PRELIMINARY TITLE

Q1: WHEN DO LAWS TAKE EFFECT?

A1: Generally, laws take effect 15 days following the completion of its publication either in the Official
Gazette, or in a newspaper of general circulation, unless it is otherwise provided (Art. 2, CC).

Q2: Explain the Nationality Theory/Lex Nationali.

A2: Lex nationali is enshrined in Art. 15 of the New CC. Such provision states that Laws relating to family
rights and duties, or to the status, condition and legal capacity of persons are binding upon the citizens of the
Philippines, even though living abroad. The foregoing rule will also apply to aliens living in the Philippines.

Q3.1: A, a Japanese national died in Quezon City. He was survived by Y, his spouse, and B and C, his children. If
A left properties in the Philippines, what law will be applied in the disposition of said properties?
A3.1: Japanese Law. Art. 16, par. 2 provides that in intestate and testamentary succession, it is the national
law of the person whose succession is under consideration that shall be applied, regardless of the nature
and location of the property.

Q3.2: In relation to said properties, what then will be governed by Japanese law?
A3.2: The order of succession, amount of successional rights, intrinsic validity of testamentary provisions,
and capacity to succeed. [Art. 16, par. 2; Art. 1039, CC]

Q4.1: A was hit by a bus driven by B. A instituted a criminal case for reckless imprudence resulting in serious
physical injuries against B. Without making a reservation, A subsequently filed an action for damages based on
quasi-delict against B. B contends that A waived his right to file said action when he did not reserve such right
in the criminal action, and thus moved for its dismissal. Is B correct?
A4.1: No. Art. 31 of the New CC provides that when a 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. In this case, the second action filed by A is patently
based on a quasi- delict. Pursuant to Art. 1157, such is a separate and distinct source of obligations, B’s
contention then cannot be upheld.

Q4.2: Does this mean then that A can recover damages both in the criminal action and in the civil action? A4.2:
No. Under Art. 2177, one cannot recover damages twice for the same act or omission complained of the
defendant.

PRIVATE INTERNATIONAL LAW

Q5: WHEN A COURT IS CONFRONTED WITH A CONFLICTS PROBLEM, WHAT ARE ITS OPTIONS?
A5: The court may either,
(a) Dismiss the case for lack of jurisdiction or on the ground of forum non conveniens; or
(b) Assume jurisdiction and apply, either (1) forum law; or (2) foreign law. [Coquia and Aguiking-
Pangalangan]

Q6: WHAT IS THE DOCTRINE OF FORUM NON CONVENIENS?

A6: This doctrine of forum non conveniens (which literally means “the forum is inconvenient”) requires the
courts to dismiss the case with a conflicts problem on the ground that the controversy may be more suitably
tried elsewhere.

Q7: Cruz, a businessman based in the Philippines, failed to pay Beto, Inc., a Seattle-based partnership, its
obligation for a contract of purchase of paper. Beto, Inc. filed an action in the Philippines against Cruz, but
Cruz submits that the court should have dismissed the case on the ground of forum non conveniens. Is Cruz
correct?
A7: No. Forum non conveniens is inapplicable. Unless the balance is strongly in favor of the defendant, the
plaintiff’s choice of forum should be rarely disturbed, and furthermore, the consideration of inadequacy to
enforce the judgment, which is one of the important factors to be considered in the application of said
principle, would

1
precisely constitute a problem to the plaintiff if the local courts decline to assume JD on the basis of said
principle, considering that defendant is a resident of the Philippines. [Wing On Company v. Syyap, 64
O.G. 8311 (1967)]

Q8: WHEN SHOULD COURTS APPLY FORUM LAW?

A8: Courts should apply forum law in the following circumstances:
1) When a specific law of the forum decrees that forum law should apply (e.g. Art. 16, CC);
2) When the applicable foreign law was not pleaded and proved; and
3) When the case falls under any of the exceptions to the application of foreign law:
a) The foreign law is contrary to an important public policy of the forum
b) The foreign law is penal in nature
c) The foreign law is procedural in nature
d) The foreign law purely fiscal or administrative in nature
e) The application of the foreign law will work undeniable injustice to the citizens of the forum
f) The case involves real or personal property situated in the forum
g) The application of the foreign law might endanger the vital interest of the state
h) The foreign law is contrary to good morals [Coquia and Aguiking-Pangalangan]

Q9: X, the special administrator of Y’s estate, moved for the reconsideration of the trial court’s denial of
the probate of Y’s will on the ground that it does not comply with Philippine law. X contends that since Y
was a resident of West Virginia and the will was executed therein, the laws of West Virginia should apply.
To support his claim, X, presented an extract from a book containing a compilation of West Virginia laws.
A, an illegitimate child of Y, opposed X’s motion contending that X failed to plead and prove said laws in
accordance with the country’s rules on evidence. If you were the judge, how would you decide such case?
A9: X’s motion should be dismissed. The courts of the Philippines are not authorized to take judicial notice
of the laws of the various States of the American Union. Such laws must be proved as facts. Here the
requirements of law were not met. There was no showing that the book from which an extract was taken
was printed or published under the authority of the state of West Virginia. as provided in the Code of Civil
Procedure; nor was the extract from the law attested by the certificate of the officer having charge of the
original. [Fleumer v. Hix, 54 Phil. 610 (1930)]

Q10: EXPLAIN THE CONCEPT OF RENVOI.

A10: Renvoi is a procedure whereby a jural matter presented is referred by the conflict of laws rules of the
forum to a foreign state, the conflict of laws rule of which, in turn, refers the matter to the law of the forum
(remission) or a third state (transmission). [Coquia and Aguiling-Pangalangan]

Q11: The will of M, a domiciliary of the Philippines, was admitted to probate, and a project of partition was
proposed. M’s illegitimate child opposed the project of partition on the ground that the distribution of the
estate should be governed by Philippine law. The lower court found that M was a US citizen, particularly, a
resident of California; hence the successional rights and intrinsic validity of the will should be governed by
California. Was the trial court correct in this case?
A11: Not necessarily. Art. 16 of the New CC provide that the national law of the decedent governs the
validity of his testamentary dispositions. Such national law includes the conflicts rules of said State. In this
case, if the conflicts rules of the California Code authorizes the reference or return of the question to the
law of the testator’s domicile. Then Philippine law would apply since M was a domiciliary of the
Philippines at the time of his death. However, if said national law provides otherwise, then Californian law
would apply in this case. [See Aznar v. Garcia, G.R. No. L-16749 (1963)]

Q12: Define domicile. And discuss its kinds, if there are any.
A12: Under Art. 50 of the New CC, domicile refers to the place where one (natural person) habitually
resides, or the place determined by the law creating or recognizing it; and in its absence shall be
understood as the place where their legal representation or place of business is (for juridical persons).
Additionally, Justice Story defines it as the place of true, fixed permanent home and principal
establishment, and to which, whenever he is absent, he has the intention of returning. [Coquia and
Aguiling-Pangalangan]
There are three kinds of domicile: (1) domicile of origin, which refers to a person’s domicile at birth; (2)
domicile of choice, also called voluntary domicile, is the place freely chosen by a person sui juris; there
must be concurrence of physical presence in the new place and unqualified intention to make that place
one’s home; and (3) constructive domicile, pertaining to the domicile assigned to persons incapable of
choosing their own domicile by operation of law. [Coquia and Aguiling-Pangalangan]

Q13: M, an American national, but a Philippine domiciliary, enlisted the legal services of N, in her suit
against her husband, O, also an American, for support in contemplation of a divorce suit. The spouses
eventually entered into a compromise agreement, and included in said agreement was a provision
negating N’s claim for attorney’s fees. This prompted N to file a case in court against M. M moved to
dismiss the case on the ground that the contract was void because divorce is not sanctioned by Philippine
law. Is M correct?
A13: No. N should be paid for the legal services which he rendered M. M and O are American citizens.
Following Art. 15 of the New CC, their status and its dissolution shall be governed by their national law. In
this case, since divorce is permitted in America, M’s contention will not hold water, and thus, the contract
herein should not and cannot be declared contrary to public policy. [See Recto v. Harden, G.R. No. L-
6897 (1956)].

Q14: B, a Filipino, and C, an Australian, entered into a contract of lease of a parcel of land, owned by B,
situated in the Philippines, in Greece. B and C stipulated that US law will govern their contract. For C’s
failure to pay rent, B instituted a case against C in the Philippines. In deciding the case, what law or laws
will be considered?
A14: Following the principle of lex loci celebrationis enshrined in Art. 17, the laws of Greece will govern the
contract’s extrinsic validity. For the contract’s intrinsic validity, Philippine law should apply. Although
generally, paramount consideration is given to the parties’ choice of law, such can be disregarded in light
of the well- established policies of the forum. In this case, Philippine law provides that real and personal
properties shall be governed by the laws of the country where they are situated. Thus, in this case, since
the object of the contract, the parcel of land, is located in the Philippines, Philippine law will apply.

Q15: A, a citizen of Pennsylvania, died in the Philippines while on vacation. Upon the death of A, her
father H sought to be proclaimed as the sole compulsory heir of A, his wife having died years prior. On
the other hand, O and P, children of S and T, A’s late siblings, sought the probate of A’s will executed
in the US. When the court allowed probate of the will in the Philippines, H raised in issue that doing so
would divest him of his legitime. Is H correct?
A15: No. Pursuant to Art. 16, par. 2, the governing law with respect to the amount of successional rights is
the national law of the decedent. In this case, the decedent was a citizen of Pennsylvania, thus, Pensylvania
law should apply. And since such law does not have a system of legitimes, H is therefore not preterited.
[Cayetano v. Leonidas, G.R. No. L-54919 (1984)]

PERSONS AND FAMILY LAW

Q16: DISTINGUISH JURIDICAL CAPACITY FROM CAPACITY TO
ACT. A16:
Juridical Capacity Capacity to Act
Fitness of a person to be the subject of
Power to do acts with legal effect
legal relations
Passive Active
Aptitude for the Holding and Enjoyment of rights Aptitude for the Exercise of rights
Inherent in natural persons Must be acquired
Lost upon death Lost through death and other causes
Can exist without capacity to act Must exist with juridical capacity
 Cannot be limited or restricted May be restricted or limited

Q17: WHAT ARE THE REQUISITES OF MARRIAGE?

A17: There are two types of requisites: essential and formal requisites. Essential requisites include the: 1)
Legal capacity of the contracting parties, which must be a man and a woman; and 2) Consent freely given
in the presence of a solemnizing officer. Formal requisites include the 1) Authority of the solemnizing
officer; 2) A valid marriage license, except in cases provided in Chapter Two of this Title; and 3) A
marriage ceremony. [Arts. 2 and 3, FC]

Q18: HOW DO ESSENTIAL AND FORMAL REQUISITES DIFFER?

A18: While both the absence of essential and formal requisites entail that the subject marriage is null, it
differs in the effect of a flaw in the requisite. If there is a defect in an essential requisite, then the marriage
is voidable and thus may be annulled. In contrast, a defect in a formal requisite will not affect the validity
of the marriage and, instead, makes the party responsible criminally, civilly, or administratively liable. [Art.
4, FC]

Q19: IS A FALSE AFFIDAVIT OF COHABITATION CONSIDERED AN IRREGULARITY OR AN ABSENCE OF

THE REQUISITE? [DE CASTRO V ASSIDAO-DE CASTRO]
A19: Such marriage shall be rendered null and void, given that a falsified requisite does not count as a
requisite and thus is considered absent.

Q20: IS FORCED CONSENT A GROUND FOR NULLITY?

A20: No. It is only a ground for annulment. The lack of consent refers to the absence of a bona fide intent to
marry.

Q21: WHY IS BREACH OF PROMISE TO MARRY NOT AN ACTIONABLE WRONG?

A21: Marriage is based on the consent voluntarily given by the parties. This entails that every person has
the capacity and the right to change her or his mind. Such breach can only be an actionable wrong in
circumstances where the right to recover money or property is advanced by the plaintiff upon the faith of
such promise [Wassmer v. Velez, G.R. No. L-20089 (1965)].

Q22: WHEN MAY A MARRIAGE BE SOLEMNIZED WITHOUT A MARRIAGE LICENSE?

A22: A marriage may be solemnized without the necessity of a marriage license in the following situations:
1. Where either or both of the contracting parties are at the point of death, even if the ailing party survives
[Art. 27, FC]
2. Where the residence of either party is so remote that there is NO MEANS OF
TRANSPORTATION to enable such party to appear personally before the local civil registrar [Art.
28, FC]
3. Marriages among Muslims or among members of ethnic cultural communities, provided that they
are solemnized in accordance with their customs/rites/practices [Art. 33, CC]
4. Where the parties have lived together as husband and wife for AT LEAST FIVE YEARS and
WITHOUT ANY LEGAL IMPEDIMENT TO MARRY EACH OTHER [Art. 34, FC]

Q23: WHO HAS THE AUTHORITY TO SOLEMNIZE MARRIAGES?

A23: Article 7, FC enumerates the persons who have the authority to solemnize a marriage. It includes
1. Any incumbent member of the judiciary within the Court’s jurisdiction
2. Any member of a religious clergy authorized by his church and registered in the civil registrar
3. Any ship captain or airplane chief only in articulo mortis (Art. 31, FC)
4. Any military commander during military operations in articulo mortis (Art. 32, FC)
5. Any consul-general, consul, or vice consul, as provided in Artl 10, FC

Q24: WHAT HAPPENS WHEN THE MARRIAGE LICENSE IS OBTAINED FROM A PLACE THAT IS
NEITHER PARTY'S RESIDENCE?
A24: Such marriage shall only constitute an irregularity to the formal requisite of marriage. In the case of
Alcantara v Alcantara [G.R. No. 167746 (2007)], even if neither party resided in Carmona, Cavite at any
point of their lives, their marriage remained valid.
Q25: WHAT IS THE EFFECT OF A MISSING MARRIAGE CERTIFICATE? A MARRIAGE CERTIFICATE THAT
WAS NOT DELIVERED TO THE REGISTRY?
A25: Since a marriage certificate is neither an essential or formal requisite of marriage, its non-submission
shall not affect the validity of the said marriage [Madridejo v. de Leon, G.R. No. L-32473 (1930)]. It is,
however, considered as an admissible proof of marriage and thus, shall be preferred over secondary evidence
of marriage.

Q26: WHY IS AN ACTION/DEFENSE FOR NULLITY IMPRESCRIPTABLE?

A26: Void marriages are void from the beginning. In other words, there is nothing to ratify and a lapse of
time would not, in any way, correct the deficiencies at the time of marriage.

Q27: WHAT ARE THE GROUNDS FOR ANNULMENT? AND, HOW DO SUCH GROUNDS DIFFER FROM ONE
ANOTHER?
A27:
Who may file an action When may they
Ground Who may ratify
for annulment file such action

Party who did not

Party who did not
receive parental
Lack of parental
consent, by freely
consent for parties
cohabiting with the
aged 18-21
spouse upon reaching
21
Within five years
receive parental
upon reaching 21
consent
Parents or
Until party reached
guardians of the
21
party aged 18- 21

Insanity The sane spouse

The relative, During the lifetime

Party suffering from
guardian, or person of the insane
unsound mind, upon
having legal charge spouse
coming to reason,
freely cohabits with of the insane
the spouse
During a lucid
The insane spouse
interval

Injured party, upon

Within five
Consent obtained freely cohabiting with
Injured party years from
through fraud the spouse after
discovery of fraud discovery of
fraud
Injured party, upon
Within five years
Consent obtained freely cohabiting with
from
through force, the spouse after
Injured party disappearance of
intimidation, and disappearance of force,
undue influence force, intimidation,
intimidation, or undue
or undue influence
influence

Within five years

Impotence Injured party from celebration of
marriage

Within five years

STD Cannot be ratified Injured party from celebration of
marriage
Q28: IS A CRIMINAL CONVICTION FOR BIGAMY NECESSARY FOR AN ACTION FOR LEGAL SEPARATION?
DOES A CIVIL ACTION FOR LEGAL SEPARATION GROUNDED ON CONCUBINAGE HAVE TO BE
SUSPENDED TO AWAIT CONVICTION IN THE RELATED CRIMINAL CASE?
A28: No. While related, the causes of action for these two are distinct [Gandionco v Penaranda, G.R. No.
79284(1987)]. Quantum of evidence for civil and criminal cases are also different (preponderance of
evidence v. guilt beyond reasonable doubt).

Q29: WHAT PROPERTIES ARE EXCLUDED FROM THE ABSOLUTE COMMUNITY?

A29: The following properties are deemed as separate properties of the spouses:
1. Property acquired DURING the marriage by GRATUITOUS title by either spouse, including its
fruits and income;
2. Property for PERSONAL AND EXCLUSIVE use of either spouse, except jewelry;
3. Property acquired BEFORE the marriage by either spouse who has LEGITIMATE DESCENDANTS
BY A FORMER MARRIAGE and the fruits and income thereof [Art. 92, FC]; and
4. Property excluded by the marriage settlements. [Art. 91, FC]

Q30: D and E are to be married. A month before their wedding, they entered into a verbal antenuptial
agreement providing that their property regime will be conjugal partnership of gains. D and E got married.
Unfortunately, during the reception, D’s father, F, because of too much excitement, died of a heart attack.
F left a will where he bequeathed a parcel of land to D.
a) What is the property regime of D and E?
b) Is the parcel of land separate property? Is community/conjugal property?
Explain. Q30:
a) Absolute community of property. D and E’s antenuptial agreement was void for it was not in
writing. The law provides that marriage settlements and any modification thereof shall be in
writing, signed by the parties, and executed before the celebration of marriage. In this case, D
and E’s marriage settlement was verbal, thus, such was void. The default property regime of
absolute community of property will therefore govern D and E’s property relations.
b) The parcel of land is exclusively owned by D. The Code provides that the absolute community of
property between the spouses shall commence at the precise moment that the marriage is celebrated.
In this case, when F died during the reception, D and E were already married. Under the law
property acquired DURING the marriage by GRATUITOUS title by either spouse, including its
fruits and income shall be excluded from the absolute community. Such rule is applicable to the
property in the case at bar, for D acquired it through succession, which is a gratuitous mode of
acquiring ownership. The parcel of land is therefore does not form part of D and E’s community
property.

Q31: COMPARE AND CONTRAST ART. 147 AND ART. 148.

A31:
Art. 147, FC
Man and woman living together as
husband and wife, with capacity to
marry (Art.5, without any legal
impediment)
-at least 18 years old
-not violative of Art. 37 (incestuous
Applicability
void marriage)
-not violative of Art. 38 (void marriage
by reason of public policy)
-not bigamous
Other void marriages due to
absence of formal requisite
Salaries and Owned in equal shares
wages
Art. 148, FC
Man and woman living together as
husband and wife, NOT capacitated to
marry
a. Under 18 years old
b. Adulterous relationship
c. Bigamous/polygamous marriage
d. Incestuous marriages under Art. 37
e. Void marriages by reason of public
policy under Art. 38
Separately owned by parties
Properties
acquired through Remains exclusive, provided there is Remains exclusive
exclusive funds proof
Properties
acquired by both Owned in common in proportion to
Governed by rules on co-ownership
through work and respective contribution
industry
Owned in equal shares since it is
presumed to have been acquired through
joint efforts

If one party did not participate in

acquisition, presumed to have contributed
No presumption of joint acquisition. When
Properties jointly, if the former’s effort consisted in
there is evidence of joint acquisition but
acquired while the care and maintenance of family and
none as to the extent of actual contribution,
living together household
there is a presumption of equal sharing.
N.B. Neither party can encumber or
dispose by acts inter vivos his share in
co- owned property without the consent
of the other party until cohabitation is
terminated.
If one party is validly married to another
Where only one party to a void
his/her share in the co-owned properties will
marriage is in good faith, share of party
accrue to the ACP/CPG of his/her existing
in bad faith is forfeited: valid marriage.
-In favor of their common children
-In case of default of or waiver by any or If the party who acted in bad faith is not
Forfeiture all of the common children or their validly married to another, his/her share
descendants, each vacant share shall shall be forfeited in the same manner as
belong to the respective surviving that provided in Art 147.
descendants
-In the absence of such descendants, The same rules on forfeiture shall apply if
such share belongs to the innocent both parties are in bad faith.
party

Q32: A and B’s marriage was annulled on the ground of fraud. Even after securing said decree of
annulment, B still continued to use A’s surname not wanting to have a different surname from her
children. Can A compel B to revert back to her maiden name?
A32: It depends. If B is the guilty party, then it is imperative and incumbent upon her to resume her
maiden name pursuant to CC 371. However, if B is the innocent spouse, she may choose to continue to use
A’s surname, UNLESS:
(a) The court decrees otherwise; or
(b) She or A is married again to another person. [Art. 371, CC]

Q33.1: X and Y, had an affair; such illicit relationship resulted in C. Two years after C’s birth, X’s wife died of
a car crash, while Y obtained an annulment from V, her husband. Thereafter, X and Y got married. Three
years later, Y gave birth to D. What is the status of both children? Who exercises parental authority over
them?
A33.1: C is an illegitimate child. While D is a legitimate child. The Code provides that children conceived
AND born outside of a valid marriage are considered illegitimate, while those conceived OR born during
the marriage of the parents are legitimate. In this case, C was conceived and born during the time when
his parents were both married to other people, thus he is illegitimate, even if his parents were eventually
married years after his birth. D, on the other hand, having been born during the marriage of X and Y,
legitimate.
Q33.2: If C, although conceived during the affair, was born during the marriage of X and Y, will the answer
in the first question change?
A33.2: No. C can never be legitimated. Under the Code, only children conceived and born outside of
wedlock of parents who, at the time of conception of the former, were not disqualified by any impediment
to marry each other, or were so disqualified only because either or both of them were below 18 years of
age, may be legitimated. In this case, when C was conceived, both of his parents were disqualified to
marry each for they were married to other people, thus, the requirement of the law that the child be
conceived or born to parents, although not married, were nevertheless qualified to enter marital union,
was wanting in this case.

Q34: WHEN DOES EMANCIPATION TAKE PLACE? WHAT ARE ITS EFFECTS?
A34: Emancipation takes place by the attainment of the age of majority. Unless otherwise provided,
majority commences at the age of 18 years old [Art. 234, FC as amended by RA 6809].
Emancipation shall terminate parental authority over the person and property of the child who shall then
be qualified and responsible for all acts of civil life, save the exceptions established by existing laws in
special cases. However, contracting marriage shall require parental consent until the age of 21; and
parents and guardians remain liable for damages caused by their children and wards below 21 years of
age who live in their company. [Art 236, FC as amended by RA 6809]

Q35: WHAT ARE THE BASES OF THE AMOUNT OF LEGAL SUPPORT?

A35: The amount of legal support shall be in proportion to:
1. The resources or means of the giver; and
2. The necessities of the recipient. [Art. 201, FC]

Q36: DISTINGUISH LEGITIMATION FROM

ADOPTION. A36:
LEGITIMATION ADOPTION
The law merely makes legal what exists The law creates by fiction a relation
Legal effect by nature which did not in fact exist
Persons affected Natural children Strangers (generally)
Procedure Extrajudicial acts of parents Always by judicial decree
Both parents
Except when:
• One spouse seeks to adopt
the legitimate child of the
other
Who should apply Both parents • One spouse seeks to adopt his own
illegitimate child, provided that the
other spouse has signified their
consent thereto
• Spouses are legally separated
from each other
Same status and rights with that of a
Creates a relationship only between
Effect on parent- legitimate child not only in relation to
the child and the adopting parents
child relationship the legitimizing parents but also to
[Sayson v. CA (1992)]
other relatives

PROPERTY
Q37: John owns a parcel of land by the West Philippine Sea. Due to the current of the sea, the area of his
property increased by 500 square meters. When john discovered this, he extended his fence around said area.
Does said increase inure to the benefit of john? Explain.
A37: NO. Such alluvial formation along the seashore is part of the public domain and, therefore, not open
to acquisition by adverse possession by private persons. It is outside the commerce of man, unless otherwise
declared by either the executive or legislative branch of the government. [De Buyser v. Dir. of Lands, G.R. No.
L-22763 (1983)]

Q38: HOW MANY YEARS IS REQUIRED TO PASS BEFORE CONTINUOUS AND NON-APPARENT EASEMENTS
MAY BE ACQUIRED BY PRESCRIPTION?
A38: None, as continuousand non-apparent easements cannot be acquired by prescription. Art. 620 of the CC
speaks of continuous and apparent easements, and how they can be applied by prescription, i.e. by
continuous and apparent use of the easement, such easement must have been used for at least 10 years,
and there is no requirement for good faith or title.

Q39: DISTINGUISH EASEMENT FROM USUFRUCT.

A39: As to constitution, easements may be constituted only on immovables, while usufructs may be
constituted on movable or immovables. As to extinguishment, easements are not extinguished by the
death of dominant owner, while usufructs are extinguished by the death of usufructuary. As to possessory
right, easements don’t involve possessory rights over an immovable, while usufructs do. As to subject
matter, easements are limited to particular or specific use of the servient estate, while usufructs include all
the uses and the fruits of the property.

Q40: WHAT ARE THE REQUISITES OF AN ACTION TO QUIET TITLE?

A40: An action to quiet title has three (3) requisites: (1) There is a cloud on title to real property or any
interest to real property; (2) The plaintiff must have legal or equitable title to, or interest in the real
property; and (3) Plaintiff must return the benefits received from the defendant.

Q41: Tito Boy entered into a Land Purchase Agreement with Tita Girl of NorthSouth Realty Corporation. By
virtue of the agreement, Tito Boy will purchase a 400 sqm parcel of land. After the Deed of Absolute Sale
was executed, he was issued a new TCT, under his name, after the old one was cancelled. However, he was
never able to physically possess the property because of his assignments as a member of the Philippine Air
Force.

When he was about to retire, he visited his property only to discover that it was occupied by Caloy Aquino
and his family. Tito Boy sent them a letter to vacate, but Carlito, son-in-law of Caloy Aquino, replied that
they were claiming ownership over the said property. Tito Boy filed a complaint against the Aquinos for
violating PD 772 (Anti-Squatting Law) but was eventually dismissed as the issue on ownership needed to be
resolved in a civil action.

Tito Boy then commissioned an engineer to do a survey of the property where they confirmed that the
property occupied is the same as the one reflected in Tito Boy’s TCT. Tito Boy then filed a complaint for
recovery against Petitioners. Taking into consideration Art. 434 of the CC, will Tito Boy be entitled to
possession? If yes, how will he prove such possession? If no, why will he not be entitled?
A41: Yes. Article 434 of the CC provides that “[i]n an action to recover, the property must be identified,
and the plaintiff must rely on the strength of his title and not on the weakness of the defendant’s claim.” In
other words, in order to recover possession, a person must prove two things: (1) the identity of the land
claimed, and (2) his title.

In this case, Tito Boy will be able to prove the identity of the property and his title. To prove his title to the
property, he may present in evidence the following documents: (1) Land Purchase Agreement; (2) Deed of
Absolute Sale; (3) and a TCT registered under his name, which also proves the title requirement of Art.
434.

To better prove the identity of the property, he may also get and offer the testimony of the one who
conducted the relocation survey, as well as any resulting survey plans or copies of the survey [Jakosalem
v. Barangan, G.R. No. 175025 (2012)].

Q42: UNDER THE NEW CIVIL CODE, WHAT IS THE PRESCRIPTIVE PERIOD PROVIDED FOR THE
ACTION TO ABATE A PUBLIC OR PRIVATE NUISANCE?
A42: Under CC 1143(2), the action to abate a public or private nuisance CANNOT be extinguished by
prescription. Such action is imprescriptible, as long as the said nuisance continues to meet the
requirements to be classified as such.
Q43: Juan and Jose are brothers. They inherited a banana plantation from their grandfather. Jose however
migrated to Japan and lived there for 30 years, while Juan stayed and managed said plantation. When Jose
returned, he asked that he and Juan partition the property. Juan refused contending that he had already
acquired the entire property through prescription, this prompted Jose to file an action for partition in
court. Will Jose’s action prosper?
A43: Yes. Under Article 494 of the New CC, “no prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.” In
this case, there was no showing that Juan renounced the co-ownership, thus he cannot invoke prescription
against Jose’s claim. Thus, Jose may properly ask for the partition of said plantation as the law provides
that each co-owner may demand at any time the partition of the thing owned in common, insofar as his
share is concerned. [Art. 494, par. 1, CC]

Q44: Z donated a parcel of land to A, B, and C. A, B, and C agreed that they will not partition the land, and
therefore, continue to be co-owners, for 15 years. During the 11th year, C filed an action for partition. A and
B opposed this action invoking their agreement. Will C’s case prosper?
A44: Yes, C’s action will prosper. CC 494 provides that an agreement to keep the thing undivided for a
certain period of time, not exceeding ten years, shall be valid. In this case, A, B, and C’s agreement was
only valid to the extent of ten years. C therefore has the right to ask for partition during the 11th year.

The answer in this case would have been different if it were Z who imposed the subject prohibition for Art.
494, par. 3 states that a donor or testator may prohibit partition for a period which shall not exceed 20
years.

Q45: DISTINGUISH CO-OWNERSHIP WITH PARTNERSHIP.

A45:
CO-OWNERSHIP PARTNERSHIP
As to creation
Can be created without formalities of a contract Can be created only by contract, express or implied
As to Juridical Personality
Has no juridical or legal personality Has juridical personality distinct from partners
As to Purpose
Purpose is collective enjoyment of the thing Purpose is to obtain profits
As to Disposition of Shares
Consent of other co-owners not needed; transferee Partner needs to be authorized; he cannot
automatically becomes co-owner substitute another as a partner in his place
As to Existence of Mutual Agency
There is no mutual representation A partner can generally bind the partnership
As to Effect of Death or Incapacity
Does not result in dissolution Results in dissolution
As to Formal Requisites
No public instrument is needed even if the object of May be made in any form except when real
the co-ownership is a real property property is contributed
As to Agreement on the Period
An agreement to keep the thing undivided for a There may be agreement as to a definite term
period of more than 10 years is void without limit set by law

Q46: DISTINGUISH OCCUPATION FROM

POSSESSION. A46:
Occupation
Mode of acquiring ownership
Only of corporeal personal property
Object must be without an owner (res nullius)
Requires an intent to acquire ownership
May not take place without some form of
possession
Possession
Raises the presumption of ownership
Over any kind of property
Property may be owned by somebody
May be had in the concept of a mere holder
May exist without occupation
 Short duration Generally of longer duration
Cannot lead to another mode of acquisition May lead to another mode which is prescription

SUCCESSION
Q47: Define what is a will. What is the form of a notarial will? Of a holographic will?
A47: A will is an act whereby a person is permitted, with the formalities prescribed by law, to control to a
certain degree the disposition of this estate, to take effect after his death. (Art. 783, CC)

Every will must be in writing and signed by the testator. (Art. 804,

CC) For NOTARIAL WILLS

 Every will, other than a holographic will, must be subscribed at the end thereof by the testator himself
or by the testator's name written by some other person in his presence, and by his express direction,
and attested and subscribed by three or more credible witnesses in the presence of the testator and
of one another.
 The testator or the person requested by him to write his name and the instrumental witnesses of the
will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin,
and all the pages shall be numbered correlatively in letters placed on the upper part of each page.
 The attestation shall state the number of pages used upon which the will is written, and the fact that
the testator signed the will and every page thereof, or caused some other person to write his name,
under his express direction, in the presence of the instrumental witnesses, and that the latter
witnessed and signed the will and all the pages thereof in the presence of the testator and of one
another.
 If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them.
(Art. 805, CC)
 Every will must be acknowledged before a notary public by the testator and the witnesses. The notary
public shall not be required to retain a copy of the will, or file another with the office of the Clerk of
Court. (Art. 806, CC)
 If the testator be deaf, or a deaf-mute, he must personally read the will, if able to do so; otherwise, he
shall designate two persons to read it and communicate to him, in some practicable manner, the
contents thereof. (Art. 807, CC)
 If the testator is blind, the 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. (Art. 808, CC)

For HOLOGRAPHIC WILLS: A person may execute a holographic will which must be entirely written,
dated, and signed by the hand of the testator himself. It is subject to no other form, and may be made in
or out of the Philippines, and need not be witnessed. (Art. 810, CC)

Q48: Who are capacitated to make a will?

A48: All persons who are not expressly prohibited by law may make a will. A person may either be male or
female, and must be over 18 years of age. He must also be of sound mind at the time of execution of the
will. (Art. 796- 798, CC.)

A person of sound mind should be able at the time of making the will, to know the nature of the estate to
be disposed of, the proper objects of his bounty, and the character of the testamentary act. (Art. 799, CC)

Q49: When does the right to succession accrue? What are the objects transmissible by succession, and to
what extent?
A49: The rights to the succession are transmitted from the moment of the death of the decedent. If
inheritance is accepted, he possession of hereditary property is deemed transmitted to the heir without
interruption. (Art. 777, 533, CC)

The inheritance includes all the property, rights and obligations of a person which are not extinguished by
his death. (Art. 76, CC) The inheritance includes a party's contractual rights and obligations because by
legal fiction, the monetary equivalent thereof devolved into the mass of their father's hereditary estate,
and we have ruled that
the hereditary assets are always liable in their totality for the payment of the debts of the estate. However,
they are liable only to the extent of the value of their inheritance. [Alvarez v. IAC, G.R. No. L-68053
(1990)]

Q50: A died leaving a notarial will in english, consisting of 8 pages, all signed on the upper left margin and
correlatively numbered. It was attested to by her cousin, a friend, and her uncle who notarized the will. It is
undisputed that she was an illiterate who does not know how to read and write. Being uneducated, she
was not able to learn how to speak in english. The will was written and signed by her uncle and notarizing
attorney in her presence and by her express direction. The same was read to her twice, by her cousin in
Filipino, and by her uncle and notarizing attorney, in english. Is the will valid?
A50: NO. Art. 805, CC requires that the will must be attested and subscribed to by three or more credible
witnesses. However, a notary public before whom the will was acknowledged cannot be considered as
the third instrumental witness since he cannot acknowledge before himself his having signed the will. If
the third witness were the notary public himself, he would have to avow, assent, or admit his having
signed the will in front of himself. This cannot be done because he cannot split his personality into two so
that one will appear before the other to acknowledge his participation in the making of the will. [Cruz v.
Villasor, G.R. No. L-32213 (1973)]

Q51: A died leaving a notarial will on a single sheet of paper with the provisions crammed together. The
probate was opposed by some of her relatives on the ground that A could not have read the will because
of her poor eyesight. The doctor who operated on her cataracts was presented as an expert witness in
court. He said that A had eyesight so bad that she can only see forms but not read them even with
prescribed glasses on. Probate court admitted the will. Was the probate court correct? Why?
A51: NO. The will should not have been admitted to probate. A could not have read the will. For all intents
and purposes of the rules on probate, A, is not unlike a blind testator, and the due execution of her will
would have required observance of the provisions of Art. 808 of the CC. The ratio of the law being to
make the provisions thereof known to him, so that he may be able to object if they are not in accordance
with his wishes. That the aim of the law is to insure that the dispositions of the will are properly
communicated to and understood by the handicapped testator, thus making them truly reflective of his
desire, is evidenced by the requirement that the will should be read to the latter, not only once but twice,
by two different persons, and that the witnesses have to act within the range of his (the testator’s) other
senses. [Garcia v. Vasquez, G.R. No. L-26615 (1970)]

Q52: A died leaving a notarial will. It consists of 2 pages: the first one contained the entire testamentary
disposition; the second page contains the attestation clause. The attestation clause did not state the
number of pages the will has. Should the will be probated?
A52: YES. Formal requisites are liberally construed. Unsubstantial departures may be ignored as long as
possibility of bad faith and fraud are obviated. While perfection in the drafting of a will may be desirable,
unsubstantial departure from the usual forms should be ignored, especially where the authenticity of the
will is not assailed. [Taboada v. Rosal, G.R. No. L-36033 (1982)]

The object of the solemnities surrounding the execution of wills is to close the door against bad faith and
fraud, to avoid substitution of wills and testaments and to guaranty their truth and authenticity. Therefore
the laws on this subject should be interpreted in such a way as to attain these primordal ends. But, on the
other hand, also one must not lose sight of the fact that it is not the object of the law to restrain and curtail
the exercise of the right to make a will. So when an interpretation already given assures such ends, any
other interpretation whatsoever, that adds nothing but demands more requisites entirely unnecessary,
useless and frustative of the testator's last will, must be disregarded. [Abangan v. Abangan, G.R. No. L-
13431 (1919)]

Q53: A executed a holographic will. It contained 2 substantial provisions: (1) that A is bequeathing her
entire estate to B, and (2) that her shares in ABC Corporation shall be given to C. During her lifetime, she
altered the first provision, erasing B’s name and substituting it with C’s name. She failed to authenticate
the same. The will was submitted to probate. Decide on the validity of the will and its provisions.
A53: The will invalidated insofar as the first provision is concerned. Art. 814 of the CC provides that an
insertion, cancellation, erasure or alteration in a holographic will must be authenticated by the testator.
However, the same does not affect the validity of the will itself, only the disposition. 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 words erased, corrected or
interlined. [Kalaw v. Relova, G.R. No. L-40207 (1984)] Here, the only disposition under the first provision
is invalidated.

Q54: A executed a holographic will. It was lost during World War II. On probate, the proponents of the will
sought to prove its dispositions by oral evidence. Should the will be probated?
A54: NO. Holographic wills may not be proven by oral testimony. Unlike holographic wills, ordinary wills
may be proved by testimonial evidence when lost or destroyed. The difference lies in the nature of the
wills. In the first, the only guarantee of authenticity is the handwriting itself; in the second, the testimony of
the subscribing or instrumental witnesses (and of the notary, now). The loss of the holographic will entails
the loss of the only medium of proof; if the ordinary will is lost, the subscribing witnesses are available to
authenticate. [Gan v. Yap, G.R. No. L-12190 (1958)]

Q55: How may a will be revoked?

A55: No will shall be revoked except in the following cases:
1. By implication of law; or
2. By some will, codicil, or other writing executed as provided in case of wills; or
3. By burning, tearing, cancelling, or obliterating the will with the intention of revoking it, by the
testator himself, or by some other person in his presence, and by his express direction. If
burned, torn, cancelled, or obliterated by some other person, without the express direction of
the testator, the will may still be established, and the estate distributed in accordance
therewith, if its contents, and due execution, and the fact of its unauthorized destruction,
cancellation, or obliteration are established according to the Rules of Court. (Art. 830, CC)

Q56: Differentiate between disinheritance and preterition.

A56: Disinheritance is a testamentary disposition depriving any compulsory heir of his share in the legitime
for a cause authorized by law (Art. 918, CC), while preterition is the omission in the testator's will of the
forced heirs or anyone of them, either because they are not mentioned therein, or, though mentioned,
they are neither instituted as heirs nor are expressly disinherited. (Art. 854, CC)

The effect of preterition annuls the institution of heir in toto, unless in the will there are testamentary
dispositions in the form of devises or legacies, while the effect of illegal disinheritance annuls the
institution of heirs, but the nullity is limited to that portion of the estate of which the disinherited heirs have
been illegally deprived. (Nuguid vs. Nuguid, G.R. No. L-23445, June 23, 1966)

OBLIGATIONS AND CONTRACTS

Q57: A, B, C and D are solidary debtors of X for P40,000. X released D from the payment of his share of
P10,000. When the obligation became due and demandable, C turned out to be insolvent. Should the share
of insolvent debtor C be divided only between the two other remaining debtors, A and B?
A57: NO, as the release of the share of one debtor would then increase the burden of the other debtors
w/o their consent. When one of the solidary debtors cannot, because of his insolvency, reimburse his
share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to
the debt of each (Art. 1217, CC). Additionally, D was released only from his share of P10,000, not from
the solidary tie that binds him to A, B and C.

Q58: Gary is a tobacco trader and also a lending investor. He sold tobacco leaves to Homer for delivery
w/in a month, although the period for delivery was not guaranteed. Despite Gary’s effort to deliver on
time, transportation problems and government red tape hindered his efforts and he could only deliver
after 30 days. Homer refused to accept the late delivery and to pay on the ground that the agreed term had
not been complied w/. As a lending investor, Gary granted a P1,000,000 loan to Isaac to be paid w/in two
years from execution of the contract. As security for the loan, Isaac promised to deliver to Gary his Toyota
Innova w/in seven (7) days, but Isaac failed to do so. Gary was thus compelled to demand payment for the
loan before the end of the agreed two-year term. Was Homer justified in refusing to accept the tobacco
leaves?
A58: Homer was not justified in refusing to accept the tobacco leaves. He consented to the terms and
conditions of sale and mustabide by it. Obligation arising from contract have the force of law between the
contracting parties.
It is clear under the facts that the period of delivery of the tobacco leaves was not guaranteed. Gary
anticipated other factors w/c may prevent him from making the delivery w/in a month. True enough
transportation problems and government red tape did. Such slight delay was, thus, excusable. Obligations
arising from contract have the force of law between the contracting parties and should be complied w/ in
good faith.

Q59: A, B, C, D and E made themselves solidarily indebted to X for the amount of P50,000. When X
demanded payment from A, the latter refused to pay on the following grounds:

(a) B is only 16 years old

(b) C has already been condoned by X
(c) D is insolvent
(d) E was given by X an extension of 6 months w/o the consent of the other four co-debtors.

State the effect of each of the above defenses put up by A on his obligation to pay X, if such defenses are
found to be true.
A59:
(a) A may avail the minority of B as a defense, but only for B’s share of P10,000. A solidary debtor
may avail himself of any defense w/c personally belongs to a solidary co-debtor, but only as to
the share of that co- debtors.
(b) A may avail of the condonation by X of C’s share of P10,000. A solidary debtor may, in actions
filed by the creditor, avail himself of all defenses w/c are derived from the nature of the obligation
and of those w/c are personal to him or pertain to his own share. With respect to those w/c
personally belongs to others, he may avail himself thereof only as regards that part of the debt for
w/c the latter are responsible. [Art.1222]
(c) A may not interpose the defense of insolvency of D as a defense. Applying the principle of mutual
guaranty among solidary debtors, A guaranteed the payment of D’s share and of all the other co-
debtors. Hence, A cannot avail of the defense of D’s insolvency.
(d) The extension of six (6) months given by X to E may be availed of by A as a partial defense but
only for the share of E. There is no novation of the obligation but only an act of liberality granted
to E alone.

Q60: Four foreign medical students rented the apartment of Thelma for a period of one year. After one
semester, three of them returned to their home country and fourth transferred to a boarding house.
Thelma discovered that they left unpaid telephone bills in the total amount of P80,000. The lease contract
provided that the lessees shall pay for the telephone services in the lease premises. Thelma demanded
that the fourth student pay the entire amount of the unpaid telephone bills, but the latter is willing to pay
only one fourth of it. Who is correct? Why?
A60: The fourth student is correct. His liability is only joint, hence, pro rata. There is solidary liability only
when the obligation expressly so states or when the law or nature of the obligation requires solidarity (Art.
1207). The contract of lease in the problem does not, I any way, stipulate solidarity.

Q61: Joey, Joy and Jojo are solidary debtors under a loan obligation of P30,000 w/c has fallen due. The
creditor has, however, condoned Jojo’s entire share in the debt. Since Joy has become insolvent, the
creditor makes a demand on Joey to pay the debt. How much, if any, may Joey be compelled to pay?
A61: Joey can be compelled to pay only the remaining balance of P200,000, in view of Jojo’s remission of
Jojo’s share by the creditor. (Art. 1219)

Q62: Enumerate the difference/s between civil obligation and natural obligation?
A62:
1. Civil obligation is based on positive law while natural obligation is based is based on equity and
natural law.
2. Civil obligation gives the creditor the legal right to compel by bringing action in court. In a natural
obligation, there is no legal right to compel performance but if the debtor voluntarily pays, he
cannot recover what he has paid.

Q63: When is demand not necessary in order that delay may exist?
A63: (1) When demand would be useless, as when the obligor has rendered it beyond his power to
perform; OR (2) When from the nature and the circumstances if the obligation it appears that the
designation of the time when the thing is to be delivered or the service is to be rendered was a controlling
motive for the establishment of the contract (time is of the essence); (3) When the law or the obligation
expressly so declare. [Art. 1169 par. 2]

Q64: What are the requisites of accion pauliana?

A64: (1)
There is a credit in favor of the plaintiff prior to the alienation by the debtor
(2)The debtor has performed a subsequent contract conveying patrimonial benefit to third person/s.
(3)The debtor’s acts are fraudulent to the prejudice of the creditor.
(4) The creditor has no other legal remedy to satisfy his claim.
(5)The third person who received the property is an accomplice to the fraud. [Cheng v. CA, G.R. No.
144169 (2001)]

Q65: Distinguish rescission from termination?

A65: Rescission may be effected by both parties by mutual agreement, or unilaterally by one of them
declaring a rescission without the consent of the other if a legally sufficient ground exists or if a decree of
rescission is applied for before the courts. It requires mutual restitution to restore the parties to their
original situation. Termination on the other hand may be effected by mutual agreement or by one party
exercising one of its remedies as a consequence of the default of the other. The parties are notrestored
to their original situation; prior to termination, parties are obliged to comply with their contractual obligations.
[Pryce Corp v. PAGCOR, G.R. No. 157480 (2005)]

Q66: A promised to pay 1000 pesos to B subject to the condition that A can secure a contract of sale with C.
A was able to fulfill this condition. B then demanded payment, but A refused. A argues that the condition
depended on his sole will as the debtor, and as such, the obligation is void. Is A correct?
A66: No. While article 1182 does state that if a condition depends upon the sole will of the debtor, the
obligation is void, it is not applicable in this case. The condition depends not only upon the will of A, the
debtor, but also the will of C, a third person to A and B’s contract. This is a mixed condition, and since it
does not depend solely on the debtor’s will, the obligation is valid.

Q67: A made a contract with B subject to a couple of conditions. B would pay A 1000 pesos if UP’s men
basketball team wins in the current season and B would pay another A another 1000 pesos if A successfully
kills B’s archenemy, D. Is A’s contract with B completely void?
A67: No. Under article 1183, those obligations subject to impossible conditions shall annul the obligations
that depend on them but if the obligation is divisible, the one without an impossible condition shall remain
valid. In this case, the obligation is divisible. The first half of the obligation is subject to a condition which
is not impossible (winning the current season) and is such valid. The second half involves a condition
contrary to good customs and public policy and as such the obligation is void.

Q68: A promised to give B a horse upon the condition that C would paint his car black. A, not wanting to
lose his horse, destroys C’s only car. Is A’s obligation to B extinguished?
A68: No. According to Article 1186, the obligation shall be deemed fulfilled when the obligor voluntarily
prevents its fulfillment. This is the case in this scenario and as such A’s obligation to B is now
demandable.

Q69: A promised to give B his car, his horse or his pocket watch. Due to A’s negligence in leaving his electric
fan running while he was out for work, a fire consumed A’s house, killing his horse and burning his house.
Can B be indemnified for the value of the lost objects?
A69: No. According to article 1204, the creditor shall have a right to indemnity when all the things that are
alternatively the object of obligation have been lost or have become impossible. Since the pocket watch
was not consumed by the fire, not all things are lost, and B is unable to be indemnified with the value of
the horse or the car.

Q70: A promised to give his car to B, but upon the former’s election, he could give his horse instead. A
abused his horse because it kept making noises, disturbing him from his sleep, and as a result, the horse
died. Is A liable to B for the horse?
A70: No. In a facultative obligation under article 1206, loss of the thing intended as a substitute does not
render the debtor liable.

Q71: A promised to pay B 1000 pesos whenever his financial situation allows him to do so. A contends that
the condition depends solely on his will and as such the obligation is void. Can B still collect from A?
A71: Yes. According to article 1180, when the debtor binds himself to pay when his means permit him to
do so, this obligation shall be deemed to be one with a period. It is not subject to a potestative condition
and is such perfectly valid.

Q72.1: Michelle owned a Toyota Vios which she used for ride-sharing. When Uber left the Philippines, she
decided to sell the said car. She offered it to her very good friend, Naomi for P250,000, with P50,000
downpayment to be paid up front, and the remaining P200,000 to be paid in monthly installments for 24
months. Naomi asked Michelle if she could take a month to decide whether or not to buy the car, to which
Michelle replied in the affirmative. Michelle told Naomi to just inform her by email should she decide to
buy the car. Five days later, Naomi was able to get P50,000 which she deposited to Michelle. The following
day, Naomi found out that Michelle sold the car to Mimi for P300,000. Naomi is now claiming that Michelle
violated their option contract.

Was there an option contract between Naomi and Michelle?

A72.1: There was no option contract violated by Michelle. According to Art. 1479. In this case, there was no
separate consideration for the option granted to Naomi. Even assuming that the P50,000 given by Naomi
to Michelle was given as the downpayment for the car, the same is not considered option money distinct
from the price of the item. The option granted to Naomi was therefore not founded upon a consideration.
As such, the general rule in Art. 1324 should apply, and the offer of Michelle could be withdrawn at any
time before acceptance.

Q72.2: Can Naomi’s tender of the downpayment be considered an acceptance of Michelle’s offer?
A72.2: No. In Malbarosa v. CA [G.R. No. 125761 (2003)] the Court ruled that when the offeror prescribes a
form by which the acceptance is to be made, an acceptance not made in such a manner is not effective.
In this case, Michelle said that the acceptance must be made by email. Naomi’s tender of the
downpayment cannot therefore be deemed an acceptance of Michelle’s offer.

Q73: Rich, the daughter of one of the wealthiest couples in the country, fell in love with Lito, the son of
their driver. Rich’s parents consented to their marriage on the condition that their marriage be under the
regime of a complete separation of property. Rich bregudgingly agreed. After they got married, Rich would
sell properties for a very cheap price to her husband Lito every three years, when Lito had enough. Are
these sales valid?
A73: Yes. The case falls under the exception in Art. 1490 of the CC which renders void any sale between
spouses. It provides that such sales are valid when a separation of property was agreed upon in the
marriage settlements.

Q74: Caleb, a 15-year-old, really wanted a Nintendo Switch. He signed up for an account in an online
trading site and changed the year of his birthday so as to make it appear that he was already 18 years old—
the age requirement to be able to avail of the site’s services. He found a seller, and thereafter bought a
Nintendo Switch, transferring the payment via bank deposit, and having the device shipped to his house.
When his mother found out about his purchase, she got mad and told him to return it. Caleb contacted the
seller and told him that he was a minor and that their contract was voidable. Is Caleb correct?
A74: No. In Mercado v. Espiritu [G.R. No. L-11872 (1917)], the court held that minors who enter into
contracts through active misrepresentation are in estoppel and cannot raise their minority to avoid the
contract.

Q75. The local news had been studded with headlines about the Mitsubishi Montero’s issues of sudden
unintended acceleration. Despite this, Raul still decided to purchase a unit for himself. A week after getting
his Montero, Raul was driving home from work and saw a dog crossing the street. Instead of slowing down
by pressing the brakes, the car sped up. Raul was able to swerve, but missed the dog only by a few inches.
Due to this trauma, he went back to Mitsubishi and asked to avoid their contract of sale, stating that he
was mistaken in thinking that the Montero he bought was a good and safe car. Is Raul entitled to avoid the
contract on the ground of mistake of fact?
A75: No. According to Art. 1333, there is no mistake if the party alleging it knew the doubt, contingency or
risk affecting the object of the contract. In this case, Raul knew of the risk affecting the Monteros released
around the time he purchased his. He could therefore not be said to have entered the contract upon a
mistake of fact that vitiated his consent.

Q76. Jose took out a loan with AsiaBank, with an interest of 12% per annum. The contract of loan included
an escalation clause that provided that the bank has the authority to increase the interest without notice
to Jose. Is such a stipulation valid?
A76: No. This stipulation violates the mutuality of contracts. According to Article 1308, the contract must
bind both contracting parties; its validity or compliance cannot be left to the will of one of them. Moreover,
in Philippine Savings Bank v. Sps. Castillo [G.R. No. 193178 (2011)], the Court held that any change to the
contract must likewise be mutually agreed upon; otherwise, it produces no binding effect.

Q77: Marlene, a motion picture actress, sued Hollywood Far East Productions for the balance allegedly due
to her for the services she rendered based on an oral contract to act for motion pictures produced by the
company. The lower court ordered the complaint dismissed because the claim was not evidenced by a
written document, either public or private. Is the lower court correct?
A77: No. In general, contracts are valid and binding from their perfection regardless of form, whether they
be oral or written [Art. 1356]. Once the essential requisites of a contract – namely (1) consent (2) proper
subject matter, and (3) consideration or causa [Article 1318] – exist, the contract is generally valid and
obligatory, regardless of the form, oral or written, in which they are couched.

Article 1356 provides two exceptions to this rule, wherein the form becomes indispensable:
1. Contracts for which the law itself requires that they be in some particular form in order to make
them valid and enforceable (the so-called solemn contracts) [Art. 1356, par. 2]
2. Contracts that the law requires to be proved by some writing (memorandum) of its terms, as in
those covered by the old Statute of Frauds [Article 1403(2)]

The contract for compensation for services sued upon by Marlene does not come under either exception.
It is true that it may fall under Article 1358, when the law requires a contract to be in some form for
convenience. But nowhere does it provide that the absence of written form in this case will make the
agreement invalid or unenforceable. On the contrary, Article 1357 clearly indicates that contracts covered
by Article 1358 are binding and enforceable by action or suit despite the absence of writing. [Dauden-
Hernaez v. Delos Angeles, G.R. No. L- 27010 (1969)]

Q78: What are the exceptions to the rule that contracts shall be obligatory in whatever form they may
have entered into, provided all the essential requisites for their validity are present?
A78: A certain form may be prescribed by law for any of the following purposes: (1) for validity [Art. 1356],
(2) enforceability [Arts. 1356 and 1403 (2)], or (3) greater efficacy of the contract [Arts. 1357 and 1358]. When
the form required is for validity, its non-observance renders the contract void and of no effect. When the
required form is for enforceability, non-compliance therewith will not permit, upon the objection of a party,
the contract, although otherwise valid, to be proved or enforced by action. Formalities intended for greater
efficacy or convenience or to bind third persons, if not done, would not adversely affect the validity or
enforceability of the contract between the contracting parties themselves. [Cenido v. Apacionado, G.R. No.
132474, November 19, 1999]. Article 1358 of the CC which requires the embodiment of certain contracts in
a public instrument, is only for convenience, and registration of the instrument only adversely affects third
parties [Fule v. CA, G.R. No. 112212 (1998)]

Q79: What are the contracts or agreements covered by the Statute of Frauds?
A79: Under Art. 1403, the following are covered by the Statute of Frauds, and hence, are unenforceable
by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the
party charged, or by his agent:
1. An agreement that by its terms is not to be performed within a year from the making thereof;
2. A special promise to answer for the debt, default or miscarriage of another
3. An agreement made in consideration of marriage, other than a mutual promise to marry;
 4. An agreement for the sale of goods, chattels or things in action, at a price not lower that 500
Pesos, unless the buyer accepts and receives part of such goods and chattels, or the evidences, or
some of them, of such things in action, or pay at the time some part of the entry is made by the
auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold,
terms of sale, price, names of the purchasers and person on whose account the sale is made, it
is a sufficient memorandum
5. An agreement for the leasing for a longer period than one year, or for the sale of real property
or of an interest therein;
6. A representation to the credit of a third person [Art. 1403, CC]

Q80: What is the reformation of an instrument and when is it proper?

A80: Reformation is a remedy in equity, whereby a written instrument is made or construed so as to
express or conform to the real intention of the parties, where some error or mistake has been committed.
It is predicated on the equitable maxim that equity treats as done that which ought to be done. The
rationale of the doctrine is that it would be unjust and unequitable to allow the enforcement of a written
instrument which does not reflect or disclose the real meeting of the minds of the parties [Rosello-Bentir v.
Leanda, G.R. No. 128991 (2000]. In granting reformation, the remedy in equity is not making a new contract
for the parties, but establishing and perpetuating the real contract between the parties which, under the
technical rules of law, could not be enforced but for such reformation [Multi-Ventures Capital and
Management Corporation v. Stalwart Management Corporation, G.R. No. 157439 (2007)].

In order that an action for reformation of instrument may prosper, the following requisites must concur: (1)
there must have been a meeting of the minds of the parties to the contract; (2) the instrument does not
express the true intention of the parties; and (3) the failure of the instrument to express the true intention
of the parties is due to mistake, fraud, inequitable conduct or accident [Art. 1359, CC].

Q81: What are the kinds of estoppel?

A81: There are three kinds of estoppel: (1) estoppel in pais; (2) estoppel by deed; and (3) estoppel by
laches. Estoppel in pais occurs if by a person’s conduct, representations, admissions or silence, he causes
another to believe certain facts to exist and such other rightfully relies and acts on such belief, as a
consequence of which he would be prejudiced if the former is permitted to deny the existence of such
facts. Estoppel by deed, on the other hand, occurs when a party to a deed and his privies are precluded
from denying any material fact stated in the said deed as against the other party and his privies. Estoppel
by laches is considered an equitable estoppel wherein a person who failed or neglected to assert a right
for an unreasonable and unexplained length of time is presumed to have abandoned or otherwise
declined to assert such right and cannot later on seek to enforce the same, to the prejudice of the other
party, who has no notice or knowledge that the former would assert such rights and whose condition has
so changed that the latter cannot, without injury or prejudice, be restored to his former state. [Co Chien v.
Sta. Lucia Realty & Development, Inc., G.R. No. 162090 (2007)]

Q82: What is estoppel by laches?

A82: Laches is the 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. The doctrine of laches is
based upon grounds of public policy which requires, for the peace of society, the discouragement of stale
claims and, unlike the statute of limitations, is not a mere question of time but is principally a question of
the inequity or unfairness of permitting a right or claim to be enforced or asserted [Tijam v. Sibonghanoy,
23 SCRA 29, April 15, 1968]. The elements of laches are: (1) conduct on the part of the defendant, or of
one under whom the defendant claims, giving rise to the situation which the complaint seeks a remedy;
(2) delay in asserting the complainants rights, the complainant having had knowledge or notice of the
defendants conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or
notice on the part of the defendant that the complainant would assert the right in which the defendant
bases the suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held barred [Estate of the Late Encarnacion Vda. de Panlilio v. Dizon, G.R.
No. 148777 (2007)]

Q83: What are the defective contracts?

A83:
Rescissible contracts- contract that has caused a particular damage to one of the parties or to a third person
and
which for equitable reasons may be set aside even if valid

Voidable or annullable contracts (contrato nulo)

- Contract in which consent of one of the parties is defective either because of:
1. Want of capacity
2. Vitiated consent, by mistake, violence, intimidation, undue influence or fraud
- But which contract is valid until judicially set aside

Unenforceable contracts – contract that for some reason cannot be enforced, unless ratified in the
manner provided by law:
1. Those entered into in the name of another person by one who has been given no authority or
legal representation, or who has acted beyond his powers;
2. Those that do not comply with the statute of frauds as set forth in this number. In the following
cases an agreement hereafter made shall be unenforceable by action, unless the same, or some
note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his
agent; evidence, therefore, of the agreement cannot be received without the writing, or a
secondary evidence of its contents:
a. An agreement that by its terms is not to be performed within a year from the making thereof;
b. A special promise to answer for the debt, default, or miscarriage of another;
c. An agreement made in consideration of marriage, other than a mutual promise to marry;
d. An agreement for the sale of goods, chattels or things in action, at a price not less than
five hundred pesos, unless the buyer accept and receive part of such goods and chattels,
or the evidences, or some of them, of such things in action or pay at the time some part
of the purchase money; but when a sale is made by auction and entry is made by the
auctioneer in his sales book, at the time of the sale, of the amount and kind of property
sold, terms of sale, price, names of the purchasers and person on whose account the
sale is made, it is a sufficient memorandum;
e. An agreement for the leasing for a longer period than one year, or for the sale of real
property or of an interest therein;
f. A representation as to the credit of a third person.

3. Those where both parties are incapable of giving consent to a contract.

Void or inexistent contracts (contrato inexistente)- contract which is an absolute nullity and produces no
effect, as if it had never been executed or entered into

Q84.1: On Ross Gellar’s 16 th birthday, he sold his car to his younger sister, Monica, for php 500,000, putting
it in a private document. A year later, Monica was enforcing the sale, as only then was she able to come up
with the purchase price. Ross refused to part with his car, saying the contract is void, as he was a minor
when he executed the contract. Moreover, the contract is in a private document, hence it cannot be
enforced. Is ross correct in saying the contract is void?
A84.1: Contract is valid but unenforceable because both parties are incapable of giving consent, being
both minors. Consent of one of the parties after attaining capacity, or their parents, converts it into a
voidable contract (Art. 1407). Moreover, the document need not be notarized. For a note or memo to
satisfy the statute of frauds, it must be complete, indicating the price and mode of payment.

Q84.2: If Monica’s parents, Sps Gellar, give consent to the sale, what will happen to the status of the contract?
A84.2: The contract will be enforceable. Ratification may cure the defect if it is done by the party against
whom the contract is being enforced, or his privies, parents or guardians. Ratification by one party
converts the contract into a voidable one. The consent of Sps Gellar cures both the incapacity of Ross and
Monica since they are siblings.

Q84.3: If their contract was notarized, can Monica validly enforce the sale?
A84.3: No. The issue is not that the document was in a public or private document, but the incapacity of
both the parties to enter into a contract, which makes it unenforceable.
Q85: Rachel conveyed a parcel of land to her minor daughter Emma through the execution of a quitclaim, in
consideration of one peso and other valuable considerations. Phoebe, Rachel’s creditor, assailed the
execution, saying she conveyed it to her prejudice. Will Phoebe’s claim hold?
A85: Yes. A conveyance leaving no property for other creditors to attach is an evidence of fraud. The
consideration was fictitious and inadequate, and is equivalent to a donation in favor of her daughter.
Badges of fraud (1387):
1) consideration is fictitious or inadequate;
2) transfer was made while suit had begun or pending;
3) sale was upon credit by insolvent debtor;
4) there was large indebtedness or complete insolvency;
5) transfer consisted of all or nearly all property especially when insolvent or greatly embarrassed financially;
6) the transfer was made between father and son when other above circumstances present
7)there was failure of vendee to take exclusive possession of all property.
8) it was known to the vendee that the vendor had no properties other than that sold to him

Q86: Chandler and Joey entered into a contract of sale of a parcel of land owned by Joey, a minor. Chandler
started making payments at first but ceased. Representatives of Joey filed for specific performance. He said
the contract is voidable can he institute the action for annullment?
A86: General rule: No. Action for annulment may be instituted by all who are thereby obliged principally or
subsidiarily. Persons capable of giving consent and guilty parties who have caused the vitiation of consent
cannot allege the incapacity or want of consent of those they contracted with. This rule is sustained by the
principle that he who comes to court must come with clean hands [Art. 1397].

Q87: Distinguish between civil and natural obligations.

A87: According to Article 1423, civil obligations give a right of action to compel their performance. Natural
obligations, not being based on positive law but on equity and natural law, do not grant a right of action to
enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of
what has been delivered or rendered by reason thereof.

Q88: A borrowed P20,000 from B and orally promised to pay it within 2 months. When A tried to pay B on
the 4th month, B demanded payment of interest of 12% per annum because of A’s delay. A paid her debt
and the interest claimed by B. After reconsidering, A demanded from B the amount she had paid as
interest. B claims she has no obligation to return the interest paid by A because it was a natural obligation
which A voluntarily performed and can no longer recover. Is B correct?
A88: No, B is not correct. The payment of interest by A is not a natural obligation because in the first
place, A had no such obligation to pay the interest. For a creditor to be entitled to compensatory interest,
there must be delay. According to Article 1169, for delay to exist, demand must have been made. In this
case, there was no demand made upon the expiration of the 2-month period. Thus, A could not be
considered in delay, and is not liable to pay compensatory interest. There being no obligation to pay
interest, in accordance with Article 2154, B must return the interest mistakenly paid since he was not
entitled thereto, and delivery was made merely through mistake.

Q89: A sued B for the payment of B’s debts even though the action for such had already prescribed.
Nevertheless, B paid A money in payment of his debts. Realizing that the action had already prescribed, B
demanded the return of the money he had paid from A. Should A return the money?
A89: No, A should not return the money. According to Article 1424, when a right to sue upon a civil
obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot
recover what he has delivered or the value of the service he has rendered.

Q90: In 2000, A and B entered into an agreement wherein the former was to register a parcel of land in the
name of B under the explicit covenant to reconvey the land to C, daughter of A, upon her graduation from
college. In 2001, the land was registered in the name of B. In 2002, A died. In 2003, C graduated from
college. In 2012, C accidentally found a copy of the agreement between A and B. In 2014, C filed a case
against B for the reconveyance of the land to her. B, in her answer, averred that the action already
prescribed. How should the matter be decided?
A90: The matter should be decided in favor of C. The case at bar involves an express trust which does
not prescribe as long as they have not been repudiated by the trustee [Diaz v. Gorricho, G.R. No. L-
11229].
Q91: A and his brother B inherited from their father 2 parcels of land with exactly the same areas. For
convenience, the TCT covering both lots were placed in A’s name alone. A sold to an innocent purchaser
one parcel in its entirety without the knowledge and consent of B, and wrongfully kept for himself the
entire price paid. What right/s of action, if any, does B has/have?
A91: When, for convenience, the TCT to the two parcels of land were placed in A’s name alone, an implied
trust (a resulting trust) is created for the benefit of B with A as trustee of one-half undivided or ideal
portion of each of the two lots. Therefore, B can file an action for damages against B for having
fraudulently sold one of the two parcels which he partly held in trust for B’s benefit.

Q92: Explain the concept of trust de son tort (constructive trust).

A92: A constructive trust is a trust not created by any word or phrase, either expressly or impliedly,
evincing a direct intention to create a trust, but one that arises in order to satisfy the demands of justice. It
does not come about by agreement or intention but in main by operation of law construed against one
who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he
oughtnot, in equity and good conscience, to hold (Heirs of Lorenzo Yap vs. CA). An example of this is
Article 1456 which states that “If property is acquired through mistake or fraud, the person obtaining it is,
by force of law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes.”

SALES
Q93: DISTINGUISH BETWEEN A CONTRACT OF SALE AND A CONTRACT TO SELL.
A93: In a contract of sale, the title to the property passes to the buyer upon the delivery of the thing sold.
In a contract to sell, the ownership is, by agreement, retained by the seller and is not to pass to the
vendee until full payment of the purchase price. In the contract of sale, the buyer’s non-payment of the
price is a negative resolutory condition; in a contract to sell, the buyer’s full payment of the price is a
positive suspensive condition to the coming into effect of the agreement. In a contract of sale, the seller
has lost and cannot recover the ownership of the property unless he takes action to set aside the contract
of sale. In the second case, the title simply remains in the seller if the buyer does not comply with the
condition precedent of making payment at the time specified in the contract. [Heirs of Atienza v. Espidol,
G.R. No. 180665 (2010)]

Q94: DISTINGUISH BETWEEN A CONDITIONAL SALE AND AN ABSOLUTE SALE.

A94: A conditional sale is one where the vendor is granted the right to unilaterally rescind the contract
predicated on the fulfillment or non-fulfillment, as the case may be, of the prescribed condition. An
absolute sale is one where the title to the property is not reserved to the vendor or if the vendor is not
granted the right to rescind the contract based on the fulfillment or non- fulfillment, as the case may be, of
the prescribed condition. [Sps. Ramos v. Sps Heruela, G.R. No. 145330 (2005)]

Q95: WHAT IS AN OPTION CONTRACT?

A95: An option contract is a privilege existing in one person, for which he had paid a consideration, which
gives him the right to buy, for example, certain merchandise of certain specified property, from another
person, if he chooses, at any time within the agreed period, at a fixed price. The contract of option is a
separate and distinct contract from the contract which the parties may enter into upon the consummation
of the option. A consideration for an optional contract is just as important as the consideration for any
other kind of contract. If there was no consideration for the contract of option, then it cannot be entered
any more than any other contract where no consideration exists. A contract of option is a contract by
virtue of the terms of which the parties thereto promise and obligate themselves to enter into contract at a
future time, upon the happening of certain events, or the fulfilment of certain conditions. [Enriquez de la
Cavada v. Diaz, G.R. No. L-11668 (1918)]

Q96: IS EARNEST MONEY PART OF THE PURCHASE PRICE?

A96: Yes. Whenever earnest money is given in a contract of sale, it shall be considered as part of the
price and as proof of the perfection of the contract. [Art. 1482]

Q97: ON JANUARY 12, BEFORE BIANCA LEFT FOR CANADA, SHE SOLD TO SHARON A RELATIVELY
NEW FERRARI. ON JANUARY 25, SHARON TOOKPOSSESSION OF SAID FERRARI. ON NOVEMBER 6,
RAJA WENT
TO SHARON TO RETRIEVE THE CAR SAYING THAT SHE BOUGHT THE SAME CAR FROM BIANCA ON MARCH
9. WHO BETWEEN SHARON AND RAJA HAS ACQUIRED OWNERSHIP OF THE CAR?
A97: Sharon. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property. [Art. 1544]

Q98: FROM THE FACTS ABOVE, IF THE PROPERTY INVOLVED WAS A REGISTERED/TITLED PARCEL
OF LAND IN MANDALUYONG, AND VIOLET HAD THE SALE TO HER REGISTERED ON MARCH 10
AFTER LEARNING THAT THE LOT WAS SOLD TO SHARON, WILL THE ANSWER STILL BE THE SAME?
A98: Yes. The rule on double sales of registered land states that ownership is deemed acquired by the
person who first registers the property in his name in good faith. In this case, Violet registered it in bad
faith. In order for the second buyer to displace the first buyer the second buyer must show that she acted
in good faith (i.e., in ignorance of the first sale and of the first buyers rights) from the time of acquisition
until title is transferred to him by registration or failing registration, by delivery of possession. [Cheng v.
Genato, G.R. No. 129760 (1998)]

Q99: WHAT IS THE MACEDA LAW?

A99: The Maceda Law (R.A. 655) is applicable to sales of immovable property on installments. The
mostimportant features are:
(1) After having paid installments for at least two years, the buyer is entitled to a mandatory
grace period of one month for every year of installment payments made, to pay the unpaid
installments without interest.

If the contract is cancelled, the seller shall refund to the buyer the cash surrender value
equivalent to fifty percent (50%) of the total payments made, and after five years of installments,
an additional five percent (5%) every year but not to exceed ninety percent (90%) of the total
payments made.

(2) In case the installments paid were less than 2 years, the seller shall give the buyer a grace
period of not less than 60 days. 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 demand for rescission by notarial act. [Rillo v. CA, G.R. No. 125347
(1997)]

Q100: WHAT IS THE RECTO LAW?

A100: The Recto Law (Art. 1484) refers to sale of movables payable in installments and limiting the right
of seller, in case of default by the buyer, to one of three remedies:
(1) Exact fulfillment;
(2)Cancel the sale if two or more installments have not been paid; and
(3)Foreclose the chattel mortgage on the things sold, also in case of default of two or more
installments, with no further action against the purchaser. [PCI Leasing and Finance, Inc., v. Giraffe-X
Creative Imaging, G.R. No. 142618 (2007)]

Q101: JASMIN SOLD A PARCEL OF LAND TO PATRICK ON JANUARY 1, 2002, PAYMENT AND DELIVERY
TO BE MADE ON FEBRUARY 1, 2002. IT WAS STIPULATED THAT IF PAYMENT WERE NOT TO BE MADE
BY PATRICK ON FEBRUARY 1, 2002, THE SALE BETWEEN PARTIES WOULD AUTOMATICALLY BE
RESCINDED. PATRICK FAILED TO PAY ON THE SAID DATE, BUT OFFERED TO PAY THREE DAYS LATER,
WHICH PAYMENT JASMIN REFUSED TO ACCEPT, CLAIMING THAT THEIR CONTRACT OF SALE HAD
ALREADY BEEN RESCINDED. IS JASMIN’S CONTENTION CORRECT?
A101: No, X is not correct. In the sale of immovable property, even though it may have been stipulated, as
in this case, that upon failure to pay the price at the time agreed upon the rescission of the contract shall
of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for
rescission of the contract has been made upon him either judicially or by a notarial act. Since no demand
for rescission was made on Y, either judicially or by a notarial act, X cannot refuse to accept the payment
offered by Y three (3) days after the expiration of the period. [Art. 1592]

Q102: WHAT IS THE REMEDY OF AN APPARENT VENDOR WHEN THE INSTRUMENT IS FOUND TO BE AN
EQUITABLE MORTGAGE?
A102: Reformation of the instrument. [Art. 1605]
Q103: RAMON OWNS A UNIT IN A GREENBELT MANSIONS CONDOMINIUM. TOGETHER WITH OTHER
OWNERS OF THE SEPARATE UNITSIN THE CONDOMINIUM, HE ISDEEMED A CO-OWNER OF THE
STUDENT LOUNGE WHICH IS A COMMON AREA. HE WANTS TO SELL HIS UNIT TO TRISH, AN AMERICAN
CITIZEN. IS THIS ALLOWED UNDER RA 4726 OR THE CONDOMINIUM ACT?
A103: No. 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. [Sec. 5, RA 4726]

Q104: IS THE CONDOMINIUM CORPORATION, BY ITSELF, ALLOWED TO SELL, EXCHANGE, LEASE OR

DISPOSE OF THE COMMON AREAS HELD BY IT?
A104: No. A condominium corporation shall not, during its existence, sell, exchange, lease or otherwise
dispose of the common areas owned or held by it in the condominium project unless authorized by the
affirmative vote of ALL the stockholders or members. [Sec. 16, RA 4726]

Q105: NOT EVERY PURCHASER OF A CONDOMINIUM UNIT IS A SHAREHOLDER OF A CONDOMINIUM

CORPORATION. TRUE OR FALSE?
A105: True. The Condominium Act leaves to the Master Deed the determination of when the shareholding
will be transferred to the buyer of the unit. But ownership of a unit is an indispensable requisite to being a
shareholder in the corporation. [Sunset View Condominium Corporation v. Campos, G.R. No. L-52361
(1981)]

Q106: IN THE DELIVERY OF A THING SOLD, WHAT ARE THE OPTIONS OF A BUYER IF THE QUANTITY
OF THE MOVABLES DELIVERED IS LESS THAN EXPECTED?
A106: The option of the buyer are the following: 1. Buyer may reject all 2. Buyer may accept a. If buyer
accepts with knowledge of seller’s inability to deliver the rest – buyer pays contract rate b. If Buyer has
used or disposed of the goods delivered prior to knowing seller’s inability to deliver the rest, or if buyer
does not know of seller’s inability to deliver the rest – buyer pays fair value [Art. 1522]

Q107: ON JULY 14, 2004, TAMARA EXECUTED IN FAVOR OF CHRISTIAN A DEED OF ABSOLUTE SALE
OVER A PARCEL OF LAND COVERED BY TCT NO. 6245. IT APPEARS IN THE DEED OF SALE THAT TAMARA
RECEIVED FROM JUAN P120,000.00 AS PURCHASE PRICE. HOWEVER, TAMARA RETAINED THE
OWNER’S DUPLICATE OF SAID TITLE. THEREAFTER, CHRISTIAN, AS LESSOR, AND TAMARA, AS LESSEE,
EXECUTED A CONTRACT OF LEASE OVER THE PROPERTY FOR A PERIOD OF ONE (1) YEAR WITH A
MONTHLY RENTAL OF P5,000.00. TAMARA, AS LESSEE, WAS ALSO OBLIGATED TO PAY THE REALTY
TAXES ON THE PROPERTY DURING THE PERIOD OF LEASE. SUSEQUENTLY, TAMARA FILED A
COMPLAINT AGAINST CHRISTIAN FOR THE REFORMATION OF THE DEED OF ABSOLUTE SALE, ALLEGING
THAT THE TRANSACTION COVERED BY THE DEED WAS AN EQUITABLE MORTGAGE. IN HIS VERIFIED
ANSWER TO THE COMPLAINT, CHRISTIAN ALLEGED THAT THE PROPERTY WAS SOLD TO HIM UNDER
THE DEED OF ABSOLUTE SALE, AND INTERPOSED COUNTERCLAIMS TO RECOVER POSSESSION OF THE
PROPERTY AND TO COMPEL TAMARA TO TURN OVER TO HIM THE OWNER’S DUPLICATE OF TITLE.
RESOLVE THE CASE.
A107: The complaint of Tamara against Christian should be dismissed. The instances when a contract —
regardless of its nomenclature — may be presumed to be an equitable mortgage are enumerated in
Article 1602 of the CC. Moreover, Article 1604 states that “the provisions of article 1602 shall also apply
to a contract purporting to be an absolute sale.” For Articles 1602 and 1604 to apply, two requisites must
concur: 1) the parties entered into a contract denominated as a contract of sale; and 2) their intention was
to secure an existing debt by way of mortgage. In the given case, although Tamara retained possession of
the property as lessee after the execution of the Deed of Sale, there is no showing that the intention of the
parties was to secure an existing debt by way of mortgage. Hence, the complaint of Tamara against
Christian should be dismissed. [Heirs of Balite v. Lim, G.R. No. 152168 (2004]

Q108: ON OCTOBER 20, 1993, EDITH AND IAN ENTERED INTO A CONTRACT WHEREBY EDITH SOLD TO
IAN A PARCEL OF LAND FOR AND IN CONSIDERATION OF P10,000.00, EDITH RESERVING TO HERSELF
THE
RIGHT TO REPURCHASE THE SAME. BECAUSE THEY WERE FRIENDS, NO PERIOD WAS AGREED
UPON FOR THE REPURCHASE OF THE PROPERTY.

UNTIL WHEN MUST EDITH EXERCISE HER RIGHT OF REPURCHASE?

IF EDITH FAILS TO REDEEM THE PROPERTY WITHIN THE ALLOWABLE PERIOD, WHAT WOULD YOU
ADVISE IAN TO DO FOR HIS PROTECTION?
A108: First, Edith can exercise her right of repurchase within four (4) years from the date of the contract.
[Art. 1606]
Second, I would advise B to file an action for consolidation of title and obtain a judicial order of
consolidation which must be recorded in the Registry of Property. [Art. 1607]

AGENCY AND PARTNERSHIP

Q109: What are the elements of agency?
A109: The following are the essential elements of agency:
a) There is consent, express or implied, of the parties to establish the relationship of agency
b) The object is the execution of a juridical act in relation to a third person
c) The agent acts as a representative and not for himself; and
d) The agent acts within the scope of his authority [Rallos v. Felix Go Chan & Sons, G.R. No. L-
24332 (1978)]

Q110: Richard sold a large parcel of land in Cebu to Leo for P100 million payable in annual installments
over a period of ten years, but title will remain with Richard until the purchase price is fully paid. To enable
Leo to pay the price, Richard gave him a power-of-attorney authorizing him to subdivide the land, sell the
individual lots, and deliver the proceeds to Richard, to be applied to the purchase price. Five years later,
Richard revoked the power of attorney and took over the sale of the subdivision lots himself. Is the
revocation valid or not? Why?
A110: The revocation is not valid. The power of attorney given to the buyer is irrevocable because it is
coupled with an interest: the agency is the means of fulfilling the obligation of the buyer to pay the price of
the land. [Article 1927, CC] In other words, a bilateral contract (contract to buy and sell the land) is
dependent on the agency.

Q111: As an agent, AL was given a guarantee commission, in addition to his regular commission, after he
sold 20 units of refrigerators to a customer, HT Hotel. The customer, however, failed to pay for the units
sold. AL’s principal, DRBI, demanded from AL payment for the customer’s accountability. AL objected, on
the ground that his job was only to sell and not to collect payment for units bought by the customer.

Is AL’s objection valid? Can DRBI collect from him or not? Reason.
A112: No, AL’s objection is not valid and DRBI can collect from AL. Since AL accepted a guarantee
commission, in addition to his regular commission, he agreed to bear the risk of collection and to pay the
principal the proceeds of the sale on the same terms agreed upon with the purchaser. [Article 1907, CC]

Q112: X appoints Y as his agent to sell his products in Cebu City. Can Y appoint a sub-agent, and if he does,
what are the effects of such appointment?
A112: Yes, the agent may appoint a substitute or sub-agent if the principal has not prohibited him from
doing so, but he shall be responsible for the acts of the substitute:
a) when he was not given the power to appoint one;
b) when he was given such power, but without designating the person, and the person appointed
was notoriously incompetent or insolvent. [Article 1892, CC]

Q113: X was the owner of an unregistered parcel of land in Cabanatuan City. As she was abroad, she
advised her sister Y via overseas call to sell the land and sign a contract of sale on her behalf.
Y thus sold the land to B1 on March 31, 2001 and executed a deed of absolute sale on behalf of X. B1 paid
the purchase price.
B2, unaware of the sale of the land to B1, signified to Y his interest to buy it but asked Y for her authority from
X. Without informing X that she had sold the land to B1, Y sought X for a written authority to sell. X e-
mailed Y an authority to sell the land. Y thereafter sold the land on May 1, 2001 to B2 on monthly
installment basis for two years, the first installment to be paid at the end of May 2001.

Who between B1 and B2 has a better right over the land?

A113: B2 has a better title. This is not a case of double sale, since the first sale was void. The law
provides that when a sale of a piece of land or any interest therein is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall be void. [Article 1874, CC] The property was sold by
Y to B1 without any written authority from the owner X. Hence, the sale to B1 was void.

Q114: Explain the doctrine of delectus personarum.

A114: Delectus personarum literally means ‘choice of the person’. It is because of this delectus personarum that
the law gives such wide authority to one partner, to bind another by contract or otherwise. Partnership is a
relation in which delectus personae is an important element. It is based on trust and confidence between the
partners. Hence, no one may be introduced into the partnership without the unanimous consent of the
other partners. This element of delectus personae, however, is true only in the case of a general partner,
but not as regards a limited partner. [Article 1866, CC]

Q115: A, B, and C were partners, the first one being an industrial partner. During the first year of
operation, the firm made a profit of P3 million. During the second year, a loss of P1.5 million was
sustained. Thus, the net profit for the two years of operation was only P1.5 million. In the articles of
partnership, it was stipulated that A, the industrial partner, would get 1/3 of the profits, but would not
participate in the losses. Is the stipulation valid?
A115: Yes, the stipulation is valid. Even the law itself exempts the industrial partner from losses. In the
absence of stipulation, the share of each partner in the profits and losses shall be in proportion to what
they may have contributed, but the industrial partner shall not be liable for the losses. [Article 1797, CC]

Q116: Will the dissolution of the partnership discharge a partner from liability?
A116: No. The dissolution of partnership does not itself discharge the existing liability of any partner. A
partner is discharged from any existing liability upon dissolution of the partnership by an agreement to
that effect between himself, the partnership creditor, and the person or partnership continuing the business,
and such agreement may be inferred from the course of dealing between the creditor having knowledge of
the dissolution and the person or the partnership continuing the business.
The individual property of a deceased partner shall be liable for all obligations of the partnership incurred
while he was a partner, but subject to prior payment of his separate debts. [Article 1835, CC]

Q117: What is the doctrine of apparent authority?

A117: One who clothes another with apparent authority as his agent and holds him out to the public as
such cannot be permitted to deny the authority of such person to act as his agent to the prejudice of third
persons dealing with such person in good faith and in honest belief that he is what he appears to be.
[Cuison v. CA, G.R. No. 88539 (1993)]

Q118: When may an act of an agent be binding upon the principal even if he acted beyond the scope of his
authority?
A118: An agent’s act even if done

CREDIT TRANSACTIONS
Q119: IN A COMMODATUM, WHAT ARE THE RULES ON THE RIGHT OF THE BAILOR TO DEMAND THE
RETURN OF THE THING LOANED?
A119: The general rule is that a bailor cannot demand the return of the thing loaned until (a) after the
expiration of the period stipulated, or (b) after the accomplishment of the use for which the commodatum
has been constituted [Art. 1946]. However, the bailor may demand the return of the thing if (a) he has
urgent need of the
thing or its temporary use [Art. 1946], (b) if the commodatum is a precarium [Art. 1947], or (c) if the bailee
commits any acts of ingratitude under Article 765 [Art. 1948].

Q120: CAN A BAILEE MAKE USE OF THE FRUITS OF THE THING LOANED IN A COMMODATUM?
A120: Yes, provided that the parties have stipulated that the bailee may make use of the fruits. The
general rule is thata bailee in commodatum is entitled only to the use of the thing loaned butnot to its
fruits [Art. 1935]. However, a stipulation that the bailee may make use of the fruits of the thing loaned is
considered valid [Art. 1940].

Q121: HOW MUST PAYMENT BE MADE IN A MUTUUM?

A121: If the object of the mutuum is money, payment must be made in the currency stipulated if it is
possible to deliver such currency. Otherwise, it is payable in the currency which is legal tender in the
Philippines [Art. 1249]. And in case of extraordinary inflation or deflation, the basis of payment shall be
the value of the currency at the time of the creation of the obligation. [Art. 1250]. If the object of the
mutuum is a fungible thing other than money, the borrower must pay the lender another thing of the same
kind, quality, and quantity. If it is impossible to do so, the borrower shall pay its value at the time of the
perfection of the loan [Art. 1955].

Q122: WHAT ARE THE RULES FOR AWARD OF INTEREST IN THE CONCEPT OF ACTUAL AND
COMPENSATORY DAMAGES?
A122: (1) When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan
or forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Art. 1169 of the CC.

(2) When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the
demand can be established with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made judicially or
extrajudicially [Art. 1169], but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.

(3) When the judgment of the court awarding a sum of money becomes final and executory, the rate of
legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum
from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit. [Nacar
v. Gallery Frames, G.R. No. 18987 (2013), modifying Eastern Shipping Lines v. CA, G.R. No. 97412 (1994), in
light of BSP-MB Circular No. 799]

Q123: WHAT IS THE NATURE OF BANK DEPOSITS?

A123: Fixed, savings, and current deposits of money in banks and similar institutions shall be governed by
the provisions concerning simple loan. [Art. 1980] Bank deposits are in the nature of irregular deposits;
they are really loans because they earn interest. The relationship then between a depositor and a bank is
one of creditor and debtor. [Serrano v. Central Bank of the Phil., G.R. No. L-30511, February 14, 1980]
The general rule is that a bank can compensate or set off the deposit in its hands for the payment of the
indebtedness to it on the part of the depositor. [Gullas v. PNB, G.R. No. L-43191 (1935)]

Q124: WHAT IS THE NATURE OF A CONTRACT FOR THE RENT OF A SAFETY DEPOSIT BOX WITH A BANK?
A124: It is a special kind of deposit. It cannot be characterized as an ordinary contract of lease because
the full and absolute possession and control of the safety deposit box was not given to the renters. The
guard key of the box remained with the bank; without this key, the renters could not open the box. On the
other hand, the bank could not likewise open the box without the renter's key. [CA Agro-Industrial
Development Corp. v. CA, G.R. No. 90027 (1993)]
Q125: DISTINGUISH THE RIGHT OF A DEPOSITARY UNDER THE CIVIL CODE AND THAT OF A
WAREHOUSEMAN UNDER THE WAREHOUSE RECEIPTS LAW (ACT NO. 2137) AS REGARDS THE
COMMINGLING OF GOODS.
A125: Under Art. 1976 of the CC, as a general rule, a depositary may commingle grain or other articles of
the same kind and quality, unless there is a stipulation to the contrary. As for a warehouseman, under
Sec. 22 of the Warehouse Receipts Law, a warehouseman shall keep the goods so far separate from
goods of other depositors and from other goods of the same depositor for which a separate receipt has
been issued, as to permit at all times the identification and redelivery of the goods deposited. The
exception, found in Sec. 23, is, if authorized by agreement or by custom, the warehouseman may mingle
fungible goods with other goods of the same kind and grade.

Q126: WHAT ARE THE REQUISITES OF PLEDGE?

A126: (1) Constituted to secure a principal obligation; (2) pledgor must be the absolute owner; (3) pledgor
must have free disposal of the thing pledged; (4) when the principal obligations becomes due, the thing
pledged may be alienated to satisfy payment of such obligation; (5) the subject matter of the contract
must be a movable property; and (6) the thing pledged must be placed in the possession of the pledgee.

Q127: WHAT ARE THE QUALIFICATIONS OF A GUARANTOR?

A127: One who is obliged to furnish a guarantor should present a person who possesses (1) integrity (2)
capacity to bind himself (3) sufficient property to answer for the obligation which he guarantees. [Art. 2056]

Q128: WHAT IS THE BENEFIT OF EXCUSSION AND HOW IS IT EXERCISED?

A128: Under the benefit of excussion, the guarantor cannot be compelled to pay the creditor unless the latter
has:
(1) exhausted all of the property of the debtor; and (2) resorted to all the legal remedies against the
debtor. [Art. 2058]

In order that the guarantor may make use of the benefit of excussion, he must: (a) set it up against the
creditor upon the latter’s demand for payment from him; and (b) point out to the creditor available property
of the debtor within the Philippine territory and sufficient to cover the amount of the debt. [Art. 2060]

Q129: MAY THE GUARANTOR BE REPLACED AT THE INSTANCE OF THE CREDITOR?

A129: Yes. The creditor may demand another who has all the qualifications in Art. 2056 if the guarantor (1)
has been convicted in first instance of a crime involving dishonesty (2) should become insolvent.
Exception: creditor has required and stipulated that a specified person should be the guarantor. [Art. 2057]

Q130: WHAT IS THE FORM OF A CONTRACT OF GUARANTY?

A130: A contract of guaranty falls under the Statute of Frauds under Art. 1403 (2)(b) of the New CC as it is
a special promise to answer for the debt, default, or miscarriage of another. As such, it is unenforceable
unless it is in writing and subscribed by the part charged or his agent.

Q131: WHEN IS THE MANAGEMENT EXTINGUISHED IN A CASE OF NEGOTIORUM GESTIO?

A131: It is extinguished:
(1) When the owner repudiates or puts an end thereto
(2) When the gestor withdraws from the management, subject to Art. 2144
(3) By the death, civil interdiction, insanity or insolvency of the owner or the gestor. [Art. 2153]

Q132: IN CASES OF SOLUTIO INDEBITI, WHAT IS THE LIABILITY OF A PAYEE IN BAD FAITH?
A132: One is liable for:
(1) For legal interest if a sum of money is involved, or
(2) For the fruits received or which should have been received if the thing produces fruits, and
(3) For any loss or impairment of the thing for any cause, and
(4) For damages to the person who delivered the thing, until it is recovered. [Art. 2159]

Q133: WHAT IS AN ANTICHRESIS? WHAT ARE THE OBLIGATIONS OF AN ANTICHRETIC CREDITOR?

A133: By the contract of antichresis the creditor acquires the right to receive the fruits of an immovable of
his debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the
principal of his credit [Art. 2132]. Under a contract of antichresis, the creditor is obliged, unless there is a
stipulation to the contrary, to pay the taxes and charges upon the estate [Art. 2135]. He is also bound to bear
the expenses necessary for the preservation and repair of the property [Article 2135].

Q134: DISCUSS THE RELIANCE ON SECURITY TEST IN RELATION TO A DRAGNET CLAUSE IN A REAL
ESTATE MORTGAGE CONTRACT.
A134: When parties conform to a dragnet clause, it is reasonable to conclude that they also agree to an
implied understanding that subsequent loans need not be secured by other securities, as the subsequent
loans will be secured by the first mortgage. However, there is no prohibition against contractually
requiring other securities for the subsequent loans. Hence, when the mortgagor takes another loan for
which another security was given, it cannot be inferred that such loan was made in reliance solely on the
original security with the dragnet clause, but rather, on the new security given [Prudential Bank v. Alviar,
G.R. No. 150197 (2005)].

Q135: WHEN IS A CONTRACT PRESUMED TO BE THAT OF AN EQUITABLE MORTGAGE?

A135: A contract is presumed to be an equitable mortgage when (1) When the price of a sale with right to
repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3)
When upon or after the expiration of the right to repurchase another instrument extending the period of
redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the
purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; or (6) In any other
case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure
the payment of a debt or the performance of any other obligation. [Art. 1602].

Q136: C BOUGHT CERTAIN SHARES OF STOCK FROM PF CORP. THE SHARES OF STOCK WERE
DELIVERED TO CUSTODIAN BANKS WHO HELD SUCH ON C’S BEHALF. WHEN PF CORP. WAS PLACED
UNDER RECEIVERSHIP BY THE SEC, THE RECEIVER WITHDREW THE SHARES FROM THE CUSTODIAN
BANKS AND WERE SOLD WITHOUT HIS KNOWLEDGE AND WITHOUT AUTHORITY FROM THE SEC. THE
PROCEEDS WERE COMMINGLED WITH PF CORP.’S OTHER ASSETS. UPON LEARNING OF THIS, HE FILED
A CLAIM FOR PAYMENT OF THE VALUE OF THE STOCKS IN THE RECEIVERSHIP PROCEEDINGS. A 15%
RATE OF RECOVERY WAS APPROVED FOR PF CORP.’S CREDITORS AND INVESTORS. C CLAIMS THAT HE
IS ENTITLED TO THE ENTIRE MONETARY VALUE OF THE SHARES OF STOCK, ARGUING THAT HE IS A
PREFERRED CREDITOR UNDER ART. 2241 (2) OF THE CIVIL CODE SINCE HIS CLAIM FOR THE MONETARY
VALUE OF THE SHARES AROSE FROM THE UNAUTHORIZED SALE OF HIS STOCKS. IS C CORRECT?
EXPLAIN.
A136: No. Under Art. 2241 (2), claims arising from misappropriation, breach of trust, or malfeasance by
public officials committed in the performance of their duties, on the movables, money or securities
obtained by them, are preferred with reference to specific movable property of the debtor. While C’s
shares were specific movable property, the money raised from them after their sale is a generic thing. C’s
claim is for the payment of the monetary value of the shares, thus it does not fall under Art. 2241(2).
At most, C is deemed an ordinary creditor whose credit, along with other ordinary credits, shall be paid
pro rata [Art. 2251(2)]. [Cordova v. Reyes Daway Lim Bernardo Lindo Rosales Law Offices, G.R. No.
146555 (2007)].

Q137: WHAT IS THE DIFFERENCE BETWEEN MORTGAGE CREDITS AND UNPAID VENDOR’S LIENS WITH
RESPECT TO PREFERRED CREDITS WITH REFERENCE TO THE DEBTOR’S SPECIFIC IMMOVABLE
PROPERTY AND REAL RIGHTS?
A137: While Art. 2242 specifically requires mortgage credits to be recorded in the Registry of Property in
order to be given preference, no such requirement is made with respect to the vendor's lien for the unpaid
price of real property sold. The law does not make any distinction between a registered and unregistered
vendor's lien. Any lien of that kind enjoys the preferred credit status. [De Barretto v. Villanueva, G.R. No.
L-14938 (1961)]

Q138: EXPLAIN THE ORDER OF PREFERENCE AND CONCURRENCE OF CREDITS PROVIDED IN THE CIVIL
CODE.
A138: The CC establishes a two-tier order of preference among the enumerated special preferred credits:
taxes come first, and all other claims come after. Only taxes, duties, and fees due on the movable or
immovable
properties enjoy preference among the special preferred credits in Arts. 2241 and 2242. All other claims in the said
articles are not preferred over any other, as there is only a concurrence of credits among them.

TORTS AND DAMAGES

Q139: Explain the concept of negotiorum gestio.
A139: Whoever voluntarily takes charge of the agency or management of the business or property of
another, without any power from the latter, is obliged to continue the same until the termination of the
affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to
do so. [Art. 2144, CC]

Q140: When is negotiorum gestio inapplicable? [Art. 2144, CC]

A140:
(1) When the property or business is not neglected or abandoned – law on unauthorized contracts applies
(2)If in fact the manager has been tacitly authorized by the owner – law on agency applies

Q141: What are the requisites for quasi-delict?

A141: (1) There must be an act or omission;
(2)Such act or omission causeds damage to another;
(3)The act or omission is caused by fault or negligence (culpa aquiliana)
(4) There is no pre-existing contractual relation between the parties.

Note: The existence of a contract between the parties does not necessarily bar the commission of a tort by one
against the other, and the consequent recovery of damages therefor.

“The act that breaks the contract may also be a tort.” [Air France. Vs. Carrascoso, G.R. No. L-21438 (1966)]

Q142: What are the instances of vicarious liability?

A142:
Imputed to On behalf of
Father, or mother if father is dead or Minor children who live in their company
incapacitated
Guardians Minors or incapacitated persons who are under their
authority and live in their company
Owners and managers of an establishment or Employees, in the service of the branches in which they
enterprise are
employed or on occasion of their functions
Employers, even if not engaged in any Employees and household helpers acting within the
business scope
or industry of their assigned tasks
State Special agents
Note: But not to an official to whom the task done
properly pertains
Note: Special agent – one who receives a definite/fixed
order or commission, foreign to the exercise of the
duties of his office if he is a special official [Meritt vs.
Government]
Teachers and heads of establishments of arts Pupils and students or apprentices, so long as they
and trades remain
in their custody

The responsibility of the persons who may be held vicariously liable shall cease when they prove that they
observed all the diligence of a good father of a family to prevent damage. [Art. 2180, CC]

Under Article 2180 of the New CC, employers are liable for the damages caused by their employees
acting within the scope of their assigned tasks. Once negligence on the part of the employee is
established, a presumption instantly arises that the employer was remiss in the selection and/or
supervision of the negligent employee. To avoid liability for the quasi-delict committed by its employee, it
is incumbent upon the employer to rebut this
presumption by presenting adequate and convincing proof that it exercised the care and diligence of a
good father of a family in the selection and supervision of its employees. [R Transport v. Yu, G.R. No.
174161 (2015)]

The basis of the master's liability in civil law is not respondent superior but rather the relationship of
paterfamilias. The theory is that ultimately the negligence of the servant, if known to the master and
susceptible of timely correction by him, reflects his own negligence if he fails to correct it in order to
prevent injury or damage. [Caedo v. Yu Khe Thai, G.R. No. L-20392 (1968)]

Q143: What is the presumption of negligence in motor vehicle mishaps?

A143: The owner is solidarily liable with his driver in motor vehicle
mishaps if:
(1) he was in the vehicle, and
(2)he could have prevented the misfortune by the use of due diligence.
If the owner was not in the motor vehicle, Art. 2180 is applicable. [Art. 2184, CC]

Disputably presumed that the driver was negligent if he had been found guilty of reckless driving or
violating traffic regulations at least twice within the next preceding two months. [Art. 2184, CC]

The law does not require that a person must possess a certain measure of skill or proficiency either in the
mechanics of driving or in the observance of traffic rules before he may own a motor vehicle. The test of
his negligence, within the meaning of Article 2184, is his omission to do that which the evidence of his
own senses tells him he should do in order to avoid the accident. And as far as perception is concerned,
absent a minimum level imposed by law, a maneuver that appears to be fraught with danger to one
passenger may appear to be entirely safe and commonplace to another. [Caedo v. Yu Khe Thai, supra]

The test of imputed negligence under Article 2184 of the CC is, to a greatdegree, necessarily subjective. Car
owners are not held to a uniform and inflexible standard of diligence as are professional drivers. What
would be a negligent omission under aforesaid Article on the part of a car owner who is in the prime of
age and knows how to handle a motor vehicle is not necessarily so on the part, say, of an old and infirm
person who is not similarly equipped. [Caedo v. Yu Khe Thai, supra]

Q144: What are the elements of the defense of res ipsa loquitur?
A144:
(1) The accident is of a kind which ordinarily does not occur in the absence of someone’s negligence;
(2) It is cause by an instrumentality within the exclusive control of the defendant/s; and
(3) The possibility of contributing conduct, which would make the plaintiff responsible, is eliminated.

Q145: When are moral damages recoverable?

A145:
(1) Criminal offense resulting in physical injuries;
(2)Quasi-delicts causing physical injuries;
(3)Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7)Libel, slander, or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309 (disrespect to the dead, wrongful interference with a funeral);
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35;
(11) Willful injury to property if the court finds such damage justly due; and
(12) Breaches of contract where the defendant acted fraudulently or in bad faith.

Q146: What are the requisites for the award of moral damages?
A146:
(1) There must be an injury, whether physical, mental, or psychological, clearly sustained by the claimant;
(2)There must be a culpable act or omission;
(3)Such act or omission is the proximate cause of the injury; and
(4) The damage is predicated on the cases cited in Article 2219.

Note: On award of moral damages to corporations—

General Rule: A corporation may not be awarded moral damages, it being a juridical person. Thus, it
cannot suffer from wounded feelings, serious anxiety, mental anguish, or moral shock. [Manila Electric
Co. v. T.E.A.M. Corporation, G.R. No. 131723 (2007)]

Exception: Libel, slander or any other form of defamation; but there must be evidence to prove the same
[Filipinas Broadcasting Network, Inc. v. Agro Medical and Educational Center, G.R. No. 141994 (2005)]

Q147: When are attorney’s fees recoverable?

A147: Under Art. 2208, in the absence of stipulation, attorney’s fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly
valid, just, and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers, and skilled workers;
(8) In actions for indemnity under workmen’s compensation and employer’s liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of
litigation should be recovered.

Q148: Who may be sued under the

State? A148:
(1) A special agent
(2) Instrumentalities discharging proprietary functions
(3) Those that consent to be sued

Q149: Distinguish between injury, damage, and damages.

Q149:
(1) Injury is an illegal invasion of a legal right.
(2) Damage is the loss, hurt, or harm, resulting from the injury.
(3) Damages is the recompense or compensation awarded.

Q150: Distinguish culpa contractual from culpa aquiliana.

A150: According to Cangco v. Manila Railroad [G.R. No. L-12191 (1918)], they differ in that:
CULPA AQUILIANA CULPA CONTRACTUAL
Basis of liability Fault or negligence or omission (first of the EE, Breach of contract
which
is then attributed to the ER)
Vinculum juris Fault or negligence of omission itself Contract
Nature of liability Vicarious liability Principal – direct and immediate
or obligation of
ER
How rebutted ER needs to show that he exercised the Common carrier exercised
diligence of a good father of a family in the extraordinary diligence to prevent
selection and breach
supervision of EEs
Burden of proof Plaintiff should prove that the damages were Plaintiff should only prove that the
caused contract exists and that the
by the negligent conduct of the defendant
 defendant has breached it – it is
not
necessary for the plaintiff to prove
negligence
Statutory basis 2176; 2180 (CC) 1170; 1172; 1174 (CC)

Q151: After ten years as a couple, A proposed to B, who was ecstatic and immediately accepted the
proposal. After two years of planning during which all the necessary arrangements and corresponding
payments were made by B’s family, A disappeared and never showed himself to B or her family again. B
sued a under Article 21 for breach of promise to marry. In his defense, A alleged that breach of promise to
marry is not an actionable wrong, and he cannot be held liable for damages under Article 21. May A be
held liable for damages?
A151: Yes. Mere breach of promise to marry is not an actionable wrong, but when it is done contrary to
morals, good customs, and public policy and with intent to injure, such breach is actionable. The case of
Wassmer v. Velez, supra is applicable. In that case, the bride had already set a wedding and went through
all necessary preparations and publicity, only to walk out when the marriage was about to be solemnized.
It was palpably contrary to morals, good customs, and public policy. In this case, the same set of
circumstances was present.

Q152: Ben was driving along Commonwealth Avenue when he received a startling text message from his
wife, causing him to hit the brakes abruptly. Manong, who was then driving a passenger jeep carrying Jane,
crashed into Ben’s car from behind. Jane suffered an abrasion on her face as a result of the crash and sued
Domeng (the owner of the jeep) for damages. Domeng alleged in his defense that since Ben’s negligence in
abruptly braking was the proximate cause of the accident, Domeng cannot be held liable for damages to
jane. Is Domeng correct?
A152: No. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions
involving breach of contract. The doctrine is a device for imputing liability to a person where there is no
relation between the parties; but where there is a pre-existing contractual relation between them, it is the
parties themselves that create the obligation. The action can be prosecuted merely by proving the
existence of the contract and the fact that the obligor, in this case the common carrier, failed to
transporthis passenger safely to his destination. [Calalas v. CA, G.R. No. 122039 (2000)].

Q153: Mark was a bagger at SM Hypermart. One busy Sunday morning, the security guard reported to the
manager that he saw Mark placing a Kitkat bar in his bag without paying for it. The manager immediately
went to the bagger’s station, pulled Mark by his collar and screamed, “Magnanakaw! Tanggal ka na sa
trabaho!” Upon inspection, no Kitkat bar was found in Mark’s bag. The manager whispered an apology and
said that Mark was not really fired. Mark filed a complaint for damages against the manager on the basis of
Articles 19 and 21 of the CC. The manager disclaimed liability on the ground that he acted in good faith
upon a well-founded belief in dismissing the employee and was only looking out for the interests of the
employer. Is the manager liable for damages?
A153: Yes. While the employer, represented by the manager, has a right to dismiss the employee for
misconduct, the manner of this right was exercised constituted a violation of Article 19, as such was
based on unfounded accusations of dishonesty [Globe v. CA, G.R. No. 81262 (1989)].

Q154: Valmonte was hired as a wedding coordinator. On the day of the wedding, she left the bridal suite to
run a few errands. Upon her return, she was accosted by the bride’s Aunt Carpio in front of the entire
entourage and accused of stealing the bride’s jewelry that had gone missing. Can Valmonte recover
damages from Carpio under Article 19 of the CC?
A154: Yes. To find the existence of an abuse of right under Article 19, the following elements must be
present: (1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent or
prejudicing or injuring another. By openly accusing respondent as the only person who went out of the
room before the loss of the jewelry in the presence of all the guests therein, and ordering that she be
immediately bodily searched, Carpio virtually branded Valmonte as the thief. True, Carpio had the right to
ascertain the identity of the malefactor, but to malign Valmonte without an iota of proof that she was the
one who actually stole the jewelry is an act which, by any standard or principle of law is impermissible.
Carpio had willfully caused injury to Valmonte in a manner which is contrary to morals and good customs
[Carpio v. Valmonte, supra]
LAND, TITLES, AND DEEDS
Q155: WHO MAY FILE AN APPLICATION FOR THE REGISTRATION OF TITLE TO LAND UNDER PD 1529?
A155: Sec. 14 of PD 1529 provides that the following may file an application for registration of title to land
with the proper Regional Trial Court, personally or through their authorized representatives:
(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 provision of existing
laws.
(3) Those who have acquired ownership of private lands or abandoned river beds by right of
accession or accretion under the existing laws.
(4) Those who have acquired ownership of land in any other manner provided for by law.

Where the land is owned in common, all the co-owners shall file the application jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an application for the
original registration of the land, provided, however, that should the period for redemption expire during the
pendency of the registration proceedings and ownership to the property consolidated in the vendee a
retro, the latter shall be substituted for the applicant and may continue the proceedings.

A trustee on behalf of his principal may apply for original registration of any land held in trust by him,
unless prohibited by the instrument creating the trust.

Q156: X FILED AN APPLICATION FOR REGISTRATION OF A PARCEL OF LAND IN 1980. NO ONE

CONTESTED X’S APPLICATION. X PRESENTED PROOF THAT HE HAD BEEN IN POSSESSION OF SAID LAND
IN THE CONCEPT OF AN OWNER FOR 38 YEARS. THE TRIAL COURT DISMISSED SAID APPLICATION ON
THE GROUND THAT ALTHOUGH THE LAND WAS ALREADY ALIENABLE AND DISPOSABLE AT THE TIME
OF X’S APPLICATION, SUCH WAS NOT WHEN X STARTED TO POSSESS IT. WAS THE DISMISSAL PROPER
IN THIS CASE?
A156: NO. The Court in Malabanan v. Republic [G.R. No. 179987 (2009)] opined that the land subject of
an application for registration needed to be classified as alienable and disposable at the time of
application. Thus, the trial court erred in dismissing X’s application in this case.

Q157: WHAT ARE THE REQUISITES FOR FILING A PETITION FOR REVIEW UNDER SEC. 32 OF 1529?
A157: A decree of registration may be reopened or reviewed by the proper Regional Trial Court upon the
concurrence of five essential requisites, to wit: (a) that the petitioner has a real and a dominical right; (b)
that he has been deprived thereof; (c) through fraud; (d) that the petition is filed within one year from the
issuance of the decree; and (e) that the property has not as yet been transferred to an innocent purchaser
for value. [Walstrom v. Mapa, G.R. No. L-38387 (1990)]

Q158: WHO IS CONSIDERED AS AN INNOCENT PURCHASE FOR VALUE?

A158: An innocent purchaser for value is one who buys the property of another without notice that some
other person has a right to or interest in it, and who pays a full and fair price at the time of the purchase or
before receiving any notice of another person’s claim. [Rosales v. Burgos, G.R. No. 143573 (2009)]

Q159: A’s title to a parcel of land was confirmed by the judge of CFI Pampanga in 1958. Months later, a
petition for review was filed by B in the same proceeding alleging that the same was registered in A’s name
through actual fraud, deceit, and intentional omission of facts. Also, B raised an allegation that a Simulated
Deed of Sale was executed in favor of C, who was also impleaded as a respondent in this case. Does the
cadastral court have the power to entertain B’s petition?
A159: YES. In a petition for the review of a decree filed within the one-year period on the ground of actual
fraud, the cadastral court acting as such could likewise inquire into an allegation that the lot subject of the
decree was transferred in a simulated sale intended to avoid such a review […] The adjudication of land
in a registration or cadastral case does not become final and incontrovertible until the expiration of one
year from entry of the final decree and as long as the final decree is not issued and the period of one year
within which it may be reviewed has not elapsed, the decision remains under the control and sound
discretion of the court rendering it, which court,
after hearing, may set aside the decision or decree and adjudicate the land to another party. [Cayanan v. Delos
Santos, G.R. No. L-21150 (1967)]

Q160: WHEN IS TITLE TO LAND DEEMED REGISTERED?

A160: Title to land is deemed registered at the time of its transcription in the Registry Book, not at the time of its
issuance. [Agcaoili; citing Manotok Realty v. CLT Realty, G.R. No. 123346 (2007)]]

Q161: WHEN WILL A WRIT OF POSSESSION NOT BE ISSUED?

A161: A writ of possession will not be issued in the following circumstances:
(a) When it has already been issued at the instance of the applicant or his successors, who hold
transfer certificates of title;
(b) When the persons against whom it is sought to be issued have occupied the premises after the final
decree was issued, and have not taken direct part as opponents in the registration proceedings
where said final decree was issued; and
(c) When the case is for reconstitution of title [Agcaoili]

Q162: THE COURT RULED IN FAVOR OF B IN THE LAND REGISTRATION PROCEEDINGS WHICH HE
FILED. UNFORTUNATELY, THE LAND IN QUESTION IS NOW BEING OCCUPIED BY C, D, AND E, WHO
STARTED OCCUPYING THE PREMISES AFTER THE FINAL DECREE WAS ISSUED, AND WHO HAVE
NOT TAKEN DIRECT PART AS OPPONENTS IN THE REGISTRATION PROCEEDINGS WHERE SAID
FINAL DECREE WAS ISSUED. WHAT THEREFORE IS B’S REMEDY IN THIS CASE?
A162: B may file an action for unlawful detainer or a reivindicatory action. In Bernas v. Nuevo [G.R. No. L-
58438 (1984)], the Supreme Court held that the rule is "when other persons have subsequently entered
the property, claiming the right of possession, the owner of the registered property or his successors in
interest cannot dispossess such persons by merely asking for a writ of possession. The remedy is to
resort to the courts of justice and institute a separate action for unlawful entry or detainer or for
reinvidicatory action, as the case may be.

Q163: WHAT MUST ACCOMPANY AN APPLICATION FOR ORIGINAL REGISTRATION?

A163: An application for original registration must be accompanied by:
(a) CENRO or PENRO Certification that the land subject of the application is alienable and disposable; and
(b) A copy of the original classification approved by the DENR Secretary and certified as a true copy
by the legal custodian thereof. [Republic v. Bantigue Point Development Corp., G.R. No. 162322
(2012)]

Q164: DISTINGUISH VOLUNTARY DEALINGS FROM INVOLUNTARY DEALINGS:

A164:
Voluntary Dealings Involuntary Dealings
Presentation of the owner’s duplicate certificate
Entry in the day book of ROD is sufficient notice
of title is required to notify; mere entry in the day
to all persons
book
of the Register of Deeds (ROD) is insufficient
An innocent purchaser for value of registered
land becomes the registered owner the
moment he presents and files a duly notarized Lenin v. Bass, (1952): Entry thereof in the day
and valid deed of sale and the same is entered book of the ROD is sufficient notice to all persons
in the day book of the ROD and at the same even if the owner’s duplicate certificate of title is
time he surrenders or presents the owner’s not presented to the ROD.
duplicate certificate of title covering the land
sold and pays the registration
fees.
Villasor v. Camon, R-C.A. No. 8551(1951): It is
Dir. Of Lands v. Reyes, G.R. No. L-27594 (1976):
necessary to register the deed or instrument in Entry in the day book of the ROD is sufficient notice
the entry book of the ROD and a memorandum to all persons of an adverse claim without the same
thereof shall also be made in the owner’s being annotated at the back of the certificate of title
duplicate
certificate and its original
Spouses Labayen v. Leonardo Serafica, G.R. No.
178443 (2008): At the time of the filing of the
petition for cancellation of encumbrance, the
lease contract already lost its efficacy. Thus,
there is no basis to save its annotation on
defendant’s title.
The fact that the cancellation of the lease
contract was forged is of no moment, for there
AFP Mutual Benefit Association v. Santiago, G.R.
No. 147559 (2008): Entry of the attachment in the
books is sufficient notice to all persons. Hence, the
fact that the deed of sale was already annotated is
of no moment with regard to third persons. The
preference created by the levy on attachment is not
diminished by the subsequent registration of the
deed of sale.