessee to extend the term, there is no
necessity for lessee to notify lessor of his
desire to so extend the term, unless the
contrary is stipulated.
2. “May be extended” as stipulation: lessee can
extend without lessor’s consent but lessee
must notify lessor.
3. “May be extended for 6 years agreed upon by
both parties” as stipulation: this must be
interpreted in favor of the lessee. Hence,
ordinarily the lessee at the end of the original
period may either:
a. leave the premises; or
b. remain in possession
4. In co-ownership, assent of all is needed;
otherwise, it is void or ineffective as against
non-consenting co-owners.
5. Where according to the terms of the contract,
the lease can be extended only by the written
consent of the arties thereto, no right of
extension can rise without such written
consent.
Rule If Lessor Objects to the Lessee’s
Continued Possession:
Requisites:
1. Contract has expired
2. Lessee continued enjoying the thing
3. Lessor Objected to this enjoyment
 If the three requisites are present,
the lessee shall be considered a possessor in
bad faith
IMPLIED NEW LESSEE
(TACITA RECONDUCCION)
 Lease which arises if at the end of the contract
the lessee should continue enjoying the thing
leased for 15 days with the acquiescence of the
lessor, unless a notice to the contrary had
previously been given by either party.
Requisites:
b. The term of the original contract has expired
c. The lessor has not given the lessee a notice to
vacate
d. The lessee continued enjoying the thing leased
for at least 15 days with the acquiescence of the
lessor
WHEN THERE IS NO IMPLIED NEW LEASE:
1. When before or after the expiration of the term,
there is a notice to vacate given by either party.
 2. When there is no definite fixed period in the
original lease contract as in the case of
successive renewals.
Effects:
a. The period of the new lease is not that stated
in the original contract but the terms in Articles
1682 and 1687.
b. Other terms of the original contract are
revived.
 Terms that are revived are only those which are
germane to the enjoyment of possession, but not
those with respect to special agreements which are
by nature foreign to the right of occupancy or
enjoyment inherent in a contract of lease – such as
an option to purchase the leases premises (Dizon
v. Magsaysay GR No. 23399, May 31, 1974)
Perpetual Lease
 A lease contract providing that the lessee
can stay in the premises for as long as he wants
for as long as he can pay the rentals and its
increases.
 This is not permissible; it is a purely
potestative condition because it leaves the
effectivity and enjoyment of leasehold rights to the
sole and exclusive will of the lease.
NOTE: In Jespajo Realty vs. CA, 27 Sept. 2002,
the SC upheld a lease contract, which provides
that “the lease contract shall continue for an
indefinite period provided that the lessee is up-to-
date in the payment of his monthly rentals” for the
contract is one with a period subject to a
resolutory condition.
PURCHASE OF THE LEASED PROPERTY
General Rule: Purchaser of thing leased can
terminate lease.
Exceptions:
a. Lease is recorded in Registry of Property;
b. There is stipulation in the contract of sale that
purchaser shall respect the lease;
c. Purchaser knows the existence of the lease;
d. Sale is fictitious; or
e. Sale is made with right of repurchase.
RENTAL REFORM ACT OF 2002
[RA NO. 9161]
Effectivity: January 1, 2002
Coverage:
1. All residential units of NCR and
other highly urbanized cities, the total monthly
rental for each of which does not exceed
P7,500.
2. All residential units in other areas
the total monthly rentals for each of which
does not exceed P4,000as of 1/1/02 without
prejudiced to pre-existing contracts.
 The lessee cannot controvert the title of the
lessor. Rule 131, Sec. 2(b) of the Rules of Court
precludes a tenant from denying the title of his
landlord and tenant between them. In Geminiano
v. CA, 259 SCRA 344; it was said that the lessees
who had undisturbed possession for the entire
term under the lease, are then estopped to deny
their landlord’s title, or to assert a better title not
only in themselves, but also in some third person
while they remain in possession of the leased
premises and until they surrender possession to
the landlord. This estoppel applies even though the
lessor had no title at that tame the relation of the
lessor and lessee was created, and may be
asserted not only by the original lessor, but also by
those who succeed to his title. (Golden Horizon
Realty Corporation v. Sy Checah, etc., GR No.
145416, Sept. 21, 2001)
Termination Of The Lease
If made for a determinate time, it ceases upon the
day fixed without the need of a demand.
1. By the expiration of the period;
2. By the total loss of the thing;
3. By the resolution of the right of the lessor;
4. By the will of the purchaser or transferee of the
thing; or
5. By rescission due to non-performance of the
obligation of one of the parties.
Lease duration: If not fixed, it shall be for all
time necessary for the gathering of fruits which the
whole estate may yield 1 year, or which it may
yield once.
Grounds for Judicial Ejectment (RA 9161)
1. Assignment of Lease or Subleasing of
residential units in whole or in part, including
the acceptance of boarders or bedspacers,
without written consent of owner.
2. Arrears in payment of rent for a total of 3
months; provided that in case of refusal by
lessor to accept payment of the rental agreed
upon, the lessee may either deposit, by way of
consignation, the amount in court or with city
or municipal treasurer as the case may be, or
 in a bank in the name of & with notice to
lessor, within a month after refusal of lessor to
accept payment (Chan & Co v. Medalla; GR
147999, February 27, 2004)
SPECIAL PROVISIONS FOR RURAL
LANDS
Effect of loss due to fortuitous event:
1. Ordinary fortuitous event
 No reduction
2. Extraordinary fortuitous event
 If more than ½ of the fruits were lost, there
shall be a reduction, unless there is a
stipulation to the contrary.
 If ½ or less, there shall be no reduction.
Repairs for which urban lessor is liable:
1. Special stipulation
2. If none, custom of the place
3. In case of doubt, the repairs are chargeable
against him.
Lease Duration:
1. If there is a fixed period, lease will be for said
period.
2. If no fixed period, apply the following rules:
a. If rent is paid daily: day to day;
b. If rent is paid weekly: week to week;
c. If rent is paid monthly: month to month;
d. If rent is paid yearly: year to year.
LAND TITLES & DEEDS
Ordinary registration of title
TORRENS TITLE
Certificate of ownership issued under the Torrens
System of registration by the government, through
the Registrar of Land Titles and Deeds; naming
and declaring the owner in fee simple of the real
property described therein, free from all liens and
encumbrances except such as may be expressly
noted thereon or otherwise reserved by law.
 The real purpose of the system is to quiet title to
put a stop forever to any question of the legality of
the title, except claims which were noted at the
time of the registrations in the certificate, or which
amy arise subsequent thereto. (Legarda vs.,
Saleeby, 31 Phil 590)
LAND TITLE
 That upon which ownership is based; it is the
evidence of the right of the owner or the extent of
his interest, and by which means he can maintain
control and as a rule assert right to exclusive
possession and enjoyment of property.
Types of Estate
1. Freehold Estate – indicates titles of ownership
a. Fee simple – absolute title; conferred
without limitation, qualification or
restriction.
c. Fee tail – pass title to grantee and his
heirs.
c.  Life state – held for duration of life.
2. Less than Freehold Estate
a. Tenancy from period to period – lease
running from month to month or year to
year with automatic renewal.
b. Tenancy at will – person is permitted to
occupy land of another without stipulation as
to period.
c. Estate for years – lease for a period agreed
upon; less or retains ownership of of land.
Registration of Deeds
 Constitutes a public repository of records of
instruments affecting registered or
unregistered lands and chattel mortgages in
the province or city wherein such office is
situated.
 The function of a Register of Deeds with
reference to the registration of deeds,
encumbrances, instruments and the like is
ministered in nature (Baranda vs. Gustillo, 167
SCRA 757).
Registration and Transfer
  We have consistently held that the Torrens
System is not a means of acquiring titles to
lands. (Sps. Del Rosario vs. Montana, et al.,
G.R. No. 134433, May 28, 2004)
 When Stronghold registered its notice of
attachment, it did not know that the land being
attached had been sold to petitioner. It had no
such knowledge precisely because the sale,
unlike the attachment, had not been registered.
It is settled that a person dealing with
registered property may rely on the title and be
charged with notice of only such burdens and
claims as annotated thereon. (Dy vs.
Stronghold Insurance Co., Inc., G.R. No.
156580, June 14, 2004)
DEED
An instrument in writing by which any real estate
or interest therein is created, alienated, mortgaged
or assigned, or by which title to any real estate
may be affected in law or equity.
Registered owner are entitled to the possession of
the property covered the said title prior physical
possession is necessary only in forcible entry
cases. In Section 48 of PD No. 1529, a certificate
of title shall not be subject to collateral attack. It
cannot be altered, modified or cancelled.
Requisites in Ordinary Land Registration
Proceedings
1. Survey of land by the Bureau of Lands or a duly
licensed private surveyor.
2. Filing of application for registration by the
applicant.
3. Setting of the date for the initial hearing of the
application by the court.
4. Transmittal of the application and the date of
initial hearing by the Clerk of Court to the Land
Registration Commission.
5. Publication of notice in the Official Gazette.
6. Service of notice upon contiguous owners or
those who have interests in the property by the
sheriff.
7. Filing of answer by any person named in the
notice or not.
8. Hearing of the case.
9. Promulgation of judgment.
10. Issuance of the decree by the Court.
11. Entry of the decree of registration.
12. Transcription of the decree.
 An amendment consisting in the inclusion of an
area not originally applied for registration must be
published. Without new publication the registration
court cannot acquire jurisdiction over the area
covered by the application (Benin vs. Tuason, 57
SCRA 531)
Probative Value of Torrens Title – Torrens Title
should be received as evidence in all the court of
the Philippines, and shall be conclusive as to all
matters contained therein principally, the identity
of the owner of the covered thereby except so far
as provided in the Land Registration Act.
Administration of the Torrens System
1. Land Registration Authority (LRA) – charged
with the efficient execution of laws relative to
the registration of lands.
2. Register of Deeds (RD) the public repository of
records of instruments affecting registered or
unregistered lands and chattel mortgages in the
province or city wherein such office is located.
 One who is in actual possession of a piece of land
claiming to be the owner, may wait until his
possession is disturbed or his title attached before
taking steps to vindicate his right. The reason
being undisturbed possession gives him a
continuing right to sell. (Spouses Occena vs.
Esponilla, GR 156973, June 4, 2004)
Instances When RD May Deny Registration
1. When there is more than one copy of the
owner’s duplicate certificate of title and not all
such copies are presented to the Register of
Deeds.
2. Where the voluntary instrument bears an
infirmity on its face.
3. Where the validity of the instrument sought to
be registered is in issue in a pending court suit
4. When the document is not verified and
notarized
◘ REMEDIES TO CHALLENGE THE JUDGMENT IN
LAND REGISTRATION
1. New Trial, on the grounds of:
a. Fraud, accident, mistake or excusable
negligence;
b. Newly discovered evidence;
c. Award of excessive damages, or insufficiency
of the evidence to justify the decision, or
decision is against the law.
 f. The action has not prescribed.
2. Relief From Judgment
When a judgment or order is entered, or other 8. Cancellation Suits Involving Double Title
proceeding is taken, against a party in 9. Annulment of Judgment
Regional Trial Court through fraud, accident, 10. Quieting of Title
mistake, or excusable negligence, he may file a 11. Criminal Action
petition in such court and in the same cause
praying that judgment, order or proceeding be set
aside.

3. Appeal
RECONSTITUTION OF TITLE
4. Petition For Review, requisites:
a. Petitioner has a real and dominical right;
b. He has been deprived thereof; Restoration of the instrument which is supposed to
c. Through actual fraud; have been lost or destroyed in its original form and
d. Petition is filed within one year from issuance condition.
of the decree;
e. Property has not yet passed to an innocent
purchaser for value.
CLASSIFICATION OF LANDS
5. Action For Reconveyance, grounds: 1. Forest
a. Fraud (within four years from discover of 2. Agricultural
fraud); 3. Mineral
b. Implied or constructive trust; 4. Public Parks
c. Express trust;
d. Void contract.

6. Action For Damages

After one year from date of the decree and if
reconveyance is not possible because the property
has passed to an innocent purchaser for value and
in good faith, the aggrieved party may bring an
ordinary action for damages only against the
applicant or persons responsible for the fraud or
were instrumental in depriving him of the property.
Such action prescribes in ten (10) years from the
issuance of the Torrens title over the property.
7. Action For Compensation Under The
Assurance Fund, requisites
a. The aggrieved party, or the suitor,
sustained loss or damage, or is deprived of
land or any estate or interest therein;
b. Such loss, damage or deprivation (1) was
occasioned by the bringing of the land
under the operation of the Torrens System
or (b) arose after original registration of
land;
c. The loss, damage or deprivation was due
to (a) fraud, or (b) any error, omission,
mistake or misdescription in any certificate
of title or in any entry or memorandum in
the registration book;
d. There was no negligence on his party;
e. He is barred under the PD 1529 or under
the provision of any law from bringing an
action for the recovery of such land or the
estate or interest therein; and
MODES OF ACQUIRING LAND TITLE
By public grant – conveyance of
public land by government to private
individual.
By adverse possession – open,
continuous, exclusive, notorious
possession of property.
By accretion – alluvium.
By reclamation – filing of submerged
land by deliberate act and reclaiming
title thereto; government.
By private grant or voluntary
transfer – voluntary execution of deed
of conveyance.
By involuntary alienation – no
consent from owner of land.
By descent or devise – hereditary
succession to the estate of deceased
owner.
By Emancipation Patent – for
purpose of ameliorating sad plight of
tenant-farmers; not transferable except
by hereditary succession.

SYSTEMS OF REGISTRATION
1. System under the Spanish Mortgage Law
2. Torrens System
3. System of recording for unregistered lands
Ways of Registering Title to the Torrens
System
1. Judicial
 Filing of petition with the court
 Decree – OCT
2. Administrative
 Filing of petition with the DENR or Director
of Lands
 Patent – OCT
KINDS OF REGISTRATION PROCEEDINGS
1. Original – securing the title for the first time
(OCT)
2. Subsequent – registration after the original
registration (OCT – TCT)
Kinds of Original Registration
1. Ordinary – voluntary registration
 Under P.D. No. 1529 and under Sec. 48(b) of
OA No. 141 as amended.
2. Cadastral – compulsory registration initiated by
the government
 Involuntary registration
ORIGINAL REGISTRATION PROCEEDING –
proceeding brought before the land registration
court to determine title of ownership to the land on
the basis of an application filed for registration or
of an answer filed by a claimant in a cadastral
registration
SUBSEQUENT REGISTRATION PROCEEDING
– where incidental matters after original
registration may be brought before the land
registration court by way of motion or petition filed
by the registered owner or a party in interest or
through the registration of deeds that may affect
land.
PERSONS WHO MAY APPLY FOR
REGISTRATION OF LAND TITLES
1. Those who by themselves or through their
predecessors-in-interest have been in open,
continuous, exclusive and notorious possession
and occupation of alienable and disposable
lands of the public domain under a bona fide
claim of ownership since June 12, 1945, or
earlier;
2. Those who have acquired ownership of private
lands by prescription under the provisions of
existing laws;
3. Those who have acquired ownership of private
lands or abandoned river beds by right or
accession or accretion; and
4. Those who have acquired ownership of land in
any other manner provided for by law.
◘ LIMITATION TO OWNERSHIP OF LAND BY
CORPORATION
A. Private Lands
 At least sixty percent Filipino to acquire
private land.
 Restricted as to extent reasonably
necessary to enable it to carry out purpose
which it was created.
 If engaged in agricultural-restricted to
1.024 hectares.
B. Patrimonial Property of State
 Lease for twenty-five years renewable.
 Limited to 1000 hectares
 Apply to both Filipino and foreign
corporations.
Muniments of Title – instruments or written
evidences which applicant holds or possesses to
enable him to substantiate and prove title to his
estate.
INDEFEASIBLITY OF CERTIFICATE OF TITLE
General Rule: upon expiration of 1 year from and
after the entry of the decree of registration in the
Register of Deeds, the certificate of title becomes
incontrovertible and indefeasible.
Exceptions:
a. If previous valid title of the same land exists;
b. When land covered is not capable of
registration; and
c. When acquisition of certificate is attended by
fraud.
DOCTRINE OF NON-COLLATERAL ATTACK OF
DECREE OR TITLE
Decree of a registration and a registered title can
not be impugned, enlarged, altered, modified, or
diminished in a collateral proceeding, not even by
direct proceeding, after the lapse of the period
prescribed by law.
RECONSTITUTION OF CERTIFICATE OF TITLE
1. Judicial Reconstitution of Title
2. Administrative Reconstitution of Title
Requisites:
a. Substantial loss or destruction of land titles
due to fire, flood or other force majeure;
b. The number of certificates of titles lost or
damaged should be at least ten percent (10%)
of the total number in the possession of the
office of the Register of Deeds;
c. There are at least 500 certificates of title that
were lost or damaged be less than five
hundred (500).
Requirements for Deeds and Other Voluntary
Acts of Conveyance to Be Registrable
1. Presentation of the Owner’s Duplicate
Certificate whenever any duly executed
voluntary instrument is filed for registration;
2. Payment of prescribed registration fees and
the requisite documentary stamps;
3. Evidence of full payment of real estate tax as
may be due; and
4. Inclusion of one extra copy of any document of
transfer of alienation of the real property to be
furnished the city or provincial assessor.
AMENDMENT AND ALTERATION OF
CERTIFICATE OF TITLE
 A certificate of title cannot be altered or
amended except in direct proceeding in court;
a summary proceeding
 Entries in registration books are not allowed to
be altered except by order of court
Grounds for Amendment or Alteration of
Certificate of Title
1. New interest not appearing on the instrument
have been created;
2. Interest have terminated or ceased;
3. Omission or error was made in entering
certificate;
4. Name of person on certificate has been
changed;
5. Registered owner has married;
6. Marriage has terminated;
7. Corporation which owner registered land has
dissolved and has not conveyed the property
within three years after its dissolution.
Involuntary Dealings with Registered Land
 Transactions affecting land in which
cooperation of registered owner is not needed;
it may even be against its will.
ATTACHMENT
 A writ issued at the institution or during
progress of an action commanding the sheriff
to attach the property, rights, credits or effects
of the defendant to satisfy demands of the
plaintiff.
 If the attachment is registered, such creates a
real right and has a priority over execution
sales.
 As between two attachments, one that is
earlier in registration is preferred.
 If the attachment is not registered, actual
knowledge is the same as registration.
REGISTRATION OF
LIS PENDENS
 TThe purpose of this is to keep subject matter
within the power of the court until the entry of final
judgment, therefore it creates a contingency and
not a lien on the property.
 NNotice of lis pendens is an involuntary
transaction, hence, it is sufficient that there is an
entry in the day book.
Effect of Registration of Lis Pendens
1. Impossibility of alienating the property in
dispute during the pendency of the suit – may
be alienated but purchaser is subject to final
outcome of pending suit.
2. The Register of Deeds is bound to carry over
notice of lis pendens on all new titles to be
issue.
Cancellation of Lis Pendens
1. Before final judgment the court may order
cancellation after showing that notice is only for
 purpose of molesting an adverse party or it is whose address is known and copies posted in
not necessary to protect rights of party who conspicuous place designated by law.
caused it to be registered.
2. Register of Deeds may also cancel by verified 4. Filing of Answer
petition of party who caused such registration.  Any person claiming interest in any part of
3. Deemed cancelled when certificate of clerk of lands subject to petition is required to file an
court stating manner of disposal of proceeding answer.
is registered.
5. Hearing of Case
 In any convenient place where land lies.
 The procedure is like any ordinary trial in the
Regional Trial Court where all conflicting and
CADASTRAL REGISTRATION adverse claims are determined.
 Lots claimed are awarded to persons or
Cadastral Registration entities.
 This is a government initiated proceeding  If none of the claimants can prove their title to
wherein all lands within a stated region are up the property, the land is declared of public
for registration – whether or not owners are domain
interested to settle their titles. 6. Decision
 The nature of the proceeding is in rem and
compulsory. 7. Issuance of Decree and Certificate of Title
 Upon the order of the court, the Land
Registration Authority shall enter the decree of
PROCEDURE FOR CADASTRAL REGISTRATION registration.
1. Cadastral Survey  The decree shall be made the basis of an OCT.
 When in the opinion of the President of the
Philippines, pursuant to requirement of public
interest, title of land within a specified area
needs to be settled and adjudicated. CADASTRAL ORDINARY
 Order the Director of Lands to make survey PROCEEDINGS REGISTRATION
and plan. This is initiated by the Private individuals
 The Director of Lands shall give notice to Government. initiate the
persons claiming interest in lands and to proceeding.
general public of day survey, which will be The subject matter are Only private lands
published in the Official Gazette and posted in private and public may be subjected to
conspicuous places on lands to be surveyed. property the proceedings
 The Geodetic Engineers shall commence the The Government is not Ownership is asserted
survey interested in asserting by the individual.
 During the survey the boundaries are marked ownership but merely
by monuments. interested in the
settlement of titles.
2. Filing of Petition The Government The expenses are
 After the survey and a plot is made, the undertake the survey shouldered by the
Director of Lands, represented by the Solicitor and advances the individual
General, shall institute a cadastral proceeding expenses
by filing a petition in court against holders, In absence of successful Applicant has another
claimants, possessors or occupants of the claimant, property goes chance to claim if
property. to the government. dismissal is without
 Parcels of lands are given their cadastral prejudice.
numbers.

3. Publication of Notice and Hearing

 The court shall order a date of hearing.
 The Land Registration Authority shall notify the
public by publishing the notice, once in the
Official Gazette, and once in newspaper of
general circulation and copy mailed to person TORTS AND DAMAGES

TORTS
A private or civil wrong or injury, other
than breach of contract for which the
court will provide a remedy in the form of
an action for damages.
It is an act or omission producing an
injury to another, without any previous
existing lawful relation of which the said
act or omission may be said to be a
natural outgrowth or incident.
Bases of Tort Liability (Sin)
1. Strict liability;
2. Intentional acts; and
3. Negligence
 Whether the driver is authorized or not by the
actual owner is irrelevant in determining the
liability of the registered owner who the law holds
primarily and directly reasonable for any accident,
injury or death caused by the operation of the
vehicle in the streets and highways. To require the
driver of the vehicle to be authorized by the actual
owner before the registered owner can be held
accountable is to defeat the very purpose why
motor vehicle legislations are enacted in the first
place. This court has consistently ruled that
regardless of who the actual owner of a motor
vehicle might be, the registered owner is the
operator of the same with respect to the public and
third persons, and as such, directly and primarily
responsible for consequences of its operation. In
contemplation of law, the owner/operator of record
is the employer of the driver, the actual operator
and employer being considered merely as his
agent (MYC – Agro-Industrial Corporation vs. Vda.
De Caldo, 132 SCRA 10, citing Vargas vs. Langcay,
6 SCRA 174; Tamayo vs. Aquino, 105 Phil. 949).
Strict Liability
◘ When the person is made liable independent of
fault or negligence upon submission of proof of
certain facts specified by law.
◘ Strict liability tort can be committed even if
reasonable care was exercised and regardless
of the state of mind of the actor at that time.
Types:
1. Animals
General Rule: The possessor of an animal or
whoever may make use of the same is responsible
for the damages, which it may cause although it
may escape or be lost.
Exception: When the damage was caused by
force majeure or by the person who suffered the
damage (Article 2183 Civil Code)
 If the acts of a third person cannot be foreseen
or prevented, the n the situation is similar to
that of force majeure and the possessor is not
liable.
 Art. 2183 is applicable whether the animal is
domestic, domesticated, or wild.
2. Falling Objects
 The head of a family that lives in a building or
a part thereof is responsible for damages
caused by things thrown or falling from the
same (Article 2193 Civil Code).
 The term “head of the family” is not limited to the
owner of the building, and it may even include the
lessee thereof (Dingcong vs. Kanaan, 72 Phil 14).
3. Liability of Employers
 Article 1711 of the NCC imposes an obligation
on owners of enterprises and other employers
to pay for the death or injuries to their
employees.
 Liability is strict because it exists even if the
cause is purely accidental.
 If the mishap was due to the employee’s own
notorious negligence, or voluntary act or
drunkenness, the employer shall not be liable
for compensation.
 When the employee’s lack of due care
contributed to his death or injury, the
compensation shall be equitably reduced.
 If the death or injury is due to the negligence
of a fellow-workman the latter and the
employer shall be solidarily liable for
compensation.
 If a fellow-worker’s intentional or malicious act
is the only cause of the death or injury, the
employer shall not be answerable unless it
should be shown that the latter did not
 exercise due diligence in the selection or
supervision of the plaintiff’s fellow-worker.
4. Nuisance
 Any act, omission, establishment, business,
condition of property, or anything else which:
a. Injures or endangers the health or safety of
others;
b. Annoys or offends the senses;
c. Shocks, defies or disregards decency or
morality;
d. Obstructs or interferes with the free passage of
any public highway or street, or any body of
water; or
e. Hinders or impairs the user of property.
(Article 694, Civil Code)
 There is a strict liability on the part of the
owner or possessor of the property where a
nuisance is found because he is obliged to ab
ate the same irrespective of the presence or
absence of fault or negligence.
 Every successive owner or
possessor of property who fails or refuses to
abate a nuisance in that property started by a
former owner or possessor is liable therefore in
the same manner as the one who created it.
(Article 686, Civil Code)
Product Liability by Manufacturers
Manufacturers and processors of foodstuffs, drinks,
toilet articles and similar goods shall be liable for
death or injuries caused by any noxious or harmful
substances used, although no contractual relation
exists (Article 2187, Civil Code)
Other Cases of Liability without Fault:
1. Proprietor
of a building or structure, for damages
resulting from its total or partial collapse, if it
should be due to lack of necessary repairs.
2. Breach
implied warranties.
3. Consumer
Act (RA 7394) – any Filipino or foreign
manufacturer, producer and importer,
independently of fault shall be liable for
redress for damages caused to consumers by
defects resulting from:
a. Design;
b. Manufacture;
c. Construction;
d. Assembly and erection;
e. Formulas and handling and making up; or
f. Presentation or packing of their products
as well as for the insufficient or inadequate
information on the use and hazards
thereof.
4. Even when an act or event causing damage to
another’s property was not due to the fault or
negligence of the defendant, the latter shall be
liable for indemnity if through the act or event
he was benefited. (Art. 23, Civil Code)
PRODUCT AND SERVICE
LIABILITY
Alternative Theories on Basis of Liability
1. Fraud or Misrepresentation
 Not all expression of opinion is actionable
misrepresentations of they are established to
be inaccurate.
2. Warranties
 The Consumer Act recognizes that the
provisions of the Civil Code on conditions and
warranties shall govern all contracts of sale
with conditions and warranties.
 Retailer shall be subsidiarily liable under the
warranty in case of failure of both the
manufacturer and distributor to honor the
warranty.
 Privity of contract is not necessary.
3. Negligence
 In product liability law, certain standards are
already imposed by special laws, rules and
regulations of proper government agencies;
certain acts or omission are expressly
prohibited by the statutes thereby making
violation thereof negligence per se.
 It is negligence per se if manufacturer
manufactured products which do not comply
with the safety standards promulgated by
appropriate government agencies.
of
4. Delict
The liability may be based on criminal negligence
under the RPC or violation of any special law.
5. Strict liability
 Manufacturers and processors of foodstuffs,
drinks, toilet articles, and similar goods, shall
be liable for death or injuries caused by any
noxious or harmful substances used although
 no contractual relation exists (Art. 2187, Civil
Code).
 Privity of contract is not required.
 It does not preclude an action based on
negligence (quasi-delict) for the same actof
using noxious or harmful substances.
 Art. 97 and 99 of the Consumer Act imposes
liability on defective products and services
upon manufacturers independent of fault.
 Knowledge of the manufacturer is not
important; the focus is on the condition of the
product and not on the conduct of the
manufacturer or seller.
DEFENSES:
1. The manufacturer, builder,
producer, or importer shall not be liable when
it evidences:
a. That it did not place the product on the
market
b. That although it did place the product on
the market such product has no defect.
c. That the consumer of third party is solely
at fault (Art. 97, Consumer Act)
2. The supplier of the services shall not be held
liable when it is proven:
a. That there is no defect in the services
rendered.
b. That the consumer or third party is solely
at fault. (Art. 99 Consumer Act)
Requisites: The plaintiff should allege and
prove that:
a. The product was defective;
b. The product was
manufactured by the defendant;
c. The defective product
was the cause of his injury.
4 Kinds of Defective Products:
a. Manufacturing defect
b. Design defect
c. Presentation defect
d. Absence of appropriate warning
BUSINESS TORTS
1. Interference of Contracts
Elements:
a. Existence of a valid contract;
b. Knowledge on the part of the third person of
the existence of the contract; and
c. Interference of the third person without legal
justification.
 The existence of a contract is
necessary and the breach must occur because
of the alleged act of interference. No action can
be maintained if the contract is void.
 Malice is not essential.
Elements of Privilege to Interfere
1) The defendant’s purpose is a justifiable one,
and
2) The actors employ no means of fraud or
deception which are regarded as unfair.
Extent of Liability:
1. Rule on Daywalt vs. La Corporation 39 Phil 587:
 Whatever may be the character of the
liability which a stranger to a contract may incur
by advising or assisting one of the parties to evade
performance, there is one proposition upon which
all must agree. This is, that the stranger cannot
become more extensively liable in damages for the
nonperformance of the contract than the party in
whose behalf he intermeddles. To hold the
stranger liable for damages in excess of those that
could be recovered against the immediate party to
the contract would lead to results at once
grotesque and unjust.
Defendant cannot be held liable for more than the
amount for which the contracting party who was
induced to break the contract can be held liable.
3. Rule under Article 2201 and 2202 Civil
Code.
If in bad faith: defendant is liable for all natural
and probable consequences of his act or omission,
whether the same is foreseen or unforeseen.
If in good faith: defendant is liable only for
consequences that can be foreseen.
2. Interference with Prospective Advantage
 It is a tort committed when there is no contract yet 4) Torts against Human Dignity (Art. 26, Civil
and the defendant is only being sued for inducing Code).
another not to enter into a contract.

3. Unfair Competition.
NEGLIGENCE
 Unfair Competition in agricultural, commercial, or
industrial enterprises, or in labor, through the use
 The omission of that degree of diligence, which
of force, intimidation, deceit, machination or any
is required by the nature of the obligation and
unjust or oppressive or highhanded method shall
corresponding to the circumstances of person,
give rise to a right of action by a person who
time and place (Article 1173 Civil Code)
thereby suffers damage. (Article 27, Civil Code)
 It is the omission to do something which a
reasonable man, guided by those
considerations, which ordinarily regulates the
Cases included:
conduct of human affairs, would do or the
doing of something which a prudent and
a. Passing off and disparagement of products; reasonable man would not do.
b. Interference;  Involve voluntary acts or omissions which
c. Misappropriation; result in injury to others without intending to
d. Monopolies and predatory pricing. cause the same or because the actor fails to
exercise due care in performing such acts or
omissions.
4. Securities Related Torts
Kinds:
a. Fraudulent transactions; GROSS NEGLIGENCE
b. Misstatements or omission of
statement of a material fact required to be Negligence where there is “want of even slight care
stated. and diligence.”

 Defendants are free from liability if they can

prove that at the time of the acquisition the
plaintiff knew of the untrue statement or if he
was aware of the falsity.

Extent of Damages: Not exceeding triple the

QUASI-DELICTS
amount of the transaction.
Fault or negligence of a person, who, by his act or
omission, connected or unconnected with, but
Prescriptive Period: Action must be brought independent from, any contractual relation, causes
within 2 years after discovery of facts constituting damages to another person.
the cause of action accrued.
Elements (ADEN):
1. Act or omission;
2. Damage to another;
INTENTIONAL TORTS 3. Existence of fault or negligence; and
4. No pre-existing contractual relation between
 Include conduct where the actor desires to the parties.
cause the consequences of his act or believes
that the consequences are substantially certain Extent of Liability
to result from it. These are: 1) Tortfeasor must foresee the result of the act or
1) Principle of Abuse Rights (Art. 19, Civil omission.
Code) 2) Damage must be direct
2) General sanction for all other provisions of 3) Damage must be the natural and probable
law which do not especially provide for result of the act even if not necessarily
their own sanction. foreseeable.
3) Acts Contra Bonus Mores (Art. 21, NCC).
Responsibility for tort is entirely separate and
distinct from civil liability but damages cannot be
recovered twice for the same act or omission.
Test of Negligence
“Would a prudent man, in the position of the
person to whom negligence is attributed foresee
harm to the person injured as a reasonable
consequence of the course about to be pursued?”
If so, the law imposes a duty on the actor to
refrain from that course or to take precaution
against tits mischievous results, and the failure to
do so constitutes negligence.
Res Ipsa Loquitor
The thing or transaction speaks for itself.
Use: Whenever the cause of the damage is not
known. There is an assumption that given
circumstances in a particular situation, there is no
other explanation for the damage caused where
the defendant had exclusive control of the things
damaged.
General Rule: negligence must be proved on a
suit in a quasi-delict so that the plaintiff may
recover
Exception: some cases where negligence may be
hard to prove and RES IPSA LOQUITOR is applied.
Take note that this presumption is rebuttable.
Requisites of Res Ipsa Loquitor:
1. The concurrence must not be a normal
occurrence;
2. There is a failure to explain the
extraordinary occurrence.
DAMNUM ABSQUE INJURIA
Is a principle that involves damage but no liability
therefore is incurred, there is no legal injury. There
exist cases where damage is incurred but there is
no legal injury. Thus, there is no one to run after.
An example is a fortuitous event.
When Defendant Presumed Negligent:
1. Accident was a kind which does not ordinarily
occur unless someone is negligent.
2. Instrumentality or agency, which caused the
injury, was under the exclusive control of the
person charged with negligence.
3. Injury suffered must not have been due to any
voluntary action or contribution on the part of
the person injured; and
4. Absence of explanation by the defendant.
Joint Tortfeasors
 All the person who command,
instigate, promote, encourage, advise,
countenance, cooperate in, aid or abet the
commission of a tort, or who approve of it after
it is done, if done for their benefit;
 They are each solidarily liable as
principals.
Principle of Concurrent Cause
 Where the concurrent or successive negligent acts
or omissions of two or more persons, although
acting independently, are in combination with the
direct and proximate cause of a single injury to a
third person, and it is impossible to determine
what proportion each contributed to the injury,
either of them is responsible for the whole injury,
even though his act alone might not have caused
the entire injury.
Circumstances to Consider In Determining
Negligence
1. Time
2. Place
3. Emergency
4. Gravity of Harm to be avoided
5. Alternative Course of Action
6. Social value or utility of activity
7. Person exposed to the risk
DEFENSES IN NEGLIGENCE CASES:
1. Fortuitous Event
Essential Requisites:
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
which constitutes the “caso fortuito,” or if it
can be foreseen, it must be impossible to
avoid;
c. The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation
in a normal manner; and
d. The obligor must be free from any participation
in the aggravation of the injury resulting to the
injury being the defendant’s negligence.
A. Comparative Negligence – the relative
degree of negligence of the parties is
considered in determining whether and to
what degree, either should be responsible
his negligence – apportionment of
damages
B. Imputed Contributory Negligence –
negligence is imputed if the actor is
different from the person who is being
made liable.
Note: in crimes thru reckless imprudence, the
defense of contributory negligence does not apply.
 Article 2185 of the Civil Code lays down
the presumption that a person driving a motor
vehicle has been negligent, if at the time of the
mishap, he was violating any traffic regulation. In
Article 2180, when an injury is caused by the
negligence of a servant or an employee the mast
or employer is presumed to be negligent either in
the selection or in the supervision of that
employee. (Pleyto, et al. v. Lomboy, et. al., G.R.
No. 148737, 05/16/2004).
3. Assumption of Risk
A plaintiff who voluntarily assumes a risk of harm
arising from teh negligent or reckless conduct of
the defendant cannot recover from such harm.

Effects of Contributory Negligence

 If the sole cause of the damage is plaintiff’s

VOLENTI NO FIT INJURIA
own fault – no recovery.
 If plaintiff’s fault or omission is the proximate One is not legal injured if he has consented to the
cause – no recovery. act complained of or was willing that it should
 If the proximate cause is still defendant’s act occur.
or omission, but plaintiff was also negligent – Elements:
the amount of damages will be mitigated.
1. Plaintiff must know that the risk is present
2. He must further understand its nature
3. His choice to incur it is free and voluntary.

NATURE CONTRACTUAL AQUILIANA CRIMINAL

Negligence Merely incidental to the
performance of the
obligation already
existing because of a
contract.
Pre-existing Yes, express or implied.
obligation
Proof Needed. Preponderance of
evidence
Defense of a good In the selection and
father of a family. supervision of employees
– not a proper defense
Negligence is direct, Negligence is direct,
substantive and substantive and
independent of a independent of a contract.
contract.
None, except the duty to None, except the duty to
be careful in all human harm others.
actions.
Preponderance of Proof beyond reasonable
evidence doubt.
Yes, in so far as Not a proper defense the
employees or guardians employee’s guilt is
are concerned. automatically the guilt of
 but may mitigate the employer of the former
damages – doctrine of is insolvent.
respondiat superior.
Burden of Proof Debtor – As long as it is Ordinarily, victim has to Accused is presumed
provided that there was a prove the negligence of innocent until the contrary
contract and that it was the defendant because is proved, so prosecution
not carried out, it is the action is based on has the burden of proving
presumed that the debtor alleged negligence on the negligence of the
is at fault. It’s the the part of the accused.
debtor’s duty to prove defendant.
that there was no
negligence in carrying
out the terms of the
contract.

EMERGENCY OR SUDDEN PERIL DOCTRINE
 Under this emergency rule, an automobile
driver who, by the negligence of another, is
suddenly placed in an emergency and
compelled to act instantly to avoid a collision
or injury is not guilty of negligence if he makes
a choice as a person of ordinary prudence
placed in such a position might make during an
emergency even though he did not make the
wisest choice.
 Under the emergency rule, one who suddenly
finds himself in a place of danger, and is
required to act without time to consider the
best means that may be adopted to avoid the
impending danger, is not guilty of negligence,
if he makes a choice as a person of ordinary
prudence placed in such a position might make
during an emergency even though he did not
make the wisest choice.
 Under the emergency rule, one who suddenly
finds himself in a place of danger, and is
required to act without time to consider the
best means that may be adopted to avoid the
impending danger, is not guilty of negligence,
if he fails to adopt what subsequently and upon
reflection may appear to have a better
method, unless the danger in which he finds
himself is brought about his own negligence
(Deelsan Transport Lines, Inc. v. C &
Construction Inc. GR No. 150634, October 1,
2003).
4. Prescription
Four years from the date of the accident (Art.
1146)
5. Involuntariness
It is a complete defense in quasi-delict cases and
the defendant is therefore not liable if force was
exerted on him.
CAUSATION:
1. PROXIMATE CAUSE
It is that cause which in natural and continuous
sequence, unbroken by any efficient intervening
cause, produces the injury and without which, the
result would not have occurred.
2 . REMOTE CAUSE
 That cause which some independent forces
merely took advantage of to accomplish
something not the natural effect thereof.
3. NEAREST CAUSE
 That the cause which is the last link in the
chain of events; the nearest point of time or
relation.
 Proximate cause is not necessarily the nearest
cause but that which is the procuring efficient
and predominant cause.
4. CONCURRENT CAUSE
 The actor is liable even if the active and
substantially simultaneous operation of the
effects of a third person’s innocent, tortuous or
criminal act is also a substantial factor in
bringing about the harm so long as the actor’s
negligent conduct actively and continuously
operate to bring about harm to another.
 Where several causes producing the injury are
concurrent and each is an efficient cause
without which the injury would not have
happened, the injury may be attributed to all
or any of the causes and recovery may be had
against any or all of the responsible persons.
 Where the concurrent or successive negligent
acts or omissions of two or more persons,
although acting independently, are in
combination with the direct and proximate
cause of a single injury to a third person, and
it is impossible to determine what proportion
each contributed to the injury, even though his
act alone might not have caused the entire
injury; they become joint tort-feasors and are
solidarity liable for the resulting damage under
Article 2194 of the Civil Code.
 Primary cause remains the proximate cause
which merely cooperated with the primary
cause and which did not break the chain of
causation.
TESTS OF PROXIMATE CAUSE
Two-Part Test
1. Cause-in-fact Test
2. Policy Test
Note: In determining the proximate cause of the
injury, it is first necessary to determine of the
defendant’s negligence was the cause-in-fact of
the damage to the plaintiff (Cause-in-fact test).
 If the defendant’s negligence was not the cause-in-
fact, the inquiry stops.
 If it is, the inquiry shifts to the question of limit of
the defendant’s liability (Policy test)
DOCTRINE OF ATTRACTIVE NUISANCE RULE:
 One who maintains on his premises dangerous
instrumentalities or appliances of a character
likely to attract children in play, and who fails
to exercise ordinary care to prevent children
from playing therewith or resorting thereto, is
liable to a child of tender years who is injured
thereby, even if the child is technically a
trespass in the premises.
PRESCRIPTION for QUASI DELICT
Article 1146 – [quasi-delict] must be instituted
within four years.
VICARIOUS LIABILITY – One liable for the act
of another under his authority regardless of his
negligence
IMPUTED NEGLIGENCE – One who did not
commit the act or omission causing damage to
another can still be civilly liable directly or
subsidiarily.
Article 2180- liability for acts or omission of those
persons for whom one is responsible, the
employer, parents, guardians, teachers and heads
of schools of Arts and Trade (however, now it
applies to all kinds of schools), and the owner and
manager of establishments are solidarily liable.
However under the Revised Penal Code, the
employer is subsidiarily liable that is, only if the
employee is insolvent.
LIABILITY FOR ACTS OR OMISSION OF THOSE
PERSONS FOR WHOM ONE IS RESPONSIBLE:
1. Father, or in case of death or incapacity,
the mother:
a. Damage caused by minor children;
b. Living in their company.
2. Guardian
a. For minors or incapacitated;
b. Under their Authority;
c. Living in their company.
3. Owners and manager of establishments;
1. For their employees;
2. In the service of the branches in which they
are employed; or
3. On the occasion of their functions.
4. Employers
a. For employees and household helpers;
b. Acting within the scope of their assigned
task;
c. Even if employers are not engaged in any
business or industry;
d. The defense of due diligence in the selection
and supervision of the employee is not
available if the defendant is sued under the
RPC;
e. One who hires an independent contractor
but controls the latter’s work is responsible
also for the latter’s negligence.
5. State – acting through a special agent and not
when the damage has been caused by the official
to whom the task done property pertains.
6. Teachers or heads of establishments of
arts and trades for pupils and students or
apprentices they remain in their custody –
Applies to academic institutions as well. Liability
attaches to the teacher-in-charge.
DEFENSE FOR 1-6: Observance of diligence of a
good father of family to prevent damage.
DEFENSE OF EMPLOYERS:
1. Exercise of due diligence in control and
supervision.
 Where the security agency recruits, hires
and assigns the works of its watchmen or
security guards to a client, the employer of
such agency, and not the client, since the
latter has no hand in selecting the security
guards. Thus, the duty to observe the diligence
of a good father of a family cannot be
demanded from the said client. A client or
customer of a security agency has no hand in
selecting who among the pool of security
guards or watchmen employed by the agency
shall be assigned to it; he duty to observe the
diligence of a good father of a family in the
selection of guards cannot, in the ordinary
course of events, be demanded from the client
whose premises or property are protected by
the security guards. The fact that a client
company may give instructions or directions to
the security guards assigned to it, does not, by
itself, render the client responsible as an
employer of the security guards concerned and
liable for their wrongful acts or omissions.
(Mercury Drug Corporation v. Libunao, G.R.
No. 144458, 07/14/2004)
2. Act was done outside working hours and in
violation of the company’s rules and
regulations.

LIABILITY WITHOUT FAULT:
INTENT OR NEGLIGENCE IS IMMATERIAL:
1. A possessor of an animal or whomever may
make use of the same for damages it may cause.
Defenses:
a. Force majeure;
b. Fault of the person suffering the damage;
and
c. Act of third persons.
2. Product liability of manufacture and
processor of foodstuff, drinks, toilet articles and
similar goods, for death or injuries caused by any
noxious or harmful substances used, although no
contractual relation exists between them and
consumers.
 There is prima facie presumption of
negligence on the part of the defendant if
the death or injury results from his
possession of dangerous weapon or
substances EXCEPT when the possession or
use is indispensable to his occupation or
business.
3. Proprietor of a building or structure –
damages resulting from its total or partial
collapse, if it should be due to lack of
necessary repairs.
4. Head of a family living in a building –
damages caused by things thrown or failing
from the same.
5. Breach of implied warranties
6. Consumer’s Act (R.A. 7394) – any Filipino
or foreign manufacturer, producer and
importer, independently of fault shall be liable
for redress, for damages caused to consumers
by defects resulting from:
a. Design;
b. Manufacture;
c. Construction;
d. Assembly and erection;
e. Formulas and handling and making up;
f. Presentation or packing of their products as
well as for the insufficient or inadequate
information on the use and hazards thereof.
To justify a grant of actual or compensatory
damages, however, it would be necessary to prove
the amount of loss with a reasonable degree of
certainly, based upon competent proof and the
best evidence obtainable by the injured party.
Moral damages are explicitly authorized in
breaches of contract when the defendant has acted
fraudulently or in bad faith. Concededly, the bank
was remiss in its obligation to releases the balance
of the loan extended to respondents. Exemplary
damages, are intended to serve as an example or
a correction for the public good. Courts may award
them if the defendant is found to have acted in a
wanton, fraudulent, reckless, oppressive, or
malevolent manner. (Philippine National Bank v.
RBL Enterprise, Inc. et al., G.R. No. 149569,
05/28/2004)
DAMAGES
A sum of money, which the law awards or
imposes as pecuniary compensation,
recompense or satisfaction, for an injury
done or a wrong sustained as a consequence
of the breach of some duty or violation of
some right (PNB v. RBL Enterprise, G.R. No.
149589, May 28, 2004)
KINDS OF DAMAGES
1. ACTUAL DAMAGES
 Those recoverable for pecuniary loss
General Rule: The actual value of the loss
must be proved for recovery.
Exceptions:
a. Stipulation of the parties.
b. When provided by law.
 The award of actual damages cannot be
based on the allegation of a witness without
any tangible document to support such claim.
In determining actual damages, courts cannot
rely on mere speculations, but must depend
on competent proof. (Bank of the Philippines
Islands vs. ALS Management & Development
Corp., G.R. No. 151621, April 14, 2004).
There is Need to:
a. Stipulation of the parties.
b. When provided by law.
Question: Is proof of pecuniary loss necessary in
an award of actual or compensatory damages? Is
the rule absolute?
Answer: Yes, an award of actual or compensatory
damages requires actual proof of pecuniary loss.
An exception from the rule, pursuant to Article
2206 of the Civil Code, are “damages for death
caused by a crime or quasi-delict” which can be
awarded forthwith to the heir of the victim by proof
 alone of such fact of death. No proof of pecuniary
loss is likewise necessary in order that moral,
nominal, temperate, liquidated or exemplary
damages may be adjudicated (Article 2216, New
Civil Code), and it is quite enough that proof of
damage, except for liquidated damages which the
parties themselves fix, is left to the sound
discretion of the court.
ACTUAL DAMAGES IN CASE OF:
Contracts and Quasi-Contracts
1. In Good Faith (mere carelessness) it is
essential that damages be:
a. The natural and probable consequence of
the breach of obligation;
b. Those that parties foresaw or could have
foreseen at the time the obligation was
constituted
2. In Bad Faith (fraud, malice, deliberate and
wanton-wrong doing)
 It is sufficient that the damages may be
reasonably attributed to the non-performance
of the obligation. It is enough that there is a
CAUSE and EFFECT relation.
 All damages can be recovered including
attorney’s fees, loss of profits, etc.
Ordinary Damages
That which is generally an inherent breach of
typical contract.
Special Damages
That which exists because of special circumstances
and for which a debtor in good faith can be held
liable only if he had been previously informed of
such circumstances.
Crimes and Quasi-Delicts
Defendant is liable for all damages that are natural
and probable consequence of the act or omission
complained of. It is NOT NECESSARY that such
damages have been foreseen or could have been
reasonably foreseen
Attorney’s Fees and Interests
 The law allows a party to recover attorney’s fees
under a written agreement. Article 2208 of the
Civil Code an award of attorney’s fees is proper if
the parties stipulated it.
 Attorney’s fees should not be awarded in the
absence of stipulation except under the instances
enumerated in Article 2208 of the Civil Code.
Article 2208 of the Civil Code allows attorney’s fees
to be awarded by a court when its claimant is
compelled to litigate with third persons or to incur
expenses to protect his interest by reason of an
unjustified act or omission of the party from whom
it is sought. The matter cannot and should not be
left to speculation and conjecture. The Court had
occasion to state that ‘[t]he reason for the award
of attorney’s fees must be disallowed on appeal.
(Spouses Hernandez, et al., v. Dolor, et al., GR
160286, 07/30/2004)
Damages May Be Recovered:
1. For loss or impairment of earning capacity in
case of temporary or permanent physical
injury.
2. For injury to the plaintiff’s business standing or
commercial credit.
Damages For Death: P50,000 minimum
Formula:
Gross Income
- Expenses (necessary living expenses)
Earning Capacity
Earning Capacity
x Life Expectancy (in months)
Damages Recoverable By Heirs
Factors in Determining Amount of Damages:
1. Life expectancy (state of health, habits, and
consequent loss of earning capacity)
2. Pecuniary loss of support and service
3. Moral and mental suffering
RULE ON ATTORNEY’S FEES
General Rule: Attorney’s fees, expenses of
litigation (other than judicial costs) are not
recoverable.
Exceptions:
1. Stipulation of parties;
2. When exemplary damages are awarded;
3. When defendant’s act or omission has
compelled the plaintiffs to litigate with third
persons or incurred expenses to protect his
interest;
4. Malicious prosecution against plaintiff;
5. Clearly unfounded civil actions or proceedings
against plaintiff;
6. Defendant acted in gross and evident bad faint
in refusing to satisfy the plaintiff’s plainly just
and demandable claim;
7. Legal support actions;
8. Recovery of wages of household helpers,
laborers and skilled workers;
9. Actions for indemnity under workmen’s
compensation and employer liability laws;
10. Separate civil action to recover civil liability
arising from crime;
11. When at least double judicial costs deem just.
(Hernandez et al., vs. Dolor et al., GR No.
160286, July 30, 2004)
Interest on Damages for:
1. Breach of Contract
 Discretion of the court
 Not from the date of filing of the complaint but
from the date the judgment of the trial court is
rendered.
2. Crimes and Quasi-Delicts
 Purely discretionary on the courts.
3. Interest On Interest Due (Accrued Interest)
 Interest due shall earn legal interest from the
time it is judicially demanded, not from
default, even, if the obligation is silent on the
matter.
4. Interest on Unliquidated Claims or Damages
General Rule: Cannot be recovered
Exception: When the demand can be
established with reasonable certainty.
2. MORAL DAMAGES
Requisites:
1. Physical Suffering,
2. Mental anguish,
3. Fright,
4. Serious anxiety,
5. Besmirched reputation,
6. Wounded feeling,
7. Moral shock,
8. Social humiliation, etc., (this must be alleged
and proved)
 Moral damages may be awarded whenever the
defendant’s wrongful act or omission is the
proximate cause of the plaintiff’s physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury in the
cases specified or analogous to those provided in
Article 2219 of the Civil Code. Though no proof of
pecuniary loss is necessary in order that moral
damages may be adjudicated, courts are mandated
to take into account all the circumstances
obtaining in the case and assets and damages
according to their discretion. Worthy of note is that
moral damages are not awarded to penalize the
defendant, or to enrich a complainant, but to
enable the latter to obtain means, diversions or
amusements that will serve to alleviate the moral
suffering he has undergone, by reason of
defendant’s culpable action. In any case, award of
moral damages must be proportionate to the
sufferings inflicted. (Carpio vs. Velmonte, GR
151866, September 9, 2004)
Physical Suffering
 Includes pain incident to surgery or medical
treatment; also includes future pain.
Mental Anguish
 A high degree of mental suffering, not merely
disappointment or regret.
 A bank is not entitled to any damages. Award of
moral damages cannot be granted to a
corporation, it being an artificial person that exists
only in legal contemplation and cannot, therefore,
experience physical suffering and mental anguish,
which can be experienced only by one having a
nervous system. The award of damages to Atty.
Valero is also baseless. We cannot ascribe any
illegal motive or malice to the bank for impleading
Atty. Valero as an officer of respondent
municipality. The bank filed the case against
respondent municipality in the honest belief that it
is exempt from paying taxes and fees. Since Atty.
Valero was the official charged with the
implementation of the ordinances of respondent
municipality, he was rightly impleaded as a
necessary party in the case. (Rural Bank of Makati,
Inc., et al. vs. Municipality of Makati, et al., GR
150763, July 2, 2004).
 Malicious prosecution, both in criminal and civil
cases, requires the presence of two elements: a)
malice; and b) absence of probable cause.
Moreover, there must be proof that the prosecution
was prompted by a sinister design to vex and
humiliate a person, and that it was initiated
deliberately knowing that the charge was false and
baseless. Moral damages cannot be recovered from
a person who has filed a complaint against another
in good faith, or without malice or bad faith.
(Ceballos vs. Intestate Estate of Mercado. Et al.,
G. R. No. 155856, May 28, 2004)
Who are entitled to Moral Damages in Case of
Death?
1. Primary
 Spouse, legitimate and illegitimate children.
2. Secondary
  Grandparents.
 Absence of primary and secondary – siblings.
Willful Injury To Property – discretionary on the
court depending on the circumstances of the case
3. NOMINAL DAMAGES
 Those adjudicated in order that a right of the
plaintiff which has been violated or invaded by the
defendant, may be vindicated or recognized and
not for the purpose of indemnifying the plaintiff for
any such loss suffered by him.
Elements
1. Right of plaintiff;
2. Resulting damage must not be capable of
pecuniary estimation;
3. Violation of such right; and
4. Purpose is not to indemnify but to vindicate or
recognize right violated.
4. TEMPERATE (MODERATE)
DAMAGES
 Compensation more than nominal but less than
compensatory damages awarded when court
finds that offended party suffered some
pecuniary loss not ascertainable.
Requisites:
1. Some pecuniary losses;
2. Loss is incapable of pecuniary estimation;
3. Must be reasonable.
5. LIQUIDATED DAMAGES
Those agreed upon by parties to be paid in case of
breach of contract. It is in the nature of penalty.
6. EXEMPLARY DAMAGES
Imposed by way of example or correction for public
good in addition to the moral, temperate,
liquidated or compensatory damages.
Pre – Requisite: claimant must prove that he is
entitled to moral, temperate or compensatory
damages even if liquidated have been agreed on in
order for exemplary damages may be awarded.
Exceptions to the Necessity of Proof:
1. In case liquidated damages had been
previously agreed upon.
2. In case loss is presumed as when a child
(minor) or a spouse dies.
3. In case of forfeiture of bonds in favor of the
government for the purpose of promoting
public interest or policy.
 Act of dismissal must be attended with bad
faith, or fraud, or was oppressive to labor or
done in a manner contrary to morals, good
customs or public policy and that social
humiliation, wounded feelings, or grave
anxiety resulted therefrom.Exemplary
damages are recoverable only when the
dismissal was affected in a wanton, oppressive
or malevolent manner. (Manila Water
Company, Inc. vs. Pena, et al., G.R. 158255,
July 8, 2004)
Guidelines in the Award of Exemplary
Damages:
1. Exemplary or corrective damages are imposed,
by way of example or correction for the public
good, in addition to the moral, temperate,
liquidated or compensatory damages (Article
2229, NCC)
2. In criminal offenses, exemplary damages as
part of the civil liability may be imposed when
the crime was committed with one or more
aggravating circumstances. Such damages are
separate and distinct from fines and shall be
paid of the offended party (Article 2232, NCC)
3. In quasi-delicts, exemplary damages may be
granted if the defendant acted with gross
negligence (Article 2232, NCC)
4. In contacts and quasi-contracts, the court may
award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless,
oppressive or malevolent (Article 2232, New
Civil Code)
5. Exemplary damages cannot be recovered as a
matter of right; the court will decide whether
or not they should. Be adjudicated (Article
2233, NCC)
6. While the amount of the exemplary damages
need not be proved, the plaintiff must show
that he is entitled to moral, temperate or
compensatory damages before the court may
consider the question, of whether or not
exemplary damages should be awarded. In
case liquidated damages have been agreed
 upon, although no proof of loss is necessary in Dispositions)
order that such liquidated damages may be 3. As to applicability
recovered, nevertheless, before the court may Governs rights and Deals with rights and
consider the question of granting exemplary obligations of States obligations of private
damages in addition to the liquidated and their relationships individuals and their
damages, the plaintiff must show that he among themselves private transactions
would be entitled to moral, temperate or which involve a foreign
compensatory damages were it not far the element
stipulation for liquidated damages (Article 4. As to persons involved
2234, NCC) Governs only states Governs individuals or
7. A stipulation whereby exemplary damages are and internationally corporations
renounced in advance shall be null and void recognized
(article 2235, New Civil Code) organizations
5. As to transactions
Recognized Assumes control over
transactions in which transactions strictly
sovereign States are private in nature
interested
6. As to remedies

CONFLICT OF LAW In case of violation of All remedies

International Law, the provided by municipal
are

State may resort to laws of the State, such

[PRIVATE diplomatic protest, as resort to courts and
negotiation, arbitration administrative
INTERNATIONAL LAW] or
filing
adjudication
cases
by tribunals
before
international tribunals
- that part of the Municipal law of a state which or may even resort to
directs its courts and administrative agencies, use of force or go to
when confronted with a legal problem involving war
a foreign element, whether or not they should
apply a foreign law or foreign laws.

DEFINITION OF TERMS:

Borrowing Statute – bars the filing of a suit in a

DISTINCTION BETWEEN forum if it is already barred by the statute of
PUBLIC I.L. & PRIVATE I.L. limitations in the place where the cause of action
accrued.
Public International Private International
Characterization – a process by which a court, at
Law Law
the beginning of a choice-of-law process, assigns a
1. As to nature or character
disputed question to an area in substantive law,
International in National, municipal or
such as family relations, etc.
character as it applies local in character
in the international
sphere Doctrine of Forum Non Conveniens –
2. As to sources jurisdiction should be declined because “the forum
Custom, treaty and Generally derived from is inconvenient”. The “inconvenience” may be
general principles of the internal law of manifested in the following ways:
law recognized by each state; except any a) The evidence and the witnesses may not be
civilized nations and conflict of laws readily available.
juridical decisions and question which is b) The court dockets of the forum may already be
teachings of the most governed by a treaty clogged.
highly qualified (e.g. Hague c) The evils of “forum shopping” ought to be
publicists Convention on the curbed.
conflicts of law relating d) The forum has no particular interest in the
to the Form of case.
Testamentary
e) Other courts are open: certainly, the case may
be better tried in said courts.
 Long Arm Statutes – statutes specifying the
kinds of contacts upon which jurisdiction will be
asserted. A state must show that there are
minimum contacts between the non-resident
defendant and the forum to justify the exercise of
jurisdiction.
 Long-arm statute is a legislative act which
provides for personal jurisdiction, via substituted
service or process over persons or corporations
which are non-residents of the state and which
voluntarily go into the state directly or by agent or
communicate with persons in the state for limited
purposes. (Black’s Law Dictionary, 5th Ed., 1979).
 Depecage – the phenomenon where the
different aspects of the case involving a foreign
element may be governed by different systems of
law.
 Renvoi – a doctrine whereby a jural mater is
presented which the conflict of law rule of the
forum refer to a foreign law, the conflicts of laws
rules of which, in turn, refers the matter back to
the law of the forum or a third state.
 Double Renvoi – occurs when the local court,
in adopting the foreign court theory, discovers that
the foreign court accepts the renvoi.
 Transmission – the process of applying the
law of foreign state through the law of a second
foreign state.
 Remission – a kind of renvoi where the
reference is made back to the law of the forum.
 Lex Fori (law of the forum) – the positive
law of the state, country or jurisdiction, of whose
judicial system of the court where the suit is
brought or remedy is sought, is an integral part.
 Lex loci contractus – the law of the place
where the contract was made or law of the place
where the contract is to be governed which may
not be the same as that of the place where it was
made.
 Lex loci rei sitae – law of the place where the
thing or subject matters is situated. Questions of
real property can be affected only by the law of the
place where it is situated.
 Lex situs – law of the place where property is
situated; the general rule is that lands and other
immovables are governed by the law of the state
where they are situated.
 Lex loci actus – law of the place where the
act was done.
 Lex loci celebrations – law of the place
where the contract is made.
 Lex loci solutionis – law of the place of the
solutions; the law of the place where the payment
or performance of a contract is to be made.
 Lex loci delicti commissi – law of the place
where the crime took place.
 Lex mercatoria - law of merchants;
commercial law; that system of laws which is
adopted by all commercial nations and constitute
as part of the law of the land.
 Lex non scripta – the unwritten common law,
which includes general and particular customs and
particular part of common law.
 Lex Domicilii – Law of the domicile; in
conflicts, the law of one’s domicile is applied in the
choice of law questions
 Lex Loci - law of the place
 Lex Nationalii – Law of one’s nationality; in
conflicts, the law of one’s domicile is applied in the
choice of law questions.
 Lex Patriae - National law
 Long Arm Statutes – statutes specifying the
kinds of contracts upon which jurisdiction will be
asserted. A state must show that there are
minimum contracts between the non-resident
defendant and the forum to justify the exercise of
jurisdiction.
 Nationality - theory by virtue of which the
status and capacity of an individual are generally
governed by the law of his nationality. This is
principally adopted in the RP.
 Particularism - maintains the view that each
State creates its own unique norms of Conflict of
Laws pursuing its own policy.
 Universalism - considers Conflict of Laws as a
part of international Law, claiming that its norms
are uniform, universal and obligatory for all states.
 Private international law "sensu stricto" -
comprises conflict of laws rules which determine
the law of which country (state) is applicable to
specific relations.
 Private international law "sensu largo" -
comprises private international law "sensu stricto"
(conflict of laws rules) and material legal norms
(the applicable specific municipal law of a state,
whether of the forum or foreign) which have direct
extraterritorial character and are imperatively
applied (eg., regulations on real property,
consumer law, currency control regulations,
insurance and banking regulations).
 Doli incapax - a principle which raises an
irrebuttable presumption in criminal law that an
infant is incapable of committing a crime.
 Per verbis inter praesentes - a simple public
exchange of vows.
NOTE: In some states, the legal acceptability of
common law marriage is very limited. Some
couples, whether because there are no local
formalities relevant to them or because they have
strongly-held prejudices against compliance with
the local forms, decide to create a marriage either
by a simple public exchange of vows (per verbis
inter praesentes),
 Limping marriages - Wherever possible, there
should be international uniformity in defining a
person's marital status so that people will not be
treated as married under the law of one state, but
not married under the law of another. However,
there may be situations in which it would be quite
unjust and inappropriate for the courts of one state
to be bound by another state's laws as to status.
 Favor matrimonii - upholds the validity of all
marriages entered into with a genuine
commitment.
 Get - the form of divorce in Judaism
 Asmachta -- Some rabbis will only marry a
couple on condition that, should the need arise,
they will handle a divorce through him so he will
guarantee the Get is done correctly. Other rabbis
contend that this condition is unenforceable under
Jewish law. This type of condition is known as an
asmachta - a condition made under circumstances
that led the contracting parties to believe that it
would never be germane. For example, in our
case, a couple getting married never "really"
assumes that they will get divorced. Although they
are aware it is a possibility the marriage could fail,
the act of contracting the marriage reveals their
state of mind - i.e., that they do not believe that it
will fail.
 Talaq – the muslim divorce.
Note: The husband may initiate the divorce
process by pronouncing the talaq, the formula of
repudiation, three times. The first two times the
talaq is pronounced, it may be withdrawn. But the
third time it is pronounced, the divorce is
irrevocable. There are a range of systems
specifying the requisite formalities to complete an
irrevocable divorce, i.e., whether some period of
time must elapse between each pronouncement of
talaq, whether there must be mediation, or the
need for witnesses. For example, in Pakistan,
section 7 Muslim Family Laws Ordinance 1961
requires the following steps:
1. that the husband pronounces the required
statement of divorce in front of witnesses; and
2. gives written notice of that pronouncement to
the Chairman of the local Union Council; and
3. gives written notice to the wife;
4. there is a waiting period of ninety days, or of a
longer period of time if the wife is pregnant;
5. an Arbitration Council must be constituted
within thirty days of the date the written notice
is given; and
6. the Arbitration Council must take all steps
necessary to try to bring about a reconciliation.
 Kyogi rikon divorce - Art. 763 of the Civil
Code of Japan authorizes a husband and wife to
divorce by mutual agreement (kyogi rikon
divorces), and more than 90% of all Japanese
divorces adopt this fast, simple and entirely non-
judicial procedure. Kyogi rikon divorces are entirely
non-judicial without the involvement of lawyers or
any tribunal. The only requirements are that each
spouse should sign a form, known as a rikon
todoke, in front of two witnesses, and that the
form should be filed with the local registration
office. The parties do not need to make any
appearance at the registry office. International
couples may obtain a consent divorce in Japan if
one of them is a Japanese citizen.
 Mareva injunction (variously known also as a
freezing order, Mareva order or Mareva
regime), in Commonwealth jurisdictions, is a court
order which freezes assets so that a defendant to
an action cannot dissipate their assets from
beyond the jurisdiction of a court so as to frustrate
a judgment. It is named for Mareva Compania
Naviera SA v International Bulkcarriers SA [1975]
2 Lloyd's Rep 509, decided in 1975, although the
first recorded instance of such an order in English
jurisprudence was Nippon Yusen Kaisha v
Karageorgis in 1975, decided very shortly before
the Mareva decision; however, in the UK the Civil
Procedure Rules 1998 now define a Mareva order
as a "freezing" order. It is widely recognized in
other common law jurisdictions and such orders
can be made to have world-wide effect. It is
variously construed as part of a court's inherent
jurisdiction to restrain breaches of its process.
WAYS OF DEALING WITH CONFLICTS
PROBLEM
1. Dismiss the case for lack of jurisdiction, or on
the ground of forum non-conveniens.
2. Assume jurisdiction and apply either the law of
the forum or of another state:
a. Apply the Internal Law – forum law
should be applied whenever there is good
reason to do so.
b. Apply the Foreign Law – when the
proper foreign law was properly pleaded
and proved.
WHEN FORUM LAW MAY BE APPLIED OVER A
CONFLICT PROBLEM
a) A specific law of the forum decrees that a
specific law should apply;
b) The proper foreign law was not properly
pleaded or proved;
c) The case falls under any of the exceptions to
the application of foreign law.
Examples:
 Article 16 of the Civil Code – real and
personal property subject to the law of the
country where they are situated and
testamentary succession governed by lex
nationalii
 Article 829 of the Civil Code – makes
revocation done outside Philippines valid
according to law of the place where will was
made or lex domicilii
 Article 819 of the Civil Code – prohibits
Filipinos from making joint wills even if valid
in foreign country
 The proper foreign law was not properly
pleaded and proved
EXCEPTIONS TO THE APPLICATION OF
FOREIGN LAW:
a. Foreign law is contrary to public policy of the
forum.
b. Foreign law is procedural in nature.
c. The case involves issues related to property.
d. The issues involved in the enforcement of
foreign claim is fiscal or administrative.
e. The foreign law or judgment is contrary to
good morals.
f. The foreign law is penal in character.
g. When application of the foreign law may work
undeniable injustice to the citizens of the
forum.
h. When application of the foreign law might
endanger the vital interest of the State.
THEORIES ON THE APPLICATION OF FOREIGN
LAW
1. Theory of Comity
Foreign law is applied because it is convenient and
because we want to give protection to our citizens,
residents and transients in our land.
2. Theory of Vested Rights
We seek to enforce not foreign laws itself but the
rights that have been vested under such foreign
law; an act done in another state may give rise to
the existence of a right if the laws of that state
created such right.
3. Theory of Local Law
Adherents of this school of thought believe that we
apply foreign law not because it is foreign, but
because our laws, by applying similar rules, require
us to do so; hence, it is as if the foreign law has
become part and parcel of our local law.
4. Theory of Harmony of Laws
Theorists here insist that in many cases we have to
apply the foreign law so that whenever a case is
decide, that is, irrespective of the forum, the
solution should be approximately the same; thus
identical or similar solutions anywhere and
everywhere. When the goal is realized, there will
be “harmony of laws”.
5. Theory of Justice
The purpose of all laws, including conflict of laws,
is the dispensing of justice; if this can be attained
in many cases applying the proper foreign law, we
must do so.
PROOF OF FOREIGN LAW
1. By pleading and proof
a. Written law
i. By official publication
ii. Copy attested by officer having legal
custody plus a certificate with seal from
secretary of embassy, legation, consul
general, consul, vice consul, consular agent
or any officer in the foreign service of the
Philippines stationed in the foreign country
to the effect that said officer has custody
(Section 24 Rule 132 of the Revised Rules
of Court)
b. Unwritten law – by testimony of experts or
writings of jurists

2. Judicial Notice (when the laws are already

within the actual knowledge of the court, such
as when they are well and generally known or
they have been actually ruled upon in other
cases before it and none of the parties
concerned claim otherwise (PCIB vs. Escrolin,
56 SCRA 266)

3. To conclude that the parties who fail to

introduce proof as to the content of a foreign
law acquiesce to the application of the forum
law.

4. Presumption that the foreign law is the same as

the law of the forum

DOCTRINE OF PROCESSUAL PRESUMPTION

Proceeds from the theory that the basic law is the
law of the forum and when the claimed applicable
foreign law is not proved, then the court has no
reason to displace the basic law.