LICEO DE CAGAYAN UNIVERSITY

COLLEGE OF LAW

CIVIL LAW REVIEW 2

JARN

GUIDE QUESTIONS

SECTION A
OBLIGATIONS

001. What is an obligation?

An obligation is a juridical necessity to give, to do, or

not to do. (Art. 1156)

002. What are the elements of an obligation?

The following are the elements of an obligation:

1. A juridical or legal tie, which binds the parties to the
obligation and which may arise either from bilateral
or unilateral acts of persons;
2. An active subject known as the creditor or blige, who
can demand the fulfillment of the obligation;
3. A passive subject known as the debtor or obligor,
from whom the obligation is juridically demandable;
and
4. The fact, prestation or service which constitutes the
object of the obligation.
003. What are the sources of an obligation?

The sources of an obligation are the following:

1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
5. Quasi-delicts. (Art. 1157)
004. What is the degree of care required of a debtor
obliged to give something?

Every person obliged to give something is also

obliged to take care of it with the proper diligence of a
good father of a family, unless the law or the stipulation of
the parties requires another standard of care. (Art. 1163)

005. What are the rights of a creditor when the

obligation to give arises?

If the obligation is determinate in the sense that the

object thereof is particularly designated or physically
segregated from all others of the same class, the rights of
the creditor are:
1. To compel specific performance. (Art. 1165)
2. To recover damages in case of breach of the
obligation. (Art. 1170)
If the obligation is indeterminate or generic, the right of
the creditor are:
1. To ask for performance of the obligation. (Art. 1246)
2. To ask that the obligation be complied with at the
expense of the debtor. (Art. 1165)
3. To recover damages in case of breach of the
obligation. (Art. 1170)
006. In obligations to do, under what circumstances
may the obligation be executed at the expense of the
debtor?

If a person obliged to do something fails to do it, the

same shall be executed at his cost.
This same rule shall be observed if he does it in
contravention of the tenor of the obligation. Furthermore,
it may be decreed that what has been poorly done be
undone. (Art. 1167)
When the obligation consists in not doing, and the
obligor does what has been forbidden him, it shall also be
undone at his expense. (Art. 1168)

007. What is the consequence when the debtor does

what he is obliged not to do?

When the obligation consists in not doing, and the

obligor does what has been forbidden him, it shall be
undone at his expense. (Art. 1168)

008. What obligations are transmissible?

Subject to the laws, all rights acquired in virtue of an

obligation are transmissible, if there has been no
stipulation to the contrary. (Art. 1178)

009. Is a person’s liability acting as a surety under a

performance bond automatically extinguished by the
death of the principal obligor?
 No. As a general rule, the death of the principal
obligor does not extinguish the obligation and the solidary
nature of the liability. Obligations are transmissible to the
heirs, except when the transmission is prevented by the
law, the stipulations of the parties, or the nature of the
obligation.
The surety’s obligation is merely accessory or
collateral to the obligation contracted by the principal.
Nevertheless, although the contract of a surety is in
essence secondary only to a valid principal obligation, his
liability to the creditor is said to be direct, primary, and
absolute; in other words, he is directly and equally bound
with the principal.

010. What are the requisites of performance of an

obligation?

The obligation arises:

1. Pure obligation: Upon demand
Every obligation whose performance does not depend
upon a future or uncertain event, or upon a past event
unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition
shall also be demandable, without prejudice to the effects
of the happening of the event. (Art. 1179)
2. Obligations with Suspensive Condition:
General Rule: Only from the time the condition is fulfilled,
but the obligation retroacts to the day of its constitution.
(Art. 1187)
Exception: Regarding fruits and interests in reciprocal
obligations, the parties are deemed as mutually
compensated during the pendency of the condition. For
unilateral obligations, the debtor shall appropriate the
fruits and interests received, unless it was intended
otherwise.

011. What are the presumptions on interest and

installment payments?

The receipt of the principal by the creditor, without

reservation with respect to the interest, shall give rise to
the presumption that said interest has been paid.
The receipt of the later installment of a debt without
reservation as to prior installments shall likewise raise the
presumption that such installments have been paid.
(Article 1176)

012. When does the obligor incur delay?

Those obliged to deliver or to do something incur in

delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of an obligation.
(Article 1169)

013. When is there breach of obligation through

fraud?
Article 1170 of the Civil Code states that those guilty of
fraud, delay, or negligence, in the performance of their
obligations, or those who, in any way, contravene the
tenor of their obligations can be held liable for damages.

014. What are the requisites for an event to be

considered fortuitous?

The requisites are:

(a) Cause of breach is dependent of the will of the debtor;
(b) The event is unforeseeable or unavoidable;
(c) Occurrence renders it absolutely impossible for the
debtor to fulfill his obligation in normal manner –
impossibility must be absolute not partial, otherwise not
force majeure; and
(d) Debtor is free from any participation in the
aggravation of the injury to the creditor.

015. What are the remedies available to a creditor in

case of breach of obligation?

The remedies are:

(a) Specific performance, or substituted performance by a
third person in case of an obligation to deliver a generic
thing, and in obligations to do, unless it is purely personal
act;
(b) Rescission (or resolution in reciprocal obligations);
© Damages, in any case; or
(d) Subsudiary remedies of creditors:
(1) Accion subrogatoria
 (2) Accion publiciana
(3) Accion directa

016. What are pure obligations?

Pure obligations are those whose effectivity or

extinguishment does not depend upon the fulfillment or
nonfulfillment of a condition or upon the expiration of a
term or period, and which, as a consequence, is
characterized by the quality of immediate demandability.
(Article 1179)

017. What are conditional obligations?

Conditional obligations are those obligations subject

to a condition and the effectivity of which is subordinated
to the fulfillment or non-fulfillment of a future and
uncertain event or a past event unknown to the parties.

018. What is a condition in the context of Philippine

Civil Law?

A condition is an event that is future and uncertain,

upon which the efficacy or extinguishment of an obligation
depends.

019. What are the effects of fulfillment of a suspensive

condition?

1. Real obligations
GR: Retroacts to the day of the constitution of the
obligation.

XPNS: There is no retroactive effect with respect to the

fruits and interest:
a. In reciprocal obligations, the fruits and interests shall
be deemed to have been mutually compensated; and
b. In unilateral obligations, the debtor appropriates the
fruits and interest received before the fulfillment of the
condition unless contrary to the intention of the parties.

2. Personal obligations - the court determines the

retroactive effect of the condition fulfilled.

020. What are the parties’ rights before fulfillment of

a suspensive condition?

1. Creditor – May bring the appropriate actions for

the preservation of his right 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 prescriptive period.

2. Debtor – May recover what, during the same

time, he has paid by mistake in case of a suspensive
condition.

021. State the rules on the improvements, loss or

deterioration of the thing during the pendency of a
suspensive condition.

When the conditions have been imposed with the

intention of suspending the efficacy of an obligation to
give, the following rules shall be observed in case of the
improvement, loss or deterioration of the thing during the
pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the
obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he
shall be obliged to pay damages; it is understood that the
thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or
it cannot be recovered;
(3) When the thing deteriorates without the fault of the
debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the
creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity for damages
in either case;
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall
have no other right than that granted to the usufructuary.
(Article 1189)

022. What are the remedies in case of breach of

reciprocal obligations?

a) Rescission under Article 1191

b) Restitution
c) Reformation
d) Specific Performance
e) Damages

023. When can a court fix the duration of the period

in an obligation?

a) If the obligation does not fix a period, but from its

nature and the circumstances it can be inferred that a
period is intended;
b) If the duration of the period when it depends upon
the will of the debtor.
024. When does the debtor lose the right to make use
of a period?

The debtor shall lose every right to make use of the

period:
(1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or security
for the debt;
(2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
(3) When by his own acts he has impaired said guaranties
or securities after their establishment, and when through
a fortuitous event they disappear, unless he immediately
gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the period;
(5) When the debtor attempts to abscond

025. What is an alternative obligation?

An obligation is alternative when two things are

equally due, under an alternative. It is a kind of
distributive obligation according to object in which
various prestation are all due. However, the performance
of one is enough as determined by choice, which, a a
general rule belongs to the debtor.

026. State the rules in regard to the choice of

prestation in an alternative obligation.

As a general rule, the right to choose the prestation

belongs to the debtor. By way of exception, it may be
exercised by the creditor only when expressly granted to
him, or by a third person when the right is given to him by
common agreement.
027. State the rules in regard to the responsibility of
the debtor pending the selection of the creditor.

Article 1203. If through the creditor's acts the debtor

cannot make a choice according to the terms of the
obligation, the latter may rescind the contract with
damages.

028. What is a facultative obligation?

A facultative obligation refers to only one prestation

agreed upon, but the obligor may render another in
substitution.

029. State the rules in regard to payment made by

solidary debtors.

Article 1217. Payment made by one of the solidary

debtors extinguished the obligation. If two or more
solidary debtors offer to pay, the creditor may choose
which offer to accept.

He who made the payment may claim from his co-

debtors only the share which corresponds to each, with
the interest for the payment already made. If the payment
is made before the debt is due, no interest for the
intervening period may be demanded.
 When one of the solidary debtors cannot, because of
his insolvency, reimburse his share to the debtor paying
the obligation, such share shall be borne by all his co-
debtors, in proportion to the debt of each.

Article 1218. Payment by solidary debtor shall not

entitle him to reimbursement from his co-debtors if such
payment is made after the obligation has prescribed or
become illegal.

030. State the rules in case remission was made by a

creditor in favor of a solidary debtor.

Article 1219. The remission made by the creditor of the

share which affects one of the solidary debtors does not
release the latter from his responsibility towards the co-
debtors, in case the debt had been totally paid by anyone
of them before the remission was effected.

Article 1220. The remission of the whole obligation

obtained by one of the solidary debtors, does not entitle
him to reimbursement from his co-debtors.

031. What shall be the liability of solidary debtors in

case of loss of the thing or when performance becomes
impossible?

Article 1221. If the thing has been lost or if the prestation

has become impossible without the fault of the solidary
debtors, the obligation shall be extinguished.
If there was fault on the part of any one of them, all shall
be responsible to the creditor, for the price and the
payment of damages and interest, without prejudice to
their action against the guilty or negligent debtor.
If through a fortuitous event, the thing is lost or the
performance has become impossible after one of the
solidary debtors has incurred in delay through the judicial
or extrajudicial demand upon him by the creditor, the
provisions of the preceding paragraph shall apply

032. What defenses are available to a solidary

debtor?

Article 1222. A solidary debtor may, in actions filed by the

creditor, avail himself of all defenses which are derived
from the nature of the obligation and of those which are
personal to him, or pertain to his own share. With respect
to those which personally belong to the others, he may
avail himself thereof only as regards that part of the debt
for which the latter are responsible.

033. What is a penal clause?

Answer:
A penal clause is an accessory undertaking to assume
greater liability in case of breach. It is generally a sum of
money, but it can be any other thing like an act or
abstention. (Tolentino)
034. When may courts reduce the penalty agreed
upon by the parties?

Answer:
According to the case of Filinvest Land, Inc. vs. CA
(G.R. No.138980 September 20, 2005), Art. 1229. Civil Code
expressly provides that “The judge shall equitably reduce
the penalty when the principal obligation has been partly
or irregularly complied with by the debtor. Even if there
has been no performance, the penalty may also be reduced
by the courts if it is iniquitous or unconscionable.”

035. How are obligations extinguished?

Answer:
An obligation is deemed extinguished from the
moment that the obligation is fully complied with Article
1231 New Civil Code:
(1) By payment or performance:
(2) By the loss of the thing due:
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor
and debtor;
(5) By compensation;
(6) By novation.

Other causes of extinguishment of obligations, such as

annulment, rescission, fulfillment of a resolutory
condition, and prescription, are governed elsewhere in
this Code.
036. What is payment or performance?

Answer:
Payment or Performance is a way of extinguishing an
obligation it is deemed provided in Article 1232. Civil Code
that ”Payment means not only the delivery of money but
also the performance, in any other manner, of an
obligation.”

037. What are the requisites of payment or

performance?

Answer:
The following are requisites of payment or performance:
1. Capacity of the person who pays
2. Capacity of the person to whom payment is made
3. Propriety of the time, place, and manner of payment
4. Acceptance of the payment by the creditor
5. Delivery of the full amount or the full performance of
the prestation

038. To whom should payment be made?

Answer:
Payment may be made to the person in whose favor the
obligation has been constitute, his successor in interest, or
Any person authorized to receive it (NCC, Art. 1240).
039. State the rules in regard to payment by a third
person.

Answer:
As provided in Art 1236.Civil Code.The creditor is not
bound to accept payment or performance by a third
person who has no interest in the fulfillment of the
obligation, unless there is a stipulation to the contrary.

Whoever pays for another may demand from the debtor

what he has paid, except that if he paid without the
knowledge or against the will of the debtor, he can recover
only insofar as the payment has been beneficial to the
debtor.

040. How should monetary debts be paid?

Answer:
If debt produces interest, the payment is not to be
applied to the principal unless the interests are covered.
(Art. 1253)

041. When will payment in promissory notes, bills of

exchange or other mercantile documents produce the
effect of payment?

Answer:
The payment of promissory notes , bill of exchange
or other mercantile documents produce payment when
they have been cashed, or when through the fault of the
creditor they have been impaired.

042. What are the requisites of application of

payments?

Answer:
There is application of payment if : there is plurality of
debts, debts are of the same kind, debts are owed by the
same debtor to the same creditor, all debts must be due,
unless parties so stipulate, or when application is made by
the party for whose benefit the term has been constituted,
and , payment made by debtor is not sufficient to cover all
of his debt.

043. State the rules on application of payments.

Art 1252 of the civil code provides that:

(1) Debtor has the right to select which of his debts he is
paying.
He must indicate at the time of making payment, and not
afterwards, which particular debt is being paid.
(2) The right to make the application once exercised is
irrevocable unless the creditor consents to the change.
(3) If not, the creditor makes the application, by so
stating in the receipt that he issues, unless there is cause
for invalidating the contract.
(4) If the creditor has not also made the application, or
the application is not valid, the application is made by
operation of law.
 (5) If debt produces interest, the payment is not to be
applied to the principal unless the interests are covered.
(6) When no application can be inferred from the
circumstances of payment, it is applied: (a) to the most
onerous debt of the debtor; or (b) if debts due are of the
same nature and burden, to all the debts in proportion
and
(7) Rules on application of payment are not applicable to
a person whose obligation as a mere surety is both
contingent and singular.
044. What is dacion en pago?

Dacion en Pago or Dation in payment under Art 1245

of the NCC is a special mode of payment where property is
alienated to the creditor in satisfaction of a debt in money
which shall be governed by the law on Sales.

045. What is payment by cession?

Payment by cession is a special form of payment

where the debtor abandons all of his property for the
benefit of his creditors, in order that the latter may obtain
their payment.

046. What are the requisites of payment by cession?

To avail this form of payment, the following

conditions must be complied with:
a. Plurality of debts
b. Partial or relative insolvency of the debtor
c. Acceptance by the creditors
047. What is tender of payment?

Tender of payment is the manifestation made by the

debtor to the creditor of his decisions to comply with his
obligation.

048. What is consignation?

Consignation refers to the deposit of the object of the

obligation to a competent court in accordance with the
rules, after such refusal or inability of the creditor to
accept payment made.

049. When is a thing deemed lost?

A thing is deemed lost when the object of the

obligation perishes, goes out of commerce of man or
disappears in such a way that its existence is unknown or
it cannot be recovered. (Art 1189)

050. What are the effects of the loss of a thing?

Art 1265 of the NCC provides that whenever the thing

is lost in the possession of the debtor, it shall be presumed
that the loss was due to his fault unless there is proof to
the contrary without prejudice to Art 1165.
This presumption does not apply in case of earthquake,
flood, storm or other natural calamity.
051. What is the effect of impossibility of the
performance of the work or service?

According to Art 1266 of the NCC, when the

prestation constituting the object of the obligation
becomes legally or physically impossible, the obligor is
released, provided that such impossibility was not due to
his fault and it took place before he has incurred delay.

052. What are the requisites of condonation?

In order that there be a valid condonation of an

obligation, the following requisites must be complied
with:
a. The total or partial extinguishment must be
gratuitous
b. It must be accepted by the obligor
c. The obligation must be demandable

053. What are the formalities required for

condonation?

For a condonation or remission to be valid, the following

requisites must concur:
a) the debt must be existing and demandable;
b) it must be gratuitous;
c) the debtor must accept the remission;
d) it must not be inofficious; and
 e) if made expressly, it must conform with the forms of
donation.

054. What is confusion or merger?

Confusion or merger is the meeting in one person of

the qualities of creditor and debtor with respect to the
same obligation. It takes place between the principal
debtor and creditor and the very same obligation must be
involved. In Valmonte v. CA, the Supreme Court held that
the confusion must be total, i.e. as regards the whole
obligation. When confusion takes place, the obligation is
extinguished. The reason behind this is because it is
absurd that a person should enforce an obligation against
himself. For example, A executed a promissory note
payable to B. B payed his debt to C using the promissory
note executed by A. Turns out C is has an obligation to pay
A. C then payed A the promissory note executed by the
latter to B. Here the obligation is extinguished because it
is absurd that A will enforce the obligation against himself.

055. What are the requisites of confusion or merger?

For a valid confusion or merger, the it is necessary that:

1. It must take place between the principal debtor and
creditor; and
2. It mus be complete and definite.

056. What are the requisites of legal compensation?

The requisites are provided under Article 1279 of the Civil
Code which reads as follows:

Art. 1279. In order that compensation may be proper, it is

necessary:
1. That each one of the obligors be bound principally,
and that he be at the same time a principal creditor of
the other;
2. That both debts consist in a sum of money, or if the
things due are consumable, they be of the same kind,
and also of the same quality if the latter has been
stated;
3. That the two debts be due;
4. That they be liquidated and demandable; and
5. That over neither of them there be any retention or
controversy, commenced by third persons and
communicated in due time to the debtor.

057. What is conventional compensation? What is

judicial compensation?

Conventional compensation.
It is the one that arises from the will of the parties, without
the need for the requirements demanded by law exposed
in the previous point. However, it cannot be valid if there
is a legal provision that in any case excludes it.
Judicial compensation.
It is the one dictated by a Judge at the request of one of the
parties. It occurs in those cases in which the legal
requirements for compensation had not been met until
the Judgment was rendered.

058. When is compensation improper?

Compensation may be improper when the necessary

requisites provided under Art. 1279 of the Civil Code does
not take place.

059. What is novation?

Novation is defined as the extinguishment of an

obligation by the substitution or change of the obligation
by a subsequent one which terminates the first, either by
changing the object or principal conditions, or by
substituting the person of the debtor, or subrogating a
third person in the rights of the creditor.

Article 1292 of the Civil Code on novation further

provides:

Article 1292. In order that an obligation may be

extinguished by another which substitute the same, it is
imperative that it be so declared in unequivocal terms, or
that the old and the new obligations be on every point
incompatible with each other.
The cancellation of the old obligation by the new one is a
necessary element of novation which may be effected
either expressly or impliedly. While there is really no hard
and fast rule to determine what might constitute sufficient
change resulting in novation, the touchstone, however, is
irreconcilable incompatibility between the old and the
new obligations.

060. What are the requisites of novation?

In every novation there are four essential requisites:

(1) a previous valid obligation; (2) the agreement of all the
parties to the new contract; (3) the extinguishment of the
old contract; and (4) validity of the new one. There must
be consent of all the parties to the substitution, resulting
in the extinction of the old obligation and the creation of a
valid new one.

061. When does novation extinguish an obligation?

The extinguishment of the old obligation by the new

one is a necessary element of novation which may be
effected either expressly or impliedly. The term
"expressly" means that the contracting parties
incontrovertibly disclose that their object in executing the
new contract is to extinguish the old one. Upon the other
hand, no specific form is required for an implied novation,
and all that is prescribed by law would be an
incompatibility between the two contracts. While there is
really no hard and fast rule to determine what might
constitute to be a sufficient change that can bring about
novation, the touchstone for contrariety, however, would
be an irreconcilable incompatibility between the old and
the new obligations.

062. What are the kinds of subjective novation?

The kinds of subjective novation are:

1. Passive subjective novation - substitution of the
debtor.
Passive Subjective Novation may be in the form of
Expromision and Delegacion.
Expromision-initiative comes from a third person. The old
debtor must be released from his obligation; otherwise,
there will be no expromision, there will be novation.
Delegacion-initiative comes from the debtor, for it is he
who delegates another to pay the debt, and thus, he
excuses himself. Here, the three parties concerned—the
old debtor, the new debtor, and the creditor—must agree.

2. Active subjective novation - substitution of the

creditor.
CONTRACTS

063. What is a contract?

The law defines contract as “a meeting of the minds

between two persons whereby one binds himself, with
respect to the other, to give something or to render some
service” (Article 1305, New Civil Code of the Philippines).

064. What are the characteristics of a contract?

(1) Mutuality of Contracts. Its validity and performance

cannot be left to the will of only one of the parties.
(2) Autonomy of Contracts. Parties are free to stipulate
terms and provisions in a contract, as long as these terms
and provisions are not contrary to law, morals, good
customs, public order and public policy.
(3) Relativity of Contracts. Contracts are binding only
upon the parties and their successors-in-interest.
(4) Consensuality of Contracts. Contracts are perfected
by mere consent. and no form is prescribed by law for
their validity. Exception: (a) real contracts (such as pledge,
chattel mortgage); (b) contracts covered under the Statute
of Frauds.
(5) Obligatory Force of Contracts. By the obligatory force
of contracts, it constitutes the law as between the parties
who are compelled to perform under the threat of being
sued in the courts of law.
065. What are the requisites of a stipulation pour
autrui?

In Limitless Potentials, Inc. v. Quilala,( G.R. Nos. 157391,

160749 and 160816, 15 July 2005, 463 SCRA 586, 60515
)the Court laid down the requisites of a stipulation pour
autrui: (1) there is a stipulation in favor of a third person;
(2) the stipulation is a part, not the whole, of the contract;
(3) the contracting parties clearly and deliberately
conferred a favor to the third person — the favor is not an
incidental benefit; (4) the favor is unconditional and
uncompensated; (5) the third person communicated his
or her acceptance of the favor before its revocation; and
(6) the contracting parties do not represent, or are not
authorized by, the third party.

066. What are the stages of a contract?

A contract has three distinct stages: preparation,

perfection, and consummation. Preparation or negotiation
begins when the prospective contracting parties manifest
their interest in the contract and ends at the moment of
their agreement. Perfection or birth of the contract occurs
when they agree upon the essential elements thereof.
Consummation, the last stage, occurs when the parties
"fulfill or perform the terms agreed upon in the contract,
culminating in the extinguishment thereof. (Swedish
Match, AB v. Court of Appeals, G.R. No. 128120, October
20, 2004, 441 SCRA 1, 18.)
067. What are the kinds of contracts?

a) Valid contract – which has the three elements of

consent, object, and cause or consideration.
b) Rescissible Contract -which has all the requisites
required by law for valid contracts (Art. 1380 NCC). What
makes it rescissible is economic damage, not just any
economic damage, but those kinds of economic damage
enumerated under (Arts. 1381 and 1382 NCC)
c) Voidable Contract – as the term implies, susceptible
to annulment; it is not ipso facto inoperative. They are
binding unless and until set aside; (Art. 1390 NCC); they
may be assailed only by a proper action in court; (Art.
1390 NCC), brought within the specified prescriptive
periods; (Arts. 1391 NCC); They are capable of
confirmation; (Arts. 1392-1396 NCC);
d) Unenforceable Contract – which cannot be given
effect, cannot be the basis of an action for specific
performance. Their defect, however, is not irremediable;
it can be cured in a process called ratification or
acknowledgment. (Article 1403, NCC)
e) Void Contracts and Inexistent Contract – the most
seriously defective of all. These contracts cannot be
ratified. Neither can the right to set up the defense of
illegality be waived. (Article 1409, NCC)

068. What are the essential requisites of a contract?

Under Article 1318 of the Civil Code, "[T]here is no

contract unless the following requisites concur: (1)
Consent of the contracting parties; (2) Object certain
which is the subject matter of the contract; (3) Cause of
the obligation which is established." Article 1352 of the
Civil Code also provides that "Contracts without cause x x
x produce no effect whatsoever."

069. What is consent and what are its requisites?

Consent is the meeting of the minds of the parties on

the subject matter and cause of the contract.
Requisites for valid consent are the following:
a. It must be manifested by the concurrence of the offer
and acceptance [Arts. 1319-1326, CC].
b. The contracting parties must possess the necessary
legal capacity [Arts. 1327-1329,CC].
c. It must be intelligent, free, spontaneous, and real (not
vitiated) [Arts. 1330-1346, CC].

070. When is an offer ineffective?

An offer may be withdrawn before it is accepted.

After acceptance, the contract is already perfected.
Under Article 1323, even if the offer is not withdrawn, its
acceptance will not produce a meeting of the minds in case
the offer has already become ineffective because of the
death, civil interdiction, insanity, or insolvency of either
party before the conveyance of the acceptance to the
offeror.
 These grounds are not exclusive. Thus, failure to
comply with the condition of the offer as to the time, place,
and the manner of payment, the expiration of the period
fixed in the offer for acceptance, the destruction of the
thing due before acceptance, rejection of the offer, etc. will
also render then offer ineffective and prevent the juridical
tie from being formed.

071. What are the requisites for a valid acceptance?

a) Unqualified and unconditional, i.e. it must conform

with all the terms of the offer,
otherwise it is a counter-offer [Art. 1319,CC]
b) Directed and communicated to the offeror and
learned by him [Art. 1319, CC] If made
through an agent, the offer is accepted from the time the
acceptance is communicated to such agent. [Art. 1322, CC]
c) Made within the proper time
d) May be express/implied, but is not presumed [Art
1320, CC]. Time, place and manner of acceptance may be
fixed by the offeror [Art 1321, CC].

072. Who cannot give consent to a contract?

Article 1327 of the New Civil Code, provides those who

cannot give consent to a contract:
a. Unemancipated Minors. – minors below 18 years of
age. There are no more unemancipated minors above 18
since the legal age was reduced from 21 to 18.
Emancipation by marriage and parental concession had
already been eliminated. Children below 18 by themselves
being minors cannot enter into valid contracts. However,
If misrepresented his age on the contract by stating of his
age, and other party was misled, the contract shall be
binding upon him on the basis of estoppel.
b. Insane Or Demented Persons. – When a person is
insane or demented, his is detached from reality. He does
not know what he is doing. He cannot act with legal effects.
Consequently, he cannot enter into valid contracts. During
lucid intervals, as may happen in rare cases, they may
enter into valid contracts because at this moment, they are
sane and capable of knowing what they are doing.
c. Deaf-Mutes. – Not all deaf-mutes are disqualified to
give consent to contracts. Only those who do not know
how to write are disqualified.

073. What are vices of consent?

Vices of consent may be divided into two(2) distinct

groups – vices of the will and vices of declaration. The first
comprehends mistakes, violence, intimidation, undue
influence and fraud; the second comprehends all forms of
simulated contracts.

074. State the rules in regard to the object of a

contract.

As a general rule, all things, rights or services may be

the object of contracts. It is, however, essential that the
following requisites must concur:
 1. the object should be within the commerce of men;
in other words, it should be susceptible of
appropriation and transmissible from one person to
another.
2. The object should be real or possible; it should
exist at the moment of the celebration of the contract
or at least, it can exist subsequently or in the future.
3. The object should be licit; in other words, it should
not be contrary to law, morals, good customs, public
order or public policy.
The object should be determinate, or at least, possible of
determination as to its kind.

075. What is cause or consideration?

The cause or consideration is “the why of the

contracts, the essential reason which moves the
contracting parties to enter into the contract.” It is the
immediate, direct or most proximate reason which
explains and justifies the creation of an obligation through
the will of the contracting parties.

076. What are the causes or considerations in

onerous, remuneratory, and gratuitous contracts?

In onerous contracts, the cause is understood to be for

each contracting party, the prestation or promise of a
thing or service by the other,
In remuneratory contracts, it is the service or benefit
which is remunerated.

In gratuitous contract, it is the liberality of the benefactor.

077. What remedy do parties have in case the law

requires a document or some other special form for a
contract?

When the intention of the parties to a perfected and

valid contract are not expressed in the instrument
purporting to embody their agreement, by reason of
mistake, fraud, inequitable conduct or accident, one of the
parties may ask for the reformation of the instrument so
that such true intention may be expressed.

In order that there can be a reformation of the

instrument, the following requisites must concur.
1. There must be a meeting of the minds of the parties
2. The true intention is not expressed in the
instrument and
3. Such failure to express their intention is due to
mistake, fraud, inadequate conduct or accident.

078. What contracts must appear in public

instruments for third parties to be bound thereby?

The following must appear in a public instrument:

(1) Acts and contracts which have for their object the
creation, transmission, modification or extinguishment of
real rights over immovable property; But sales of real
property or of an interest therein are governed by Statute
of frauds;

(2) The cession, repudiation or renunciation of hereditary

rights or of those of the conjugal partnership of gains;

(3) The power to administer property, or any other power

which has for its object an act appearing or which should
appear in a public document, or should prejudice a third
person;

(4) The cession of actions or rights proceeding from an act

appearing in a public document.

079. When may a party ask for reformation of an

instrument?

In order that there can be a reformation of the

instrument, the following requisites must concur.
1. There must be a meeting of the minds of the parties
2. The true intention is not expressed in the instrument
and
3. Such failure to express their intention is due to
mistake, fraud, inadequate conduct or accident.

080. When can there be no reformation of an

instrument?
As provided under ART. 1366 NCC there can be no
reformation in the following cases:
1. simple donations inter vivos wherein no condition is
imposed;
2. wills; and
3. those where the real agreement is void.

Also, when one of the parties has brought an action to

enforce the instrument, he cannot subsequently ask for its
reformation. (ART 1367 NCC).

081. Who may ask for reformation of an instrument?

1) when a mutual mistake of the parties causes the failure

of the instrument to disclose their real agreement, the
party who can bring the action is either party or his
successors in interest.

2) a. if one party was mistaken and the other acted

fraudulently or inequitable in such a way that the
instrument does not show their true intention (ART.
1362).
b. when one party was mistaken and the other knew or
believed that the instrument did not state their real
agreement but concealed that fact from the former
(ART. 1363)
c. when through ignorance, lack of skill, negligence or
bad faith on the part of the person drafting the
instrument (ART. 1364);
 d. if two(2) parties agree upon the mortgage or pledge
of real or personal property, but the instrument states
that the property is sold absolutely, or with a right of
repurchase (ART. 1365)

In the above instances, the party who can bring the

action for the reformation of an instrument is the
injured party or his heirs and assigns. (ART. 1368)

082. State the rules on interpretation of contracts.

Articles 1370 to 1379 of the Civil Code cover the rules

on interpretation of contracts under Civil Law. Foremost
among these rules are:
• If the terms of the contract are clear and leave no
doubt upon the intention of the contracting parties, the
literal meaning of its stipulations shall control. If the
words appear contrary to the evident intention of the
parties, intention prevails over words (Art. 1370).
• If a stipulation of any contract can have several
meanings, the meaning which will be most adequate to
render the stipulation effective shall be adopted (Art.
1373).
• Words, which may have different significations, shall
be understood in that which is most in keeping with the
nature and object of the contract (Art. 1375).
• The usage or custom of the place shall be borne in
mind when interpreting the ambiguities of a contract, and
shall fill the omission of stipulations which are ordinarily
established (Art. 1376).
083. What are rescissible contracts?

Under Article 1381 of the New Civil Code, rescissible

contracts are those which have caused a particular
economic damage either to one of the parties or to a third
person and which may be set aside even if valid. It may be
set aside in whole or in part, to the extent of the damage
caused.

084. State the grounds for rescission of contracts.

Under the Civil Code the following are grounds for

rescission of contracts:
a. Those which are entered into by guardians
whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the
things which are the object thereof;
b. Those agreed upon in representation of
absentees, if the latter suffer the lesion stated in the
preceding number;
c. Those undertaken in fraud of creditors when the
latter cannot in any other manner collect the claims
due them;
d. Those which refer to things under litigation if
they have been entered into by the defendant without
the knowledge and approval of the litigants or of
competent judicial authority;
e. All other contracts specially declared by law to
be subject to rescission; and
 f. Those payments made in a state of insolvency for
obligations to whose fulfillment the debtor could not
be compelled at the time they were effected are also
rescissible.

085. What are voidable contracts?

Voidable contracts are those in which all of the

essential elements for validity are present, but the
element of consent is vitiated either by lack of legal
capacity of one of the contracting parties, or by mistake,
violence, intimidation, undue influence or fraud.

086. What contracts are voidable?

Under Article 1390 of the New Civil Code, the

following are the contracts that are voidable or annullable,
even though there may have been no damage to the
contracting parties:

a. Those where one of the contracting parties is

incapable of giving his consent to a contract; and
b. Those where the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud.

087. When should an action for the annulment of a

contract be filed?

The action for annulment of a voidable contract must

be commenced within a period of four (4) years. Under the
Civil Code, if the action refers to contracts entered into by
an incapacitated person, the period shall be counted from
the time the guardianship ceases; if it refers to those
vitiated consent by reason of violence, intimidation or
undue influence, the period shall be counted from the time
such violence, intimidation or undue influence ceases or
disappears; and if it refers to those vitiated consent
through mistake or fraud, the period shall be counted from
the time of the discovery of such mistake or fraud.

088. What is ratification and what are its requisites

and effects?

Ratification, or confirmation refers to the act or

means by virtue of which efficacy is given to a contract
which suffers from a vice of curable nullity.

The law provides the concurrence of the following

requisites of ratification, to wit:

a. The contract should be tainted with a vice which is

susceptible of being cured.
b. The confirmation should be effected by the person
who is entitled to do so under the law.
c. It should be effected with knowledge of the reason
which renders the contract voidable.
d. The reason which renders the contract voidable
should have already disappeared.
 As provided under Articles 1392 and 1396 of the New
Civil Code, there are two (2) distinct effects of ratification:
first, it extinguishes the action to annul the contract; and
second, it cleanses the contract of its defects from the
moment it was constituted.

089. What are unenforceable contracts?

Unenforceable contracts are those contracts which

cannot be enforced by a proper action in court, unless they
are ratified, because either they are entered into without
or in excess of authority or they do not comply with the
Statute of Frauds or both of the contracting parties do not
possess the required legal capacity.

090. What are the grounds for the unenforceability of

contracts?

The following are the grounds for the

unenforceability of contracts as provided under the law:
a. Those which are entered into without or in excess
of authority;
b. Those that do not comply with the Statute of
Frauds, such as those not made in writing nor
subscribed by the party charged or by his agent; or
c. Those which entered into by both contracting
parties who are incapable of giving consent.

091. What is the Statute of Frauds?

 Under Article 1403 paragraph 2 of the New Civil
Code, the Statute of Frauds is descriptive of statutes which
require certain classes of contracts to be in writing. The
contract shall be unenforceable by action unless the same
or some note or memorandum thereof be in writing and
subscribed by the party charged or by his agent. Evidence
of the contract, therefore, cannot be received without the
writing or a secondary evidence of its content.

092. What are void and inexistent contracts?

Void and inexistent contracts are those which lack

absolutely either in fact or in law one or some or all of
those elements which are essential for its validity. Also,
void contracts are the contracts where all of the requisites
prescribed by law for contracts are present, but the cause,
object or purpose is contrary to law, morals, good
customs, public order, or public policy, or they are
prohibited by law, or declared as void by the same.
Inexistent contracts, on one hand, are the contracts which
lack absolutely one or some or all of those requisites
which are essential for its validity.

093. What contracts are inexistent and void?

Art 1409 of the New Civil Code states that the

following contracts are inexistent and void:
a) Those whose cause, object or purpose is contrary to
law, morals, good customs, public order or public policy
b) Those which are absolutely simulated or fictitious
c) Those whose cause or object did not exist at the time
of the transaction
d) Those whose object is outside the commerce of men
e) Those which contemplate an impossible service
f) Those where the intention of the parties relative to
the principal object of the contract cannot be ascertained
g) Those expressly prohibited or declared void by law

094. Distinguish resolution of contracts from

rescission of contracts.

In the case of Heirs of Sofia Quirong vs DBP (GR No.

173441), the Supreme Court ruled that resolution of
contracts is based on the person’s breach of faith, or a
violation of the reciprocity between the parties, while
rescission of contracts is a subsidiary action based on
injury to the plaintiff’s economic interests as described in
Arts. 1380 and 1381.
NATURAL OBLIGATIONS, ESTOPPEL, AND SPECIAL
CONTRACTS

095. What are natural obligations?

Natural obligations are those based on equity and

natural law, which are not enforceable by means of a court
action, but which, after voluntary fulfillment by the
obligor, authorize the retention by the oblige of what has
been delivered or rendered by reason thereof. They refer
to those obligations without a sanction, susceptible of
voluntary performance, but not through compulsion by
legal means.

096. What is estoppel?

Estoppel is a condition or state by virtue of which an

admission or representation is rendered conclusive upon
the person making it, and cannot be denied or disproved
as against the person relying thereon.

097. What is estoppel in pais?

Estoppel in pais or by conduct is that which arises

when one by his acts, representations or admissions, or by
his silence when he ought to speak out, intentionally or
through culpable negligence, induces another to believe
certain facts to exist and such other rightfully relies and
acts on such belief, as a consequence of which he would be
prejudiced if the former is permitted to deny the existence
of such facts.

098. What is estoppel by deed?

Estoppel by deed is a type of technical estoppel by

virtue of which a party to a deed and his privies are
precluded from asserting as against the other party and
his privies any right or title in derogation of the deed, or
from denying any material fact asserted therein.

099. What is estoppel by laches?

It is a type of equitable estoppel which arises when a

party knowing his rights as against another, takes no step
or delays in enforcing them until the condition of the
latter, who has no knowledge or notice that the former
would assert such rights, has become so changed that he
cannot, without injury or prejudice, be resorted to his
former state.

100. What may be the object of a contract of sale?

The object must be licit and at the same time

determinate or, at least, capable of being made
determinate without the necessity of a new or further
agreement between the parties.

101. Distinguish a contract of sale from a contract to

sell.
 First, in a contract of sale, title passes to the vendee
upon delivery of the thing sold, whereas in a contract to
sell, by agreement, ownership is reserved in the vendor
and is not to pass until full payment of the price. Second,
in a contract of sale, nonpayment is a negative resolutory
condition, while in a contract to sell, full payment is a
positive suspensive condition. Lastly, in a contract of sale,
the vendor has lost and cannot recover ownership until
and unless the contract is resolved or rescinded, while in
a contract to sell, title remains in the vendor, and when he
seeks to eject the vendee because of non-compliance by
such vendee with the suspensive condition stipulated, he
is enforcing the contract and not resolving the same.

102. Distinguish a conditional contract of sale from a

contract to sell.

First, in a conditional contract of sale, the first

element of consent is present, although it is conditioned
upon the happening of a contingent event, which may or
may not occur, while in a contract to sell, the prospective
seller does not yet agree or consent to transfer of
ownership of the property subject to the contract to sell
until the happening of an event, which may be the full
payment of the purchase price.

Second, as to the effect of fulfillment of suspensive

condition, in a conditional contract of sale, if the
suspensive condition is fulfilled, the contract of sale is
thereby perfected, such that if there had already been
previous delivery of the property subject of the sale to the
buyer, ownership thereto automatically transfers to the
buyer by operation of law without any further act having
to be performed by the seller. Whereas in a contract to sell,
the fulfillment of the suspensive condition (full payment
of the purchase price) will not automatically transfer the
ownership to the buyer although the property may have
been previously delivered to him.

Lastly, in a conditional contract of sale, upon

fulfillment of the suspensive condition, the sale becomes
absolute and this will affect the seller’s title thereto; which
means that the second buyer of property who may have
actual or constructive knowledge of defect in the seller’s
title cannot be a registrant in good faith. While in a
contract to sell, a third person buying such property
despite the fulfillment of the suspensive condition cannot
be deemed a buyer in bad faith.

103. State the rules in regard to things having

potential existence as objects of contracts of sale.

Article 1461 of the NCC provides that ‘’Things having

potential existence may be the object of contract of sale.
The efficacy of the sale of a mere hope or expectancy is
deemed subject to the condition that the thing will come
into existence. The sale of a vain hope or expectancy is
void.’’
104. Distinguish a contract of sale from a contract for
a piece of work.

A contract of sale is ordered or manufactured in the

ordinary course of business while a contract for a piece of
work is manufactured especially for the customer and
upon his special order and not for the general public. A
contract of sale involves the sale of a thing or right while a
contract for a piece of work involves lease of service. In a
contract of sale, the obligation of the seller is a real
obligation or an obligation to give. On the other hand, in a
contract for a piece of work, the obligation of the seller is
personal or obligation to do.

105. When the consideration of a contract is partly

money and partly another thing, when is it considered
a contract of sale?

When the consideration of a contract is partly in

money and partly another thing, and if intention is not
clear, it is considered a contract of sale if the value of the
thing is equal or less than the amount of money.

106. When is a price valid?

For a price to be valid, the following must be present:

1. It is real and not fictitious;
2. Paid in money or its equivalent;
3. Certain or ascertainable at the time of the perfection
of the contract;
 4. In some cases, must not be grossly inferior to the
value of the thing sold.
107. When is a contract of sale perfected?

A contract of sale is deemed perfected at the moment

there is meeting of minds upon the thing which is the
object of the contract and upon the price.

108. Distinguish earnest money from option money.

Earnest money forms part of the purchase price while

option money is a money given as distinct consideration
for an option contract. Earnest money is given only when
there is already a sale while option money applies to a sale
not yet perfected. Earnest money when given, the buyer is
bound to pay the balance while in option money, the
prospective buyer is not required to buy. In Earnest
money, if the sale did not materialize, it must be returned
while in option money, if the buyer does not decide to buy,
it cannot be recovered. In Earnest money, the title passes
to the buyer upon delivery of the thing sold while in option
money, ownership is reserved to the seller and is not to
pass until full payment. Earnest money involves specific
performance and rescission while option money merely
involves specific performance.

109. Who may enter into a contract of sale?

 All persons, whether natural or juridical, who can
bind themselves, have legal capacity to enter into a
contract of sale.

110. When is there a valid sale between husband and

wife?

There is a valid sale between a husband and a wife

when a separation of property was agreed upon in the
marriage settlements or when there has been a judicial
separation of property agreed upon between them under
Article 191 of the Family Code.

111. Who are relatively incapacitated to buy?

The following are relatively incapacitated to buy:

1. Spouses (NCC, Art. 1490);

2. Agents, Guardians, Executors and
Administrators;
3. Public Officers and Employees;
4. Court Officers and Employees,; and
5. Others specially disqualified by law. (NCC, Art. 1491)

112. What are the obligations of a vendor?

The obligations of the vendor are the following:

1. Deliver the thing sold;
2. Deliver fruits & accessions/accessories accruing from
perfection of sale;
 3. Transfer the ownership;
4. Warranties;
5. Take care of the thing, pending delivery, with proper
diligence;
6. Pay for the expenses of the deed of sale unless there
is a stipulation to the contrary;
7. Obligation of taking-out the Insurance coverage;
113. To whom should the ownership of the thing sold
be transferred in case of double sale?

The following are the rules governing double sale on

different properties:
(a) Movable property – ownership shall be
transferred to the person who may have first taken
possession in good faith (Art. 1544, NCC)
(b) Immovable property – ownership belongs to:
Ø The one who, in good faith, first recorded the
sale in the Registry of Property; or
Ø If there is no inscription of sale in the title, the
one who was first in possession in good faith;
or
Ø In the absence thereof, the one who presents
the oldest title, provided there is good faith
(c) Art. 1544 does NOT apply in cases where the
first sale of an unregistered immovable occurred
prior to an execution sale and the second sale
occurred by virtue of an execution sale. This is
because a buyer of unregistered land at an
execution sale only steps into the shoes of the
judgment debtor (the person who sold the
 property prior to the execution sale). The second
buyer merely acquires the latter’s interest in the
property sold as of the time the property was
levied upon.
(d) Instrument or deeds establishing, transmitting,
acknowledging, modifying or extinguishing rights
with respect to lands not registered under the Land
Registration Act or the Spanish Mortgage Law, are
required to be registered in the Registry of
Property to prejudice 3rd persons, although such
registration is understood to be “without prejudice
to a third party with a better right”.

114. What are the obligations of a vendee?

The following are the obligations of a vendee:

Ø Acceptance of the goods (Art. 1585, NCC)
o Exercise of acts of ownership over the goods is a
manifestation of acceptance, such as making use
of them as owner, making alterations in the
goods, or subjecting it to the process of
manufacture.
o The exception – the vendee’s right to make a test
of goods, but only if necessary, to enable him to
determine whether or not to accept the goods.
Ø Inspection/Examination of goods (Art. 1584, NCC)
o The buyer is not deemed to have accepted the
goods delivered which he has not previously
examined unless and until he has had a
 reasonable opportunity to examine them for the
purpose of ascertaining whether they are in
conformity with the contract.
o The exception – If there is a stipulation to the
contrary.
Ø Obligation to pay the price (Art. 1582, NCC)
o The vendee is bound to pay the price of the thing
sold at the time and place stipulated in the
contract.
o The vendee shall owe interest on the price from
the time the thing is delivered up to the time of
payment if there is stipulation requiring
interests, or even if there is none, if the thing
delivered produces fruits or income, or if the
buyer incurs in default from the time of judicial
or extrajudicial demand for payment.
o The vendee also has a right to suspend the
payment when his ownership or possession is
disturbed or other reasonable grounds.
Ø Obligation to bear the expenses for the execution and
registration of the sale and putting the goods in a
deliverable state, if so stipulated (Art. 1521)

115. How is ownership of the thing sold acquired?

The ownership of the thing sold shall be transferred

to the vendee upon the actual or constructive delivery
thereof, or in any manner signifying an agreement that
possession is transferred from the vendor to the vendee.

When the vendor is not the owner, ownership is not

acquired by the vendee. One cannot give what one does
not have.

116. When is there actual delivery of the thing sold?

Art. 1497, NCC provides that actual delivery is

deemed made when the thing sold is placed in the control
and possession of the vendee. The parties may agree when
and on what conditions the ownership shall pass to the
vendee.

117. What is constructive delivery?

Constructive delivery occurs when the parties conduct

themselves as if a transfer of property has occurred
without an actual or symbolic transfer. Examples of
constructive delivery includes:
Ø Execution of public instrument (Art. 1498, NCC)
o Produces the same legal effects of actual delivery
Ø Symbolic delivery (Art. 1498, NCC)
o Example is the delivery of keys of the place
where the movables is stored or kept.
Ø Traditio longa manu (long hand)
 o The delivery of movable property by mere
consent or agreement, if the thing sold cannot be
transferred to the possession of the vendee at
the time of sale.
Ø Traditio brevi manu (short hand)
o Delivery of movable property by mere consent
or agreement if the vendee had it in his
possession for any other reason.
Ø Traditio constitutum possessorium
o The vendor continues to posses the property
sold, not as owner but in some other capacity
(like tenant or lessee)
Ø Qausi-traditio
o Mode of delivery of incorporeal things or rights.
Ø Delivery to a common carrier
o Tantamount to delivery to vendee. The vendee
assumes the risk of loss.

118. What is the effect when the thing sold was lost at
the
time of the perfection of the contract?

Pursuant to Art. 1493-1492, NCC, the vendor bears

the risk of losses and deterioration at the time of the
perfection of the contract. When there is total loss, the
contract becomes void because the object did not exist at
the time of the transaction. When there is only partial loss
or the loss resulted in the substantial change in character,
the vendee may withdraw from the contract or buy the
remainder at a proportionate price.
119. Who bears the risk of loss in an obligation to
deliver
a generic thing?

As a general rule, the loss of a generic thing does not

extinguish an obligation. The exception is that in case of
delimited generic things, where the kind or class is limited
itself, and the whole class perishes. Thus, the rule that the
vendor bears the risk of losses and deterioration applies.

120. What is a negotiable document of title?

A document of title is negotiable if by its terms the

goods are to be delivered to bearer or to order of a named
person. Only the owner of the document or one to whom
possession or custody of the document has been entrusted
by the owner, may negotiate it.

121. What is a non-negotiable document of title?

A document of title is non-negotiable if by its terms the

goods are to be delivered only to a specified person only.
Thus, the carrier will not deliver the goods to any holder
of the document or to whom such document of title may
have been endorsed by the consignee.

122. When may a negotiable document be negotiated

by
delivery?

To transfer title effectively through negotiation of the

document of title, it must be “duly negotiated.” In general
terms, a document of title is duly negotiated when the
person named in it indorses and delivers the document to
a holder who purchases it in good faith and for value,
without notice that someone else might have a claim
against the goods, assuming the transaction is in the
regular course of business or financing.

123. When may a negotiable document be negotiated

by indorsement?

When it is negotiated only by the endorsement of the

person to whose order the goods are by the terms of the
document deliverable, coupled with a delivery thereof
Such endorsement may be in blank, to bearer or to a
specified person. If endorsed to a specified person, it may
again be negotiated by the endorsement of such person in
blank, to bearer or to another specified person.
Subsequent negotiations may be made in like manner

124. Who may negotiate a negotiable document of

title?

A negotiable document of title may be negotiated by:

a. The owner thereof (i.e., the person to whom it was

originally issued); or
 b. Any person to whom the possession or custody of the
document has been entrusted by the owner, ifm by
the terms thereof the bailee undertakes to deliver the
goods to the order of the person to whom the
possession or custody of the document has been
entrusted, or if at the time of such entrusting the
document is in such form that it may be negotiated by
deliver.

125. What are the effects to a person upon whom such

a
negotiable document of title has been negotiated?

A person to whom a negotiable document of title has been

duly negotiated acquires thereby:
(a) Such title to the goods as the person negotiating
the document to him had or had ability to convey to a
purchaser in good faith and for value;
(b) Such title to the goods as the person to whose
order the goods were to be delivered by the terms of
the document had or had ability to convey to a
purchaser in good faith and for value; and
(c) The direct obligation of the bailee issuing the
document to hold possession of the goods for him
according to the terms of the document as fully as if
such bailee had contracted directly with him
The legal effects of proper negotiation is the assurance to
the buying or negotiating public of the protective mantle
that the law places upon their faith in accepting a
negotiable document of title as a medium to transact on
the goods covered thereby.

126. What are the effects of a transfer of a non-

negotiable document of title?

A person to whom a non-negotiable document of title

has been duly assigned acquires thereby, as against the
transferor:
(a) The title to the goods, subject to the terms of any
agreement with the transferor; and
(b) The right to notify the bailee who issued the
document of the transfer thereof, and thereby to
acquire the direct obligation of such bailee to hold
possession of the goods for him according to the
terms of the document.
Unlike in the negotiation of a negotiable document of
title which ipso jure makes the bailee liable to the holder
thereof, in the assignment of a non-negotiable document
of title, there is no legal relationship between the assignee
and the bailee until the latter is informed by the former of
the assignment of the covering document of title.
Likewise, the assignee merely steps into the shoes of his
immediate assignor.

127. What are the implied warranties in a contract of

sale?

a. Warranty that seller has right to sell

 b. Warranty against eviction
c. Warranty against non-apparent servitudes
d. Warranty against hidden defects
e. Redhibitory defects of animals

128. When shall eviction take place?

The seller’s implied warranty against eviction only

applies (i.e., there has been a breach of warranty) when
the following conditions are present:
(a) Purchaser has been deprived of, or evicted from,
the whole or part of the thing sold;
(b) Eviction is by a fi nal judgment;
(c) Basis thereof is by virtue of a right prior to the sale
made by the seller; and
(d) Seller has been summoned and made co-
defendant in the suit for eviction at the instance of the
buyer.
The warranty cannot be enforced until a final judgment
has been rendered, whereby the buyer loses the thing
acquired or a part thereof.

129. What are the rights of the vendee in case eviction

takes place?

Under Article 1555 of the Civil Code, when the

warranty has been agreed upon or nothing has been
stipulated on this point, in case eviction occurs, the vendee
shall have the right to demand of the vendor:
(a) Return of the value which the thing sold had at the
time of the eviction, be it greater or lesser than the
price of the sale;
(b) Income or fruits, if buyer has been ordered to
deliver them to the party who won the suit against
him;
(c) Costs of the suit which caused the eviction, and, in
a proper case, those of the suit brought against the
seller for the warranty;
(d) Expenses of the contract, if the buyer has paid
them; and
(e) Damages and interests and ornamental expenses,
if the sale was made in bad faith.

130. When is there an implied warranty as to the

quality and fitness of the goods?

Under Article 1562 of the Civil Code, in a sale of goods,

there is an implied warranty or condition as to the quality
or fitness of the goods, as follows:
(a) Where the buyer, expressly or by implication,
makes known to the seller the particular purpose for
which the goods are acquired, and it appears that the
buyer relies on the seller’s skill or judgment (whether
he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be reasonably
fi t for such purpose;
 (b) Where the goods are bought by description from
a seller who deals in goods of that description
(whether he be the grower or manufacturer or not),
there is an implied warranty that the goods shall be
of merchantable quality.
An implied warranty or condition as to the quality or
fitness for a particular purpose may be annexed by the
usage of trade.

131. What is the remedy of the seller of real property

when he has reasonable ground to fear the loss of
the property sold and its price?

In sale of immovable property where the seller has

reasonable grounds to fear being left without the price
and without the thing, he may immediately sue for the
rescission of the sale. If, on the other hand, such ground
does not exist, the provision of Art 1191 will apply.

132. What is the remedy when the buyer fails to pay

for the goods?

1. Action for Price (NCC, Art. 1595).

Where, under a contract of sale, the ownership of the
goods has passed to the buyer and he wrongfully neglects
or refuses to pay for the goods according to the terms of
the contract of sale, the seller may maintain an action
against him for the price of the goods

2.Action for Damages (NCC, Art. 1596)

In case of wrongful neglect or refusal by the buyer to
accept or pay for the thing sold.

3.Possessory Lien (NCC, Art. 1527)

Seller is not bound to deliver the object of the contract of
sale if the buyer has not paid him the price. This remedy
presupposes that the sale is on credit.

4. Loss of Lien (NCC, Art. 1529)

When he delivers the goods to the carrier or other bailee
for purpose of transmission to the buyer without
reserving the ownership in the goods or the right to the
possession thereof; When the buyer or his agent lawfully
obtains possession of the goods; or By waiver thereof.

5. Right of Stoppage in Transitu (NCC, Art. 1530)

When the buyer of goods is or becomes insolvent, the
unpaid seller who has parted with the possession of the
goods has the right of stopping them in transitu, that is to
say, he may resume possession of the goods at any time
while they are in transit, and he will then become entitled
to the same rights in regard to the goods as he would have
had if he had never parted with the possession.

6. Special Right to Resell the Goods (NCC, Art. 1533)

Where the goods are of perishable nature, or where the
seller expressly reserves the right of resale in case the
buyer should make default, or where the buyer has been
in default in the payment of the price for an unreasonable
time, an unpaid seller having a right of lien or having
stopped the goods in transitu may resell the goods.

7. Special Right to Rescind (NCC, Art. 1597)

Where the goods have not been delivered to the buyer,
and the buyer has repudiated the contract of sale, or has
manifested his inability to perform his obligations
thereunder, or has committed a breach thereof, the seller
may totally rescind the contract of sale by giving notice of
his election so to do to the buyer.

133. What is the remedy of the vendor when the

vendee neglects or fails to accept and pay for the
goods?

Where, under a contract of sale, the ownership of the

goods has passed to the buyer and he wrongfully neglects
or refuses to pay for the goods according to the terms of
the contract of sale, the seller may maintain an action
against him for the price of the goods(NCC, Art. 1595)

134. When can the seller rescind the contract of sale?

Rescission of a contract will not be permitted for a

slight or casual breach, but only for such substantial and
fundamental breach as would defeat the very object of the
parties in making the agreement.
1. Where the seller has expressly reserved the right to
rescind in case the buyer should make default; or
2. Where the buyer has been in default in the payment of
the price for unreasonable length of time. [NCC, Art.
1534(1)]

135. What is the buyer’s remedy when the seller fails

to deliver the goods sold?

Action for specific performance without giving the

seller the option of retaining the goods on payments of
damages.

136. What is the buyer’s remedy when the seller

breaches warranty?

The buyer may, at his election, avail of the following

remedies:
a. Accept goods & set up breach of warranty by way of
recoupment in diminution or extinction of the price;
b. Accept goods & maintain action against seller for
damages;
c. Refuse to accept goods & maintain action against seller
for damages;
d. Rescind contract of sale & refuse to receive
goods/return them when already received and recover
the price

137. What are the options of the buyer when the

seller delivers goods greater than agreed?
A. The buyer may accept only the goods which were
included in the contract and reject the excess; or

B. The buyer may accept the entire goods delivered and he

shall pay for them at the contract rate. (NCC, Art. 1522)

138. What may the buyer do when the seller delivers

mixed goods of different descriptions not included in
the contract?

A. The buyer may accept the goods which are in

accordance with the contract and reject the rest (NCC, Art.
1522); or

B. The buyer may also accept them all if he so desires, but

he must pay for them all

139. What is the rule on condominium ownership?

It is the co-ownership of the common areas by

holders of units.

1. Definition of a condominium:

Interest in a real property consisting of a separate interest

in a unit in a residential, industrial or commercial building
and an undivided interest in the land on which it is located
and in other common areas of the building.

2. Effect of transfer of a condominium unit:

a. It shall include transfer/conveyance of the the
undivided interest in the common area or in the
membership or shareholdings in the condominium
corporation
b. With the unit comess an exclusive easement for the use
of the air space encompassed by the boundaries of the unit
c. Common areas are held in common by the unit owners
in equal shares; one for each unit

3. Rights of a condominium owner (subject to master deed’s

limitations):

a. Non-exclusive easement for ingress, egress, and support

through the common areas
b. Right to paint, repaint, tile, wax, paper or refinish and
decorate the inner surface of the walls, ceilings, floors,
windows and doors bounding his/her own unit
c. Exclusive right to mortgage, pledge, or encumber
d. Absolute right to sell or dispose of his condominium

4. Common areas shall remain undivided and there shall be

no judicial partition subject to Sec. 8 of the Condominium
Law

140. What contracts are covered under the Recto

Law?

This law covers contracts of sale of personal property

by installment. (Act No. 4122) It is also applied to
contracts purporting to be leases of personal property
with option to buy, when the lessor has deprived the
lessee of the possession or enjoyment of the thing.
Recto Law applies only to sale payable in installments and
not to a sale where there is an initial payment and the
balance is payable in the future, because such is a straight
sale, not a sale by installments.

141. What are the alternative remedies available to

the seller in case of buyer’s breach?

1. Specific Performance: Exact fulfillment should the buyer

fail to pay.
2. Rescission: Cancel the sale if the buyer fails to pay 2 or
more installments.
3. Foreclosure: Foreclose on chattel mortgage if buyer fails
to pay two (2) or more installments. He shall have no
further action against the purchaser to recover any unpaid
balance of the price. Any agreement to the contrary shall
be void.

142. In what instances would the Maceda Law apply?

Exceptions?

The Maceda Law Involves the sale of immovables on

installment. It applies in the following instances:
1. Contract of sale:
2. Contract to sell;
3. Financing. Transactions

It is not applicable in:

1. Industrial lots;
2. Commercial buildings (and commercial lots by
implication);
3. Sale to tenants under agrarian laws; and
4. Sale of lands payable in straight terms. (Sec. 3, R.A. No.
6552)

NB: The list is not exclusive.

143. What is conventional redemption?

Answer: In conventional redemption, the seller reserved

the right to repurchase the thing sold coupled with
obligation to return price of the sale, expenses of contract
& other legitimate payments and the necessary & useful
expenses made on the thing sold Note: Right to repurchase
must be reserved at the time of perfection of sale.

144. When is a contract presumed to be one of

equitable mortgage?

Answer: Art. 1602 of the Civil Code provides that:

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

145. What is legal redemption?

Answer: Legal redemption is the right to be subrogated

upon the same terms and conditions stipulated in the
contract, in the place of one who acquires the thing by
purchase or by dation in payment or by other transaction
whereby ownership is transmitted by onerous title.

146. Who may exercise legal redemption?

Answer: Art. 1620. A co-owner of a thing may exercise the

right of redemption in case the shares of all the other-co-
owners or of any of them, are sold to a third person. If the
price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right
of redemption, they may only do so in proportion to the
share they may respectively have in the thing owned in
common. (1522a)

Art. 1623. The right of legal redemption or redemption

shall not be exercised except within thirty days from the
notice in writing by the respective vendor, or by the
vendor, as the case may be. The deed of sale shall not be
accorded in the Registry of Property, unless accompanied
by an affidavit of the vendor that he has given written
notice thereof at all possible redemptioners.
The right of redemption of co-owners excludes that of
adjoining owners. (1524a)

147. What is a trust?

Answer: A trust is a fiduciary relationship with respect to

property which involves the existence of equitable duties
imposed upon the holder of the title to the property to deal
with it for the benefit of another.

148. What is an express trust?

Answer: An express trust is one that is created by the

intention of the trustor or of the parties.

149. What is an implied trust?

Answer: An implied trust is one that is created by

operation of law.
150. What are the two types of implied trusts?

Answer: Implied trusts are further classified into

constructive trusts and resulting trusts. Constructive
trusts, on the one hand, come about in the main by
operation of law and not by agreement or intention. They
arise not by any word or phrase, either expressly or
impliedly, evincing a direct intention to create a trust, but
one which arises in order to satisfy the demands of justice.
Also known as trusts ex maleficio, trusts ex delicto and
trusts de son tort, they are construed against one who by
actual or constructive fraud, duress, abuse of confidence,
commission of a wrong or any form of unconscionable
conduct, artifice, concealment of questionable means, or
who in any way against equity and good conscience has
obtained or holds the legal right to property which he
ought not, in equity and good conscience, hold and enjoy.
They are aptly characterized as "fraud-rectifying trust,"
imposed by equity to satisfy the demands of justice and to
defeat or prevent the wrongful act of one of the parties.
Constructive trusts are illustrated in Articles 1450, 1454,
1455 and 1456.

On the other hand, resulting trusts arise from the nature

or circumstances of the consideration involved in a
transaction whereby one person becomes invested with
legal title but is obligated in equity to hold his title for the
benefit of another. This is based on the equitable doctrine
that valuable consideration and not legal title is
determinative of equitable title or interest and is always
presumed to have been contemplated by the parties. Such
intent is presumed as it is not expressed in the instrument
or deed of conveyance and is to be found in the nature of
their transaction. Implied trusts of this nature are hence
describable as "intention-enforcing trusts." Specific
examples of resulting trusts may be found in the Civil
Code, particularly Articles 1448, 1449, 1451, 1452 and
1453.

151. State the rules in regard to the acceptance by an

agent of the agency.

Article 1870. Acceptance by the agent may also be express,

or implied from his acts which carry out the agency, or
from his silence or inaction according to the
circumstances. (n)

Article 1871. Between persons who are present, the

acceptance of the agency may also be implied if the
principal delivers his power of attorney to the agent and
the latter receives it without any objection. (n)

Article 1872. Between persons who are absent, the

acceptance of the agency cannot be implied from the
silence of the agent, except:
(1) When the principal transmits his power of attorney to
the agent, who receives it without any objection;
(2) When the principal entrusts to him by letter or
telegram a power of attorney with respect to the business
in which he is habitually engaged as an agent, and he did
not reply to the letter or telegram. (n)

Article 1873. If a person specially informs another or

states by public advertisement that he has given a power
of attorney to a third person, the latter thereby becomes a
duly authorized agent, in the former case with respect to
the person who received the special information, and in
the latter case with regard to any person.
The power shall continue to be in full force until the notice
is rescinded in the same manner in which it was given. (n)

Article 1874. When a sale of a piece of land or any interest

therein is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void. (n)

Article 1875. Agency is presumed to be for a

compensation, unless there is proof to the contrary. (n)

Article 1876. An agency is either general or special.

The former comprises all the business of the principal. The
latter, one or more specific transactions. (1712)

152. What acts comprise an agency couched in

general terms?

Answer: Article 1877. An agency couched in general terms

comprises only acts of administration, even if the principal
should state that he withholds no power or that the agent
may execute such acts as he may consider appropriate, or
even though the agency should authorize a general and
unlimited management. (n)

153. What are the obligations of a commission agent?

The obligations includes the following;

1. To carry out the agency in accordance with its terms
[Article 1884, Civil Code];
2. To answer for the damages which through his non-
performance the principal may suffer
Article 1884, Civil Code

154. When is court approval necessary in

compromises?

Art. 2032 provides that; The courts approval is necessary

in compromises entered into by guardians, parents,
absentee’s representatives, and administrators or
executors of decedent’s estate.

155. What is the effect of a compromise?

A compromise has upon the parties the effect and

authority of res judicata; but there shall be no execution
except in compliance with a judicial compromise. (Art.
1816)

156. What is a contract of loan?

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

157. What is the effect of commodatum being purely

personal in character?

The following are the effects;

1. The death of either the bailor or the bailee
extinguishes the contract;
2. The bailee can neither lend nor lease the object of
the contract to a third person. However, the members of
the
bailee's household may make use of the thing loaned,
unless there is a stipulation to the contrary, or unles
s the nature of the thing forbids such use.

158. What are the obligations of a bailee?

1. The bailee is liable for ordinary expenses—

the borrower should defray the expenses for the use and
preservation of
the thing loaned for after all, he acquires the use of t
he same and he is supposed to return the identical thing
2. The borrower must take good care of the thing wi
th the diligence of a good father of a family (due diligence)

3. Generally, the borrower would not be liable for the loss

of a thing due to a fortuitous event but he would be liable
in case of the following circumstances:
a. If he devotes the thing to any purpose different
from that for which it has been loaned;
b. If he keeps it longer than the period stipulated, or after
the accomplishment of the use for which the
commodatum has been constituted;
c. If the thing loaned has been delivered with
appraisal of its value, unless there is a stipulation
exemption the bailee from responsibility in case of a
fortuitous event;
d. If he lends or leases the thing to a third person,
who is not a member of his household;
e. If, being able to save either the thing borrowed or his
own thing, he chose to save the latter. (JPSP:
should be considered as an exemption. This is
actually based on ingratitude. Nonetheless, this
provision tends to control one’s instinct for self-
preservation)

4. The bailee is not liable for the deterioration of th

e thing loaned due only to the use thereof and without his
fault

5. He cannot retain the thing loaned on the ground that

the bailor owes him something, even though it may be for
the reason of expenses.
He can have the right to retain
though for damages as mentioned in Article 1951—
“The bailor who, knowing the flaws of the thing loaned,
does not
advise the bailee of the same, shall be liable to the latter
for the damages which he may suffer by reason thereof”.

6. When there are two or more bailees to whom a t

hing is
loaned in the same contract, they are liable solidarily
to the bailor
a. To safeguard effectively the rights of the lender
b. Law presumes that the bailor takes into account
the personal integrity and responsibility of all the
bailees and that, therefore, he would not have
constituted the commodatum is there were only one
liable

159. What are the liabilities of a bailor?

He is liable to the bailee for damages in case he has

knowledge of flaws of the thing loaned, and he didn’t
advise the bailee of the same
a. There is flaw or defect in the thing loaned
b. The flaw or defect is hidden
c. The bailor is aware thereof
d. He doesn’t advise the bailee of the same
e. The bailee suffers damages by reason of the said
flaw or defect
f. He cannot excuse himself from liability for any expense
or damages by abandoning the thing to the bailee

160. What is a simple loan or mutuum?

It is a contract by virtue of which one of the

contracting parties delivers to the other money or any
other consumable(fungible) thing subject to the condition
that the same amount of the same kind and quality be paid
or returned.

161. Is there a transfer of ownership in a simple loan?

Yes, ownership passes to the borrower. Art. 1934. An

accepted promise to deliver something by way of
commodatum or simple loan is binding upon parties, but
the commodatum or simple loan itself shall not be
perfected until the delivery of the object of the contract.

162. What is conventional interest?

It is an interest rate agreed by the parties without

outside intervention.

163. What are rules on interest on interest?

The law provides for a compound interest which is

imposed when interest due and unpaid is capitalized or
added to the principal. (Art. 1959, CC)
It shall be allowed in the following instances, to wit:
a. When there is an express written stipulation to that
effect (Art.1956, CC) OR
b. Upon judicial demand. However, debtor is not liable
to pay compound interest even after judicial demand
when there is no stipulation for payment of interest. (Art.
2212, CC)
164. What is compensatory interest?

Compensatory interest is also known as Legal

Interest, that which the law directs to be charged in the
absence of any agreement as to the rate between the
parties, or when there are actual and compensatory
damages imposed by the Court.

165. What is a finance charge?

Under Rep. Act No. 3765, otherwise known as “Truth

in Lending Act” (TILA) Sec. 3(3), Finance charge includes
interest, fees, service charges, discounts, and such other
charges incident to the extension of credit as the Board
may be regulation prescribe.

166. Is the interest rate subject to any ceiling under

Philippine laws?

No. CB Circular No. 905 has abolished interest rate

ceilings. With the promulgation of such circular, usury has
become “legally inexistent” as the parties can now legally
agree on any interest that may be charged on the loan.
167. What is a 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. (Article
1962, CC)

168. What is a voluntary deposit?

The deposit itself is a real contract, as it is not

perfected until the delivery of the thing. (Art. 1968, CC) A
contract to deposit, or an agreement to constitute a
deposit, is consensual and binding.

169. What are the obligations of a depositary?

Its obligations include the following, to wit:

a. Keep the thing safely
b. Return the thing to the depositor, heirs, successors or
person designated in the contract, when required (Art.
1972, CC), together with all its products, accessories and
accessions. (Art. 1983, CC) at the place designated when
deposit was made. Otherwise, where the thing may be
(Art. 1987, CC).
c. Bear the expenses for preservation of the thing
deposited if the deposit is onerous. (Art. 1992. CC)
170. What are the obligations of a depositor?
a. Depositor is obliged to reimburse the depositary for
expenses incurred for preservation in a gratuitous
deposit. (Art.1992, CC)
b. Depositor is obliged to pay losses incurred due to the
character of thing deposited.
Exceptions:
a. Depositor was not aware nor expected to know of the
dangerous character of the thing;
b. Depositor notified the depositary of such dangerous
character;
c. Depositary was aware of the danger without advice
from the depositor.
171. When is a contract of deposit extinguished?
A deposit is extinguished:
a. Upon the loss or destruction of the thing deposited;
b. Upon the death of either the depositor or the
depositary, in case of a gratuitous deposit. (Article 1995,
Ibid.)
172. When is there necessary deposit?

A deposit is necessary when it is made in compliance

with a legal obligation, or on the occasion of any calamity,
or by travelers with common carriers (Arts.1734-1735,
CC), or by travelers in hotels and inns. (Arts.1996-2004,
CC)
173. What are the responsibilities of keepers of hotels
or inns as depositaries?

The responsibilities of keepers of hotels or inns shall

be the same as that of depositaries, provided that notice
was given to them, or to
their employees, of the effects brought by the guests
and
that, on the part of the latter, they take the precautio
ns which said hotel-
keepers or their substitutes advised relative to the
care and vigilance of their effects

174. When may a hotelkeeper retain the things

brought into the hotel by a guest?

The hotel keeper may retain things brought into the

hotel by the guests as security for the account of lodging
or the supplies furnished to the hotel guests.

175. Define lease of things.

In the lease of things, one of the parties binds himself

to give to another the enjoyment or use of a thing for a
price certain, and for a period which may be definite or
indefinite up to ninety-nine years.
176. Define lease of work or service.

In the lease of work or service, one of the parties

binds himself to execute a piece of work or to render to the
other some service for a price certain.

177. What are the obligations of a lessor?

The obligations of the lessor are the following:

1) To deliver the thing which is the object of the contract
in such a condition as to render it fit for the use intended;
(2) To make on the same during the lease all the
necessary repairs in order to keep it suitable for the use
to which it has been devoted, unless there is a stipulation
to the contrary;
(3) To maintain the lessee in the peaceful and adequate
enjoyment of the lease for the entire duration of the
contract.

178. What are the obligations of a lessee?

The obligations of the lessee are the following:

1) To pay the price of the lease according to the terms
stipulated;
(2) To use the thing leased as a diligent father of a family,
devoting it to the use stipulated; and in the absence of
stipulation, to that which may be inferred from the
nature of the thing leased, according to the custom of the
place;
(3) To pay expenses for the deed of lease.
4. to bring to the knowledge of the proprietor, within the
shortest possible time, every usurpation or untoward act
which any third person may have committed or may be
openly preparing to carry out upon the thing leased
5. Advise the owner, with the same urgency, pf the need
of all repairs.

179. What rights are allowed to a lessee of rural

lands?

The rights of the lessee in rural lands are the

following:
1. Suspend the payment of the rent in case the lessor
fails to make necessary repairs or to maintain the
lessee in peaceful and adequate enjoyment of the
property leased:
2. Ask the recisison of the contract and indemnification
for damages, or only the latter in case the lessor
should not comply with the obligations set forth in
articles 1654.
3. Terminate the lease contract in case the leased
property intended for human habitation is in such a
condition that its use brings imminent danger to life
and health
180. What rights are not allowed to a lessee of rural
lands?

The lessee of rural lands has no right to:

1. Sell the leased property;
2. Sub-lease the property in the absence of a stipulation
in the contract;
3. Make major changes to the property without the
consent of the lessor;
4. Change the nature of the property without hte
consent of the lessor
181. What extraordinary events allow the lessee to
reduce his rent?

The lessee may reduce his ren when there is loss of

more than one-half of the fruits through extraordinary
and fortuitous events such as war, pestilence, unusual
flood, locusts, earthquake, or others which are uncommon
and which the contracting parties could not have
reasonably foreseen.

182. What is the rule on the duration of lease of rural

lands?

The duration of the lease of rural lands, when not

fixed, is understood to have been for all the time necessary
for the gather of the fruits which the whole estate leased
may yield in one year, or which it may yield once, although
two or more years have to elapse for such purpose.
183. What is the rule on repairs on leased urban
lands?
In default of a special stipulation, the custom of the
place shall be observed with regard to the kind of
repairs on urban property for which the lessor shall
be liable. In case of doubt, it is deemed that repairs
are chargeable against the lessor.

184. What is the duration provided by law if the

period for lease on urban lands is not fixed?
If the period for the lease has not been fixed, it is
understood to be from year to year, if the rent agreed
upon is annual; from month to month, if it is monthly;
from week to week, if the rent is weekly; and from day
to day, if the rent is to be paid daily.
185. What is the purpose of the Condominium Act?
It is an act to define condominium, establish
requirements for its creation, and govern its
incidents.
186. What is deemed a “sale” under the Condominium
Act?
Any transfer or conveyance of a unit or an apartment,
office or store or other space of the condominium
unit, shall include the transfer or conveyance of the
undivided interests in the common areas or, in a
 proper case, the membership or shareholdings in the
condominium corporation.

187. What are the buyer’s options under the

Condominium Act if there is delay in the delivery of
the project?
If there is delay in the delivery of the project, the
buyer has the option
(a) To desist from further paying installments due to
the
failure of the developer to complete the project on
time.
(b) To demand for full reimbursement the total
amount paid including amortization interest
QUASI-CONTRACTS AND LAND TITLES & DEEDS

188. What are quasi-contracts?

Quasi-contracts are the judicial relations arising
from certain lawful, voluntary and unilateral acts by
virtue of which the parties become bound to each
other based on the principle that no one shall be
unjustly enriched or benefited at the expense of
another.
189. What is negotiorum gestio?
The voluntary administration of any person of the
business or property of another, without any consent
or authority from the latter, which creates an
obligation for reimbursement for the necessary
expenses the gestor had spent.
190. When will negotiorum gestio not arise?

The juridical relation does not arise in either of these

instances:
(a) When the property or business is not
neglected or abandoned;
(b) If in fact the manager has been tacitly
authorized by the owner.
191. When will the officious manager be liable in case
of fortuitous events?
 The officious manager shall be liable for any
fortuitous event:
(a) If he undertakes risky operations which the
owner was not accustomed to embark upon;
(b) If he has preferred his own interest to that of
the owner;
(c) If he fails to return the property or business
after demand by the owner; or
(d) If he assumes the management in bad faith.

192. What is the effect of ratification by the owner of

the business of the negotiorum gestio?
The ratification of the management by the owner of
the business produces the effects of an express
agency, even if the business may not have been
successful.

193. When is the management [in negotiorum gestio]

extinguished?

Management is extinguished:
1. When the owner repudiates it or puts an end thereto;
2. When the officious manager withdraws from the
management, subject to the provisions of Article
2144 of the Civil Code;
3. By the death, civil interdiction, insanity or insolvency
of the owner or the officious manager (Article 2153).
194. What is solution indebiti?

It is the juridical relation, which is created when

something is received when there is no right to demand it
and it was unduly delivered through mistake (Article 2154
of the Civil Code).

195. What is the Torrens System?

It is a system of registration of transactions with

interest in land the object of which is, under governmental
authority, to establish and certify the ownership of an
absolute and indefeasible title to realty, and to simplify its
transfer.

196. What is a certificate of title?

Is a certificate of ownership issued by the Register of

Deeds naming and declaring the owner of the real
property described therein free from all liens and
encumbrances, except such as may be expressly noted
thereon or otherwise reserved by law.

197. What are agrarian lands?

It refers to land devoted to agricultural activity as

defined under the Comprehensive Agrarian Reform Law
(RA 6657) and not classified as mineral, forest, residential,
commercial or industrial land.
198. What is the Tenant Emancipation Doctrine?

It provides for the emancipation of farmers of private

agricultural lands primarily devoted to rice and corn
under a system of sharecrop or lease-tenancy, whether
classified as landed estate or not.

199. What are the requisites for registration of

ancestral lands?
1. Applicant must be a member of the Indigenous
Cultural Communities/Indigenous Peoples
(ICCs/Ips);
2. Possession of ancestral land must not be less than 30
years immediately preceding the approval of
Indigenous Peoples’ Rights Act (IPRA, RA 8371) on
October 29, 1997; and
3. By operation of law, the land is already classified as
alienable and disposable even with a slope of 18% or
more. Hence, no need to submit a separate
certification that the land has been classified as
alienable and disposable (IPRA, Sec. 12).
200. Are lands under native title part of the public
domain?

No, native title is a right of private ownership

particularly granted to Indigenous Cultural
Communities/Indigenous Peoples (ICCs/IPs) over their
ancestral lands and domains. The Indigenous Peoples’
Rights Act (IPRA) categorically declares ancestral lands
and domains held by native title as never to have been
public land.

201. Who can own lands in the Philippines?

In general, only Filipino citizens and corporations or

partnerships with at least 60% of the shares owned by
Filipinos are entitled to own or acquire land in the
Philippines.

202. May a natural-born citizen who has lost his

Philippine citizenship be a transferee of or acquire
private lands in the Philippines?

Yes, the provisions of Article XII, Section 8 of the 1987

Constitution provides that a natural-born citizen of the
Philippines who has lost his Philippine citizenship may be
a transferee of or own private lands, subject to limitations
provided by law.

203. What are the limitations to land ownership by

corporations?

a. For private lands:

1. At least 60% Filipino [Sec. 2, Art. XII, 1987
Constitution];
2. Restricted as to extent reasonably necessary to enable
it to carry out the purpose for which it was created;
3. If engaged in agriculture, it is restricted to 1,024
hectares.
 b. For patrimonial property of the State [Sec. 3, Art. XII,
1987 Constitution]
1. Lease only for a limited period of 25 years;
2. Limited to 1,000 hectares;
3. Applies to both Filipino and Foreign corporations;
4. This limitation does not apply where the corporation
acquired the land, the same was already private land
[Republic v. IAC and Acme Plywood & Veneer co., Inc.,
G.R. No. 73002 (1986)].

204. Who may apply for original registration in ordinary

land registration proceedings?

a. Under Sec. 14, PD 1529:

1. Those who by themselves or through their

predecessors-in-interest, have been in open,
continuous, exclusive and notorious possession and
occupation of alienable and disposable lands of the
public domain under a bona fide claim of ownership
since June 12, 1945, or earlier.
2. Those who have acquired ownership of private lands
by prescription under the provisions of existing laws.
3. Those who have acquired ownership of private lands
or abandoned river beds by right or accession or
accretion under the existing laws.
4. Those who have acquired ownership of land in any
other manner provided for by law [see: Republic
 represented by Mindanao Medical Center v CA, G.R.
No. 40912 (1976)]
● Land owned in common: ALL coowners shall file
the application jointly.
● Land has been sold under pacto de retro: the
vendor a retro may file an application for the original
registration of the land, provided, however, that
should the period for redemption expire during the
pendency of the registration proceedings and
ownership to the property consolidated in the vendee
a retro, the latter shall be substituted for the applicant
and may continue the proceedings.
● Land subject of a trust agreement: A trustee on
behalf of his principal may apply for original
registration of any land held in trust by him, unless
prohibited by the instrument creating the trust.

b. Under Sec. 16, PD 1529; Land Applied for Registration by

a Non-Resident of the Philippines:

He shall file his application:

1. An instrument in due form;
2. Appointing a duly authorized representative or
attorney-in-fact, whose authority shall accompany the
application;
3. Giving his full name and postal address; and
4. Shall therein agree that the service of any legal
process in the proceedings under or growing out of the
application made upon his agent or representative
 shall be of the same legal effect as if made upon the
applicant within the Philippines.

c. Under Sec. 12, CA 141:

Any person who:

1. Is a citizen of the Philippines over the age of 18, or
the head of a family;
2. Does not own more than 24 hectares of land in the
Philippines, or has not had the benefit of any
gratuitous allotment of more than 24 hectares of land
since the occupation of the Philippines by the United
States.

d. Under RA 8371:

1. Sec. 11 – Formal recognition of ancestral domains by

virtue of Native Title may be solicited by ICCs/IPs
concerned
2. Sec. 12 – Option to secure certificate of title under
CA 141 or Land Registration Act 496
● Individual members of cultural communities with
respect to individually-owned ancestral lands who, by
themselves or through their predecessors-in -interest,
have been in continuous possession and occupation of
the same in the concept of owner since time
immemorial or for a period of not less than thirty (30)
years immediately preceding the approval of this Act
and uncontested by the members of the same ICCs/IPs
 shall have the option to secure title to their ancestral
lands
● Option granted shall be exercised within 20 years
from the approval of RA 8371

205. What are the steps in the process of registration

in ordinary land registration proceedings?

STEP 1: Survey of the land by the Bureau of Lands or a duly

registered private surveyor drawn on a tracing cloth plan.

STEP 2: Filing of Application Filing for application for

registration by the applicant at the RTC of the province, city,
or municipality where the property is located [Sec. 17, PD
1529]

a. Form of the application:

1. In writing
2. Signed by the applicant/s or person duly authorized
in his behalf
3. Sworn before any officer authorized to administer
oath for the province or city where the application was
actually signed
4. Application is presented in duplicate

b. Contents of the application:

1. Full description of the land as evidenced by the survey
plan;
 2. The citizenship and civil status of the applicant,
whether single or married, and, if married, the name of
the wife or husband, and, if the marriage has been legally
dissolved, when and how the marriage relation
terminated.
3. The full names and addresses of all occupants of the
land and those of the adjoining owners, if known, and, if
not known, it shall state the extent of the search to find
them.
4. Whether the property is conjugal, paraphernal, or
exclusively owned by the applicant.
5. Assessed value of the land and the buildings and
improvements thereon;
6. Whether or not there are Mortgages or encumbrances
of any kind affecting the land;
7. The manner by which the applicant has acquired the
land in accordance with Sec. 14, P.D. 1529
8. Original muniments of title, and 9. If the land is
bounded by a public or private way or road [Sec. 15, PD
1529]

c. Documents to accompany the application [from

Regulations in Ordinary Land Registration Cases]
1. Tracing-cloth plan duly approved by the Director of
Lands, together with two blueprint or photographic
copies thereof;
2. Three copies of the corresponding technical
descriptions;
3. Three copies of the surveyor’s certificate;
 4. All original muniments of title in the possession of the
applicant which prove his rights, to the title he prays for
or to the land he claims; and
5. Certificate in quadruplicate of the city or provincial
treasurer of the assessed value of the land, at its last
assessment for taxation, or, in the absence thereof, that
of the next preceding year. However, in case the land has
not been assessed, the application may be accompanied
with an affidavit in quadruplicate of the fair market
value of the land, signed by three disinterested persons.

d. Land Registration Application Covering Two or More

Parcels: An application may include two or more parcels
of land belonging to the applicant/s provided that they are
situated within the same province or city. The Court may
at any time order an application to be amended by striking
out one or more parcels or by a severance of the
application. [Sec. 18, PD 1529]

e. Amendments to the Application

1. Sec. 19, PD 1529 permits the applicants to amend the
application including joinder, substitution, or
discontinuance as to parties at any stage of the
proceedings upon such just and reasonable terms as the
court may order:
● Joinder – inclusion of additional applicants;
amended by adding names of new applicants;
● Substitution – replacement of the original party by
another
 ● Discontinuance – removal of names of one or more
applicants
2. However, substantial amendments shall be subject to
the same requirements of publication and notice as in an
original application under Sec. 23 of PD 1529. Such
substantial amendments include:
● A change in the boundaries
● An increase in the area of the land applied for; or
● The inclusion of an additional land
3. Only where the original survey plan is amended
during the registration proceedings, by the addition of
land not previous included in the original plan, should
publication be made in order to confer jurisdiction on
the court to order the registration of the area added after
the publication of the original plan. If the amendment
involves a reduction in the original area, no new
publication is required. [Republic v. Court of Appeals
and Ribaya G.R. No. 113549 (1996)]
f. Special Cases:
1. If the land is bounded by a road, the applicant must
state in his application if he claims any portion of the
land within the limits of the road, or if he likes to have
the boundaries determined. [Sec. 20, PD 1529]
2. If the applicant is a non-resident, he shall appoint an
agent or representative who is a Philippine resident.
[Sec. 16, PD 1529]
 3. Intestate Estate of Don Mariano San Pedro v. CA G.R.
No. 130727 (1996)]: A person claiming ownership of
real property must clearly identify the land claimed by
him.
4. In re: Application for Land Registration v. Republic
[G.R. No. 147359 (2008)] An applicant in a land
registration case must prove the facts and
circumstances evidencing the alleged ownership of the
land applied for. General statements which are mere
conclusions of law and not factual proof of possession
are unavailing. The deeds in its favor only proved
possession of its predecessors-ininterest as early as
1948. (The law now stands that a mere showing of
possession for 30 years is not sufficient. Open,
continuous, exclusive, and notorious (OCEN) possession
must be shown to have started on June 12, 1945 or
earlier.)

STEP 3: Setting of the date for the initial hearing of the

application by the Court

a. The Court shall issue an order setting the date and hour
of the initial hearing within 5 days from filing of the
application
b. The initial hearing shall be 45 – 90 days from the date of
the order [Sec. 23, PD 1529]
● If the date of the initial hearing was set beyond the 90-
day period, the Court will still acquire jurisdiction where
the applicant has complied with all the requirements of
 the law. [Republic v. San Lorenzo Dev’t, G.R. No. 170724
(2007)]
STEP 4: Transmittal to the LRA The application and the date
of initial hearing together with all the documents or other
evidences attached thereto are transmitted by the Clerk of
Court to the Land Registration Authority (LRA).
STEP 5: Publication of a Notice of the Filing of the
Application and date and place of hearing

a. Publication shall be sufficient to confer jurisdiction

upon the court. [Sec. 23, PD 1529]
b. It is done to charge the whole world of knowledge of the
application of the land involved, and invite them to take
part in the case and assent and prove their rights over the
subject property thereof. [Agcaoili]
c. Form and contents of the notice:
1. Addressed to all persons appearing to have an interest
in the land involved
2. Requires all persons concerned to appear in court on
the date and time indicated to show cause why the
application for registration should not be granted
d. The public shall be given notice of the initial hearing of
the application by publication
1. The Commissioner of Land Registration (CLR) shall
cause it to be published once in the Official gazette AND
once in a newspaper of general circulation
2. This is sufficient to confer jurisdiction to the court
e. It is not necessary to give personal notice to the owners
or claimants of the land sought to be registered to vest the
court with authority over the res. Land registration
proceedings are actions in rem. [Director of Lands v. CA,
G.R. No. 102858 (1997)]
f. Once the registration court had acquired jurisdiction
over a certain parcel, or parcels, of land in the registration
proceedings in virtue of the publication of the application,
that jurisdiction attaches to the land or lands mentioned
and described in the application. If it is later shown that
the decree of registration had included land or lands not
included in the original application as published, then the
registration proceedings and the decree of registration
must be declared null and void insofar — but only insofar
— as the land not included in the publication is concerned.
[Benin v. Tuason, G.R. No. L-26127 (1974)]

STEP 6: Service of Notice Service of notice upon contiguous

owners, occupants and those known to have interest in the
property by the Sheriff;
a. Mailing:
1. Within 7 days from publication, the CLR shall mail a
copy of the notice
2. Copies of the notice shall be mailed to:
● Every person named in the notice whose address is
known.
● the Secretary of Public Highways, to the Provincial
Governor, and to the Mayor of the municipality or city,
in which the land lies, if the applicant requests to have
the line of a public way or road determined
 ● Secretary of Agrarian Reform, the Solicitor General,
the Director of Lands, the Director of Mines and/or the
Director of Fisheries and Aquatic Resources, (as
appropriate) if the land borders on a river, navigable
stream or shore, or on an arm of the sea where a river
or harbor line has been established, or on a lake, or if
it otherwise appears from the application or the
proceedings that a tenant-farmer or the national
government may have a claim adverse to that of the
applicant
b. Posting:
1. CLR shall cause the sheriff or his deputy to post the
notice at least 14 days before the hearing: 2. In a
conspicuous place on each parcel of land included in the
application and in a conspicuous place on the bulletin
board of the municipal building of the municipality or
city in which the land or portion thereof is situated.
3. The court may also cause notice to be served to such
other persons and in such manner as it may deem
proper.

c. Notice of application and initial hearing by publication

is sufficient and the mere fact that a person purporting to
have a legitimate claim in the property did not receive
personal notice is not a sufficient ground to invalidate the
proceedings although he may ask for the review of the
judgment or the reopening of the decree of registration, if
he was made the victim of actual fraud. [Republic v.
Abadilla, CA, G.R. No. 6902-R (1951)]
STEP 7: Answer Filing of answer or opposition to the
application by any person whether named in the notice or
not;
a. Who may file? Any person claiming an interest, whether
named in the notice or not.
b. When to file? On or before the date of initial hearing, or
within such further time as may be allowed by the court.
c. What shall it contain? It shall state all the objections and
the interest claimed by the party the remedy desired.
d. How shall it be made? It shall be signed and sworn to by
him or by some other duly authorized person. Sec. 25, PD
1529 provides for the requisites of an opposition:
1. It shall set forth “all the objections to the application”
and
2. It shall state the “interest claimed by the party filing
the same”
e. Effect of Failure to Answer:
1. If no one appears/files an answer, upon motion, the
court shall order a default to be recorded. 2. By the
description in the notice "To all Whom It May Concern",
all the world are made parties defendant and shall be
concluded by the default order.
3. Where an appearance has been entered and an
answer filed, a default order shall be entered against
persons who did not appear and answer.
4. Absence of opposition does not justify outright
registration. [Director of Lands vs. Agustin, G.R. No. L-
16173 (1921)]
f. Order of Default: If no person appears and answers
within the time allowed, the court shall, upon motion of
the applicant, no reason to the contrary appearing, order
a general default to be recorded and require the applicant
to present evidence. By the description in the notice “To
all Whom It May Concern,” all the world are made parties
defendant and shall be concluded by the default order.

Where an appearance has been entered and an answer

filed, a special default order shall be entered against
persons who did not appear and answer. [Sec. 26, PD
1529]

g. Effects of Default:
1. With respect to the Applicant – he has the right to
present or adduce evidence ex parte
2. With respect to those covered by the default order –
they have no legal standing in court; therefore, they are no
longer allowed to participate and no opportunity to
present evidence
h. For relief from an order of default, see Sec. 3, Rule 18,
Rules of Court.

STEP 8: Hearing of the case by the court

a. Proof necessary in land registration
1. Proof that land has been declassified from the forest
zone, is alienable or disposable, and is registrable (e.g.
Presidential proclamation, legislative acts.
2. Identity of the land (survey plan)
3. Possession and occupation of the land for the length
of time and in the manner required by law. [Sec. 4, PD
1073 amending Sec. 48(b) and (c) of the Public Land Act]
 4. If he claims private ownership not because of his
possession, he must prove the basis of such claim by
submitting muniments of title.
b. Proving Private Ownership
1. Spanish titles are inadmissible and ineffective proof of
ownership in land registration proceedings filed AFTER
Aug. 16, 1976 [PD 892 as discussed in Santiago v. SBMA,
G.R. No. 156888, (2006)]
2. Tax declaration and receipts are not conclusive but
have strong probative value when accompanied by
proof of actual possession. [Municipality of Santiago v.
CA, G.R. No. L-49903 (1983)]
3. Other proofs such as testimonial evidence
c. Applicable procedural law:
1. Reception of evidence is governed by PD 1529
2. Rules of Court shall, insofar as not inconsistent with
the provisions of the Decree, be applicable to land
registration and cadastral cases by analogy or in a
suppletory character and whenever practicable and
convenient [Sec. 34, PD 1529]
3. Sec. 27, PD 1529: The trial court shall see to it that all
registration proceedings are disposed within ninety
days from the date the case is submitted for decision.
The Court may either:
1) Hear the parties and their evidence, or
2) Refer the case or any part thereof to a referee
● Referee shall hear the parties, receive their
evidence, and submit his report thereon to the Court
within 15 days after termination of such hearing
 ● Hearing before a referee may be held at any
convenient place within the province or city as may be
fixed by him and after reasonable notice thereof shall
have been served to the parties concerned
● Upon receipt of the report the Court may:
a. Adopt the same
b. Set aside the report
c. Modify the report
d. Refer back or recommit the case to the referee for
presentation of evidence
● According to Heirs of Mario Malabanan v. Republic
[G.R. No. 179987 (2014)], the following matters must
be established:
a. Issue of ownership;
b. Possession and occupation of the land;
c. Identity and description of the land;
d. That the land is alienable and disposable of the
public domain; and
e. The applicant has acquired the land through any
other modes of acquiring ownership

STEP 9: Promulgation of Judgment by the Court

a. This is the adjudication, determination, and resolution

of the issue of ownership
b. Forms of Judgment:
1. Dismissal of the application
● With prejudice – principle of res judicata applies
and the party can no longer re-file the case
● Without prejudice – the party may refile the case
 2. Partial Judgment – in a case where only a portion of
the land subject of registration is contested, the court
may render partial judgment provided that a
subdivision plan showing the contested and
uncontested portions approved by the Director of Land
is previously submitted to said court. [Sec. 28, PD 1529]
3. Judgment Confirming Title - Judgment may be
rendered confirming the title of the applicant, or the
oppositor as the case may be, to the land or portions
thereof upon finding that the party concerned has
sufficient title proper for registration. [Sec. 29, PD 1529]
c. Finality of Judgment - Sec. 30, par. 1, PD 1529 provides
that the judgment becomes final upon the expiration of 30
days counted from receipt of notice of judgment.

Note: This has been MODIFIED to the lapse of 15 days

counted from receipt of notice of judgment as per Sec. 39,
BP 129

STEP 10: Issuance of the decree

a. If the court finds after hearing that the applicant or

adverse claimant has title as stated in his application or
adverse claim and proper for registration, a decree of
confirmation and registration shall be entered
b. The Court declares the decision final and instructs the
LRA to issue a decree of confirmation and registration
within 15 days from entry of judgment
Note: It is not the court that issues the decree, but the LRA
who issues the decree of confirmation and registration. This
duty to issue the decree of registration does not prescribe.
Republic v. Nillas, G.R. No. 159595 (2007)]

c. One year after issuance of the decree, it becomes

incontrovertible and amendments of the same will not be
allowed except in cases of clerical errors Court retains
jurisdiction over the case until after the expiration of 1
year from the issuance of the decree of registration.
[Gomez v. CA, (1988)]

Note: While a decision in land registration proceeding

becomes final after the expiration of thirty days from the
date of service of its notice, the decree of registration does
not become final until after the lapse of one year from the
date of its issuance and entry.

STEP 11: Entry of the decree of registration This serves as

the reckoning date to determine the 1-year period from
which one can impugn the validity of the registration. [Sec.
32, PD 1529]

a. Decree is entered in the LRA

b. Every decree of registration shall:
1. Bear the day of the year, hour, and minute of its entry,
2. Be signed by the Administrator of the Land
Registration Authority in his ex officio capacity as Clerk
of Court in land registration matters
3. State whether the owner is:
 ● Married or unmarried, and if married, the name of
the husband or wife, provided that if the land
adjudicated is conjugal property, it shall be issued in
the names of both spouses.
● If the owner is under disability, it shall state the
nature of the disability,
● If the owner is a minor, his age
4. Contain a description of the land as finally determined
by the court,
5. Set forth the estate of the owner, and also, in such
manner as to show their relative priority, all particular
estates, mortgages, easements, liens, attachments and
other encumbrances, including rights of tenant-farmer,
if any, to which the land or owner’s estate is subject,
6. Contain any other matter properly to be determined
[Sec. 31, PD 1529]

STEP 12: Sending of copy of the decree of registration to the

corresponding Register of Deeds (Registrar of Land Titles
and Deeds)

STEP 13: Transcription of the decree of registration

a. It is transcribed in the registration book of the Registrar
of Land Titles and Deeds
b. Registrar issues owner’s duplicate OCT of the applicant
by the Registrar of Land Titles and Deeds, upon payment
of the prescribed fees.
206. What remedies are available to an aggrieved
party in a registration proceeding after a decree of
registration has been issued?

An aggrieved party in a registration proceeding may

avail himself of the following remedies:

1. Motion for New Trial [see Rule 37, ROC] Relief from
Judgment [see Rule 38, ROC]
2. Appeal
3. Relief from Judgment
4. Petition for Review of Decree of Registration
5. Action for Reconveyance
6. Quieting of Title
7. Cancellation of Title
8. Action for Damages
9. Action for Compensation from the Assurance Fund
10. Annulment of Judgment or Final Orders and
Resolutions
11. Reversion
12. Criminal Prosecution

207. What is the nature of a cadastral proceeding?

It is a proceeding in rem, initiated by the filing of a

petition for registration by the government, not by the
persons claiming ownership of the land subject thereof,
and the latter are, on the pain of losing their claim thereto,
in effect compelled to go to court to make known their
claim or interest therein, and to substantiate such claim or
interest.

Unlike other kinds of registration, this is compulsory

as it is initiated by the government. The government does
not seek the registration of land in its name. The objective
of the proceeding is the adjudication of title to the lands or
lots involved in said proceeding.

Purpose: 1. To serve the public interest by requiring

that the titles to any unregistered lands be settled and
adjudicated; 2. To settle all disputes over the land; and 3.
To remove all clouds over land titles, as far as practicable.

208. What is the procedure in cadastral registration?

STEP 1: Determination of the President that public

interest requires title to unregistered lands be settled and
adjudicated. President then orders the Director of Lands
to conduct a cadastral survey.

STEP 2: Director of lands shall make a cadastral survey.

STEP 3: Director of Lands gives notice to interested

persons and to the general public. Contents of the Notice:
1. Day on which the survey will begin
2. Full and accurate description of the lands to be
surveyed

STEP 4: Publication of notice

 1. Published once in the Official Gazette
2. A copy of the notice in English or the national language
shall be posted in a conspicuous place on the bulletin
board of the municipal building of the municipality in
which the lands or any portion thereof is situated

A copy of the notice shall also be sent to: a. Mayor of

the municipality; b. Barangay captain; and c. Sangguniang
Panlalawigan and Sangguniang Bayan concerned.

STEP 5: Geodetic engineers or other Bureau of Land

employees in charge of the survey shall give notice
reasonably in advance of the date of the survey. They shall
also mark the boundaries of the lands with monuments.

STEP 6: Interested persons should communicate with the

geodetic engineer if he requests for any information about
the land.

STEP 7: Actual survey and plotting of the land.

STEP 8: Director of Lands represented by Solicitor General

shall institute original registration proceedings.
1. Petition is filed in the appropriate RTC where the land
is situated
2. Contents of the Petition:
a. That public interest requires that the title to such lands
be settled and adjudicated and praying that such titles be
so settled and adjudicated
b. Description of the lands
c. Accompanied by a plan thereof d. Such other data as may
serve to furnish full notice to the occupants of the lands
and to all persons who may claim any right or interest
therein.

STEP 9: Publication, mailing posting

STEP 10: Hearing Jurisdiction of the Cadastral Court:

1. Adjudicate title to any claimant thereto
2. Declare land as a public land
3. Order correction of technical description
4. Order the issuance of new title in place of the title issued
under voluntary registration proceedings
5. Determine the priority of overlapping title 6. Order the
partition of the property

STEP 11: Decision

STEP 12: Issuance of the decree and certificate of title

Note: Reopening of cadastral cases no longer allowed. RA
931, effective June 20, 1953 for five (5) years, authorizing
the reopening of cadastral cases under certain conditions
and which had been extended until Dec. 31, 1968, is no
longer in force.

Courts are thus without jurisdiction or authority to reopen

a cadastral proceeding since Dec. 31, 1968. [Aquino, citing
Republic v. Estenzo, G.R. No. L-35512 (1988)
209. What are deemed voluntary dealings?

Voluntary dealings are deeds, instruments,

documents which are the results of free and voluntary acts
of parties thereto.

The act of registration shall be the operative act to

convey or affect the land insofar as third persons are
concerned. [Sec. 51, PD 1529]

210. What is the procedure to register conveyances

and transfers of registered land?

a. If entire property is the subject [Sec. 57, PD 1529]

1. Owner executes and registers the deed which must be
sufficient in form.
2. A new certificate of title is issued and Register of
Deeds prepares and delivers to grantee his owner’s
duplicate certificate
3. Register of Deeds notes upon the OCT and
theduplicate certificate the date of transfer, the volume
and page of the registration book where the new
certificate is registered
4. The original and the owner’s duplicate of the grantor’s
certificate shall be stamped “cancelled”.
5. The deed of conveyance shall be filed and indorsed
with the number and the place of registration of the
certificate of title of the land conveyed.
b. If only a portion of property is the subject [Sec. 58, PD
1529]
1. Include a plan which shows all the portions already
subdivided with verified and approved technical
description.
2. That plan with the certified copy of the technical
descriptions shall be filed with the Register of Deeds for
annotation in the TCT.
3. Register of Deeds shall issue a TCT and cancel the
grantor’s certificate partially OR it may be cancelled
totally and a new one issued describing therein the
remaining portion

c. If there are SUBSISTING encumbrances and

annotations: They shall be carried over in the new
certificate or certificates; except when they have been
simultaneously discharged.

211. What is the procedure for registration of

voluntary dealings less than ownership of subject
land?

a. Filing of the instrument with the Register of Deeds

b. A brief memorandum thereof is made:

1. On the certificate of title by the Register of Deeds and
signed by him, and
2. On the owner’s duplicate
 Cancellation or extinguishment of such interests shall
be registered in the same manner.

212. What are involuntary dealings?

Involuntary dealings refer to the writ, order, or

process issued by the court of record affecting registered
land, also other instruments which are not willful acts of
the registered owner, executed without his knowledge or
consent. The entry thereof in the day book is sufficient
notice to all persons of such adverse claim.

Involuntary dealings, unlike the voluntary dealings,

requires the registration. It is the act of registration which
creates a constructive notice to the whole world of such
instrument or court writ or process and is the operative
act that conveys ownership or affects the land insofar as
third persons are concerned.

213. How are attachments registered?

Process of Registration
a. Copy of writ in order to preserve any lien, right or
attachment upon registered land shall be filed with the
Register of Deeds where the land lies, containing number
of certificate of title of land to be affected or description of
land [PD 1529, Sec 69]
b. Register of Deeds to index attachment in names of both
plaintiff & defendant or name of person whom property is
held or in whose name stands in the records
 1. If duplicate of certificate of title is not presented:
● Register of Deeds shall within 36 hours send
notice to registered owner by mail stating that
there has been registration & requesting him to
produce duplicate so that memorandum be
made
● If owner neglects or refuses – Register of
Deeds shall report matter to court.
2. Court after notice shall enter an order to owner to
surrender certificate at time & place to be named
therein.
c. Although notice of attachment is not noted in duplicate,
notation in book of entry of Register of Deeds produces
effect of registration already

214. What properties are non-registrable?

Civil Code provisions dealing with non- registrable

properties
1. Properties of public dominion [Art. 420, CC]
(i) Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges constructed
by the State, banks, shores, roadsteads, and others of
similar character;
(ii)Those which belong to the State, without being for
public use, and are intended for some public service
or for the development of the national wealth.
2. Waters under Art. 502, CC
• (i) Rivers and natural beds;
• (ii) Continuous or intermittent waters of springs and
brooks running in their natural beds and the beds
themselves;
• (iii) Waters rising continuously or intermittently on
lands of public dominion;
• (iv) Lakes and lagoons formed by Nature on public
lands, and their beds;
• (v) Rain waters running through ravines or sand
beds, which are also part of public dominion;
• (vi) Subterranean waters on public lands;
• (vii) Waters found within the zone of operation of
public works, even if constructed by a contractor;
• (viii) Waters rising continuously or intermittently on
lands belonging to private persons, to the State, to a
province, or to a city or municipality from the
moment they leave such lands; and
• (ix) The waste waters of fountains, sewers, and public
establishments.
Specific kinds of non-registrable properties or lands
1. Forest or timberland, public forest, forest reserves
2. National parks – Under the present Constitution,
national parks are declared part of the public domain, and
shall be conserved and may not be increased nor
diminished, except by law [Rep. v AFP Retirement and
Separation Benefits System, G.R. No. 180463 (2013)]
3. Mangrove swamps - Mangrove swamps or mangroves
should be understood as comprised within the public
forests of the Philippines as defined in Sec. 1820,
Administrative Code of 1917. [Director of Forestry v.
Villareal, G.R. No. L-32266 (1980)]
4. Mineral lands - Both under the 1987
Constitution and Sec. 2 of the Public Land Act, mineral
lands are not alienable and disposable. [Lepanto
Consolidated Mining Co. v. Dumyung, G.R. No. L-31666
(1979)]
5. Foreshore land and seashore and reclaimed lands-
Seashore, foreshore, and/or portions of territorial waters
and beaches, cannot be registered. Even alluvial formation
along the seashore is part of public domain. [Aquino, citing
Dizon v. Rodriguez, G.R. Nos. L-20300-01 (1965)]
6. Lakes - Lakes are part of public dominion. [Art. 502(4),
CC]
7. Creeks and Streams – A dried up creek bed is property
of public dominion [Fernando v. Acuna, G.R. No. 161030
(2011)]
8. Military or Naval Reservations - The reservation made
segregates it from the public domain and no amount of
time in whatever nature of possession could have ripen
such possession into private ownership. [Republic v.
Marcos, G.R. No. L-32941 (1973)]
9. Watershed - The Constitution expressly mandates the
conservation and utilization of natural resources, which
includes the country’s watershed. [Tan v. Director of
Forestry, G.R. No. L-24548, (1983)]
10. Grazing lands - While the 1987 Constitution does not
specifically prove that grazing lands are not disposable,
yet if such lands are part of a forest reserve, there can be
no doubt that the same are incapable of registration.
[Aquino, citing Director of Lands v. Rivas, G.R. No. L-
61539 (1986)]
11. Previously titled land - Proceeds from the
indefeasibility of the Torrens title.
12. Alluvial deposit along river when man- made - Such
deposit is really an encroachment of a portion of the bed
of the river, classified as property of the public domain
under Art. 420, par. 1 and Art. 502 (1) of the CC, hence not
open to registration. [Republic v. CA, G.R. No. L- 61647
(1984)]
13. Reservations for public and semi-public purposes – Sec.
14, Chapter 4, Book III of EO No. 292 provides that the
President shall have the power to reserve for settlement
or public use, and for specific public purposes, any of the
lands of public domain, the use of which is not otherwise
directed by law.

215. What is the effect of registration of sale of

unregistered property?

Effects of Transactions Covering Unregistered Land

1. As between the parties – The contract is binding and
valid even if not registered.
2. As among third persons – There must be registration
for the transaction to be binding against third
persons.
Torts and Damages

216. What are the elements of abuse of rights?

Elements [Albenson v. CA, G.R. No. 88694 (1993)]:

1. There is a legal right or duty;
2. Which is exercised in bad faith; and
3. For the sole intent of prejudicing or injuring another.

217. What is the principle of unjust enrichment?

One person should not be permitted to unjustly

enrich himself at the expense of another, but should be
required to make restitution of, or for property or benefits
received, retained, or appropriated where it is just and
equitable that such restitution be made, and where such
action involves no violation or frustration of law or
opposition to public policy, either directly or indirectly.

Enrichment at the expense of another is not per se

forbidden. It is such enrichment without just or legal cause
that is contemplated here. Just and legal cause is always
presumed, and the plaintiff has the burden of proving its
absence. The restitution must cover the loss suffered by
the plaintiff but it can never exceed the amount of unjust
enrichment of the defendant if it is less than the loss of the
plaintiff.

218. What are the requisites of an accion in rem verso?

Requisites
1. That the defendant has been enriched;
2. That the plaintiff has suffered a loss;
3. That the enrichment of the defendant is without just
or legal ground; and
4. That the plaintiff has no other action based on
contract, crime or quasi-delict.

219. What is the concept of liability without fault or

strict liability? When is it applicable?

This provision imposes liability even without fault, as

long as the injurious act or event benefited the defendant.

This article is based on equity, an involuntary act,

because of its character cannot generally create an
obligation; but when by such act its author has been
enriched, it is only just that he should indemnify for the
damages caused, to the extent of his enrichment. The
indemnity does not include unrealized profits of the
injured party, because defendant’s enrichment is the limit
of his liability. The plaintiff has the burden of proving the
extent of the benefit or enrichment of the defendant.

220. What is the liability of a person who committed

acts contrary to law?

The Court held that violation of a statutory duty is

negligence, and that Article 20 provides the legal basis for
award of damages to a party who suffers damage
whenever one commits an act in violation of some legal
provision.

221. What are the elements of acts contra bonus

mores?

Elements [Albenson v. CA, supra].

1. There is an act which is legal;
2. But which is contrary to morals, good customs, and
public policy; and
3. It is done with intent to injure.

222. Correlate Articles 19, 20, and 21 of the New Civil

Code.

Article 19 intended that the exercise of any right must

be in accordance with the purpose for which it was
established. It must not be excessive or unduly harsh;
there must be no intention to injure another.
Article 20 intended to provide a remedy in cases
where the law declares an act illegal but fails to provide
for a relief to the party injured.
Article 21 is designed to expand the concept of torts
and quasi-delict in this jurisdiction by granting adequate
legal remedy for the untold number of moral wrongs
which is impossible for human foresight to specifically
enumerate and punish in statute books.
223. What are intentional torts?

Intentional torts include conduct where the actor

desires to cause the consequences of his act or believes the
consequences are substantially certain to result from
it.This is a liability for personal acts or omission when a
person by his act or omission causes damage or prejudice
to another, a juridical relation is created by virtue of which
the injured person acquires a right to be indemnified and
the person causing the damage is charged with the
corresponding duty of repairing the damage. The reason
for this is found in the obvious truth that man should
subordinate his acts to the precepts of prudence and if he
fails to observe them and cause damage to another, he
must repair the damage

224. What are torts borne out of negligence?

Negligence is the omission to do something which a

reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would
do, or the doing of something which a prudent and
reasonable man would not do

The diligence with which the law requires the

individual to at all times govern his conduct varies with
the nature of the situation in which he is placed and the
importance of the act which he is to perform

225. When does strict liability exist in a tort?

 This happens instances where negligence is not
required to be proven to incur liability; and diligence is
not a defense. This includes Articles 1711, 1723, 2183,
2187, 2189-2193.

226. What are the kinds of torts according to scope?

The following are torts according to scope

A.) Human Relations Tort

Liability for personal acts or omission is founded on
that indisputable principle of justice recognized by all
legislators that when a person by his act or omission
causes damage or prejudice to another, a juridical relation
is created by virtue of which the injured person acquires a
right to be indemnified and the person causing the
damage is charged with the corresponding duty of
repairing the damage. The reason for this is found in the
obvious truth that man should subordinate his acts to the
precepts of prudence and if he fails to observe them and
cause damage to another, he must repair the damage
[Manresa]. Human Relations provisions in the Civil Code
include Art. 19 (Abuse of Rights) , Art. 20 (Acts Contrary
to Law), Art. 21 (Acts contrary to morals), and Art. 26
(Violation of Human Dignity).
B.) Strict Liability Tort
This refers to instances where negligence is not
required to be proven to incur liability; and diligence is
not a defense. This includes Articles 1711, 1723, 2183,
2187, 2189-2193
C.) Independent Civil Actions
Civil Code provisions on independent civil actions
include Articles 32-35. In these cases, a civil action may be
filed independently of the criminal action, even if there
has been no reservation made by the injured party; the
law in itself makes such reservation. The result of the civil
action is thus independent of the result of the criminal
action. The underlying purpose for this independent civil
action is to allow the citizen to enforce his rights in a
private action brought by him, regardless of the action of
the State attorney.

227. Who may be held liable for quasi-delicts?

Whoever by act or omission causes damage to

another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties,
is quasi-delict or culpa aquilana (Art. 2176, NCC).

The direct tortfeasor is one who is made liable for a

tort committed through his own acts. The tortfeasor may
be a natural or juridical person. In other words, the direct
tortfeasor is liable for quasi-delict. Liability consists in the
payment of damages for the injury suffered.

228. Who are vicariously liable for damages caused

by another?
 The obligation imposed under Art. 2176 (i.e., to pay
for injury suffered) is also demandable from those
persons (natural or juridical) who are responsible for the
person who has committed a quasi-delict (i.e., the direct
tortfeasor). Under this, liability is primary and direct
(solidarily liable with the direct tortfeasor), not
subsidiary. It is not conditioned upon the insolvency of or
prior recourse against the direct tortfeasor.

229. Who are deemed joint tortfeasors?

All persons responsible for a quasi-delict. They are all

persons who command, instigate, promote, encourage,
advise, countenance, cooperate in, aid or abet in the
commission of a tort, or who approve of it after it is done,
if done for their benefit. Under Art. 2194, their
responsibility is solidary.

230. What is proximate cause?

That cause, which, in natural and continuous

sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would
not have occurred.
In order that civil liability for negligence may arise,
there must be a direct causal connection between the
damage suffered by the plaintiff and the act or omission of
the defendant
231. What are the tests to determine if there is factual
causation of injury or damage through a negligent act?

The test is would a prudent man, in the position of

the tortfeasor, foresee harm to the person injured as a
reasonable consequence of the course about to be
pursued? If so, the law imposes a duty on the actor to take
precaution against its mischievous results, and failure to
do so constitutes negligence (Picart v. Smith, G.R. No.
L12219, March 15, 1918).
Whether such negligent conduct is a cause without
which the injury would not have occurred or is the
efficient cause which set in motion the chain of
circumstances leading to the injury. [Bataclan v. Medina,
G.R. No. 10126 (1957)]

232. What is an efficient intervening cause?

The test of determining whether or not the

intervening cause is sufficient to absolve a prior cause of
the injury is as follows: whether the intervention of a later
cause is a significant part of the risk involved in the
defendant’s conduct or is so reasonably connected with it
that the responsibility should not be terminated. In the
affirmative, such foreseeable intervening forces are within
the scope of the original risk, and hence of the defendant’s
negligence. In the negative, there exists an efficient
intervening cause that relieves the defendant of liability.
233. Distinguish cause from condition.

It is no longer practicable to distinguish cause from

condition. The Supreme Court adopted Prosser and
Keeton’s view that:
“Cause and condition. Many courts have sought to distin-
guish between the active “cause” of the harm and the
existing “conditions” upon which that cause operated. If
the defendant has created only a passive static condition
which made the damage possible, the defendant is said not
to be liable. But so far as the fact of causation is concerned,
in the sense of necessary ante- cedents which have played
an important part in producing the result, it is quite
impossible to distinguish between active forces and
passive situations, particularly since, as is invariably the
case, the latter are the result of other active forces which
have gone before. The defendant who spills gasoline about
the premises creates a “condition,” but the act may be
culpable because of the danger of fire. When a spark
ignites the gasoline, the condition has done quite as much
to bring about the fire as the spark; and since that is the
very risk which the defendant has created, the defendant
will not escape responsibility. Even the lapse of a
considerable time during which the “condition” remains
static will not necessarily affect liability; one who digs a
trench in the highway may still be liable to another who
falls into it a month afterward. “Cause” and “condition”
still find occasional mention in the decisions; but the
distinction is now almost entirely dis- credited. So far as it
has any validity at all, it must refer to the type of case
where the forces set in operation by the defendant have
come to rest in a position of apparent safety, and some
new force intervenes. But even in such cases, it is not the
distinction between “cause” and “condition” which is
important, but the nature of the risk and the character of
the intervening cause.”

234. Discuss the Last Clear Chance Doctrine.

Otherwise known as the doctrine of discovered peril

or the humanitarian doctrine., may be stated as follows:
Where both parties are negligent in such a way that it
would be impossible to determine whose negligence was
the proximate cause of the accident, the party who had the
last clear chance or opportunity to avoid the accident by
the use of proper care but failed to do so is considered in
law solely responsible for the consequences of the
accident. (Picart v. Smith, 37 Phil. 809)

235. When is the Last Clear Chance Doctrine

inapplicable?

In case the party at fault cannot be determined -

Doctrine of inscrutable fault shall apply. If fault cannot be
determined, each shall suffer its own damages and both
shall be solidarily liable for damages/losses to their
cargoes. Doctrine of last clear chance and doctrine of
contributory negligence are not applicable.

236. What is the concept of legal injury?

 Injury is the illegal invasion of a legal right; damage is
the loss, hurt, or harm which results from the injury;
damages are the compensation awarded for the damage
suffered. There can be damage without injury in those
instances in which the loss or harm was not the result of a
violation of a legal duty. Example: damnum absque injuria

237. When may an action for injuries prosper?

An action for injuries may prosper when there is

1. A legal Right in favor of a person
2. A correlative legal Obligation on the part of the
defendant to respect such right.
3. A Wrong, an act or omission in violation of such right
with consequent injury.

238. What need be established to warrant damages

arising from a violation of a right?

The mere fact that the plaintiff suffered losses does

not give rise to a right to recover damages. To warrant the
recovery of damages, there must be both a right of action
for a legal wrong inflicted by the defendant, and damage
resulting to the plaintiff therefrom. Wrong without
damage, or damage without wrong, does not constitute a
cause of action, since damages are merely part of the
remedy allowed for the injury caused by a breach or
wrong.

239. What are the classes of injuries?

 An offense causes two (2) classes of injuries — the
first is the social injury produced by the criminal act which
is sought to be repaired thru the imposition of the
corresponding penalty, and the second is the personal
injury caused to the victim of the crime, which injury is
sought to be compensated thru indemnity, which is civil in
nature. (Odelon Ramos v. Hon. Gonong, GR L-42010,
August 31, 1976)

240. What is the principle of damnum absque

injuria?

Under the principle of damnum absque injuria, the

legitimate exercise of a person's right, even if it causes loss
to another, does not automatically result in an actionable
injury and the law does not prescribe a remedy for the
loss. However, this principle admits of exception as when
there is an abuse of a person's right.

241. What are intentional torts? What are its kinds?

Intentional torts include conduct where the actor

desires to cause the consequences of his act or believes the
consequences are substantially certain to result from it.
Intentional torts include assault, battery, false
imprisonment, defamation, invasion of privacy and
interference of property.

242. What are the elements of interference with

contractual relations?
 The elements of the tort of interference with
contractual relation are: (a) existence of a valid contract;
(b) knowledge on the part of the third person of the
existence of the contract; and (c) interference of the third
person without legal justification or excuse. (So Ping Bun
vs. Court of Appeals, G.R. No. 120554, September 21, 1999

243. What is negligence?

Negligence is the omission to do something which a

reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would
do, or the doing of something which a prudent and
reasonable man would not do.

244. What is the degree of diligence of a good father

of a family?

A reasonable man is deemed to have knowledge of

the facts that a man should be expected to know based on
ordinary human experience.
245. What test is used to determine the existence of
negligence?
The test is would a prudent man, in the position of the
tortfeasor, foresee harm to the person injured as a
reasonable consequence of the course about to be
pursued? If so, the law imposes a duty on the actor to take
precaution against its mischievous results, and failure to
do so constitutes negligence.
246. What is the emergency rule?

Is an individual who suddenly finds himself in a

situation of danger and is required to act without much
time to consider the best means that may adopted to avoid
the impending danger, is not guilty of negligence if he fails
to undertake what subsequently and upon reflection may
appear to be a better solution, unless the emergency was
brought by his own negligence.

247. If an accident is caused by unreasonable risk of

harm due to the negligence of the defendant, will the
contributory negligence of the plaintiff be
appreciated as an efficient intervening cause?

Yes, according to Article 2179 of the New Civil Code

of the Philippines: “When the plaintiff’s own negligence
was the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only
contributory, the immediate and proximate cause of the
injury being the defendant’s lack of due care, the plaintiff
may recover damages, but the courts shall mitigate the
damages to be awarded.”

248. What is the quantum of proof required in

negligence cases? Who bears its burden?

The quantum of proof is preponderance of evidence.

The plaintiff alleging damage due to negligent acts in his
complaint has the burden of proving such negligence.
249. When is presumption of negligence applicable?

> Art. 2184 and Art. 2185; presumption of the negligence

of a motor driver;
> Art. 2188; possession of deadly weapon
> presumption of negligence may also arise because of
certain contractual relationship between the parties. (ex.
Contract of carriage)

250. What is the effect of defenses in cases involving

negligence?
Art. 2179. When the plaintiff’s own negligence was
the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only
contributory, the immediate and proximate cause of the
injury being the defendants lack of due care, the plaintiff
may recover damages, but the courts shall mitigate the
damages to be awarded.

251. What are the different defenses in negligence

cases?

a. Plaintiff’s conduct and contributory negligence

b. Imputed contributory negligence
c. Fortuitous event
d. Assumption of Risk
e. Death
f. Prescription
g. Involuntariness
252. What are affirmative duties?

a. Duty to rescue
> Duty to the rescuer
> Duty to rescue
b. Owners, proprietors and possessors
>Trespassers
>Visitors
> Children and attractive nuisance rule
> State of necessity
c. Employers and employees
>employer
>Employee
d. Banks
e. Common Carriers
f. Doctors
g. Lawyers

253. What is vicarious liability?

Vicarious liability is a situation in which one

party is held partly responsible for the unlawful
actions of a third party.

"Article 2180. The obligation imposed by Article

2176 is demandable not only for one's own acts or
omissions, but also for those persons for whom one
is responsible. The father, and in case of his death or
incapacity, the mother is responsible for the damages
 caused by the minor children who live in their
company.

254. What are the requisites for manufacturers to be

held liable for products produced by them?

Though the range of defective product cases is broad,

the claims typically fall into three categories of
product liability:
(1) defective manufacture;
(2) defective design; and
(3) failure to provide adequate warnings or
instructions concerning the proper use of the
product.

Thus, to sustain a claim liability under

quasi-delict, the following requisites
must concur:
(a) damages suffered by the plaintiff;
(b) fault or negligence of the defendant,
or some other person for whose acts he
must respond; and
© the connection of cause and effect
between the fault or negligence of the
defendant

255. May noise be considered a nuisance?

 Yes, a noise is considered a nuisance under our
Civil Code when it annoys or offends the senses; or
hinders or impairs the use of property. As can be
gleaned from Article 696 of the Civil Code, the owners
or possessors of property, even their successors, are
liable for such nuisance.
256. What constitute violations of constitutional
rights and civil liberties under the New Civil Code?
A civil rights violation is any offense that occurs as a
result or threat of force against a victim by the offender
on the basis of being a member of a protected category.
For example, a victim who is assaulted due to their race
or sexual orientation. Violations can include injuries or
even death. Civil rights can occur if a person has had
their granted freedoms taken away or is discriminated
against based on:
• Race

• Color

• Gender

• Age

• National origin

• Disability

When a person’s rights are violated, the offender may be

prosecuted under certain criminal statutes.

257. What are the requisites for a peace officer to be

held primarily liable for damages for refusing or
failing to render aid or protection to a person whose
life or property is in danger?
 When a member of a city or municipal police force
refuses or fails to render aid or protection to any person
in case of danger to life or property, such peace officer
shall be primarily liable for damages, and the city or
municipality shall be subsidiarily responsible therefor.
(Article 34)

258. In what instances may provinces, cities, and

municipalities be liable for damages for the death of
or injuries to a person?

Art. 2189 of the NCC provides that Provinces,

cities and municipalities shall be liable for damages
for the death of, or injuries suffered by, any person by
reason of the defective condition of roads, streets,
bridges, public buildings and other public works
under their control and supervision.
259. When may the owner of a vehicle be held
solidarily liable with his driver in a motor vehicle
mishap?

Under Article 2180 of the Civil Code, “employers

shall be held 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.” The law
creates a presumption that the employer failed to
exercise the diligence of a good father of the family in
the selection and supervision of his or her employee.
 This failure is the basis of their direct and primary
liability, unless they can prove the contrary.

260. What is the “registered owner rule”?

The registered owner of the vehicle rule means

that registered owner of any vehicle, even if not used
for public service, would primarily be responsible to
the public or to third persons for injuries caused by
the latter while the vehicle was being driven on the
highways or streets.

261. When may the proprietor of a building or

structure be held liable for damages?

Article 1723. The engineer or architect who drew up

the plans and specifications for a building is liable for
damages if within fifteen years from the completion of the
structure, the same should collapse by reason of a defect
in those plans and specifications, or due to the defects in
the ground. The contractor is likewise responsible for the
damages if the edifice falls, within the same period, on
account of defects in the construction or the use of
materials of inferior quality furnished by him, or due to
any violation of the terms of the contract. If the engineer
or architect supervises the construction, he shall be
solidarily liable with the contractor.
 Acceptance of the building, after completion, does not
imply waiver of any of the cause of action by reason of any
defect mentioned in the preceding paragraph.
The action must be brought within ten years following the
collapse of the building.
262. When may the head of a family be held liable for
damages?
Parents can be held responsible for their
children's harmful actions much the same way that
employers are responsible for the harmful actions of
their employees. This legal concept is known as
vicarious liability. The parent is vicariously liable,
despite not being directly responsible for the
injury.

263. May a person claim damages against another for

violation of his data privacy?

Yes, one may claim compensation if you suffered

damages due to inaccurate, incomplete, outdated, false,
unlawfully obtained or unauthorized use of personal data,
considering any violation of your rights and freedoms as
data subject. This is stated under RA 10173.

264. Who shall be held liable for damages caused by

animals?

Article 2183 of the Philippine Civil Code states:

 “The possessor of an animal or whoever may
make use of the same is responsible for the damage which
it may cause, although it may escape or be lost. This
responsibility shall cease only in case the damage should
come from force majeure or from the fault of the person
who has suffered damage.”

As can be seen above, a possessor of an animal

is liable for the injuries and damages caused by his
pet. Even if one is not the owner but the actual possessor
of the dog, he can still be held liable. As enunciated by the
Supreme Court, the liability here is not based on
negligence or lack of vigilance of the possessor of the
animal. Rather, it is based on natural equity and on the
principle of social interest that he who possesses animals
for his utility, pleasure or service must answer for the
damage which such animal may cause.

265. When may the possessor or user of an animal be

free of liability for damages the animal may cause?

As stated in Article 2183 of the Philippine Civil Code,

this responsibility shall cease only in case the damage
should come from force majeure or from the fault of the
person who has suffered damage.

266. When may a property owner be held liable for an

attractive nuisance?
 Jurisprudence provides that property owner may be
liable for attractive nuisance when the owner maintains
on his premises dangerous instrumentalities or
appliances of a character likely to attract children in play,
and who fails to exercise ordinary care to prevent children
from playing therewith or resorting thereto, is liable to a
child of tender years who is injured thereby, even if the
child is technically a trespasser in the premises.

267. When is a manufacturer liable for defective

products under the Consumer Act?

According to RA 7394, also known as the Consumer

Act of the Philippines, states that in Art. 97 Liability for the
Defective Products. — Any Filipino or foreign
manufacturer, producer, and any importer, shall be liable
for redress, independent of fault, for damages caused by
consumers by defects resulting from design, manufacture,
construction, construction, assembly and erection,
formulas and handling and making up, presentation or
packing of their products, as well as for the insufficient or
inadequate information on the use and hazards thereof.

268. What is the legal concept of damages? What are

its kinds?

The term “damages” was defined by the Supreme

Court in a case, as the sum of money which the law awards
or imposes as a pecuniary compensation, a recompense,
or satisfaction for an injury done or a wrong sustained as
a consequence either of a breach of a contractual
obligation or a tortious act.
In Philippine laws, there are six kinds of damages, namely:
1. Actual or compensatory Damages
2. Moral Damages
3. Exemplary or corrective Damages
4. Liquidated Damages
5. Nominal Damages
6. Temperate or moderate Damages

269. What are actual or compensatory damages?

What are its kinds?

Article 2199 of the new Civil Code provides that,

“except as provided by law or by stipulation, one is
entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory
damages. He who claims actual or compensatory damages
must establish and prove by competent evidence actual
pecuniary loss.
Actual or compensatory damages are those
awarded in satisfaction of, or in recompense for, loss or
injury sustained. They simply make good or replace the
loss caused by the wrong. (Mariano Mendoza vs. Leonora
Gomez, G.R. No. 160110, June 18, 2014)
270. When may attorney’s fees be awarded?
Attorney’s fees may be awarded only when a separate
civil action to recover civil liability has been filed or when
exemplary damages are awarded. The reason for this is
that there is no attorney in a criminal case, only a public
prosecutor, who is compensated by the government.

271. What is the extent of liability for crimes and

quasi-delicts?

The concept of liability in quasi-delictual cases is

embodied in Chapter 2, Title XVII of the Civil Code.
Liability for quasi-delict under this article
requires the following conditions: (1) an unlawful act or
omission amounting to a fault or negligence, imputable to
the defendant; (2) damage or injury to the plaintiff; (3)
such damage or injury being the natural and probable, or
direct and immediate consequence of the defendant’s
wrongful act or omission; and (4) there being no pre-
existing contractual relation between the plaintiff and
defendant.
As for criminal liability, as a rule only natural
persons who are alive can be held criminally liable. The
reasons are: (i) The element of mens rea can only be found
in natural persons: malice in intentional felonies and
indifference in culpable felonies are attributes of natural
persons (ii) juridical persons cannot be arrested (iii) the
principal penalties consisting of deprivation of life or
of liberty, restriction of liberty, deprivation of rights, and
the accessory penalties of disqualification, cannot be
served by juridical persons.
Criminal acts or omission, whether intentional
or negligent (Article 365), are governed by the Revised
Penal Code of the Philippines (Act 3815). Whereas, no-
crime negligent acts or omissions are covered by the Civil
Code, specially Article 2176.

272. What is the extent of liability for breach of

contract?

Article 1170 of the Civil Code states that those

guilty of fraud, delay, or negligence, in the performance of
their obligations, or those who, in any way, contravene the
tenor of their obligations can be held liable for damages.
Liability for breach of contract should include
damages, specific performance, or contract cancellation
and restitution.

273. What are moral damages?

Moral Damages include physical suffering, mental

anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are
the proximate result of the defendant's wrongful act for
omission. (Art. 2217)

274. When may moral damages be awarded?

Moral damages are awarded to enable the injured party

to obtain means, diversions or amusements that will
serve to alleviate the moral suffering he has undergone,
by reason of the defendant’s culpable action. (Kierulf vs.
Court of Appeals, G.R. No. 99301, 13 March 1997)
The provisions of the new Civil Code on moral damages
state:
“Art. 2217. Moral damages include physical suffering,
mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shocks, social
humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendant’s wrongful act or omission.
Art. 2219. Moral damages may be recovered in the
following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28,
29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or
abused, referred to in No. 3 of this article, may also
recover moral damages. The spouse, descendants,
ascendants, and brothers and sister may bring action
mentioned in No. 9 of this article, in the order named.
Art. 2220. Willful injury to property may be legal ground
for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due.
The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.

275. Who may recover moral damages?

Natural persons who suffer physical suffering, mental

anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and
similar injury.

The parents of the female seduced, abducted, raped,

or abused, in cases of seduction, abduction, rape, or other
lascivious acts may also recover moral damages.

The spouse, descendants, ascendants, and brothers

and sister may bring action mentioned in Article 309 of
the Civil Code of the Philippines (Any person who shows
disrespect to the dead, or wrongfully interferes with a
funeral shall be liable to the family of the deceased for
damages, material and moral.), in the order named.
276. What are nominal damages? Temperate?
Liquidated? Exemplary?

Under Article 2221 of the Civil Code, nominal

damages may be awarded in order that the plaintiff’s
right, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered. Nominal damages are recoverable where a legal
right is technically violated and must be vindicated against
an invasion that has produced no actual present loss of
any kind or where there has been a breach of contract and
no substantial injury or actual damages whatsoever have
been or can be shown. (Seven Brothers Shipping
Corporation vs. DMC-Construction Resources, Inc., G.R.
No. 193914, 26 November 2014)

Article 2221 of the new Civil Code provides:

“Nominal damages are adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered by him.” The assessment of nominal damages is
left to the discretion of the court, according to the
circumstances of the case.

Under Article 2224 of the New Civil Code, temperate

damages may be recovered when pecuniary loss has been
suffered but the amount cannot, from the nature of the
case, be proven with certainty. In such cases, the amount
of the award is left to the discretion of the courts,
according to the circumstances of each case, but the same
should be reasonable, bearing in mind that temperate
damages should be more than nominal but less than
compensatory. (Republic of the Philippines vs. Alberto
Looyuko, G.R. No. 170966, 22 June 2016)

Under Article 2226 of the Civil Code, liquidated

damages are those agreed upon by the parties to a
contract, to be paid in case of breach thereof. The parties
to a contract are allowed to stipulate on liquidated
damages to be paid in case of breach. It is attached to an
obligation in order to ensure performance and has a
double function: (1) to provide for liquidated damages,
and (2) to strengthen the coercive force of the obligation
by the threat of greater responsibility in the event of
breach. The amount agreed upon answers for damages
suffered by the owner due to delays in the completion of
the project. As a pre-condition to such award, however,
there must be proof of the fact of delay in the performance
of the obligation. (Atlantic Erectors, Inc., vs. Court of
Appeals, G.R. No. 170732, 11 October 2012)

The liability for liquidated damages is governed by

Articles 2226-2228 of the Civil Code which provide:
“Article 2226. Liquidated damages are those agreed upon
by the parties to a contract, to be paid in case of breach
thereof.
Article 2227. Liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they
are iniquitous or unconscionable.
Article 2228. When the breach of the contract committed
by the defendant is not the one contemplated by the
parties in agreeing upon the liquidated damages, the law
shall determine the measure of damages, and not the
stipulation.”

Article 2229 of the Civil Code provides that

exemplary or corrective damages are imposed, by way
of example or correction for the public good, in addition to
moral, temperate, liquidated or compensatory damages.
Article 2231 of the same Code further states that in quasi-
delicts, exemplary damages may be granted if the
defendant acted with gross negligence. (Mariano Mendoza
vs. Leonora Gomez, G.R. No. 160110, June 18, 2014)

277. When may damages be recovered?

Art 2205 of the NCC provides that damages may be

recovered:
a. For the loss or impairment of earning capacity in
cases of temporary or permanent personal injury
b. For injury to the plaintiff’s business standing or
commercial credit
278. What may be recovered in case of death?
 Article 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been
mitigating circumstances. In addition:
(l)The defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid
to the heirs of the latter; such indemnity shall in every case
be assessed and awarded by the court, unless the
deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the
time of his death;
(2) If the deceased was obliged to give support according
to the provisions of article 291, the recipient who is not an
heir called to the decedent's inheritance by the law of
testate or intestate succession, may demand support from
the person causing the death, for a period not exceeding
five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the
deceased.
279. How is loss of earning capacity computed in case of
death or incapacity of the victim?
The formula in computing the loss of earning capacity as
discussed in People vs Reanzares (GR 130656, June 29,
2000), penned by Associate Justice Josue Bellosillo, is: loss
of earning capacity = [2/3 x (80 – age of the deceased)] x
1/2 annual gross income.
Succinctly, the step-by-step guide to compute an award
for loss of earning capacity dictates:
“(1) Subtract the age of the deceased from 80.
“(2) Multiply the answer in (1) by 2, and divide it by 3
(these operations are interchangeable).
“(3) Multiply 50 (percent) to the annual gross income of
the deceased.
“(4) Multiply the answer in (2) by the answer in (3). This
is the loss of earning capacity to be awarded.” (People vs
Wahiman, GR 200942, June 16, 2015).
280. What may mitigate liability of a defendant in a crime?
In quasi-delicts? In breach of contract?
The court shall mitigate the liability of the defendant in a
crime when the immediate and proximate cause of the
injury being the defendant’s lack of due care, stated
otherwise, when the plaintiff’s own negligence was the
immediate and proximate cause of his injury, he cannot
recover for damages. (ART. 2179)

In contracts, quasi-contracts and quasi-delicts, the court

may equitably mitigate the damages under the following
circumstances:
1. That the plaintiff himself has contravened the terms
of the contract;
2. That the plaintiff has derived some benefit as a result
of the contract;
3. In cases where exemplary damages are to be
awarded, that the defendant acted upon the advice of
a counsel;
4. That the loss would have resulted in any event
5. That since the filing of the action, the defendant has
done his best to lessen the plaintiff’s loss or injury.
(art. 2215)
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