1. An oral mortgage is void against innocent
third parties but valid between the parties
themselves
False Art. 1356. Contracts shall be obligatory,
in whatever form they may have been entered
into, provided all the essential requisites for
their validity are present. Unless otherwise
required to be in writing the mortgage is valid
and enforceable
2. An unregistered REM may still be the subject
of foreclosure.
True. If the instrument is not recorded, the
mortgage is nevertheless binding between the
parties.
3. A contract of antichresis that doesn’t specify
the interest in writing, although it expressly
mentioned the principal amount is void and of
no effect at all.
False. The obligation to pay interest is not the
essence of antichresis. It is where the creditor
acquires the right to receive the fruits of an
immovable with the obligation to apply them
to the payment of interest.
4. A CM is a real contract because it requires
constructive delivery by the registration of the
contract in the CM registry.
False. Under Article 2140 If the movable,
instead of
being recorded, is delivered to the creditor
or a third person, the contract is a pledge and
not a chattel mortgage.
5. What must be contained in an affidavit of
good faith?
A statement wherein the parties severally
swear that the mortgage is made for the
purpose of securing the obligation specified in
the conditions thereof and for no other
purposes and that the same is just and valid
obligation as one not entered into for the
purpose of fraud.
6. A CM w/out containing an affidavit of GF is
void for all intents and purposes.
False. The absence of the affidavit vitiates a
mortgage as against creditors and subsequent
encumbrancers. It is unenforceable against
third persons but valid between the parties.
7. Lessee may mortgage the thing leased but
only valid during the effectivity of the lease.
False. The lessee is not the absolute owner of
the property. The mortgagor must be the
absolute owner of the thing mortgaged
8. A mortgage made by a co-owner of a
property w/o the consent of other co-owners
produces no legal effect.
False. Art. 493. Each co-owner shall have the
full ownership of his part and of the fruits and
benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and
even substitute
another person in its enjoyment, except when
personal rights are involved. But the effect of
the alienation or the mortgage, with respect to
the co-owners, shall be limited to the portion
which may
be alloted to him in the division upon the
termination of the coownership.
9. The nullity of a mortgage does not render
null and void the principal obligation it
guarantees
True. The mortgage is only accessory to the
principal obligation. What is lost is the right to
foreclose the mortgage as a special remedy for
satisfying or settling the indebtedness or the
principal obligation.
10. A municipality may not mortgage a
patrimonial property being used as a public
market.

True. It is well-settled that public plazas are
properties for public use and therefore, belongs
to the public dominion. As such, it can be used
by anybody and no one can exercise over it the
rights of a private owner.
11. Growing fruits while they are attached to
the land may not be proper objects of CM
False. The Chattel mortgage law fully
recognize that growing crops are personal
property
12. A machinery classified as RP under Art 415
NCC may be the object of a valid CM.
True. Parties to a chattel mortage contract may
treat as personal property that which under the
law is a real property.
13. A mortgage may be gratuitous.
True. The law does not require mortgages to be
for consideration.
14. A mortgage follows the property whoever
the possessor may be provided there is formal
assumption of mortgage by the transferee.
False. Formal assumption is not necessary. A
purchaser is necessarily bound to acknowledge
and respect the encumbrance to which is
subjected the purchased thing.
15. While the law does not specifically require
the possession of the property to the antichretic
creditor, delivery has been held a standard
characteristic of the contract of antichresis
True. Further, once the creditor has taken
possession of the immovable, the debtor
cannot reacquire the enjoyment of the same
without first having totally paid what he owes
the creditor
16. All immovable properties may be the object
of a contract of antichresis.
False. Only immovable properties of the
creditor.
17. The mortgage extends to both natural and
artificial accessions
True. Art. 2127. The mortgage extends to the
natural accessions, to the improvements,
growing fruits, and the rents or income not yet
received when the obligation becomes due,
and to the amount of the indemnity granted or
owing to the proprietor from the insurers of
the property mortgaged, or in virtue of
expropriation for public use, with the
declarations, amplifications and limitations
established by law, whether the estate remains
in the possession of the mortgagor, or it passes
into the hands of a third person.
18. The parties must agree on the valuation of
the fruits for application to the interest and
principal of the debt
False. Art. 2133. The actual market value of the
fruits at the time of the application thereof to
the interest and principal shall be the measure
of such application.
19. The parties may stipulate to the share of
taxes and charges upon the estate during the
period of antichresis
True. Art. 2135. The creditor, unless there is a
stipulation to the contrary, is obliged to pay the
taxes and charges upon the estate.
20. The expenses for preservation of the
property in an antichresis shall be deducted
from the fruits of the same.
True. The creditor is bound to bear the
expenses necessary for its preservation and
repair. The sums spent for the purposes stated
in this article shall be deducted from the fruits
RIGHTS OF AN ANTICHRETIC CREDITOR
21. Receive fruits
22. Actual MV of the fruits at the the of
application

23. Enjoyment of immovable
OBLIGATIONS OF AN ANTICHRETIC
CREDITOR
24. Taxes
25. Charges upon estate
26. Apply fruits after receiving them
27. The chattel mortgage is deemed to cover
only the property described therein and not
like or substituted property thereafter acquired
by the mortgagor notwithstanding a contrary
stipulation
True
28. Stocks in trade which are naturally
revolving or floating and perishable goods that
are naturally expected to be replaced may be
the proper objects of a CM, provided the deed
must be amended every time there is a
replacement of the goods
True
57-62. Examples of Legal Pledge
1. Agent’s right of retention of objects of
an agency until the principal effects
reimbursement and indemnity (Art.
1914)
2. Depositary may retain the thing
deposited until full payment of what
may be due him by reason of the deposit
(Art. 1994)
3. Hotel-keepers. (Art. 2004)
4. Useful expenses shall be refunded only
to the possessor in good faith with the
same right of retention (Art. 546)
5. Upon the termination of the usufruct,
the thing in usufruct shall be delivered
to the owner, without prejudice to the
right of retention pertaining to the
usufructuary or his heirs for taxes and
extraordinary expenses which should be
reimbursed (Art. 612)
6. He who has executed work upon a
movable has a right to retain it by way
of pledge until he is paid. (Art. 1731)
63-69. Rules for a valid extrajudicial foreclosure
of a thing pledged
1. File application before the executive
judge thru the clerk of court
2. Clerk will examine whether there was
compliance with the posting of notice
and publication
3. Raffling of application among sheriffs
4. Auction sale (may be had even if there is
only 1 participating bidder)
5. Clerk shall issue a certificate of payment
6. Certificate of sale must be approved by
the executive judge
7. Archival of records
70. For all intents and purposes, pledge is
extinguished when the thing pledged is in the
hands of the pledgor
False. There is only a disputable
presumption.
Art. 2110. If the thing pledged is returned by
the pledgee to the pledgor or owner, the
pledge is extinguished. Any stipulation to the
contrary shall be void.
If subsequent to the perfection of the pledge,
the thing is in the possession of the pledgor or
owner, there is a prima facie presumption that
the same has been returned by the pledgee.
This same presumption exists if the thing
pledged is in the possession of a third person
who has received it from the pledgor or owner
after the constitution of the pledge.

 
71. The rules governing possession and Insures the right of a Custody and
preservation of a thing pledged by agreement part to property or to safekeeping of the
shall apply to legal pledge. recover in case of thing deposited
favorable judgment
True.
May cover movable as Movables only
Art. 2121. Pledges created by operation of law,
well as immovable
such as those referred to in Articles 546, 1731,
property
and 1994, are governed by the foregoing
articles on the possession, care and sale of the Cause is always Cause is generally
thing as well as on the termination of the onerous. gratuitous.
pledge. However, after payment of the debt
and expenses, the remainder of the price of the As to time of return: Time of return is
sale shall be delivered to the obligor. Upon order of the upon demand of the
Court or when depositor.
72-74. Obligations of a pledgee litigation ended
1. Take care of the thing with the diligence Thing is held in behalf It is held in behalf of
of a good father of a family of a person who has a the depositor.
2. Liable in case of loss or deterioration by right to the thing
reason of fraud, negligence or delay, or
contravenes the tenor thereof.
3. Not to deposit the same with a third 88-92. Solidary Debtor vs. Solidary Guarantor
person.
Solidary Debtor Solidary Guarantor
75-80. Characteristics and features of a
Conventional Deposit General Rule, he shall General Rule, Debtor
the one to pay the will pay the debt
1. Gratuitous debt
2. Involves only movable property
3. Voluntary or necessary Solidarily and Subsidarily liable to
4. Real primarily liable the debtor
5. Unilateral (If gratuitous) Not entitled to benefit Entitled to benefit of
6. Bilateral (If onerous) of excussion excussion
81-83. Obligation of a Depositary
He is the original His is only a collateral
1. Safekeeping promissor undertaking
2. Return the thing on demand
Bound to know every No need for notice of
3. Liable in case of loss if it was due to his
default default
fault or negligence
84-87. Judicial vs. Extra-Judicial Deposit
93. A quasi-contract will not arise if the act is
Judicial Deposit Extra-Judicial
not unilateral and voluntary and no unjust
Deposit
enrichment exists: True
Will of the Court Will of the parties or
Basis: Quasi contracts are based on the
contract
principle that no one shall be unjustly enriched

 

or benefited at the expense of another. (Civil
Code, Art. 2142)
94. A quasi-contract may be
nominate/innominate: True
95. The rights under a quasi-contract prescribe
in six years: True
Basis: Article 1145
“The following actions must be commenced
within six years:
a. upon an oral contract;
b. upon a quasi-contract”
96. Negotiorum gestio arises when a person
takes charge of an abandoned property of
another who does not oppose not withstanding
knowledge: False
Article 2144 provides that the juridical relation
arising from negotiorum gestio will not arise if
the manager has been tacitly authorized by the
owner. So if the owner knows/authorizes the
manager, negotiorum gestio will not arise.
97. Gestor who attempts to appropriate the
property is governed by rules on implied trust.
False (can’t find the answer to this, sorry L)
98. Solutio indebiti ariseswhen payment is
made through mistake, liberality or some other
cause.
False.
Only when payment is made through mistake.
(Art. 2154)
99. Where negligence is punishable under RPC,
the repsonsibility for QD is distinct from civil
liability arising from the felony and may
therefore be pursued separately.
True
Article 1161: Civil obligations arising from
criminal offenses shall be governed by the
penal laws, subject to the provisions of Article
2177.
Article 2177: Responsibility for fault or
negligence under the Article 2176 is entirely
separate and distince form the civil liability
arising from negligence under the RPC. But the
plaintiff cannot recover damages twice for the
same act or omission of the defendant.
100. Breach of contract may arise from quasi-
delict
True, such as in cases of negligence in breach
of contract of carriage (???)
101 – 102: Define 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. (Brucales vs People, Gr No. 181052)
103 – 104: Define Contributory Negligence
Article 2179. When the plaintiffs own
negligence was the immediate and proximate
cause of his injury, he cannot recover damages.
But if his negligence was only contributory, the
immediate and proximate cause of the injury
being the defendants lack of due care, the
plaintiff may recover damages, but the courts
shall mitigate the damages to be awarded.
105 – 106. Define Doctrine of Discovered Peril
The doctrine holding that where both parties
are negligent, but the negligent act of one is
appreciably later in time than that of the other,
or when it is impossible to determine whose
fault or negligence should be attributed to the
incident, the one who had the last clear
opportunity to avoid the impending harm and
failed to do so is chargeable with the

consequences thereof. [Picart v. Smith, 37
Phil. 809].
107. Under the doctrine of supervening
negligence, the antecedent negligence of a
telephone company is not providing warning
signs on excavations would not make it liable if
P had a clear chance to avoid the accident.
True.
An antecedent negligence of a person does not
preclude the recovery of damages for
supervening negligence of, or bar a defense
against the liability sought by, another if the
latter, who had the last fair chance, could have
avoided the impending harm by the exercise of
due diligence. [Pantranco North Express, Inc.
v. Baesa, 179 SCRA 384].
(Doctrine of supervening negligence is the
same as Doctrine of discovered peril.)
108. Volonti non fit injuria not apply if a
person, aware of possible danger, takes some
risks in order to preserve life.
True.
(also called Doctrine of Assumption of Risk) -
The precept that denotes that a person who
knows and comprehends the peril and
voluntarily exposes himself or herself to it,
although not negligent in doing so, is regarded
as engaging in an assumption of the risk and is
precluded from a recovery for an injury
ensuing therefrom.
109 – 110: Doctrine of Imputed Negligence
(aka Doctrine of Vicarious Liability)
A legal doctrine that assigns liability for an
injury to a person who did not cause the injury
but who has a particular legal relationship to
the person who did act negligently. (Art. 2176)
111. Burden of proof is the same in action
ciulpa contractual and culpa acquillana.
False
Culpa aquiliana - rests on plaintiff
Culpa contractual – defendant to
present proof of contract and non-
performance is sufficient
112 – 113. Res Ipsa Loquitor
Res Ipsa Loquitor - The thing itself speaks. One
is presumed to be negligent if he had exclusive
control of whatever caused the injury even
though there is no specific evidence of an act of
negligence, and without negligence the
accident would not have happened.
114. PH law recognizes the strict liability in
torts rule.
True
(Examples: Vestil vs IAC;
Art. 2187,2193,1711,1712)
115. Liability may be created even if there is no
fault or negligence.
True.
Go back to the sources of obligation. Liability
may arise from law, contract, etc. (Article 1157)
116. If driver and owner of a cargo truck which
figured in a road mishap were found liable for
torts, their liability is solidary.
- TRUE if the owner was in the vehicle with the
driver and could have by the use of due
diligence prevented the misfortune but if he
was not in the vehicle with the driver at the
time of the mishap then it would be vicarious
liability. ART. 2184

117. A subsidiary writ of execution may be
issued against employer of an accused even if
the former did not participate in the criminal
proceedings.
- TRUE. Art. 2180 shall apply.
118-123 Requirements of Negotorium Gestio
a. no meeting of the minds
b. taking charge of another’s business or
property
c. property or business have been abandoned
or neglected
d. must not have been authorized by the owner
e. done in good faith
f. the gestor must have voluntarily taken
charge
124-131 When is the Gestor liable for fortuitous
event
a. risky operations which the owner was not
accustomed
b. preferred his own interest
c. failed to return the property on demand of
owner
d. bad faith
e. he is unfit to carry on the management
f. intervened and prevented a more competent
person for the job
g. delegated the work to another
h. it is stipulated
132-139 extinguishment of Negotorium Gestio
a. Repudiation
b. withdrawal
c. death of the gestor
d. civil interdiction of the gestor
e. insanity of the gestor
f. insolvency of the gestor
g. loss of the property ( not sure though )
h. death, civil interdiction, insanity or
insolvency of the owner.
140. if the payor was in doubt whether debt is
due, he may recover upon proof that it was not
due.
- TRUE ART. 2156
141. Negotorium Gestio and Solutio Indebiti
apply in 1 and the same situation
-FALSE. They are different, in SI there is
mistake while in NG there is voluntariness of
action. In SI it is received while in NG he is the
one who takes charge of the property ( I think)
142. Negotorium Gestio is the management of
affairs or property of another without the
latter’s consent whether implied or express and
for his benefit.
- TRUE art 2144
143. A person who receives in good faith a
payment made erroneously by the payor shall
only answer for the thing and its accessories to
the extent of his enrichment.
- TRUE ART 2160

 
144 – 147 requirements of solutio indebiti
a. delivery to the payee
b. receipt
c. wrong delivery was by reason of mistake
d. there was no right to demand it

 
1. A survivorship agreement that upon the death of one of the joint account
holders, the full amount of money in their account shall become the
property of the survivor is a valid aleatory contract.
2. Betting in a basketball game is valid because it is not a game of chance.
3. A manufacturer or seller of a product cannot be held liable for any
damage caused by the product in the absence of proof that product was
defective.
4. A single transaction whereby two or more persons contribute funds to
buy certain estate for profit creates partnership only to that particular
transaction.
5. The liability for a contract entered into on behalf of unincorporated
association or ostensible corporation may be in a person who may not have
directly transacted on its behalf but reaped benefits from the contract.
6. A stipulation in a contract of partnership that upon the death of a partner,
the partnership shall continue to exist amongst the surviving partners and
the heir/s of the deceased partner is valid.
7. Where the title to real property is in the name of the partners, in
conveyance executed by all partners passes all their rights in such property.
8. If the cause is not justified or no cause was given, withdrawing managing
partner named in AOP may be compelled to remain in the firm until
selection of replacement and amendment of AOP.
9. Acquisition of 62% of the partnership interest by new partners, coupled
with retirement or withdrawal of partners who had original owned such
interest results to constitution of new partnership.
10. A partnership which does not fix its term is also referred to as
partnership without a term.
11. An action brought by attorney in fact in his own name instead of the
principal will not prosper unless name of principal is disclosed in the body
of complaint.
12. Liability arising from a partner’s negligence shall be solidary among the
guilty partner, innocent partners and partnership.
13. Prescription of right to inquire on the business affairs of partnership or
demand an accounting starts to run from the dissolution of partnership.
14. The agent’s interest in his promised commission upon completion of his
obligation makes agency coupled with interest.
15. Principal cannot be held liable for actions of agents outside scope of their
authority even if principal received benefits from the same.
1
FALSE. Not a game of chance but prohibited under PD 438.
TRUE.
FALSE. No partnership was created even for the aforementioned
particular transaction.
TRUE.
Clearly, under the law on estoppel, on behalf of a corporation and those
benefited by it, knowing it to be those acting on behalf of a corporation and
those benefited by it, knowing it to be without valid existence, are held liable as
general partners.
TRUE.
The death of one of the partners does not ipso facto dissolve the partnership
when, by common agreement, the surviving partners and the heirs of the
deceased decide to continue, the said agreement being in such case considered
as a continuation of the original contract of partnership.
TRUE. Article 1819 last paragraph
FALSE. The withdrawing partner is liable for damages for unjustified
dissolution but in no case can he be compelled to remain in the
partnership.
TRUE.
TRUE.
It is also referred to as partnership at will.
FALSE. An attorney in fact cannot file an action.
TRUE.
FALSE. Articles 1806, 1807, and 1809 show that the right to demand
accounting exists as long as the partnership lasts. Prescription begins to
run only upon the dissolution of the partnership when the final
accounting is done.
FALSE. It doesn’t make an agency one coupled with interest. An
agent’s interest in earning his agreed compensation is an ordinary
incident of agency. It is a usual byproduct of agency which does not
affect the essential nature of the relationship.
FALSE. Acts of agent exceeding scope of his authority cannot bind
principal unless the latter ratifies the contract. (Article 1898)
16. Broker may still claim for commission despite absence of authorization
from principal.
17. Power to foreclose given to mortgagee is governed by rules on ordinary
agency.
18. As between the parties to the agency, scope of agent’s authority is what
appears in written terms of power of attorney regardless of different
instructions from principal because third parties are not bound to inquire on
the written terms.
19. There is an implied trust when property is sold and the legal estate is
granted to one party but the price paid by another for the purpose of having
the beneficial interest of the property.
20. If a person obtains legal title to property by fraud and concealment,
courts of equity will impress upon the title is so called resulting trust in
favor of the defrauded party.
21. In an express trust, acceptance by the trustee is necessary for the creation
of the trust.
22. A trustor may not have the capacity to transfer property.
23. Trusts over real property are enforceable in any form.
24. Trustee can acquire trust property by adverse possession even without
repudiation of trust.
25. An express trust concerning an immovable or any interest may be
proved by parole evidence.
26. In an implied trust over a parcel of land, action to recover must be
brought within five years from issuance of title to property.
27. For an action for reconveyance based on fraud to prosper, petitioner
must prove by clear and convincing evidence only his title to the property.
28. Prescription will lie IN FAVOR of persons who are not in possession of
the disputed land provided they claim an interest thereon.
TRUE.
Unlike agents, brokers do not represent a principal so he doesn’t need
authorization from such.
FALSE. The power to foreclose is not an ordinary agency that
contemplates exclusively the representation of the principal by the
agent but is primarily an authority conferred upon the mortgagee for
the latter’s own protection.
FALSE. The agent may be liable for damages for not following the
instructions of the principal. However, the instructions are binding
only on the principal and agent and non-compliance by the agent
cannot prejudice third persons.
TRUE. Article 1448
FALSE. If a person obtains legal title to property by fraud or
concealment, courts of equity will impress upon the title a so-called
CONSTRUCTIVE TRUST in favor of the defrauded party.
FALSE. In the case of an express trust, acceptance of trust by a trustee
is necessary to charge him with the office of the trustee and the
administration of the trust and to vest the legal title in him. However,
his acceptance of the trust is NOT NECESSARY TO ITS EXISTENCE
AND VALIDITY, since if he declines the trust, the courts will appoint a
trustee to fill the office that he declines.
FALSE. Trustor must always have capacity to transfer property for he
transfers legal ownership of property to a person for the benefit of a
third party, who owns the equitable little.
FALSE. Article 1443 particularly provides for a form in order to enforce
express trust concerning immovable or any interest therein. It cannot
be proved by parol evidence.
FALSE. The express trusts disable the trustee from acquiring for his
own benefit the property committed to his management or custody, at
least while he does not openly repudiate the trust and makes such
repudiation known to the beneficiary.
FALSE. Article 1443. No express trusts concerning an immovable or
any interest therein may be proved by parol evidence.
FALSE. An action for the reconveyance of land based on implied or
constructive trust prescribes within 10 years. And it is from the date of
the issuance of such title that the effective assertion of adverse title for
purposes of the statute of limitations is counted.
FALSE. He must prove his title to the property as well as the
fraudulent act.
FALSE. The prescriptive rule applies only when the plaintiff or the
person enforcing the trust is not in possession of the contested
property, since if a person claiming to be the owner thereof is in actual
possession of the property, the right to seek reconveyance, which, in
effect, seeks to quiet title to property does not prescribe for he may
wait until his possession is disturbed or his title is attacked before
taking steps to vindicate his right.
29. In our jurisdiction, it is an enshrined rule that even a registered owner of
property may be barred from recovering possession of property by virtue of
laches.
30. Refusal on part of borrower to execute an agreement to cover the after-
acquired obligation can constitute an act of default on the part of the
borrower and the foreclosure may cover debts incurred after the time of
constitution of chattel mortgage sought to be foreclosed.
31. The rules governing loans or forbearances may be applied by analogy to
discounts.
32. Where indebtedness actually owing to the holder of mortgage is less than
sum named in the mortgage, mortgage may be enforced for more than the
actual sum due.
33. In a loan transaction, obligation to pay a sum certain in money may be
paid in money or by use of check if agreed upon.
34. Failure of entrustee to turn over proceeds of sale of goods, covered by
trust receipts to entruster or to return said goods when not disposed of in
accordance with the terms of trust receipt creates a civil obligation but not a
criminal case.
35. Legal rate for loan/forbearance of money may be applied to an
obligation arising from a piece of work.
36. If obligation consists in the payment of sum of money, and the debtor
incurs in delay, indemnity for damages, there being no stipulation to the
contrary, shall be the payment of interest agreed upon, and in the absence of
stipulation, legal interest which is 6% per annum.
37. In simple loan with stipulation of usurious interest, prestation of debtor
to pay the principal debt, which is the cause of contract becomes illegal.
38. In cases where no interest has been stipulated by the parties, as in case of
PH American Accident Insurance, accrued conventional interest could
further earn interest upon judicial demand.
39. A registered mortgage right over the property is inferior to an
unrecorded sale.
40. Exemplary damages are awarded for wanton acts and granted by way of
compensation for damages suffered by plaintiff so as to ____ others as a sort
of deterrent.
41. Loss of earning capacity cannot be awarded in case of damages
predicated on breach of contract.
42. Temperate damages are more than nominal damages and intended as a
reasonable compensation for injury sustained even in the documentary
proof.
FALSE, according to Vice Dean. No reason given. But TRUE in most
samplex.
TRUE
Acme Shoe Rubber & Plastic Corp. vs. Court of Appeals
FALSE, according to Vice Dean. No reason given. But TRUE in most
samplex.
FALSE. Mortgage cannot be enforced for more than the actual sum
due.
FALSE. If the thing loaned is money, payment must be made in the
currency stipulated, if it is possible to deliver such currency; otherwise,
it is payable in the currency which is legal tender in the Philippines
(Art. 1249). check is not a legal tender and, therefore, cannot constitute
valid tender of payment.
FALSE. Entrustee is liable for estafa.
FALSE, according to VD.
TRUE. (Art. 2209)
FALSE. Prestation of debtor to pay the principal debt is NOT illegal.
(Angel Jose Warehousing Co., Inc. vs. Chelda Enterprises)
FALSE. No accrued conventional interest could further earn interest
upon judicial demand.
True
State Investment House, Inc. vs. Court of Appeals
False, not by way of compensation.
False, it may be awarded.
It should be emphasized that the rule in crimes and quasi-delicts is the same as
the rule in breach of contracts and quasi-contracts where the breach was
accompanied by fraud, bad faith, malice or wanton attitude on the part of the
obligor.
1
43. Moral damages may not be recovered in cases of seduction if the victim
was already an adult at the time she had an affair with the seducer.
44. The seller of a car which was repossessed for appraisal purposes can still
claim for the balance of the purchase price.
45. The owner of establishment are solidary liable with their driver for any
accident resulting from latter's negligent operation of the vehicle provided
said owners were riding therein at the time of mishap.
46. Vendor of personal property sold on instalment basis is not precluded
after foreclosing the chattel mortgage on the thing sold, from having
recourse against the additional security put up by a third party to guarantee
the purchaser's performance of his obligation because the rights emanate
from different contracts.
47. Whenever a piece of rural land not exceeding 1 hectare is alienated, law
grants the adjoining owners a right of redemption even if grantee or buyer
does not own any other rural land.
48. When a 3rd person claims a legal right to the property leased, it is a
trespass in fact for which lessor shall not be liable unless stipulated.
49. The mere act of submitting a case to authorities for prosecution makes
one liable for malicious prosecution.
50. A private complainant can be held liable for malicious prosecution if
accused is acquitted by RTC on reasonable doubt.
51. In case of GF, damages recoverable from breach of contract are those
which are the natural and probable consequences of the breach of obligation,
WON the parties could have reasonably foreseen them or not.
52. In rape cases, the court may, in discretion, award moral damages to
victim without need for pleading or proof of the basis thereof.
53. On issue of public humiliation, the courts consider the social standing
and profession of a person in awarding him actual damages.
54. The diligence required of banks is more than that of a good father of a
family.
55. Payment of obligation in foreign currency is prohibited.
56. A loan of use exists when a person receives a loan of money or any other
fungible thing and acquires ownership thereof.
57. Failure to pay instalment payments in a contract to sell is a breach that
will justify rescission of contract.
58. Specially preferred credits must be satisfied first before ordinary credits
under 2244 be paid according to their priority.
False, the essential feature under Article 21 of the Civil Code is
seduction, that in law is more than mere sexual intercourse, or a breach
of promise of marriage; it connotes essentially the idea of deceit,
enticement, superior power or abuse of confidence on the part of the
seducer to which the woman has yielded (U.S. v. Buenaventura)
1
True
Art. 2184 last paragraph
False, vendor of personal property shall have no further action
againspt the purchaser to recover any unpaid balance of the price.
Art. 1484
False, except when the grantee or buyer does not own any other rural
land.
Primary structures Corp vs. Sps. Valencia
False, it is a trespass in law and lessor is liable.
False, prosecution must be with malice and in bad faith.
False, there must be competent evidence to show that the complainant
acted in bad faith.
True
False, in rape cases moral damages are awarded without need of proof
other than the fact of rape because it is assumed that the victim has
suffered moral injuries entitling her to such an award.
People vs. Sambrano
False, social standing is relevant only in awarding moral damages.
Simon vs. Martinez
True
BPI vs. CA
False, it is not prohibited.
False, it is simple loan or loan for consumption.
True
True
59. In precarium, bailor can demand the return of the thing at will from
bailee.
60. Execution of deed of assignment in lieu of surety bond will have same
effect as dation in payment.
61. Forged deed of sale may become root of valid title if certificate has
already been transferred from the name of true owner to the name of forger.
62. Mortgagee may insure the mortgaged property for his benefit but not for
his sole benefit.
63. Doctrine of LCC means that even though a person’s own acts may have
placed him in a position of peril and an injury results, the injured person is
not entitled to recovery and parties must suffer own damages.
64. In res ipsa loquitor, burden of proof remains on plaintiff to prove that
injury arose from defendant’s want of care.
65. Recovery of actual damages, it is not necessary to prove actual amount of
loss with reasonable degree of certainty.
66. Grant of attorney’s fees as part of damages is an exception rather than
the rule and counsel’s fees are not awarded every time a party prevails in
suit.
67. Principal of an academic school is liable for tort committed by student.
68. Moral damages are generally recoverable in an action for breach of
contract because every person must comply with his contractual obligation
in good faith.
69. If the safekeeping of the thing delivered is not the principal purpose of
the contract, rules on deposit should still govern.
70. A contract of sale is void and produces no effect whatsoever where price
which appears therein as paid, has in fact never been paid by purchaser to
vendor.
71. Generally, malice can be presumed from defamatory words but
privileged character of a communication destroys the presumption of
malice.
72. An interest rate of 2% a month is iniquitous and stipulation of interest is
void.
73. The court in Atlantic Gulf vs. CA did not exceed its jurisdiction when it
modified the judgment of trial court by increasing the award of damages in
favour of the private respondents who, in the first place, did not impose an
appeal therefrom.
74. When the judgment awarding sum of money becomes FE, the monetary
award shall earn interest at 6% per annum from the date of such finality
until its satisfaction, regardless of whether the case involves a loan or
forbearance of sum of money.
True
False, no debt was extinguished upon the execution of the deed of
assignment, which was intended merely as another security for the
issuance of the surety bonds.
Citizen’s Surety and Insurance Co., vs. CA
True
A fraudulent or forged document of sale may become the root of a valid title if
the certificate of title has already been transferred from the name of the owner
to the name of the forger or the name indicated by the forger. (Duran vs. IAC)
False, mortgagee may insure for his sole benefit.
False, it means that even if the plaintiff was guilty of antecedent
negligence, the defendant is still liable because he had the last clear
chance of avoiding injury.
False, it is regarded as a mode of proof, of a mere procedural
convenience since it furnishes a substitute for, and relieves a plaintiff
of, the burden of producing specific proof of negligence.
True
As long as duly proved
True
False, only when the student is in the custody of the school authorities
and within its premises.
False, only if the defendant acted fraudulently or in bad faith.
False, there is no deposit but some other contract.
Art. 1962, last sentence
True
True
Ocejo, Perez & Co. vs. Flores and Bas
False, stipulation of interest is still valid but the rate of interest shall be
reduced.
False, “respondent appellate court exceeded its jurisdiction when it
modified the judgment of the trial court by increasing the award of
damages in favor of private respondents who, in the first place, did not
interpose an appeal therefrom.”
True
 75. A claim for damages sustained on a shipment of goods is a solidary False, solidary obligation of the common carrier, arrastre operator and
obligation of shipper, common carrier and arrastre operator and custom customs broker.
brokers.
Eastern Shipping Lines vs CA

76. All the claims under 2242 must be paid pro rata. False, only taxes enjoy absolute preference and all the 13 items in 2242
must be paid pro rata.

Magdalena vs. Villanueva

From Quiz 8
1. Future debts of unknown amount may not be guaranteed because FALSE. A guaranty may also be given as security for future debts.
there is no principal obligation yet.

2. Guaranty must be express but exceptionally it may be implied FALSE. A guaranty is not presumed. It must be express and cannot extend to
from acts of the guarantor as in guaranty by estoppel more than what is stipulated therein.

3. The guarantor can bind himself for more than what the debtor is FALSE. A guarantor can bind himself for less but NOT FOR MORE.
liable for but not for less.

4. If the parties avail of contractual provision for automatic TRUE. (Art. 2079)
extension, the guarantor will be released.

5. In case of a merger between the debtor and the guarantor, the TRUE
guaranty is extinguished but a sub-guarantor, if any, is released.

6. There is no excussion/exhaustion in judicial guaranty. TRUE

7. When the principal obligation is modified by agreement, the FALSE. The guarantor or surety will not be released by a change in the
guarantor is released if he didn’t agree to the modification even if the principal contract where such change does not have the effect of making its
modified obligation will be less onerous obligation more onerous. (Visayan Distributors, Inc. vs. Flores)

8. A remission in favor of 1 of 5 guarantors extinguishes the principal FALSE. Principal obligation extinguished only if remission is made without
obligation but only to the extent of 1/5 the consent of the other guarantors (Art. 2078).

9-14 Examples of Legal Pledge 9. Necessary and useful expenses

10. Termination of usufruct
11. Execution of work upon a movable
12. Agent’s right to retention of objects of an agency until
principal effects reimbursement and pays indemnity
13. Depositary
14. Hotel Keepers

15-21 Extrajudicial foreclosure of a thing pledged

15. File application before the executive judge thru the
clerk of court
16. Clerk will examine WON there was compliance with
posting of notice and publication
17. Raffling of application among sheriffs
18. Auction sale may be had even if there is only 1
participating bidder
19. Clerk shall issue a certificate of payment
20. Certificate of sale must be approved by the EJ
21. Archival of records

22. For all intents and purposes of pledge is extinguished when thing FALSE. There is only prima facie presumption that the same has been returned
pledged is in the possession of pledger. by the pledgee. (Art. 2110)

23. The rules governing possession and preservation of a thing 23. The rules governing possession and preservation of a thing pledged by
pledged by agreement shall apply to legal pledges. agreement shall apply to legal pledges.
TRUE.
24-26 Obligations of a pledgee 24. Take care w/ diligence of good father of family
25. Liable for loss or deteriorioration by reason of fraud,
26. negligence, delay or violation of contract

27-32 Conventional deposit 27. Gratuitous

28. Only movable property
29. Voluntary or necessary
30. Real
31. Unilateral if gratuitous
32. Bilateral if for compensation

33-35 Depositary 33. Safekeep

34. Return when required
35. Liable for loss through his fault or negligence

36-39 Judicial vs. Conventional Judicial Conventional

1. Court orders attachment
2. Movable or immovable
3. Delivery is made by court
order
4. Attachment or seizure
1. Necessary or voluntary
2. Only movable
3. Delivery may be made by
will of depositor
4. Compliance with legal obligation

40-44 Solidary Guarantor vs. Solidary Debtor SG SD

1. Debtor shall pay
2. Subsidiarily liable
3. Entitled to excussion
4. Collateral undertaking
5. No need for notice
1. Debt shall be paid
2. Solidary and primarily liable
3. Not entitled to excussion
4. Original promisor
5. Bound to know every default

WAREHOUSE RECEIPTS LAW

1. The warehouse receipts law applies to all warehouses, whether True
private or public, bonded or not.
Citizen’s State Bank of Vici vs. Galtig

2. Mere fact that the goods deposited are incorrectly described does True
not make ineffective the receipt when the identity of the goods is
fully established by evidence. American Foreign Banking Corporation

3-11. What should be included in a warehouse receipt 3. location of the warehouse

4. date of issue or receipt
5. consecutive number of receipt
6. person to whom gods are deliverable
7. rate of storage charges
8. description of goods or packages
9. signature of the warehouseman
10. warehouseman’s ownership or interest over the goods
11. statement of advances made or liabilities incurred

12. A warehouse receipt has 2-fold function of being a contract and a True
receipt.
Contract, evidence of receipt and representation of goods. But the SC, in a number of
cases, limited the functions to 2 – contract and receipt.

13. A judgement creditor can levy by execution the goods covered by False, while in possession of such warehouseman, the goods cannot be
a negotiable receipt while in possession of the warehouseman even attached or levied upon under an execution unless: document be first
before surrendering the receipt. surrendered.

Sec. 25, WRL

14. Failure to make the receipt negotiable does not render it non- True
negotiable if it contains the words of negotiability.
Manufacturers Mercantile Co vs. Monarch Refrigerator
15. Where, by the terms of the negotiable receipt, the goods are True
deliverable to bearer or where negotiable receipt has been indorsed
in blank or to bearer, any holder may indorse the same to him or to Section 37, WRL
any other specified person, and in such case, the receipt shall
thereafter be negotiated only by indorsement of such indorsee.

16. Indorsement of a receipt shall make the indorser liable for failure
on the part of the warehouseman or previous indorsers of receipt to
fulfil their respective obligations.
False, shall not make the indorser liable.
Sec. 45, WRL: Indorser not a guarantor. — The indorsement of a receipt shall not
make the indorser liable for any failure on the part of the warehouseman or previous
indorsers of the receipt to fulfill their respective obligations.

17. A receipt in which it is stated that goods received will be False, it is non-negotiable.
delivered to the depositor or to any other specified person is a
negotiable receipt. Section 4, WRL

18. A negotiable receipt with insertion that it is non-negotiable shall False, the insertion is void.
render the receipt non-negotiable.
No provision shall be inserted in a negotiable receipt that it is non-negotiable. Such
provision, if inserted, shall be void. (sec. 5, WRL)

19. Alteration of receipt shall not excuse the warehouseman who True
issued it from any liability ___ it was made without fraudulent
intent. Sec. 13, WRL

20. ____ commingled with other goods of the same kind. True

As a rule, the depositary is permitted to commingle grain or other articles of the same
kind and quality. (Sec. 23, WRL)
 F. 1. The delivery of something or anything in gf.
It must be licit and may be the prestation of a valid F. Civil obligation. 10. A natural obligation arises when debtor
within the commerce of obligation. Art. 1243. Payment made pays the creditor after a judicial order
men. to the creditor by the for debtor to retain the debt.
F. Contract 2. The source of obligation of a school for debtor after the latter
injuries suffered by a student who was has been judicially
mauled inside the campus by a stranger ordered to retain the
is quasi-delict. debt shall not be valid
F. Not liable to pay 3. A son-in-law who brings his mother-in- T 11. The obligation arising from a contract of
(under 2167, yung law to a hospital for treatment shall be loan is unilateral.
mother-in-law general liable under the law to pay for the T. 12. It is essential in bilateral reciprocal
rule) hospital bills. obligations that both arise from the
T same source.
4. An obligation based on quasi-delict may
F. Not cyclic
arise from the performance of a 13. An obligation arising from a contract of
contract. commodatum is an example of cyclic
F. Obliged is the general obligation.
5. The officious manager in negorotium
T. 14. A divisible obligation is susceptible of
rule under 2144. (EXC: gestio has no obligation to the owner if
This juridical relation partial performance.
he acts in good faith. F. Integrity of obligation. 15. Identity of obligation requires that the
does not arise in either
of these instances: performance must be complete.
(1) When the property or F. Specific lang. 16. In obligations to give specific/generic
business is not things, the obligor must perform in GF
neglected or the principal and all accessory
abandoned; obligations.
(2) If in fact the manager T 17. As a general rule, an obligation to do
has been tacitly may be performed by another at the
authorized by the debtor's expense.
owner.) T 18. There is no legal accessory obligation
T 6. A moral obligation is also referred to as in an obligation not to do.
an imperfect obligation because it has F. 19. An obligation not to do can be
no legal consequence. performed by a delegate.
F. Civil lang. Natural 7. Civil and moral obligations may become F. Action may be filed
obligation there is a natural obligations.
20. Any action for a breach of an obligation
based on the principle of is premature if there is no actual breach
juridical tie and may anticipatory breach as
legal effect if voluntarily upon the expiration of the prescribed
enunciated in the case period for performance.
fulfilled. Sa moral, wala. of Blossom and Co. vs
T 8. A civil obligation that lapsed by Manila Gas Corp.
extinctive prescription ipso facto F. Recovery of damages 21. Fraud in the performance of contractual
becomes a natural obligation. obligation may result to an annulment of
T 9. A civil obligation arises when a minor the contract.
who has entered into a contract w/o the F. Annulment of contract 22. Fraud in the performance of an
consent of parent/guardian voluntarily is only a remedy in dolo obligation and deceit in celebration of a
pays a sum of money in fulfillment of incidente (one contract are similar in the sense that an
the obligation and obligee has spent it committed in the action for annulment is a common
performance of an remedy.

QUIZ 1 1
 obligation). rights.
F. Prohibition only refers 23. A cause of action based on fraud T 35. The debtor may recover what he pays
to future fraud. committed in the execution of an voluntarily before fulfillment of the
obligation cannot be waived. condition.
F. Only positive 24. There could be delay in the F. The obligation will be 36. In case of a positive suspensive
obligation. performance of a negative obligation. extinguished. condition, the obligation becomes
effective upon lapse of the time
T 25. There is no delay in the performance of indicated or when it becomes evident
alternative obligations. the event cannot occur.
F. 26. In an obligation not to do, there could T. 37. The loss of the thing due pending the
be specific performance. happening of a suspensive condition
will give the creditor the right to rescind
T 27. An unpaid seller may avail of w/ damages.
extrajudicial remedies for breach of F. Unless deterioration
buyer's obligations.
38. The detoriation of the thing due pending
is due to the fault of the the happening of a suspensive
T 28. Mechanical defects of a vehicle and tire debtor.
blowout are not fortuitous events. condition will give the creditor the right
to rescind w/ damages.
F. Carnapping per se 29. Carnapping per se is a fortuitous event.
does not foreclose the F. 39. A single breach is sufficient for the
rescission of an installment sale of a
possibility of negligence
on the part of the owner movable.
or possessor of the car T. 40. A single breach is not sufficient for the
(Sicam vs Jorge, 2007 rescission of the installment sale of an
case) immovable.
F. The obligation was 30. If debtor promised to deliver a big T. 41. Rescission under 1191 applies only to
generic. carabao to creditor/agent, the death of reciprocal obligations.
debtor's 1 and only big carabao in a T. 42. Rescission under 1191 may be refused
flood extinguished his obligation. by the court.
T F. A period is a day 43. A period may refer to a past unknown
31. The unreasonable suspension of a certain and must event because even if unknown, it
bank's operations by CB may be a necessarily come, already happened.
Government prohibition fortuitous event to excuse the bank
is a fortuitous event. although it may not
from performing its obligation to a know when. ( par 3, Art
depositor. 1193)
F. 32. An impossible condition shall not affect T. 44. The creditor may reject advance
the validity of an onerous or gratuitous payment in an obligation w/ a period.
It shall affect. obligation. T. 45. There is no retroactivity in an obligation
T. 33. The imposition of a potestative subject to a resolutory condition.
resolutory condition will not affect the F. Under Art 1200 The 46. If the debtor in an alternative obligation
validity of the obligation. right to choose belongs does not choose, the creditor may
F. Under Art 1188, the 34. Pending the happening of a suspensive to the debtor unless choose the prestation to be delivered.
creditor may, before the condition, the creditor could not avail of expressly granted to the
fulfillment of the any action against the debtor. creditor.
condition, may bring T. 47. In an alternative obligation, the election
appropriate actions for becomes operative only when
the preservation of his

QUIZ 1 2

F. The creditor may
demand the value of any
object lost BUT not if the
first object was lost
through fortuitous
event.
F. Art. 1245 Dacion is
governed by law on
sales. (p. 246 Jurado
Oblicon.
In facultative, right of
choice pertains to
debtor. In dacion,
consent of creditor is
needed.
F. In facultative
obligations, the right of
choice pertains only to
the debtor. It is in
alternative obligations
where the right of choice
may pertain to the
creditor or a third
person.
F.
T.
T.
F. Art. 1423
F. Art. 1423. Natural
obligations are based on
equity and natural law
F.
QUIZ 1
communicated to the other party.
48. If by the debtor's fault all alternative
prestations were lost, the creditor may
demand the value of any object lose
even if the first object was lost through
a fortuitous event.
49. The rules applicable to facultative
obligations are the same as the rules on
dation in payment.
50. The choice to substitute in a facultative
obligation may be given to the creditor.
51. In a solidary obligation, there is mutual
agency among debtors.
52. An obligation is a juridical necessity to
do or not to do, to give or not to give.
53. Obligations arising from valid, voidable
and rescissible contracts have the force
of law between the contracting parties
and should be complied w/ in GF.
54. Exceptionally, natural obligations can
be enforced by court action to prevent
unjust enrichment.
55. Civil obligations derive their binding
force from positive law, while natural
from divine law.
56. A driver of a car, who was not able to
control the car due to negligent act of
truck driver in encroaching upon his
lane is liable for damages for injuries
suffered by the passengers of a
jeepney it hit.
F. 57. In order that demand may not be
necessary, it is required that the
obligation or the law expressly states
the demand shall not be necessary.
F. Art. 1174 provides,
58. 1174 exempts an obligor from liability
also, those though on account of fortuitious events or force
foreseen but are
majeure, refers only to unforseeable
inevitable. events.
F. Under Cuizon vs. CA, 59. A court can stipulate for the parties or
it is not in the province
amend the agreement where the same
of the court to alter a contravents law, morals, good customs,
contract by construction public order or policy.
or to make a new
contract for the parties.
Its duty is confined to
the interpretation of the
one which they have
made for themselves
without regard to its
wisdom or folly as the
court cannot supply
material stipulations or
read into the contract
words which it does not
contain. (p. 812 Jurado
Reviewer)
T. 60. Robbery may be considered a fortuitous
event.
F. In Tan Chiong case, 61. When the negligence of a person
when the negligence of concurs w/ the act of God in producing
the carrier concurs with
a losee, such person is exempt from
an act of God producing liability by showing that the immediate
loss, the carrier is not cause of damage was the act of God.
exempted from liability
by showing the
immediate cause of the
damage was the act of
God. When the loss is
caused by the act of
God, if the negligence of
the carrier mingles with
it as an active and
cooperative cause, he is
still liable (p. 89 Jurado
Oblicon). To constitute a
3
 fortuitous event that
would exempt a person
from responsibility, it is
necessary: that xxx (4)
the obligor (debtor)
must be free of
participation in, or
aggravation of the injury
to the creditor.
F. Dolo incidente refers
to deceptions not
serious in character and
without which the other
party would still have
entered into the
contract.
T 63. One
F. Not liable for the
‘entire’ loss. Article
1739. In order that the
common carrier may be
exempted from
responsibility, the
natural disaster must
have been the proximate
and only cause of the
loss. However, the
common carrier must
exercise due diligence
to prevent or minimize
loss before, during and
after the occurrence of
flood, storm or other
natural disaster in order
that the common carrier
may be exempted from
liability for the loss,
destruction, or
deterioration of the
goods. The same duty is
QUIZ 1
incumbent upon the
common carrier in case
of an act of the public
enemy referred to in
article 1734, No. 2.
Article 1741. If the
shipper or owner merely
contributed to the loss,
destruction or
62. Dolo incidente or incidental fraud must deterioration of the
be serious and w/o which the other goods, the proximate
party would still have entered the cause thereof being the
contract. negligence of the
common carrier, the
latter shall be liable in
damages, which
who negligently creates a however, shall be
equitably reduced.
dangerous condition cannot escape
liability for the natural and probable F. Art. 1176 provides 65. The receipt of the principal by the
consequences thereof, although the act “shall give rise to the creditor, w/o reservation w/ respect to
of a 3rd person, or an act of God for presumption”. Not the interest, shall give rise to a
which he is not responsible intervenes “conclusive conclusive presumption that said
to precipitate hte loss. presumption.” There interest has been paid.
only arises a disputable
64. Where a natural disaster is hte only and
presumption. (p. 102
proximate cause of a loss, the failure of Jurado Oblicon)
a common carrier to exercise due
T 66. The person using violence or causing
diligence to minimize loss before fear to make another perform a criminal
during, and after the occurence of a
act, shall be primarily liable for the civil
natural disaster, shall make it liable for obligation arising therefrom.
the entire loss.
F. Art. 1166. Obligation 67. The obligation to give a determinate
to give a determinate thing includes that of delivering all the
thing includes that of accessions and accessories only if they
delivering all its have been mentioned.
accessions and
accessories, even
though they may not
have been mentioned.
F. Art. 1182. When the 68. When the fulfilment of the condition
fulfilment of the depends on the sole will of debtor or
condition depends upon creditor, obligation shall be void.
the sole will of the
debtor, the conditional
obligation shall be void.
T. 69. Before the resolutory condition
happens, the party who has a right is
4

T 70. If the improvement was at the expense
F. The student is in 71. For purposes of liability, the school
custody of the school
authorities as long as he
is under the control and
influence of the school
and within its premises
(Amadora vs. CA); They
are at attendance in the
school, including recess
time.
F. Art. 1163. Every 72. A
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. 1173 (2nd par) If the
law or contract does not
state the diligence which
is to be observed in the
performance, that which
is expected of a good
father of a family shall
be required.
F. Art. 1169. Those 73. There is no delay when a lessee, who
obliged to deliver or to
do something incur in
delay from the time the
obligee judicially or
extrajudicially demands
from them the fulfilment
of their obligation.
F.
74. A property owner may file an action for
In obligation to do, no
QUIZ 1
practically in the same position as one specific performance. construction within a reasonable period
who has an obligation subject to of time after signing of the contract
suspensive condition. even if no specific period was agreed
upon.
of the debtor, he shall have the same T. 75. If time is of the essence, the creditor
rights as a usufructuary. may rescind the obligation even if the
debtor is ready to perform a day after
exercises custody over a minor student the designated period.
doing his assignment at Starbucks. T 76. A donation made to 3rd party a year
before the obligation of debtor to
creditor was established cannot be
rescinded.
F. Fortuitous event is an 77. A collision of a barge w/ a bridge
event which could not support of Ayala bridge along Pasig
be foreseen or which river is a fortuitous event.
though foreseen, were
travel agency must observe EO inevitable. It does not
diligence in performing its obligation to fall within the meaning
process travel docs. of FC.
T 78. Throwing of stones by mischievous
boys which broke the windshield of a
taxi causing it to turn turtle is a valid
defense against liability of injuroes
suffered by a passenger.
T 79. The standard precautionary release of
waters of a dam to avoid spillover is a
valid defense against flood damage
claims.
Enumeration:
 Instances when a debtor is liable notwithstanding a fortuitous event
1. Expressly declared by law
2. Obligor or debtor delays
3. O/D promised to the same thing to 2 or more persons who do not have the
same interest
4. Obligor is at fault
5. Stipulation or agreement that the obligor will not be excused even if the cause
is fortuitous event
failed to pay his monthly rent for 10 6. Assumption of risk
mos, pays immediately upon demand. 7. Generic thing to be delivered
 Requisites of mora solvendi.
1. Positive obligation
2. Demandable and liquidated obligation
3. Delay by obligor for reasons imputable to him
4. Demand extra or judicial
Instances when consignation may be made without tender

1. Creditor to whom tender of payment has been made refuses without just cause
specific performance against a to accept it
contractor who fails to commence
5
 2. Creditor is absent or unknown, or does not appear at the place of
payment;
3. Creditor is incapacitated to receive the payment at the time it is due;
4. Creditor refuses to give a receipt, without just cause
5. 2 or more persons claim the same right to collect;
6. Title of the obligation has been lost.
 Requisites of payment by cession.
1. 2 or more debts
2. 2 or more creditors
3. 1 insolvent debtor
4. Abandonment by debtor of his properties in favor of creditors
5. Acceptance of creditors
 Instances when penalty can be equitably reduced (7)
o Partial performance or irregular performance
o Iniquitous or unconscionable penalty agreed upon
 Instances when law provides a direct action against the debtor's debtor (4)
(Requisites of subrogatory ba to?)
o Creditor has a right of credit against the debtor although not yet liquidated
o Due and demandable credit
o Failure of debtor to collect from 3rd persons or debtor of debtor
o Insufficient assets of debtor
o Rights and actions are not purely personal
 Distinction between rescission of contracts in fraud of creditor
and rescission/resolution under art 1191 (6)
Resolution 1191 Rescission 1380
Valid and existing contracts Same
1 party to the contract demands Party suffering lesion or 3rd party
prejudiced demand
Non performance is a ground Equity grounds
Court determines sufficiency o Sufficiency of reason does not affect
reason to justify extension of time to right to ask for rescission
perform obligation
Reciprocal obligations Unilateral or reciprocal
Principal remedy Subsidiary remedy
 Requisites of application of rule on fortuitous events (4)
1. Independent of the human will or at least of debtor’s will
2. Unforeseen or if foreseen, is inevitable
3. Impossible for debtor to comply w/ his obligation in a normal manner
4. Free from any participation in or aggravation or, the injury to the creditor or no
concurrent negligence on his part↓

QUIZ 1 6
 F. 1. A joint obligation may be obligations such
Joint “indivisible” enforced only by proceeding share shall be
obligation. against all the debtors. borne by all his
T. 2. In a joint divisible obligation, codebtors, in
the delay of one debtor will proportion to the
not affect others. dent of each.
T. 3. Tortfeasors are solidarity F. 11. The source of solidarity is the
liable. nature of the thing or
T. 4. A mortgage of a property by Source of solidarity prestation.
coowners results to real which is the
solidarity. exception to GR of
T. 5. In a solidary obligation, presumed joint
remission by any creditor will obligation:
extinguish the entire obligation * obligation
even if creditor did not give his expressly states
consent. * law requires
F. 6. A solidary creditor can assign * nature requires
his rights W/o the consent of T. 12. There can be no partial
A SC cannot assign the others but he will be liable performance of an indivisible
his rights without to his cocreditors for the obligation.
the consent of adverse effect of his F. 13. Indivisibility depends on the
others. assignment. tie that binds the parties..
F 7. A partial remission of a It depends on the
solidary obligation may purpose of the
exclude a debtor from further obligation.
liability if the creditor so F. 14. An obligation not to do is
provides. presumed to be indivisible.
T. 8. The incapacity of 1 debtor in a No such
solidary obligation may be presumption. It
used as a defense by the shall be determined
codebtors but only as regards by the character of
the share of the incapacitated the prestation.
debtor. F 15. The nullity of a penal clause
T 9. In passive solidarity, loss of will not affect the principal
the thing due by the fault of 1 obligation but the nullity of the
debtor will make all debtors principal obligation will nullify
liable for the price of things the penal clause except if it is
plus damages. complementary in nature.
F. 10. If 1 solidary debtor is T 16. Proof of actual damages in
insolvent, his share in the debt not necessary in enforcing the
When 1 of SDs paid by another debtor shall penalty on an obligation with a
cannot, because of be borne equally by all penal clause..
insolvency, codebtors including the one T 17. Debtor cannot pay the penalty
reimburse his who paid.. to be excised to be excused
share to the debtor from the performance of the
paying the principal obligation.

QUIZ 2 1
 F 18. In no case may a term or person who does not intend to
period be given retroactive It requires the be reimbursed by the debtor is
Retroactivity effect. consent. deemed a donation that
applies only to requires acceptance by he
suspension debtor
condition. F 28. The theory that a 3rd person
F. 19. If the obligation is subject to a may pay for the debtor applies
period in diem, it becomes Depends on as regards – sales of right to
Period in diem is a demandable only upon arrival whether the debtor repurchase
resolutory of a day certain. has knowledge of
condition which the payment made
makes it by the 3rd person
demandable af F 29. When the creditor promises to
once. accept or is estopped, he may
T 20. An agreement to extend The payment of be required to accept payment
indefinitely the period of debts in money by check although it is not
performance is valid. shall be made in legal tender. .
T 21. If by stipulation, a guarantor is the currency
solidary liable with the stipulated. If it is
principal debtor, guarantor’s not possible to
obligation is no longer deliver such
subsidiary. currency, then in
T 22. In case of fraud, penalty shall the currency which
not substitute the payment of is legal tender in
interest and damages. PH.
T. 23. Dario in solutim is a voluntary F 30. When the debt is partially
mode of extinguishing an liquidated, the creditor must
obligation. When the debt is in demand the liquidation of the
T 24. Payment in the strict sense part liquidated and entire debt before the partial
in part unliquidate, payment may be allowed.
required acceptance of
the creditor may
creditor, express/implied, and
demand and the
the creditor may reject it for a
debtor may effect
valid reason. .
the payment of the
F. 25. The creditor has the burden of
former without
proving payments, which must
waiting for the
One who pleads be convincing.
liquidation of the
payment has the
latter.
burden of proving
T 31. Imputation of payments is the
it.
designation of the debt to
T 26. The receipt of latter
which should be applied a
installment of a debt without
payment made by a debtor
reservation as to prior
who owes several debts to the
payments shall give rise to a
same creditor.
prima facie presumption of
F 32. Dation in solutim is an act
payment.
whereby a property of the
F 27. Payment made by a 3rd

QUIZ 2 2
 It must be a debtor or a 3rd person is
property of the alienated to the creditor in
debtor and not a 3rd satisfaction of a debt in
person. money.
F. 33. Payment by assignment vests
title to the property in the
Creditors do not creditors.
acquire ownership
but must sell the
thing and apply the
proceeds to the
debts.
T 34. Tender alone whiteout
consignation is not as valid as
payment.
T 35. When the written title to the
obligation has been lost,
consignation can be made
without tender
T 36. Impossibility of performance
as a mode of extinguishment
includes not only physical or
legal impossibility but also
impracticabilty because of
extreme difficulty manifestly
beyond the contemplation of
all parties.
F. 37. In an obligation to deliver
determinate thing, the
Without fault only. obligation shall be
extinguished if it should be
destroyed with or without fault
of debtor provided the
destruction happened before
he has incurred in delay.
F. 38. If the creditor is in mora
before the loss, he shall be
He shall be liable liabl for damages except in
for any fortuitous case of a fortuitous event.
event until he has
effected delivery.
F. 39. The theory of improvisability
will apply only upon showing if
Not enough. Equity mere inconvenience,
cannot relieve from unexpected impediments or
bad bargains increased expense.
QUIZ 2
simply because
they are such.
T 40. It is presumed that the
accessory obligation of pledge
has been remitted where the
thing pledged after its delivery
to the creditor is found in
possession of the debtor or a
3rd person who owes the thing
T. 41. Confusion or merger is
terminated by revocation of
cause..
F 42. Compensation is prohibited in
obligation arising from deposit
but 3llowed in obligation
arising from commodatum
T 43. If a person should have
against him several debts
susceptible of compensation,
rules on application of
payment apply.
T 44. Conventional compensation
requires that contracts
requiring debts compensated
be valid and operative
F 45. The requisites of legal
compensation under 1279
Requisites for also apply to conventional
conventional compensation.
* Each party can
fully dispose of the
credit
* Agree to the
extinguishment of
the mutual credits
F 46. Compensation may not be
waived.
T. 47. In modificatory novarion, the
obligation remains subject to
the modification established.
F 48. Extension of the term of
payment constitutes extinctive
novation.
T 49. Extension of the time coupled
with the payment of interest
3
 on the amount due constitutes
effective novation..
F 50. Reduction of the period
originally stipulated does not
One instance constitute novation
where extinctive
novation is
constituted.
T 51. Expromission releases the old
debtor.
T 52. Insolvency of the new debtor
in case of delegacion revives
the obligation of the debtor if
the insolvency is anterior and
public or anterior and known
to the old debtor.
T 53. When a creditor pays another
creditor who is preferred, even
without knowledge of the
debtor, legal subrogation of
creditor is presumed.
T 54. Payment means not only the
delivery of money but also the
performance, in any manner,
of an obligation.
T 55. A stranger who pays on behalf
of sa debtor with the latter’s
consent can demand from the
debtor what he has actually
paid.
F. 56. Even if the creditor does not
ratify payment, proof of benefit
Proof of benefit to to the creditor is not required
the creditor need for the validity of payment
not to be proved if made to a person not
the creditor ratifies authorized.
the payment to the
3rd person.
F 57. Integrity of payment requires
that no partial payment to be
allowed unless creditor
agrees.
T 58. Legal payment by assignment
is governed by insolvency law.
F 59. The debtor may withdraw the
thing deposited leaving the
QUIZ 2
Before the creditor obligation in force even after
accepts the the creditor accepts the
consignation consignation.
T 60. Condonation or remission is
the gratituous abandonment
by a creditor of his right.
T 61. A pure obligation is not
subject to a condition at a
period and is demandable at
once.
T 62. A condition is a future and
uncertain event upon the
happening of which the
demandability or
extinguishment of an
obligation.
T 63. If the impossible condition is a
condition not to do, the
obligation is considered not
conditional.
F 64. A suspensive condition,
Potestative or Resolutory
Suepsnive – gives avoids the obligation.
rise to obligation
Potesative –
depends on a will
of 3rd
person/chance
Resolutory –
extinguish
F 65. If debtor paid by mistake
before the fulfilment of the
He may recover, condition, he may recover
but not the fruits what during the same time he
and interests. has paid by mistake as well as
fruits and interest.
T 66. In case of voluntary
prevention of the fulfilment of
a condition by the obligor, the
condition is deemed fulfilled.
F 67. A day certain is understood to
be that which must
One refers to necessarily come although it
obligation with a may not be known when or a
period while the past event unknown to the
second part refers parties.
4
 to conditional PH.
obligation. F. 76. Dation in payment requires 2
BONUS 68. in case of payment in or more creditors.
advance, if the obligor was It needs only 1
unaware of the period or creditor.
belives that the obligation is F. 77. Exceptionally, tender w/o
already due and demandable, consignation maybe valid as
the thing paid or delivered Tender alone will payment but shall not stop the
may be recovered with fruits not have the effect running of the agreed
and interests. of payment. interests.
T 69. When a Potestative condition T 78. Merger is when the same
is imposed not on the birth of person becomes the creditor
the obligation but on its and debtor in same obligation.
fulfilment, the validity of the F. 79. Remission/condonation,
obligation is not affected. express/implied, shall comply
T 70. The rule that detoriation Only express with the forms of donation to
during the pendency of the condonation shall be valid.
condition and without the fault comply w/ the
of the debtor shall be borne by forms of donation.
the creditor may apply in an T 80. The debtor shall be laible for
obligation with Resolutory damages in cases of
condition. accidental loss of the thing if
T 71. In a contract to sell RP on the promises to deliver the
instalments, the failure to pay same thing to 2 diffferent
in full the purchase price is person having the same
merely a failure of a positive interest.
suspensive condition but not a T 81. Rules of application of
breach of obligation that will payments shall aply to several
allow rescission under 1191. obligation susceptible of
F 72. A 3rd person who pays on compensation.
behalf of the debtor can F. 82. Confusion is the extinction in
demand subrogation in the the concurrent amount of the
creditor’s right. Compensation. obligations of those persons
T 73. As GR, in an obligation to give who are reciprocally debtors
payment by 1 who does not and creditors of each other.
have the free disposal of the F 83. Change in quantity is not
thing due and capacity to novation.
alienate is void. T 84. Change in price is extinctive
F. 74. Subrogation does not include novation.
reimbursement but only F 85. There is no novation unless
Subrogation exercise of other rights incompatibility is shown.
includes all rights. attached to the original T 86. Novation may be made even
obligation. w/o the knowledge or against
F 75. A stipulation for payment to be the will of debtor but not w/o
made in a foreign currency is consent of creditor.
valid even if the payment is in F. 87. Expromission requires

QUIZ 2 5
 knowledge or consent of the
It may be made old debtor in order to be valid.
even w/o the
knowledge or
against the will of
the old debtor.
T 88. Insolvency of the new debtor,
before, or after novation, does
not revive the old obligation in
any case if the old debtor did
not agree to an expromission.
F. 89. Only the consent of the new
debtor is necessary but not
Acceptance of that of the creditor in case of
creditor is required delegacion.
in delegacion.
T 90. In delegation, insolvency of
the new debtor revives the
obligation of old debtor if the
insolvency was anterior or
public or anterior and known
to old debtor.
T 91. There is legal subrogation
when a 3rd person, not
interested in the obligation
pays w/ express/tacit approval
of debtor.
F. 92. Compensaiton is allowed in
commodatum and support.
Only allowed in
commodatum.
T 93. Confusion is the person of the
guarantor does not extinguish
the obligation.
F 94. Debtor may setup the
compensation of debts
maturing previous to cession
but not of subsequent ones.
F. 95. In dation in payment, a
stipulation entitling the creditor
Pactum to appropriate automatically
commisorium the thing given as security, in
case of debtor’s failure to pay
is valid.
F. 96. Junior creditor may make
payment but creditor is not
Creditor must bound to accept.
accept as the same
would constitute
unjust refusal.
T 97. There may be partial payment
when several guarantors
invoke the benefit of division.
F. 98. A stipulation recognizing an
old obligation but requiring the
No novation if debtor to give security by way
unimportant of mortgage results in
modifications are extinctive novation.
made on the
obligation.
T 99. As a rule, a creditor shall pay
the expenses of cosngiation.
F 100. A stipulation ot the effect that
the remaining deposit of the
lessee will be forfeited in the
event the lessee will cause a
ground for cancellation of the
contract is an example of a
penal clause.
Enumeration:
 8 instances when debtor may be liable for damages despite accidental loss
o Law provides
o Stipulation of parties
o Generic obligation
o Delay
o Promise to deliver same thing to 3 or more persons who do not have same
interest
o Assumption of risk
o Obligor contributed to the loss
o BF and loss due to fortuitous event
 5 requisites for application of payment
o 1 creditor and 1 debtor
o 2 or more debts
o Same kind of debt
o Due
o Insufficient amount to cover all debt
 6 consignation w/o tender may be made
o Creditor is absent/unknown
o C does not appear at the time of payment
o C is incapacitated

QUIZ 2 6
 o C unjustly refuses to give receipt
o 2 or more persons claim the same right to collect
o Lost title
 Demandable even before arrival of period
o After the obligation has been contracted, he becomes insolvent
 UNL he gives a guaranty or security for the debt;
o Does not furnish to the creditor the guaranties or securities which he has
promised;
o By his own acts he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear
 UNL he immediately gives new ones equally satisfactory;
o Debtor violates any undertaking, in consideration of which the creditor agreed
to the period;
o Debtor attempts to abscond.
 Penalty may be reduced
o Partial compliance
o Irregular compliance
o Iniquitous penalty
o Unconsciosable penalty

QUIZ 2 7
F. 1.
It should be the vendee
who should make the
rescission.
T 2.
F. 3.
Consummation, instead
of signing..
F. 4.
Delivery is required to
perfect contract.
F. 5.
If it looks to the
future/past transactions,
it is conditional.
F. 6.
Not yet determined at
the moment of
celebration of the
contract since it
depends upon the
happening of uncertain
event. Thus charging
the parties with the risk
of loss or gain.
T 7.
F. 8.
Essential elements
F. 9.
Delivery and not
formality is an essential
element of real contract.
F 10. Since a partnership is consensual contract, in
Formalities under
partnership must be
followed
F. 11. Principle of liberty of contracts means that
Consensuality of
contracts
T. 12. Real contracts are not subject to the principle
F. 13. Generally, the court may relieve a party from
Generally, contract is
QUIZ 3
A vendor who cannot eject squatters from the the law between parties
property as agreed in the deed may rescind and the court cannot
the contract. interfere.
F. 14. Relativity of contracts means that contract
A lessor may file a collection case against a Mutuality of contracts. binds both contracting parties.
widow pursuant to an apartment lease T 15. Consent is manifested by the concurrence of
contract signed by the widow and her the other and acceptance upon the subject
deceased husband. matter and cause.
The different stages of a contract are: T 16. In contracts of correspondence, consent
preparation, perfection, and signing. exists as soon as offeror learns of the
acceptance by offeree.
A real contract, delivery of subject is required F. 17. If the offer is made through an agent, the offer
to extinguish the obligation. Acceptance is is accepted from the time acceptance is
communicated to the communicated to the offeree.
A contract is preparatory when it looks agent.
forward to other future transactions or past T 18. Business advertisements of things for sale
transactions unknown to parties. are not definite offers, but mere invitations to
make an offer, unless contrary appears.
In aleatory contracts, the benefit to each party F. 19. The advertiser is bound to accept the lowest
is predetermined in advance. Not bound to accept, or highest bid.
except in case of
judicial forclosure.
F. 20. An offer terminates upon the incapacity of the
offerer even after the acceptance is
Before acceptance is conveyed.
conveyed.
F. 21. Vices of consent that affects volition includes
Incapacity is not incapacity, error and fraud.
3 kinds of contracts by equivalence of included in vices of
prestations – gratuitous, onerous and consent.
remunatory T 22. Error or mistake is the inadvertent and
The natural elements of a contract are those excusable disregard of a circumstance
without which there is no contract. material to the contract.
Formality prescribed by law/stipulation is an T 23. Fraud in the execution may give rise to an
essential element of a real contract. action for damages even if the fraud is only
incidental.
F. 24. In remunatory contracts, the cause is the
undertaking or promise of a thing by the other
no case will non-compliance with formalities Onerous contract. party.
invalidate the contract. F. 25. The statement of a false cause in contracts
shall render them void even if it can be
If it should not be proved that they were founded upon another
contracts are perfected by mere consent and proved. cause which is true and lawful.
from that moment parties are bound. F. 26. In case of illegal causa, the innocent party
He may recover. may not recover what has given.
of consensuality of contracts. T 27. Reformation is the remedy wherein a written
instrument is made so as to express the real
a contract.
1
 intention of the parties when some error has party had an
been committed. opportunity to know the
T 28. The intention prevails as between parties in facts, are not in
case conflicts exists between the words and themselves fraudulent.
intention of parties. T 45. Nemo auditor propriam turpitudinem allegans.
F 29. Contract is rescissible when the guardian’s T 46. In case the court decrees annulment of the
More than ¼ ward sufers lesion by less than ¼ of the value contract and the same was already
of the things which are the object thereof. performed, there must be mutual restitution.
F 30. The prescriptive period of the action for T 47. Where the contract is entirely illegal and both
From the date the rescission is counted from the date of parties are equally guilty, there may be no
contract was entered discovery. action by 1 against the other.
into F 48. Rescission is possible even if plaintiff is not
31. Contracts void ab initio may be invoked only The plaintiff must be able to return what he received under the
F by the parties, principal or subsidiary or their able to return what he is contract.
May include 3rd persons. privies. obliged to restore by
T 32. Relative nullity may be cured by confirmation reason of contract.
or prescription. F 49. When there is vice of consent, the contract is
T 33. Only contracts having all the essential Voidable rescissible.
requisites may be ratified. T 50. An absolutely stimulated contract is ab initio
T 34. The effects of ratification retroact to the time void and inexistent.
that the contract was entered into. T 51. Intent of the parties to the contract is deduced
F 35. All agreements for leasing/sale of RP or of an from the language employed by the parties.
interst therein are governed by Statute of F. 52. Inadequacy for the cause upon the contract
Longer period than 1 Frauds. Inadequacy only invalidates the same.
year invalidates if there has
T 36. Statute of Frauds does not determine been fraud, mistake or
credibility or weight of evidence. undue influence.
T 37. When a contract is ratified by 1 of the parties,
contract becomes valid and enforceable. T 53. Conesensual contracts are perfected by mere
T 38. If the agreement is not illegal per se, but consent.
merely prohibited, an aggrived party may still T 54. A stipulation in a contract expressly conferring
recover damages from the other. upon 1 party the right to cancel the contract
F 39. A verbal promise to put in writing a contract violates ‘mutuality of contracts’.
that is covered by Statute of Frauds is F 55. Fixing a period in the offer prevents its
Not covered. enforceable. revocation before acceptance by
T 40. The interpretation of obscure words or Offer may be withdrawn communicating the notice of withdrawal
stipulations must not favour the party causing any time before except when the option is founded upon
the obscurity. acceptance. separate consideration, as something paid or
T 41. Malice is essential to hold a 3rd person who promised.
induces another to violate his contract liable. F. 56. There is simulation if the disagreement
F. 42. The contract bettween a minor and a lunatic between the true and apparent will, or intent
Unenforceable is void. Both parties must bind is not by agreement __________exists only in
F. 43. Minors cannot give consent in all contracts. themselves. 1 of them.
Not all contracts. F. 57. Relative simulation makes the apparent
F 44. Usual exaggerations in trade are not contract void as between parties, but the
Usual exaggerations in fraudulent unless aggrived party is illiterate. Parties are bound by hidden contract is ____ the necessary
trade, when the other their apparent act. requisites.

QUIZ 3 2
F. 58. Exceptionally, contracts may have as objects made by an expert ___ has relied due to the
No contract may be future things such as future inheritance. former’s special knowledge.
entered into upon future F 70. Vices of consent consist in circumstances
inheritance. affecting adversely the decision of a party to
T 59. Absence of causa renders the contract non- Voidable only. enter into a contract makes the contract void.
existent. T 71. A stipulation pour autrui must be accepted to
F. 60. Existence of a motive may supply want of be valid.
Motive may be regarded causa if the motive as purpose or end of the T 72. A stipulation pour autrui is an exception to the
as the cause of the contract is legitimate. rule on relativity of contracts.
contract if it is founded F 73. Exceptionally, strictly personal rights may be
upon a fraudulent They cannot. object of contracts.
purpose to prejudice a T 74. In a phone conversation, X agreed to buy
3rd person. house and lot of Y for 5M to be paid on or
F 61. The contract is void if the inadequacy of before __________ that the deed of sale will
Rescissible contract. cause is shown to consist in lesion by more be executed and signed on or before the
than ¼ entered into by guardians or same date. The agreement to ____
representatives in behalf of the unenforceable.
wards/absentees. F. 75. A contract between a minor and an insane is
Unenforceable void.
F 76. Restitution is not possible if the object of the
It is possible under contract is service.
1398.
F 62. Where both parties are guilty, there may be
no action by 1 against the other, except
Guilty party has no right where one of the parties to the contract is More questions 2/2/17
to bring action. incapable of giving consent.
• Fraud in execution gives rise to damages. → F. Annulment
F. 63. The party who has brought an action to
enforce the instrument may subsequently ask • Warranty in sale is an accidental element. → F. Natural element.
He cannot subsequently for its reformation in court. • In contracts of correspondence, consent exists as soon as
ask for its reformation. offeror learns of the acceptance by offeree. → F ? Check code of
T 64. A and B signed a contract of lease over a commerce not sure.
parcel of land although their agreement was o Commercial contracts are consensual.
one of the sale and ____ actually the i. EXC: Code of commerce requires specific forms
purchase price. In all instances, true intention → charter and loans on bottomry and
must prevail. respondentia
T 65. A contract of Antichresis is a solemn contract.
o Code of Commerce – follows manifestation theory
F. 66. A contract of loan stipulating an interest rate
o NCC – from the time it came to his knowledge
of 20% a month is void if not in writing.
Contract is valid but no • Deposit, pledge, commodatum are real contracts. → T
interest shall be due. • Causal fraud gives rise to action for damages while incidental
T 67. Essential requisites include delivery in real fraud annuls the contract. → F. The other way around.
contracts and required formality in solemn • Contract entered into by a lunatic has no effect. → F. May effect
contracts. padin ata. Not in all cases void.
T 68. Dolo causante gives rise to an action for
damages while dolo incidente may annul the
contract.
T 69. Fraud as a vice of consent consists of
misrepresentation or concealment of a fact

QUIZ 3 3
 • 7 void contracts
a. Cause, object or purpose is contrary to law, morals, good
customs, public order or public policy;
• 9 badges of fraud (7 lang sa codal) b. Absolutely simulated or fictitious;
o Fictitious or inadequate consideration of conveyance c. Cause or object did not exist at the time of the transaction;
o Transfer made by debtor after suit has began and while it is d. Object is outside the commerce of men;
pending against him e. Contemplate an impossible service;
o Sale upon credit by an insolvent debtor f. Intention of the parties relative to the principal object of the
o Evidence of large indebtedness or complete insolvency contract cannot be ascertained;
o Transfer of all/nearly of his property by debtor g. Expressly prohibited or declared void by law
o Transfer between father and son 2. 7 requisites of legal compensation
o Failure of vendee to take exclusive possession of all the a. Parties are principal creditors and debtors of each other
property b. Both debts consist in the sum of money or of consumable
• Badges of fraud (from the net) things of same kind and quality
o (1) The transfer was to an insider. c. Due and demandable
o (2) The debtor retained possession or control of the property d. Liquidated
transferred. e. No retention or controversy commenced by 3rd person
o (3) The transfer was disclosed or concealed. 3. 4 requisites of mora solvendi
o (4) Before the transfer was made, the debtor had been sued or a. Positive obligation
threatened with suit. b. Demandable and liquidated
o (5) The transfer was of substantially all the debtor's assets. c. Delays for reasons imputable to him
o (6) The debtor absconded. d. Demand (j/ej)
o (7) The debtor removed or concealed assets. 4. 6 instances when consignation may be made w/o tender
o (8) The value of the consideration received by the debtor was a. Absent or unknown
not reasonably equivalent to the value of the asset transferred. b. Incapacitated to receive payment
o (9) The debtor was insolvent or became insolvent shortly after c. Refuses w/o just cause
the transfer was made. d. 2 or more persons claim the same right
o (10) The transfer occurred shortly before or shortly after a e. Lost title
substantial debt was incurred. 5. 5 examples of rescissible contract
o (11) The debtor transferred the essential assets of the a. Entered into guardians – whenever the wards whom they
business to a lienholder who transferred the assets to an represent suffer lesion by more than ¼ of the value of the
insider of the debtor. things which are the object thereof
• 8 unenforceable contracts b. Represent absentees – if the latter suffer lesion
o Entered into a name of another by 1 without or acting in excess c. Fraud of creditors – latter cannot collect the claims due
of authority d. Litigation – entered into by defendant w/o knowledge and
o Not comply w/ SoF approval of litigants or of competent judicial authority
i. Agreement to be performed within a year after making e. Other contracts specially declared by law to be subject to
contract rescission
ii. Special promise to answer for debt, default or 6. 5 requisites of payment by cession
miscarriage of another a. 2 or more creditors
iii. Agreement made in consideration of promise to marry b. Insolvent debtor
iv. Agreement for sale of goods, chattels or things in c. Assignment
action at price not less than 500; exception: auction d. Involve all properties of debtor
when recorded sale in sales book e. Accepted by creditors
v. Agreement for lease of property for more than 1 year 7. Requisites of dolo causante
& sale of real property regardless of price a. Misrepresentation or concealment
vi. Representation as to credit of another b. Induced the consent of the other
o Both parties are incapable of giving consent c. Fact is not true

QUIZ 3 4
 d. Aware of falsity
e. Relied on it w/o FN
f. Give consent because of it
g. Not committed by both – only 1
8. Contracts to be written in public instrument for public convenience
a. Donation of RP
b. Contract of partnership
c. Creation, transmission, modification or extinguishment of real
rights over RP; sales of RP or of an interest
d. Cession, repudation or renunciation of hereditary rights or CPG
e. Power to administer property
f. Cession of actions or rights proceeding from an act appearing
in a public document
9. Statute of frauds
a. By its terms is not to be performed w/in a year from the making
thereof
b. Answer for debt, default, or miscarriage of another
c. Consideration of marriage, other than mutual promise to marry
d. Sale of goods, chattel, or things in action, at a price not les
than 500 (UNL buyer accept and receive)
e. Leasing for a longer period than 1 year or for sale of RP or
interest therein
f. Representation as to credit of a 3rd p
10. Badges of frauds
a. Fictitious or inadequate consideration of conveyance
b. Transfer made by debtor after suit has began and while it is
pending against him
c. Sale upon credit by an insolvent debtor
d. Evidence of large indebtedness or complete insolvency
e. Transfer of all/nearly of his property by debtor
f. Transfer between father and son
g. Failure of vendee to take exclusive possession of all the
property
11. Unenforceable contracts
a. Entered into a name of another by 1 without or acting in excess
of authority
b. Not comply w/ SoF
c. Both parties are incapable of giving
12. Void contracts
a. Cause, object or purpose is contrary to law, morals, good
customs, public order or public policy;
b. Absolutely simulated or fictitious;
c. Cause or object did not exist at the time of the transaction;
d. Object is outside the commerce of men;
e. Contemplate an impossible service;
f. Intention of the parties relative to the principal object of the
contract cannot be ascertained;
g. Expressly prohibited or declared void by law.
QUIZ 3
• Instances when reformation is not available (MEMAID)
1. Simple donations inter vivos wherein no condition is imposed
2. Wills
3. When the real agreement is void
4. When one of the parties brought an action to enforce the instrument
• Rescissible contracts
1. Those which are entered into by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the
value of the things which are the object thereof
2. Those agreed upon in representation of absentees, if the latter
suffer the lesion stated in the preceding number
3. Those undertaken in fraud of creditors when the latter cannot in any
manner collect the claims due them
4. Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval
of the litigants or of competent judicial authority
5. All other contracts specially declared by law to be subject to
rescission
6. 1098
7. 1189(4)
• Difference – dacion and cession
1. Number of parties: 1 creditor – plurality of creditors
2. Financial condition of parties: Debtor not necessarily in state of
financial difficulty – debtor is partially or relatively insolvent
3. Object: thing delivered is considered as equivalent of performance
– universality of property
4. Effect: extinguishes obligation to the extent of value of thing
delivered- releases debtor for net proceeds
5. Extent of properties involved: not all properties of debtor – all his
properties
6. Effect to the creditors: creditor becomes owner – creditor does not
become owner
• Solemn contracts
1. Donation of real property
2. Sale of real property
3. Real estate mortgage
4. Lease of urban land
5. Lease of rural land
6. Antichresis
7. An agreement that by its terms is not to be performed within a year
from the making thereof
8. A special promise to answer for the debt, default, or miscarriage of
another
5
 Quiz 4 - SALES
1. A contract of sale of a parcel of land is consensual, formal,
bilateral, onerous, nominate, principal and commutative FALSE. Not
formal
2. Even if time is of essence, a buyer who already paid 80& of the
price and delayed in payment only for 1 month, must be given an
adiditional period to complete payment of purcahse price in
cosideraiton of equity and justice. FALSE. Time is of
essence. (Refer to 1191.)
3. Shocking gross inadequacy of the price in an execution sale
executed by a court sheriff may invalidate a sale. FALSE. Art. 1470
Gross inadequacy of price does not affect a contract of sale
4. A vehicle sales proposal stipulating that the price of a model
2015 Toyota Vios car 20% of w/c will be paid as a downpayment in 3
days and the balance in 36 monthly installments and w/ a specific date
for pick up is a perfected contract of sale is signed by the buyer. TRUE
5. A written acknowledgment showing that a fishing vessel w/ a
price of 900k is now in the possession & responsibility of the buyer is a
perfected contract of sale if there is a firm commitment that documents
pertaining to the sale & agreement of payment are to follow.
FALSE. No agreement as to the manner of payment.
6. A sale is perfected upon acceptance of a unilateral promise to
sell at a fixed price even if there is no option money paid to support the
promise FALSE. Bilateral promise to sell and buy
7. An option contract supported by a separate consideration is a
non-binding offer that may be withdrawn at any time before
acceptance by the buyer TRUE
8. A lessee may not ask for the rescission of the sale of the leased
property where he is living, in violation of a stipulated right of 1st
priority to buy, even if the right was not annotated on the TCT
TRUE
9. To be binding, the right of first refusal stipulated in a lease
agreement must also be supported by an independent consideration
FALSE. No need (price/period)
QUIZ 4 (2018 ver.)
10. In a lease w/ right of 1st refusal, the lessor cannot sell to a 3rd
party at the price of P 5300/sq m after an offer to sell at P 6000/ sq m
was declined by the lessee TRUE
11. A perfected contract of sale cannot be challenged on the
ground of the seller’s non-ownership of the thing sold at the time of the
perfection of the contract TRUE
12. X leased to Y a roof deck of its bldg. w/ the agreement that any
permanent improvements made on the property by Y shall belong to X.
Y installed glass jalousies purchased on credit from Z. Upon Y’s failure
to pay the outstanding balance of the 50%, a levy on the glass jalousies
is proper FALSE.
Sampaguita Pictures v Jalwindor: “The fact that Capitol
failed to pay Jalwindor the purchase price of the items levied
upon did not prevent the transfer of ownership to Capitol
and, later, to Sampaguita by virtue of the agreement in their
lease contract. Therefore, the complaint of Sampaguita to
nullify the Sheriff's sale is well founded, and should
prosper.”
13. There is symbolic delivery of a parcel of land upon the
execution of a deed of absolute sale even if the buyer had not acquired
actual possession thereof because it is occupied by a 3rd party w/ an
adverse claim of ownership FALSE. To be equivalent to
actual delivery, thing must be subject to the control of the
vendor. Addison vs Felix- “if the vendee x enjoy its
possession due to an opposition of a 3rd person who is in
actual possession..”
14. A few days before his death, X sold his land to Y, who in turn
sold it to Z. The heirs of X sold the same land to W, who in GF
registered the sale. Z, who took actual possession of the land a day after
the sale by W, has a better right to the land TRUE
15. In Art 1544, a 2nd buyer may still claim in GF even if the 1st
buyer was already in possession of the property at the time of the sale,
if the seller assured the 2nd buyer that the alleged buyer is merely a
lessee FALSE. “Art 1544 Par 2: Should there be no
inscription, the ownership shall pertain to the person who in
GF was first in the possession..”
1
16. The rules on double sale will apply when the deed of absolute
sale in installments with a downpayment of 20% amounting to 200k
was executed after a contract to sell in favor of another buyer who paid
50% (500k) of the purchase price FALSE. Rules on double
sale do not apply if the first transaction is a contract/promise
to sell.
27. Sale may be rescinded if the inadequacy of the price results in
lesion by more than ¼ of the valley of the thing sold by the owner
FALSE
28. By agreement, an option money may be considered part of the
purchase price should buyer execersie the option to buy TRUE

17. When the consideration is partly in money and partly in 29. A verbal sale of parcel of land by an agent is valid provided that
kind,the contract is one of sale if the parties intended it to be a sale his authority to sell is in writing. TRUE
even if the thing given as part of the consideration is greater in value
than the money given TRUE 30. A contract of sale is perfected where the acceptance was made
if different from the place of offer. FALSE. Meeting of minds
18. An accepted bilateral promise to buy and sell a car at a price
less than 500k but not more than 505k is binding as an executory 31. A deteriotiration of the thing sold at the time of perfection may
agreement of sale FALSE render the contract inoperative. TRUE

19. A unilateral promise to sell is binding as a contract of sale if a 32. If the loss of the thing sold at the time of perfection was by the
separate consideration independent of the price is given FALSE fault of the seller, sale shall still be valid. FALSE. Void

20. A conditional contract of sale may be an executed contract or 33. If the loss of the thing sold at the time of perfection was a
an executory contract TRUE fortuitous event, the risk is on the buyer if the sale is conditiona.
FALSE. Seller
21. Things under resolutory condition of destruction may be
objects of a valid sale. TRUE 34. The expenses of execution and registration of the sale are
borne by the seller. TRUE
22. The sale by Pedro to Juan of a losing lotto ticket for a past
draw date is necessarily void because the hope of winning is vain. 35. Before the fall of the hammer in an auction sale, a bidder may
TRUE retract his bid but the auctioneer could not withdraw the goods from
the sale. FALSE. Both may withdraw
23. Sale of inheritance before partition is void because the heir
could not predetermine what he will receive after partiion proceedings. 36. A legally separated husband may sell a car to his wife.
FALSE. Valid even without enumerating the things. TRUE

24. Subsequent acquisition of a title by vendor w/o title validates 37. Without qualification, a sale between persons in trust relations
the sale even if the acquisition depends on contingency TRUE is necessasrily void. TRUE. Only if no transfer of ownership

25. If a 3rd party tasked to give the price of the sale refuses to fix 38. Enumerate 3 obligations of seller Transfer, deliver,
the price, the court may fix the price FALSE warrant

26. If the price is simulated, the sale shall be considered a 39. Delivery by seller’s retention of the thing he is possessing by
donation. FALSE another right subordinate to the buyer is known as Traditio
constitutum possessorium

QUIZ 4 (2018 ver.) 2

40. When the seller is not the owner, the buyer who purchased the
property in a fair has no better title than that of the seller.
FALSE .Public fairs/markets not affected s
41. A negotiable document itlte of goods indorsed in blank may be
subsequently indorsed to a specified person but could not be indorsed
in balnk. FALSE. It may be negotiated in blank, to
bearer or specified person.
42. Where a negotiable document of title was transferred for value
by mere delivery instead of the required indorsement, transferee mau
compel transferor to indorse the document TRUE
43. The validy of negotiation is not affected by the fact that the
owner of the document was deprived by theft even if the holder had
notice, prior to negotiation, of the unlawful deprivation. FALSE.
Transferee must be in GF and without notice of theft by the
time of negotiation.
44. Transferee of a non-nego document of title to goods may hold
the bailee liable for the possession of the goods provided that he
notifies the bailee before latter was notified by transferor of a
subsequent sale of goods. TRUE
45. In the absence of stipulation, the goods sold must be delivered
at any time. FALSE. Seller is bound to send then within
reasonable time.
46. If by agreement, seller is required to deliver the goods to the
buyer, delivery to the carrier is deemed delivery to the buyer if by the
BOL, the goods are deliverable to the order of the buyer whether or not
seller retains possession of BOL. TRUE
47. A seller who was conditionally paid with the buyer’s personal
check can habe the rights of an unpaid seller of goods if chek is
dishonoured. TRUE
48. An unpaid sller of goods has the right to retain goods even if
the same were already delivered to the carrier. FALSE. Unpaid
seller has right of stoppage
49. An unpaid seller has a lien on the goods when the buyer
becomes insolvent, provided that the seller is still in possession of the
QUIZ 4 (2018 ver.)
goods. FALSE. Unpaid seller has lien on the goods regardless
of whether or not goods are in his possession
50. Exceptionally, seller may exercise the right of stoppage in
transit even if buyer already accepted delivery. FALSE. No longer
in transit.
51. If carrier wrongfully withholds possession from the buyer,
seller can exercise the right of stoppage. FALSE. Wrongful refusal
by carrier to deliver will terminate the right of stoppage.
52. Right of stoppage in transit may be exercised by obtaining
actual possession of the goods from the carrier. TRUE
53. Unpaid seller may resell goods without notice to buyer if the
latter has been in default of the payment of price for unreasonable
time. FALSE. Only if the goods are perishable or based on
an agreement.
Alternative: TRUE
54. Unpaid seller may rescind the sale where buyer fails to pay the
price after a year from the delivery. FALSE. There must be
notice of intention to rescind contract that must be given to
the buyer
55. Unpaid seller’s right of stoppage in transit is not affected by a
subsequent disposition of goods by the original buyer except where
disposition was with consent of the seller. TRUE
56. Buyer was in need of 1,000 sqm of land required by the
franchsior required for the opening of a business. He purchased from
the seller at a price of 100,000 per sqm. He discovered that the total
area delivered to him was only 975. Buyer can opt to rescind hte sale.
TRUE
57. If on the other hand (46) the land has an area of 1,100, the
buyer has no other option but to return the excess area. FALSE. He
may also accept and pay for the same.
58. If If a parcel of land beleived to be 1,000 sqm was sold at a
lump sum of 1 million, buyer should pay more if the land turns out to
3
be 1,025 to avoid just enrichment. FALSE. No increase or 1. Rescission
decrese of price.
2. Indemnity
59. As a rule, the buyer of goods is not bound to accept delivery by
70- 76. Requisites of warranty against redhibitory vices.
instalment TRUE
1. Serious or important defect
60. In a cash sale, seller is excused from making delivery if no
payment is tendered by the buyer unless a period for payment is fixed. 2. Hidden
TRUE
3. Exist at time of sale
61. Rules on double sale will apply to a sale made by the principal 4. Notice to the defect was given within reasonable
and another sale by the agent to different buyers TRUE time
5. Action for rescission or reduciton of price must be
62. A previous buyer who was informed of a subequent sale in
broguth within proper period - 6 mos or 40 days from
favor of another buyer rushed to the register of deeds to register hte
delivery
sale in his name. Who has a better rgith to the land if subsequent buyer
was ain possesion of hte same First buyer 6. No waiver of warranty
7. Buyer would not have bought it has he known of the
63. Warranty against eviction may be validly waived by the buyer
voice
with knowledge of risk. TRUE
77- 78. When may buyer suspend payment after delivery
64. In case of breach of warranty against eviction, buyer may also
demand ornamental expsnses even if the sale was made in GF.
FALSE. Sale must be done in BF. 1. Disturbance
2. Fear
65. The warranty against hidden encumbrances may still apply
even if encumbrance is recorded. FALSE. It will not apply if the 79- 82. Legal guarantees of seller for payment of price of buyer
encumbrance is recorded unless there is an express
warranty that it is free from all burdens and encumbrances 1. Possesorry lien
(A1560)
2. Right of stoppage in transit
66. If an animal sold was classified as condemned, there is no 3. Right to resale
warranty against hidden vices provided that the animal was examined
by an expert. FALSE. No warranty against hidden defects of 4. Right to rescind
animals sold at fairs or public auctions, or if livestock sold as
condemned. 83- 86. Extinguishment of sale

67. Disease is presumed covered by warranty if it casuses death 7 days 1. Payment or performance
from purchase. FALSE. 3 days 2. Loss

68- 69. 2 remedies of buyer in case of breach of warranty against 3. Condonation

hidden encumbrances 4. Merger or consolidation

QUIZ 4 (2018 ver.) 4

 5. Compensaiton 1. Co-ownership
6. Novation 2. Alienation of shares.
3. Sale to a 3rd person or stranger
87. What is conventional redemption
4. Sale before partition
1. Vendor reserves right to repurchase the thing sold.
104. A valid assignment of credit transfers title to the assigned
2. with the obligation to comply with Arts.1601 and
credit to the assignee, even if debtor is unaware thereof. TRUE
1616
105. Assignor in GF answers for solvency of the debtor, unless
88- 91. Nature of conventional redemption
insolvency of debtor was prior to the sale and of common knwoedlge.
FALSE. No wararnty for solvency of debtor, unless
1. Contractual stipulator or insolvency was prior to the sale and of common
2. Accidental knowledge.
3. Potestative 106-110. Legal redemption instances
4. Real right
1. Sale of coo to a stranger
92-95. Equitable mortgage 2. Credit/incorporeal right in litigation is sold
1. Unusually inadequate price of sale with right to 3. Sale of an heir of his hereditary rights to a stranger.
repurchase 4. Sale of adjacent rural lands not exceeding 1
2. Vendor remains in possession as lessee hectare.
3. Buyer retains a part of the purchase price 5. Sale of adjacent urban lunds bought merley for
spectulation
4. Vendor binds himself to pay taxes
5. Other case - real intent is to secure payment of a 111- 112. 2 ways of negotiating document title to goods
debt/performance of obligation 1. Indorsement and delivery
96-98. Exercise right of redemption 2. Delivery

1. Co-owners 113- 120. Juan entered into a contract of lease with Juana over the
latter’s apartment unit at a monthly rental of P10,000.00 for a term of
2. Co-heirs 5 years. Can Juan sublet the property or assign his lease rights?
3. Judgment debtors Juan can sublet the property but he may not assign his lease
rights. Under A1650, when there is no express prohibition,
99. A vendee a retro has a right to be subrogated to the vendor's the lessee may sublet the thing leased, in whole or in part,
rights and action. TRUE without prejudice to his responsibility for the performance.
However under A1649, the lessee cannot assign the lease
100-103. Legal redemption by a co-owner without the consent of the lessor, unless there is a
stipulation to the contrary.

QUIZ 4 (2018 ver.) 5

Enumeration
 Requisites on warranty against eviction
◦ Vendee is deprived, in whole or in part, of the thing
purchased
◦ Deprivation is by virtue of a final judgment
◦ Judgment is based on a right prior to the sale or an act
imputable to the vendor
◦ Vendor was summoned in the suir for eviction at the
instance of the vendee:
▪ To enable the seller to prove his claim
▪ To avoid multiplicity of suits
▪ To satisfy due process
◦ No waiver of warranty by the vendee
 Kinds of implied warranties
◦ Warrranty that the seller has a right to sell
◦ Warranty against eviction
◦ Warranty against non-apparent burden or servitudes
◦ Warranty against hidden defects or unknown
encumbrance
◦ Warranty against redhibitory defects on animals
◦ Warranties as to fitness or merchantable quality
◦ Warranties for consumer goods
 Exceptions to warranty against animal vices
[Warranty against Redhibitory Defect on Animals]
◦ Knowdledge of B ;Expert B; Stipulations; Fairs and public
auctions; Livestock sold as condemed
a. sale of animals on teams ( 2 or more )
• when only one is defective, only one is redhibited &
not the others
• exception: when it appears that purchase of team
will not be done without the defective one
• apply to sale of other things
b. sale of animals at fair or public auction
• no warranty against hidden defects
c. sale of animals with contagious disease is void
d. sale of unit of animal
• void if use / service for which they are acquired has
been stated in the contract and they are found to be unfit
thereof
• prescription of action: 40 days from date of delivery
to buyer
QUIZ 4 (2018 ver.)
• if sale is rescinded, animals to be returned in same
condition when they are acquired; buyer shall answer for
injury / loss due to his fault
• buyer may elect between withdrawing from sale or
demanding proportionate reduction of price with damages
in either case
 Persons disqualifed to buy
◦ ABSOLUTE INCAPACITY
▪ Minors
▪ Insane or demented persons
▪ Deaf-mutes who do not know how to write
◦ RELATIVE INCAPACITY
1. Sale between spouses – it is void except:
a. The spouses executed a marriage settlement and in
the marriage settlement they agreed for a complete
separation of property regime. Then they can sell to
each other.
b. If no marriage settlement, they may have obtained
judicial declaration of separation of property. After
that, they can sell to each other.
2. Those mentioned in Article 1491
a. A guardian cannot buy the property of the ward. The
guardian is not actually prohibited from entering into
any and all contracts. It is just that he cannot be the
buyer of a property of his ward.
b. An agent cannot buy without the consent of the
principal a property which he was supposed to sell or
administer.
c. The executors and administrators of the estate
cannot buy a property which is part of the estate.
d. Public officers, judges, their staff, clerk of court,
stenographers and lawyers are prohibited from buying
those properties which are the subject of litigation
during the pendency of the case.
 Exceptions to right to suspend payment
◦ If the vendor gives security for the return of the price
◦ If it has been stipulated that notwithstanding such
contingency, the vendee is bound to make the payment
◦ If the vendor has caused the disturbance or danger to
cease
◦ If the disturbance is a mere act of trespass
6
 ◦ If the vendee has fully paid the price

 Goods in transit
◦ STOPPAGE OF GOODS IN TRANSITU – a right which a
seller of goods on credit has to recall them or retake them
while they are in possession of a carrier or other
middleman who received them for delivery to the buyer ,
on discovery of the insolvency of the buyer.
▪ Seller must be unpaid
▪ Buyer must be insolvent
▪ Goods must be in transit
▪ Seller or his agent in that behalf must either:
 Actually take possession of the goods sold
 Give notice of his claim to the carrier or other
person in possession of the goods
▪ The carrier or other person in possession must
redeliver the goods to, or according to the directions
of, the seller
▪ The seller must bear the expenses of delivery of the
goods after the exercise of the right

 DOUBLE SALE
o Two or more transactions must constitute valid sales
o They must pertain to exactly the same object or subject
matter
o Tbey must be brought from the same or immediate
seller
o Two or more buyers who are at odds the rightful
ownership of the subject matter must represent
conflictin interest

 SUBLEASE
o A separate and distinct contract of lease wherein the
original lessee becomes a sublessor to a sublessee of
the thing, in whole or in part, without prejudice to his
responsibility for the performance of the contract
toward the lessor.

QUIZ 4 (2018 ver.) 7

 1. A contract of sale of a
parcel of land is
consensual, formal,
bilateral, onerous,
nominate, principal and
commutative
2. Even if time is of essence,
a buyer who already paid
80& of the price and
delayed in payment only for
1 month, must be given an
adiditional period to
complete payment of
purcahse price in
cosideraiton of equity and
justice.
3. Shocking gross inadequacy
of the price in an execution
sale executed by a court
sheriff may invalidate a
sale
4. A vehicle sales proposal
stipulating that the price of
a model 2015 Toyota Vios
car 20% of w/c will be paid
as a downpayment in 3
days and the balance in 36
monthly installments and
w/ a specific date for pick
up is a perfected contract
of sale is signed by the
buyer.
5. A written acknowledgment
showing that a fishing
vessel w/ a price of 900k is
now in the possession &
responsibility of the buyer
is a perfected contract of
sale if there is a firm
commitment that
documents pertaining to
the sale & agreement of
payment are to follow
6. A sale is perfected upon
QUIZ 4 – FINALS
F acceptance of a unilateral
promise to sell at a fixed
Not formal price even if there is no
option money paid to
support the promise
7. An option contract T
F supported by a separate
consideration is a non-
Time is of essence. binding offer that may be
Refer to 1191. withdrawn at any time
before acceptance by the
buyer
8. A lessee may not ask for T
the rescission of the sale of
the leased property where
he is living, in violation of a
F stipulated right of 1st priority
to buy, even if the right was
not annotated on the TCT
9. To be binding, the right of F.
first refusal stipulated in a
T lease agreement must also No need (price/period)
be supported by an
independent consideration
10. In a lease w/ right of 1st T
refusal, the lessor cannot
sell to a 3rd party at the
price of P 5300/sq m after
an offer to sell at P 6000/
sq m was declined by the
lessee
11. A perfected contract of sale T
F cannot be challenged on
the ground of the seller’s
non-ownership of the thing
sold at the time of the
perfection of the contract
12. X leased to Y a roof deck F
of its bldg. w/ the
agreement that any Sampaguita Pictures v
permanent improvements Jalwindor: “The fact that Capitol
made on the property by Y failed to pay Jalwindor the
shall belong to X. Y purchase price of the items
F installed glass jalousies levied upon did not prevent the
1
 purchased on credit from Z.
Upon Y’s failure to pay the
outstanding balance of the
50%, a levy on the glass
jalousies is proper
13. There is symbolic delivery
of a parcel of land upon the
execution of a deed of
absolute sale even if the
buyer had not acquired
actual possession thereof
because it is occupied by a
3rd party w/ an adverse
claim of ownership
14. A few days before his
death, X sold his land to Y,
who in turn sold it to Z. The
heirs of X sold the same
land to W, who in GF
registered the sale. Z, who
took actual possession of
the land a day after the
sale by W, has a better
right to the land
15. In Art 1544, a 2nd buyer
may still claim in GF even if
the 1st buyer was already in
possession of the property
at the time of the sale, if
the seller assured the 2nd
buyer that the alleged
buyer is merely a lessee
16. The rules on double sale
will apply when the deed of
absolute sale in
installments with a
downpayment of 20%
amounting to 200k was
executed after a contract to
sell in favor of another
buyer who paid 50% (500k)
QUIZ 4 – FINALS
transfer of ownership to Capitol
and, later, to Sampaguita by
virtue of the agreement in their
lease contract. Therefore, the
complaint of Sampaguita to
nullify the Sheriff's sale is well
founded, and should prosper.”
F greater in value than the
To be equivalent to actual
delivery, thing must be subject to
the control of the vendor.
Addison vs Felix- “if the vendee
x enjoy its possession due to an
opposition of a 3rd person who is
in actual possession..”
T 19. A unilateral promise to sell
F condition of destruction
“Art 1544 Par 2: Should there be
no inscription, the ownership
shall pertain to the person who in
GF was first in the possession..”
F 23. Sale of inheritance before
Rules on double sale do not
apply if the first transaction is a
contract/promise to sell.
of the purchase price
17. When the consideration is T
partly in money and partly
in kind,the contract is one
of sale if the parties
intended it to be a sale
even if the thing given as
part of the consideration is
money given
18. An accepted bilateral F
promise to buy and sell a
car at a price less than
500k but not more than
505k is binding as an
executory agreement of
sale
F
is binding as a contract of
sale if a separate
consideration independent
of the price is given
20. A conditional contract of T
sale may be an executed
contract or an executory
contract
21. Things under resolutory T
may be objects of a valid
sale.
22. The sale by Pedro to Juan T
of a losing lotto ticket for a
past draw date is
necessarily void because
the hope of winning is vain.
F
partition is void because
the heir could not Valid even without enumerating
predetermine what he will the things.
receive after partiion
proceedings.
24. Subsequent acquisition of T
a title by vendor w/o title
validates the sale even if
2
 the acquisition depends on
contingency
25. If a 3rd party tasked to give
the price of the sale
refuses to fix the price, the
court may fix the price
26. If the price is simulated, the
sale shall be considered a
donation.
27. Sale may be rescinded if
the inadequacy of the price
results in lesion by more
than ¼ of the valley of the
thing sold by the owner
28. By agreement, an option
money may be considered
part of the purchase price
should buyer execersie the
option to buy
29. A verbal sale of parcel of
land by an agent is valid
provided that his authority
to sell is in writing.
30. A contract of sale is
perfected where the
acceptance was made if
different from the place of
offer.
31. A deteriotiration of the thing
sold at the time of
perfection may render the
contract inoperative.
32. If the loss of the thing sold
at the time of perfection
was by the fault of the
seller, sale shall still be
valid.
33. If the loss of the thing sold
at the time of perfection
was a fortuitous event, the
risk is on the buyer if the
sale is conditiona.
34. The expenses of execution
and registration of the sale
QUIZ 4 – FINALS
are borne by the seller.
35. Before the fall of the F
F hammer in an auction sale,
a bidder may retract his bid Both may withdraw
but the auctioneer could
not withdraw the goods
F from the sale.
36. A legally separated T
husband may sell a car to
F his wife.
37. Without qualification, a sale T
between persons in trust
relations is necessasrily Only if no transfer of ownership
void.
T 38. Enumerate 3 obligations of Transfer, deliver, warrant
seller
39. Delivery by seller’s Traditio constitutum
retention of the thing he is possessorium
possessing by another right
T subordinate to the buyer is
known as
40. When the seller is not the F
owner, the buyer who
F purchased the property in a Public fairs/markets not affected
fair has no better title than s
Meeting of minds that of the seller.
T SAMPLEX
1. A contract of sale is F.
consensual, bilateral,
F onerous, nominate, Not preparatory
principal, preparatory and
Void commutative.
2. When the consideration is F
partly in money and partly It shall be considered a barter if
F in kind, the contract is one the value of the thing given as part
of sale if the parties of the consideration exceeds the
Seller intended it to be a sale amount of money or its equivalent;
even if the thing given as otherwise, it is a sale.
part of the consideration is
T greater in value than the
money given.
3
 3. A bilateral promise to sell is
binding as an executory
agreement of sale.
4. A unilateral promise to sell
is binding as a contract of
sale if a separate condition
independent of the price is
given.
5. A conditional contract of
sale may be an executed
contract of an executory
contract
6. Things under resolutory
condition may be objects
ofa vlaid sale
7. Sale of a losing ticket for a
past draw date is
necessarily void because of
the hope of winning is vain
8. Sale of inheritance before
partition is void because
the heir could not pre-
determine what he will
receive after partition
proceeding
9. Subsequent acquisition of
title by a vendor w/o title
validates the sale even if
the acquisition depends on
contingency.
10. If a 3rd party tasked to give
the price of the sale refuses
to fix the price, court may
fix it.
11. If the price is simulated, the
sale shall be considered a
donation.
12. Sale may be rescinded if
the inadequacy of price
results in lesion by more
QUIZ 4 – FINALS
F. than ¼ of the value of the of price does not affect a contract
Only if it is a bilateral promise to thing sold by the owner. of sale, except as it may indicate a
buy and sell. defect in the consent or the parties
F intended a donation or some other
act.
An accepted unilateral promise to 13. By agreement, an option T
buy or sell a determinate thing for money may be considered
ap rice certain is binding upon a part of the purchase price Alternative: F, element of a valid
promisor if the promise is should buyer exercise the option contract is a prestation, a
supported by a consideration option to buy. consideration separate and
distinct from the price. distcint from the purchase price
T for the option given.
14. A verbal sale of a parcel of T
land by an agent is valid
provided that his authority
to sell is in writing.
15. A contract of sale is F
perfected where the
T acceptance was made if Contract of sale is consensual.
different from the place of
offer
16. A detoriation of the thing T
F sold at the time of
perfection may render the
One who sells an inheritance w/o contract inoperative.
enumerating the things composed, 17. If the loss of the thing sold F.
shall be answerable as an heir. at the time of perfecting
was by the fault of the The contract is inexistent and void
T seller, sale shall still be because there is no object.
valid.
Alternative: F, no need to validate. 18. If the loss of the thing sold F.
at the time of perfection
was by a fortuitous event, The risk is borne by the seller.
F the risk is on the buyer if
the sale is conditional.
Courts can fix if the 3rd party acted 19. Expenses of execution and T
in BF or by mistake registration of the sale are
F. borne by the seller.
20. Before the fall of the F.
Sale is void, but the act may be hammer in an auction sale,
shown to be a donation. a bidder may retract his bid A bidder may withdraw the goods
T but the auctioneer could not unless auction has been
withdraw the goods from announced to be w/o reserve.
Alternative: F, gross inadequacy the sale.
4
 21. In a sale of car, the vendor
can cancel the sale if the
vendee fails to pay the 1st
instalment.
22. A legally separated
husband may sell a car to
his wife.
23. A sale between persons in
trust relations is necessarily
void.
24. x
25. x
26. x
27. Delivery by seller’s
retention of the thing he is
possessing by another right
subordinate to the buyer is
known as
28. When the seller is not the
owner, the buyer who
purchased the property in a
fair has no better title than
that of the seller.
29. x
30. x
31. A negotiable document itlte
of goods indorsed in blank
may be subsequently
indorsed to a specified
person but could not be
indorsed in balnk.
32. Where a negotiable
document of title was
transferred for value by
mere delivery instead of the
required indorsement,
QUIZ 4 – FINALS
F.
2 or more.
T not affected by the fact that
F. Only property involved in the
trust relations.
Alternative: T. Void if there is no
complete transfer of ownership
but intention was merely to make
grantee a depository of the thing
subject of contract.
Obligations of a vendor:
1. Transfer ownership
2. Deliver the thing
3. Make warranties
Traditio constitutum
possessorium
F.
Purchases made in fairs shall not
be affected
2 ways to negotiate a negotiable
document of title to goods
1. Indorsement and delivery
2. Delivery
F.
It may be negotiated in blank, to
bearer or specified person.
T 38.
transferee mau compel
transferor to indorse the
document
33. The validy of negotiation is F.
the owner of the document Transferee must be in GF and
was deprived by theft even without notice of theft by the time
if the holder had notice, of negotiation.
prior to negotiation, of the
unlawful deprivation.
34. Transferee of a non-nego T
document of title to goods
may hold the bailee liable
for the possession of the
goods provided that he
notifies the bailee before
latter was notified by
transferor of a subsequent
sale of goods.
35. In the absence of F
stipulation, the goods sold
must be delivered at any Seller is bound to send then within
time. reasonable time.
36. If by agreement, seller is T
required to deliver the
goods to the buyer, delivery
to the carrier is deemed
delivery to the buyer if by
the BOL, the goods are
deliverable to the order of
the buyer whether or not
seller retains possession of
BOL.
37. A seller who was T
conditionally paid with the
buyer’s personal check can
habe the rights of an
unpaid seller of goods if
chek is dishonoured.
An unpaid sller of goods F
has the right to retain
goods even if the same
were already delivered to
the carrier.
5
 39. An unpaid seller has a lien
on the goods when the
buyer becomes insolvent,
provided that the seller is
still in possession of the
goods.
40. Exceptionally, seller may
exercise the right of
stoppage in transit even if
buyer already accepted
delivery.
41. If carrier wrongfully
withholds possession from
the buyer, seller can
exercise the right of
stoppage.
42. Right of stoppage in transit
may be exercised by
obtaining actual possession
of the goods from the
carrier.
43. Unpaid seller may resell
goods without notice to
buyer if the latter has been
in default of the payment of
price for unreasonable
time.
44. Unpaid seller may rescund
the sale where buyer fails
to pay the price after a year
from the delivery.
45. Unpaid seller’s right of
stoppage in transit is not
affected by a subsequent
disposition of goods by the
original buyer except where
disposition was with
consent of the seller.
46. Buyer was in need of 1,000
sqm of land required by the
franchsior required for the
opening of a business. He
purchased from the seller at
a price of 100,000 per sqm.
QUIZ 4 – FINALS
F He discovered that the total
area delivered to him was
only 975. Buyer can opt to
rescind hte sale.
47. If on the other hand (46) F
the land has an area of
F 1,100, the buyer has no He may also accept and pay for
other option but to return the same.
No longer in transit. the excess area.
48. If If a parcel of land F
beleived to be 1,000 sqm
F. was sold at a lump sum of 1 No increase or decrese of price.
Wrongul refusal by carrier to million, buyer should pay
deliver will terminate the right of more if the land turns out to
stoppage. be 1,025 to avoid just
enrichment.
T 49. As a rule, the buyer of T
goods is not bound to
accept delivery by
instalment
50. In a cash sale, seller is T
F. excused from making
Only if the goods are perishable or delivery if no payment is
based on an agreement. tendered by the buyer
unless a period for payment
Alternatieve: T is fixed.
51. Rules on double sale will T
F apply to a sale made by the
principal and another sale
by the agent to different
buyers
T 52. A previous buyer who was Frist buyer
informed of a subequent
sale in favor of another
buyer rushed to the register
of deeds to register hte sale
in his name. Who has a
better rgith to the land if
T subsequent buyer was ain
possesion of hte same
53. Warranty against eviction T
may be validly waived by
the buyer with knowledge
of risk.
6
 54. In case of breach of F 72. x Extinguishment of sale
warranty against eviction, 73. x 1. Payment or performance
buyer may also demand Sale must be done in BF. 74. x 2. Loss
ornamental expsnses even 75. x 3. Condonation
if the sale was made in GF. 4. Merger or consolidation
55. X 2 remedies of buyer in case of 5. Compensaiton
56. X breach of warranty against hidden 6. Novation
encumbrances 76. x What is conventional redemption
1. Rescission 77. x 1. Vendor reserves right to
2. Indemnity repurchase the thing sold.
57. x Requisites of warranty against 2. Obligation to comply with 1616
58. x redhibitory vices. 78. x Nature of conventional redemption
59. x 1. Serious or important defect 79. x 1. Contractual
60. x 2. Hidden 80. x 2. Accidental
61. x 3. Exist at time of sale 81. x 3. Potestative
62. x 4. Notice to the defect was given 4. Real right
63. x within reasonable time 82. x Equitable mortgage
5. Action for rescission or 83. x 1. Unusually inadequate price of
reduciton of price must be broguth 84. x sale with right to repurchase
within proper period - 6 mos or 40 85. x 2. Vendor remains in possession
days from delivery as lessee
6. No waiver of warranty 3. Buyer retains a part of the
7. Buyer would not have bought it purchase price
has he known of the voice 4. Vendor binds himself to pay
64. If an animal sold was F taxes
classified as condemned, No warranty against hidden 5. Other case - real intent is to
there is no warranty against defects of animals sold at fairs or secure payment of a
hidden vices provided that public auctions, or if livestock debt/performance of obligation
the animal was examined sold as condemned. 86. x Exercise right of redemption
by an expert. 87. x 1. Co-owners
65. Disease is presumed 3 days 88. x 2. Co-heirs
covered by warranty if it 3. Judgment debtors
casuses death 7 days from 89. A vendee a retro has a right T
purchase. to be subrogated to the
66. x When may buyer suspend vendor's rights and action.
67. x payment after delivery 90. x Legal redemption by a co-owner
1. Disturbance 91. x 1. Co-ownership
2. Fear 92. x 2. Alienation of shares.
68. x Legal guarantees of seller for 93. x 3. Sale to a 3rd person or stranger
69. x payment of price of buyer 4. Sale before partition
70. x 1. Possesorry lien 94. A valid assignment of credit T
71. x 2. Right of stoppage in transit transfers title to the
3. Right to resale assigned credit to the
4. Right to rescind assignee, even if debtor is

QUIZ 4 – FINALS 7
 unaware thereof.
95. Assignor in GF answers for
solvency of the debtor,
unless insolvency of debtor
was prior to the sale and of
common knwoedlge.
96. x
97. x
98. x
99. x
100.x
101.A contract of lease is
consensual, nominate,
bialteral, onerous, and
commutative, although
exceptionally it could be
gratitutoous.
F.
No wararnty for solvency of
debtor, unless stipulator or
insolvency was prior to the sale
and of common knowledge.
Legal redemption instances
1. Sale of coo to a stranger
2. Credit/incorporeal right in
litigation is sold
3. Sale of an heir of his hereditary
rights to a stranger.
4. Sale of adjacent rural lands not
exceeding 1 hectare.
5. Sale of adjacent urban lunds
bought merley for spectulation
F.
It cannot be gratuitous.

Enumeration
 Requisites on warranty vs eviction
 Kinds of implied warrantieas
 Exceptions to warranty vs animal vices
◦ Knowdledge of B
◦ Expert B
◦ Stipulations
◦ Fairs and public auctions
◦ Livestock sold as condemed
 Persons disqualifed to buy
 Exceptions to right to suspend payment
 Goods in transit

QUIZ 4 – FINALS 8
CORRECTED:
1. Dean J and U may enter into
a singke sale, lease and
mortgage of the same
property in 1 and same
document without affecting
their validity
2. Caveat emptor and venditor F answer even for a mere act of
apply to voluntary sale, forced Both do not apply to lease of
sale, and lease of things. things.
3. In a sale of goods, there is a T
possibility thar vendor may be
deeemed to have complied
with the prestation even if he
does not delivery the goods
4. Recto law applies to
assignment of credit and
incorporeal rights.
5. An informal settler can validly T
lease but nto sell the land and
improvement occupied by him
6. A contract of lease is
consensual, nominate,
bilateral, onerous, and
remunatory.
7. Lease of professional services T
may be implied because no
specific form is required.
8. Lease of work, lessee
becomes the agent of the
lessor but only with respect to
the particular work performed.
9. Exceptionally, a portion of the
town plaza which is property
for public use may be the
object of lase
10. Persons enumerated in 1491
are prohibited from entering 1646 – only disqualified to become
into the contract of lease of lessees of the things under 1491
T service
11. A right may also be the object T
of a contract of lease and the
compensation is referred to as
royalty
12. The lessee is obliged to F
trespass which a 3rd party may Not obliged to answer
cause on the use of the thing
leased but lessee shall have a
different action against
intruder.
13. When lessor repairs the thing F
leased but the lessee is not 1658 – Lessee may suspend
satisfied, latter may suspend payment of rent in case lessors fail
T payment of rent. to make necessary repairs or
maintain lease in a peaceful and
adequate enjoyment of property
leased
14. If lessee fails to comply with F.
his obligations, lessor may file He may file an action for
F an action for rescission and rescission w/ damages or
Principal, not remunatory. action for damages only. damages only.
15. If lessor sells the leased F
Rescissible only when in BF
property to a 3rd person in
violation of the right of 1st
refusal given to lessee,
contract is rescissible
regardless of GF of buyer.
F
1644 – relation of principal and 16. Lessor has subrogatory right F
agent does not exist between against a sub-lessee for 1652 – The sub lessee is
them. unpaid rent. subsidiarily liable to the lessor for
any rent due from the lessee.
T
17. A lease extendible by mutual T
agreement would simply
amount to a right of 1st refusal
F in favor of the lessee so that
even if a 3rd party would offer
QUIZ 5_CIVREV 1
 a higher rent, lease in favor of lease that all improvements Stipulation not contrary to law, etc
1st lessee will not be extended introduced by lessee without is valid and binding.
unless he matches the offer reimbursement is not valid.
18. A contract for the lease of F. 27. Lease of determinate time T
vibrator is personal and thus ceases upon day fixed without
terminated by death of lessee. Not terminated by death of either. need of demand.
19. An implied new lease may F 28. X 3 modes to terminate lease:
result even if there is an No impled renewal of lease where  Purchaser of piece of land
express stipulation to the parties stipulated that there would
29. x
under an unrecorded sale
contrary be no renewal by implication. 30. x  Expiration of period
 Total destruction due to FE
20. An implied new lease is for F
 Dwelling/building intended
the same period as the Instead of the original period,
period of new lease will be accdg brings imminent and seriour
original lease but a guaranty
to the character of property and danger to life/health
executed by a 3rd person in
favor of the lessor shall cease mode of payment of rent.
with respect to the new lease
21. Failure to pay rentals makes F
possession unlawful Unless coupled with a refusal on
part of lessor to pay after lawful
demand.
22. Provision in contract of lease F
that improvements introduced
by lessee will accrue to lessor
upon termination of lease Rules on sales will not apply.
shall be governed by rules on
sale of property
23. Lessor may terminate lease T
when rentals are not paid
without need of court action
24. Contract of sale entered in T
violation of right of 1st refusal
is valid
25. Lessee in a lease of rural F
lands has a right to reduction Loss must be more than ½ of
of rental on account of sterility fruits.
of land and for loss of fruits
due to extraordinary and
unforeseen event.
26. A provision in a contract of F 1. A contract of lease is F

QUIZ 5_CIVREV 2
 consensual, nominate,
bilateral, onerous, and
remunatory.
2. Lease of professional
services may be implied
because no specific form is
required.
3. Lease of work, lessee
becomes the agent of the
lessor but only with respect
to the particular work
performed.
4. The term ‘price certain’
must be in money or its
equivalent.
5. Contract of lase for 99
years is void.
6. Exceptionally, a portion of
the town plaza which is
property for public use may
be the object of lase
7. Period in a contract of
lease for services may be
definite or indefinite
8. X
9. X
10. X
11. X
12. X
13. Persons enumerated in
1491 are prohibited from
entering into the contract of
lease of service
14. A right may also be the
object of a contract of lease
and the compensation is
referred to as royalty
15. The lessee is obliged to
answer even for a mere act
of trespass which a 3rd
party may cause on the use
Principal, not remunatory. of the thing leased but lessee in peaceful and adequate
lessee shall have a enjoyment of property leased.
different action against
T intruder.
16. When lessor repairs the F
thing leased but the lessee
is not satisfied, latter may 1658 – Lessee may suspend
F suspend payment of rent. payment of rent in case lessors fail
1644 – relation of principal and to make necessary repairs or
agent does not exist between them. maintain lease in a peaceful and
adequate enjoyment of property
leased
F 17. If lessee fails to comply F
A price certain exists when the with his obligations, lessor
same can be ascertained accdg to may file an action for Rescission and damages
customs and usage of place. rescission and action for Damages only
F damages only.
More than 99 years is invalid 18. X Warranties in contract of lease
F 19. X  Lessors right to lease thing
 Lessee enjoy legal and
??? peaceful possession
 Fit for use
F  Free from hidden
Indefinite period only apply to lease fault/defect
of things. 20. If lessor sells the leased F
5 Persons who are disqualified to property to a 3rd person in
become lessees violation of the right of 1st Rescissible only when in BF
 Guardian refusal given to lessee,
 Agents contract is rescissible
 Executors/admin regardless of GF of buyer.
 PO/E 21. Lessor has subrogatory F
 Justices/judges right against a sub-lessee
F for unpaid rent. 1652 – The sub lessee is
1646 – only disqualified to become subsidiarily liable to the lessor for
lessees of the things under 1491 any rent due from the lessee.
However, the sublessee shall not be
T responsible beyond the amount of
rent due from him, in accordance
??? with the terms of the sublease, at
the time of the extrajudicial demand
F by the lessor.
Lessee may suspend the payment Payments of rent in advance by the
of rent in case lessor fails to make sublessee shall be deemed not to
necessary repairs or to maintain have been made, so far as the
QUIZ 5_CIVREV 3
 lessor's claim is concerned, unless lessee will not be extended
said payments were effected in unless he matches the offer
virtue of the custom of the place. 30. A contract for the lease of T
22. X Obligations of lessor vibrator is personal and
23. X (1) To deliver the thing which is the thus terminated by death of ??
24. X object of the contract in such a lessee.
condition as to render it fit for the 31. An implied new lease may F
use intended; result even if there is an
(2) To make on the same during the express stipulation to the No impled renewal of lease where
lease all the necessary repairs in contrary parties stipulated that there would
order to keep it suitable for the use be no renewal by implication.
to which it has been devoted, 32. An implied new lease is for F
unless there is a stipulation to the the same period as the
contrary; original lease but a Instead of the original period,
(3) To maintain the lessee in the guaranty executed by a 3rd period of new lease will be accdg to
peaceful and adequate enjoyment of person in favor of the the character of property and mode
the lease for the entire duration of lessor shall cease with of payment of rent.
the contract. respect to the new lease
25. X Obligatons of lessee 33. X Rights of lessee
26. X (1) To pay the price of the lease 34. X  Demand delivery of thing
27. X according to the terms stipulated; 35. X  Peaceful and adequate
28. X (2) To use the thing leased as a 36. X enjoyment for entire
diligent father of a family, devoting
duration
it to the use stipulated; and in the
absence of stipulation, to that which  Sub-lease (UNL stipulation
may be inferred from the nature of to contrary)
the thing leased, according to the  Choose between
custom of the place; proportional reduction of
(3) To pay expenses for the deed of rent and rescission of lease
lease. if thing is partially
(4) to bring to the knowledge of the destroyed by FE.
proprietor, within the shortest  Terminate lease if in
possible time, every usurpation or condition that brings
untoward act which any third imminent/serious danger
person may have committed or may  Ask for proportional
be openly preparing to carry out reduction if urgent repairs
upon the thing leased last for more than 40 d
29. A lease extendible by T 37. X Grounds for ejectment
38. X (1) When the period agreed upon, or
mutual agreement would
39. X that which is fixed for the duration
simply amount to a right of
40. X of leases under Articles 1682 and
1st refusal in favor of the
1687, has expired;
lessee so that even if a 3rd
(2) Lack of payment of the price
party would offer a higher
stipulated;
rent, lease in favor of 1st
(3) Violation of any of the conditions

QUIZ 5_CIVREV 4

41. Destruction of thing by FE
obligates lessor to rebuild
the thing leased
42. Failure to pay rentals
makes possession unlawful
43. Provision in contract of
lease that improvements
introduced by lessee will
accrue to lessor upon
termination of lease shall
be governed by rules on
sale of property
44. Lessor may terminate lease
when rentals are not paid
without need of court action
45. Contract of sale entered in
violation of right of 1st
refusal is valid
46. Lessee in a lease of rural
lands has a right to
reduction of rental on
account of sterility of land
and for loss of fruits due to
extraordinary and
unforeseen event.
agreed upon in the contract; fortuitous events, save always when
(4) When the lessee devotes the there is a specific stipulation to the
thing leased to any use or service contrary.
not stipulated which causes the Extraordinary fortuitous events are
deterioration thereof; or if he does understood to be: fire, war,
not observe the requirement in No. pestilence, unusual flood, locusts,
2 of Article 1657, as regards the use earthquake, or others which are
thereof. uncommon, and which the
F contracting parties could not have
1655 – If the thing leased is totally reasonably foreseen.
destroyed by a fortuitous event, the 47. A provision in a contract of F
lease is extinguished. If the lease that all improvements
destruction is partial, the lessee introduced by lessee Stipulation not contrary to law, etc
may choose between a proportional without reimbursement is is valid and binding.
reduction of the rent and a not valid.
rescission of the lease. 48. Lease of determinate time T
F ceases upon day fixed
Unless coupled with a refusal on without need of demand.
part of lessor to pay after lawful 49. In an express trust, F
demand. acceptance by the trustee 1445 – No trust shall fail because
F is necessary for creation of the trustee appointed declines the
trust. designation, unless the contrary
No need to apply the rules on sales should appear in the instrument
of property. constituting the trust.
50. Acceptance by beneficiary F
is not necessary for the 1446 – Acceptance by the
creation of express trust. beneficiary is necessary.
T Nevertheless, if the trust imposes
no onerous condition upon the
beneficiary, his acceptance shall be
T presumed, if there is no proof to the
contrary.
51. A trustor may or may not F
F have the capacity to Trustor must have the capacity.
transfer the property.
1680 – The lessee shall have no 52. An express trust is created F
right to a reduction of the rent on by mere declaration of It is created by direct and positive
account of the sterility of the land trustee that he holds acts of parties.
leased, or by reason of the loss of property in trust.
fruits due to ordinary fortuitous 53. Trusts over real property T
events; but he shall have such right are enforceable in any
in case of the loss of more than form.
one-half of the fruits through 54. Trustee can acquire trust F
extraordinary and unforeseen property by adverse
QUIZ 5_CIVREV 5
 possession even w/o
repudiation of trust.
55. In order to bind 3rd persons
to a trust, same must be in
a public instrument.
56. Statute of limitations apply
to express trust.
57. Constructive trust is
imposed by law to carry out
the actual or presumed
intent of the parties if
express trust is prejudicial
to the interest of
beneficiary.
58. Resulting trusts are
established by law,
regardless of intention, in
order to prevent fraud,
oppression or unjust
enrichment.
59. No express trust
concerning an immovable
property or any interest
may be proven by parole
evidence.
60. There is a resulting trust
when a donation is made to
a person but appears
thought the legal estate is
transmitted to donee, he
nevertheless is either to
have no beneficial interest
or only a part thereof.
61. There is a constructive trust
when land passes by
succession and causes the
legal title to be put in name
of another.
62. There is a constructive trust
if the price of sale of
Trustee must perform unequivocal property is loaned or paid
acts of repudiation. by 1 person for benefit of
F another and conveyance is
made to lender or payor to
Personal property – proved by oral secure payment of debt.
evidence; Real property – public 63. Laches is a defense in T
instrument resulting trusts unless
F beneficiary had no
Express trusts do not prescribe as knowledge of facts.
long as they have not been 64. In express trusts, statute of T
repudiated. limitations does not apply
F to subsisting and
continuing trusts so long as
Resulting there is no denial or
repudiation thereof.
65. An oral trust is sufficient in T
case of trust over
personalty.
F 66. In case of impossible trust, T
court may authorize
Constructive deviation in interest of trust.
67. No need for trustee to F
render an account under Under ROC, he must render under
oath. oath at least 1x a year until his trust
T is fulfilled, unless he is excused, a
true account.
68. Trustor cannot prohibit T
alienation for a period of
more than 25 years.
T 69. Merger is a mode of T
extinguishment of implied
or express trust.
70. In an implied trust over a F
parcel of land, action to
recover must be brought It prescribes in 10 years.
within 5 years from
issuance of title to property.
T
Enumerations for LEASE
Characeteristics of contract of lease
T  Consensual
 Bialteral
QUIZ 5_CIVREV 6
  Onerous  Liable for loss or deterioration caused by his household, guest,
 Commutative vistors.
 Temporary
Remedies in case of breach
Who needs SPA to register  Rescission + damages
 Husband – wife's paraphernal real estate  Damageso only
 Father/guardian – minor or ward  Rescission and judicial ejectment
 Manager/administratior  Unlawful detainer

Obligations of lessor Lessee shall have a right to reduction in case of loss of more than ½ of the
 Deliver the thing fruits
 Necessary repairs  Extraordinary and unforeseen FE
 Peaceful and adequate enjoyment of lessee  No stipulataiton
 Warrant – eviction, hidden defects  Not lost after they have been separated from stalk, root or trunk
 Not to alter the form to impair its use
 Permit outgoing lessee to do whatever may be necessary (lease of Obligations of sub-lessee
rural lands)  Bound to lessor for all acts on use and preservation
 Subsidiary liable to lessor for any rent due to lessee
Remedies in case of breach of Lessor's obligations
 Rescission + damages EXC to the rule that purchaser of piece of land may terminate the lease
 Damages only  Stipulation to contrary
 Purchaser knows of the existence of lease
Rights of lessee  Fictitious sale
 Demand delivery
 Peaceful and adequate enjoyment REQS: Implied newl ease
 Sub-lease  Expired terminated
 Choose (reduction of rent and rescssion)  No notice to vacate
 Suspend payment  Continued enjoyment for 15 days w/ acquisence of the lessor
 Terminate lease
 Ask for proportional reduction of rent Periods of lease
 Year to year
Obligatioms of lessee  Month to month
 Pay price  Week to week
 Pay expenses for deed  Day to day
 Use as a DGOAF
Courts may fix a longer terminated
 Notify lessor of every usurpation or untoward act of 3rd perso
 More than 1 year occupation
 Notify owner of need for urgent repairs
 Over 6 months possession, if weekly
 Tolerate works of lessor for urgent repairs
 Over 1 month stay, if daily
 Return tjing upon termination
 Liable for loss or deterioration due to his own F/N

QUIZ 5_CIVREV 7
Right to ejectment  Edifice falls w/in 15 years from completion
 Expiration of period  Defects in construction/use of inferior quality materials
 Lack of payment of price  EA supervised the construction
 Violation of conditions agreed upon  Filed w/in 10 years following collpase
 Devotion of the thing to any use/service not stipulated which causes
deterioration Remedies of contractor in case of increase in costs
 Withdraw from contracting
Lesssor's options in case of useful improvements  Demand an increase in price
 Pay lessee ½ of value of improvements
 Refuse to reimburse but allwo lessee to remove Requisites of demand in increase of price
 Change in plans/specifications
Obligations of contractor  Authorized by proprietor in writing
 Produce the work  Additional price to be paid has been determined in writing by both
 Deliver thing parties
 Warranty of title
 Warranty vs hidden defects Contract is rescinded w/o contractor's fault
 Pay the price to 3rd party seller  Death of contractor
 Execute work as to qualities agreed upon  Cannot finish work due to circumstances beyong his control
 Remove defect or execute another work
(de leon)
Contract is still liable in case of acceptance of defects
Kinds of lease
 Hidden defect + cannot expect ER to recognize
 Things
 ER reserves his rights against contractor for HD
 Works
EXC to the rule that contractor cannot claim compensation if work destroyed  Service
before delivery
 ER delays in receiving
 Result of poor quality of material

Equitable compensation
 Cannot complete on account of defect in material furnished by ER
 Orders from ER, w/o any fault on contractor

Engineer is liable
 Drew up plans and specifications
 Collapsed w/in 15 years from completion
 Defect in plans/specificaations/ground
 Filed w/in 10 years following collpase

Contractor and EA are solidarily liable

QUIZ 5_CIVREV 8
T - 2 5 15 18 20 22 23 25 26 29 31 39 42 43 47 48 51 52 55 61 62 64 68 71 72 74 75 77
91 92 96 98 100 102 104 105 106 110
BONUS 49 50
8 - smaller or first one to request if equal area
3/21/17 SAMPLEX PARTNERSHIP AGENCY TRUST SALES LEASE
1. Insolvency, for the purposes of stoppage F.
in transitu, must be declared by a court
of competent jurisdiction. Strict proof not required.
2. STI may be exercised even if the
ownership in the goods may have
passed to the buyer.
3. Warranty against eviction applies to a tax F
sale.
4. The sale of a 3-month old calf for
breeding purposes raises an IW of
witness for breeding.
5. The sarisari store owner impliedly
warrants fitness for human consumption
of a bottle of Ginebra sold.
6. If a vendee will lease the thing sold with
pacto de recto to the seller, rules on
mutuum apply.
7. A verbal assignment of credits followed F
by tradition shall have efect on 3rd
persons because the ownership acquried It must be in a public instrument
by the assignee is a real right. or recorded if real property/
8. Among 3 adjoining owners of 5,000 sqm
agricultural lot sold to a stranger, who
has the preferred right of redemption?
9. The lessee of a room in a boading house F
is entitled to the continuation of the same
if owner rebuilds.
10. In an action for rescission filed by lessor
for non-performance by lessee of
obligations, court has the discretion to
grant lessee a longer period for
performa.ce
11. In an express trust, acceptance by the
trustee is necessary for creation of trust.
12. Acceptance by beneficiary is not
necessary for the creation of express
T trustee.
F repudiation of trust.
T
F repudiated.
Rules on commodatum. (char)
Smaller area
If equal, first requestor.
F
No such discretion (Luna v
Carandang).
F name may subject himself to the
Not necessary (trustee).
F
Necessary (beneficiary)
trust.
13. A trustor may or may not have the F
capacity to transfer the property. Trustor must have the capacity.
14. An express trust is created by mere F
declaration of trustee that he holds It is created by direct and
property in trust. positive acts of parties.
15. Beneficiary is the person for whose T
benefit the property is held by the
16. Trusts over RP are enforceable in any F
form
17. Trustee can acquire trust property by F
adverse possession even w/o Trustee must perform
unequivocal acts of repudiation.
18. In order to bind 3rd persons to a trust, T
same must be in a public instrument.
19. Statute of limitations apply to express F
trust. Express trusts do not prescribe
as long as they have not been
20. There is partnership when two or more T
persons bind themselves to contribute
money, property, reputation or industry in
a common fund, with the intention of
dividing the profits among themselves.
21. A contract of partnership may be F.
commenced in any form, except when a
parcel of land is contributed in which Public instrument and inventory
case the contract must be in a private or are required.
public instrument.
22. Husband and wife may enter Into a T
partnership for the exercise of a
profession.
23. The sharing of gross returns results to a T
prima facie presumption of partnership.
24. A person who not being a partner in fact F
allows his name to be included in the firm Persons who, not being partners,
include their names in the firm
liabilities of a limited partner. name do not acquire the rights of
a partner. Liable as general
partner.
25. Appraisal of goods contributed to the
partnership must be based on the value
at the time of the perfection of contract if
different from delivery.
26. An industrial partner may engage himself T
in any other business with the authority
of other partners.
27. When there is no specification as to the
management of the partnership, the
partner with the highest contribution
becomes the manager.
28. The capitalist partners may exclude from F
the partnership an industrial partner who
engages himself in a business without
the required authority even if the
industrial partner also contributed a
parcel of land to the partnership.
29. A limited partner is a partner in a
partnership
30. A limited partner who is also a general
partner is liable to the creditors of the
partnership only up to his contribution
31. Limited partnership is dissolved upon
retirement, death, insolvency, insanity or
civil interdiction of a general partner.
32. A contract of agency to sell personal
property is a real contract that would
require the delivery of the thing sold.
33. A partnership is formed even if no
inventory and public instrument of real
properties contributed to the partnership
was made.
T attached to the public
F
All partners are considered
agents, regardless of amoutn of
capital contributions.
T
F partner from any share in the profits or
A person who is a general, and
also at the same time a limited
partner, shall have all the rights
and powers and be subject to all
the restrictions of a general
partner; except that, in respect to
his contribution, he shall have
the rights against the other
members which he would have
had if he were not also a general
partner.
T dissolves the partnership.
F becomes a partner _________ partners’
Only real contracts such as
deposit, pledge and
commodatum require delivery.
F with his individual properties in all
A contract of partnership is void
whenever immovable property is
contributed thereto, if an
inventory of said property is not
made, signed by the parties, and
34. Universal partnership of all present
property includes title to all present and
future property as well as future
properties acquired by gratuitious title.
35. A contract of partnership with a capital of F
3000 pesos must appear in a public
instrument and recorded with the SEC to personality.
be enforceable.
36. Those prohibited from giving each other
any donation or advantage is prohibited
from entering into any partnership.
37. A stipulation excluding an industrial
losses is valid.
38. An industrial partner is exempt from
payment of liabilities to his creditors.
39. A transfer of a partner’s entire interest in
the partnership to his only partner
40. In voluntary transfer of a partner’s
interest in the partnership, the assignee
consent thereto.
Assuming: msising word is 'without'
41. A person admitted as partner in an
already existing partnership is also liable
obligations of the partnership arising
before his admission unless there is a
contrary stipulation.
42. A commission agent cannot sell on credit T
goods or items without the express or
instrument.
F
In a universal partnership of all
present property, the property
which belong to each partners at
the time of the constitution of the
partnership, becomes the
common property of all the
partners, as well as the profits
which they may acquire
therewith.
It does not affect the juridical
F
Prohibition only applies to
universal partnership
F
Only applies in losses.
F
All partners, including industrial
ones, shall be liable pro rata with
all their property for the
contracts which may be entered
into in the name and for account
of the partnership.
T
F
Their consent is needed for
assignee to become a partner.
F
His liability shall be satisfied only
out of partnership property, i.e.
out of his share.
 implied consent of the principal.
43. An agency ‘coupled with an interest’
survives the grantor’s death.
44. In case there are two or more principals,
any one of them may revoke the agency
provided the consent of the other is
sought.
45. Constructive trusts are imposed by the
law to carry out the actual or presumed
intent of the parties if the express trust is
prejudicial to the interest of the
beneficiary.
46. Resulting trust is established by law
regardless of the intention of the parties
in order to prevent fraud, oppression or
unjust enrichment.
47. No express trust concerning an
immovable or any interest therein may
be proved by parole evidence.
48. There is resulting trust when a donation T
is made to a person but it appears that
although legal estate is transmitted to the
donee, he nevertheless is either to have
no beneficial interest or only a part
thereof.
49. There is a constructive trust when land
passes by succession to any person and
he causes the legal title thereto to be put Resulting trust.
in the name of another.
50. There is constructive trust if the price of
the sale of property is loaned or paid by
one person for the benefit of another and
the conveyance is made to the borrower
but mortgaged to secure payment of the
debt.
51. Laches is a defense in resulting trusts
T
F
Any one of them may revoke the
agency without need of the
other’s consent.
F does not of itself establish a
Constructive trusts arise
contrary to intention of the
parties
F
Resulting trust is one in which
the intention to create a trust is
implied or presumed in law.
Constructive trust is the one
which is imposed by law
regardless of the intention of the
parties to promote justice,
frustrate fraud and prevent
unjust enrichment.
T existence of the partnership.
F agreement, the rights and duties of the
F
Constructive trust is created
when purchase of property leads
to its title being placed in the
name of the person who loaned
the purchase price as a security
for payment of the debt and not
when conveyance was made to
the borrower.
T so long as the act of the partner
unless the beneficiary had no knowledge
of the facts.
52. In express trusts, the statute of T
limitations does not apply in subsisting
and continuing trusts so long as there is
no denial or repudiation thereof.
53. The sharing of gross returns is sufficient F
to establish partnership. The sharing of gross returns
partnership.
54. Special capacity to contract is required of F
the parties to a contract of partnership. The presence of the essential
elements and the legal capacity
of the parties to enter in a
contract is sufficient
55. When an unlawful partnership is T
dissolved by a judicial decree, the profits
and unlawful objects shall be confiscated
in favor of the State.
56. A partnership of all present property F
comprises all that the partners may Universal partnership of profits
acquire by the industry of work during the and not all present property.
57. In case of doubt, the articles of universal F
partnership shall constitute a partnership It shall be considered universal
of all present property since it involve partnership of all profits not
less transmission of rights. properties.
58. When a partnership for a fixed term or F
particular undertaking is continued after
the termination of such term or particular Not always, only if it is
undertaking without any express consistent with a partnership at
will.
partners remain the same as they were
at such termination for the same period
as initially fixed in the contract of
partnership.
59. Important alterations in the immovable F
property of partnership, if useful and
beneficial to the partnership, is by mere This is a strict act of dominion
act of administration and may be made which requires the consent of all.
upon the financial majority.
60. Strangers are bound to inquire into the F
existence of any restriction of authority Every partner is an agent of the
on the part of the partner. partnership. No need to inquire

61. Misappropriation of one partner binds the T
partnership when the partner in the
course of business receives money or
property of a third person and the money
or property so received is misapplied
without the knowledge of the other
partners.
62. If a person specially informs another or T
states by public advertisement that he
has given a power of attorney to a third
person, the holder 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 even if
the latter did not read the publication
when he transacted with the agent.
63. A special power of attorney is necessary
to make gifts for charity or to employees
in the business managed by the agent.
64. A special power of attorney is necessary T
to loan or borrow money, unless the
latter act be urgent and indispensable for
the improvement or preservation of the
things which are under administration.
65. An agent may be relieved by agreement
from the obligation to make an
accounting.
66. If the commission agent receives
guaranty commission in addition to
ordinary commission, the agent shall
bear the risk of collection and shall pay
the principal the proceeds of the sale on
is apparently for the carrying on
of business of the partnership in
the usual way which he is a
member binds the partnership
F transaction or undertaking, they are
Article 1878 provides that a
special power of attorney is
needed to make gifts, except
customary ones for charity or
those made to employees in the
business managed by the agent.
F
The agreement is void based on
Article 1891. The agent has an
absolute duty to render an
accounting to his principal of all
transactions and material facts
that may have some relevance
with the agency.
F 76. In an implied trust, the action to recover
General rule still apply even in
consented credit.
the same terms agreed upon with the
purchaser unless the principal consented
to the sale on credit.
67. If the third person does not know that the F
agent exceeded the scope of his If the agent contracts in the name
authority, he may hold the agent liable as of the principal, exceeding the
well as the principal, even if he has not scope of his authority, and the
inquired into the authority of the agent. principal does not ratify the
contract, it shall be void if the
party with whom the agent
contracted is aware of the limits
of the powers granted by the
principal. In this case, however,
the agent is liable if he undertook
to secure the principal’s
ratification.
68. Agency by ostensible authority consists T
in the conscious permission of acts
beyond those powers granted.
69. 59. If two or more principals have F
appointed an agent for a common
Solidary liable
jointly liable unless solidarity is agreed
upon
70. An agency is not revoked by the F
principal’s death if it has been constituted Agency will survive only if the 3rd
in the interest of a third person without person accepts the stipulation in
notice or knowledge of the interest. his favor.
71. An oral trust is sufficient in case of trust T
over personalty.
72. in case of an impossible trust the court T
may authorize deviation in the interest of
the trust.
73. There is no need for the trustee to render F
an account under oath.
74. The trustor cannot prohibit alienation for T
a period more than 25 years.
75. Merger is a cause for the termination of T
an implied or express trust.
F
must be brought within 5 years from the
issuance of title to the property. 10 years
77. A partner may transfer his interest to T
another over the objection of other
 partners
78. A secret and silent partner is one who F
has no voice in the management of the He is not known to be a partner
partnership and is not known to the by outside parties nor held out
partners as a partner by the other
partners.
79. The partnership begins from the moment F
it is recorded in the SEC. A partnership begins from the
moment of the execution of the
contract.
80. The fruits to the property promised to be F liable for debts contracted after his
delivered should also be delivered
without exception. Subject to exceptions.
81. In case of imminent loss of the business F
of the partnership, an industrial partner The industrial partner is explicitly
shall be required to contribute additional excluded to render additional
service to the partnership. service.
82. An industrial partner can engage in other F
business but must not compete with the An industrial partner cannot
partnership, unless otherwise stipulated. engage in business for himself,
unless the partnership expressly
permits him to do so.
83. A partner, as agent, cannot assign F the rights of the assignor.
partnership property in payment of
partnership debt. He can assign property.
84. Dissolution terminates the partnership. F there is a special power of attorney.
The partnership, although
dissolved, continues to exist
until its termination, at which
time the winding up of its affairs
should have been completed and
the net partnership assets are
partitioned and distributed to the
partners
87. Creditors of the old partnership are no
longer considered as creditors of the
continued partnership.
88. The individual property of a deceased
partner, whose name is being used by
the continuing partnership, shall be held
death.
89. A limited partner may contribute services F
to the partnership.
90. A limited partner’s surname may appear
in the partnership name but he becomes
a general person with respect to the
partners and third parties.
91. A substituted partner is one admitted to
all the rights of a limited partner.
92. An assignee of a limited partner acquires T
93. An agent may be bound to render
service without compensation provided
94. In all cases, a special power of attorney
is necessary to loan or borrow money.
95. A special power to compromise
authorizes submission to arbitration.
partnership continuing the
business;
F
In such case, the law makes the
creditors of the dissolved
partnership also creditors of the
persons or partnership
continuing the business.
F
Exemption from liability to
creditors of a dissolved
partnership.
He cannot contribute services.
F
With respect to the partnership
creditors.
T
F.
Agent is entitled to stipulated
compensaition.
F
It is not necessary if it is urgent
and indispensable for the
preservation of the things which
are under administration.
F
Separate SPAs required.

85. Insolvency of a partner is one of the
causes for voluntary dissolution of a
partnership.
86. In case of an agreement between a
partner, the partnership debtors and the
persons continuing the business, a
partner may be discharged from
liabilities.
F 96. There is an implied acceptance if the
Involuntary.
F
A partner is discharged from any
existing liability upon the
dissolution of the partnership by
an agreement to that effect
between himself, the partnership
creditor and the person or
T
principal delivers his power of attorney to
the agent and the latter receives it
without objectio
97. An agent may be exempted from
rendering an accounting
F
Agent is bound to render an
account of his transactions and
to deliver to the principal
whatever he may have received
by virtue of the agency, even

98. If the principal does not mention the
power to substitute at all, the agent may
appoint one but he is responsible for the
acts of the substitute.
99. An agency is gratuitous unless
compensation is agreed upon.
100. The accomplishment of the object of the
agency extinguishes an agency even
prior to the final accounting.
101. An agency at will is revoked even if the
revocation is not brought to the
knowledge of the agent.
102. When a partner by estoppel combines
with another partner and on the strength
of representation, contracted with a third
person, both of them are liable pro rata.
103. A partner is a co-owner of the other
partners with respect to the undistributed Refers only to specific
net profits of the partnership
104. Winding up may be done by mere
assignee in exceptional circumstances.
105. A decree of dissolution of a partnership
may be granted upon application of the
purchaser of partnership interest in case
of termination of term or undertaking.
106. Except as necessary for winding up,
dissolution terminates all authority of
partners to act for the partnership.
107. After dissolution, a partner can bind the
partnership by any transaction which
would bind the partnership if dissolution
had not taken place, provided the other
party to the transaction had extended
credit to the partnership after dissolution.
108. Dissolution necessarily discharges a
partner of liability for obligations incurred
thereafter.
though it may not be owing to sharr of any liability created by
the principal. the acting partner as if the
partnership had jot been
T dissolved
109. Unless otherwise agreed, the partners F
who have not wrongfully dissolved the Not insolvent
partnership or the legal representative of
F
the last surviving insolvent partner, has
Agency is presumed to be for a
the right to wind up the partnership
compensation, unless there is
affairs, provided, however, that any
proof to the contrary.
partner, his legal representative or his
T assignee, upon cause shown, may
obtain winding up by the court.
110. When partnership agreement is T
T rescinded on the ground of fraud or
misrepresentation, partners who are not
Alt: F di ko alam guilty shall have the right to subrogation
for any payments made by them of
T partnership liabilities.
F
partnership property.
T
T
T
F
F
Where a person enters into a new
contract with a third person after
dissolution, the new contract
generally will bind the partners.
Each of them is liable for his
1. The insolvency of the
guarantor entitles the creditor
to demand another guarantor
even if the creditor
designated the guarantor
2. Future debts of unknown
amount may not be
guaranteed because there is
no principal obligation yet
3. Guaranty must be express
but exceptionally it may be
implied from acts of the
guarantor as in guaranty by
estoppel
4. The guarantor can bind
himself for more than what
the debtor is liable for but not
for less
5. The debtor may interpose
against the guarantor all
defenses available against
the creditor
6. The benefit of exhaustion
available to the guarantor is
not available if the guaranty is
in the form of pledge or
mortgage on the guarantor’s
property
7. Execution may be enforced
against the guarantor
whenever a writ of execution
is issued against a debtor
8. If the guarantor pays before
the due date, he cant proceed
against the debtor until that
date arrives except when the
F debtor ratifies the payment
Art 2057- If the guarantor should be 9-15 7 INSTANCES WHERE THE BENEFIT OF
convicted in first instance of a crime EXHAUSTION IS NOT AVAILABLE
involving dishonesty or should become
insolvent, the creditor may demand 1. When the guarantor has
another who has all the qualifications constituted in favor of the
required in the preceding article. The creditor a pledge or mortgage as
case is excepted where the creditor has an addtl security
required and stipulated that a specified 2. Non compliance w/ Art 2060
person should be the guarantor 3. He has a judicial bondsman and
F sub-surety
Art 2053 A guaranty may also be given as 4. G expressly renounces it
security for future debts, the amount of 5. Bound himself solidarily w/
which is not yet known; there can be no debtor
claim against the guarantor until the debt 6. Debtor’s insolvency
is liquidated. A conditional obligation 7. He has absconded, or cant be
may also be secured. sued w/in the Phils unless he
F has left a manager or
Art 2055 A guaranty is not presumed; it representative
must be express and cannot extend to 8. It may be presumed that an
more than what is stipulated therein. execution on the property of the
principal debtor would not result
F in the satisfaction of the
Art 2054 A guarantor may bind himself obligation
for less, but not for more than the 16. If the parties avail of contractual T
principal debtor, both as regards the provision for automatic extension, the
amount and the onerous nature of the guarantor will be released
conditions. Should he have bound 17. in case of a merger between the F
himself for more, his obligations shall be debtor and the guarantor, the guaranty Guaranty is accessory and subsidiary
reduced to the limits of that of the debtor. is extinguished but a sub-guarantor, if
F any, is released
Only if the G pays w/out notifying the 18. there is no excussion/exhaustion in T
debtor judicial guaranty
19. when the principal obligation is F
T modified by agreement, the guarantor Alteration should be onerous as to
is released if he didn’t agree to the impose a new obli or add burden to the
modification even if the modified guarantor
obligation will be less onerous
20. a remission in favor of 1 of 5 F
guarantors extinguishes the principal Extinguished only if remission is made
F obligation but only to the extent of 1/5 w/out the consent of the other Gs
Art 2058 The guarantor cannot be 21. an oral mortgage is void against T
compelled to pay the creditor unless the rd
latter has exhausted all the property of innocent 3 parties but valid bet. the
the debtor, and has resorted to all the parties themselves
legal remedies against the debtor 22. an unregistered RE mortgage may T
T still be the subject of foreclosure
23. a contract of antichresis that
doesn’t specify the interest in writing,
although it expressly mentioned the
principal amount is void and of no
effect at all
24. a chattel mortgage is a real
contract because it requires
constructive delivery by the registration
of the contract in the CM registry
25. what must be contained in an
affidavit of good faith
26. a CM w/out containing an affidavit
of GF is void for all intents and
purposes
27. a lessee may mortgage the thing
leased but only valid during the
effectivity of the lease
28. a mortgage made by a co-owner of
a property w/out the consent of other
co-owners produces no legal effect
29. the nullity of a mortgage does not
render null and void the principal obli it
guarantees
30. a municipality may not mortgage a
patrimonial property being used as a
public market
31. growing fruits while they are
attached to the land may not be proper
objects of CM
32. a machinery classified as RP under
Art 415 NCC may be the object of a
valid CM
33. a mortgage may be gratuitous
34. a mortgage follows the property
whoever the possessor may be
provided there is formal assumption of
mortgage by the transferee
F 35. while the law does not specifically F
Obli to pay interest is not the essence of require the possession of the prop to Not standard but special req
antichresis the antichretic creditor, delivery has
been held a standard characteristic of
the contract of antichresis
F 36. all immovable properties may be T
Antichresis is an accessory, formal, the object of a contract of antichresis F- immovable of the creditor
unilateral contract. Indispensable req of 37. the mortgage extends to both T
registration is not equivalent to natural and artificial accessions
constructive delivery 38. the parties must agree on the F
A statement wherein the parties severally valuation of the fruits for application to Art 2133- actual MV of fruits at the time of
swear that the mortgage is made for the the interest and principal of the debt application
purpose of securing the obli specified in 39. the parties may stipulate to the F
the conditions thereof and for no other share of taxes and charges upon the Art 2135
purposes and that the same is just and estate during the period of antichresis
valid obligation as one not entered into 40. the expenses for preservation of
for the purpose of fraud the prop in an antichresis shall be
F. deducted from the fruits of the same
Affidavit only required for the purpose of 41-43 RIGHTS OF AN ANTICHRETIC CREDITOR
transforming an already valid mortgage A. Right to receive the fruits of the
to a preferred one. Absence of such debtor’s immovable
rd B. Right to the actual MV of the
vitiates the mortgage only as against 3 fruits at the time of the
persons w/out notice application thereof to the
F interest and principal
Lessee not the absolute owner of the C. Right to enjoyment of an
prop immovable
F 44-46 OBLIGATIONS OF AN ANTICHRETIC
Produces a legal effect *Art 493 C CREDITOR
Unless stipulation to the contrary, to pay:
T a. Taxes
b. Charges upon the estate. If he
doesn’t pay: indemnity for
F damages
Municipality is the absolute owner of the c. Apply the fruits after receiving
property them to the interest if owing and
T after, to the principal
47. the chattel mortgage is deemed to T
cover only the prop described therein
F and not like or substituted property
CM primarily for movables under Art 416- thereafter acquired by the mortgagor
417 NCC notwithstanding a contrary stipulation
Exceptions: 48. stocks in trade which are naturally T
a. Bldg. under Art 415 (1) revolving or floating and perishable
b. Estoppel goods that are naturally expected to be
T replaced may be the proper objects of
F (?) a CM, provided the deed must be
Formal assumption not necessary amended every time there is a
replacement of the goods
49. a promise expressed in a CM to F
include debts to be contracted in the
future is a binding commitment that can
be compelled upon the security itself
even if there is no amendment of the
old agreement or the execution of a
new one
50. a stipulation in a RE mortgage
prohibiting the mortgagor fr. Selling the
mortgaged property w/out the written
consent of the mortgagee is valid
because obligations arising from
contract have the force of law bet. the
contracting parties
51. the absence of written consent of
the mortgagee in a sale of a mortgaged
rd
chattel to a 3 party doesn’t affect the
validity of the sale although the
mortgagor could be criminally liable
52. stipulations in a contract of
antichresis for the extrajudicial
foreclosure of the security is void for
lack of legal basis
53. in a RE mortgage foreclosure
pursuant to Art 3135 doesn’t require
personal notice to the mortgagor
54. in RE mortgage and antichresis,
deficiency or the excess is for the
acct/credit of the debtor unlike in the
case of pledge
55. after foreclosure of a CM or PP
paid on installment, the seller cant
recover the deficiency from the buyer
56. the loss of the property mortgaged
by a fortuitous event shall necessarily
free the debtor-mortgagor from the prin
obli
57. the commitment of a buyer at an
auction resell the prop to the mortgagor
beyond the period of redemption is not
binding unless supported by a separate
consideration
58-61
Marquez v Elisan Credit Corp c. Possession of thing mortgaged
remains w/debtor
d. Different procedure in sale in a
public auction
e. If the price of the sale in case of
foreclosure is less than the
T amount of the principal obli,
creditor can recover deficiency
PLEDGE
a. Real
b. Reqt that it be in a public
rd
instrument is merely to bind 3
T persons
c. Possession vested w/ creditor
d. Diff procedure in public auction
sale
e. Creditor not entitled to recover
deficiency
F 62-65 4 DISTINCTIONS: CM and RE
Parties may agree on the same, as in MORTGAGE
mortgage and pledge
CM
T a. Constituted on movables
b. Cant guarantee future oblis
c. CM needs to be registered in CM
T registry as a security for
performance of an obli
d. Registration essential for
validity
T RE Mortgage
a. Constituted on immovable
b. May guarantee future
F obligations
Mortgage is an accessory contract, loss c. Needs to be registered to bind
of the thing mortgaged doesn’t affect the rd
principal contract
3 persons
d. Registration not essential for its
F validity
Right of redemption may be exercised w/
66. a pledger who is not the debtor has F
in 1 yr from the reg of the cert of sale;
the rights of a guarantor to seek Excussion is not included
w/out the reg of the prop, redemption is
reimbursement, subrogation, excussion
still possible even when the commitment
and is not prejudiced by any waiver of
is not supported by a separate
defense by the debtor
consideration
67. the incorporeal right of lease over a F
4 DISTINCTIONS: CM and PLEDGE
condominium unit evidenced by a Lease contract is not a document of title
CM
notarized contract of lease may be which accompanies an incorporeal right,
a. Consensual
validly pledged which may be pledged
b. Requirement of registration is
essential for validity
 rd
68. a pledge made by a 3 party who
is not the owner is void because only
an owner w/out exception may pledge
his property
69. a thing pledged may be alienated at
the instance of the creditor to satisfy
the principal obligation
70. an agreement to the effect that the
thing pledged should be applied in
payment of the obligation by way of
dacion en pago is void because this will
constitute pactum comissorium
71. est tota in tota et tota in qualibet
parte
72. if there are 3 debtors who are
jointly liable, the creditor may enforce
the obligation of each against the
whole thing pledged
73. a pledge is an accessory, real,
unilateral and preparatory contract
74. if a promissory note was used in
pledge and was subsequently sold at
auction to satisfy the principal
obligation for a bid price higher than
the amount secured by the pledge, the
debtor is not entitled to the surplus,
should there be any
75. a verbal pledge is void
76-81
F 82. the pledgee cannot use the thing F
rd pledged without the express authority Art 2104 The creditor cannot use the
A 3 party may pledge another’s of the pledger even if its preservation thing pledged, without the authority of
property w/ authority and consent of the requires the owner, and if he should do so, or
owner of such to secure the principal obli should misuse the thing in any other
F way, the owner may ask that it be
It will amount to dacion en pago judicially or extrajudicially deposited.
When the preservation of the thing
F pledged requires its use, it must be used
There is no more pledge but a valid by the creditor but only for that purpose.
dacion en pago 83. all fruits produced by the thing T
pledged are subject to legal
compensation even in the absence of a
There is whole in the whole and the stipulation to this effect
whole in every part 84. the thing in pledge couldn’t be F
F subjected to a precautionary sale w/out Pledger has the right to alienate the thing
The creditor cant immediately enforce the consent of the pledger pledged provided the pledgee consents
the obligation of the joint debtors against to the sale
the whole thing pledged because he may
do so only when the credit has not been
satisfied in due time 85-91 7 CONDITIONS AND RULES FOR VALID
F EXTRAJUDICIAL FORECLOSURE OF A
It is not preparatory THING PLEDGED
T a. Filing of an application before
the executive judge thru the
clerk of court
b. CoC will examine whether there
was compliance with the
required posting of notice and
publication
F c. Application is raffled among the
Not required to be in writing; no express sheriffs
stipulation d. Auction sale may be had even if
INSTANCES OF LEGAL PLEDGE there is only 1 participating
a. Art 546 wrt necessary and bidder
useful expenses e. CoC shall issue a cert of
b. Art 612 wrt termination of payment indicating the amt of
usufruct indebtedness, the filing fees
c. Art 1731 wrt execution of work collected and the mortgages
upon a movable sought to be foreclosed, the
d. Art 1914 wrt agent’s right to description of the RE and their
retention of objects of an respective obligations
agency until principal effects f. Cert of sale must be approved
reimbursement and pays by the EJ
indemnity g. After the redemption period has
e. Art 1994 wrt depositary expired, CoC shall archive the
f. Art 2004 wrt hotel keepers records
92. the pledge of a pawn ticket must T
renew it if necessary
93. as a rule, a pledgee may deposit
rd
the thing pledged w/ a 3 party of
proven integrity
94. unless stipulated otherwise, the
return of the thing pledged to the owner
extinguishes the pledge
95. for all intents and purposes, the
pledge is extinguished when the thing
pledged is in the possession of the
pledger
96-100
101. the pledgor must pay the
necessary and useful expenses
incurred by the pledgee on the thing
pledged
102-106
pledged in case it wasn’t sold in
st nd
T the 1 and 2 auction
107. the rules governing the F
possession and preservation of the Art 2121 in rel to Art 546 governs
T thing pledged by agreement also apply possession in legal pledge, while Art
to legal pledges 2098 governs that of pledge by
agreement
F 108-110 3 OBLIS OF A PLEDGEE
It may be extinguished even if it is not in a. Take care of the thing with the
the hands of the pledger DGOAFOAF
b. Apply the fruits of the thing for
5 RIGHTS OF A PLEDGOR payment of the interest to the
a. Right to claim back the security principal
pledged on repayment of the c. Be responsible for acts of the
debt w/ interest and other subordinate
charges
b. Right to receive a reasonable
notice in case the pledgee
intends to sell the goods and in
case he doesn’t receive the
notice, he has the right to claim
damages
c. In case of sale, he is entitled to
receive from the pledgee any
surplus that may remain w/ him
after the debt is completely paid
off
d. Right to claim any accruals to
the things pledged
e. If any loss is caused to the
goods due to the mishandling or
negligence of the pledgee, he
has the right to claim the same
T
5 GROUNDS FOR EXTINGUISHMENT OF
PLEDGE
a. Return of the thing pledged by
the Pee to the Pr
b. Statement in writing by the Pee
that he renounces or abandons
the pledge
c. Payment of the debt
d. Sale of the thing pledged at an
auction
e. Appropriation of the thing
1. An oral mortgage is void against F
rd
innocent 3 parties but valid
between. the parties themselves
2. An unregistered REM may still
be the subject of foreclosure.
3. A contract of antichresis that
doesn’t specify the interest in
writing, although it expressly
mentioned the principal amount
is void and of no effect at all.
4. A CM is a real contract because F
it requires constructive delivery
by the registration of the contract Antichresis is an accessory, formal,
in the CM registry.
5. What must be contained in an
affidavit of good faith
6. A CM w/out containing an
affidavit of GF is void for all
intents and purposes.
7. Lessee may mortgage the thing
leased but only valid during the
effectivity of the lease.
8. A mortgage made by a co-owner F
of a property w/o the consent of Produces a legal effect
other co-owners produces no
legal effect.
9. The nullity of a mortgage does
not render null and void the
principal obli it guarantees
10. A municipality may not mortgage T
a patrimonial property being
used as a public market.
11. Growing fruits while they are
attached to the land may not be
T
F whoever the possessor may be
Obligation to pay interest is not the essence
of antichresis.
unilateral contract.
A statement wherein the parties severally
swear that the mortgage is made for the
purpose of securing the obli specified in the
conditions thereof and for no other purposes
and that the same is just and valid
obligation as one not entered into for the
purpose of fraud.
F.
Affidavit only required for the purpose of
transforming an already valid mortgage to a
preferred one.
F
Lessee is not the absolute owner of the
property.
T
F 23. Enjoyment of immovable
proper objects of CM.
12. A machinery classified as RP T
under Art 415 NCC may be the
object of a valid CM.
13. A mortgage may be gratuitous. T
14. A mortgage follows the property F
provided there is formal Formal assumption not necessary.
assumption of mortgage by the
transferee.
15. While the law does not T
specifically require the
possession of the prop to the
antichretic creditor, delivery has
been held a standard
characteristic of the contract of
antichresis
16. All immovable properties may be F
the object of a contract of
antichresis. Only immovable of the creditor.
17. The mortgage extends to both T
natural and artificial accessions
18. The parties must agree on the F
valuation of the fruits for Actual MV of fruits at the time of application
application to the interest and
principal of the debt
19. The parties may stipulate to the T.
share of taxes and charges upon
the estate during the period of
antichresis
20. The expenses for preservation of T
the property in an antichresis
shall be deducted from the fruits
of the same.
21. Receive fruits RIGHTS OF AN ANTICHRETIC CREDITOR
22. Actual MV of the fruits at the the
of application
24. Taxes
25. Charges upon estate
26. Apply fruits after receiving them
27. The chattel mortgage is deemed
to cover only the prop described
therein and not like or substituted
property thereafter acquired by
the mortgagor notwithstanding a
contrary stipulation
28. Sstocks in trade which are
naturally revolving or floating and
perishable goods that are
naturally expected to be replaced
may be the proper objects of a
CM, provided the deed must be
amended every time there is a
replacement of the goods
29. A promise expressed in a CM to
include debts to be contracted in
the future is a binding
commitment that can be
compelled upon the security
itself even if there is no
amendment of the old agreement
or the execution of a new one
30. A stipulation in a REM prohibiting F
the mortgagor from selling the
mortgaged property w/out the
written consent of the mortgagee
is valid because obligations
arising from contract have the
force of law bet. the contracting
parties
31. The absence of written consent
of the mortgagee in a sale of a
rd
mortgaged chattel to a 3 party
doesn’t affect the validity of the
sale although the mortgagor
could be criminally liable
32. Stipulations in a contract of
antichresis for the extrajudicial
foreclosure of the security is void mortgage and pledge
OBLIGATIONS OF AN ANTICHRETIC for lack of legal basis
CREDITOR
33. In REM, foreclosure pursuant to T
Art 3135 doesn’t require
T personal notice to the mortgagor
34. In REM and antichresis, T
deficiency or the excess is for
the acct/credit of the debtor
unlike in the case of pledge .
35. After foreclosure of a CM or PP T
F
paid on installment, the seller
cannot recover the deficiency
Stocks cannot be an object of CM.
from the buyer
36. The loss of the property F
mortgaged by a fortuitous event Mortgage is an accessory contract, loss of
shall necessarily free the debtor- the thing mortgaged doesn’t affect the
mortgagor from the principal principal contract.
obligation.
F
37. The commitment of a buyer at an F
Marquez v Elisan Credit Corp auction resell the prop to the Right of redemption may be exercised w/ in
mortgagor beyond the period of 1 yr from the reg of the cert of sale; w/o the
redemption is not binding unless reg of the prop, redemption is still possible
supported by a separate even when the commitment is not supported
consideration. by a separate consideration
Pactum commisorium DIFF: CM and PLEDGE CM PLEDGE
38. X 1. Consensual 1. Real
39. X 2. Registration 2. Public instrument
40. X essential for validity to bind 3rd persons
41. X 3. Possession 3. Possession with
remains with debtor creditor
4. Different 4. Different
T procedure in public procedure in public
auction sale auction sale
5. If price of sale is 5. Credior not
less than the amount entitled to recover
of pincipal, creditor deficiency
can recover
deficiency.
F
DIFF: CM and REM CM REM
Parties may agree on the same, as in
42. X 1. Movable 1. Immovable
43. X 2. x guarantee future 2. Future obligations
44. X
45. X
46. A survivorship agreement that
upon death of 1 of the joint
accoutn holders the full amount
of money in their account shall
become the property of the
survivor is a valid aleatory
contract.
47. Betting in a basketball game is
valid because it is not a game of
chance.
48. fThe insolvency of the guarantor
entitles the creditor to demand
another guarantor even if the
creditor designated the guarantor involving dishonesty or should become
49. Future debts of unknown amount F
may not be guaranteed because
there is no principal obligation
yet.
50. Guaranty must be express but
exceptionally it may be implied
from acts of the guarantor as in
guaranty by estoppel
51. The guarantor can bind himself
for more than what the debtor is
liable for but not for less
52. If the parties avail of contractual
provision for automatic
extension, the guarantor will be
released
53. In case of a merger between the
debtor and the guarantor, the
guaranty is extinguished but a
obligations may be guaranteed. sub-guarantor, if any, is released
3. Registration in CM 3. Registration to
registry as a security bind 3rd persons. 54. There is no T
for performance of an 4. Registration X excussion/exhaustion in judicial
obligation essential guaranty
4. Registration 55. When the principal obligation is F
essential for validity modified by agreement, the Alteration should be onerous as to impose a
T guarantor is released if he didn’t new obli or add burden to the guarantor
agree to the modification even if
the modified obligation will be
less onerous
56. A remission in favor of 1 of 5 T
guarantors extinguishes the
principal obligation but only to
F the extent of 1/5
57. Necessary and useful expenses EXAMPLES OF LEGAL PLEDGE
Prohibited. 58. Termination of usufruct
F 59. Execution of work upon a
Art 2057- If the guarantor should be movable
convicted in first instance of a crime 60. Agent’s right to retention of
objects of an agency until
insolvent, the creditor may demand another principal effects reimbursement
who has all the qualifications required in the and pays indemnity
preceding article. The case is excepted 61. Depositary
where the creditor has required and 62. Hotel keepers
stipulated that a specified person should be
63. File application before the 7 CONDITIONS AND RULES FOR VALID
the guarantor
executive judge thru the clerk of EXTRAJUDICIAL FORECLOSURE OF A
court THING PLEDGED
A guaranty may also be given as security for 64. Clerk will examine WON there  Debt must be due and
future debts. was compliance with posting of demandable
notice and publication  Notify the owner
65. Raffling of application among  Intenvention of notary public
F
A guaranty is not presumed; it must be
sheriffs  Sale in public auction
express and cannot extend to more than
66. Auction sale may be had even if  Bids must be I ncash
there is only 1 participating
what is stipulated therein.
bidder
F 67. Clerk shall issue a certificate of
A guarantor may bind himself for less, but payment
not for more than. 68. Certificate of sale must be
approved by the EJ
F
69. Archival of records
70. For all intents and purposes of F
T
pledge is extinguished when
thing pledged is in the Only a disputable presumption.
 possession of pledgor enrichment exists.
71. The rules governing possession T
and preservation of a thing 94. A quasi-contract may be T
pledged by agreement shall nominate/innominate.
apply to legal pledges.
95. The rights under quasi-contract T
72. Take care w/ diligence of good 3 OBLIGATIONS OF PLEDGEE prescribes in 6 years.
father of family
73. Liable for loss or deteriorioration 96. Negorotium gestio arises when a F
person takes charge of an
by reason of fraud, negligence,
abandoned property of another No knowlsegdge.
delay or violation of contract
who does not oppose
74. Not deposit with a 3rd person
notwithstanding knwoeldge.
75. Gratuitous CHARACTERISTICS AND FEATURES OF
CONVENTIONAL DEPOSIT
97. Gestor who attempts to F
76. Only movable property
appropriate the property is
77. Voluntary or necessary governed by rules on implied Not govern
78. Real trust.
79. Unilateral if gratuitous
80. Bilateral if for compensation 98. Solutio indebiti arises when F
payment is made through
81. Safekeep OBLIGATION OF DEPOSITARY mistake, liberality or some other It arises when payment is unduly delivered
82. Return when required cause. through mistake only.
83. Liable for loss through his fault or
negligence 99. Where negligence is punishabel T
under RPC, the repsonsibility for
QD is distinct from civil liability
JUDICIAL VS CONVENTIONAL DEPOSIT Judicial EJ arising from the feliny and may
84. X 1. Court orders the 1. Necessary or therefore be pursued separately.
85. x attachment/seizure voluntary
86. x 2. Movable or 2. Only movable 100. Breach of contract may result T
87. x immovable 3. Delivery may be from QD.
3. Delivery is made made by will of 101. Define proximate cause Causw ehich in natural and continuous
by court order depositor sequence, unbroken by any efficient
102. x
4. Attachment or 4. Compliance with intervening cause, produces the injury and
seizure legal obligsation or w/o which the result would not have
calamity occurred.
SOLIDARY GUARANTOR VS SOLIDARY SD SG 103. Doctrine of contributory If P's negligence was only contributory, the
DEBTOR 1. Debt shall be paid 1. Debtor shall pay negligence immediate and proximate cause of injury
88. x 2. Solidary and 2. Subsidiarily liable
104. x being D's lack of due care, P can still
89. x primarily liable 3. Entitled to recover but the court shall mitigate the
90. x 3. Not entitled to excussio damages to be awarded.
91. x excussion 4. Collateral
92. x 4. Original promisor undertaking
5. Bound to know 5. No need for notice
every default

93. A quasi-contract will not arise if T 105. Doctrine of discovered peril Where both parties are negligent, but the
the act is not unilateral and 106. x negligent act of one is appreciably later in
voluntary and no unjust time than that of the other, or when it is

107. Under the doctrine of
supervening negligence, the
antecedent negligence of a
telephone company is not
providing warning signs on
excavations would not make it
liable if P had a clear chance to
avoid the accident.
108. Volonti non fit injuria not apply if
a person, aware of possible
danger, takes some risks in order
to preserve life.
109. Doctrine of imputed negligence
110. x
111. Burden of proof is the same in
action ciulpa contractual and
culpa acquillana.
112. Res ipsa loquitor
113. x
114. PH law recognizes the strict
liability in torts rule.
115. Liability may be created even if
there is no fault or negligence.
116. If driver and owner of cargo truck T
which figured in a road mishap
were found liable for torts, their
liability is solidary.
117. A subsidiary writ of execution
may be issued against ER of an
accused even if the formed did
not participate in the criminal
impossible to determine whose fault or
negligence should be attributed to the
incident, the one who had the last clear
opportunity to avoid the impending harm
and failed to do so is liable.
T 120. Not authorized by owner.
T
Obligation under 2176 is demandable not
only for one's acts or omissions but also for
those of persons for whom one is
responsible.
F 135. Civil interdiction
Culpa aquiliana - rests on plaintiff
Culpa contractual – defendant to present
proof of contract and non-performance is
sufficient
The thing itself speaks. One is presumed to
be negligent if he had exclusive control of
whatever caused the injury even though
there is no specific evidence of an act of
negligence, and without negligence the
accident would not have happened.
T 142. NG is the management of affairs T
T consent, whether implied or
T
proceedings.
118. Voluntarily assumption or REQS OF NEGOROTIUM GESTIO
management of business or
property
119. Abandoned or neglected.
121. No contract
122. GF
123. Unjust enrichment
124. Risky operations GESTOR LIABLE FOR FORTUITIOUS
125. Prefferd his own interested EVENT
126. Fail to return upon demand
127. BF
128. Unfit to carry on
129. Intervened and prevented more
competent person
130. Delegate to another
131. Stipulation
132. Repudiation EXTINGUISHMENT OF NG
133. Withdrawal
134. Death
136. Insanity
137. Insolvency
138. Death, civil interdiciton of owner
139. Insanity, insolvency of owner
140. If payor was in doubt whether T
debt is due, he may recover
upon prood that it was not due.
141. NG and SI may apply in 1 and F
the same situtation Different
or property of anotehr w/o latter's
express and for his benefit
143. A person who receives in GF a T
payment made erroneously by
the payor shall only answer for
the thing and its accessories to
the extent of his enrichment
144. Delivery to a payee REQS OF SOLUTIO INDEBITI
145. No right to demand what was
delivered
146. Mistake
147. ???Receipt
148. If a thing paid to payee in GF
was thereafter alienated, payee
may restore the price or assign
the action to collect it.
149. Payee in BF must restore the
capital w/ interest, or thing with
fruits which were received or
should have been received, if
thing produces fruits plus
damages.
150. Payee in BF can demand
reimbursement for necessary
and useful exepnses w/ right to
retention.
151. If thing paid belongs to 3rd
person, payee who fines out the
true owner must notify the latter
to claim the thing w/in 60 days.
152. Liability of 2 or more payees in
SI is joint unless solidary is
stipulated.
153. A stranger who gives support
has a right to claim from the one
legally bound unless he gave it
out of piety and w/o intent to be
paid.
154. When trhough an accident, a
person was injured and treated
or helped by another while not in Unless service rendered out of pure
a condition to give consnet, he
shall be liable to pay for the
services rendered him even if
they were rendered on pure
generosity.
155. Exceptionally, a crime of rape
may be considered QD.
156. Act or ommission
157. Damage is caused
158. Fault or negligence
159. No pre-existing contractual
relation between parties
160. Culpa contractual and culpa T
aquilliana both give rise to an
obligation to indemnify.
T
161. As a general rule, QD covers all T
negligent or culpable acts or
ommissions whether punished
by law or not so long as they dod
F not constiute breach of contract.
162. Factors affecting negligence are T
person, time, place and skills.
163. Person may be held responsible T
for the acts and negligence of
F others under his control and
supervision as in injury caused
He can demand for necessary expenses but by stray animals.
no right of retention.
164. Parents PERSONS RESPONSIBLE FOR HTE
F 165. Guardians ACTS OF OTHERS
166. School, administrators, teachers
Claim the thing within 1 month. 167. Employers
168. State
F 169. Head of families that live in T
buildings or parts thereof shall be
Solidary. liable for damages caused by
things thrown or falling frm the
T
same and no proof of negligence
is required to hold them liable.
170. Damages recoverable for QD T
include damnum emergens and
lucrumcessans
F
171. Fault must be the proximate and F
need to be the only cause for
generosity. daamge in order to recover Negligence/Coontributory negligence/strict
indemnification. liability
172. Actual damages are reparation T
of pecuniary losses.
F 173. Moral damages are reparation T
Quasi-delict for non-pecuniary losses.
REQS OF QD
174. Liquidated damages must be F
proveb ny claimant. No need for proof.
175. Exemplary damages are for T
deterring future violations.
176. Fixing amount of indemnity may F 199. With reference to specific F
only be by law or courts. Agreement of parties as to liquidated movable property, claim of EE of
damages. the owner now enjoy preference Real preference only with respect to taxes.
over taxes.
177. Crimes and QD EXTENT OF COMPENSATORY DAMAGES
178. Breach of contract 200. With respect to specific T
immovable property, only taxes
179. Pleading and proof of loss REQS FOR RECOVERY OF ACTUAL
enjoy absolute preference and
180. Proven with reasonable certainty LOSS other preferred credits must be
181. Fact of death, if deaath resulted divided pro rata..
182. Equitable mitigtion of damages
may be decreed if loss would T
have resulted in any even if there
was no breach by defendant
183. No interest may be recovered on T
unliqiudated claim of damages,
except when damend can be
established w/ reasonable
certainty at court's discretion.
184. Exemplary damages are WHEN ATTY FEES CAN BE
awarded RECOCVERED
185. Malicious prosecution
186. Unfounded civil action or
proceedings
187. Legal support
188. Malicious prosecution WHEN MORAL DAMAGES BE
189. Adultery or concubinage RECOVERED
190. Illegal search
191. Libel
192. Seduciton
193. Agreed upon by parties CHARACTERISTICS OF LIQUIDATED
194. Equitably reduced if iniquitous or DAMAGES
unconscionable
195. When breach is not the one
stipulated, law will determine the
measure of damages.
196. LD are those damages agreed F
upon by parties and may not be May be reduced if iniquitous or
equitable reduced. unconscionable.

197. ED cannot be awarded alone. T

198. Preference under 2241 can only T
be applied if there is an
insolvency proceeding.
QUIZ 9 – 120 items
1. A survivor ship agreement that upon the death of 1 of F.
the joint account holders the full amount of money in
their account shall become the property of the survivor It is prohibited.
is a valid aleatory contract.
2. Betting in a basketball game is valid because it is not a F
game of chance. Not a game of chance, nut under PD438, it is prohibited.
3. A manufacturer or seller of a prodcut cannot be held T
liable for any damage casued by the product in
absence of proof that product was defective
4. A single transaction whereby 2 or more persons F
contribute funds to buy certain real estate for profit An isolated transaction whereby 2 or more persons contribute
creates partnership only to that particular transaction. funds to buy certail RP for profit in the abasnece of other
circumstances showing contrary intention cannot be considered
partnership.
5. The liability for a contract entered into on behald of an T
unincorporated association or ostensible corporation
may be in a person who may not have directly
transacted on its behalf, but reaped benefits from the
contract.
6. A stipulation in a contract of partnership that upon the
death of a partner, the partnership shall continue to
exist amongs the surviving partners and the heir/s of
the deceased partner is valid.
7. Where the title to RP is in the name of the partners in
conveyance executed by all partners passes all their
rights in such property.
8. If the cause is not justified or no casue was given,
withdrawing managing partner named in AOP may be
compelled to remain in the firm until selection of
replacement and amendment of AOP.
9. Acquisiton of 62% of hte partnership interest by new T
partners, coupled with retirement or withdrawal of
partners who had originally owned such interest,
results to constitution of new partnership.
10. A partnership which does not fix its term is also F
referred as a Partnership w/o term. Partnership at will
11. An action broguth by atty in fact in his own name F
instead of hte pricnipal will not prosper unless name of Atty in fact cannot file an action.
principal is disclosed in the body of complaint.
12. Liability arising from a partner's negligence shall be T
solidary among the guilty partner, innocent partners,
and partnership.
13. Prescription of right to inqurie on the business affairs of T
partnership or demand an accounting starts to run from
the dissolution of partnerhsip.
14. The agent's interst in his promised commission upon F
completion of his obligation makes agency coupled w/ Not an agency coupled w/ interest.
interest.
15. Principal cannot be held liable for actions of agents F
outside scope of their auhtority even if principal Acts beyond authority do not binid unless ratified.
received benefits from the same.
16. Broker may still claim for commission depsite absence T
of authoritsation from principal.
17. Power to foreclosre given to mortgage is govered by F
rules on ordinary agency. Not an ordinary agency.
18. As between the parties to the agency, socpe of agent's T
authority is what appears in written terms of power of
 atty regardless of different insturctions from principal
becuase 3rd parties are not bound to inquire on hte
written terms.
19. There is an implied trust when property is sold, and hte T
legal estate is granted to 1 party but the price paid by
another fro the purpose of having the beneficial
interest of the orperty.
20. If a person obtains legal title to property by fraud and T
concealment, courts of equity will impress upon hte
title is so called resulting trust in favor of the defrauded
party.
21. In an express trust, acceptance by the trustee is T
necessary fro the creation of the trust.
22. A trustor may not have the capacity to transfer
property.
23. Trusts over RP are enforceable in any form. F
1143
24. Trustee can acquire trist property by adverse F
possession even w/o repudation of trust. One of the requisites of trustee to claim title by prescription is
performance of open and unequivocal acts of repudiation.
25. An express trust concerning an immovable or any F
interest may be proved by parole evidence. It may not be proven by parole evidence.
26. In an implied trust over a parcel of land, action to F
recover msut be brought w/in 5 years from issuance of 10 years
title to property.
27. For an aciton for reconveyance based on fraud to F
prosper, petititoner must prove by CCE only his title to Title and fact of fraud.
the property.
28. Prescription will lie in favor of persons who are not in F
possession of the disputed land provided they claim an
interest thereon.
29. In our jurisdiction, it is an enshrined rule that even a T
registered owner of proeprty may be barred from
recovering possesion of property by viurtue of laches.
30. Refusal on part of borrower to exxecute an agreeemtn T
to cover the after-acquired obligsation can constityte
an act of default on the part of the borrrower and the
foreclusre may cover debts incurred after the time of
constiution of CM sought to be foreclosed.
31. The rules governing loans or forbearances may be
appliued by analogy to discounts.
32. Where indebtedness actually owing to the holder of F
morotgage is less than sum named in the mortgage, Where indebtedness actuallu pwing to holder of mortaage is less
mortgage may be enforced fro more than the actual than sum named in mortgage, mortgage cannot benforced for
sum due. mo rethan the actual sum,
33. In a loan transaction, obligation to pay a sum certain in
money may be paid in money or by use of check if
agreed upon.
34. Failre of entrutee to turn over proceeds of sale of F
goods, covered by trust receipts to entruster or to Liable for estafa
return said goods when not disposed of in
accoradance with the terms of trust receipt creates a
civil obligation but not a criminal case.
35. Legal rate for loan/forbearance of money may be T
applied to an obligsation arising from a piece of work.
36. If obligation constits in the payment of sum of money, T
and the debtor incurs in delay, indemnity for damages,
there being no stipulation to the contrary, shall be the
 payment of interest agreed upon, and in the absence
of stipulation, legal interest which is 6% per annum.
37. In simple loan with stipulation of usurious interest, F
prestation of debtor to pay the principal debt, which is Illegality lies only as to the presation to pay stipulated interest
the cause of contract becomes ilelgal.
38. In cases where no interest has been stipulated by the F
parties, as in case of PH American Accident Insurance, No interest was stipulated
accrued conventional interest could further earn
interest upon judicial demand.
39. A registered mortgage right over the property is inferior T
to an unrecroded sale.
40. Exemplary dmaages are awarded for wanton acts and
granted by way of compensation for damages suffered
by plaintiff so as to ____ others as a sort of deferrent.
41. Loss of earning capacty cannot be awarded in case of
damages predicated on breach of contract.
42. Temparate damages are more than nominal damages
and inteded as a reasonable compensation fro injury
sustained even in the documentary proof.
43. Moral damages may not be recovered in cases of
seduction if the victim was already an adult at the time
she had an affair with the _____
44. The seller of a car which was repossessed for
appraisal purposes can still claim fro the balance of the
purchase price
45. The owner of establishment are solidary liable with
their driver fro any accident resukting from latter's
negligent operation of the vehicle provided said owners
were riding therein at the time of mishap.
46. Vendor of personal property sold on isntallment basis
is not precluded after foreclosing the CM on the thing
sold, from having recourse against the additional
security put up by a 3rd party to guarantee the
purchaser's performance of his obligation because the
rifghts eminate from different contracts.
47. Whenever a price of rural land not exceeding 1 hectare
is alienated ,law grantes the adjoining owners a right of
redemption even if grantee or buyer does not own any
other rural land.
48. When a 3rd person claims a legal right to the property
leased, it is a tresspass in fact for which lessor shall
not be liable unless stipualted.
49. The mere act of submitting a case to auhtorities for F
prosecution makes 1 liable for malciious prosecution.
50. A private complainant can be held liable for malicious F
prosceution if accused is acquitted by RTC on
reasoanbale doubt.
51. In case of GF, damages recoverable from breach of T
contract are those which are the natural and probable
consequences of the berach of obligation, WON the
parties could have reasonably foreseen them or not.
52. In rape cases, the court may, in discretion, award F
moral damages to victim without need fro pleading or
proof of the basis thereof.
53. On issued of public humiliation, the courts conider the F
social standing and profession of a perosn in awarding
him actual damages.
54. The diligence required of banks is more than that of a T
 good father of a fmily.
55. Payment of obligation in foreign currency is prohibited. F
56. A loan of use exists when a person receives a loan of
money or any other fundible thing and acquires
ownership tehreof.
57. Failure to pay installment payments in a contract to sell T
is a berach thatwill justify rescission of contract.
58. Specially preffered credits must be sastisfied first T
before ordinary credits under 2244 be paid according
to their priority.
59. In precarium, bailor can demand the return of the thing T
at will from bailee.
60. Execution of deed of assignment in liue of surety bond F
will have same effect as deation in payment.
61. Forged deed of sale may become root of vlaid title if F
certificate has already been trasnferred from the name
of true owner to the name of forger.
62. Mortgagee may insure the mortgaged property for his T
benefit but not for his sole benfit.
63. Doctrine of LCC means that even though a person/s F
own acts may have placed him in a position of peril,
and an injury results the injured person is not entitiled
to recovery and partiesm ust suffer own damages.
64. In res ipsa loquitor, burden or proof remains on plaintiff F
to prove that injury arose from defendant's want of
care.
65. Recover actual daamges, it is not necessary to prove T
actual amount of loss with reasonable degree of
certainty.
66. Grant of atty fees as part of damages is exception T
rather than the rule and counsel's fees are not
awarded every tiem a party prevails in suit.
67. Principal of an acadamic school is liable for tort F
committed by student.
68. Moral damages are generally recoverable in an action F
for berach of contract beccause every person msut
comply with his contractual obligation in GF.
69. If the safekeeping of the thing delivered is not the F
principal purpose of the contract, rules on deposit
should still govern.
70. A contract of sale is void and produces no effect
whatsover where price which appears therein as paid,
has in fact never been paid by purchaser to vendor.
71. Generally, malice can be presumed from defamatory T
words but privileged character of a ocmmunication
destroys the persumption of malice.
72. An interest rate of 2% a month is iniquitous and F
stipulation of interest payment is void.
73. The court in Atlantic Gulf vs CA did not exceed its F
jurisdiction when it modified the judgment of trial court
by increasing the award of damages in favor of the
private respondents who, in the first place, did not
impose an appeal therefrom.
74. When the judgment aweading sum of money becomes T
FE, the monetary award shall earn interest at 6% per
annum from the date of such finality until its
satisfaction, regardless of whether the case involves a
 loan or forbearance of sum of money.
75. A claim for damages sustained on a shipment of goods T
is a solidary oblgiation of shipper, common carrier and
arrastre operator, and customs brakers.
76. All the claims under 2242 must be paid pro rata.

FROM QUIZ 8 → 76-119

1. Future debts of unknown amount may not be F
guaranteed because there is no principal obligation A guaranty may also be given as security for future debts.
yet.
2. Guaranty must be express but exceptionally it may be F
implied from acts of the guarantor as in guaranty by A guaranty is not presumed; it must be express and cannot
estoppel extend to more than what is stipulated therein.
3. The guarantor can bind himself for more than what the F
debtor is liable for but not for less A guarantor may bind himself for less, but not for more than.
4. If the parties avail of contractual provision for T
automatic extension, the guarantor will be released
5. In case of a merger between the debtor and the F
guarantor, the guaranty is extinguished but a sub- Guaranty is accessory and subsidiary.
guarantor, if any, is released
6. There is no excussion/exhaustion in judicial guaranty T
7. When the principal obligation is modified by F
agreement, the guarantor is released if he didn’t agree Alteration should be onerous as to impose a new obli or add
to the modification even if the modified obligation will burden to the guarantor
be less onerous
8. A remission in favor of 1 of 5 guarantors extinguishes F
the principal obligation but only to the extent of 1/5 Extinguished only if remission is made w/out the consent of the
other Gs
9. Necessary and useful expenses EXAMPLES OF LEGAL PLEDGE
10. Termination of usufruct
11. Execution of work upon a movable
12. Agent’s right to retention of objects of an agency until
principal effects reimbursement and pays indemnity
13. Depositary
14. Hotel keepers
15. File application before the executive judge thru the 7 CONDITIONS AND RULES FOR VALID EXTRAJUDICIAL
clerk of court FORECLOSURE OF A THING PLEDGED
16. Clerk will examine WON there was compliance with
posting of notice and publication
17. Raffling of application among sheriffs
18. Auction sale may be had even if there is only 1
participating bidder
19. Clerk shall issue a certificate of payment
20. Certificate of sale must be approved by the EJ
21. Archival of records

22. For all intents and purposes of pledge is extinguished F

when thing pledged is in the possession of pledgor
Only a disputable presumption.
23. The rules governing possession and preservation of a T
thing pledged by agreement shall apply to legal
pledges.
24. Take care w/ diligence of good father of family 3 OBLIGATIONS OF PLEDGEE
25. Liable for loss or deteriorioration by reason of fraud,
negligence, delay or violation of contract
26. Not deposit with a 3rd person
27. Gratuitous CHARACTERISTICS AND FEATURES OF CONVENTIONAL
28. Only movable property DEPOSIT
 29. Voluntary or necessary
30. Real
31. Unilateral if gratuitous
32. Bilateral if for compensation
33. Safekeep OBLIGATION OF DEPOSITARY
34. Return when required
35. Liable for loss through his fault or negligence

JUDICIAL VS CONVENTIONAL DEPOSIT Judicial EJ

36. X 1. Court orders the 1. Necessary or voluntary
37. x attachment/seizure 2. Only movable
38. x 2. Movable or immovable 3. Delivery may be made by
39. x 3. Delivery is made by court will of depositor
order 4. Compliance with legal
4. Attachment or seizure obligsation or calamity
SOLIDARY GUARANTOR VS SOLIDARY DEBTOR SD SG
40. x 1. Debt shall be paid 1. Debtor shall pay
41. x 2. Solidary and primarily liable 2. Subsidiarily liable
42. x 3. Not entitled to excussion 3. Entitled to excussio
43. x 4. Original promisor 4. Collateral undertaking
44. x 5. Bound to know every default 5. No need for notice

WAREHOUSE
1. The warehouse receitps law applies to all warehouses,
whether private or publuc, bonded or not.
2. Mere fact that the goods deposited are incorrectly
described does not make ineffective the receipt when
the identity of the goods is fully established by
evidence.
3. X WHAT SHOULD BE INCLUDED IN WAREHOUSERECEIPT
4. x
5. x
6. x
7. x
8. x
9. x
10. x
11. x
12. A warehouse receipt has 2-fold function of being
contract and a receipt
13. A judgment creditor can levy by execution the goods
covered by a negotiable receipt while in possession of
the Wman even before surrendering the receipt.
14. Fialure to mark the receipt 'negotiable' does not render
it non-nego if it contains wordsof negotiability.
15. Where, by the terms of the negotiable receipt, the
goods are deliverable to bearer or where negotiable
receipt has been indorsed in blank or to bearer, any
holder may indorse the same to him or to any other
specified person, and in such case, the receipt shall
thereafter be negotiated only by indorsement of such
indorsee.
16. Indorsement of a receipt shall make the indorser liable
for failure of the part of wman or previous indorsers of
receipt to fuilfill heir respective oblgiaitons.
17. A receipt in which it is stated that goods received will
be delivered to the depositor or to any other specified
person is a negotiabel receipt.
18. A negotiable receipt with insertion that it is non-
negotiable shall render the receipt non-negotable.
19. Alteration of receipt shall not excuse the Wman who
issued it from any liability ______ it was made w/o
fraudulent intent.
20. __________ commingled with other goods of the same
kind.
Quiz 10 (2017-2018)

1. Motive is material in negligence F.
cases.



2. An insane person is exempt from
liability arising from delict.



3. Violation of a statutory duty does not F
constitute negligence.



4. Error of judgment on the part of the F
surgeon necessarily makes him liable
for damages.


5. 4 elements in medical negligence a. Duty to use at least the same level of
cases care that any reasonably prudent
6. x doctor would use to treat a condition
7. x under the same circumstances
8. x b. Breach of such professional duty or
improper performance thereof
c. Injury is caused to the patient,
constituting actionable malpractice
d. The doctor’s actions were the
Proximate Cause of the patient’s
injury

9. Unlike in the case of fraud, a person F
may validly waive his right to recover
damages which may result from
negligence, provided it is not gross

10. Elements of abuse of right a. there is legal right or duty
11. x b. exercised in bad faith
12. x c. for the sole intent of prejudicing or
injuring another

1
 OTHER CLASS:
Explain the Emergency Rule in Torts à A defense in Torts case where the
defendant may be free from liability if he
can prove that there is an unexpected
and sudden situation, that is an
emergency, which is not caused by him,
and during that unexpected and sudden
situation he acted reasonably

If he can prove that, he will be excused
from liability because a person who is in
an emergency is not expected to be so
alert so as to foreclose the possibility of
injuring others

13. In an express trust, the action to F.
compel the trustee to convey the
property to the beneficiary
prescribes in 10 years.

14. Action based on an implied F
constructive trust prescribes in 10
years from the time of repudiation.


15. The fact that pacto de retro sale is F
not the true value of the property
justifies the conclusion that the
contract is one of equitable
mortgage.

16. A co-owner has the pre-emptive right F.
to buy the shares of his co-owners.
The right of a co-owner is limited to the
redemption of a share that was sold to a
stranger

17. What must the lessee do if lessor After tender, there is unjust refusal..
refuses to accept rentals? Consignation

18. ? F.

2
 19. Extraordinary obligation of carrier F.
ceases when goods are placed in
warehouse, rules on deposit shall
apply.

20. Instances where the partners’ a. Wrongful acts by the partners in the
liability is solidary with the use of partnership property causing
partnership damage to another person (2
21. X instances):
22. X b. While doing an act that is in accord
with the purposes of the partnership
c. If with the consent of the other
partners
d. Misapplication/Misappropriation of
funds received by the partner for the
partnership
e. Misapplication of funds received by
the partnership but in the custody of
the partner

OTHER CLASS:
Enumerate the specific obligations of the a. he must perform the agency within
agent in performing the agency with the scope of his authority
exactness b. he must do anything, even if not
expressly provided, conducive to the
performance or accomplishment of
the objectives/purposes of the agency
c. Even if granted, agent should not do
anything unlawful

23. Liability of an industrial partner for F
outstanding partnership obligation is
solidary. The liability of an industrial partner is
not solidary (1860)

24. Requisites of agency by necessity a. Real existence of an emergency
25. X b. Inability of the agent to communicate
26. X with the principal
27. X c. Exercise of the add’l authority
28. X d. for the principal’s own protection
e. Adoption of fairly reasonable means,
premises duly considered

Note: Actually, agency can never be
created by necessity, what is created is

3
 add’l authority in an agent appointed
and authorized before the emergency
arose


OTHER CLASS:
5 distinctions on rescission of contracts
under 1380 and 1191











29. Extraordinary expenses on the F.
occasion of the actual use by the
bailee without fault shall be borne by They should equally the burden
the bailor.

30. ? F.

Since the original party was not released,
there is no novation


31. – 40.
X borrowed money from Y. As surety,
Z executed a REM in favor of Y. X
failed to comply, Y foreclosed REM. Z
– to nullify on the ground that Y
should have resorted first to the
properties of X. Is Z’s action correct?

4
 41. – 50.
“O,” owner of a copying machine, “O’s” suit is legally untenable. Art. 1485
leased it to “L” at a rental of P4,000 a NCC provides that the Recto Law
month for a period of 1 year with (Art.1484) applies to contracts
option on the part of “L” to buy the purporting to be leases of personal
copying machine at the end of the property with option to buy, when the
year for P80,000, to be paid by lessor has deprives the lessee of the
applying the rentals, so that “L” possession of enjoyment of the thing.
needs only to pay P32,000. “L” failed Under 1484, the seller has 3 options in
to pay rentals for the 4th, 5th, and 6th case of non-payment of the installment,
months so that “O” terminated the that is,
lease and repossessed for copying (1) specific performance
machine, then sued “L” for the unpaid (2) rescission, or
rental of 3 months, or P12,000. Is (3) foreclosure.
“O’s” sut legally tenable? Explain.
In this case, “O”, in effect, availed of the
remedy of rescission involves mutual
restitution and no action can be
maintained for the enforcement of the
contract.

(Aquino, p.577)

5
1. The source of obligation of a school for injuries suffered by a
student mauled inside the campus by
a trespasser is delict. F
2. A son-in-law who brings his mother-in-law to a hospital for
treatment is obliged to pay for the
hospital bills because of a quasi-contract. F
3. An obligation based on quasi-delict may arise from the performance
of a contract T
4. The officious manager in gestio has no obligation to the property
owner. F
5. A moral obligation has no legal consequence and cannot be enforced
by a court action. T
6. The delivery of anything for a certain consideration may not be the
prestation ofa valid obligation. T (correction)
Civil obligations may become moral obligations. F
8. A civil obligation extinguished by extinctive prescription becomes a
natural obligation. T
9. A civil obligation arises when a minor, who has entered into a
contract without the consent of the
parent or guardian, voluntarily pays a sum of money in fulfillment of
the obligation and the obligee has I
spent it in good faith. T
10. A natural obligation arises when the debtor pays the creditor after
a judicial order for the debtor to
retain the debt. F
11. A contract of loan gives rise to reciprocal obligations between the
bailee and the bailor. F
12. It is essential in bilateral reciprocal obligations that both arise
from the same source. T
13. An obligation arising from a contract of sale is an example of a
cyclic obligation. F
14. A divisible obligation is susceptible of partial performance even
if there is a contrary stipulation. F
15. Integrity of obligation requires that the performance thereof must
be complete. T

16. In obligations to give specific or generic things, the obligor must

perform in good faith the principal
as well as all accessory obligations. F
17. As a general rule, an obligation to do may be performed by another
at the debtors expense. T
18. There is no legal accessory obligation in an obligation not to do.
T
19. An obligation not to do cannot be performed by a delegate. T
20. Any action fora breach of an obligation is premature if there is no
actual breach within the prescribed period for performance. F
21. Fraud in the performance of a contractual obligation is not aground
for annulment of the contract. T
22. Actions for annulment and damages are common remedies in case of
fraud in the performance of an obligation and deceit in celebration of
a contract. F.
23. A cause of action based on fraud committed by X in the execution of
a contractual obligation may be waived. T
24. There could be delay in the performance of a negative obligation. F
25. There is no delay in the performance of alternative obligations. T
26. There could be an action for specific performance in an obligation
not to do. F
27. An unpaid seller may avail of extra-judicial remedies for breach of
the buyer’s obligations. T
28. Mechanical defects of a vehicle and tire blowout are not fortuitous
events. T
29. Carnapping per se is a fortuitous event. F
30. If the debtor promised to deliver a big carabao to the creditor or
his agent, the death of the debtors one and only big carabao in a flood
extinguished his obligation. F
31. The unreasonable suspension of a bank's operations by the Central
Bank may be a fortuitous event to excuse the bank from performing its
obligation to a depositor. T
32. An impossible condition shall not affect the validity of an onerous
or gratuitous obligation. F
33. The imposition of a condition will not affect the validity of the
obligation. T
34. Pending the happening of a suspensive condition, the creditor could
not avail of any action against the debtor. F
35. The debtor may recover what he pays voluntarily before fulfillment
of the condition. F
36. In case of a positive suspensive condition, the obligation is
extinguished upon lapse of the time indicated or when it becomes
evident the event cannot occur. T
37. The loss of the thing due pending the happening of a suspensive
condition will extinguish the obligation. T
38. The deterioration of the thing due pending the happening of a
suspensive condition may give the creditor the right to rescind the
obligation plus damages even if there was no fault on the part of the
debtor F
39. A single breach is sufficient for the rescission of an installment
sale of a movable. F
40. A single breach is not sufficient for the rescission of the
installment sale of an immovable. F
41. The rescission under Article 1191 applies only to reciprocal
obligations. T
42. A rescission under Article 1191 may be refused by the court even if
the plaintiff proves the contractual breach. T
43. A period may refer to a past unknown event because even if unknown,
it already happened. F
44. As a general rule, the creditor may not reject advance payment in
an obligation with a period. F
45. There is no retroactivity in an obligation subject to a resolutory
condition. T
46. If the debtor in an alternative obligation does not choose, the
creditor can choose the prestation to
be delivered. F
47. In an alternative obligation, the election becomes operative only
when communicated to the other party or a third party by agreement. T
48. If by the debtor’s fault all alternative were lost, the creditor
may demand the value of any object lost even if the first object was
lost through a fortuitous event. F
49. The rules applicable to facultative obligations are different from
the rules on dation in payment T
50. The choice to substitute in a facultative obligation may be given
to the creditor. F
51. In a solidary obligation, there is mutual agency among debtors. F

52. An obligation is a juridical necessity to do or not to do, to give

or not to give. T
53. Obligations arising from valid, voidable and rescissible contracts
have the force of law between the contracting parties and should be
complied with in good faith. T
54. Exceptionally, natural obligations can be enforced by court action
to prevent unjust enrichment. F
55. Civil obligations derive their binding force from positive law,
while natural obligations derive their binding force from divine law. F
56. In no case may a driver of a car, who was not able to control the
car due to the negligent act of a truck driver in encroaching upon its
lane, will be liable for damages for the injuries suffered by the
passengers of a jeepnev it hit under the rules on fortuitous events. F

57. In order that demand may not be necessary, it is required that the
obligation or the law expressly states that demand shall not be
necessary- F
58. Article 1174 which exempts an obligor from liability on account of
fortuitous events orforce majeure, refers only to events that are
unforeseeable or inevitable. T
59. A court can stipulate for the parties or amend their agreement
where the same contravenes law, morals, good customs, public order or
public policy. F
60. Exceptionally, robbery may be considered a fortuitous event. T
61. When the negligence of a person concurs with an act of God in
producing a loss, such person is exempt from liability by showing that
the immediate cause of the damage was the act of God. F

62. or incidental fraud in the execution of a contract must be serious

in character and
without which the other party would still have entered into the
contract. F
63. One who negligently creates a dangerous condition cannot escape
liability for the natural and
probable consequences thereof, although the act of a third person, or
an act of God for which he is not
responsible, intervenes to precipitate the loss. T
64. Where a natural disaster is the only and proximate cause of a loss,
the failure of a common carrier
to exercise due diligence to minimize loss before, during and after the
occurTence of the natural disaster,
shall make it liable for the entire loss. F
65. The receipt of the principal by the creditor, without reservation
with respect to the interest, shall give
rise to a conclusive presumption that said interest has been paid. F
66. The person using violence or causing fearto make another perform a
criminal act, shall be primarily
liable for the civil obligation arising therefrom. T
67. The obligation to give a determinate thing includes that of
delivering all its accessions and
accessories only if they have been mentioned. F
68. When the fulfillment of the condition depends upon the sole will
ofa debtororacreditor, the obligation
shall be void. F
69. Before the resolutory condition happens, the party who has a right
is practically in the same position
as one who has an obligation subject to a suspensive condition. T
70.
If the improvement on the object of the obligation was at the expense
of the debtor, he shall have
the same rights as a usufructuary. T
71. For purposes of liability, the school exercises custody over a
minor student doing his assignment at
Starbucks Café. F
72. A travel agency must observe extraordinary diligence in performing
its obligation to process travel
documents. F
73. There is no delay when a lessee, who failed to pay his monthly rent
for 10 months, pays immediately
upon demand. T
74. A creditor can only wait for the debtor to perform his obligation
if no specific period was agreed upon.
75. If time is of the essence, the creditor may rescind the obligation
even if the debtor is ready to perform
a day after the designated period. T
76. A donation made to a third party a year before the obligation of
the debtor to the creditor was
established cannot be rescinded at the instance of the latter. T
77. A collision of a barge with the bridge support of Ayala bridge
along the Pasig river is
78. The throwing of stones by mischievous boys which broke the
windshield of a taxi causing it to tum
turtle is a valid defense against liability for injuries suffered by a
passenger. T
79. The standard precautionary release of the waters of a dam to avoid
spillover is a valid defense against
flood damage claims. T
80. A joint indivisible obligation may be enforced only by proceeding
against all debtors. T

81. In a joint divisible obligation, the delay of one debtor will not
affect the others. F
82. Tortfeasors are liable. T
83. A mortgage of a property by co-owners results to real solidarity. T
84. In a solidary obligation, remission by any creditor will extinguish
the entire obligation even if one
creditor did not give his consent. T
85. A solidary creditor can assign his bights without the consent of
the others but he will be liable to his
CIVREV2-DD-SBCA-SOL-2020-2021
Q1,2&3 - MARCH 16, 2021 LECTURE

221. A representation that a product being sold is the best in the world even if it is not, is fraudulent. F
222. In case the court decrees annulment of the contract and the same was already performed, there
must be mutual restitution. T
223. Where the contract is entirely illegal and both parties are equally guilty, there may be no action by
one against the other. T
224. Exceptionally, rescission may be possible even if plaintiff is not able to return what he received under
the contract. T
225. When there is vice of consent, the contract is rescissible. F
226. An absolutely simulated contract is void ab initio and inexistent. T
227. Intent of the parties to the contract is deduced from the language employed by the parties. T
228. Inadequacy of cause upon the contract invalidates the same when there is mistake. T
229. Consensual contracts are perfected by mere consent. T
230. Contracts of loan, deposit, and partnership are real contracts. F
231. A stipulation in a contract expressly conferring upon one party the right to cancel the contract is
violative of the principle of “mutuality of contract”. F
232. Fixing a period in the offer does not prevent its revocation before acceptance by communicating the
notice of withdrawal, except in options founded upon a separate consideration, as something paid or
promised. T
233. There is simulation if the disagreement between the true and apparent will, or intent, is not by
agreement of all the parties but exists only in one of them. F
234. A relative simulation makes the apparent contract void as between parties, but the hidden contract is
valid if it is lawful and has the necessary requisites. T
235. Exceptionally, contracts may have as objects future things such as future inheritance. T
236. Absence of causa renders the contract non-existent. T
237. Existence of a motive may supply want of causa if the motive as purpose or end of the contract is
legal. F
238. The contract is void if the inadequacy of cause is shown to consist in lesion by more than one-fourth
of the value in contracts entered into by guardians or representatives in behalf of the wards or absentees.
F
239. Where both parties are guilty in entering into an illegal contract, the party who is incapable of giving
consent may still file an action to recover what he has given. T
240. The party who has brought an action to enforce the instrument may subsequently ask for its
reformation upon approval of the court. F
241. A and B signed a contract of lease over a parcel of land although their agreement was one of sale
and the amount paid was actually the purchase price. In all instances, the true intention must prevail. F
242. A verbal contract of loan stipulating an interest rate of 20% a month is void. F
243. Essential requisites include delivery in real contracts and the required formality in solemn contracts.
T
244. Dolo causante gives rise to an action for damages while dolo incidente may annul the contract. F
245. Fraud as a vice of consent may consist of a misrepresentation or concealment of a fact or opinion
made by an expert upon whom the other party has relied due to the former’s special knowledge. T
246. Vices of consent consist in circumstances affecting adversely the decision of a party to enter into a
contract, thus rendering the contract void. F
247. A stipulation pour autrui must be accepted by the beneficiary to be valid. T
248. A stipulation pour autrui is an exception to the rule on relativity of contracts. T
249. Exceptionally, personal rights may be the object of contracts. T
250. In a phone conversation X agreed to buy the house and lot of Y for P5,000,000 to be paid on or
before February 5, 2017 and that the deed of sale will be executed and signed on or before the same
date. The agreement to reduce the deed in writing is enforceable. F
CIVREV2-DD-SBCA-SOL-2020-2021
Q1,2&3 - MARCH 16, 2021 LECTURE

251. A contract between a minor and an insane is void. F

252. The inadequacy of consideration may be a vice of fraud. T
253. Proof of large indebtedness is not a vice of fraud. F
254. Transfer of property between relatives is necessarily a vice of fraud. F
255. The failure of a vendee to take exclusive possession of the object of sale may indicate that the sale
was fraudulent. T
256. Solidary creditors cannot assign their rights without the consent of the debtors. F
257. A solidary creditor cannot condone the entire obligation without the consent of the other creditors. F
258. A, B, and C are creditors of X and Y. By stipulation, it is possible for A and B to be solidary creditors
while C is a joint creditor. T
259. Payment of a natural obligation by a solidary debtor gives him the right against his co-debtors for
their respective shares. F
260. Because A had been helping X cross the street every day, X decided to condone the solidary
obligation of A and B in the amount of P500. A can collect P250 from B. F
261. Conventional compensation may cover debts not yet due. T
262. If the thing to be restituted as a result of annulment of the contract was lost through the debtor's
fault, he must still return the fruits and the value of the thing lost at the time the contract was executed. F
263. Upon annulment of the contract, a minor has no obligation to make restitution of what he had
received without proof that he was benefited thereby. T
264. Ratification by the aggrieved party of a voidable contract must be with the consent of the other
contracting party to be effective. F
265. The power to administer property must be in a public document to be enforceable. F
266. A deed of donation of a real property valued at P4,900 must be in a public document to be valid. T
267. If both parties breached their reciprocal obligations, each shall bear his own damages. F
268. The debtor still has the burden to prove his lack of fault if the car due was lost while in his
possession due to a fire that gutted his garage. F
269. Agency, partnership, and deposit are principal and preparatory contracts. F
270. Intimidation as a vice of consent may be employed by the ghost of the creditors relative. F
271. A threat to file a disbarment case against a lawyer if he will not issue a promissory note for the return
of attorney's fees collected will constitute vitiation of consent. F
272. A void contract may be ratified. F
273. An option money is the consideration in an option contract. T
274. An offer becomes ineffective upon the qualified acceptance by the offeree. T
275. The statement of willingness to buy a determinate car is a valid offer. F
CIVREV2-DD-SBCA-SOL-2020-2021 Q4 - MARCH 23, 2021 LECTURE

1.A contract of sale of a parcel of land is consensual, bilateral, onerous, nominate, principal, and
commutative. T
2. Even if time is of the essence, a buyer, who already paid 89% of the purchase price and was
delayed in payment only for one month, must be given an additional period within which to
complete payment of the purchase price in consideration of equity and justice. F
3. As in ordinary sale, a shocking gross inadequacy of the price in an execution sale executed
by a court sheriff may invalidate the sale. F
4.A written acknowledgment stating that a fishing vessel with a price of P900,000 is now in the
possession and responsibility of the buyer is a perfected contract of sale if there is a firm
commitment that documents pertaining to the sale and agreement of payments are to follow. F
5.A sale is perfected upon acceptance of a unilateral promise to sell at a fixed price even if there
is no option money paid to support the promise. T
6. An option contract unsupported by a separate consideration is a non-binding offer that may
be withdrawn at any time before acceptance by the buyer. T
7.A lessee may ask for the rescission of the sale of the leased property where he is living, in
violation of a stipulated right of first priority to buy, even if the right was not annotated on the
TCT. T
8.To be binding, the right of first refusal stipulated in a lease agreement must also be supported
by an independent consideration. F
9.In a lease with right of first refusal, the lessor can already sell to a third party at a price of
P5,300 per square meter after an offer to sell at P6,000 per square meter was declined by the
lessee. F
10. A perfected contract of sale cannot be challenged on the ground of the seller’s
non-ownership of the thing sold at the time of the perfection of the contract. T
11. There is symbolic delivery of a parcel of land upon the execution of a deed of absolute sale
even if the buyer had not acquired actual possession thereof because it is occupied by a third
party with an adverse claim of ownership. F
12. A few days before his death, X sold his land to Y, who, in turn, sold it to Z a year later. A
month after the sale to Z, the heirs of X sold the same land to W, who in good faith registered
the sale. Z, who took actual possession of the land a day after the registration of the sale by W,
has a better right over the land. T
13. In Article 1544, a second buyer may still claim good faith even if the first buyer was already
in possession of the property at the time of the sale, if the seller assured the second buyer that
the alleged first buyer was merely a lessee. F
14. The rules on double sale will apply when a deed of absolute sale in installments with a down
payment of 20% amounting to P200,000 was executed after a contract to sell in favor of another
buyer who paid 50% (P500,000) of the purchase price. F
15. When the consideration is partly in money and partly in kind, the contract is one of sale if the
parties intended it to be a sale even if the thing given as part of the consideration is greater in
value than the money given. T
16. An accepted bilateral promise to buy and sell a car at a price not less than P500,000 but not
more than P550,000 is binding as an executory agreement of sale. F
17. A unilateral promise to sell is binding as a contract of sale if a separate consideration
independent of the price is given. F
CIVREV2-DD-SBCA-SOL-2020-2021 Q4 - MARCH 23, 2021 LECTURE

18. A conditional contract of sale may be an executed contract or an executory contract. T

19. Things under resolutory condition of destruction may be objects of a valid sale. T
20. The sale by Pedro to Juan of a losing lotto ticket for a past draw date is necessarily void
because the hope of winning is vain. F
21. Sale of inheritance before partition is void because the heir could not pre-determine what he
will receive after the partition proceedings. F
22. If a third party tasked to give the price of the sale refuses to fix the price, the court may fix
the price. F
23. If the price is simulated, the sale shall be considered a donation. F
24. The sale may be rescinded if the inadequacy of the price results in lesion by more than 1/4
of the value of the thing sold by the owner. F
25. If an earnest money is already paid, a contract of sale is already perfected. T
26. A verbal sale of a parcel of land by an agent is valid provided that his authority to sell is in
writing. T
27. Insolvency must be declared by a court of competent jurisdiction for purposes of stoppage in
transit. F
28. If the carrier wrongfully withholds possession from the buyer, the seller can still exercise the
right of stoppage. F
29. The right of stoppage in transit may be exercised by obtaining actual possession of the
goods from the carrier. T
30. The unpaid seller may resell the goods without notice to the buyer if the latter has been in
default in the payment of the price for an unreasonable time. F
31. The buyer was in need of a 1000 square meter of land required by a franchisor for the
opening of a business. He purchased a 1,000 square meter property from the seller at a price of
P 100,000 per square meter. Thereafter, he discovered that the total area of the land delivered
to him was only 975 square meters. The buyer can opt to rescind the sale. T
32. If a parcel of land believed to be 1,000 square meters turns out to be 1,100 square meters,
the buyer has no other option but to return the excess area. F
33. If a parcel of land believed to be 1,000 square meters was sold at a limp sum of P1,000,000,
the buyer should pay more if the land turns out to be 1,025 square meters to avoid unjust
enrichment. F
34. As a rule the buyer of goods is not bound to accept delivery by instalment. T
35. The rules on double sale will apply to a sale made by the principal and another sale made
by the agent to different buyers. T
36. A previous buyer who was informed of a subsequent sale in favor of another buyer rushed
to the Register of Deeds to register the sale in his name. The registration was in bad faith. F
37. The warranty against eviction may be validly waived by the buyer with knowledge of the risk.
T
38. If an animal sold was classified as condemned, there is no warranty against hidden vices
provided that the animal was examined by an expert. F
39. The disease is presumed covered by the warranty if it causes death after 7 days from
purchase. F
40. Knowledge of a third party of an unregistered right to repurchase is equivalent to registration
negating good faith on his part. T
CIVREV2-DD-SBCA-SOL-2020-2021 Q4 - MARCH 23, 2021 LECTURE

41. A contract entered into by an agent exceeding his authority is unenforceable. T

42. The lack of a license to sell in violation of a mandatory provision of PD 957 results to the
invalidation of the contract to sell entered into by a subdivision developer with a buyer. F
43. Article 1544 of the Civil Code on double sale will also apply to sales involving unregistered
land. F
44. In a contract to sell, the buyer may file an action for specific performance if the seller refuses
to accept the full purchase price tendered by the former. F
45. In a potential sale transaction, the prior payment of earnest money even before the property
owner can agree to sell his property can be used to bind the owner to the obligations of a seller
under an otherwise perfected contract of sale. F
46. A duly registered levy on attachment could not prevail over a prior sale even if unregistered
because of the rule of first in time better in right. F
47. The death of a debtor in an obligation to do extinguishes the obligation. T
48. The loss of the thing used to secure an obligation due to the fault of the creditor terminates
the principal obligation. F
49. There will be delay if the debtor refuses to choose an alternative prestation within the period
agreed upon for the choice to be done. F
50. A debtor may compel his creditor to accept as legal tender the commemorative Php50,000
bill issued by the Bangko Sentral ng Pilipinas. F
51. There can be delay on the part of the creditor in an obligation not to do if he fails to stop the
prohibited act within a reasonable period of time. F
52. Warranty in sales is an essential element of the contract. F
53. Vices of consent that affects cognition includes incapacity, error and fraud. T
54. Gross negligence in the performance of an obligation will have the same consequences as
fraud. T
55. A stipulation for an incentive of plus 1 in the final grade in Civil Law Review 1 for students
who watched the Red Lions win the NCAA championship is valid. F
56. Dacion en pago may also apply to an obligation to give a determinate thing. F
57. The fulfillment of a joint obligation to deliver a carabao requires the concurrence of all
debtors. T
58. The warranty against eviction applies to a tax sale. F
59. The sale of a 3-month calf for breeding purposes raises an implied warranty of fitness for
breeding. F
60. A sari-sari store owner warrants fitness for consumption of a bottle of Ginebra sold. T

OBLIGATIONS
Requisites of Obligations - JAPO
1. Juridical tie or vinculum juris – binding
force established by the various sources
of obligations
2. Active subject – obligee
3. Passive subject – obligor
4. Object – the prestation or conduct
required (to give, to do or not to do)
Sources of Obligations (Art. 1157)
1. Law
2. Contracts
3. Quasi-contracts - e.g. negotiorum
gestio, solutio indebiti
4. Delict – acts or omissions punished by
law
5. Quasi-delicts
Classifications of Obligations (Primary)
1. Pure or conditional
2. Obligations with a period
3. Facultative or alternative
4. Joint or solidary
5. Divisible or indivisible
6. Obligations with a penal cause
Classifications of Obligations (Secondary)
1. Unilateral or bilateral
2. Principal or primary
3. Real or personal
4. Positive or negative
5. Legal, conventional or penal
6. Individual or collective
7. Nominate or innominate
Civil Law Review 2 – ENUMERATIONS
Compiled by: Amores-Arienza-Encinas-Lucero-Pascua-Pisec
Page | 1
8. Specific or generic
9. Cyclic or instantaneous
10. Conjunctive or disjunctive
Modes of breaching the obligation
1. Fraud or dolo
2. Negligence or culpa
3. Delay or mora
4. Contravention of the tenor of the
obligation
Kinds of Delay or Mora
1. Mora solvendi – delay on the part of the
obligor or debtor
2. Mora accipiendi or creditoris – delay on
the part of the creditor or oblige
3. Compensatio morae – both parties are
in delay
Requirements before debtor may be
considered in delay
1. Obligation is positive
2. The obligation is demandable and
liquidated
3. Obligor delays for reasons imputable to
him
4. There must be demand whether judicial
or extrajudicial
When demand is not necessary in order to
incur delay
1. Obligation expressly declares
2. Law expressly declares
3. W h e n f r o m t h e n a t u r e a n d t h e
circumstances of the obligation it
appears that the designation of the time
when the thing is to be rendered was a
controlling motive for the establishment
of the contract
4. When demand would be useless
5. In reciprocal obligations, neither party
incurs in delay if the other does not

comply or is not ready to comply in a
proper manner with what is incumbent
upon him. Delay begins from the
moment one of the parties fulfills his
obligation
Kinds of negligence
1. Culpa aquiliana – negligence itself is the
independent source of obligation
2. Culpa contractual – there is negligence
in the performance of the contractual
obligation
3. Criminal negligence – negligence that
constitutes criminal liability
Requisites of Fortuitous Event
1. Cause is independent of the human will
2. Impossible to foresee or if can be
foreseen, impossible to avoid
3. Renders it impossible for the debtor to
fulfill his obligation in a normal manner
4. O b l i g o r m u s t b e f r e e f r o m a n y
participation in the aggravation of the
injury resulting to the creditor
Instances when a debtor is liable
notwithstanding a fortuitous event
1. Expressly declared by law
2. Obligor or debtor delays
3. Obligor promised to the same thing to 2
or more persons who do not have the
same interest
4. Obligor is at fault
5. Stipulation or agreement that the obligor
will not be excused even if the cause is
fortuitous event
6. Assumption of risk
7. Generic thing is to be delivered
Remedies of the creditor (principal)
1. Specific performance (Arts. 1165 and
1167)
2. Substitute performance (Art. 1165)
3. Equivalent performance (Arts. 1168 and
1170)
Civil Law Review 2 – ENUMERATIONS
Compiled by: Amores-Arienza-Encinas-Lucero-Pascua-Pisec
Page | 2
Remedies of the creditor (principal)
1. S u b r o g a t o r y a c t i o n o r a c c i o n
subrogatoria (Art. 1170)
2. Rescissory Action or accion pauliana
(Arts. 1177 and 1381[3])
Requisites of Accion Subrogatoria
1. Creditor has right of credit against the
debtor
2. Credit must be due and demandable
3. Failure of debtor to collect from third
persons (debtor of debtor)
4. Assets in the hands of the debtor are
insufficient
Requisites of Accion Pauliana
1. Plaintiff asking for rescission, has a
credit prior to the alienation, although
demandable later
2. Debtor has made a subsequent contract
conveying a patrimonial benefit to a third
person
3. That the creditor has no other legal
remedy to satisfy his claim but would
benefit by rescission of the conveyance
of the 3rd person
4. That the act being impugned is
fraudulent
5. That the 3rd person who received the
property conveyed, if by onerous title,
has been an accomplice in the fraud
Non-transmissible rights
1. When there is a stipulation that the right
cannot be transferred
2. When the law or contract requires prior
consent before transfer and no such
consent was acquired
3. When the law expressly prohibits
transfer
4. When the right is purely personal
Kinds of conditions
1. Suspensive or resolutory

2. Potestative or casual or mixed
3. Possible or impossible
4. Positive or negative
5. Divisible or indivisible
6. Conjunctive or alternative
7. Express or implied
Requisites for constructive fulfillment of
suspensive condition
1. Intent of the obligor to prevent the
fulfillment of the condition
2. Actual prevention of fulfillment
Requisites of mora solvendi.
1. Positive obligation
2. Demandable and liquidated obligation
3. Delay by obligor for reasons imputable
to him
4. Demand extra or judicial
Period vs condition
1. P: future and certain time or event; C:
future and uncertain event
2. P : i s s u s p e n s i v e , a f f e c t s o n l y
demandability; C: if suspensive, affects
the birth or perfection
3. P: generally, no retroactive effect; C:
with retroactive effect
4. P: obligation still exists if the period
depends upon the will of the obligor; C:
obligation is void if condition depends
upon the will of the obligor
Kinds of period:
1. Suspensive (ex die) or resolutory (in
diem)
2. Legal or conventional or judicial
3. Definite or indefinite
Requisites for applicability of Art. 1195
(Delivery by mistake)
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1. Obligation to give
2. Period is for the benefit of the creditor
and debtor
3. Obligor delivered before the period
4. Obligor is not aware of the period or he
believes that the obligation has become
due and demandable
When is Art. 1195 inapplicable
1. Obligations to do and not to do
2. Reciprocal obligations and both parties
prematurely performed their respective
obligation
3. Period is for the benefit of the creditor
alone
4. When the debtor voluntarily and
knowingly delivered the thing knowing
that the obligation is not yet due
Alternative vs facultative obligations
1. A: two or more prestations are due; F:
only one is due
2. A: debtore can choose any of the
alternatives; F: debtor has only one
choice but with a right to substitute
3. A: debtor in certain cases may be liable
if the choice and loss of any alternative
is due to his fault; F: loss of the
substitute due to the debtor’s fault will
not make the debtor liable
4. A: choice is generally with the debtor but
it can be given to the creditor and a third
person; F: option to substitute is always
with the debtor
Kinds of solidary obligations
1. Conventional or natural or legal
2. Passive or active
3. Uniform or non-uniform
Solidary vs indivisible
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1. S: 2 or more creditors and/or 2 or more 4. Confusion or merger of the rights of

debtors; I: there may only be on creditor creditor and debtor
and only one debtor
5. Compensation
2. S: prestation remains the same even in
case of non-performance; I: converted 6. Novation
into one for damages in case of non-
performance 7. Annulment

3. S: debtor is liable for the breach of the 8. Rescission

other debtors; I: debtor is not liable for
the breach of others 9. Fulfillment of a resolutory condition

4. S: collective performance is required; I: 10. Prescription

performance may be done by one.
11. Death (in cases of personal obligations)
Purpose of penal clauses
12. Expiration of a resolutory period
1. I n d u c e m e n t – i n s u r a n c e i n t h e
performance of an obligation 13. Impossibility of performance

2. P u n i t i v e – p u n i s h m e n t f o r n o n - 14. Fortuitous event

compliance
Characteristics of payment
3. Deterrence and retribution
1. Integrity – complete and faithful
4. To fix in advance the damage that may performance
be awarded to do away with proof
2. Identity – debtor must give or do what
thereof later
was stipulated upon or what should be
Nature of penal clauses given or done, exception: facultative
obligations and dacion en pago
1. Penalty is not an alternative obligation
3. Indivisibility – creditor entitled to full
2. Generally not complementary compliance and may not be compelled
to accept partial performance
3. Proof of actual damages not necessary
To whom should payment be made
4. Nullity of principal obligation nullifies
accessory obligation but not vice versa 1. Creditor

When penalty can be reduced 2. Successors-in-interest of the creditor

1. When there was partial compliance 3. Any person authorized to receive the
payment
2. When there was compliance but it was
irregularly done Requisites of dacion en pago

3. Iniquitous 1. Instead of the original prestation,

another prestation is performed
4. Unconscionable
2. Original prestation that is due and the
one performed are different

Grounds for (or causes of) extinguishment 3. Parties agreed that the performance of
the different prestation extinguishes the
1. Payment of performance obligation

2. Loss of the thing due Exceptions to indivisibility (i.e. partial

performance can be made)
3. Condonation or remission of the debt

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1. When debt is liquidated in part and 3. 1 insolvent debtor

unliquidated in part 4. A b a n d o n m e n t b y d e b t o r o f h i s
properties in favor of creditors
2. Parties agreed on partial compliance 5. Acceptance of creditors

3. Nature of the obligation is that it cannot Distinction between rescission of contracts

be done in one instance in fraud of creditor and rescission/resolution
under art 1191 (6)
4. Solidary obligations where the debtors
are bound by different terms and
conditions Resolution 1191 Rescission 1380
Valid and existing Same
5. Joint debtors who are bound to deliver contracts
their respective shares only
1 p a r t y t o t h e Party suffering
When may delivery of commercial paper or contract demands lesion or 3rd party
mercantile document produce the effect of p r e j u d i c e d
payment demand
1. When it is encashed Non performance is Equity grounds
a ground
2. When it is impaired due to the fault of
the creditor Court determines Sufficiency of
sufficiency o reason reason does not
to justify extension affect right to ask
of time to perform for rescission
Requisites of application of payments obligation
1. 2 or more debts R e c i p r o c a l Unilateral or
obligations reciprocal
2. Debtor and creditor in such obligations
are the same Principal remedy Subsidiary remedy

3. Obligations must be of the same kind

4. Obligations are all due and demandable Dacion en pago vs assignment

5. Payment is not sufficient to pay all
obligations
Instances when consignation may be made
without tender
1. Creditor to whom tender of payment has
been made refuses without just cause to
accept it
2. Creditor is absent or unknown, or does
not appear at the place of payment;
3. Creditor is incapacitated to receive the
payment at the time it is due;
4. Creditor refuses to give a receipt,
without just cause
5. 2 or more persons claim the same right
to collect;
6. Title of the obligation has been lost.
7.
Requisites of payment by cession.
1. 2 or more debts
2. 2 or more creditors
1. D: ownership of the thing delivered is
transferred; A: ownership not acquired
but must sell the thing and apply the
proceeds to the debts
2. D: debt is extinguished; A: extinguished
only up to the extent covered by the
proceeds of the sale
3. D: only one creditor; A: two or more
creditors
4. D: insolvency of debtor not required
before application; A: insolvency
required
Requisites of valid tender of payment
1. Made to the creditor
2. Complete, regular and identical

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3. Must not only be complete but must also
include accessory obligations, if any
4. Obligation must be due
5. Tender must be unconditional
Requisites of valid consignation
1. Debt must be due
2. Creditor refused to accept payment
without just cause
3. Previous notice of consignation had
been given to the person interested in
the performance of the obligation
4. Amount due was placed at the disposal
of the court
5. Person interested must be notified after
consignation had been made
When is a determinate thing lost
1. When it perishes
2. Goes out of commerce
3. Disappears in such a way that its
existence is unknown or it cannot be
recovered
Exceptions to extinguishment of obligation
by virtue of loss or impossibility
1. Law so provides
2. Agreed upon or stipulated upon
3. Nature of obligation requires the
assumption of risk
4. Thing to be delivered is a generic thing
5. Debtor is guilty of delay
6. Debtor promised to deliver the same
thing to 2 or more persons
7. Obligation arises from a criminal act
8. Debtor’s negligence concurs with the
fortuitous event
Elements of condonation
1. Acceptance by the obligor
2. Consideration is pure liberality
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3. Compliance with formalities
Formalities for condonation
1. Express remission - must comply with
formalities of donation
2. Remission in a will that takes effect
upon death of creditor – formalities of a
will
3. Implied remission – no formalities
required
Kinds of remission
1. Express or implied
2. Partial or total
3. Inter vivos or mortis causa
Elements of confusion or merger
1. Must take place between principal
creditor and principal debtor
2. Must be complete and definite
Elements of compensation
1. Each one of the obligors be bound
principally and that be at the same time
a principal creditor of the other
2. 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. 2 debts must be due
4. Must be liquidated and demandable
5. That over neither party there be any
retention or controversy, commenced by
third persons and communicated in due
time to the debtor
Instances when compensation cannot take
effect
1. One of the debts arises from a deposit
or from the obligations of a depositary
2. One of the debts arises from the
obligations of a bailee in commodatum

3. One involves a claim for support by
gratuitous title
4. One of the debts arises because of civil
liability arising from criminal liability
Requisites of novation
1. There must be a previous valid
obligation
2. There must be an agreement of the
parties concerned to a new contract
3. There must be extinguishment of the old
contract
4. There must be a new valid contract
Kinds of novations
1. Total or partial
2. Express or implied
3. Subjective/personal or objective/real or
mixed
4. Extinctive or modificatory
Kinds of subjective novation
1. Expromission or delegacion
2. Conventional or legal
Expromission vs delegacion
1. E: Initiative does not come from debtor;
D: comes from debtor
2. E: Consent not present and not
necessary; D: Consent of debtor,
creditor and 3rd person needed
3. E: Debtor is released; D: Debtor is
released
4. E: Insolvenct of new debtor does not
revive the obligation of the old debtor; D:
insolvency revives the obligation if
existing at the time of novation (anterior)
and is of public knowledge or known to
debtor.
Demandable even before arrival of period
1. After the obligation has been contracted,
he becomes insolvent unless he gives a
guaranty or security for the debt;
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2. Does not furnish to the creditor the
guaranties or securities which he has
promised;
3. 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. Debtor violates any undertaking, in
consideration of which the creditor
agreed to the period;
5. Debtor attempts to abscond.
7 requisites of legal compensation
1. Parties are principal creditors and
debtors of each other
2. Both debts consist in the sum of money
or of consumable things of same kind
and quality
3. Due and demandable
4. Liquidated
5. No retention or controversy commenced
by 3rd person
Requisites of dolo causante
1. Misrepresentation or concealment
2. Induced the consent of the other
3. Fact is not true
4. Aware of falsity
5. Relied on it w/o FN
6. Give consent because of it
7. Not committed by both – only 1
CONTRACTS
Elements of a contract:
1. Consent
2. Object or subject matter
3. Cause or consideration
Classification of contracts:
According to their relation to other contracts
1. Preparatory
2. Principal
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3. Accessory 1. Things

According to risk involved: 2. Services

1. Commutative Stages of Contracts:

2. Aleatory 1. Generation

2. Perfection

According to their perfection: 3. Consummation

1. Consensual Characteristics of Contracts:

2. Real 1. Mutuality

According to their purpose 2. Autonomy

1. Transfer of ownership 3. Relativity

2. Conveyance of use 4. Consensuality

3. Rendition of service 5. Obligatory force of contracts

According to the nature or vinculum which they Requisites of an OFFER:

produce
1. Definite
1. Unilateral
2. Intentional
2. Bilateral
3. Complete
According to their names or norms regulating
them: 4. Directed to a person or persons

1. Nominate Requisites of Acceptance:

2. Innominate 1. Absolute

Kinds of Innominate Contracts: 2. Directed to the offeror

Do ut des- I give that you give 3. Made with intention to be bound

Do ut facias- I give that you do 4. Made within the proper time

Facio ut des- I do that you give 5. Communicated to the offeror and

learned by him unless the offeror knows
Facio ut faqcias-I do that you do of the acceptance

According to their form: Theories that determine the exact moment of

perfection when acceptance is made by letter
1. Common or informal or telegram:

2. Special or formal 1. Manifestation Theory

According to cause: 2. Expedition Theory

1. Onerous 3. Reception Theory

2. Gratuitous 4. Cognition Theory

According to their subject matter: Requisites of an Option Contract

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1. S u p p o r t e d b y a n i n d e p e n d e n t 1. C o n c u r r e n c e o f t h e o f f e r a n d
consideration acceptance

2. Exclusive 2. Legal capacity

Persons INCAPACITATED to give consent: 3. Intelligent, free, spontaneous

1. Minors 4. Real

Exceptions: Requisites of Mistake:

a. When the contract is entered 1. The error must be substantial

into by a minor who actively
misrepresents his age not 2. The error must be excusable
merely constructive
representation 3. The error must be a mistake of fact and
not of law
b. When it involves the sale and
delivery of necessaries to Two general kinds of Mistake
minors
Mistake of Fact Mistake of Law
c. When it involves a natural
obligation and such obligation is As to Existence
fulfilled voluntarily by the minor
One or both One or both parties
d. Contracts by guardians or legal contracting parties arrive at an erroneous
representatives believe that a fact conclusion regarding
exists when in reality the interpretation of a
e. When upon reaching the age of it does not or vice question of law or
majority, they ratify the same versa l e g a l e ff e c t s o f a
certain act or
f. When a minor opens a savings transaction
account without the assistance
of his parents, provided that the As to Vitiation of Consent
minor is atleast 7 years old and
Vitiates consent Does not vitiate
can read and write
consent except when
2. Insane or demented persons it involves mutual
error as to the effect of
3. Deaf-mutes who do not know how to an agreement when
write the real purpose is
frustrated
Vices of consent


1. Vices of the will Requisites of vitiation of consent due to
mutual error (Mistake of law):
a. Violence
1. Mistake must be of a past or present
b. Intimidation fact
c. Mistake 2. Must be with respect to the legal effect
of an agreement
d. Fraud
3. Must be mutual
e. Undue influence
4. Parties’ real purpose must have been
2. Vices of declaration frustrated
Requisites of consent: Requisites of Violence:

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1. Must be serious or irresistible 5. The person alleged to be unduly

influenced was suffering from mental
2. Must be the determining cause for the weakness, or was ignorant or in
party upon whom it is employed in financial distress
entering into the contract
Kinds of fraud
3. It is not justified
1. Fraud in the perfection of the contract
4. It is sufficient
2. Fraud in the performance of an
Requisites of intimidation: obligation

1. One party is compelled to give his
consent by a reasonable and well-
grounded fear of an evil
2. The evil must be imminent and grave
3. The evil must be upon his person pr
property, spouse, descendants pr
ascendants
4. It is the reason why he enters the
contract
Requisites of Fraud under Article 1338:
1. It must be in bad faith that is with
knowledge of its falsity
2. One party must have employed fraud or
insidious words or machinations
3. Damage or injury resulted to the other
party
4. It must have been serious

5. The evil must be unjust 5. It induced the other party to enter into a
contract
Violence vs. Intimidation
6. It must have been employed by both
Violence Intimidation contracting parties or by third persons

Refers to physical R e f e r s t o m o r a l Dolo Causante vs. Dolo Incidente

compulsion compulsion
Dolo Causante Dolo Incidente
External or prevents Internal or induces the
the will to manifest performance of an act As to extent of misrepresentation
itself
Refers to those Refers to those
deceptions or deceptions or
midrepresentations of misrepresentations
a serious character which are not serious
Requisites of undue influence
employed by one in character and
1. Improper advantage party and without without which the
which the other party other party would
2. Power over the will of another would not have have still entered the
entered into the contract
3. Deprivation of the latter’s will of a contract
reasonable freedom of choice
As to Extent of Fraud
Circumstances considered in determining Serious in character Not serious in
whether the influence exerted is character
unreasonable:
As to Cause
1. Confidential relations
It is the cause which It is not the cause that
2. Family relations induces the party to induced the party to
enter into a contract enter into a contract
3. Spiritual relations
As to Effect
4. Other relations between the parties

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Renders the contract Renders the party c. Services contrary to laws,

voidable liable for damages morals, good customs, public
order or public policy

d. Impossible things or services

Simulation of contracts e. Things outside the commerce of
men
1. A deliberate declaration contrary to the
will of the parties f. Objects not possible of
determination as to their kind
2. Agreement of the parties to the
apparently valid act Essential requisites of cause:
3. The purpose is to deceive or to hide 1. Existing at the time of the celebration of
from third persons although it is not the contract
necessary that the purpose be illicit or
for purposes of fraud 2. Licit or lawful

Kinds of simulation of contract: 3. True

1. Absolute Cause vs. Object

2. Relative
Cause Object
Two juridical acts in relatively simulated In remuneratory contracts
contracts:
The service or benefit The thing which is
1. Ostensible act which is remunerated given in remuneration
2. Hidden act In gratuitous contracts

Requisites of the OBJECT of the contract: The liberality of the The thing which is
donor or benefactor given or donated
1. Must be within the commerce of man
As t the thing
2. Should be real or possible
Prestation or promise The thing or service
3. Should be licit of a thing or service itself
by the other
4. Should be determinate. or atleast As to contracting parties
possible of determination
Different with respect May be the same for
Things which cannot be the object of to each party both the parties
contracts:

General rule: All things or services may be the

object of contracts. This includes future things or
rights which do not belong to the obligor when Effects of lack, illegality, falsity, or
the contract was made inadequacy of cause

Exceptions: 1. Total lack or absence of cause

a. Future inheritance, except in 2. Illegal or unlawful cause

cases expressly authorized by
law 3. False cause

b. Intransmissible rights 4. Inadequacy of cause or lesion

Contracts which must appear in writing

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1. Donation of personal property whose 2. Their true intention is not expressed in

value exceeds Php500 the instrument

2. Stipulation limiting the common carrier’s
duty of extraordinary diligence
3. Antichresis
4. Sale of a piece of land or any interest
therein through an agent
3. Failure to express true intention is due
to mistake, fraud, inequitable conduct or
accident
4. The facts upon which relief by way of
reformation of instrument is sought are
put in issue by the pleadings

5. Agreements regarding payment of 5. Clear and convincing proof of mistake,

interest in contracts of loan accident, relative simulation, fraud, or
inequitable conduct
Contracts which must appear in a public
document: Reformation vs. Annulment

1. Essential for validity

Reformation Annulment
a. D o n a t i o n o f i m m o v a b l e As to validity of contract
properties
Presupposes that The contract was not
b. Partnership where immovable there is a valid validly entered into as
property or rela rights are contract but the when their minds did
contributed to the common fund document or not meet or if the
instrument executed consent was vitiated
2. For efficacy and convenience does not express their
true intention
a. Acts and contracts which have
for their object creation, As to effect
transmission, modification or
extinguishment of real rights G i v e s l i f e t o t h e Involves a complete
over immovable property contract by making nullification of the
t h e i n s t r u m e n t contract
b. The cession, repudiation, or conform to the true
renunciation of hereditary rights intention of the parties
or those of the conjugal
partnership of gains

c. The power to administer Causes or grounds for reformation:

property, or any other power
which has for its object an act 1. Mutual mistake of parties
appearing or which should
appear in a public document, or Requisites:
should prejudice a third person
a. Mistake must be mutual
d. The cession of actions or rights
proceeding from an act b. Mistake must be of a
appearing in a public document fact

Contracts which must be registered: c. Mistake must not cause

the failure of the
1. Chattel mortgages instrument to express
their true intention
2. Sale or transfer of large cattle
d. There must be clear
Requisites of reformation of instruments: and convincing proof of
the mutual mistake
1. Meeting of the minds of the parties
e.

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2. Unilateral
3. Mistake by third person
4. In case of ignorance, lack of skill,
negligence, or bad faith on the part of
the person drafting the instrument of the
clerk or typist
5. Others speficied by law
Instances where there can be no
reformation:
1. Simple donations inter vivos wherein no
condition is imposed
2. Wills
3. When the real agreement is void
4. When one of the parties has brought an
action to enforce the instrument, no
subsequent reformation can be asked.
Who may ask for reformation:
1. Either party or his successors in
interest, if the mistake was mutual
2. Upon petition of the injured party, or his
heirs and assigns
Rescissible contracts
1. Those which are entered into by
guardians whenever the wards whom
they represent suffer lesion by more
than one-fourth of the value of the things
which are the object thereof;
2. Those agreed upon in representation of
absentees, if the latter suffer the lesion
stated in the preceding number;
3. Those undertaken in fraud of creditors
when the latter cannot in any other
manner collect the claims due them;
4. Those which refer to things under
litigation if they have been entered into
by the defendant without the knowledge
and approval of the litigants or of
competent judicial authority;
5. All other contracts specially declared by
law to be subject to rescission.
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Requisites of rescission:
1. Action must be brought within 4 years;
2. Things which is the object of the
contract must not have passed legally to
the possession of a third person acting
in good faith;
3. Party asking for rescission must have no
other legal means to obtain reparation
for the damages caused suffered by
him;
4. Contract must be rescissible;
5. Person demanding rescission must be
able to return whatever he may be
obliged to restore if rescission id granted
Characteristics of rescissible contracts
1. The defect consists in injury or damage
either to one of the contacting parties or
to third persons
2. Before rescission, they are valid and
therefore, legally effective
3. They can be attacked directly and not
collaterally;
4. They can be attacked only by a
contracting party or a third person who
is injured or defrauded;
5. They are susceptible of convalidation
only by prescription and not ratification
Badges of fraud
1. The fact of inadequate or fictitious cause
or consideration of the conveyance
2. Transfer by a debtor after suit has been
begun and while it is pending against
him
3. Sale on credit by an insolvent debtor;
4. Evidence of large indebtedness or
complete insolvency;
5. Transfer of all or nearly all of debtor’s
property by him, especially when
insolvent or greatly embarrassed
financially;
6. Transfer between father and son, where
others of the above circumstances are
present;
7. Failure of the vendee to take exclusive
possession of all the property
8. Gross disparity between the price and
the value
Voidable contracts

1. Those where one of the parties is
incapable of giving consent to a
contract;
2. Those where the consent is vitiated by
mistake, violence, intimidation, undue
influence or fraud.
These contracts are binding, unless they are
annulled by a proper action in court. They are
susceptible of ratification. (n)
Modes to extinguish an action for annulment
1. Prescription
2. Ratification
3. Loss of the thing which is the object of
the contract through fraud or fault of the
person who is entitled to institute the
action
REQUISITES OF RATIFICATION
1. C o n t r a c t i s t a i n t e d w i t h a v i c e
susceptible of being cured;
2. Confirmation is effected by the person
who is entitled to do so under the law;
3. It is effected with knowledge of the vice
or defect of the contract;
4. Cause of the nullity or defect have
already disappeared
UNENFORECEABLE CONTRACTS unless
they are ratified:
1. Those entered into in the name of
another person by one who has been
given no authority or legal
representation, or who has acted
beyond his powers;
2. Those that do not comply with the
Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless the
same, or some note or memorandum,
thereof, be in writing, and subscribed by
the party charged, or by his agent;
evidence, therefore, of the agreement
cannot be received without the writing,
or a secondary evidence of its contents:
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(a) An agreement that by its terms is not to
be performed within a year from the
making thereof;
(b) A special promise to answer for the
debt, default, or miscarriage of another;
(c) An agreement made in consideration of
marriage, other than a mutual promise
to marry;
(d) An agreement for the sale of goods,
chattels or things in action, at a price not
less than five hundred pesos, unless the
buyer accept and receive part of such
goods and chattels, or the evidences, or
some of them, of such things in action or
pay at the time some part of the
purchase money; but when a sale is
made by auction and entry is made by
the auctioneer in his sales book, at the
time of the sale, of the amount and kind
of property sold, terms of sale, price,
names of the purchasers and person on
whose account the sale is made, it is a
sufficient memorandum;
(e) An agreement of the leasing for a longer
period than one year, or for the sale of
real property or of an interest therein;
(f) A representation as to the credit of a
third person.
3. Those where both parties are incapable
of giving consent to a contract.
Characteristics of unenforceable contracts
1. They cannot be enforced by a proper
action in court
2. They are susceptible of ratification
3. They cannot be assailed by third
persons
Inexistent and void contracts from the
beginning:
1. Those whose cause, object or purpose
is contrary to law, morals, good
customs, public order or public policy;
2. Those which are absolutely simulated or
fictitious;
3. Those whose cause or object did not
exist at the time of the transaction;
4. Those whose object is outside the
commerce of men;
5. Those which contemplate an impossible
service;
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6. Those where the intention of the parties 4. Estoppel by laches

relative to the principal object of the
contract cannot be ascertained;
SALES AND LEASE
7. Those expressly prohibited or declared
void by law.
These contracts cannot be ratified. Neither can Essential Requisites
the right to set up the defense of illegality be
waived. 1. Consent
2. Object
3. Cause
Characteristics of void contracts
Characteristics of Contract of Sale
1. They do not produce any legal effect;
2. They are not susceptible of ratification; 1. Consensual
3. The right to set up the defense of 2. Bilateral and reciprocal
inexistence or absolute nullity is 3. Principal
imprescriptible; 4. Onerous
4. The inexistence or absolute nullity of a 5. Commutative
contract cannot be invoked by a person 6. Nominate
whose interests are not directly affected;
Difference between Contract of Sale and
5. The defense of illegality of a contract is Contract to Sell
not available to third persons whose
interest are not directly affected 1. In contract of sale, title passes to the
vendee upon delivery of the thing sold
Natural obligations while in contract to sell, ownership is
reserved in the vendor and is not to
1. That there be a juridical tie between two pass until full payment of the price.
persons 2. In contract of sale, nonpayment is a
2. That this is not given effect by law. negative resolutory condition while
contract to sell, full payment is a positive
suspensive condition.
Examples of natural obligation 3. In contract of sale, the vendor has lost
and cannot recover ownership until and
1. Performance after the civil obligation unless the contract is resolved or
has prescribed; rescinded while in contract to sell, title
2. Reimbursement of a third person for a remains in the vendor, and when seeks
debt that has prescribed; to eject the vendee because of
3. Performance after action to enforce civil noncompliance by such vendee with the
obligation has failed; suspensive condition stipulated, he is
4. Payment by heir of debt exceeding enforcing the contract and not resolving
the same.
value of property inherited

Kinds of estoppel
Difference between emptio res speratae and
1. Estoppel in pais or by conduct; emptio spei
2. Technical Estoppels:
a. Estoppel by deed- a party to a emptio res speratae emptio spei
deed is precluded from
asserting as against the other refers to the sale of a the sale of mere hope
p a r t y, a n y m a t e r i a l f a c t s t h i n g h a v i n g a or expectancy
asserted therein; potential existence
b. Estoppel by record- a party is
precluded from denying the truth
of matters set forth in a record
3. Estoppel by Judgment

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the uncertainty is with the uncertainty with
regard the quantity regard the existence
and quality but not of the thing
with regard to the
existence of the thing
the contract deals contract deals with
with a future thing the present thing –
the hope or
expectancy
that the thing should the sale poduces
exist, so that if it does effects even though
not, there is no the thing itself does
contract for lack of an not come into
essential requisite existence since the
subject matter is the
hope itself
In a contract of sale of personal property, the
price of which is payable in installments, the
vendor may exercise any of the following
remedies:
1. Exact fulfillment of the obligation, should
the vendee fail to pay;
2. Cancel the sale, should the vendee’s
failure to pay cover two or more
installments;
3. Foreclose the chattel mortgage on the
thing sold, if one has been constituted,
should the vendee’s failure to pay cover
two or more installments.
Two step process convering the cancellation
of a contract under Section 4 of R.A. 6552:
1. The seller should extend the buyer a
grace period of at least 60 days from the
due date of the installment;
2. At the end of the grace period, the seller
shall furnish the buyer with a notice of
cancellation or demand rescission
through a notarial act, effective 30 days
from the buyer’s receipt.
Exceptions where the husband and the wife
can sell property to each other during the
marriage:
1. When a separation of property was
agreed upon in the marriage
settlements;
2. When there has been a judicial
separation of property under Article 191.
Persons who cannot acquire by purchase,
even at public or judicial auction, either in
person or through the mediation of another:
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1. The guardian, the property of the person
or person who may be under his
guardianship;
2. A g e n t s , t h e p r o p e r t y w h o s e
administration or sale may have been
intrusted to them, unless the consent of
the principal has been given;
3. Executors and administrators, the
property of the estate under
administration;
4. Public officers and employees, the
property of the State or of any
subdivision thereof, or of any
government owned or controlled
corporation, or institution, the
administration of which has been
intrusted to them;
5. Justices, judges, prosecuting attorneys,
clerk of superior and inferior courts, and
other officers and employees connected
with the administration of justice, the
property and rights in litigation or levied
upon on execution before the court
within whose jurisdiction or territory they
exercise their respective functions.
6. Any others specially disqualified by law.
Exceptions where the vendee acquires no
better title to the object than the vendor had:
1. Where the true owner is estopped or
precluded by his conduct from denying
the vendor’s authority to sell;
2. Where the sale is made by the
registered or apparent owner in
accordance with recording or
registration laws;
3. Where the sale is made pursuant to a
statutory power of sale or under the
order of a court of competent
jurisdiction;
4. Where the purchase is made in a
merchant’s store or in fairs, or markets,
in accordance with the Code of
Commerce.
Negotiable documents of title
A negotiable document of title may be
negotiated by delivery:
1. Where the terms of the document the
carrier warehouseman or other bailee
issuing the same undertakes to deliver
the goods to the bearer;

2. Where by the terms of the document the
carrier, warehousemen or other bailee
issuing the same undertakes to deliver
the goods to the order of specified
person, and such person or a
subsequent indorsee of the document
has indorsed it in blank or to the bearer.
Who may negotiate a negotiable document of
title?
1. By the owner thereof; or
2. By any person to whom the possession
or custody of the document has been
entrusted by the owner, if, by the terms
of the document the bailee issuing the
document 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 in such form that it may be
negotiated by delivery.
Rights acquired by a person whom a
negotiable document of title has been duly
negotiated:
1. 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 for value and also 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
for value.
2. 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 bailer had contracted
directly with him.
Implied warranties of the person who
negotiated a document of title by
indorsement or delivery:
1. That the document is genuine;
2. That he has a legal right to negotiate or
transfer it;
3. That he has knowledge of no fact which
would impair the validity or worth of the
document;
4. That he has the right to transfer the title
to the goods and that the goods are
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merchantable or fit for a particular
purpose, whenever such warranties
would have been implied if the contract
of the parties had been to transfer
without a document of title the goods
represented thereby.
When seller deemed to be an unpaid seller:
1. When the whole of the price has not
been paid or tendered;
2. When a bill of exchange or other
negotiable instrument has been
received as conditional payment, and
the condition on which it was received
has been broken by reason of the
dishonor of the instrument, the
insolvency of the buyer, or otherwise.
Remedies of an Unpaid Seller:
1. A lien on the goods or right to retain
them for the price while he is in
possession of them;
2. In case of the insolvency of the buyer, a
right of stopping the goods in transit
after he has parted with the possession
of them;
3. A right of resale;
4. A right to rescind the sale.
Instances where the unpaid seller of the
goods who is in possession of the goods is
entitled to retain possession of them until
the payment or tender of the price:
1. Where the goods have been sold
without any stipulation as to credit;
2. Where the goods have been sold on
credit, but the term of credit has expired;
and
3. Where the buyer becomes insolvent.
Instances where the unpaid seller loses his
right of lien or retention:
1. When he delivers the goods to a carrier
or other bailee for the purpose of
transmission to the buyer without
reserving the ownership in the goods or
the right to the possession thereof;
2. When the buyer or his agent lawfully
obtains possession of the goods;
3. By waiver thereof.
Instances where the right of resale is
available to the unpaid seller:

1. Where the goods are of perishable
nature;
2. Where the seller has expressly reserved
the right of resale in case the buyer
should make a default;
3. Where the buyer has been in default in
the payment of the price for an
unreasonable time.
Instances where the right of rescission is
available to the unpaid seller:
1. Where the expressly reserved the right
to do so in case the buyer should make
default;
2. Where the buyer has been in default in
the payment of the price for an
unreasonable time.
Rules of Preference in double sales:
1. The first registrant in good faith
2. Should there be no entry, the first
person in possession in good faith
3. In the absence thereof, the buyer who
presents the oldest title in good faith.
Implied warranties in contract of sale:
1. An implied warranty on the part of the
seller that he has a right to sell the thing
at the time when the ownership is to
pass, and that the buyer shall from that
time have and enjoy the legal and
peaceful possession of the thing.
2. An implied warranty that the thing shall
be free from any hidden faults or
defects, or any charge or encumbrance
not declared or known to the buyer.
Requisites of warranties against eviction:
1. Deprivation of the vendee of the whole
or part of the thing purchased;
2. The deprivation must be by virtue of a
final judgment;
3. The deprivation must be based on a
right prior to the sale or an act imputable
to the vendor;
4. The vendor must be summoned in the
suit for eviction at the instance of the
vendee.
Rights of the vendee in case there is no
agreement with regard to warranty in case of
eviction:
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1. The return of the value which the thing
sold had at the time of the eviction be it
greater or less than the price of the sale;
2. The income or fruits, if he has been
ordered to deliver them to the party who
won the suit against him;
3. The cost of the suit which caused the
eviction and, in a proper case, those of
the suit brought against the vendor for
the warranty;
4. The expenses of the contract, if the
vendee has paid them;
5. The damages and interests, and
ornamental expenses, if the sale was
made in bad faith.
Instances where the vendee is liable for
interest on the price:
1. Should it have been so stipulated;
2. Should the thing sold and delivered
produce fruits or income; and
3. Should he be in default, from the time of
judicial or extrajudicial demand for the
payment of the price.
Instances where the vendee may suspend
the payment of the price:
1. S h o u l d h e b e d i s t u r b e d i n t h e
possession or ownership of the thing
sold;
2. Should he have reasonable grounds to
fear such disturbance by a vindicatory
action or by a foreclosure of mortgage;
Instances where the right does not exist:
1. Should there be a stipulation to that
effect;
2. Should the vendor give security for the
return of the price;
3. Should the vendor have caused the
disturbance or danger to cease;
4. Should the disturbance consist only of a
mere act of trespass.
Badges of equitable mortgage:
1. When the price of a sale with right to
repurchase is unusually inadequate;
2. When the vendor remains in possession as
lessee or otherwise;
3. When upon or after the expiration of the
right to repurchase another instrument
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extending the period of redemption or 4. Redemption by mortgagor within 1 year

granting a new period is executed; should his mortgaged property be
4. When the purchaser retains for himself a foreclosed and subsequently sold
part of the purchase price;
5. When the vendor binds himself to pay the Redemption vs pre-emption
taxes on the thing sold;
6. In any other case where it may be fairly
inferred that the real intention of the parties Redemption Pre-emption
is that the transaction shall secure the Sale to 3rd person has Sale to 3rd person
payment of a debt or the performance of already b e e n has not yet been
any other obligation; perfected perfected
7. When there is doubt as to whether the
contract is a contract of sale with right to Right of redemption Exercised only where
repurchase or an equitable mortgage has a much broader there is a prospective
scope than the right of resale of a small
pre-emption piece of urban land
Obligations of the vendor a retro when he originally bought by
exercises his right of repurchase: the prospective
vendor merely for
1. To return to the vendee the price of the sale speculation
2. To pay the expenses of the contract and
other legitimate payments made by reason Directed against the Directed against the
3rd person who bought prospective vendor
of the sale
the property who is about to resell
3. To pay all necessary and useful expenses the property
made on the thing sold
Effect of redemption is To prevent the birth
Different instances of legal redemption: t o e x t i n g u i s h a or perfection of a
c o n t r a c t t h a t h a s contract
already been
Under the New Civil Code
perfected

1. Sale of a co-‐owner of his share to a

stranger (Art. 1620)
2. When a credit or other incorporeal right
in litigation is sold (Art. 1634)
3. Sale of an heir of his hereditary rights to
a stranger (Art. 1088)
4. Sale of adjacent rural lands not
exceeding 1 hectare (Art. 1621) Lease of things vs lease of services
5. Sale of adjacent small urban lands
bought merely for speculation (Art.
1622) Lease of things Lease of
services
Under other laws: As to object Thing Work or
service
1. Redemption by the applicant, his widow,
and legal heirs within 5 years should a As to Deliver the thing Perform
obligation leased to the some work or
piece of land under a homestead or free
of lessor lessee service for
patent be alienated to a third person the lessee
2. Redemption by a judgment debtor within
1 year should real property belonging to As to Specific Only remedy
him be sold on execution remedies in Performance or as a general
3. Redemption by owner should property case of for damages rule: action
belonging to him be sold for delinquent breach for damages
realty taxes

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Obligations of lessor:
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 thing during the
lease 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
Obligations of lessee:
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 the expenses for the deed of
lease
Requisites of an implied new lease:
1. Contract of Lease should have ended
2. Lessee should have continued enjoying
the thing leased for 15 days
3. Continued enjoyment should be with the
acquiescence of the lessor
4. Notice to the contrary by either party
should not have been previously given
5. No express contract entered into by the
lessor and lessee after the old contract
had ended
Grounds for which the lessor may judicially
eject the lessee:
1. When the period agreed upon or that
which is fixed for the duration of the
leases under Articles 1682 and 1687,
has expired
2. Lack of payment of the price stipulated
3. When the lessee devotes the thing
leased to any use or service not
stipulated which causes the
deterioration thereof or if he does not
observe the requirement in no. 2 of
Article 1657, as regards the use thereof
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Different limitations imposed upon the lessor
in order to protect the lessee (rent control
act):
1. Rent of any residential unit covered by
this Act shall not be increased by more
than ten percent (10%) annually as long
as the unit is occupied by the same
lessee. When the residential unit
becomes vacant, the lessor may set the
initial rent for the next lessee.
2. Lessor cannot demand more than one
(1) month advance rent. Neither can he
demand more than two (2) months
deposit which shall be kept in a bank
under the lessor's account name during
the entire duration of the lease
agreement. Any and all interest that
shall accrue therein shall be returned to
the lessee at the expiration of the lease
contract.
3. No lessor or his successor-in-interest
shall be entitled to eject the lessee upon
the ground that the leased premises
have been sold or mortgaged to a third
person regardless of whether the lease
or mortgage is registered or not.
Grounds for judicial ejectment under ra no.
9341:
1. Assignment of lease or subleasing of
residential units in whole or in part,
including the acceptance of boarders or
bedspacers, without the written consent
of the owner/lessor;
2. Arrears in payment of rent for a total of
three (3) months: Provided, That in the
case of refusal by the lessor to accept
payment of the rent agreed upon, the
lessee may either deposit, by way of
consignation, the amount in court, or
with the city or municipal treasurer, as
the case may be, or in a bank in the
name of and with notice to the lessor,
within one month after the refusal of the
lessor to accept payment.

The lessee shall thereafter deposit the
rent within ten (10) days of every current
month. Failure to deposit the rent for
three (3) months shall constitute a
ground for ejectment.
The lessor, upon authority of the court in
case of consignation or upon joint
affidavit by him and the lessee to be
submitted to the city or municipal
treasurer and to the bank where deposit
was made, shall be allowed to withdraw
the deposits;
3. Legitimate need of the owner/lessor to
repossess his or her property for his or
her own use or for the use of any
immediate member of his or her family
as a residential unit: Provided, however,
That the lease for a definite period has
expired: Provided, further, that the
lessor has given the lessee the formal
notice three (3) months in advance of
the lessor's intention to repossess the
property and: Provided, finally, that the
owner/lessor is prohibited from leasing
the residential unit or allowing its use by
a third party for a period of at least (1)
year from the time of repossession.
4. Need of the lessor to make necessary
repairs of the leased premises which is
the subject of an existing order of
condemnation by appropriate authorities
concerned in order to make the said
premises safe and habitable: Provided,
That after said repair, the lessee ejected
shalI have the first preference to lease
the same premises: Provided, however,
That the new rent shall be reasonably
commensurate with the expenses
incurred for the repair of the said
residential unit and: Provided, finally,
That if the residential unit is condemned
or completely demolished, the lease of
the new building will no longer be
subject to the aforementioned first
preference rule in this subsection; and
5. Expiration of the period of the lease
contract.
Instances where the purchaser cannot
terminate an existing lease:
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1. Where the lease is recorded in the
Registry of Property
2. Where there is a stipulation in the
contract of sale that the purchaser shall
respect the lease
3. Where the purchaser knows of the
existence of the lease
4. Where the sale is fictitious
5. Where the sale is made with right of
repurchase
Common carriers
Requisites in order an agreement between
the common carrier and the shipper or owner
limiting the liability of the former for the loss,
destruction, or deterioration of the goods to
a degree less than extraordinary diligence
shall be valid:
1. It must be in writing, signed by the
shipper or owner;
2. It must be supported by a valuable
consideration other than the service
rendered by the common carrier; and
3. It must be reasonable, just and not
contrary to public policy.
Any of the following or similar stipulations
shall be considered unreasonable, unjust
and contrary to public policy:
1. That the goods are transported at the
risk of the owner or shipper;
2. That the common carrier will not be
liable for any loss, destruction, or
deterioration of the goods;
3. That the common carrier need not
observe any diligence in the custody of
the goods;
4. That the common carrier shall exercise
a degree of diligence less than that of a
good father of a family, or of a man of
ordinary prudence in the vigilance over
the movables transported;
5. That the common carrier shall not be
responsible for the acts or omission of
his or its employees;
6. That the common carrier's liability for
acts committed by thieves, or of robbers
who do not act with grave or irresistible
threat, violence or force, is dispensed
with or diminished;
 P a g e | 22

7. That the common carrier is not Rights of an assignee (article 1813)

responsible for the loss, destruction, or
deterioration of goods on account of the
defective condition of the car, vehicle,
ship, airplane or other equipment used
in the contract of carriage.
PARTNERSHIP
a. In case of fraud, avail of the usual
remedies
b. In case of dissolution, has the right to
receive the assignor’s interest
c. Right to account from the date only of
the last account agreed to by all the
partners

Assignee has no right to: (article 1813)

Right to formal account as to partnership
affairs (article 1809)
a. Interfere in the management or
administration of the partnership
a. If partner is wrongfully excluded from
business or affairs
the partnership business or possession
b. Inquire any information or account of
of its property by his co-partners
partnership transactions
b. If the right exists under the terms of any
c. Inspect the partnership books
agreement
c. As provided by Article 1807
Dissolution (article 1830)
d. Whenever other circumstances render it
just and reasonable
a. Without violation of the agreement
i. Termination of the term of
Property rights of a partner (article 1810)
partnership
ii. Express will of any partner when
a. His rights in a specific property
no particular term or
b. Interest in the partnership
undertaking is specified
c. Right to participate in the management
iii. Express will of any partner who
have not assigned their interests
Incident of co-ownership of specific
iv. Expulsion of any partner from
partnership property (article 1811)
the business
b. In contravention of any agreement of the
a. Equal right to possess specific property
partners
b. Right is not assignable EXCEPT in
c. Any event which makes it unlawful
when ALL of the partners assign their
d. When a specific thing, which a partner
rights in the same property
had promised to contribute to the
c. Not subject to attachment or execution
partnership, perishes before delivery
EXCEPT on a claim against partnership
e. Death of a partner
d. Not subject to legal support under Article
f. Insolvency of any of the partners or the
291
partnership
g. Civil interdiction of any partner
Except when authorized by the other
h. By decree of court
partners or unless they have abandoned the
business, one or more but less than all of the
Limitations of the power of a general partner
partners have no authority to (restriction on
(Article 1850):
authority under article 1818):
a. Do any act in contravention of the
a. Assign the partnership property
certificate;
b. Dispose of the goodwill of the business
c. Do any other act which would make it b. Do any act which would make it
impossible to carry on the business of a impossible to carry on the ordinary
partnership business of the partnership;
d. Confess a judgment
e. Enter into a compromise concerning c. Confess a judgment against the
partnership claim or liability partnership;
f. Submit a partnership claim or liability to
arbitration d. Possess partnership property, or assign
g. Renounce a claim of the partnership their rights in specific partnership

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property, for other than a partnership
purpose;
e. Admit a person as a general partner;
f. Admit a person as a limited partner,
unless the right so to do is given in the
certificate;
g. Continue the business with partnership
property on the death, retirement,
insanity, civil interdiction or insolvency of
a general partner, unless the right so to
do is given in the certificate.
Rights of a limited partner (article 1851)
a. Have the partnership books kept at the
principal place of business of the
partnership, and at a reasonable hour to
inspect and copy any of them;
b. H a v e o n d e m a n d t r u e a n d f u l l
information of all things affecting the
partnership, and a formal account of
partnership affairs whenever
circumstances render it just and
reasonable; and
c. Have dissolution and winding up by
decree of court.
d. Right to receive profits or other
compensation by way of income
e. Loan money to and transact any other
business with the partnership (Article
1854)
f. Receive on an account of resulting
claims against the partnership a pro rata
share of the assets UNLESS he is a
also a general partner (Article 1854)
When limited partner may demand return of
his contribution (article 1857)
a. On the dissolution of a partnership; or
b. When the date specified in the
certificate for its return has arrived, or
c. After he has six months' notice in writing
to all other members, if no time is
specified in the certificate, either for the
return of the contribution or for the
dissolution of the partnership.
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When limited partner may have the
partnership dissolved and its affairs wound
up:
a. H e r i g h t f u l l y b u t u n s u c c e s s f u l l y
demands the return of his contribution,
or
b. The other liabilities of the partnership
have not been paid, or the partnership
property is insufficient for their payment
as required by the first paragraph, No. 1,
and the limited partner would otherwise
be entitled to the return of his
contribution.
Liability of a limited partner to the
partnership:
a. F o r t h e d i ff e r e n c e b e t w e e n h i s
contribution as actually made and that
stated in the certificate as having been
made; and
b. For any unpaid contribution which he
agreed in the certificate to make in the
future at the time and on the conditions
stated in the certificate.
c. Holds as trustee for the partnership
specific property as was contributed by
him
d. Holds as trustee for the partnership
money or other property wrongfully paid
or conveyed to him on account of his
contribution
Order of payment of the liabilities of the
partnership
a. Those to creditors, in the order of
priority as provided by law, except those
to limited partners on account of their
contributions, and to general partners;
b. Those to limited partners in respect to
their share of the profits and other
compensation by way of income on their
contributions;
c. Those to limited partners in respect to
the capital of their contributions;
d. Those to general partners other than for
capital and profits;
e. Those to general partners in respect to
profits;

f. Those to general partners in respect to
capital.
AGENCY
When the acceptance of the agency can be
implied from the silence of the agent
a. When the principal transmits his power
of attorney to the agent, who receives it
without any objection;
b. 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.
Instances where special power of attorney is
required
a. To make such payments as are not
usually considered as acts of
administration;
b. To effect novations which put an end to
obligations already in existence at the
time the agency was constituted;
c. To compromise, to submit questions to
arbitration, to renounce the right to
appeal from a judgment, to waive
objections to the venue of an action or
to abandon a prescription already
acquired;
d. To waive any obligation gratuitously;
e. To enter into any contract by which the
ownership of an immovable is
transmitted or acquired either
gratuitously or for a valuable
consideration;
f. To make gifts, except customary ones
for charity or those made to employees
in the business managed by the agent;
g. To loan or borrow money, unless the
latter act be urgent and indispensable
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for the preservation of the things which
are under administration;
h. To lease any real property to another
person for more than one year;
i. To bind the principal to render some
service without compensation;
j. To bind the principal in a contract of
partnership;
k. To obligate the principal as a guarantor
or surety;
l. To create or convey real rights over
immovable property;
m. To accept or repudiate an inheritance;
n. To ratify or recognize obligations
contracted before the agency;
o. Any other act of strict dominion.
Obligations of the agent
a. Carry out the agency
b. Finish the business already begun on
the death of the principal should the
delay entail any danger
c. If he declines, bound to observe
DOAGFAF
d. A d v a n c e n e c e s s a r y e x p e n s e s i f
stipulated
e. Carry out agency as per instructions of
the principal
How does the agent observe care and
diligence in the execution of the agency?
a. The agent is bound by his acceptance to
carry out the agency, and is liable for the
damage which, through his non-
performance, the principal may suffer.
(Art. 1884)
b. In case a person declines an agency, he
is bound to observe the diligence of a
good father of a family in the custody
and preservation of the goods forwarded
to him by the owner until the latter
should appoint an agent or take charge
of the goods. (Art. 1885)
 P a g e | 25

c. Should there be a stipulation that the a. Safekeeping

agent shall advance the necessary b. Return when required
funds, he shall be bound to do so except c. Liable for loss through his fault or
when the principal is insolvent. (Art. negligence
1886)
d. In the execution of the agency, the agent When depositary is liable for loss through
shall act in accordance with the fortuitous event
instructions of the principal. (Art. 1887)
e. An agent shall not carry out an agency if a. Stipulated
its execution would manifestly result in b. Uses the thing without depositor’s
loss or damage to the principal. (Art. consent
1888) c. Delays its return
d. Allows others to use it
Modes of extinguishment of agency
Obligations of depositor
a. Revocation, express or implied, by the
principal a. Reimbursement for preservation of thing
b. Withdrawal of the agent b. Reimbursement for any loss arising from
c. Death, civil interdiction, insanity, or the character of the thing deposited
insolvency of the principal or agent c. Right to retain the thing until full
d. Dissolution of firm or corporation which payment
entrusted or accepted the agency
e. Accomplishment of object or purpose of Judicial Deposit Conventional
the agency Deposit
f. Expiration of the period which agency
was 1. Court orders the 1. Necessary or
g. constituted attachment/seizure voluntary
2. Movable or 2. Only movable
Requisites for valid revocation of agency immovable 3. Delivery may be
3. Delivery is made by made by will of
a. Return of the document evidencing court order depositor
agency if the authority of the agent is in 4. Attachment or 4. Compliance with
writing(Art. 1920) seizure legal obligation or
b. Actual notice if agency has been calamity
entrusted for the purpose of contracting
with specified persons under Article
1921 Necessary deposit
c. Notice by publication is sufficient as to
other persons (Article 1922) a. In compliance with a legal obligation
d. Notice of revocation to the agent(Article b. Takes place on the occasion of any
1923) calamity
c. Hotels or inns
When is the agency not revoked by
theprincipal's death? Characteristics of judicial deposit

a. If a bilateral contract depends on it a. Seizure or sequestration of property is

b. If agency is the means of fulfilling an
obligation already contracted
c. Agency coupled w/ interest
ordered by court
b. Movables and immovable
c. Depositary cannot be relieved of his
responsibility until the controversy has
come to an end
d. Diligence of a good father of a family

DEPOSIT Features of conventional deposit

Obligations of depositary a. Gratuitous

b. Only movable property
c. Real

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d. Unilateral d. Release of the debtor

e. Principally for safekeeping of the thing e. Payment
delivered f. Loss
f. Delivery is made by the will of the g. Remission
depositor h. Merger

Extinguishment of deposit Solidary Guarantor Solidary Debtor

a. Loss or destruction 1. Debt shall be paid 1. Debtor shall pay
b. Death 2. Solidary and 2. Subsidiarity liable
primarily liable 3. Entitled to
GUARANTY 3. Not entitled to excussion
excussion 4. Collateral
4. Original promisor undertaking
Characteristics 5. Bound to know 5. No need for notice
every default
a. Gratuitous
b. Accessory
c. Subsidiary
d. Conditional REAL ESTATE MORTGAGE
e. Unilateral
f. Express
g. Covered by Statute of Frauds Requisites

Rights of guarantor before making payment a. Secure fulfillment of a principal

obligation
a. Proceed against principal debtor b. Absolute owner
b. Obtain release from guaranty c. Free disposal
c. Demand security
d. Notify debtor before payment Characteristics

Instances where the benefit of exhaustion is a. Constituted on immovable property

not available b. May guarantee future obligations
c. Needs to be registered to bind third
a. When the guarantor has constituted in persons
favor of the creditor a pledge or d. Registration not essential for its validity
mortgage as an additional security
b. Non compliance w/ Art 2060 CHATTEL MORTGAGE
c. He has a judicial bondsman and sub-
surety
d. Guarantor expressly renounces it Requisites
e. Bound himself solidarily w/ debtor
f. Debtor’s insolvency d. Secure fulfillment of a principal
g. He has absconded, or can’t be sued w/ obligation
in the Philippines unless he has left a e. Absolute owner
manager or representative f. Free disposal
h. It may be presumed that an execution
on the property of the principal debtor Characteristics
would not result in the satisfaction of the
obligation a. Constituted on movables
b. Can’t guarantee future obligations
c. Chattel mortgage needs to be registered
Modes of extinguishing guaranty d. Registration is essential for its validity

a. Creditor Voluntary accepts immovable Chattel Mortgage Pledge

property or other in payment of debt
b. Creditor releases one of the guarantors
c. Extension granted to debtor

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1. Consensual 1. Real Rights of pledgee

2. Registration 2. Public instrument to
essential for validity bind 3rd persons a. Retention
3. Possession 3. Possession with b. Reimbursement
remains with debtor creditor c. Compensate earnings of pledge with
4. Different procedure 4. Different procedure debt
in public in public d. Bring actions to recover/defend the thing
auction sale auction sale pledged vs 3rd persons
5. If price of sale is 5. Creditor not entitled e. Demand substitute or immediate
less than the amount to recover deficiency payment
of principal, creditor f. Cause sale of appropriate thing pledged
can recover
deficiency. Obligations of a pledgee

a. Take care of the thing with the

Chattel Mortgage Real Estate DGOAFOAF
Mortgage b. b. Apply the fruits of the thing for
payment of the interest to the principal
1. Movable 1. Immovable c. Be responsible for acts of the
2. Cannot guarantee 2. Can guarantee subordinate
future obligations future obligations d. Cannot use the thing pledged
3. Registration in CM 3. Registration to bind e. Liability for loss
registry as a security 3rd persons. f. Account for profits derived
for performance of an 4. Registration is not
obligation essential Instances of legal pledge
4. Registration
essential for validity a. necessary and useful expenses
b. termination of usufruct
c. execution of work upon a movable
PLEDGE d. agent’s right to retention of objects of an
agency until principal effects
reimbursement and pays indemnity
Requisites e. depositary
f. hotel keepers
a. Secure fulfillment of a principal
obligation Grounds for extinguishment of pledge
b. Absolute owner
c. Free disposal a. Return of the thing pledged by the
Pledgee to the Pledgor
Characteristics b. Statement in writing by the Pledgee that
he renounces or abandons the pledge
a. Real c. Payment of the debt
b. Requirement that it be in a public d. Sale of the thing pledged at a public
instrument is merely to bind 3rd persons auction
c. Possession vested w/ creditor e. Appropriation of the thing
d. Diff procedure in public auction sale
e. Creditor not entitled to recover Conditions and rules for valid extrajudicial
deficiency foreclosure of a thing pledged
Rights of a pledgor a. Filing of an application before the
executive judge thru the clerk of court
a. Alienate b. Clerk of court will examine whether
b. Demand return of the thing pledged there was compliance with the required
c. Ask for the deposit of the thing posting of notice and publication
d. Substitute the thing pledged c. Application is raffled among the sheriffs
e. Bid at a public auction d. Auction sale may be had even if there is
only 1 participating bidder\

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e. Clerk of court shall issue a cert of a. Risky operations

payment indicating the amount of b. Preferred his own interested
indebtedness, the filing fees collected c. Fail to return upon demand
and the mortgages sought to be d. Unfit to carry on
foreclosed, the description of the RE e. Intervened and prevented more
and their respective obligations competent person
f. Cert of sale must be approved by the EJ f. Delegate to another
g. After the redemption period has expired, g. Stipulation
Clerk of court shall archive the records
Extinguishment of negotorium gestio
ANTICHRESIS a. Repudiation
b. Withdrawal
Rights of an antichretic creditor c. Death of either
d. Civil interdiction of either
a. Right to receive the fruits of the debtor’s e. Insanity of either
immovable f. Loss of the thing subject of NG
b. Right to the actual MV of the fruits at the g. Owner appointed a substitute
time of the application thereof to the h. Payment/reimbursement
interest and principal
c. Right to enjoyment of an Immovable
SOLUTIO INDEBITI
Obligations of an antichretic creditor
Requisites
Unless stipulation to the contrary, to pay:
a. Delivery
a. Taxes b. Made to a payee
b. Charges upon the estate. c. No right to demand what was delivered
d. Payment was made thru mistake
If he doesn’t pay:
OTHER QUASI CONTRACTS
a. indemnity for damages
b. Apply the fruits after receiving them to
the interest if owing and after, to the a. Art. 2164. When, without the knowledge
principal of the person obliged to give support, it
is given by a stranger, the latter shall
NEGOTORIUM GESTIO
have a right to claim the same from the
former, unless it appears that he gave it
Requisites out of piety and without intention of
being repaid.
a. Voluntarily assumption or management
of business or property of another b. Art. 2165. When funeral expenses are
b. No power from the latter borne by a third person, without the
c. Abandoned or neglected. knowledge of those relatives who were
d. Not authorized by owner. obliged to give support to the deceased,
e. GF said relatives shall reimburse the third
f. As a consequence of w/c, OM is obliged person, should the latter claim
to continue the same until the reimbursement.
termination of the affair and its incidents
or to require a person concerned to c. Art. 2166. When the person obliged to
substitute him, if the owner is in the support an orphan, or an insane or other
position to do so indigent person unjustly refuses to give
support to the latter, any third person
may furnish support to the needy
individual, with right of reimbursement
from the person obliged to give support.
Gestor liable for fortuitous event The provisions of this article apply when
the father or mother of a child under

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eighteen years of age unjustly refuses to l. Art. 2175. Any person who is
support him. constrained to pay the taxes of another
shall be entitled to reimbursement from
d. Art. 2167. When through an accident or the latter.
other cause a person is injured or
becomes seriously ill, and he is treated
or helped while he is not in a condition
to give consent to a contract, he shall be QUASI-DELICT
liable to pay for the services of the
physician or other person aiding him,
unless the service has been rendered
out of pure generosity. Requisites

e. Art. 2168. When during a fire, flood, a. Act or omission constituting fault or
storm, or other calamity, property is negligence
saved from destruction by another b. Damage is caused
person without the knowledge of the c. No pre-existing contractual relation
owner, the latter is bound to pay the between parties
former just compensation. d. Causal relation bet the act/omission and
the damage
f. Art. 2169. When the government, upon
the failure of any person to comply with Persons liable for the acts of others
health or safety regulations concerning
p r o p e r t y, u n d e r t a k e s t o d o t h e a. Parents/head of family
necessary work, even over his b. Guardians
objection, he shall be liable to pay the c. School, Administrators, teachers, etc
expenses. engaged in child care; teachers or
heads of establishments of arts and
g. Art. 2170. When by accident or other trade
fortuitous event, movables separately d. Employers
pertaining to two or more persons are e. The state
commingled or confused, the rules on
co-ownership shall be applicable. Kinds of damages

h. Art. 2171. The rights and obligations of a. Actual or Compensatory

the finder of lost personal property shall b. Moral
be governed by Articles 719 and 720. c. Nominal
d. Temperate or moderate
i. Art. 2172. The right of every possessor e. Liquidated
in good faith to reimbursement for f. Exemplary or Corrective
necessary and useful expenses is
governed by Article 546. Actual damages
j. Art. 2173. When a third person, without a. Proof of loss
the knowledge of the debtor, pays the b. Receipts
debt, the rights of the former are c. Fact of death, if death resulted
governed by Articles 1236 and 1237.
Compensatory damages
k. Art. 2174. When in a small community a
nationality of the inhabitants of age a. Crimes and quasi-delicts
decide upon a measure for protection b. Damages in breach of contract
against lawlessness, fire, flood, storm or
other calamity, any one who objects to Attorney’s fees
the plan and refuses to contribute to the
expenses but is benefited by the project a. Exemplary damages are awarded
as executed shall be liable to pay his b. Malicious prosecution
share of said expenses. c. Unfounded civil action or proceedings
d. Legal support

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Moral damages
a. A criminal offense resulting in physical
injuries;
b. Quasi-delicts causing physical injuries;
c. Seduction, abduction, rape, or other
lascivious acts;
d. Adultery or concubinage;
e. Illegal or arbitrary detention or arrest;
f. Illegal search;
g. Libel, slander or any other form of
defamation;
h. Malicious prosecution;
i. Acts mentioned in Article 309;
j. Acts and actions referred to in Articles
21, 26, 27, 28, 29, 30, 32, 34, and 35.
Extent of liquidated damages
a. Art. 2226: Those agreed upon by the
parties in a contract, to be paid in case
of breach thereof.
b. Art. 2227: Liquidated damages, whether
intended as an indemnity or a penalty,
shall equitably reduced if they are
iniquitous or unconscionable.
c. Art. 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.
Liquidated damages
a. agreed upon by the parties in a contract
b. its essence is a genuine covenanted
pre-estimate of damages
c. the injured party need not prove his
damages in order that the sum
stipulated may be demanded
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d. should the principal obligation be void,
the stipulation on liquidated damages
shall also be void
e. purpose is to prevent breach of
obligations between the contracting
parties
f. can be reduced if they are inequitably
iniquitous or unconscionable
When the courts may mitigate the damages
awarded:
a. That the plaintiff himself has
contravened the terms of the contract;
b. That the plaintiff has derived some
benefit as a result of the contract;
c. In cases where exemplary damages are
to be awarded, that the defendant acted
upon the advice of counsel;
d. That the loss would have resulted in any
event;
e. That since the filing of the action, the
defendant has done his best to lessen
the plaintiff's loss or injury.
RES IPSA LOQUITUR is a rule of necessity and
it applies where evidence is absent or not readily
available, provided the following requisites are
present:
1. the accident was of a kind which does
not ordinarily occur unless someone is
negligent
2. the instrumentality or agency which
caused the injury was under the
exclusive control of the person charged
with negligence; and
3. the injury suffered must not have been
due to any voluntary action or
contribution on the part of the person
injured. x x x. (D. M. CONSUNJI, INC.
vs. CA)
PROXIMATE CAUSE - The 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.
CONTRIBUTORY NEGLIGENCE - Conduct on
the part of the injured party, contributing as a
legal cause to the harm he has suffered, which
falls below the standard, which he is required to
conform for his own protection. Thus there is
contributory negligence when the party's act
showed lack of ordinary care and foresight that
such act could cause him harm or put his life in
danger.
IMPUTED NEGLIGENCE - Negligence is
imputed if the actor is different from the person
who is being made liable. Examples of imputed
negligence:
1. Employers who are made liable for
the negligent acts of their agents or
employees and
2. Parents who are made liable for the
negligent acts of their children.
DOCTRINE OF DISCOVERED PERIL - The
doctrine [holding] that where both parties are
negligent, but the negligent act of one is
appreciably later in time than that of the other, or
when it is impossible to determine whose fault or
negligence should be attributed to the incident,
the one who had the last clear opportunity to
avoid the impending harm and failed to do so is
chargeable with the consequences thereof.
WAREHOUSE RECEIPTS LAW
Obligation of a warehouseman
a. Issue a in the required form for goods
received
b. To take care of the goods deposited with
ordinary and reasonable diligence
c. To deliver the goods to the person
lawfully entitled
d. Not to co-mingle the goods deposited
UNLESS goods deposited are fungible
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and of the same kind and grade giving
rise to ownership over co-mingled mass
e. To i n s u r e t h e g o o d s i n p r o p e r
circumstances
f. To mark a non-negotiable warehouse
receipt
g. To mark such duplicate of a negotiable
warehouse receipt
h. To give proper notice in case of sale of
the goods as provided in the WRL
i. To cancel WR when delivered
Required information in a warehouse
a. Location of warehouse
b. Date of Issue of Receipt
c. Consecutive number of Receipt
d. Person to whom goods are deliverable
e. Rate of Storage charge
f. Description of package or goods
g. Signature of warehouseman
h. Warehouseman’s interest to the goods
or ownership
i. Statement of advances made and
liabilities incurred.
Warehouseman’s lien’s when:
a. All lawful charges for storage and
preservation of the goods;
b. All lawful claims for money advanced,
interest, insurance, transportation, labor,
weighing, coopering, and other charges
and expenses in relation to such goods;
and
c. All reasonable charges and expenses
for notice and advertisements of sale,
and for the sale of the goods where
default had been made in satisfying the
warehouseman’s lien.
Rights of a warehouseman
a. Refuse delivery of goods under
instances provided for by law and until
he has reasonable time to check the
validity of the claims
b. Right to enforce his lien
c. Right to file an action for interpleader
and allow the claimants to prove their
claim or in case an action is filed against
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him, set up the defense that there are 2

or more claimants

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1. The delivery of something or anything False.
may be the prestation of a valid One of the requisites of a prestation is
obligation.
that it must be determinate or at least
determinable according to pre-
established elements or criteria.
The delivery of something or anything
is not determinate or at least
determinable.
2. The source of obligation of a school for False.
injuries suffered by a student who was The source of obligation of the school is
mauled inside the campus by a stranger contract. Art. 2180 of the NCC is not
is quasi-delict.
applicable when the assailant is an
outsider. An implied contract may be
held to be established between a school
and the students, which results in
obligations for both parties, e.g., the
school must ensure adequate steps are
taken to maintain peace and order
within the campus premises and to
prevent breakdown thereof.
(p. 995, Rabuya)
3. A son-in-law who brings his mother-in- False.
law to a hospital for treatment shall be The son-in-law is not liable to pay.
liable under the law to pay for the ARTICLE 2167 of NCC: When through
hospital bills.
an accident or other cause a person is
injured or becomes seriously ill, and he
is treated or helped while he is not in a
condition to give consent to a contract,
he shall be liable to pay for the services
of the physician or other person aiding
him, unless the service has been
rendered out of pure generosity.
4. An obligation based on quasi-delict may True.
arise from the performance of a contract.
A liability for tort may arise even under
a contract, where tort is that which
breaches the contract.
(p. 945, Rabuya)
5. The officious manager in negorotium False. Obliged is the general rule under
gestio has no obligation to the owner if 2144. (EXC: This juridical relation does
he acts in good faith. not arise in either of these instances:
(1) When the property or business is
not neglected or abandoned;
(2) If in fact the manager has been
tacitly authorized by the owner.)
6. A moral obligation is also referred to as True.
an imperfect obligation because it has no
legal consequence.
7. Civil and moral obligations may become False.
natural obligations.
Only civil obligations may become
moral obligations. Natural obligations,
not being based on positive law but on
equity and natural law, do not grant a
right of action to enforce their
performance, but after voluntary
fulfillment by the obligor, they
authorize the retention of what has
been delivered or rendered by reason
thereof

8. A civil obligation that lapsed by True.

extinctive prescription ipso facto becomes
a natural obligation.
9. A civil obligation arises when a minor True.
who has entered into a contract without
the consent of parent/guardian
voluntarily pays a sum of money in
fulfillment of the obligation and obligee
has spent it in good faith.
10. A natural obligation arises when debtor False.
pays the creditor after a judicial order Civil obligation arises not a natural
for debtor to retain the debt.
obligation.
11. The obligation arising from a contract of True.
loan is unilateral.
12. It is essential in bilateral reciprocal True.
obligations that both arise from the same
source.
13. An obligation arising from a contract of False.
commodatum is an example of cyclic Commodatum is not a cyclic obligation.
obligation.
A cyclic obligation is one which can be
performed repeatedly.
14. A divisible obligation is susceptible of True.
partial performance.
15. Identity of obligation requires that the False.
performance must be complete.
It should be integrity of obligation.
Identity of obligation requires that only
the prestation agreed upon and no
other must be complied with.
(p. 283 of Mem Aid or p. 346 of
Aquino)
16. In obligations to give specific/generic False.
things, the obligor must perform in good Only in obligations to give specific
faith the principal and all accessory things and not of generic things. There
obligations.
is no accessory obligations in
obligations to give generic things.
17. As a general rule, an obligation to do True.
may be performed by another at the
debtor's expense.
18. There is no legal accessory obligation in True.
an obligation not to do.
19. An obligation not to do can be False.
performed by a delegate.
In obligations not to do, the
performance thereof cannot be
delegated of performed by an agent.
(p. 253 of Mem Aid)
20. Any action for a breach of an obligation False.
is premature if there is no actual breach Action may be filed based on the
upon the expiration of the prescribed principle of anticipatory breach as
period for performance. enunciated in the case of Blossom and
Co. vs Manila Gas Corp.
21. Fraud in the performance of contractual False.
obligation may result to an annulment of Fraud in the performance of an
the contract.
obligation gives rise to a right of the
creditor to recover damages from the
debtor.
22. Fraud in the performance of an False.
obligation and deceit in celebration of a An action for annulment of contract is
contract are similar in the sense that an not a common remedy.
action for annulment is a common
remedy.
23. A cause of action based on fraud False.
committed in the execution of an The law prohibits the renunciation of
obligation cannot be waived.
action for damages on the ground of
future fraud but it does not prohibit
fraud already committed. In other
words, the prohibition only refers to
future fraud.
(p. 254 of Mem Aid)
24. There could be delay in the performance False.
of a negative obligation.
In negative obligations, delay or mora
is not possible unlike in positive
obligations. One cannot be late in not
doing or giving
(p. 253 and 257 of Mem Aid)
25. There is no delay in the performance of True.
alternative obligations.
26. In an obligation not to do, there could be False.
specific performance.
The remedy of specific performance is
not available in an obligation not to do.
The remedies of the creditor/obligee in
an obligation not to do are as follows:
a. If the debtor did what he was
obliged not to do- it can be undone
at his expense.
b. If the debtor did what he was
obliged not to do but it is
impossible to undo- the debtor
 shall be liable for damages.

27. Obligations arising from valid, True.

voidable and rescissible contracts
have the force of law between the
contracting parties and should be
complied w/ in GF.

28. Exceptionally, natural obligations False. Art. 1423 provides that natural
can be enforced by court action to obligations do not grant a right of
prevent unjust enrichment. action to enforce their performance.

29. Civil obligations derive their binding False. Art. 1423. Natural obligations
force from positive law, while are based on equity and natural law.
natural from divine law.

30. A driver of a car, who was not able to
control the car due to negligent act of
truck driver in encroaching upon his
lane is liable for damages for injuries
suffered by the passengers of a
jeepney it hit.
False. Doctrine of State of Emergency
will absolve the car driver from
liability from damages arising in
avoiding an injury to himself in which
he is not negligent.

31. In order that demand may not be
necessary, it is required that the
obligation or the law expressly states
the demand shall not be necessary.
True. It is an indispensable that the
obligation or the law should expressly
add that the obligor shall incur delay if
he fails to fulfil the obligation upon the
arrival shall not be necessary. (Bayola
vs. Silang Traffic Co)

32. 1174 exempts an obligor from False. Art. 1174 also includes events
liability on account of fortuitious which although foreseen, are
events or force majeure, refers only inevitable.
to unforseeable events.

33. A court can stipulate for the parties False.

or amend the agreement where the
same contravenes law, morals, good Under Cuizon vs. CA, it is not in the
customs, public order or policy. province of the court to alter a contract
by construction or to make a new
contract for the parties. Its duty is
confined to the interpretation of the
one which they have made for
themselves without regard to its

34. Robbery may be considered
fortuitous event.
35. When the negligence of a person
concurs w/ the act of God in
producing a loss, such person is
exempt from liability by showing
that the immediate cause of damage
was the act of God.
36. Dolo incidente or incidental fraud
must be serious and w/o which the
other party would still have entered
the contract.
37. One who negligently creates a True.
dangerous condition cannot escape
liability for the natural and probable
consequences thereof, although the
act of a 3rd person, or an act of God
for which he is not responsible
intervenes to precipitate the loss.
38. Where a natural disaster is the only
and proximate cause of a loss, the
failure of a common carrier to
exercise due diligence to minimize
loss before during, and after the
occurrence of a natural disaster, shall
make it liable for the entire loss.
wisdom or folly as the court cannot
supply material stipulations or read
into the contract words which it does
not contain. (p. 812 Jurado Reviewer)
a True.
False. In Tan Chiong case, when the
negligence of the carrier concurs with
an act of God producing loss, the
carrier is not exempted from liability
by showing the immediate cause of the
damage was the act of God. When the
loss is caused by the act of God, if the
negligence of the carrier mingles with
it as an active and cooperative cause,
he is still liable (p. 89 Jurado)
False. Dolo incidente refers to
deceptions not serious in character and
without which the other party would
still have entered into the contract.
False. Not liable for the ‘entire’ loss.
Article 1739. In order that the common
carrier may be exempted from
responsibility, the natural disaster
must have been the proximate and
only cause of the loss. However, the
common carrier must exercise due
diligence to prevent or minimize loss
before, during and after the occurrence
of flood, storm or other natural
disaster in order that the common
carrier may be exempted from liability

39. The receipt of the principal by the
creditor, w/o reservation w/ respect
to the interest, shall give rise to a
conclusive presumption that said
interest has been paid.
for the loss, destruction, or
deterioration of the goods. The same
duty is incumbent upon the common
carrier in case of an act of the public
enemy referred to in article 1734, No. 2.
Article 1741. If the shipper or owner
merely contributed to the loss,
destruction or deterioration of the
goods, the proximate cause thereof
being the negligence of the common
carrier, the latter shall be liable in
damages, which however, shall be
equitably reduced.
False. Art. 1176 provides “shall give
rise to the presumption”. Not
“conclusive presumption.” There only
arises a disputable presumption. (p.
102 Jurado)

40. The person using violence or causing True.

fear to make another perform a
criminal act, shall be primarily liable
for the civil obligation arising
therefrom.

41. The obligation to give a determinate False. Art. 1166. Obligation to give a
thing includes that of delivering all determinate thing includes that of
the accessions and accessories only ifdelivering all its accessions and
they have been mentioned. accessories, even though they may not
have been mentioned.
42. When the fulfilment of the condition False. Art. 1182. When the fulfilment of
depends on the sole will of debtor or the condition depends upon the sole
creditor, obligation shall be void. will of the debtor, the conditional
obligation shall be void.
43. Before the resolutory condition True.
happens, the party who has a right is
practically in the same position as
one who has an obligation subject to
suspensive condition.

44. If the improvement was at the True.

expense of the debtor, he shall have
the same rights as a usufructuary.
45. For purposes of liability, the school False. The student is in custody of the
exercises custody over a minor school authorities only as long as he is
student doing his assignment at under the control and influence of the
Starbucks. school and within its premises
(Amadora vs. CA)
46. A travel agency must observe EO False. Art. 1163. Every person obliged
diligence in performing its obligation to give something is also obliged to
to process travel docs. 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.

A travel agency is not a common

carrier.

47. There is no delay when a lessee, whoFalse. Art. 1169. Those obliged to
failed to pay his monthly rent for 10
deliver or to do something incur in
mos, pays immediately upondelay from the time the obligee
demand. judicially or extrajudicially demands
from them the fulfilment of their
obligation.
48. A property owner may file an action False.
for specific performance against a In obligation to do, there can be no
contractor who fails to commence specific performance.
construction within a reasonable
period of time after signing of the
contract even if no specific period
was agreed upon.

49. If time is of the essence, the creditor True.

may rescind the obligation even if
the debtor is ready to perform a day
after the designated period.

50. A donation made to 3rd party a year True.

before the obligation of debtor to
creditor was established cannot be
rescinded.

51. A collision of a barge w/ a bridge False. Fortuitous event is an event

support of Ayala bridge along Pasig which could not be foreseen or which
river is a fortuitous event. though foreseen, were inevitable. The
collision could have been avoided.
 52. Throwing of stones by mischievous True.
boys which broke the windshield of a
taxi causing it to turn turtle is a valid
defense against liability of injuries
suffered by a passenger.

53. The standard precautionary release True.

of waters of a dam to avoid spillover
is a valid defense against flood
damage claims.

Enumeration:

• Instances when a debtor is liable notwithstanding a fortuitous event

1. Expressly declared by law
2. Obligor or debtor delays
3. Obligor or debtor promised to the same thing to 2 or more persons
who do not have the same interest
4. Obligor is at fault
5. Stipulation or agreement that the obligor will not be excused even if
the cause is fortuitous event
6. Assumption of risk
7. Generic thing to be delivered

• Requisites of mora solvendi

1. Positive obligation
2. Demandable and liquidated obligation
3. Delay by obligor for reasons imputable to him
4. Demand extra or judicial

• Instances when consignation may be made without tender

1. Creditor to whom tender of payment has been made refuses without
just cause to accept it
2. Creditor is absent or unknown, or does not appear at the place of
payment;
3. Creditor is incapacitated to receive the payment at the time it is due;
4. Creditor refuses to give a receipt, without just cause
5. 2 or more persons claim the same right to collect;
6. Title of the obligation has been lost.
• Requisites of payment by cession
1. 2 or more debts
2. 2 or more creditors
3. 1 insolvent debtor
4. Abandonment by debtor of his properties in favor of creditors
5. Acceptance of creditors

• Instances when law provides a direct action against the debtor's debtor
1. Creditor has a right of credit against the debtor although not yet
liquidated
2. Due and demandable credit
3. Failure of debtor to collect from 3rd persons or debtor of debtor
4. Insufficient assets of debtor
5. Rights and actions are not purely personal

• Distinction between rescission of contracts in fraud of creditor and

rescission/resolution under Art 1191

Resolution 1191 Rescission 1380

Valid and existing contracts Valid and existing contracts
1 party to the contract demands Party suffering lesion or 3rd party
prejudiced demands
Non performance is a ground Equity grounds
Court determines sufficiency of Sufficiency of reason does not affect
reason to justify extension of time to right to ask for rescission
perform obligation
Reciprocal obligations Unilateral or reciprocal
Principal remedy Subsidiary remedy

• Requisites of application of rule on fortuitous events (4)

1. Independent of the human will or at least of debtor’s will
2. Unforeseen or if foreseen, is inevitable
3. Impossible for debtor to comply w/ his obligation in a normal manner
4. Free from any participation in or aggravation or, the injury to the creditor
or no concurrent negligence on his part
F. 1. A vendor who be error to hold that the claim
It should be the vendee who cannot eject against her as well as the claim
should make the rescission. squatters from the against her husband should be
property as agreed made in the decedent's estate.
Art. 1191 – The Power to rescind in the deed may (Agcaoili vs. Vda. de Agcaoili, 90
obligation is implied in reciprocal rescind the Phil. 97)
obligations, in case one of the contract. F. 3. The different stages
obligors should not comply with Consummation, instead of of a contract are:
what is incumbent upon him. signing. preparation,
perfection, and
The injured party may choose Stages of Contracts: signing.
between FULFILLMENT and 1. Generation/Preparation –
RESCISSION of the obligation, comprehends the
with the payment of damages in preliminary or preparation
either case. or conception. It is the
period of negotiation and
Should he choose fulfillment and bargaining.
the same should become 2. Perfection – the moment
impossible, the injured party may when the parties come to
still seek for rescission. agree on the terms of the
T 2. A lessor may file a contract
collection case 3. Consummation – it is the
Under the law and well settled against a widow fulfillment or performance
jurisprudence, when the pursuant to an of the terms agreed upon in
obligation is a solidary one, the apartment lease the contract.
creditor may bring his action in contract signed by F. 4. A real contract,
toto against any of the debtors the widow and her Real Contracts (i.e. deposit, delivery of subject
obligated in solidum. Thus, if deceased husband. pledge, and commodatum) are is required to
husband and wife bound PERFECTED (not extinguished) extinguish the
themselves jointly and severally, by the delivery of the object of the obligation.
in case of his death, her liability is obligation (Art. 1316)
independent of and separate from
her husband's; she may be sued
for the whole debt and it would

QUIZ 3 1
F. 5. A contract is gain.
If it looks to the future/past preparatory when
transactions, it is it looks forward to T 7. 3 kinds of contracts
CONDITIONAL. other future by equivalence of
transactions or past Cause in Onerous Contracts: The prestations –
CONDITIONAL CONTRACT – transactions prestation or promise of a thing or gratuitous, onerous
if its efficacy should depend upon unknown to service by the other. and remunatory
the future existence of the thing. parties. Cause in Remuneratory
Contracts: Past service or benefit
A PREPARATORY CONTRACT which by itself is a recoverable
is one in which one party grants debt.
to the other, for a fixed period and Cause in Gratuitous Contracts:
under specified conditions, to Mere liberality of the benefactor.
decide whether or not to enter F. 8. The natural
into a principal contract. Essential elements – those elements of a
without which there can be no contract are those
It binds the party who had given contract (A1318). without which
the option not to enter into the there is no contract.
principal contract with any other Natural elements – those which
person during the period are derived from the nature of the
designated, and within that contract and ordinarily
period, to enter into such contract accompany the same; they are
to whom the option was granted presumed by law, although they
if the latter should decide to use can be excluded by the
the option. contracting parties if they so
desire.
F. 6. In aleatory F. 9. Formality
In aleatory contracts, the benefit contracts, the Delivery and not formality is an prescribed by
to each party is not yet benefit to each essential element of real contract. law/stipulation is
determined at the moment of party is (Art. 1316) an essential
celebration of the contract since it predetermined in element of a real
depends upon the happening of advance. contract.
an uncertain event. Thus charging
the parties with the risk of loss or

QUIZ 3 2
F 10. Since a partnership force upon both of the contracting
Formalities under partnership is consensual parties.
must be followed, i.e. Art. 1773, contract, in no case
Art. 1771 will non- This principle is explicitly
compliance with recognized in Arts. 1159, 1308,
formalities 1315, and 1356.
invalidate the F. 14. Relativity of
contract. Mutuality of Contracts (Art. contracts means
F. 11. Principle of liberty 1308) that contract binds
Consensuality of Contracts (Art. of contracts means The contract must bind both both contracting
1315) that contracts are parties. The validity or fulfilment parties.
General Rule: Contracts are perfected by mere of a contract cannot be left to the
perfected by mere consent and consent and from will of one of the contracting
from that moment, the parties are that moment parties.
bound to the fulfillment of what parties are bound.
has been expressly stipulated and Relativity (Art. 1311)
to all consequences which, Contracts take effect only between
according to their nature may be parties, their assigns and heirs.
in keeping with good faith, usage T 15. Consent is
and law. Art 1319. Consent is manifested manifested by the
Exception: by the meeting of the offer and the concurrence of the
Real contracts (e.g., deposit, acceptance upon the thing and the other and
pledge and commodatum) are not cause which are to constitute the acceptance upon
perfected until the delivery of the contract. the subject matter
object of the obligation. and cause.
T. A1315 12. Real contracts are T 16. In contracts of
not subject to the In contracts by correspondence, as correspondence,
principle of soon as the will of the offeree consent exists as
consensuality of finds itself in the presence of the soon as offeror
contracts. express and existing will of the learns of the
F. 13. Generally, the offeror, and adheres to it in a acceptance by
Obligatory Force of Contracts court may relieve a manner equally express, the offeree.
It is a rule that once the contract is party from a consent of the two parties is
perfected, it shall be of obligatory contract. realized and their wills take

QUIZ 3 3
reciprocal possession of one a. Violence includes incapacity,
another. b. Intimidation error and fraud.
F. 17. If the offer is made c. Mistake
An offer made through an agent through an agent, d. Fraud
is accepted from the time the offer is e. Undue influence
acceptance is communicated to accepted from the
him (Article 1322). time acceptance is Incapacity is not included in
communicated to vices of consent.
the offeree. T 22. Error or mistake is
T 18. Business the inadvertent and
Business Advertisements (Art. advertisements of Mistake or error must be excusable
1325) things for sale are excusable and must be a mistake disregard of a
They are mere invitations to make not definite offers, of fact, and not of law. circumstance
an offer, and NOT definite offers, but mere material to the
unless it appears otherwise. invitations to make There is no mistake if the party contract.
an offer, unless alleging it knew the doubt,
contrary appears. contingency or risk affecting the
F. 19. The advertiser is object of the contract (Art. 1333)
Advertisement for Bidders (Art. bound to accept the T 23. Fraud in the
1326) lowest or highest execution may give
It is simply an invitation to make bid. Fraud rise to an action for
proposals. The advertiser is not When, through insidious words damages even if
bound to accept the highest or or machinations of one party, the the fraud is only
lowest bidder, unless it appears other is induced to enter into a incidental.
otherwise. contract which, without them, he
F. 20. An offer terminates would not have agreed to (Art.
upon the incapacity 1338).
An offer becomes ineffective upon of the offerer even
the death, civil interdiction, after the acceptance Dolo Incidente (Art. 1344)
insanity or insolvency of either is conveyed. Incidental fraud obliges the
party BEFORE acceptance is person employing it to pay
conveyed (Art. 1323). damages.
F. 21. Vices of consent
Vices of Consent (Art. 1330) that affects volition

QUIZ 3 4
F. 24. In remunatory T 27. Reformation is the
contracts, the cause Reformation of Instruments remedy wherein a
Cause in Onerous Contracts: The is the undertaking Remedy through which a written written instrument
prestation or promise of a thing or or promise of a instrument is made or construed is made so as to
service by the other. thing by the other so as to express or conform to the express the real
party. real intention of the parties when intention of the
Cause in Remuneratory some error or mistake has been parties when some
Contracts: Past service or benefit committed. (Art. 1359) error has been
which by itself is a recoverable committed.
debt. T. Art. 1359 28. The intention
F. 25. The statement of a prevails as between
false cause in parties in case
Art. 1353. The statement of a false contracts shall conflicts exist
cause in contracts shall render render them void between the words
them void, if it should not be even if it can be and intention of
proved that they were founded proved that they parties.
upon another cause which is true were founded upon F 29. Contract is
and lawful. another cause More than ¼. rescissible when
which is true and the guardian’s
lawful. Art. 1381. The following contracts ward sufers lesion
F. 26. In case of illegal are rescissible: by less than ¼ of
He may recover. cause, the innocent (1) Those which are entered the value of the
party may not into by guardians things which are
Art. 1412 (2) When only one of the recover what has whenever the wards whom the object thereof.
contracting parties is at fault, he given. they represent suffer lesion
cannot recover what he has given by more than ¼ of the
by reason of the contract, or ask value of the things which
for the fulfilment of what has been are the object thereof; xxx
promised him. The other, who is F 30. The prescriptive
not at fault, may demand the From the date the contract was period of the action
return of what he has given entered into for rescission is
without any obligation to comply counted from the
with his promise. date of discovery.

QUIZ 3 5
 31. Contracts void ab enforceable.
F initio may be T 38. If the agreement is
May include 3rd persons. invoked only by not illegal per se,
the parties, but merely
principal or prohibited, an
subsidiary or their aggrived party may
privies. still recover
T 32. Relative nullity damages from the
may be cured by other.
confirmation or F 39. A verbal promise
prescription. to put in writing a
T 33. Only contracts Not covered. contract that is
having all the covered by Statute
essential requisites of Frauds is
may be ratified. enforceable.
T 34. The effects of T 40. The interpretation
ratification retroact of obscure words
to the time that the or stipulations
contract was must not favour the
entered into. party causing the
F 35. All agreements for obscurity.
leasing/sale of RP T 41. Malice is essential
Longer period than 1 year or of an interst to hold a 3rd person
therein are who induces
governed by another to violate
Statute of Frauds. his contract liable.
T 36. Statute of Frauds F. 42. The contract
does not determine Unenforceable bettween a minor
credibility or and a lunatic is
weight of evidence. void.
T 37. When a contract is F. 43. Minors cannot give
ratified by 1 of the Not all contracts. consent in all
parties, contract contracts.
becomes valid and

QUIZ 3 6
F 44. Usual T 50. An absolutely
Usual exaggerations in trade, exaggerations in stimulated contract
when the other party had an trade are not is ab initio void
opportunity to know the facts, fraudulent unless and inexistent.
are not in themselves fraudulent. aggrived party is T 51. Intent of the parties
illiterate. to the contract is
T 45. Nemo auditor deduced from the
propriam language employed
turpitudinem by the parties.
allegans. F. 52. Inadequacy for the
T 46. In case the court Inadequacy only invalidates if cause upon the
decrees annulment there has been fraud, mistake or contract invalidates
of the contract and undue influence. the same.
the same was
already performed, T 53. Conesensual
there must be contracts are
mutual restitution. perfected by mere
T 47. Where the contract consent.
is entirely illegal T 54. A stipulation in a
and both parties contract expressly
are equally guilty, conferring upon 1
there may be no party the right to
action by 1 against cancel the contract
the other. violates ‘mutuality
F 48. Rescission is of contracts’.
The plaintiff must be able to possible even if F 55. Fixing a period in
return what he is obliged to plaintiff is not able the offer prevents
restore by reason of contract. to return what he Offer may be withdrawn any its revocation
received under the time before acceptance. before acceptance
contract. by communicating
F 49. When there is vice the notice of
Voidable of consent, the withdrawal except
contract is when the option is
rescissible. founded upon

QUIZ 3 7
 separate when it predetermines the want of causa if the
consideration, as purpose of contract. If the motive motive as purpose
something paid or is illegal, it shall render the or end of the
promised. contract void. Rabuya. (89.4.2) contract is
F. 56. There is simulation legitimate.
if the disagreement F 61. The contract is void
Both parties must bind between the true False. if the inadequacy of
themselves. and apparent will, Article 1381 cause is shown to
or intent is not by consist in lesion by
The following are rescissible
agreement more than ¼
contracts:
__________exists entered into by
only in 1 of them. (1) Those which are entered into guardians or
F. 57. Relative simulation by guardians whenever the representatives in
makes the apparent wards whom they represent behalf of the
Parties are bound by their contract void as suffer lesion by more than one- wards/absentees.
apparent act. between parties, fourth of the value of the things
but the hidden which are the object thereof;
contract is ____ the
(2) Those agreed upon in
necessary
representation of absentees, if
requisites.
the latter suffer the lesion stated
F. 58. Exceptionally, in the preceding number;
No contract may be entered into contracts may have
upon future inheritance. as objects future (3) Those undertaken in fraud of
things such as creditors when the latter cannot in
future inheritance. any other manner collect the
T 59. Absence of causa claims due them;
Article 1352. Contracts without renders the (4) Those which refer to things
cause, or with unlawful cause, contract non- under litigation if they have been
produce no effect whatever. The existent. entered into by the defendant
cause is unlawful if it is contrary without the knowledge and
to law, morals, good customs, approval of the litigants or of
public order or public policy. competent judicial authority;
F. 60. Existence of a
Motive may be regarded as causa motive may supply (5) All other contracts specially

QUIZ 3 8
declared by law to be subject to
rescission.
True.
Article 1415. Where one of the
parties to an illegal contract is
incapable of giving consent, the
courts may, if the interest of
justice so demands allow recovery
of money or property delivered
by the incapacitated person.
F.
Article 1367. When one of the
parties has brought an action to
enforce the instrument, he cannot
subsequently ask for its
reformation.
F.
The following articles are
exceptions to the rule that
intention of parties shall prevail.
Article 1366. There shall be no
reformation in the following
cases:
(1) Simple donations inter vivos
wherein no condition is imposed;
(2) Wills
Article 1359. When, there having
been a meeting of the minds of the
QUIZ 3
parties to a contract, their true
intention is not expressed in the
instrument purporting to embody
62. Where both parties the agreement, by reason of
are guilty, there mistake, fraud, inequitable
may be no action conduct or accident, one of the
by 1 against the parties may ask for the
other, except where reformation of the instrument to
one of the parties to the end that such true intention
the contract is may be expressed.
incapable of giving If mistake, fraud, inequitable
consent. conduct, or accident has
63. The party who has prevented a meeting of the minds
brought an action of the parties, the proper remedy
to enforce the is not reformation of the
instrument may instrument but annulment of the
subsequently ask contract.
for its reformation
in court. Article 1367. When one of the
64. A and B signed a parties has brought an action to
contract of lease enforce the instrument, he cannot
over a parcel of subsequently ask for its
land although their reformation.
agreement was one F 65. A contract of
of the sale and ____ A contract of Antichresis is a Antichresis is a
actually the consensual contract. The law does solemn contract.
purchase price. In not require that it must be in
all instances, true writing. Instead, what is required
intention must to be specified in writing is only
prevail. the amount of principal and
interest, if owing. Hence, if such
specification has already been
made in the principal contract of
loan, then the Contract of
9
Antichresis itself need not be in fraud referred to is causal fraud
writing. or dolo causante.
F. 66. A contract of loan T 69. Fraud as a vice of
stipulating an Article 1341. A mere expression of consent consists of
Notwithstanding the suspension interest rate of 20% an opinion does not signify fraud, misrepresentation
of Usury Law, if the stipulated a month is void if unless made by an expert and the or concealment of a
interest is excessive, iniquitous, not in writing. other party has relied on the fact made by an
unconscionable and exorbitant, former's special knowledge expert ___ has
such excessive interest is void. relied due to the
However, the principal obligation former’s special
subsists despite the nullity of knowledge.
stipulated interest. F 70. Vices of consent
T 67. Essential requisites consist in
Article 1316. Real contracts, such include delivery in Article 1390. The following circumstances
as deposit, pledge and real contracts and contracts are voidable or affecting adversely
commodatum, are not perfected required formality annullable, even though there the decision of a
until the delivery of the object of in solemn may have been no damage to the party to enter into a
the obligation. contracts. contracting parties: contract makes the
(1) Those where one of the parties contract void.
Article 749. In order that the is incapable of giving consent to a
donation of an immovable may be contract;
valid, it must be made in a public (2) Those where the consent is
document, specifying therein the vitiated by mistake, violence,
property donated and the value of intimidation, undue influence or
the charges which the donee must fraud.
satisfy. (solemn contracts)
F 68. Dolo causante These contracts are binding,
The kind of fraud that will vitiate gives rise to an unless they are annulled by a
a contract refers to those insidious action for damages proper action in court. They are
words or machinations resorted to while dolo susceptible of ratification
by one of the contracting parties incidente may F 71. A stipulation pour
to induce others to enter into a annul the contract. It is valid but subject to revocation autrui must be
contract which without them he until accepted and communicated. accepted to be
would not have agreed to. The valid.

QUIZ 3 10
Article 1311. Contracts take 74. In a phone
effect only between the parties, conversation, X
their assigns and heirs, except agreed to buy
in case where the rights and house and lot of Y
obligations arising from the for 5M to be paid
contract are not transmissible on or before
by their nature, or by __________ that the
stipulation or by provision of deed of sale will be
law. The heir is not liable executed and
beyond the value of the signed on or before
property he received from the the same date. The
decedent. agreement to ____
unenforceable.
If a contract should contain some F. 75. A contract between
stipulation in favor of a third Article 1403. The following a minor and an
person, he may demand its contracts are unenforceable, insane is void.
fulfillment provided he unless they are ratified:
communicated his acceptance to
the obligor before its revocation. (1) Those entered into in the name
A mere incidental benefit or of another person by one who has
interest of a person is not been given no authority or legal
sufficient. The contracting parties representation, or who has acted
must have clearly and deliberately beyond his powers;
conferred a favor upon a third (2) Those that do not comply with
person. the Statute of Frauds as set forth
T 72. A stipulation pour in this number. In the following
(refer to preceding answer) autrui is an cases an agreement hereafter
exception to the made shall be unenforceable by
rule on relativity of action, unless the same, or some
contracts. note or memorandum, thereof, be
F 73. Exceptionally, in writing, and subscribed by the
There are no exceptions. strictly personal party charged, or by his agent;
rights may be evidence, therefore, of the
object of contracts. agreement cannot be received
without the writing, or a
QUIZ 3 11
secondary evidence of its
contents:
(a) An agreement that by its terms
is not to be performed within a
year from the making thereof;
(b) A special promise to answer
for the debt, default, or
miscarriage of another;
(c) An agreement made in
consideration of marriage, other
than a mutual promise to marry;
(d) An agreement for the sale of
goods, chattels or things in action,
at a price not less than five
hundred pesos, unless the buyer
accept and receive part of such
goods and chattels, or the
evidences, or some of them, of
such things in action or pay at the
time some part of the purchase
money; but when a sale is made
by auction and entry is made by
the auctioneer in his sales book, at
the time of the sale, of the amount
and kind of property sold, terms
of sale, price, names of the
purchasers and person on whose
account the sale is made, it is a
sufficient memorandum;
(e) An agreement for the leasing
for a longer period than one year,
or for the sale of real property or
QUIZ 3
of an interest therein;
( f ) A representation as to the
credit of a third person.
(3) Those where both parties are
incapable of giving consent to a
contract.
F 76. Restitution is not
It is possible under 1398. possible if the
object of the
Article 1398. An obligation having contract is service.
been annulled, the contracting
parties shall restore to each other
the things which have been the
subject matter of the contract,
with their fruits, and the price
with its interest, except in cases
provided by law. In obligations
to render service, the value
thereof shall be the basis for
damages.
Enumeration
• 9 badges of fraud (7 lang sa codal)
o Fictitious or inadequate consideration of
conveyance
o Transfer made by debtor after suit has began
and while it is pending against him
o Sale upon credit by an insolvent debtor
o Evidence of large indebtedness or complete
insolvency
o Transfer of all/nearly of his property by debtor
o Transfer between father and son
12
 o Failure of vendee to take exclusive possession
of all the property
• Badges of fraud (from the net)
o (1) The transfer was to an insider.
o (2) The debtor retained possession or control of
the property transferred.
o (3) The transfer was disclosed or concealed.
o (4) Before the transfer was made, the debtor
had been sued or threatened with suit.
o (5) The transfer was of substantially all the
debtor's assets.
o (6) The debtor absconded.
o (7) The debtor removed or concealed assets.
o (8) The value of the consideration received by
the debtor was not reasonably equivalent to the
value of the asset transferred.
o (9) The debtor was insolvent or became
insolvent shortly after the transfer was made.
o (10) The transfer occurred shortly before or
shortly after a substantial debt was incurred.
o (11) The debtor transferred the essential assets
of the business to a lienholder who transferred
the assets to an insider of the debtor.
• 8 unenforceable contracts
o Entered into a name of another by 1 without or
acting in excess of authority
o Not comply w/ SoF
i. Agreement to be performed within a
year after making contract
ii. Special promise to answer for debt,
default or miscarriage of another
iii. Agreement made in consideration of
promise to marry
QUIZ 3
iv. Agreement for sale of goods, chattels or
things in action at price not less than
500; exception: auction when recorded
sale in sales book
v. Agreement for lease of property for
more than 1 year & sale of real property
regardless of price
vi. Representation as to credit of another
o Both parties are incapable of giving consent
• 7 void contracts
a. Cause, object or purpose is contrary to law,
morals, good customs, public order or public
policy;
b. Absolutely simulated or fictitious;
c. Cause or object did not exist at the time of the
transaction;
d. Object is outside the commerce of men;
e. Contemplate an impossible service;
f. Intention of the parties relative to the principal
object of the contract cannot be ascertained;
g. Expressly prohibited or declared void by law
13

Enumeration
2. 7 requisites of legal compensation
a. Parties are principal creditors and debtors of
each other
b. Both debts consist in the sum of money or of
consumable things of same kind and quality
c. Due and demandable
d. Liquidated
e. No retention or controversy commenced by 3rd
person
3. 4 requisites of mora solvendi
a. Positive obligation
b. Demandable and liquidated
c. Delays for reasons imputable to him
d. Demand (j/ej)
4. 6 instances when consignation may be made w/o
tender
a. Absent or unknown
b. Incapacitated to receive payment
c. Refuses w/o just cause
d. 2 or more persons claim the same right
e. Lost title
5. 5 examples of rescissible contract
a. Entered into guardians – whenever the wards
whom they represent suffer lesion by more
than ¼ of the value of the things which are the
object thereof
b. Represent absentees – if the latter suffer lesion
c. Fraud of creditors – latter cannot collect the
claims due
d. Litigation – entered into by defendant w/o
knowledge and approval of litigants or of
competent judicial authority
e. Other contracts specially declared by law to be
subject to rescission
6. 5 requisites of payment by cession
a. 2 or more creditors
b. Insolvent debtor
c. Assignment
d. Involve all properties of debtor
e. Accepted by creditors
7. Requisites of dolo causante
a. Misrepresentation or concealment
b. Induced the consent of the other
c. Fact is not true
d. Aware of falsity
e. Relied on it w/o FN
f. Give consent because of it
g. Not committed by both – only 1
8. Contracts to be written in public instrument for public
convenience
a. Donation of RP
b. Contract of partnership
c. Creation, transmission, modification or
extinguishment of real rights over RP; sales of
RP or of an interest

QUIZ 3 14
 d. Cession, repudation or renunciation of
hereditary rights or CPG
e. Power to administer property
f. Cession of actions or rights proceeding from an
act appearing in a public document
9. Statute of frauds
a. By its terms is not to be performed w/in a year
from the making thereof
b. Answer for debt, default, or miscarriage of
another
c. Consideration of marriage, other than mutual
promise to marry
d. Sale of goods, chattel, or things in action, at a
price not les than 500 (UNL buyer accept and
receive)
e. Leasing for a longer period than 1 year or for
sale of RP or interest therein
f. Representation as to credit of a 3rd p
10. Badges of frauds
a. Fictitious or inadequate consideration of
conveyance
b. Transfer made by debtor after suit has began
and while it is pending against him
c. Sale upon credit by an insolvent debtor
d. Evidence of large indebtedness or complete
insolvency
e. Transfer of all/nearly of his property by debtor
f. Transfer between father and son
g. Failure of vendee to take exclusive possession
of all the property
11. Unenforceable contracts
a. Entered into a name of another by 1 without or
acting in excess of authority
b. Not comply w/ SoF
QUIZ 3
c. Both parties are incapable of giving
12. Void contracts
a. Cause, object or purpose is contrary to law,
morals, good customs, public order or public
policy;
b. Absolutely simulated or fictitious;
c. Cause or object did not exist at the time of the
transaction;
d. Object is outside the commerce of men;
e. Contemplate an impossible service;
f. Intention of the parties relative to the principal
object of the contract cannot be ascertained;
g. Expressly prohibited or declared void by law.
More questions 2/2/17
• Fraud in execution gives rise to damages. → F.
Annulment
• Warranty in sale is an accidental element. → F.
Natural element.
• In contracts of correspondence, consent exists as soon
as offeror learns of the acceptance by offeree. → F ?
Check code of commerce not sure.
o Commercial contracts are consensual.
15
 i. EXC: Code of commerce requires
specific forms → charter and loans on
bottomry and respondentia
o Code of Commerce – follows manifestation
theory
o NCC – from the time it came to his knowledge
• Deposit, pledge, commodatum are real contracts. → T
• Causal fraud gives rise to action for damages while
incidental fraud annuls the contract. → F. The other
way around.
• Contract entered into by a lunatic has no effect. → F.
May effect padin ata. Not in all cases void.

Enumeration
• 4 instances when reformation is not available
(MEMAID)
• 7 rescissible contracts
• 5 difference – dacion and cession
• 8 solemn contracts

QUIZ 3 16
  

1. A contract of sale of a F the owner of the property or

parcel of land is the party interested in it has
consensual, formal, Not formal been for any other reason
bilateral, onerous, misled or surprised, then the
nominate, principal sale will be regarded
and commutative as fraudulent and void, and
2. Even if time is of F the party injured will be
essence, a buyer who permitted to redeem the
already paid 80& of Time is of essence. property sold
the price and delayed Refer to 1191.
in payment only for 1 4. A vehicle sales F.
month, must be given proposal stipulating
an adiditional period that the price of a Payment of the monthly
to complete payment model 2015 Toyota installments shall indicate
of purcahse price in Vios car 20% of w/c the amount.
cosideraiton of equity will be paid as a
and justice. downpayment in 3
3. Shocking gross T days and the balance
inadequacy of the in 36 monthly
price in an execution A judicial sale of real estate installments and w/ a
sale executed by a will not be set aside for specific date for pick
court sheriff may inadequacy of price, unless up is a perfected
invalidate a sale the inadequacy be so great as contract of sale is
to shock the conscience, or signed by the buyer.
unless there be additional
circumstances against its
fairness. If the inadequacy of
price paid for the purchase of
real estate at a sale on
an execution be so gross as to
shock the conscience, or if in
addition to gross inadequacy
the purchaser has been guilty
of unfairness or has taken
any undue advantage, or if

QUIZ  4  –  FINALS   1
 
  

5. A written F 8. A lessee may not ask False.

acknowledgment for the rescission of Lessee cannot ask for
showing that a fishing the sale of the leased rescission if it was
vessel w/ a price of property where he is transferred to another in
900k is now in the living, in violation of a good faith, all he may
possession & stipulated right of 1st recover is damages.
responsibility of the priority to buy, even if
buyer is a perfected the right was not
contract of sale if there annotated on the TCT
is a firm commitment 9. To be binding, the F.
that documents right of first refusal
pertaining to the sale stipulated in a lease No need for independent
& agreement of agreement must also consideration.
payment are to follow be supported by an
6. A sale is perfected False. independent
upon acceptance of a Art. 1479. An accepted consideration
unilateral promise to unilateral promise to buy or 10. In a lease w/ right of T.
sell at a fixed price to sell a determinate thing 1st refusal, the lessor It cannot be offered at a
even if there is no for a price certain is binding cannot sell to a 3rd different amount to the third
option money paid to upon the promissor if the party at the price of P person.
support the promise promise is supported by a 5300/sq m after an
consideration distinct from offer to sell at P 6000/
the price. sq m was declined by
the lessee
Option contract is NOT the 11. A perfected contract True.
contract of sale itself. of sale cannot be 1459.
7. An option contract T challenged on the The thing must be licit and
supported by a ground of the seller’s the vendor must have a
separate consideration non-ownership of the right to transfer the
is a non-binding offer thing sold at the time ownership thereof AT THE
that may be of the perfection of the TIME IT IS DELIVERED.
withdrawn at any contract
time before
acceptance by the
buyer

QUIZ  4  –  FINALS   2
 
  

12. X leased to Y a roof F W, who in GF

deck of its bldg. w/ registered the sale. Z,
the agreement that Sampaguita Pictures v who took actual
any permanent Jalwindor: “The fact that possession of the land
improvements made Capitol failed to pay a day after the sale by
on the property by Y Jalwindor the purchase W, has a better right
shall belong to X. Y price of the items levied to the land
installed glass upon did not prevent the 15. In Art 1544, a 2nd F
jalousies purchased transfer of ownership to buyer may still claim
on credit from Z. Capitol and, later, to in GF even if the 1st “Art 1544 Par 2: Should
Upon Y’s failure to Sampaguita by virtue of the buyer was already in there be no inscription, the
pay the outstanding agreement in their lease possession of the ownership shall pertain to
balance of the 50%, a contract. Therefore, the property at the time of the person who in GF was
levy on the glass complaint of Sampaguita to the sale, if the seller first in the possession..”
jalousies is proper nullify the Sheriff's sale is assured the 2nd buyer
well founded, and should that the alleged buyer
prosper.” is merely a lessee
16. The rules on double F
13. There is symbolic F sale will apply when
delivery of a parcel of the deed of absolute Rules on double sale do not
land upon the To be equivalent to actual sale in installments apply if the first transaction
execution of a deed of delivery, thing must be with a downpayment is a contract/promise to sell.
absolute sale even if subject to the control of the of 20% amounting to
the buyer had not vendor. Addison vs Felix- 200k was executed
acquired actual “if the vendee x enjoy its after a contract to sell
possession thereof possession due to an in favor of another
because it is occupied opposition of a 3rd person buyer who paid 50%
by a 3rd party w/ an who is in actual (500k) of the purchase
adverse claim of possession..” price
ownership
14. A few days before his T
death, X sold his land
to Y, who in turn sold
it to Z. The heirs of X
sold the same land to

QUIZ  4  –  FINALS   3
 
  

17. When the T ticket for a past draw

consideration is partly date is necessarily
in money and partly void because the hope
in kind,the contract is of winning is vain.
one of sale if the 23. Sale of inheritance F
parties intended it to before partition is
be a sale even if the void because the heir Valid even without
thing given as part of could not enumerating the things.
the consideration is predetermine what he
greater in value than will receive after
the money given partition proceedings.
18. An accepted bilateral F 24. Subsequent T
promise to buy and Price should be certain. acquisition of a title
sell a car at a price less by vendor w/o title
than 500k but not validates the sale even
more than 505k is if the acquisition
binding as an depends on
executory agreement contingency
of sale 25. If a 3rd party tasked to F
19. A unilateral promise F give the price of the Art. 1469…Should such
to sell is binding as a sale refuses to fix the person or persons be unable
contract of sale if a price, the court may or unwilling to fix, the
separate consideration fix the price contract shall be
independent of the inefficacious, unless the
price is given parties subsequently agree
20. A conditional contract T upon the price.
of sale may be an F the third person acted in
executed contract or bad faith or by mistake, the
an executory contract courts may fix the price…
21. Things under T
resolutory condition
of destruction may be
objects of a valid sale.
22. The sale by Pedro to T
Juan of a losing lotto

QUIZ  4  –  FINALS   4
 
  

26. If the price is F 31. A deterioration of the T

simulated, the sale Art. 1471. If the price is thing sold at the time
shall be considered a simulated, the sale is void, of perfection may
donation. but the act may be shown to render the contract
have been in reality a inoperative.
donation or some other act 32. If the loss of the thing F
or contract. sold at the time of
27. Sale may be rescinded F perfection was by the Void
if the inadequacy of 1471. Gross inadequacy of a fault of the seller, sale
the price results in price does not affect a shall still be valid.
lesion by more than ¼ contract of sale, except as it 33. If the loss of the thing F
of the valley of the may indicate a defect in the sold at the time of
thing sold by the consent or that the parties perfection was a Seller
owner really intended a donation fortuitous event, the
or some other act or risk is on the buyer if
contract. the sale is conditional.
28. By agreement, an T 34. The expenses of T
option money may be execution and
considered part of the registration of the sale
purchase price should are borne by the seller.
buyer execersie the 35. Before the fall of the F
option to buy hammer in an auction 1476. (2) A sale by auction is
29. A verbal sale of parcel T sale, a bidder may perfected when the
of land by an agent is retract his bid but the auctioneer announces its
valid provided that auctioneer could not perfection by the fall of the
his authority to sell is withdraw the goods hammer, or in other
in writing. from the sale. customary manner. Until
30. A contract of sale is F such announcement is
perfected where the 1475. A contract of sale is made, any bidder may
acceptance was made perfected by mere consent, retract his bid; and the
if different from the that is, at the moment there auctioneer may withdraw
place of offer. is meeting of minds upon the goods from the sale
the thing which is the object unless the auction has been
of the contract and upon the announced to be without
price. reserve.

QUIZ  4  –  FINALS   5
 
  

36. A legally separated T 2. When the F

husband may sell a consideration is partly It shall be considered a barter
car to his wife. in money and partly if the value of the thing
37. Without qualification, T in kind, the contract is given as part of the
a sale between one of sale if the consideration exceeds the
persons in trust Only if no transfer of parties intended it to amount of money or its
relations is ownership be a sale even if the equivalent; otherwise, it is a
necessasrily void. thing given as part of sale.
38. Enumerate 3 Transfer ownership of th the consideration is
obligations of seller thing which is the object of greater in value than
the sale; the money given.
To deliver it; and 3. A bilateral promise to F.
To warrant the same sell is binding as an Only if it is a bilateral
39. Delivery by seller’s Traditio constitutum executory agreement promise to buy and sell.
retention of the thing possessorium of sale.
he is possessing by 4. A unilateral promise F
another right to sell is binding as a
subordinate to the contract of sale if a An accepted unilateral
buyer is known as separate condition promise to buy or sell a
40. When the seller is not F independent of the determinate thing for ap rice
the owner, the buyer price is given. certain is binding upon
who purchased the Public fairs/markets not promisor if the promise is
property in a fair has affected supported by a consideration
no better title than S distinct from the price.
that of the seller. 5. A conditional contract T
of sale may be an
executed contract of
SAMPLEX an executory contract
6. Things under
1. A contract of sale is F. resolutory condition
consensual, bilateral, may be objects ofa
onerous, nominate, Not preparatory vlaid sale
principal, preparatory
and commutative.

QUIZ  4  –  FINALS   6
 
  

7. Sale of a losing ticket T or some other act.

for a past draw date is 13. By agreement, an T
necessarily void option money may be
because of the hope of considered a part of Alternative: F, element of a
winning is vain the purchase price valid option contract is a
8. Sale of inheritance F should buyer exercise prestation, a consideration
before partition is void the option to buy. separate and distcint from
because the heir could One who sells an inheritance the purchase price for the
not pre-determine w/o enumerating the things option given.
what he will receive composed, shall be 14. A verbal sale of a T
after partition answerable as an heir. parcel of land by an
proceeding agent is valid
9. Subsequent T provided that his
acquisition of title by a authority to sell is in
vendor w/o title Alternative: F, no need to writing.
validates the sale even validate. 15. A contract of sale is F
if the acquisition perfected where the
depends on acceptance was made Contract of sale is
contingency. if different from the consensual.
10. If a 3rd party tasked to F place of offer
give the price of the 16. A detoriation of the T
sale refuses to fix the Courts can fix if the 3rd party thing sold at the time
price, court may fix it. acted in BF or by mistake of perfection may
11. If the price is F. render the contract
simulated, the sale inoperative.
shall be considered a Sale is void, but the act may 17. If the loss of the thing F.
donation. be shown to be a donation. sold at the time of
12. Sale may be rescinded T perfecting was by the The contract is inexistent and
if the inadequacy of fault of the seller, sale void because there is no
price results in lesion Alternative: F, gross shall still be valid. object.
by more than ¼ of the inadequacy of price does not 18. If the loss of the thing F.
value of the thing sold affect a contract of sale, sold at the time of
by the owner. except as it may indicate a perfection was by a The risk is borne by the
defect in the consent or the fortuitous event, the seller.
parties intended a donation

QUIZ  4  –  FINALS   7
 
  

risk is on the buyer if 27. Delivery by seller’s Traditio constitutum

the sale is conditional. retention of the thing possessorium
19. Expenses of execution T he is possessing by
and registration of the another right
sale are borne by the subordinate to the
seller. buyer is known as
20. Before the fall of the F. 28. When the seller is not F.
hammer in an auction the owner, the buyer
sale, a bidder may A bidder may withdraw the who purchased the Purchases made in fairs shall
retract his bid but the goods unless auction has property in a fair has not be affected
auctioneer could not been announced to be w/o no better title than that
withdraw the goods reserve. of the seller.
from the sale. 29. x 2 ways to negotiate a
21. In a sale of car, the F. 30. x negotiable document of title
vendor can cancel the to goods
sale if the vendee fails 2 or more. 1. Indorsement and delivery
to pay the 1st 2. Delivery
instalment. 31. A negotiable F.
22. A legally separated T document itlte of It may be negotiated in
husband may sell a car goods indorsed in blank, to bearer or specified
to his wife. blank may be person.
23. A sale between F. Only property involved in subsequently indorsed
persons in trust the trust relations. to a specified person
relations is necessarily but could not be
void. Alternative: T. Void if there indorsed in balnk.
is no complete transfer of 32. Where a negotiable T
ownership but intention was document of title was
merely to make grantee a transferred for value
depository of the thing by mere delivery
subject of contract. instead of the required
24. x Obligations of a vendor: indorsement,
25. x 1. Transfer ownership transferee mau compel
26. x 2. Deliver the thing transferor to indorse
3. Make warranties the document
33. The validy of F.

QUIZ  4  –  FINALS   8
 
  

negotiation is not BOL.

affected by the fact Transferee must be in GF 37. A seller who was T
that the owner of the and without notice of theft conditionally paid
document was by the time of negotiation. with the buyer’s
deprived by theft even personal check can
if the holder had have the rights of an
notice, prior to unpaid seller of goods
negotiation, of the if check is
unlawful deprivation. dishonoured.
34. Transferee of a non- T 38. An unpaid seller of F
nego document of title goods has the right to Art 1527. xx the unpaid seller
to goods may hold the retain goods even if of goods who is in
bailee liable for the the same were already possession of them is entitled
possession of the delivered to the to retain possession of them
goods provided that carrier. until payment or tender of
he notifies the bailee the price xxx
before latter was 39. An unpaid seller has a F
notified by transferor lien on the goods T
of a subsequent sale of when the buyer Art 1527. Subject to the
goods. becomes insolvent, provisions of this title, the
35. In the absence of F provided that the unpaid seller of goods who is
stipulation, the goods seller is still in in possession of them is
sold must be delivered Seller is bound to send then possession of the entitled to retain them until
at any time. within reasonable time. goods. payment or tender of the
36. If by agreement, seller T price in the following cases,
is required to deliver namely:
the goods to the xxx
buyer, delivery to the (3) where the buyer becomes
carrier is deemed insolvent. xxx
delivery to the buyer if
by the BOL, the goods
are deliverable to the
order of the buyer
whether or not seller
retains possession of

QUIZ  4  –  FINALS   9
 
  

40. Exceptionally, seller F disposition was with

may exercise the right consent of the seller.
of stoppage in transit No longer in transit. 46. Buyer was in need of T
even if buyer already 1,000 sqm of land
accepted delivery. required by the
41. If carrier wrongfully F. franchsior required for
withholds possession Wrongful refusal by carrier the opening of a
from the buyer, seller to deliver will terminate the business. He
can exercise the right right of stoppage. purchased from the
of stoppage. seller at a price of
42. Right of stoppage in T 100,000 per sqm. He
transit may be discovered that the
exercised by obtaining total area delivered to
actual possession of him was only 975.
the goods from the Buyer can opt to
carrier. rescind hte sale.
43. Unpaid seller may F. 47. If on the other hand F
resell goods without Only if the goods are (46) the land has an
notice to buyer if the perishable or based on an area of 1,100, the He may also accept and pay
latter has been in agreement. buyer has no other for the same.
default of the payment option but to return
of price for Alternative: T the excess area.
unreasonable time. 48. If a parcel of land F
44. Unpaid seller may F believed to be 1,000
rescind the sale where The unpaid seller must have sqm. was sold at a Art1542. In the sale of real
buyer fails to pay the exercised the right of lump sum of 1 million, estate, made for lump sum
price after a year from retention or stoppage in buyer should pay xxx there shall be no increase
the delivery. transit. more if the land turns or decrease of price, although
45. Unpaid seller’s right T out to be 1,025 to there be a greater or lesser
of stoppage in transit avoid just enrichment. areas or number than that
is not affected by a stated in the contract
subsequent 49. As a rule, the buyer of T
disposition of goods goods is not bound to
by the original buyer accept delivery by
except where instalment

QUIZ  4  –  FINALS   1
0
  

50. In a cash sale, seller is T 55. X 2 remedies of buyer in case

excused from making 56. X of breach of warranty against
delivery if no payment hidden encumbrances
is tendered by the 1. Rescission
buyer unless a period 2. Indemnity
for payment is fixed. 57. x Requisites of warranty
51. Rules on double sale T 58. x against redhibitory vices.
will apply to a sale 59. x 1. Serious or important defect
made by the principal 60. x 2. Hidden
and another sale by 61. x 3. Existed at time of sale
the agent to different 62. x 4. Notice to the defect was
buyers 63. x given within reasonable time
52. A previous buyer who First buyer. 5. Action for rescission or
was informed of a Knowledge gained by the reduction of price must be
subsequent sale in first buyer of the second sale brought within proper period
favor of another buyer cannot defeat the first - 6 mos or 40 days from
rushed to the register buyer’s rights except when delivery
of deeds to register the the second buyer registers in 6. No waiver of warranty
sale in his name. Who good faith the second sale 7. Buyer would not have
has a better right to ahead of the first. bought it has he known of
the land if subsequent the voice
buyer was in 64. If an animal sold was F
possession of the same classified as Art 1574. There is no
53. Warranty against T condemned, there is warranty against hidden
eviction may be no warranty against defects of animals sold at
validly waived by the hidden vices provided fairs or public auctions, or if
buyer with knowledge that the animal was livestock sold as condemned.
of risk. examined by an
54. In case of breach of F expert.
warranty against 65. Disease is presumed F
eviction, buyer may Sale must be done in BF. covered by warranty if Art 1578. If the animal should
also demand it causes death 7 days die within 3 days after its
ornamental expenses from purchase. purchase, the vendor shall be
even if the sale was liable if the disease which
made in GF. cause the death existed at the

QUIZ  4  –  FINALS   1
1
  

time of the contract. 81. x 2. Accidental

66. x When may buyer suspend
67. x payment after delivery
(Art. 1590)
1. Should the vendee be
disturbed in the possession
or ownership of the thing
acquired; or
2. Should he have reasonable
grounds to fear such
disturbance, by a vindicatory
action or a foreclosure or
mortgage.
68. x Legal guarantees of seller for
69. x payment of price of buyer
70. x 1. Possesorry lien
71. x 2. Right of stoppage in transit
3. Right to resale
4. Right to rescind
72. x Extinguishment of sale
73. x 1. Payment or performance
74. x 2. Loss
75. x 3. Condonation
4. Merger or consolidation
5. Compensaiton
6. Novation
76. x What is conventional
77. x redemption
1. Vendor reserves right to
repurchase the thing sold.
2. Obligation to comply with
1616
78. x Nature of conventional
79. x redemption
80. x 1. Contractual
3. Potestative
4. Real right
82. x Equitable mortgage
83. x 1. Unusually inadequate
84. x price of sale with right to
85. x repurchase
2. Vendor remains in
possession as lessee
3. Buyer retains a part of the
purchase price
4. Vendor binds himself to
pay taxes
5. Other case - real intent is to
secure payment of a
debt/performance of
obligation
86. x Exercise right of redemption
87. x 1. Co-owners
88. x 2. Co-heirs
3. Judgment debtors
89. A vendee a retro has a True.
right to be subrogated
to the vendor's rights A sale with pacto de
and action. retro transfer the legal title to
the vendee (Alderete vs.
Amandoron, 46 Phil., 488),
and the vendee is subrogated
to all the right and actions of
the vendors (art. 1511, Civil
Code), and therefore the
vendee is the owner of the
estate in fee simplesubject to
the vendor's right off
redemption.

QUIZ  4  –  FINALS   1
2
  

90. x Legal redemption by a co- onerous, and

91. x owner commutative,
92. x 1. Co-ownership although exceptionally
93. x 2. Alienation of shares. it could be
3. Sale to a 3rd person or gratitutoous.
stranger
4. Sale before partition
94. A valid assignment of T Enumeration
credit transfers title to • Requisites on warranty vs eviction
the assigned credit to • Kinds of implied warrantieas
the assignee, even if • Exceptions to warranty vs animal vices
debtor is unaware ◦ Knowdledge of B
thereof. ◦ Expert B
95. Assignor in GF F. ◦ Stipulations
answers for solvency ◦ Fairs and public auctions
of the debtor, unless No wararnty for solvency of ◦ Livestock sold as condemed
insolvency of debtor debtor, unless stipulator or • Persons disqualifed to buy
was prior to the sale insolvency was prior to the • Exceptions to right to suspend payment
and of common sale and of common
• Goods in transit
knwoedlge. knowledge.
96. x Legal redemption instances
97. x 1. Sale of coo to a stranger
98. x 2. Credit/incorporeal right in
99. x litigation is sold
100. x 3. Sale of an heir of his
hereditary rights to a
stranger.
4. Sale of adjacent rural lands
not exceeding 1 hectare.
5. Sale of adjacent urban
lunds bought merley for
spectulation
101. A contract of F.
lease is consensual,
nominate, bialteral, It cannot be gratuitous.

QUIZ
 4
 –
 FINALS
  1
3
Part 1:
1. Dean Jara and Ulan may enter into a single
sale, lease and mortgage of the same property in
one and same document without affecting their
validity. – True
2. Caveat emptor and venditor apply to voluntary
sale, forced sale, and lease of things. – False, Both
do not apply to lease of things.
3. In a sale of goods, there is a possibility that
vendor may be deemed to have complied with
the prestation even if he does not deliver the
goods. – True, Art. 1477: The ownership of the
thing sold shall be transferred to the vendee upon
the actual or constructive delivery thereof
4. Recto law applies to assignment of credit and
incorporeal rights. – True, seller may validly
assign his credit in favor of another. When the
vendor assigns his credit to another person, the
latter is likewise bound by the same law.
Accordingly, when the assignee forecloses on the
mortgage, there can be no further recovery of the
deficiency and the seller-mortgagee is deemed to
have renounced any right thereto. Article 1484(3),
however, does not bar one to whom the seller-
mortgagee has assigned on a with-recourse basis
his credit against the buyer from recovering from
the seller the assigned credit in full al- though the
seller may have no right of recovery against the
buyer for the deficiency (p. 127-128, De Leon)
5. An informal settler can validly lease but not to
sell the land and improvement occupied by him.
– True, to sell is an act of strict dominion which
only the owner of a thing may validly do. An
informal settler has no title and merely has
possession. The lessor need not be the owner of
the thing leased as long as he can transmit its
enjoyment or use to the lessee since ownership is
not being transferred (p. 563, De Leon)
6. A contract of lease is consensual, nominate,
bilateral, onerous, and remunatory. – False,
Principal, Nominate, Bilateral, Onerous,
Commutative, and Consensual, not
Remuneratory.
7. Lease of professional services may be implied
because no specific form is required. – True, lease
of service is not a formal contract which requires
formalities for their validity.
8. Lease of work, lessee becomes the agent of the
lessor but only with respect to the particular work
performed. – False, 1644 – 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, but the relation of
principal and agent does not exist between them
9. Exceptionally, a portion of the town plaza
which is property for public use may be the object
of lease. – T/F, The essence or essential purpose
of the lease of things is the transmission of the
temporary enjoyment or use by the lessee of a
thing for a certain period in consideration of the
undertaking to pay rent therefor. Hence, the
object of the lease must be within the commerce
of man (Art. 1374.); otherwise, it is void. Thus, a
lease of property belonging to the public do-
main such as a road or a public plaza is void ab
initio (p. 562, De Leon).
Note: Samplex answer was True, not sure if lease
of “portion” of public plaza makes a difference.
10. Persons enumerated in 1491 are prohibited
from entering into the contract of lease of service.
– False, The persons disqualified to buy referred
to in Articles 1490 and 1491 are also disqualified
to become lessees of the things mentioned
thereon. (Art. 1646.) (p. 149, De Leon)
11. A right may also be the object of a contract of
lease and the compensation is referred to as
royalty. – True
12. The lessee is obliged to answer even for a
mere act of trespass which a 3rd party may cause
on the use of the thing leased but lessee shall
have a different action against intruder. – False,
Not obliged to answer. Where the disturbance in
the lessee’s possession is caused by a mere
intruder who acted without any color of title or
right, the disturbance is a mere act of trespass for
which the lessor is not liable. The lessee has a
direct action against the trespasser (p. 612, De
Leon)
13. When lessor repairs the thing leased but the
lessee is not satisfied, latter may suspend
payment of rent. – False, 1658 – Lessee may
suspend payment of rent in case lessors fail to
make necessary repairs or maintain lease in a
peaceful and adequate enjoyment of property
leased. It is sufficient that the repairs were made,
without regard of the lessee’s preference.
14. If lessee fails to comply with his obligations,
lessor may file an action for rescission and action
for damages only. – False, ART. 1659 provides: if
the lessor or the lessee should not comply with
the obligations set forth in Articles 1654 and 1657,
the aggrieved party may ask for the rescission of
the contract and indemnification for damages, or
only the latter, allowing the contract to remain in
force.
15. If lessor sells the leased property to a 3rd
person in violation of the right of 1st refusal given
to lessee, contract is rescissible regardless of GF of
buyer. – False, rescissible only when in Bad faith.
The Court held that a lease with a proviso
granting the lessee the right of first priority ‘all
things and conditions being equal’ meant that
there should be identity of the terms and
conditions to be offered to the lessee and all other
prospective buyers, with the lessee to enjoy the
right of first priority. A deed of sale executed in
favor of a third party who cannot be deemed a
purchaser in good faith, and which is in violation
of a right of first refusal granted to the lessee is
not voidable under the Statute of Frauds but
rescissible under Articles 1380 to 1381(3) of the
New Civil Code Riviera Filipina, Inc. vs. Court of
Appeals, 380 SCRA 245 [2002] (p. 97, De Leon).
16. Lessor has subrogatory right against sub-
lessee for unpaid rent. – False, Article 1652. Sub-
lessee is subsidiarily liable to the lessor for any
rent due from the lessee. However, sublessee
should not be responsible beyond the amount of
rent due from him. Furthermore, advance
payments made by the sub-lessee shall be
deemed not to have been made, so far as the
lessor's claim is concerned., unless said payments
were effected by virtue of custom of the place.
17. A lease extendible by mutual agreement
would simply amount to right first refusal in
favor of the lessee so that even if a third party
would offer a higher rent, lease in favor of first
lessee will not be extended unless he matches the
offer. – True
18. A contract for the lease of vibrator is personal
and thus terminated by death of lessee. – False, a
lease contract is not essentially personal in
character, thus it is not terminated by death of
either except if the contract states otherwise.
19. An implied new lease may result even if there
is an express stipulation to the contrary. – False,
No implied renewal of lease where parties
stipulated that there would be no renewal by
implication. In Agalo-os vs IAC, it was held that
no implied new lease when there is contrary
stipulation.
20. An implied new lease is for the same period as
the original lease but a guaranty executed by a
third person in favor of the lessor shall cease with
respect to the new lease. – False:
a. PERIOD of the new lease is not that stated in
the original contract but the time established in
Article 1682 and 1687—according to the character
of property and mode of payment of rent.
b. GUARANTY – Article 1672. Accessory
obligations contracted by third person are
extinguished.
21. Failure to pay rent makes possession
unlawful. – False, For possession to be unlawful,
the lessee must have failed or refused to pay after
lawful demand.
22. Provision in contract of lease that
improvements introduced by lessee will accrue to
lessor upon termination of lease shall be
governed by rules on sale of property. – False, No
need to apply rules on sales of property.
23. Lessor may terminate lease when rentals are
not paid without need of court action. – True
24. Contract of sale entered in violation of right of
first refusal is valid. – True, The lessor is under
legal duty to the lessee not to sell to anybody at
any price until after he has made an offer to sell
to the latter at a certain price and the lessee failed
to accept it. However, the sale in violation of such
right is valid. It may be rescinded, or may be the
subject of an action for specific performance.
25. Lessee in a lease of rural lands has a right to
reduction of rental on account of sterility of land
and for loss of fruits due to extraordinary and
unforeseen event. – False, Article 1680. Only
entitled to right of reduction when loss be more
than one-half of fruits.
26. A provision in a contract of lease that all
improvements introduced by lessee without
reimbursement is not valid. – False, Stipulation is
not contrary to law thus it is valid and binding.
27. Lease of determinate time ceases upon day
fixed without need of demand. – True, Article
1669. If there is determinate time or period fixed,
the lease will be for said period and ends on the
day fixed without need of demand.
Modes to terminate lease:
28. purchaser of piece of land under an
unrecorded sale
29. expiration of period
30. total destruction due to fortuitous event
31. dwelling/ building intended brings imminent
and serious danger to life/health.
Part 2:
1. A contract of lease is consensual, nominate,
bilateral, onerous, and remunatory.
FALSE. A contract of lease is consensual,
bilateral, onerous, and commutative contract by
which the owner temporarily grants the use of his
property to another who undertakes to pay the
rent. (Aquino. p. 590)
2. Lease of professional services may be implied
because no specific form is required.
TRUE. A contract of lease is not required to be in
any form in order to be valid. (Rabuya, p. 492)
3. In a lease of work, lessee becomes the agent of
the lessor but only with respect to the particular
work performed.
ARTICLE 1644 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, but the relation of principal and
agent does not exist between them.
4. The term ‘price certain’ must be in money or its
equivalent.
The price is considered certain if:
(1) it is a fixed amount;
(2) it is certain with reference to another thing
certain; or
(3) that the determination thereof is left to the
judgment of a special person or persons.
(Aquino, p. 546)
5. Contract of lease for 99 years is void.
TRUE. With respect to lease of things, the law
states that it may be definite or indefinite.
However, no lease for more that 99 years shall be
valid. (Aquino, p. 590)
6. Exceptionally, a portion of the town plaza
which is property for public use may be subject of
lease.
The object of the contract must be within the
commerce of men. Hence, the properties of public
dominion cannot be validly made the subject
matter of a contract of lease, such as public streets
or a public plaza.
With respect to properties of public dominion
owned by the State, the law, in certain instances,
expressly allows lease of properties ordinarily
part of the public domain, as in the case of tidal
swamps, mangroves, marshes, foreshore lands,
and ponds suitable for fishery operations.
(Rabuya, p. 490)

7. Period in a contract of lease for services may be
definite or indefinite
ARTICLE 1643. 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. However, no lease for more than
ninety-nine years shall be valid.
8-12. Persons who are disqualified to become
lessees:
The persons disqualified to buy referred to in Art.
1490-91 are also disqualified to become lessees of
the things mentioned therein. (Aquino, p. 593)
ARTICLE 1490. The husband and the wife cannot
sell property to each other, except:
(1) When a separation of property was agreed
upon in the marriage settlements; or
(2) When there has been a judicial separation of
property under article 191. (1458a)
ARTICLE 1491. The following persons cannot
acquire by purchase, even at a public or judicial
auction, either in person or through the
mediation of another:
(1) The guardian, the property of the person or
persons who may be under his guardianship;
(2) Agents, the property whose administration or
sale may have been intrusted to them, unless the
consent of the principal has been given;
(3) Executors and administrators, the property of
the estate under administration;
(4) Public officers and employees, the property of
the State or of any subdivision thereof, or of any
government-owned or controlled corporation, or
institution, the administration of which has been
intrusted to them; this provision shall apply to
judges and government experts who, in any
manner whatsoever, take part in the sale; cdasia
(5) Justices, judges, prosecuting attorneys, clerks
of superior and inferior courts, and other officers
and employees connected with the administration
of justice, the property and rights in litigation or
levied upon an execution before the court within
whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the
act of acquiring by assignment and shall apply to
lawyers, with respect to the property and rights
which may be the object of any litigation in which
they may take part by virtue of their profession;
(6) Any others specially disqualified by law.
(1459a)
13. Persons enumerated in 1491 are prohibited
from entering into the contract of lease of service.
FALSE – prohibition is with respect to things and
not to service.
In lease of urban or rural lands, the person
disqualified to buy referred to in Articles 1490
and 1491 of the CC are also disqualified to
become lessees of the things mentioned therein.
(Rabuya, p. 491)
The persons disqualified to buy referred to in Art.
1490-91 are also disqualified to become lessees of
the things mentioned therein. (Aquino, p. 593)
14. A right may also be the object of a contract of
lease and the compensation is referred to as
royalty.
Object or subject-matter: Either real or personal
property. The object may either be real or
personal property. As to personal property,
consumable goods cannot be the subject matter of
a contract except – when they are merely to be
exhibited; or when they are accessory to an
industrial establishment. (Rabuya, pp. 489-490)
Royalty - A payment reserved by the grantor of a
patent, lease of a mine, or similar right, and
payable proportionately to the use made of the
right by the grantee. (Black’s Dictionary)
15. The lessee is obliged to answer even for a
mere act of trespass which a 3rd party may cause
on the use of the thing leased but lessee shall
have a different action against intruder.
FALSE. The lessor is not answerable for mere acts
of trespass (no right); the lessee has a direct action
against the trespasser. (Aquino, 592)
16. When lessor repairs the thing leased but the
lessee is not satisfied, latter may suspend
payment of rent.
ARTICLE 1658. The lessee may suspend the
payment of the rent in case the lessor fails to
make the necessary repairs or to maintain the
lessee in peaceful and adequate enjoyment of the
property leased.
17. If lessee fails to comply with his obligations,
lessor may file an action for rescission and action
for damages only.
ARTICLE 1659. If the lessor or the lessee should
not comply with the obligations set forth in
articles 1654 and 1657, the aggrieved party may
ask for the rescission of the contract and
indemnification for damages, or only the latter,
allowing the contract to remain in force.
18-19. Warranties in contract of lease
(1) Lessor’s right to lease the thing
(2) Lessee enjoys legal and peaceful possession
(3) Thing is fit for use
(4) Thing is free from hidden defects/fault
20. If lessor sells the leased property to a 3rd
person in violation of the right of 1st refusal given
to lessee, contract is rescissible regardless of GF of
buyer.
Rescissible only when in BF.
21.Lessor has subrogatory right against a sub-
lessee for unpaid rent.
In case of sublease, the lessee’s obligation to the
lessor remains without prejudice to his
responsibility for the performance of the contract
toward the lessor.
The sub-lessee is subsidiariily liable to the lessor
for any rent due from the lessee. However, the
sub-lessee shall not be responsible beyond the
amount fo rent due from him...
(Aquino, p. 597)
22-24. Obligations of lessor
(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;
(4) To be responsible for warranty against
eviction;
(5) To be responsible for warranty against hidden
defects;
(6) Not to alter the form of the things in such a
way as to impair the use to which the thing is
devoted under the terms of the lease;
(7) In lease of rural lands, the outgoing lessee
shall allow the incoming lessee or the lessor the
use of the premises and other means necessary
for the preparatory labor for the following year;
and, reciprocally, the incoming lessee or the
lessor is under obligation to permit the outgoing
lessee to do whatever may be necessary for the
gathering or harvesting and utilization of the
fruits, all in accordance with the custom of the
place.
(Aquino, pp. 591-592)
25-28. Obligations of lessee
(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 notify the owner of the need for urgent
repairs;
(5) To tolerate the works of the lessor for urgent
repairs;
(6) To notify the lessee every usurpation or
untoward act of third persons;
(7) To return the thing leased at the termination
of the lease just as he received it except for
ordinary wear and tear;
(8) To be liable for loss or deterioration due to his
own fault or negligence;
(9) To be liable for any deterioration caused by
the members of his household and by guests and
visitors.
(Aquino, pp. 594-595)
29. A lease extendible by mutual agreement
would simply amount to a right of 1st refusal in
favor of the lessee so that even if a 3rd party
would offer a higher rent, lease in favor of 1st
lessee will not be extended unless he matches the
offer.
30. A contract for the lease of vibrator is personal
and thus terminated by death of lessee.
FALSE? Death is not a ground?
The lease may terminate:
(1) By the expiration of the period;
(2) By the total loss of the thing;
(3) By resolution of the right of the lessor;
(4) By will of the purchaser or transferee of the
thing; and
(5) By rescission due to non-performance of
obligation of one of the parties.
(Rabuya, pp. 507-508)
31. An implied new lease may result even if there
is an express stipulation to the contrary.
If the lease was made for a determinate time, it
ceases upon the day fixed, without the need of a
demand.
An implied new lease is created when it is shown
that: (a) the term of the original contract of lease
has expired; (b) the lessor has not given the lessee
a notice to vacate; and (c) the lessee continued
enjoying the thing leased for 15 days with the
acquiescence of the lessor. (Rabuya 508)
If the lessee continued enjoying the thing after the
expiration of the contract when there is no
implied new lease because the lessor objected to
the continued enjoyment by the lessee, the latter
shall be subject to the responsibilities of a
possessor in bad faith. (Rabuya, p. 511)
32. An implied new lease is for the same period as
the original lease but a guaranty executed by a
3rd person in favor of the lessor shall cease with
respect to the new lease.
In case of an implied new lease, the other terms of
the original contract, aside from the period, shall
be revived. (Rabuya, p. 510)
33-36. Rights of lessee.
(1) To demand delivery of the thing leased;
(2) To be in peaceful and adequate enjoyment of
the lease for the entire duration of the contract;
(3) To sublease the property unless there is a
stipulation to the contrary;
(4) To choose between proportional reduction of
rent and rescission of the lease if the thing is
partially destroyed by fortuitous event;
(5) To suspend the payment of the rent in case the
lessor fails to make the necessary repairs or to
maintain the lessee in peaceful and adequate
enjoyment of the property leased;
(6) To terminate the lease if the leased dwelling
place or building intended for habitation is in
such a condition that its use brings imminent and
serious danger to his life or health or
uninhabitable;
(7) To ask for proportional reduction of the rent if
the urgent repairs being made by the lessor will
last for more than 40 days.
(Aquino, pp. 593-594)
37-40
Grounds for ejectment
(1) When the period agreed upon, or that which is
fixed for the duration of leases under Articles
1682 and 1687, has expired;
(2) Lack of payment of the price stipulated;
(3) Violation of any of the conditions
agreed upon in the contract;
(4) When the lessee devotes the thing leased to
any use or service not stipulated which causes the
deterioration thereof; or if he does not observe the
requirement in No. 2 of Article 1657, as regards
the use thereof.
41. Destruction of thing by FE obligates lessor to
rebuild the thing leased.
False. 1655 – If the thing leased is totally
destroyed by a fortuitous event, the lease is
extinguished. If the destruction is partial, the
lessee may choose between a proportional
reduction of the rent and a rescission of the lease.
42. Failure to pay rentals makes possession
unlawful
False. Unless coupled with a refusal on part of
lessor to pay after lawful demand.
43. Provision in contract of lease that
improvements introduced by lessee will accrue to
lessor upon termination of lease shall be
governed by rules on sale of property
False. No need to apply the rules on sales of
property.
44. Lessor may terminate lease when rentals are
not paid without need of court action.
True.
45. Contract of sale entered in violation of right of
1st refusal is valid.
True.
46. Lessee in a lease of rural lands has a right to
reduction of rental on account of sterility of land
and for loss of fruits due to extraordinary and
unforeseen event.
False. 1680 – The lessee shall have no right to a
reduction of the rent on account of the sterility of
the land leased, or by reason of the loss of fruits
due to ordinary fortuitous events; but he shall
have such right in case of the loss of more than
one-half of the fruits through extraordinary and
unforeseenfortuitous events, save always when
there is a specific stipulation to the contrary.
Extraordinary fortuitous events are understood to
be: fire, war, pestilence, unusual flood, locusts,
earthquake, or others which are uncommon, and
which the contracting parties could not have
reasonably foreseen.
47. A provision in a contract of lease that all
improvements introduced by lessee without
reimbursement is not valid.
F
Stipulation not contrary to law, etc is valid and
binding.
48. Lease of determinate time ceases upon day
fixed without need of demand.
True.
49. In an express trust, acceptance by the trustee
is necessary for creation of trust.
False. It is acceptance by beneficiary which is
needed.1445 – No trust shall fail because the
trustee appointed declines the designation, unless
the contrary should appear in the instrument
constituting the trust.
50. Acceptance by beneficiary is not necessary for
the creation of express trust.
1446 – Acceptance by the beneficiary is necessary.
Nevertheless, if the trust imposes no onerous
condition upon the beneficiary, his acceptance
shall be presumed, if there is no proof to the
contrary.
51. A trustor may or may not have the capacity to
transfer the property.
False. He mut have capacity.
52. An express trust is created by mere
declaration of trustee that he holds property in
trust.
False. It is created by direct and positive acts of
the parties.
53. Trusts over real property are enforceable in
any form.
False. In express trust, a formality is required.
54. Trustee can acquire trust property by adverse
possession even w/o repudiation of trust.
False. There must be repudiation in case of
express trusts.
55. In order to bind 3rd persons to a trust, same
must be in a public instrument.
False. Trusts over personal property may be
proved orally.
56. Statute of limitations apply to express trust.
False. It is impresciptible.
57. Constructive trust is imposed by law to carry
out the actual or presumed intent of the parties if
express trust is prejudicial to the
False. It must be Resulting Trusts.
58. Resulting trusts are established by law,
regardless of intention, in order to prevent fraud,
oppression or unjust enrichment.
False. It must be constructive trusts.
59. No express trust concerning an immovable
property or any interest may be proven by parole
evidence.
True.
60. There is a resulting trust when a donation is
made to a person but appears thought the legal
estate is transmitted to donee, he nevertheless is
either to have no beneficial interest or only a part
thereof.
True.
61. There is a constructive trust when land passes
by succession and causes the legal title to be put
in name of another.
True.
62. There is a constructive trust if the price of sale
of property is loaned or paid by 1 person for
benefit of another and conveyance is made to
lender or payor to secure payment of debt.
True.
63. Laches is a defense in resulting trusts unless
beneficiary had no knowledge of facts.
True.
64. In express trusts, statute of limitations does
not apply to subsisting and continuing trusts so
long as there is no denial or repudiation thereof.
True.
65. An oral trust is sufficient in case of trust over
personalty.
True.
66. In case of impossible trust, court may
authorize deviation in interest of trust.
True.
67. No need for trustee to render an account
under oath.
False. Under ROC, he must render under oath at
least 1x a year until his trust is fulfilled, unless he
is excused, a true account.
68. Trustor cannot prohibit alienation for a period
of more than 25 years.
True.
69. Merger is a mode of extinguishment of
implied or express trust.
True.
70. In an implied trust over a parcel of land,
action to recover must be brought within 5 years
from issuance of title to property.
False. 10 years.

 

QUIZ 7

1. The insolvency of theguarantor entitles the creditorto demand another

guarantoreven if the creditordesignated the guarantor.

FALSE. Under Article 2057, if the guarantor should beconvicted in first instance
of a crimeinvolving dishonesty or should becomeinsolvent, the creditor may
demandanother who has all the qualificationsrequired in the preceding article.
Thecase is excepted where the creditor hasrequired and stipulated that a
specifiedperson should be the guarantor.

2. Future debts of unknownamount may not beguaranteed because there isno

principal obligation yet.

FALSE. Under Article 2053,a guaranty may also be given assecurity for future
debts, the amount ofwhich is not yet known; there can be noclaim against the
guarantor until the debtis liquidated. A conditional obligationmay also be secured.

3. Guaranty must be expressbut exceptionally it may beimplied from acts of

theguarantor as in guaranty byestoppel.

FALSE. Under Article 2055,aguaranty is not presumed; itmust be express and

cannot extend tomore than what is stipulated therein.

4. The guarantor can bindhimself for more than whatthe debtor is liable for but
notfor less.

FALSE. Under Article 2054,a guarantor may bind himselffor less, but not for
more than theprincipal debtor, both as regards theamount and the onerous
nature of theconditions. Should he have boundhimself for more, his obligations
shall bereduced to the limits of that of the debtor.

5. The debtor may interposeagainst the guarantor alldefenses available againstthe

creditor.

FALSE. Under Article 2068, if the guarantee pays without notifying thedebtor, the
latter may enforce against him all the defenses which he could have set up
against the creditor at the time the payment was made.

6. The benefit of exhaustionavailable to the guarantor isnot available if the guaranty

isin the form of pledge ormortgage on the guarantor’sproperty.

TRUE.

7. Execution may be enforcedagainst the guarantorwhenever a writ of executionis

issued against a debtor.

 
  

FALSE. Under Article 2058,the guarantor cannot becompelled to pay the creditor
unless thelatter has exhausted all the property ofthe debtor, and has resorted to
all thelegal remedies against the debtor.

8. If the guarantor pays beforethe due date, he cannot proceedagainst the debtor
until thatdate arrives except when thedebtor ratifies the payment.

TRUE.

9-15. Seven instances where the benefits of exhaustion is not available.

a. When the guarantor has constituted in favor of thecreditor a pledge or
mortgage asan additional security
b. Non-compliance w/ Art 2060 (set up the benefit of excussion with the creditor,
and point out to the creditor the available property of the debtor)
c. He has a judicial bondsman andsub-surety
d. Guarantor expressly renounces it
e. Bound himself solidarilywith the debtor
f. Debtor’s insolvency
g. He has absconded, or cannot be sued w/in the Philippines unless hehas left a
manager orrepresentative
h. It may be presumed that anexecution on the property of theprincipal debtor
would not resultin the satisfaction of theobligation

16. If the parties avail of contractualprovision for automatic extension, theguarantor

will be released.

TRUE.

17. In case of a merger between thedebtor and the guarantor, the guarantyis
extinguished but a sub-guarantor, ifany, is released.

FALSE. Guaranty is accessory and subsidiary contract; therefore, the

extinguishment of its principal contract will likewise extinguish the sub-
guarantor’s obligation.

18. There is no excussion/exhaustion injudicial guaranty.

TRUE. Under Article 2084, a judicial bondsman cannot demand the exhaustion
of the property of the principal debtor.

19. When the principal obligation ismodified by agreement, the guarantoris released
if he didn’t agree to themodification even if the modifiedobligation will be less
onerous.

 
  

FALSE. A material alteration should be onerous as toimpose a new obligation or

add burden to theguarantorin order to release guarantor.

20. A remission in favor of 1 of 5guarantors extinguishes the principalobligation but

only to the extent of 1/5.

TRUE. Under Article 2078, a release made by the creditor in favor of one of the
guarantors, without the consent of the others, benefits all to the extent of the
share of the guarantor to whom it has been granted.

ALTERNATIVE ANSWER:
FALSE. The guaranty is extinguished only if remission is madewithout the
consent of the other guarantors, under Article 2078.

21. An oral mortgage is void againstinnocent 3rdparties but valid between theparties
themselves.

TRUE.

22. An unregistered REM may still be the subject of foreclosure.

TRUE. The purpose of registration is to bind third persons, but not the validity of
the contract.

23. A contract of antichresis that doesn’t specify the interest in writing,although it

expressly mentioned theprincipal amount is void and of noeffect at all.

FALSE. Obligation to pay interest is not the essence ofantichresis, but the
obligation to apply all the fruits, after receiving them, to the payment of interest, if
owing, and thereafter the principal in accordance with the provision of Article
2133 or 2138 of the Civil Code.

24. A chattel mortgage is a realcontract because it requiresconstructive delivery by

the registrationof the contract in the CM registry.

FALSE. Chattel mortgage is a consensual contract, as delivery is not required for

its validity.Registration of chattel mortgage, although required by law, is not
equivalent toconstructive delivery.

25. What must be contained in anaffidavit of good faith?

Under Section 5 of Act No 1508, the affidavit of good faith must contain a
statement wherein the parties severallyswear that the mortgage is made for
thepurpose of securing the obligation specified inthe conditions thereof and for
no otherpurposes and that the same is just andvalid obligation as one not
entered intofor the purpose of fraud.

 
  

26. A CM without containing an affidavitof good faith is void for all intents
andpurposes.

FALSE.Affidavit only required for the purpose oftransforming an already valid

mortgageto a preferred one. Absence of suchaffidavit vitiates the mortgage only
as against 3rdpersons without notice, like creditors and subsequent
encumbrances.

27. A lessee may mortgage the thingleased but only valid during theeffectivity of the
lease.

FALSE. Lessee not the absolute owner of theproperty, and therefore not in
compliance with the second essential requisite under Article 2085, that the
mortgagor be the absolute owner of the thing mortgaged.

28. A mortgage made by a co-owner ofa property without the consent of otherco-
owners produces no legal effect.

FALSE. Under Article 493, such mortgage made by a co-owner produces a legal
effect, which is it burdens only that portion which may be allotted to the co-owner
in the division upon the termination of the co-ownership.

29. The nullity of a mortgage does notrender null and void the principal obligation
itguarantees.

TRUE.The extinguishment of a contract of mortgage does not affect the principal

obligation since it is merely an accessory contract.

30. A municipality may not mortgage apatrimonial property being used as apublic
market.

TRUE. Since the property is being used for public use as a public market, it is
therefore considered as part of public dominion – which is inalienable or
unencumbered.

31. Growing fruits while they areattached to the land may not be properobjects of
chattel mortgage.

FALSE. Pursuant to Section 2 of Act 1508, parties may treat as personal

property that which by its nature would be real propertyby virtue of estoppel. This
is as long as the parties to the contract so agree, and no innocent 3rd party will be
prejudiced thereby. (Makati Leasing and Financial Corp v Wearever Textile Mills,
Inc)

ALTERNATIVE ANSWER:

 
  

TRUE. Generally, chattel mortgage can cover only personal or movable property
under Article 2140.

32. A machinery classified as real property underArt 415 NCC may be the object of
avalid chattel mortgage.

TRUE. This is by virtue of estoppel; or in case of buildings under Article 415(1)

ALTERNATIVE ANSWER:
FALSE. Chattel mortgage is primarily for movables under Art 416-417 NCC.

33. A mortgage may be gratuitous.

TRUE.

34. A mortgage follows the propertywhoever the possessor may beprovided there is
formal assumption ofmortgage by the transferee.

FALSE.Formal assumption of mortgage is not necessary for it to follow the

property.

35. While the law does not specificallyrequire the possession of the property tothe
antichretic creditor, delivery hasbeen held a standard characteristic ofthe contract
of antichresis.

FALSE. Delivery is not a standard but special requisite.

36. All immovable properties may bethe object of a contract of antichresis.

FALSE. Onlythe immovable of the debtor, under Article 2132.

37. The mortgage extends to bothnatural and artificial accessions.

TRUE. Under Article 2127, mortgage extends to the natural accessions, to the
improvements, growing fruits, and the rents or income not yet received when the
obligation becomes due, etc.

38. the parties must agree on the valuation of the fruits for application to the interest and
principal of the debt

F Art 2133- actual MV of fruits at the time of application

39. the parties may stipulate to the share of taxes and charges upon the estate during
the period of antichresis

F Art 2135

 
  

40. the expenses for preservation of the prop in an antichresis shall be deducted from
the fruits of the same

T Art 2135 (3)

41-43

RIGHTS OF AN ANTICHRETIC CREDITOR

A. Right to receive the fruits of the debtor’s immovable

B. Right to the actual MV of the fruits at the time of the application thereof to
the interest and principal

C. Right to enjoyment of an immovable

44-46

OBLIGATIONS OF AN ANTICHRETIC CREDITOR Unless stipulation to the

contrary, to pay:

Taxes

Charges upon the estate. If he doesn’t pay: indemnity for damages

Apply the fruits after receiving them to the interest if owing and after, to the
principal

47. the chattel mortgage is deemed to cover only the prop described therein and not like
or substituted property thereafter acquired by the mortgagor notwithstanding a contrary
stipulation
T
Sec. 7, Chattel Mortgage Law. Rule applies regardless of any stipulation contrary.

48. stocks in trade which are naturally revolving or floating and perishable goods that
are naturally expected to be replaced may be the proper objects of a CM, provided the
deed must be amended every time there is a replacement of the goods

49. A promise expressed in a CM to include debts to be contracted in the future is a

binding commitment that can be compelled upon the security itself even if there is no
amendment of the old agreement or the execution of a new one

F. Marquez v Elisan Credit Corp

50. A stipulation in a RE mortgage prohibiting the mortgagor fr. Selling the mortgaged

 
  

property w/out the written consent of the mortgagee is valid because obligations arising
from contract have the force of law bet. thecontracting parties

T. Autonomy of Contracts

51. the absence of written consent of the mortgagee in a sale of a mortgaged chattel to
a 3rd party doesn’t affect the validity of the sale although the mortgagor could be
criminally liable

T. Consent of the mortgagee in sale of mortgaged property not a requirement under CM

law.

52. stipulations in a contract of antichresis for the extrajudicial foreclosure of the security
is void for lack of legal basis

F Parties may agree on the same, as in mortgage and pledge

53. in a RE mortgage foreclosure pursuant to Art 3135 doesn’t require personal notice
to the mortgagor

T. Not a requirement under Act 3135

54. in RE mortgage and antichresis, deficiency or the excess is for the acct/credit of the
debtor unlike in the case of pledge

T. Act 3135 is silent as to right to recover deficiency, but under the Mortgage Law
which is still in force, mortgagee has the right to claim for deficiency

55. After foreclosure of a CM or PP paid on installment, the seller cant recover the
deficiency from the buyer

T. Under the Mortgage Law which is still in force, mortgagee has the right to
claim for deficiency.

56. the loss of the property mortgaged by a fortuitous event shall necessarily free the
debtor-mortgagor from the prin obli

F Mortgage is an accessory contract, loss of the thing mortgaged doesn’t affect

the principal contract

57. the commitment of a buyer at an auction resell the prop to the mortgagor beyond the
period of redemption is not binding unless supported by a separate consideration

F. Right of redemption may be exercised w/ in 1 yr from the reg of the cert of sale;
w/out the reg of the prop, redemption is still possible even when the commitment
is not supported by a separate consideration

58-61

 
  

4 DISTINCTIONS: CM and PLEDGE CM

a. Consensual

b. Requirement of registration is essential for validity

c. Possession of thing mortgaged remains w/debtor

d. Different procedure in sale in a public auction

e. If the price of the sale in case of foreclosure is less than the amount of the
principal obli, creditor can recover deficiency

PLEDGE

a. Real

b. Reqt that it be in a public rd instrument is merely to bind 3 persons

c. Possession vested w/ creditor

d.Diff procedure in public auction sale

e. Creditor not entitled to recover deficiency

62-65

4 DISTINCTIONS: CM and RE MORTGAGE

CM

a. Constituted on movables

b. Cant guarantee future oblis

c. CM needs to be registered in CM registry as a security for performance of
an obli

d. Registration essential for validity

RE Mortgage

b.Constituted on immovable

c. May guarantee future obligations

d. Needs to be registered to bind rd 3 persons

 
  

e. Registration not essential for its validity

66. a pledger who is not the debtor has the rights of a guarantor to seek reimbursement,
subrogation, excussion and is not prejudiced by any waiver of defense by the debtor

F Excussion is not included

67. the incorporeal right of lease over a condominium unit evidenced by a notarized
contract of lease may be validly pledged

F Lease contract is not a document of title which accompanies an incorporeal

right, which may be pledged

68. a pledge made by a 3rd is not the owner is void because only an owner w/out
exception may pledge his property

A 3rd party may pledge another’s property w/ authority and consent of the owner
of such to secure the principal obli

69. a thing pledged may be alienated at the instance of the creditor to satisfy the
principal obligation

F It will amount to dacion en pago

70. an agreement to the effect that the thing pledged should be applied in payment of
the obligation by way of dacion en pago is void because this will constitute pactum
comissorium

F There is no more pledge but a valid dacion en pago

71. est tota in tota et tota in qualibet parte

There is whole in the whole and the whole in every part

72. if there are 3 debtors who are jointly liable, the creditor may enforce the obligation of
each against the whole thing pledged

F The creditor cant immediately enforce the obligation of the joint debtors against
the whole thing pledged because he may do so only when the credit has not been
satisfied in due time

73. a pledge is an accessory, real, unilateral and preparatory contract

F It is not preparatory

74. if a promissory note was used in pledge and was subsequently sold at auction to

 
  

satisfy the principal obligation for a bid price higher than the amount secured by the
pledge, the debtor is not entitled to the surplus, should there be any

T. Art 2115, debtor not entitled to excess.

75. A verbal pledge is void
False. There is no such requirement that it must be in writing. But article 2092
states that a promise to constitute pledge gives rise only a personal action.
76-81 Instances of legal pledge
a.Art 546 wrt necessary and useful expenses
b. Art 612 wrt termination ofusufruct
c. Art 1731 wrt execution of workupon a movable
d. Art 1914 wrt agent’s right to retention of objects of an agency until
principal effects reimbursement and pays indemnity
e. Art 1994 wrt depositary
f .Art 2004 wrt hotel keepers
82. The pledgee cannot use the thing pledged without the express authority of the
pledgor even its preservation requires.
False. Article 2104 the creditor cannot use the thing pledged, without the
authority of the owner, and if he shiuld do so, or should misuse the thing in any
other way , the owner may ask that it be judicially or extrajuducially deposited.
When the preservation of the thing pleged requires its use, it must be used by the
creditor but only for its purpose.
83. All fruits produced by the thing pledged are subject to legal compensation even in
the absence of a stipulation to this effect.
TRUE. Aricle 2102 if the pledge earns or produces fruits, income, dividends, or
interest, the creditor shall compensate what he receives with those which are
owing him.
84. The thing in pledge couldn’t be subjected to a precautionary sale without the
consent of the pledgor.
FALSE. Article 2108 if without the fault of the pledge, there is danger of
destruction , impairment or diminution in value of the thing pledged, he may
cause the same be sold at a public sale.
85-91 Conditions and rules for a valid extrajudicial foreclosure of a thing pleged.
1. FILING OF APPLICATION BEFORE THE EXECUTIVE JUDGE THROUGH
THE CLERK OF COURT

 
  

2. CLERK OF COURT WILL EXAMINE WHETHER COMLIANCE WITH

POSTING AND PUBLICATION
3. THE APPLIOCATION SHALL BE RAFFLED AMONG SHERIFFS
4. AUCTION SALE MAY BE HAD EVEN IF THERE IS ONLY ONE
PARTCIPATING BIDDER
5. THE CLERK OF COURT SHALL ISSUE A CERTIFICATE OF PAYMENT
6. THE CERTIFICATE OF SALE MUST BE APPROVED BY THE EXECUTIVE
JUDGE
7. AFTER THE REDEMPTION PERIOD HAS EXPIRED, THE CLERK OF
COURT SHALL ARCHIVE THE RECORDS.
92. The pledge of a pawn ticket must renew it if necessary.
TRUE. (HINDI KO MAHANAP SAGOT DITO,SAMPLEX ANSWER TO)
93. As a rule, a pledgee may deposit the thing pleged with a 3rd party of proven integrity.
FALSE. Ariticle 2100 the pledge cannot deposit the thing pledged with a third
person, unless there is a stipulation authorizing him to do so.
94. Unless stipulated otherwise, the return of the thing pledged to the owener
extinguishes the pledge.
TRUE. Article 2110 if the thing pledged is returned by the peldgee to the pledgor
or owner, the pledge is extinguished. Any stipulation to the contrary shall be
void.
95. For all intents and purposes, the pledge is extinguished when the thing pledged is
the possession of the pledgor.
FALSE. Article 2107 if there is reasonable ground of destruction, without the fault
of the pledge, the pledgor may demand the return of the thing pledge. And
substitute it with another thing.
96-100 Rights of a pledgor
1. To demand return in case of reasonable grounds to fear destruction or
impairment of the thing without the pledgee’s fault.
2. To bid and be preferred at the public auction.
3. To alienate the thing pledged provided the pledgee consents to the sale.
4. To ask the thing pledged to be deposited.
101. The pledgor must pay the necessary expenses incurred by the pledgee on the
thing pledged.
TRUE. Article 2099, the creditor has the right to reimbursement of the expenses
made for its preservation.

 
  

102-106 Extinguishment of the pledge

1.The same as causes of all obligations
2. The return of the thing pledged
3. Statement in writing that the pledgee renounces or abandons the pledge.
4.Payment Of debt
5. Sale of the thing pledged at public auction
6. Appropiration.
107. The rules governing the possession and preservation of the thing pledged by
agreement also apply to legal pledges.
FALSE. Article 2121 in realtion to article 546 governs possession in legal pledge,
while article 2098 governs that of pledge by agreement.
108-110 Obligations of pledgee.
1. To take care of the thing with the dilidgence of a good a father
2. Not to use the thing pledged, unless authorized by the owner or for its
preservation
3. Not to deposit the thing with a third person unless stipulated
4. Responsiobiluty for acts of his agents and employees
5. To advise pledgor of danger to the thing
6. To return the thing upon payment,