CIVIL LAW

I. LEGAL PERSONALITY, CAPACITY TO ACT

1. When is a child considered born for civil purposes?

As a general rule, the fetus is considered born if it is alive at the time it is completely delivered from
the mother’s womb.

However, if the fetus had an intrauterine life of less than seven (7) months, it is not deemed born if it
dies within 24 hours after its complete delivery from the maternal womb. (Art. 41, Civil Code)

2. Emma gave birth to a child who died one (1) minute immediately after its complete
delivery. Did the child acquire civil personality?

The child acquired personality, unless it had an intra-uterine life of less than seven (7) months. For
civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the
mother’s womb. However, if the fetus had an intra-uterine life of less than seven (7) months, it is not
deemed born if it dies within twenty-four (24) hours after its complete delivery from the maternal
womb. (Art. 41, Civil Code)

3. Distinguish juridical capacity from capacity to act?

Basis Juridical Capacity Capacity to Act

(Art. 37, Civil Code) (Art. 37, Civil Code)
Definition Fitness to be subject of legal Power to do acts with legal effect
relations
Acquisition Inherent Through fulfillment of specific
legal activities
Extinguishment Only through death Through death and other causes
In relation to the other Can exist without capacity to Cannot exist without juridical
act capacity
Limitation None Minority, insanity or imbecility,
state of being deaf-mute,
prodigality, and civil interdiction
(restriction) (Art. 38, Civil Code)

Age, insanity, imbecility, state of

being deaf-mute, penalty,
prodigality, family relations,
alienage, absence, insolvency,
and trusteeship, among others.
(modification/limitation) (Art.
39, Civil Code)
 II. MARITAL RELATIONSHIPS

4. What is the status of the following marriages:

(a) A marriage between a step-brother and a step-sister?

If the marriage was celebrated during the effectivity of the Civil Code but prior to the effectivity of
the Family Code, said marriage is expressly prohibited, therefore, void. However, if the marriage
was celebrated from the time the Family Code took effect, or on or after 3 August 1988, said
marriage is no longer prohibited. (Art. 80, Civil Code)

(b) A marriage between a half-brother and a half-sister?

Void for being incestuous. Marriages between brothers and sisters, whether of the full or half blood,
are incestuous and void from the beginning, whether relationship between the parties be legitimate
or illegitimate. (Art. 35, Family Code)

(c) A marriage which took place five (5) months after the issuance of a marriage license.

Void for absence of an essential requisite. A marriage license shall be valid in any part of the
Philippines for a period of 120 days from the date of issue and shall be deemed automatically
cancelled at the expiration of the said period if the contracting parties have not made use of it.
(Art. 20, Family Code)

(d) A marriage contracted by an 18-year-old illegitimate child who obtained the parental
consent only of her putative father.

Voidable for lack of parental consent. Since illegitimate children are under the exclusive parental
authority of their mother, it is the consent of the mother that is required. (Art. 176, Family Code)

(e) A second marriage celebrated on August 3, 1984, contracted by a person whose first
husband had been missing for four (4) consecutive years, without securing a judicial
declaration of presumptive death.

Valid. The requirement of securing a judicial declaration of presumptive death for purposes of
remarriage applies only to marriages celebrated during the effectivity of the Family which took
effect on August 3, 1988. Prior thereto, the applicable law is the Civil Code which does not impose
a similar requirement. (Armas vs. Calisterio, G.R. No. 136467, April 6, 2000)

(f) A marriage where one party was afflicted with a sexually transmissible disease found
to be serious and appears to be incurable during the marriage.

Valid. For affliction with a sexually transmissible disease to render a marriage voidable, it must
either be (a) existing at the time of the marriage; or (b) concealed and existing at the time of the
marriage amounting to fraud in obtaining consent. (Arts. 45 and 46, Family Code)
 (g) A marriage which took place with the presence of only three (3) persons: the
contracting parties and the solemnizing officer.

Valid. The absence of at least two (2) witnesses of legal age is a mere irregularity that shall not
affect the validity of the marriage, but the party or parties responsible for the irregularity shall be
civilly, criminally and administratively liable. (Arts. 3 and 4, Family Code)

5. What are the rules on sex determination vis-a-vis (a) sex reassignment and (b) persons
who are biologically intersex?

Sex reassignment. Considering that there is no law legally recognizing sex reassignment, the
determination of a person’s sex made at the time of his or her birth, if not attended by error, is
immutable. The sex of a person is determined at birth, visually done by the birth attendant (the
physician or midwife) by examining the genitals of the infant. (Silverio vs. Republic, G.R. No. 174689,
October 22, 2007)

Intersex. However, where the person is biologically or naturally intersex (or diagnosed with Congenital
Adrenal Hyperplasia), the determining factor in his gender classification would be what the individual,
having reached the age of majority, with good reason thinks of his/her sex. Sexual development in
cases of intersex persons makes the gender classification at birth inconclusive. It is at maturity that
the gender of such persons is fixed. (Republic vs. Cagandahan, G.R. No. 166676, September 12, 2008)

6. What are the instances when marriage license may be dispensed with?

The requirement of marriage license may be dispensed with in the following instances:

(1) Marriage in articulo mortis (at the point of death) even if the ailing party subsequently survives;
(2) If the residence of either party is so located that there is no means of transportation to enable
such party to personally appear before the local civil registrar;
(3) Marriage among Muslims or among members of the ethnic cultural communities, provided they are
solemnized in accordance with their customs, rites or practices;
(4) Marriage of a man and a woman who have lived together and exclusively with each other as
husband and wife for a continuous and unbroken period of at least five years before the marriage.
(Arts. 27, 28, 33, and 34, Family Code, Ninal vs. Bayadog, G.R. No. 133778 dated March 14, 2000)
(5) Marriages celebrated abroad and in accordance with the laws of the place of celebration which do
not require a valid marriage license (Arts. 26 and 35, Family Code)

7. Tamano married Zorayda in 2012. When they separated in fact, Tamano married Estrellita,
her childhood sweetheart. In 2018, when Zorayda found out about the second marriage of
her husband filed a complaint for the declaration of nullity of marriage between Estrellita
and Tamano for being bigamous. In opposing the complaint, Estrellita claims that only the
husband or the wife in a void marriage can file a petition for declaration of nullity of
marriage pursuant to AM No. 02-11-10-SC. Is she correct?

No. The aggrieved spouse in the prior marriage has personality to file the petition of absolute nullity of
a subsequent marriage on the ground of bigamy. AM No. 02-11-10-SC does not preclude a spouse of
a subsisting marriage to question the validity of a subsequent marriage. On the contrary, the rule refers
to the husband or wife of the subsisting marriage because the parties to the subsequent bigamous
 marriage are neither the husband or the wife under the law. (Juliano-Llave vs. Republic, G.R. No.
169766, March 30, 2011)

8. Will a person who contracted another marriage be liable for bigamy, if the first one is
contracted only through signing a marriage contract, and without a marriage ceremony?

No, as the first marriage is not a marriage at all. The mere private act of signing a marriage contract
bears no semblance to a valid marriage and thus, needs no judicial declaration of nullity. Such act
alone, without more, cannot be deemed to constitute an ostensibly valid marriage for which a person
might be held liable for bigamy unless he first secures a judicial declaration of nullity before he contracts
a subsequent marriage. (Morigo vs. People, G.R. No. 145226, February 06, 2004)

9. What are the exceptions to the rule that all marriages solemnized outside the Philippines,
in accordance with the laws in force in the country where they were solemnized, and valid
there as such, shall also be valid in the Philippines?

(1) Marriages contracted by any party below 18 years of age even with the consent of parents or
guardians (Art. 35 [1], Family Code);
(2) Bigamous or polygamous marriages not failing under Art. 41, which provides that where before the
celebration of a subsequent marriage, the prior spouse had been absent for four consecutive years
(or two years in case of disappearance where there is danger of death) and the spouse present
has a well-founded belief that the absent spouse was already dead (Art. 35 [4], Family Code);
(3) Marriages contracted through mistake of one contracting party as to the identity of the other (Art.
35 [5], Family Code);
(4) Subsequent marriages that are void under Art. 53, i.e., when there is non-compliance with the
requirement of recording in the appropriate civil registry and registries of property the judgment
of annulment or of absolute nullity of the marriage, the partition and distribution of the properties
of the spouses and the delivery of the children’s presumptive legitimes, and where either of the
former spouses marry again (Art. 35 [6], Family Code);
(5) A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, even if such incapacity
becomes manifest only after its solemnization (Art. 36, Family Code);
(6) Incestuous marriages (Art. 37, Family Code); or
(7) Void marriages by reasons of public policy. (Art. 38, Family Code)

10. Can consul-generals, consuls, or vice-consuls solemnize a marriage abroad between a

Filipino and an Alien?

No, consul-generals, consults, or vice-consuls cannot solemnize mixed marriages. Only marriages
between Filipino citizens abroad may be solemnized by a consul-general, consul or vice-consul of the
Republic of the Philippines. With this, their authority is limited to marriages of both Filipinos residing
abroad. (Art. 10, Family Code)

11. May a divorce decree obtained abroad by a Filipino married to a foreigner be recognized
as valid in the Philippines pursuant to Par. 2, Art. 26 of the Family Code?

Yes, Par. 2, Art. 26 of the Family Code still applies even if it is the Filipino spouse who obtained a
divorce decree, thus, it will still capacitate him or her to remarry. The purpose of Par. 2 of Article 26 is
 to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after
a foreign divorce decree that is effective in the country where it was rendered, is no longer married to
the Filipino spouse. Whether the Filipino spouse initiated the foreign divorce proceeding or not, a
favorable decree dissolving the marriage bond and capacitating his or her alien spouse to remarry will
have the same result: the Filipino spouse will effectively be without a husband or wife. (Republic vs.
Manalo, G.R. No. 221029, April 24, 2018)

12. Jennifer, a Filipino citizen, and Tetsushi, a Japanese citizen, were married in Quezon City.
After 19 years of marriage, the two filed a Notification of Divorce by Agreement, which the
Mayor of Osaka City received and was later recorded in Tetsushi’s family register as
certified by the Mayor. Jennifer then filed a Petition for judicial recognition of foreign
divorce and declaration of capacity to remarry. In her Petition, Jennifer submitted of their
Divorce Certificate, Tetsushi’s Family Register, the Certificate of Acceptance of the
Notification of Divorce, and and English translation of the Civil Code of Japan, among
others. The Regional Trial Court denied Jennifer’s Petition for judicial recognition of
foreign divorce and declaration of capacity to remarry and noted that the copy of the Civil
Code of Japan and its English translation submitted by Jennifer were not duly
authenticated by the Philippine Consul in Japan, the Japanese Consul of Manila, or the
Department of Foreign Affairs. Jennifer contends that because it was printed by a public
authority, the Civil Code of Japan is deemed to be an official publication under the Rules
and therefore, a self-authenticating document that need not be certified. Is Jennifer’s
contention correct?

No. Philippine courts do not take judicial notice of foreign judgments and laws. They must be proven
as fact under our rules of evidence. A divorce decree obtained abroad is deemed a foreign judgment,
hence, the indispensable need to have it pleaded and proved before its legal effects may be extended
to the Filipino spouses. Here, the English translation submitted by Jennifer is not an official publication
exempted from the requirement of authentication. (Arreza vs. Toyo, G.R. No. 213198, July 01, 2019)

13. Rhoda and Seiichi were married on April 20, 2001, in Metro Manila. They lived together for
nine (9) years in Japan and did not have any children. Rhoda alleged that Seiichi filed for
divorce and the divorce was granted. Rhoda secured a Divorce Certificate issued by the
Consul of the Japanese Consulate in the Philippines and had it authenticated by an
authentication officer of the Department of Foreign Affairs. Rhoda then tried to have the
Divorce Certificate registered with the Civil Registry of Manila but was refused by the City
Registrar since there was no court recognizing it. When she went to the Department of
Foreign Affairs to renew her passport, she was likewise told that she needed a proper court
order. She was also informed by the National Statistics Office that her divorce could only
be annotated in the Certificate of Marriage if there was a court order capacitating her to
remarry. Is a court order necessary for Rhoda to have the capacity to remarry?

Yes. Judicial recognition of a foreign divorce requires that the national law of the foreign spouse and
the divorce decree be pleaded and proved as a fact before the Regional Trial Court. The Filipino spouse
may be granted the capacity to remarry once the courts find that the foreign divorce was validly
obtained by the foreign spouse according to his or her national law, and that the foreign spouse’s
national law considers the dissolution of the marital relationship to be absolute. (Racho vs. Tanaka,
G.R. No. 199515, June 25, 2018)
14. Discuss the difference between bigamous marriage under Art. 40 and Art. 35 (4) of the
Family Code?

Distinction Art. 40 Art. 35 (4)

As to status of prior
marriage
As to property relations
As to effect to the second
marriage
prior marriage is itself void but
a party thereto did not secure
a judicial declaration of nullity
of the prior marriage before
contracting a subsequent
marriage.
property regime in a marriage
following a void marriage
the subsequent marriage is
also void because of failure
prior marriage is perfectly
valid, or at least voidable, and
a party thereto contracts
another marriage prior to its
termination,
property regime in a marriage
following a bigamous marriage
under Art. 35(4) is governed
by Art. 148.
subsequent marriage is void
for being bigamous

15. When is declaration of nullity of marriage on the ground of psychological incapacity

warranted? 1

To warrant the declaration of nullity of marriage, the psychological incapacity must be characterized
by:

(1) Gravity, i.e., it must be grave and serious such that the party would be incapable of carrying
out the ordinary duties required in a marriage;
(2) Juridical antecedence i.e., it must be rooted in the history of the party antedating the marriage,
although the overt manifestations may emerge only after the marriage; and
(3) Incurability i.e., it must be incurable, or even if it were otherwise, the cure would be beyond
the means of the party involved. (Santos vs. CA, G.R. No. 112019, January 4, 1995)

16. Ellen sought for a judicial decree of presumptive death of her husband Badong which
allowed her to validly marry her childhood sweetheart, Cardoso. Later, Badong appeared.
What is the effect of Badong’s re-appearance to Ellen’s subsequent marriage?

It will have no effect on the validity of Ellen’s subsequent marriage, unless Badong files an Affidavit of
Reappearance. The second marriage shall automatically be terminated by recording Badong’s affidavit
of reappearance, unless there is a judgment annulling the previous marriage or declaring it void ab
initio. (Arts. 41 and 42, Family Code)

1
Nota Bene: In the case of Tan-Andal v. Andal, G.R. No. 196359, penned by Justice Leonen, the Supreme Court held
that psychological incapacity is not a medical but a legal concept. It need not be a mental or personality disorder. It
need not be a permanent and incurable condition. Therefore, the testimony of psychologist or psychiatrist is not
mandatory in all cases. The totality of the evidence must show clear and convincing evidence to cause the declaration
of nullity of marriage. However, note that this decision was promulgated only last May 11, 2021, hence, is not covered
by the 2022 Bar Examinations.
17. Jeff and Kris were married in 2005 and soon after had a son. A few months after giving
birth, Kris told Jeff that she wanted to stay with her own family in Cebu. When Jeff thought
things were going well, Kris’ demands for money kept escalating, Kris changed mobile
numbers frequently, Kris never bothered to see Jeff and left the parenting of their child to
her husband. When Jeff confronted Kris if she was cohabiting with another man, Kris
showed no remorse and blamed Jeff for abandoning her to work abroad. When Jeff
considered the possibility of having his marriage declared null, he engaged clinical
psychologist Dr. Marina. Dr. Marina concluded that Kris: (1) was suffering from schizoid
personality disorder; (2) manifested maladaptive behavioral patterns; and (3) was
psychologically incapacitated to such an extent that she was “incapable of performing
essential marital obligations”. The same report also explained how Kris’ condition had its
onset in early childhood. Subsequently, Jeff filed a Petition for Declaration of Nullity of
Marriage on account of psychological incapacity. May the marriage be declared null and
void?

Yes. When the totality of evidence demonstrates psychological incapacity, a marriage may be declared
null and void pursuant to the Family Code. Here, total evidence showed that Kris is unsuited to fulfill
the essential obligations of marriage. (Calma vs. Santos-Calma, G.R. No. 242070, August 24, 2020)

18. While they were sweethearts, Teresa already noticed that Rodolfo was an introvert and
was prone to jealousy. She observed that Rodolfo appeared to have no ambition in life and
felt insecure of his siblings, who excelled in their studies and careers. Teresa and Rodolfo
still got married and had two children. Rodolfo’s attitude worsened in that he treated
Teresa as a sex slave and he once poked a gun at his own 15-year-old cousin who was
staying at their house because he suspected his cousin of being Teresa’s lover. Teresa then
filed a petition for declaration of nullity of marriage. During trial, Dr. Lopez was presented
as witness. Dr. Lopez stated that Rodolfo’s psychological disorder probably started during
his late childhood years and developed in his early adolescent years. Dr. Lopez explained
that Rodolfo’s psychological incapacity to perform his marital obligations was likely caused
by growing up with a pathogenic parental model.

May the marriage of Teresa and Rodolfo be declared null and void on the ground of
psychological incapacity?2

Yes. Psychological incapacity is a mental illness that leads to an inability to comply with or comprehend
essential marital obligations. Here, Rodolfo’s paranoid personality disorder made him distrustful and
prone to extreme jealousy and acts of depravity, incapacitating him to fully comprehend and assume

2
Nota Bene: In the case of Tan-Andal v. Andal, G.R. No. 196359, penned by Justice Leonen, the Supreme Court held
that psychological incapacity is not a medical but a legal concept. It need not be a mental or personality disorder. It
need not be a permanent and incurable condition. Therefore, the testimony of psychologist or psychiatrist is not
mandatory in all cases. The totality of the evidence must show clear and convincing evidence to cause the declaration
of nullity of marriage. However, note that this decision was promulgated only last May 11, 2021, hence, is not covered
by the 2022 Bar Examinations.
 the essential obligations of marriage. (Tani-De La Fuente vs. De La Fuente, G.R. No. 188400, March
08, 2017, J Leonen)3

19. Prudencio and Arlene were married in 2000. But after ten years of marriage, Prudencio
abandoned his wife and children. A friend then informed Arlene that Prudencio contracted
a second marriage with Jean at Pasay City. Arlene then secured a copy of Prudencio and
Jean’s marriage contract at the City Civil Registrar’s Office and thereafter filed a complaint
for bigamy. In defense, Prudencio argued that his marriage with Arlene was void because
the copy of their Marriage Contract did not bear the solemnizing officer’s signature. The
trial court ruled that the elements of bigamy were present but concluded that Prudencio
could not unilaterally declare his marriage with Arlene as void. Is Prudencio correct in
declaring his marriage void?

No. A person cannot unilaterally declare his marriage void. The law provides that a judicial declaration
of nullity is indispensable for the purposes of remarriage. (De Guzman vs. People, G.R. No. 224742,
August 07, 2019, J Leonen)

20. Alice discovered that Norberto was previously married to a certain Gina, as evidenced by
a marriage contract registered with the National Statistics Office. Alice subsequently filed
a criminal Complaint for bigamy against Norberto. On the other hand, Norberto alleged
that before finalizing their marriage plans, Norberto revealed to Alice that he had a” fake
marriage” with his college girlfriend, Gina. Despite the revelation, Alice and Norberto were
still married. Is Alice’s and Norberto’s marriage bigamous?

Yes. Persons intending to contract a second marriage must first secure a judicial declaration of nullity
of their first marriage. If they proceed with the second marriage without the judicial declaration, they
are guilty of bigamy regardless of evidence of the nullity of the first marriage. (Vitangcol vs. People,
G.R. No. 207406, January 13, 2016, J Leonen)

21. What are the actions for annulment of voidable marriages?

Persons Who May

Grounds Prescription Period Ratification
File
(Art. 45, FC) (Art. 47, FC) (Art. 45, FC)
(Art. 47, FC)
Parent/ legal
Any time before such party
guardian having
has reached the age of 21
Absence of Parental charge of the minor Free cohabitation after
Consent attaining the age of 21
Parties to the Within 5 years after
marriage attaining the age of 21

Sane spouse who Free cohabitation after

Any time before the death
Unsound mind has no knowledge the insane spouse
of either party
of the insanity regains sanity
 Persons Who May
Grounds Prescription Period Ratification
File
(Art. 45, FC) (Art. 47, FC) (Art. 45, FC)
(Art. 47, FC)
Relative guardian or
persons having
legal charge of the
insane
During lucid interval or after
Insane spouse
regaining sanity
Free cohabitation with
Within 5 years after the full knowledge of the
Fraud
discovery of fraud facts constituting the
fraud
Free cohabitation after
Within 5 years from the time
disappearance of
Force, intimidation, the force, intimidation, or
force, intimidation /
or undue influence Injured party undue influence disappeared
undue influence,
or ceased
respectively

Impotency
No ratification since
Serious and incurable Within 5 years after the
the defect is
Sexually Transmissible marriage
permanent
Disease Disease

22. When can cohabitation for at least five (5) years be a substitute to the marriage license
requirement?

1. The man and woman must have been living as husband and wife for at least five (5) years before
the marriage;
2. The parties must have no legal impediment to marry each other;
3. The fact of absence of legal impediment between the parties must be present at the time of
marriage;
4. The parties must execute an affidavit stating that they have lived together for at least five (5) years
(and are without legal impediment to marry each other); and
5. The solemnizing officer must execute a sworn statement that he had ascertained the qualifications
of the parties and that he had found no legal impediment to their marriage (Borja-Manzano vs.
Sanchez, A.M. No. MTJ–00–1329, March 08, 2001).
 23. Celerina was declared presumptively dead after her husband, Ricardo, had filed a petition
for declaration of absence or presumptive death for the purpose of remarriage with the
RTC knowing fully well that his wife is still alive. Celerina filed a petition for annulment of
judgment on the grounds of extrinsic fraud and lack of jurisdiction. The RTC dismissed
Celerina’s petition for annulment of judgment for being a wrong remedy. According to the
RTC, the proper remedy was to file a sworn statement before the civil registry, declaring
her reappearance in accordance with Art. 42 of the Family Code. Is the RTC correct?

No. The provision on reappearance in the Family Code as a remedy to effect the termination of the
subsequent marriage does not preclude the spouse who was declared presumptively dead from availing
other remedies existing in law. The Supreme Court had, in fact, recognized that a subsequent marriage
may also be terminated by filing an action in court to prove the reappearance of the absentee and
obtain a declaration of dissolution or termination of the subsequent marriage. (Santos vs. Santos, G.R.
No. 187061, October 08, 2014, J Leonen)

III. PROPERTY (CONCEPT OF PROPERTY, OWNERSHIP, CO-OWNERSHIP, RIGHT OF

ACCESSION, EASEMENT, NUISANCE)

24. What is ownership and what are the rights included therein?

An independent right of exclusive enjoyment and control of the thing for the purpose of deriving
therefrom all advantages required by the reasonable needs of the owner and the promotion of the
general welfare but subject to the restructions imposed by law and the right of others (Rabuya, Civil
Law Reviewer Vol. 1, 2017, p. 350-351, citing Outline of Civil Law by Reyes and Puno Vol. II)

While the Civil Code does not define ownership, it enumerates the rights which are included therein,
to wit:

a) Right to enjoy
b) Right to dispose (jus disponendi)
c) Right to vindicate (jus vindicandi)
d) Right to exclude
e) Right to demand indemnity for damages suffered due to lawful interference by a third person to
avert an imminent danger;
f) Right to just compensation in eminent domain cases;
g) Right to construct any works or make any plantations and excavations on the surface or subsurface
of the land;
h) Right to hidden treasure found in the owner‘s property; and
i) Right to accessions.

25. What are the characteristics of co-ownership?

The following are the characteristics of co-ownership:

a. There are two or more co-owners (Art. 484, NCC);
b. There is a single object which is not materially or physically divided and over which his ideal share
of the whole, each of the co-owner exercises ownership, together with the other co-owners;
 c. There is no mutual representation by the co-owners;
d. It exists for the common enjoyment of the co-owners;
e. It has no distinct legal personality;
f. It is governed first of all by the contract of the parties; otherwise, by special legal provisions, and
in default of such provisions, by the provisions of Title III on Co-ownership.

26. Armando and Lydia are co-owners of a house and lot; however, the Certificate of Title is
only registered solely in the name of Lydia without annotation of the co-ownership. Lydia
then secured a loan secured by a mortgage on the property. Is the mortgage valid?

The mortgage is null and void insofar as the ½ share of Armando in the subject property is
concerned, but is valid only on the ½ share of Lydia. Under Article 493 of the Civil Code, a co-owner
can alienate only his pro indiviso share in the co-owned property, and not the share of his co-owners.
(Alano v. Planter’s Development Bank, G.R. No. 171628, June 13, 2011, DEL CASTILLO)

27. In industrial succession, what are the rights, liabilities and remedies available to a
landowner, builder, planter, sower, and owner of the materials?

Landowner (LO); Builder, Planter, Sower (B, P, S); Owner of the Materials (OM)
BUILDING, PLANTING, OR SOWINGON ONE’S OWN LAND WITH MATERIALS
BELONGING TO ANOTHER
If both the LO and If both the LO and If LO acted in bad If LO acted in good
the OM acted in the OM acted in bad faith and OM acted faith and OM acted
good faith faith in good faith in bad faith
(1) LO may The bad faith of one (1) LO is liable for OM loses his materials
appropriate what neutralizes the bad damages. without any right
he has built, faith of the other. (2) OM may: whatsoever and is
planted or sown, Hence, they must be a. Demand the liable to the LO for
but must pay the treated as if both of value of his damages. (Arts. 447,
value of the them acted in good materials plus 449, and 455, Civil
materials; OR damages; OR
faith. Code)
(2) LO may return the b. Demand the
materials to the return of the
OM, if it can be materials,
made without even if injury is
damage to the caused to the
materials. land, plus
damages.
 BUILDING, PLANTING, OR SOWING
WITH ONE’S OWN MATERIALS ON THE LAND BELONGING TO ANOTHER
If both the LO and If both the LO and If the LO acted in If the LO acted in
the BPS-OM acted the BPS-OM acted good faith and the bad faith and the
in good faith in bad faith BPS-OM acted in BPS-OM acted in
bad faith good faith
(1) LO may The bad faith of one (1) LO may (1) BPS-OM may:
appropriate as his neutralizes the bad appropriate as his a. Demand the
own the works, faith of the other. own the works, value of his
sowing, or Hence, they must be sowing, or materials plus
planting, but must treated as if both of planting, without damages; OR
pay the BPS-OM them acted in good need of paying b. Demand the
the necessary and indemnity, plus return of the
faith.
useful expenses, damages; OR materials,
and in proper (2) LO may demand even if injury
cases, expenses the demolition of is caused to
for pure luxury; OR whatever has been the land, plus
(2) LO may oblige the built, planted, or damages.
BP to pay the price sown even if injury (Arts. 448-
of the land, if the is caused to the 454, Civil
value of the land is land, plus Code)
not considerably damages; OR
more than that of (3) LO may compel the
the building or BP to pay the price
trees; and the S, of the land, even if
the proper rent. the land is
considerably more
(3) LO is entitled to than that of the
remove the works, building or trees,
sowing, or planting plus damages.
when, after having
chosen to sell his (4) BPS-OM is entitled
land, the BPS-OM to reimbursement
fails to pay for the of necessary
same; expenses for the
preservation of the
(4) Pending land.
reimbursement,
the BPS-OM has
the right of
retention.
 BUILDING, PLANTING, OR SOWING
ON THE LAND OF ANOTHER WITH MATERIALS BELONGING TO A THIRD PERSON
OM acted in good faith OM acted in bad faith
(1) OM must be paid the value of the materials; (1) OM loses his materials without any right
(2) BPS is primarily liable to make such payment whatsoever and is liable for damages;
to the OM (with damages if BPS acted in bad (2) LO can claim what has been built, planted,
faith); or sown on his land without any obligation
(3) If BPS pays, he becomes the OM and the to indemnify the OM;
case would be the same as that of building, (3) BPS who acted in good faith may claim from
planting, or sowing with one’s own materials the LO a reasonable compensation for his
on the land of another (refer to the table labor;
above); (4) BPS who acted in bad faith is not entitled to
(4) LO is subsidiarily for the payment of the anything, he is instead liable for damages.
value of the materials. It will attach only (Arts. 447-454, Civil Code)
when: the BPS is insolvent; and the LO
chooses to appropriate the building,
planting, or sowing. However, if the LO pays
for the value of the materials, he becomes
the OM, who may: demand damages from
the BPS; or pay the BPS a reasonable
compensation if the latter acted in good
faith.

28. What are the requisites of accretion as a mode of acquiring property?

Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence
of the following requisites:
(1) The deposition of soil or sediment be gradual and imperceptible;
(2) It be resulted of the action of the waters of the river; and
(3) The land where accretion takes place is adjacent to the banks of rivers.

Thus, it is not enough to be a riparian owner in order to enjoy the benefits of accretion. One who
claims the right of accretion must show by preponderant evidence that he has met all the conditions
provided by law. (New Regent Sources, Inc. vs. Tanjuatco Jr., G.R. No. 168800, April 16, 2009)
29. Rody is the riparian owner of a parcel of land adjacent to the Pasig River. Unknown to
Rody who migrated as an OFW to New Zealand, an accretion developed in 1980 by force
of nature, which Dany immediately took actual possession and control as owner, but only
registered it in his name in 1991. Later, a second accretion developed in 1992 adjacent to
the first accretion registered in Dany’s name, which Dany immediately took actual
possession and control by building a rest house, but neglected to register it in his name.
Thus, his driver, Pepe, registered the second accretion in his name in 1995. Upon Rody’s
return to Manila in 2015, he discovered what transpired while he was overseas and a legal
battle ensued.

(a) Rody filed an action for Reconveyance and Cancellation of Title against Dany and Pepe
on the ground that he is the riparian owner. In his defense, Dany claimed that the
action for reconveyance has prescribed. Will Rody’s action prosper?

No. The action for reconveyance has prescribed by virtue of Dany’s registration of the Title in
1991. Alluvial property automatically belongs to the owner of the estate to which it may have been
added, but the owner of the adjoining property must register the same under the Torrens System;
otherwise, the alluvial property may be subject to acquisition by prescription by third persons.
(Heirs of Narvasa vs. Imbornal, G.R. No. 182908, August 8, 2014)

(b) Dany also filed a similar action against Pepe, on the ground that he is the riparian
owner of the First Accretion. In his defense, Pepe claimed that Dany’s action has
prescribed as 20 years have lapsed since he registered the Second Accretion in his
name. Decide.

The case filed by Dany against Pepe will prosper because Dany was able to take actual possession
and control of the Second Accretion. There is no prescription when, in an action for reconveyance,
the claimant is in actual possession of the property because this, in effect, is an action for quieting
of title. And, an action for quieting of title is imprescriptible. (PNB vs. Jumamoy, G.R. No. 169901,
August 3, 2011)

(c) Suppose Rody returned in 2000 and initiated a case in the same year. With Dany raising
the defense that the action has prescribed as he has been in actual possession and
control in the concept of an owner over the First Accretion since 1980, how would you
then decide?

If Rody had returned in 2000, I will decide in his favor. An action for reconveyance of a parcel of
land based on implied constructive trust prescribes in 10 years, the point of reference being the
date of the deed or the date of the issuance of the certificate of title of the property. (Villanueva-
Mijares vs. Court of Appeals, G.R. No. 108921, April 12, 2000)
30. What are the rights of the dominant estate owner?

1. To use the easement and exercise all rights necessary for it [ Art. 625, Civil Code].
2. The owner of the dominant estate is granted the right to use the principal easement, and all
accessory servitudes.
3. To make, at his own expense, on the servient estate, any works necessary for the use and
preservation of the servitude, but without altering it or rendering it more burdensome. [Art. 627(1),
Civil Code]
4. In a right of way, to ask for change in width of easement sufficient for the needs of the dominant
estate. [Art. 651, Civil Code]
5. The needs of the dominant property ultimately determine the width of the passage. And these
needs may vary from time to time. [Encarnacion vs. CA, G.R. No. 77628, March 11, 1991]
6. To renounce totally the easement, if he desires to be exempt from contributing to the expenses.
[Art. 628, Civil Code]

31. What are the rights of the servient estate owner?

1. To retain the ownership of the portion of the estate on which the easement is established [ Art.
630, Civil Code]
2. To use the easement, provided he shall also be obliged to pay the expenses necessary for the
preservation and use of the servitude. [Art. 628(2), Civil Code] (Exception to paying expenses:
There is an agreement to the contrary. )
3. To change the place or manner of the use of the easement, provided it be equally convenient [Art.
629(2), Civil Code]. In case the easement becomes very inconvenient for the servient estate owner,
or if it prevents him from making any important works, repairs, or improvements, the easement
MAY BE CHANGED, provided:
1. He offers another place/manner equally convenient.
2. Does not cause injury to the dominant estate owner.
3. Does not cause injury to those who have a right to use the easement, if any.

32. What are the requisites of a legal or compulsory right of way?

Legal easement of right of way is an easement which has been imposed by law and not by the parties
and it has “for its object either public use or the interest of private persons.” To be entitled to a legal
easement of right of way, the following requisites must concur:

1. The dominant estate is surrounded by other immovable and has no adequate outlet to a public
highway;
2. Payment of proper indemnity;
3. The isolation was not due to acts of the proprietor of the dominant estate; and
4. The right of way claimed is at the point least prejudicial to the servient estate, and insofar as
consistent with this rule, where the distance of the dominant estate to a public highway may be
the shortest. (Woodridge School, Inc. vs. ARB Construction Co., Inc., G.R. No. 157 285, February
16, 2007)
33. What is a nuisance?

Nuisance is any omission, establishment, business or condition of property or anything else which:

a) Injures or endangers safety of others;

b) Annoys or offends the senses;
c) Shocks, defies or disregards the decency or morality;
d) Obstructs or interferes with the free passage to any public highway or street or any body of water,
or
e) Hinders or impairs the use of the property (Art. 694, Civil Code)

IV. OBLIGATIONS

34. Distinguish culpa contractual, culpa aquiliana, and culpa criminal from each other.

Culpa Contractual Culpa Aquiliana Culpa Criminal

CHARACTER OF NEGLIGENCE
Negligence is merely incidental Negligence is independent, Negligence is independent,
to the performance of an direct, and substantive. direct, and substantive.
obligation already existing
because of a contract
RELATIONSHIP OF PARTIES
The contractual relation is pre- There may or may not be a pre- There is no pre-existing
existing. existing contractual relation. contractual relation.
SOURCE OF OBLIGATION
Contract. Quasi-delict. Law.
PROOF REQUIRED
Proof by preponderance of Proof by preponderance of Proof beyond reasonable
evidence. evidence. doubt.
DEFENSE OF A GOOD FATHER OF A FAMILY
IN THE SELECTION AND SUPERVISION OF EMPLOYEES
Not a proper or complete A proper or complete defense. Not a proper defense. The
defense, though it may employer becomes subsidiarily
mitigate damages. liable if its employee becomes
insolvent. (Jurado, Comments
and Jurisprudence on
Obligations and Contracts
[2010]; Rabuya, supra.)
35. Saludaga is a student at FEU who was accidentally shot by Rosete, one of the security
guards on duty. Saludaga filed a claim for damages against FEU on the basis of the contract
between him and FEU by virtue of their student-school relationship. FEU however, denies
liability on the grounds that the shooting was a fortuitous event which they could not have
reasonable foreseen nor avoided. Is FEU’s argument tenable?

No, FEU’s argument is untenable. An act of God cannot be invoked to protect a person who has failed
to take steps to forestall the possible adverse consequences of such a loss. In order for force majeure
to be considered, respondents must show that no negligence or misconduct was committed that may
have occasioned the loss. One’s negligence may have concurred with an act of God in producing
damage and injury to another; nonetheless, showing that the immediate or proximate cause of the
damage or injury was a fortuitous event would not exempt one from liability. When the effect is found
to be partly the result of a person’s participation—whether by active intervention, neglect or failure to
act—the whole occurrence is humanized and removed from the rules applicable to acts of God.
(Saludaga vs. Far Eastern University, G.R. No. 179337 April 30, 2008)

36. What are the remedies available to the creditors in case of breach of specific and generic
obligations?

SPECIFIC OBLIGATION GENERIC OBLIGATION

Specific performance
Rescission (action to rescind under Art. 1380,
Civil Code)
Resolution (action for cancellation under Art.
1191, Civil Code)
Damages, in both cases (Art. 1170, Civil Code)
Specific performance (delivery of any thing
belonging to the same species)
Ask that the obligation be complied with at the
debtor‘s expense
Resolution or specific performance, with
damages in either case (Art. 1191, Civil Code)

Note: May be exclusive or in addition to the above‐mentioned remedies ( Pineda, Obligations

and Contracts, 2000 ed, p. 37)

37. Effect of Breach of Both Parties:

The liability of the first infractor shall be equitably tempered by the courts; If it cannot be determined
which of the parties first violated the contract, the same shall be deemed extinguished, and each shall
bear his own damages. (Art. 1192, Civil Code).

The above rules are deemed just. The first one is fair to both parties because the second infractor also
derived or thought he would derive some advantage by his own act or neglect. The second rule is
likewise just, because it is presumed that both at about the same time tried to reap some benefit.
38. George Pay was the creditor of Palanca, to whom the latter executed a promissory note
dated January 30, 1952 in favor of the former, promising to pay him the amount of P26,900
upon the receipt of Palanca of his share of a certain estate or upon demand. On August 26,
1967 or more than 15 years after, Pay filed a petition for the payment of the promissory
note. Can Pay still claim payment for the note?

No, George Pay cannot anymore claim payment on the note. A promissory note payable “on demand”
is immediately due and demandable; action thereon prescribes within ten years consistent with the
provisions under the Civil Code and Sec. 43, Act No. 90. The obligation being due and demandable, it
would appear that the filing of the suit after fifteen years was much too late. (Pay vs. Vda. De Palanca,
G.R. No. L-29900 June 28, 1974)

39. What are the rights of the parties before the fulfillment of the condition?

1. CREDITOR- May bring the appropriate actions for the preservation of his right (Art. 1188, Civil
Code) such as:

a) Action for prohibition/restraining the alienation of the thing pending the happening of the
suspensive condition;
b) Petition for the annotation of the creditor’s right with the proper registry;
c) Action to demand security if the debtor has become insolvent;
d) Action to set aside alienations made by the debtor in fraud of creditors; or
e) Action against adverse possessors to interrupt the running of the prescriptive period.

2. DEBTOR-May recover what, during the same time, he has paid by mistake in case of a suspensive
condition. (Art. 1188, Civil Code)

40. On July 1963, Chaves delivered to Gonzales a typewriter for the latter to repair. However,
after the lapse of sometime and despite repeated demands from Chaves, Gonzales failed
to repair the typewriter. As such, Chaves demanded the return of the typewriter. When the
same was returned, the typewriter was in shambles. Chaves then brought the typewriter
to Freixas Business Machines who fixed the typewriter. The job cost Chaves a total of
P89.85, P31.10 of which was for the spare parts. Chaves now is claiming the said amount
from Gonzales. Gonzales however, denies liability on the grounds that their contract is one
for the repair of the typewriter, which does not have a period. Hence, Gonzales argues that
the proper action from Chaves would have been to go to the courts to ask them to fix the
period, instead of having the typewriter returned to him. Can Gonzales be held liable?

Yes, Gonzales can be held liable. Where Gonzales virtually admitted non-performance by returning the
typewriter he was obliged to repair in a non-working condition, with essential parts, missing, he cannot
invoke Article 1137 of the Civil Code. The time for compliance having evidently expired, and there being
a breach of contract by non-performance, it was academic for the Chaves to have first petitioned the
court to fix a period for the performance of the contract before filing his complaint in this case. The
fixing of a period would thus be a mere formality and would serve no purpose than to delay. Further,
under Article 1167 of the Civil Code, a person who is obliged to do something and fails to do it shall be
liable for the cost of executing the obligation in a proper manner. The cost of execution of the obligation
to repair a typewriter is the cost of the labor or service expended in the repair of the typewriter. In
addition, Gonzales, under Article 1170 of the Code, is liable for the cost of the missing parts because
 in his obligation to repair the typewriter he is bound to return the typewriter in the same condition it
was when he received it. (Chaves vs. Gonzales, G.R. No. 27454 April 30, 1970)

41. Ronquillo et al issued a promissory note which states that they individually and jointly
agree to pay the amount due within a period of 6 months. Is there a joint or solidary
liability on the part of the debtor?

There is solidary liability. The term “individually” has the same meaning as “collectively”, “separately”,
“distinctively”, respectively or “severally”. An agreement to be “individually liable” undoubtedly creates
a several obligation, and a “several obligation” is one by which one individual binds himself to perform
the whole obligation. (Ronquillo vs. Court of Appeals, G.R. No. L-55138 September 28, 1984)

42. Calang, a bus driver under Philtranco Service Enterprises, Inc. (Philtranco), was found
guilty beyond reasonable doubt of reckless imprudence resulting to multiple homicide,
multiple physical injuries and damage to property after he caused the death of multiple
people after hitting a Sarao Jeep while driving a Philtranco Bus in Samar. The trial court
likewise found Philtranco, being Calang’s employer, to be jointly and severally liable with
Calang. Is the finding of the Trial Court correct?

No, the finding of the Trial Court was not correct. If the source of cause of action is based on delict,
only the employee can be held liable and the nature of the liability of the employer is only subsidiary.
Since the cause of action against Calang was based on delict, here, both the RTC and the CA erred in
holding Philtranco jointly and severally liable with Calang. (Calang vs. People, G.R. No. 190696 August
3, 2010)

43. Adworld filed a claim against Transworld when the billboard of the latter collapsed,
resulting likewise to a damage to Adworld’s own billboard. Transworld however, denies
liability on the grounds that the collapse of their billboard was due toas due to
extraordinarily strong winds that occurred instantly and unexpectedly. They further claim
that if anyone was to be held liable, it should be Ruks Consult who was the party that
constructed Transworld’s billboard. Ruks for its part, also denies liability claiming that
Transworld’s billboard already had an existing foundation and that it merely finished the
structure according to the terms and conditions of its contract with Transworld. Can
Transworld and/or Ruks be held liable?

Yes, both parties can be held liable. Under Article 2194 of the Civil Code, joint tortfeasors are solidarily
liable for the resulting damage. In other words, joint tortfeasors are each liable as principals, to the
same extent and in the same manner as if they had performed the wrongful act themselves.” Here,
Both Transworld and Ruks were fully aware that the foundation for the former’s billboard was weak;
yet, neither of them took any positive step to reinforce the same. They merely relied on each other’s
word that repairs would be done to such foundation, but none was done at all. Clearly, the foregoing
circumstances show that both Transworld and Ruks are guilty of negligence in the construction of the
former’s billboard, and perforce, should be held liable for its collapse and the resulting damage to
Adworld’s billboard structure (Ruks Konsult and Construction vs. Adworld Sign and Advertising
Corporation, G.R. No. 204866 January 21, 2015)
44. On January 8, 2012, Sps. Lam and Kodak Philippines, Ltd. Executed a Letter Agreement for
the sale of three (3) units of the Kodak Minilab System 22XL (Minilab) in the amount of
₱1,796,000 per unit, with the following terms: “ (1) Said Minilab Equipment packages will
avail a total of 19% multiple order discount based on prevailing equipment price provided
said equipment packages will be purchased not later than June 30, 2012; (2) 19% Multiple
Order Discount shall be applied in the form of merchandise and delivered in advance
immediately after signing of the contract; (3) No down payment; (4) Minilab Equipment
Package shall be payable in 48 monthly installments at ₱35,000 inclusive of 24% interest
rate for the first 12 months; the balance shall be re-amortized for the remaining 36 months
and the prevailing interest shall be applied.” Is the obligation divisible or indivisible?

It is indivisible. An obligation is indivisible does not admit of division, or even though it does, neither
the nature of the contract nor the intention of the parties permits it to be fulfilled by parts. The
indivisibility here refers to the prestation and not to the object thereof. In this case, based on the Letter
Agreement, the intention of the parties is for there to be a single transaction covering all three (3) units
of Minilab. Kodak’s obligation was to deliver all products purchased under a “package,” and, in turn,
Sps. Lam’s obligation was to pay for the total purchase price, payable in installments. The intention of
the parties to bind themselves to an indivisible obligation can be further discerned through their direct
acts in relation to the package deal. There was only one agreement covering all three (3) units of
Minilab and their accessories. Furthermore, the 19% multiple order discount as contained in the Letter
Agreement was applied to all three acquired units. The “no downpayment” term contained in the Letter
Agreement was also applicable to all units. Lastly, the Letter Agreement clearly referred to the object
of the contract as “Minilab Equipment Package.” (Sps. Lam vs. Kodak Philippines, Ltd., G.R. No. 167615,
January 11, 2016)

45. Dan Lim entered into an agreement with Arco Pulp where the former agreed to deliver
scrap papers worth P7,220,968.31 to the latter and the latter to either pay Lim the value
of the raw materials or deliver to him the finished product of equivalent value. Arco Pulp
initially issued a check to Lim worth P1,487,766.68. However, such check was dishonored.
On the same day, Arco Pulp entered into a memorandum of agreement with one Eric Sy
where Arco Pulp bound itself to deliver the finished products to Sy, and Lim would supply
the raw materials. Lim now went against Arco Pulp for the amount of P7,220,968.31. Arco
Pulp however, argues that the memorandum of agreement novated their obligation to Lim,
thus they cannot be held liable for the 7 million. Was there novation?

No, there was no novation. Novation extinguishes an obligation between two parties when there is a
substitution of objects or debtors or when there is subrogation of the creditor. It occurs only when the
new contract declares so “in unequivocal terms” or that “the old and the new obligations be on every
point incompatible with each other.” Further, the consent of the creditor must also be secured for the
novation to be valid: Novation must be expressly consented to. (Arco Pulp and Paper Co., Inc. vs. Lim,
G.R. No. 206806, June 25, 2014)

46. What is subrogation?

It is the transfer of all the rights of the creditor to a third person, who substitutes him in all his rights
(Jurado, Comments and Jurisprudence on Obligations and Contracts, 2010, p349) .
47. Two forms of subrogation

1. Conventional – It takes place by the agreement of and requires the consent of the original parties
(the debtor and original creditor) and of the third person (the new creditor) ( Art. 1301, Civil Code);
2. Legal – It takes place by operation of law and is not to be presumed outside of the following
cases:
a. When a creditor pays another creditor who is preferred, even if the payment is without the
debtor‘s knowledge;
b. When a third person interested in the fulfillment of the obligation pays the obligation, even if
such payment is without the knowledge of the debtor without prejudice to the effects of
confusion as to the latter‘s share;
c. When a third person, not interested in the obligation, pays the obligation but only if such
payment is with the consent of the debtor, whether express or implied ( Arts. 1300 and 1302,
Civil Code).

48. Distinguish Subrogation from Assignment

DISTINCTION SUBROGATION ASSIGNMENT

Consent The debtor‘s consent is necessary Not required
Nature Extinguishes an obligation and Refers to the same right which
gives rise to a new one passes from one person to
another.
Effect of nullity of old Nullity of an old obligation may be The nullity of an obligation is not
obligation cured by subrogation, such that remedied by the assignment of the
the new obligation will be perfectly creditor‘s right to another.
valid. (Ledonio vs. Capitol
Development Corp., G.R. No.
149040, July 4, 2007)

49. Does a manifestation of a desire to answer for the debt of another amount to novation by
substitution of the debtor so as to release the original debtor from his obligation?

No. To constitute novation by substitution of debtor, the former debtor must be expressly released
from the obligation and the third person or new debtor must assume the former’s place in the
contractual relations. Moreover, the fact that the creditor accepts payments from a third person, who
has assumed the obligation, will result merely in the addition of debtors and not novation. At its core,
novation is never presumed, and the animus novandi, whether totally or partially, must appear by
express agreement of the parties, or by their acts that are too clear and unequivocal to be mistaken.
(Odiamar vs. Valencia, G.R. No. 213582, June 28, 2016)

50. On April 11, 1961, Confesor executed a second promissory not expressly acknowledging a
loan which has already prescribed and promising to pay the same on or before June 15,
1961. Can Confesor be held liable for the second promissory note executed in
consideration a previous promissory note, the enforcement of which had been barred by
prescription?

Yes, Confesor can be held liable. In Villaroel vs. Estrada, the court held that when a debt is already
barred by prescription, it cannot be enforced by the creditor. But a new contract recognizing and
 assuming the prescribed debt would be valid and enforceable. Thus, "where, therefore, a party
acknowledges the correctness of a debt and promises to pay it after the same has prescribed and with
full knowledge of the prescription he thereby waives the benefit of prescription." Furthermore, by
issuing the second promissory note, said respondent thereby effectively and expressly renounced and
waived his right to the prescription of the action covering the first promissory note. (DBP vs. Adil, G.R.
No. L-48889, May 11, 1988)

V. CONTRACTS (IN GENERAL, LOANS AND MORTGAGES, INTEREST)

51. What are the requisites for mistake of fact to result in vitiation consent?

1. The error must be substantial regarding:

a. The object of the contract ( error in re):
i. When the thing constitutes the object of the contract is confused with another thing
(Mistake as to Identity of the thing – error in corpore)
ii. Mistake as to the substance of the thing (error in substantia)
iii. Mistake regarding the quantity of the thing (error in quantitate); if mistake refers only to
accidental or secondary qualities, the contract is not rendered voidable ( error in qualitate)
b. The conditions which principally moved or induced one of the parties
c. Identity or qualifications (error in personae), but only if such was the principal cause of the
contract.
d. The error must be excusable (not caused by negligence).
2. The error must be a mistake of fact, and not of law. (Jurado, Comments and Jurisprudence on
Obligations and Contracts, 2010 ed., pp. 430-432)
3. A simple mistake of account, however, shall only give rise to its correction. (Art. 1331, Civil Code)
4. An error so patent and obvious that nobody could have made it, or one which could have been
avoided by ordinary prudence, cannot be invoked by the one who made it in order to annul his
contract. (Alcasid vs. CA, G.R. No. 104751, October 7, 1994)

52. What is the effect of fraud by third persons on the validity of a contract?

Misrepresentation by a third person does not vitiate consent, unless such misrepresentation has
created substantial mistake and the same is mutual. (Art. 1342, Civil Code) Misrepresentation
made in good faith is not fraudulent but may constitute error (Art. 1343, Civil Code)

53. Discuss the rules on the validity or enforceability of electronic documents.

Electronic documents shall have the legal effect, validity or enforceability as any other document or
legal writing (Sec. 7, R.A. 8792, Electronic Commerce Act).

If the law requires that a document be in writing, that requirement is met by an electronic document
if the said electronic document maintains its integrity and reliability and can be authenticated so as to
be usable for subsequent reference, in that -
 1. The electronic document has remained complete and unaltered, apart from the addition of any
endorsement and any authorized change, or any change which arises in the normal course of
communication, storage and display; and
2. The electronic document is reliable in the light of the purpose for which it was generated and in
the light of all relevant circumstances ( Sec. 7[a], RA 8792).

If the law requires it to be in the original form, the requirement is met by an electronic document if:

1. There exists a reliable assurance as to the integrity of the document from the time when it was
first generated in its final form; and
2. That document is capable of being displayed to the person to whom it is to be presented and no
provision of the law shall apply to vary any and all requirements of existing laws on formalities
required in the execution of documents for their validity Sec. 7[b], RA 8792).

54. What are real contracts?

Under Art. 1316 of the Civil Code, real contracts are contracts that are not perfected until the delivery
of the object of the obligation, as opposed to consensual contracts that are perfected by mere meeting
of the minds. Specifically, these are deposit, commodatum, and mutuum.

(1) Deposit. A deposit is constituted from the moment a person receives a thing belonging to
another, with the obligation of safely keeping it and of returning the same. If the safekeeping
of the thing delivered is not the principal purpose of the contract, there is no deposit but some
other contract. (Art. 1962, Civil Code)
(2) Commodatum. By the contract of commodatum, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a certain time and return
it. (Art. 1933, Civil Code)
(3) Mutuum. By the contract of mutuum, one of the parties delivers to another, either money or
other consumable thing, upon the condition that the same amount of the same kind and quality
shall be paid. (Art. 1933, Civil Code)

Note: In previous civil law discussions, contract of pledge is classified as a real contract. However,
contract of pledge in the Civil Code was already repealed by virtue of Personal Property Security Act
which is also referred to Security Agreement involving personal property as a collateral.

55. Distinguish from each other an option contract and a right of first refusal.

Option Contract Right of First Refusal

NATURE
A grant, for a fixed period and under specified A grant of a first priority to another in the event
conditions, of the power to decide, whether or the grantor decides to enter into a contract
not to enter into a principal contract. (usually an offer to sell, but not the sale itself).
CONSIDERATION
To be binding, the promise must be supported Need not be supported by a consideration
by a consideration distinct from the price. distinct from the price.
 TERMS
The option granted to the offeree is for a fixed While the object might be made determinate,
period and at a determined price. the exercise of the right of first refusal would be
dependent not only on the owner’s eventual
intention to enter into a binding juridical relation
with another but also on terms, including the
price, that are yet to be firmed up. (Carceller vs.
CA, G.R. No. 124791, February 10, 1999; PUP
vs. Golden Horizon Realty, G.R. No. 183612,
March 15, 2010; Tuazon vs. Del Rosario-Suarez,
G.R. No. 168325, December 8, 2010)

56. What are the distinctions among defective contracts?

Rescissible Voidable Unenforceable Void or Inexistent

DEFINITION
Those validly agreed Those which possess Those that cannot be Those which, because
upon because all the all the essential enforced in court or of certain defects,
essential dements requisites of a valid sued upon by reason generally produce no
exist and, therefore contract but one of the of defects provided by effect at all.
legally effective, but in parties is legally law until and unless
the cases established incapable of giving they are ratified
by law, the remedy of consent, or consent is according to law.
rescission is granted in vitiated by mistake,
the interest of equity. violence, intimidation,
undue influence, or
fraud.
DEFECTS
Injury or damage Vitiation of consent or Entered into in excess VOID: All requisites
either to one of the legal incapacity of one or without any prescribed by law for
contracting parties or of the contracting authority, non- contracts are present,
to third persons. parties. compliance with the but because, object, or
Statute of Frauds, or purpose is contrary to
incapacity of both law, morals, good
contracting parties. customs, public order
or public policy, or
contracts prohibited
by law or declared by
law to be void.

INEXISTENT: Lacking
absolutely either in
fact or in law one or
some of the elements
of a valid contract.
 Rescissible Voidable Unenforceable Void or Inexistent
GROUNDS
(1) Those which are (1) Those where one (1) Those entered into (1) Those whose
entered into by of the parties is in the name of cause, object or
guardians incapable of giving another person by purpose is
whenever the consent to a one who has been contrary to law,
wards whom they contract; given no authority morals, good
represent suffer (2) Those where the or legal customs, public
lesion by more consent is vitiated representation, or order or public
than ¼ of the by mistake, who has acted policy;
value of the violence, beyond his (2) Those which are
things which are intimidation, powers; absolutely
the object undue influence or (2) Those that do not simulated or
thereof; fraud. comply with the fictitious;
(2) Those agreed Statute of Frauds; (3) Those whose
upon in (1) Those where both cause or object did
representation of parties are not exist at the
absentees, if the incapable of giving time of the
latter suffer the consent to a transaction;
lesion stated in contract. (4) Those whose
the preceding object is outside
number; the commerce of
(3) Those undertaken men;
in fraud of (5) Those which
creditors when contemplate an
the latter cannot impossible service;
in any other (6) Those where the
manner collect intention of the
the claims due parties relative to
them; the principal
(4) Those which refer object of the
to things under contract cannot be
litigation if they ascertained;
have been (7) Those expressly
entered into by prohibited or
the defendant declared void by
without the law.
knowledge and
approval of the
litigants or of
competent
judicial authority;
(5) All other contracts
specially declared
by law to be
subject to
rescission.
NECESSITY OF DAMAGE
Necessary. Not necessary. Not necessary. Not necessary.
 Rescissible Voidable Unenforceable Void or Inexistent
WHO MAY ASSAIL
One of the contracting One of the contracting Any of the contracting One of the contracting
parties or third person parties (but not the parties. , including parties or third person
injured or defrauded, guilty one) or third heirs, assigns, or whose interest is
including heirs, persons whose rights successors-in-interest. directly affected,
assigns, or successors- are prejudiced with including heirs,
in-interest. respect to one of the assigns, or successors-
contracting parties, in-interest.
including heirs,
assigns, or successors-
in-interest.
HOW ASSAILED
Direct action only. Directly and Collaterally (by way of Directly or collaterally.
collaterally (by way of defense to an action
defense to an action under the contract)
under the contract).
VALIDITY
Valid until rescinded. Valid until annulled. Valid if the elements of Void from the
a contract are beginning.
complete, but still
unenforceable unless
ratified.
PRESCRIPTIVE PERIOD
Four (4) years. Four (4) years. N/A. Imprescriptible.

57. Differentiate mutuum from commodatum.

COMMODATUM MUTUUM or SIMPLE LOAN

As to the object delivery of something not delivery of money or other

consumable so that the bailee may consumable thing, upon the condition
use the same for a certain time and that the same amount of the same
return it kind and quality shall be paid

As to the movable or immovable thing, which is money or other consumable thing

subject matter ordinarily non-consumable

As to nature essentially gratuitous may be gratuitous or with a

stipulation to pay interest

As to transfer bailor retains the ownership of the ownership passes to the borrower
of ownership thing loaned
(Spouses Abella vs. Romeo , G.R. No. 195166, July 08, 2015, Leonen, J.)
58. Cruz lent Jose his car until Jose finished his Bar exams. Soon after Cruz delivered the car,
Jose brought it to Mitsubishi Cubao for maintenance check-up and incurred costs of
P8,000. Seeing the car’s peeling and faded paint, Jose also had the car repainted for
P10,000. After the bar exams, Cruz asked for the return of his car. Jose said he would
return it as soon as Cruz has reimbursed him for the car maintenance and repainting costs
of P 18,000. Is Jose's refusal to return the car justified?

No. Under Article 1944, the bailee cannot retain the thing loaned on the ground that the bailor
owes him something, even though it may be by reason of expenses. However, the bailee has the
right of retention for damages which he may suffer if the bailor who, knowing the flaws of the
thing loaned, does not advise the bailee of the same (Art. 1951, Civil Code).

59. What are the types of interest?

There are two (2) types of interest, namely, monetary interest and compensatory interest. Monetary
interest is the compensation fixed by the parties for the use or forbearance of money. On the other
hand, compensatory interest is that imposed by law or by the courts as a penalty or indemnity for
damages. In other words, the right to recover interest arises only either by virtue of a contract
(monetary interest) or as damages for the delay or failure to pay the principal loan on which the interest
is demanded (compensatory interest). (Odiamar vs. Valencia, supra.)

60. May interest be imposed even in the absence of stipulation in a contract?

Yes. Interest may be imposed even in the absence of stipulation in the contract. Art. 2210 of the Civil
Code expressly provides that “interest may, in the discretion of the court, be allowed upon damages
awarded for breach of contract.” In this relation, Art. 2209 of the same Code provides that “if the
obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity
for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed
upon, and in the absence of stipulation, the legal interest, which is six per cent per annum.” (Estores
vs. Sps. Supangan, G.R. No. 175139, April 18, 2012)

61. Is a proviso in loans with banks that interest rate would be made “to depend on the
prevailing market value” valid?

Yes. Such provision does not signify an automatic increase in interest. It simply means that the bank
may adjust the interest according to the prevailing market rate. This may result to either an increase
or a decrease in interest. (Lotto Restaurant, Corp. vs. BPI Family Savings Bank, Inc., G.R. No. 177260,
March 30, 2011)
 VI. TORTS, QUASI DELICTS

62. How should the Registered-Owner Rule and the rule on Employer’s Vicarious Liability
under Article 2180 of the Civil Code be harmonized in cases where both rules apply?

In cases where both the registered-owner rule and Article 2180 apply, the plaintiff may first prove the
employer’s ownership of the vehicle involved in a mishap by presenting the vehicle’s registration in
evidence. Thereafter, a disputable presumption that the requirements for an employer’s liability under
Article 2180 of the Civil Code have been satisfied will arise. The burden of evidence then shifts to the
defendant to show that no liability under Article 2180 has ensued. (Caravan Travel and Tours
International, Inc. vs. Abejar, G.R. No. 170631, February 10, 2016)

63. On September 8, 2011, a vehicle collision between a truck and a passenger van happened
in North Luzon Expressway (NLEX), resulting in the death of all the passengers in the van.
An action for damages based on quasi-delict was filed against the driver, Badong, as well
as the operator and registered owner of the truck, Zenaida. Zenaida interposed that it is
not the actual owner of the truck and contended that the children had no cause of action
against it because on September 7, 2011, it sold the truck to MMO Trucking owned by
Carmina. The latter being the alleged owner at the time of the collision, Zenaida filed a
Third Party Complaint against Carmina. Is the contention of Zenaida tenable?

No. Zenaida as the operator on record of the truck is liable to the heirs of the victims of the mishap.
Zenaida cannot point fingers at the alleged real owner to exculpate itself from vicarious liability under
Art. 2180 of the Civil Code, which states that the obligation imposed by Art. 2176 is demandable not
only for one’s own acts or omissions, but also for those of persons for whom one is responsible.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry. Regardless of whoever Zenaida claims to be the actual owner of the truck by reason of a
contract of sale, it is nevertheless primarily liable for the damages or injury caused by the truck
registered under his name. (Orix Metro Leasing and Finance Corporation vs. Mangalinao, G.R. No.
174089, January 25, 2012)

64. What is the liability of Joint Tortfeasors?

The responsibility of two or more persons who are liable for quasi-delict is soliday (CIVIL CODE, Art.
2194). Each are liable as principals and in the same manner as if they had performed the wrongful act
themselves (Ruks Konsult and Construction vs. Adworld Sign and Advertising Corp., G.R. No. 204856,
January 1, 2015).

65. What is the nature of the responsibility of an employer for the negligence of his
employees?

The responsibility of an employer for the negligence of his employees in the performance of his duties
is primary, that is, the injured party may recover from the employer directly, regardless of the solvency
of his employees (Philtranco Service Enterprises, Inc. vs. CA, G.R. No. 120553, June 17, 1997).
Nevertheless, this vicarious liability is applicable only if there is an employer-employee relationship
(Metro Manila Transit Corp. vs. CA, G.R. No. 144408, June 21, 1993). The employer-employee
relationship cannot be presumed but must be sufficiently proven by the plaintiff. The plaintiff must also
 show that the employee was acting within the scope of his assigned task when the tort complained of
was committed (Reyes vs. Doctolero, G.R. No. 185579, August 2, 2017).

66. Karmelle and her friend Janine were having a conversation when Janine’s friend, Finela,
approached her to ask if she could have Finela’s check cleared and encashed for a service
fee of 2.5%. The check is under the account of another person and drawn by a certain John
against Bank of America Alhambra Branch in USA, payable to cash. Because Janine does
not have a dollar account in which to deposit the check, she asked Karmelle if she could
accommodate Finela’s request since she has a dollar savings account. Karmelle agreed.
She deposited the check and was informed of the 15-day clearing period. Five days later,
the proceeds of the subject check had been temporarily credited to PNB’s account. After
informing Karmelle that the check had already been cleared and that the amount had been
credited to her account, she personally withdrew the proceeds and gave them to Finela.

PNB learned about the bounced check when it received a debit advice and a letter from
Philadelphia National Bank demanding the return of the money. Karmelle contacted Finela
to get the money back but the latter told her that all the money had already been given to
several people. Later on, PNB demanded the payment of the amount withdrawn by
Karmelle, while the latter, as her main defense, claimed that the proximate cause of PNB’s
injury was its own negligence of paying the amount without waiting for the 15-day
clearing period.

Is the act of PNB, in releasing the proceeds of the check prior to the lapse of the 15-day
clearing period the proximate cause of the loss?

Yes. The payment of the amounts of checks without previously clearing them with the drawee bank,
especially so where the drawee bank is a foreign bank and the amounts involved were large, is contrary
to normal or ordinary banking practice. Clearly, PNB’s disregard of its preventive and protective
measure against the possibility of being victimized by bad checks had brought upon itself the injury of
losing a significant amount of money. PNB miserably failed to do its duty of exercising extraordinary
diligence and reasonable business prudence. The disregard of its own banking policy amounts to gross
negligence, which the law defines as “negligence characterized by the want of even slight care, acting
or omitting to act in a situation where there is duty to act, not inadvertently but willfully and intentionally
with a conscious indifference to consequences in so far as other persons may be affected.” (Philippine
National Bank vs. Spouses Cheah, G.R. No. 170865, April 25, 2002)

Is Karmelle guilty of contributory negligence?

Yes. Karmelle is guilty of contributory negligence and is bound to share the loss with the bank. Karmelle
failed to observe caution in giving her full trust in accommodating a complete stranger and this led her
to be swindled. The fact that the check was cleared after only eight banking days from the time it was
deposited or contrary to what Janine told Karmelle that clearing takes 15 days should have already put
Karmelle on guard. (Philippine National Bank vs. Spouses Cheah, G.R. No. 170865, April 25, 2002)

67. What is the doctrine of last clear chance? When is it applied?

The doctrine of last clear chance provides that where both parties are negligent but the negligent act
of one is appreciably later in point of time than that of the other, or where it is impossible to determine
whose fault or negligence brought about the occurrence of the incident, the one who had the last clear
 opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences
arising therefrom. Stated differently, the rule is that the antecedent negligence of a person does not
preclude recovery of damages caused by the supervening negligence of the latter, who had the last
fair chance to prevent the impending harm by the exercise of due diligence. (Philippine National
Railways vs. Vizcara, G.R. No. 190022, February 15, 2012)

68. Two (2) vehicles, a van and a tricycle, figured in an accident along Sumulong Highway,
Antipolo City. The Mitsubishi L-300 van was owned and registered under Imperial's name,
and was driven by Laraga. The tricycle was driven by Mercado. On board the tricycle were
the Bayaban Spouses, who sustained injuries. The Bayaban Spouses demanded
compensation from Imperial, Laraga, and Mercado for the hospital bills and loss of income
that they sustained while undergoing therapy and post-medical treatment. When their
demand was unheeded, the Bayaban Spouses filed a Complaint for damages before the
Regional Trial Court. Imperial denied liability, contending that the van was under the
custody of one Pascua. Is the burden of proof shifted to Imperial to prove that his
employee Laraga, acting within the scope of his task?

Yes. Article 2176 defines "quasi-delict" as the fault or negligence that causes damage to another, there
being no pre-existing contractual relations between the parties. On the other hand, Article 2180
enumerates persons who are vicariously liable for the fault or negligence of persons over whom they
exercise control, whether absolute or limited. Specifically, for employers, they are deemed liable or
morally responsible for the fault or negligence of their employees but only if the employees are acting
within the scope of their assigned tasks. An act is deemed an assigned task if it is "done by an employee,
in furtherance of the interests of the employer or for the account of the employer at the time of the
infliction of the injury or damage. Applying the foregoing, this Court finds that respondents have
discharged the burden of proof necessary to hold Imperial vicariously liable under Article 2180 of the
Civil Code. With respondents having discharged their burden of proof, the disputable presumption that
petitioner Imperial was negligent in the selection and supervision of Laraga arises. ( Imperial vs. Heirs
of Neil Bayaban and Marylou Bayaban, G.R. No. 197626, October 3, 2018)

69. What is the doctrine of res ipsa loquitur? When is it applied?

Res ipsa loquitur literally means “the thing or the transaction speaks for itself.” It is a maxim for the
rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit
an inference or raise a presumption of negligence, or make out a plaintiff's prima facie case, and
present a question of fact for defendant to meet with an explanation. For the doctrine to apply, the
following requirements must be shown to exist, namely:

(1) The accident is of a kind that ordinarily does not occur in the absence of someone’s negligence;
(2) It is caused by an instrumentality within the exclusive control of the defendant or defendants; and
(3) The possibility of contributing conduct that would make the plaintiff responsible is eliminated.

However, res ipsa loquitur is not a rule of substantive law and does not constitute an independent or
separate ground for liability. Instead, it is considered as merely evidentiary, a mode of proof, or a mere
procedural convenience, since it furnishes a substitute for, and relieves a plaintiff of, the burden of
producing a specific proof of negligence. (Tan vs. Jam Transit, Inc., G.R. No. 183198, November 25,
2009)
70. How do the actions based on contractual negligence and actions based on quasi-delict
differ from one another?

It differs in terms of conditions, defenses, and proof. They generally cannot co-exist. Once a breach of
contract is proved, the defendant is presumed negligent and must prove not being at fault. In a quasi-
delict, however, the complaining party has the burden of proving the other party's negligence. (Orient
freight international, Inc vs. Keihin-Everett Forwarding Co., Inc., G.R. No. 191937, August 9, 2017)

VII. DAMAGES

71. What is the difference between damage, injury, and damages?

Damage is the loss, hurt, or harm which results from the injury; Injury is the legal invasion of the legal
right; and Damages are the compensation awarded for the damage suffered. ( Far East Bank and Trust
Company vs. Pacilan, Jr., G.R. No. 157314, July 29, 2005)

Damage Injury Damages

Is the loss, hurt or harm which Is the legal invasion of the legal The compensation awarded for
results from the injury. right the damage suffered.

72. Can damages be only paid with money?

Damages can only be paid with money and not “palay” because “palay” is not a legal tender currency
in the Philippine (Vda. Simeon Borlado vs. CA, G.R. No. 114118, August 28, 2001).

73. What are the kinds of actual or compensatory damages?

a. Damnum Emergens/Dano Emergente (actual damages)- All the natural and probable
consequences of the act or omission complained of, classified as one for the loss of what a person
already possesses.
b. Lucrum Cessans/Lucro Cesante (compensatory damages)- For failure to receive, as benefit,
that which would have pertained to him (expected profits) ( Filipinas Synthetic vs. De Los Santos,
G.R. No. 152033, March 16, 2011)

74. May actual damages be recovered on the basis of mere testimony?

No, there is no tangible document upon which the actual damages is based, actual damages cannot
be recovered on the basis of mere testimony. In crimes and quasi-delict, the defendant is liable for all
damages which are natural and probable consequences of the act or omission complained of. To seek
recovery for actual damages, it is essential that the injured party proves actual amount of loss with
reasonable degree of certainty premised upon competent proof and on the best evidence available.
Courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount
of damages, but must depend on actual proof. There must be a factual basis for an award of actual
damages. Actual damages to be awarded must be proven by clear evidence. ( Fuentes vs. CA, G.R. No.
111692, February 9, 1996)
75. Can Article 21 of the Civil Code be used as a basis for the award of actual damages?

No, Article 21 cannot be used as a basis for award of actual damages when there is a pre-existing
contractual relation between the parties. ( ACI Philippines, Inc. vs. Coquia, G.R. No. 174466, July 14,
2008)

76. How can Loss or Impairment of Earning Capacity be compensated?

To be compensated for loss of earning capacity, it is not necessary that the victim be gainfully employed
at the time of injury or death. Actual damages are awarded not for the loss of earnings but for the loss
of capacity to earn money. (People vs. Sanchez, G.R. No. 121039-45, October 18, 2001)

77. How is loss of earning capacity computed?

The formula for the compensation of loss of earning capacity is as follows:

Net Earning Capacity= Life Expectancy x (Gross Annual Income - Necessary Living Expenses)
Life Expectancy= ⅔ x (80- age of the deceased)
(Smith Bell Dodwell Shipping Agency Corporation vs. Borja, G.R. No. 143008, June 10, 2002)

78. MV Lorcon Lorenzo, a commercial vessel owned by Lorenzo Shipping , hit and rammed
NAPOCOR’s Power Barge 104. NAPOCOR submitted pieces of evidence to the court as basis
for actual damages it has suffered. However, Lorenzo Shipping pointed out that the
evidence falls short of proving pecuniary loss, which shall be the basis for awarding actual
damages. The CA awarded temperate damages in lieu of actual damages to NAPOCOR as
the amount of damages was not proven by NAPOCOR. Is Lorenzo Shipping liable for actual
damages?

No. Article 2219 of the Civil Code spells out the basic requirement that compensation by way of actual
damages is awarded only to the extent that pecuniary loss is proven. NAPOCOR failed to establish the
precise amount of pecuniary loss it suffered. Nevertheless, it remains that the Power Barge 104
sustained damage, which may be reckoned financially as a result of the MV Lorcon Lorenzo’s ramming
into it. NAPOCOR suffered pecuniary loss, albeit its precise extent or amount had not been established.
Accordingly, the CA’s conclusion that the NAPOCOR is entitled to temperate damages should be
sustained. (Lorenzo Shipping Corporation vs. National Power Corporation, G.R. No. 181683, October 7,
2015)

79. When may a corporation be entitled to moral damages?

A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot
experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish,
or moral shock. Nevertheless, a juridical person can validly complain for libel or any other form of
defamation and claim for moral damages. Art. 2219 (7) does not qualify whether the plaintiff is a
natural or juridical person (Filipinas Broadcasting Network, Inc. vs. Ago Medical and Educational Center-
Bicol Christian College of Medicine, G.R. No. 141994, January 17, 2005)
80. An article written by Raffy Tulfo, and was published in Abante Tonite, reported that a
certain Michael C. Guy, who was being investigated for tax fraud, went to former
Department of Finance Secretary Juanita Amatong’s house to ask for help. Claiming that
the article had tainted his reputation, Guy filed a Complaint-Affidavit against Tulfo and the
following representatives of Abante Tonite’s Publisher. The RTC convicted Tulfo and
Macasaet, et al. of the crime of libel and ordered them to pay Guy: P5,000,000 as actual
damages, and P5,000,000 as moral damages. The CA affirmed the RTC’s decision, however,
modified it awarding exemplary damages in the amount of P500,000 and reduced the
moral damages to P500,000. Later on, in its amended decision, the CA deleted the
exemplary damages, as well as the actual damages awarded by the RTC.

a. Is Guy entitled to actual damages?

NO. This Court has emphasized that actual damages cannot be presumed and courts, in making
an award, must point out specific facts which could afford basis for measuring whatever
compensatory or actual damages are borne. An award of actual damages is dependent upon
competent proof of the damages suffered and the actual amount thereof. The award must be
based on the evidence presented, not on the personal knowledge of the court; and certainly not
on flimsy, remote, speculative and unsubstantial proof.

b. Is Guy entitled to exemplary damages?

YES. Contrary to the CA’s ruling, exemplary damages may be awarded even in the absence of
aggravating circumstances. It may be awarded where the circumstances of the case show the
highly reprehensible or outrageous conduct of the offender.

c. Is the reduction of moral damages proper?

YES. Art. 2219 of the Civil Code specifically states that moral damages may be recovered in cases
of libel, slander, or defamation. The amount of moral damages that the courts may award depends
upon the set of circumstances for each case. There is no fixed standard to determine the amount
of moral damages to be given. Courts are given the discretion to fix the amount to be awarded in
favor of the injured party, so long as there is sufficient basis for awarding such amount. (Michael
C. Guy vs. Raffy Tulfo, G.R. No. 213023, April 10, 2019)

81. When is nominal damages awarded?

Nominal damages may be awarded to a plaintiff whose right has been violated or invaded by the
defendant, for the purpose of vindicating or recognizing that right and not for indemnifying the plaintiff
for any loss suffered by him. Its award is thus not for the purpose of indemnification for a loss but for
the recognition and vindication of a right (Libcap Marketing Corp. vs. Baquial, G.R. No. 192011, June
30, 2014)
82. Can temperate and actual damages be awarded at the same time?

No. Temperate and Actual damages are mutually exclusive in that both may not be awarded at the
same time (People vs. Gutierrez, G.R. No. 188602, February 4, 2010)

83. Are there exceptions to the rule that temperate and actual damages are mutually
exclusive?

Yes. Temperate and actual damages may both be awarded:

1. In cases where the resulting injury might be continuing and possible future complications directly
arising from the injury, while certain occur are difficult to predict ( Ramos vs. CA, G.R. No. 124354,
April 11, 2002)
2. In cases of additional damages to cover estimated future cost of proper care where it would not
be equitable for the victim to constantly come to court and invoke their aid in seeking adjustments
to the compensatory damages previously awarded (Ramos vs. CA G.R. No. 124354, April 11, 2002)

84. When may Attorney’s Fees be awarded?

Attorney’s fees may be awarded when a party is compelled to litigate or incur expenses to protect its
interest, or when the court deems it just and equitable. (Durban Apartments Corp. vs. Pioneer
Insurance and Surety Corp., G.R. No. 179419, January 12, 2011)

85. What are the instances when Attorney’s fees may not be recovered?

1. When it is shown that the judgment creditor did not come to court with clean hands; and
2. When there is no evidence of fraud and bad faith on the part of the tortfeasor. ( Tac-an Danao vs.
CA, G.R. No. 62251, July 29, 1985)
3. When damages may be recovered

86. Suppose that the only surviving heir of a certain person whose death was caused by a
crime or quasi-delict is a brother or sister, can such brother or sister recover moral
damages for mental anguish by reason of death of the deceased?

No, such brother or sister cannot recover moral damages for mental anguish by reason of the death of
the deceased. No. 3 of Art. 2206 of the Civil Code is explicit. According to this provision, only “the
spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased.” Brothers and sisters are not
included. (Receiver for North Negros Sugar Co. vs. Ibañez, G.R. No. L-22183, August 30, 1968)

87. How can damages be reduced in quasi-delicts cases?

In quasi-delict, the contributory negligence of the plaintiff shall reduce the damages he may recover.
(Art. 2214, Civil Code)
88. Rodolfo, Monalisa, Johanna and Abellana arrived at the municipal wharf of Jetafe, Bohol.
They boarded a cargo truck which would transfer them from the wharf to Poblacion, Jetafe.
While the passengers were getting on the truck, Simolde called Caballes, the official truck
driver. Caballes approached Simolde but left the engine running. While Simolde and
Caballes were talking, Aparra, chief diesel mechanic, started driving the truck. Upon seeing
the truck move, Caballes rushed to the truck and sat beside Aparra. However, instead of
taking control of the vehicle, Caballes allowed Aparra to drive. Shortly thereafter, Aparra
lost control of the truck and they fell off the wharf. Consequently, Rodolfo and Monalisa
died while Johanna and Abellana were injured. Vivian, the widow of Rodolfo and the
mother of Johanna, filed a complaint.

A) Whether or not quasi-delict was committed?

Yes. The requisites for quasi-delict are: (1) damages to the plaintiff; (2) negligence, by act or
omission of which defendant, or some person for whose acts he must respond, was guilty; and (3)
the connection of cause and effect between such negligence and the damages. The said requisites
are all present. Caballes was grossly negligent in allowing Aparra to drive the truck despite being
an inexperienced driver. Aparra’s inexperience caused the accident that led to the deaths of Rodolfo
and Monalisa. It is undisputed that the deaths of Vivian’s husband and daughter caused damages
to her.

B) Whether or not loss of earning capacity should be awarded to Vivian, wife of Rodolfo?

YES. Art. 2206 of the Civil Code provides that the amount of damages for death caused by a crime
of quasi-delict shall be at least THREE THOUSAND PESOS (Php 3,000.00), even though there may
have been mitigating circumstances. In addition, the defendant shall be liable, among others, for
the loss of earning capacity of the deceased, and the indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death. The indemnity for the
deceased’s lost of earning capacity is meant to compensate the heirs for the income they would
have received had the decedent continued to live. ( Vivian Torreon and Felomina Abellana vs.
Generoso Aparra, Jr., Felix Caballes, and CArmelo Simolde, G.R. No. 188493, December 13, 2017)

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